here rests on a careful consideration of all of the above enumerated factors, without undue weight being placed on this single factor.
2. The Convenience of Witnesses
While this factor is not alone compelling to transfer, because neither party has alleged that there is a burdensome number of witnesses that will be required to be transported to New Jersey from Minnesota, or vice versa, defendant does suggest, and plaintiff does not dispute, that nearly all of the witnesses and relevant documents are located in Minnesota. Some of our brethren have given credence to this argument as a factor warranting transfer, see Sporalich v. United States, 471 F. Supp. 440, 441 (W.D. Pa. 1979); we do not, however, find this alone to be so compelling as to warrant transfer. It is persuasive, however, when combined with the other factors weighing in favor of transfer, below.
3. The Relative Financial Resources of the Parties
As was earlier pointed out, this is a case of two corporations embroiled in a contract dispute, with each of the parties of similar financial strength. We believe from the papers submitted that the parties are on equal footing; however, plaintiff has asserted that defendant Green Tree is in deep financial difficulty. This assertion is not strong enough alone, though, to make this factor of compelling weight.
4. The Parties' Choice of Law
This is the first truly compelling factor the Court has reached. In both the Agreements between Security and Green Tree and between Green Tree and Midwest, valid choice of law provisions dictate Minnesota law shall apply. See Provision 17 of the Sale and Servicing Agreement of February 9, 1984 between Security and Green Tree; Provision 6.07 of the Servicing Sale Agreement of May 21, 1985 between Green Tree and Midwest.
We are bound to apply the law of the State in which we sit, New Jersey, to all substantive issues, including questions governed by choice of law principles. Klaxon v. Stentor Electric Co., 313 U.S. 487, 496, 85 L. Ed. 1477, 61 S. Ct. 1020 (1941); Rohm and Haas Co. v. Adco Chemical Co., 689 F.2d 424, 429 (3d Cir. 1982). New Jersey conflict of laws principles clearly recognize the validity and enforceability of choice of law provisions in contracts such as the one between Security and Green Tree. See Kalman Floor Co., Inc. v. Jos. L. Muscarelle, Inc., 196 N.J. Super. 16, 481 A.2d 553 (1984) ("Generally, where parties have agreed in a commercial agreement to be governed by the laws of a particular State, our courts will uphold the contractual choice if it is not violative of the public policy of New Jersey." 196 N.J. Super. at 21); see also Crinnion v. The Great Atlantic & Pacific Tea Co., 156 N.J. Super. 479, 483, 384 A.2d 159 (App. Div. 1978); Knollmeyer v. Rudco Industries, Inc., 154 N.J. Super. 309, 312-313, 381 A.2d 378 (App. Div. 1977), certif. denied, 77 N.J. 477, 391 A.2d 492 (1978); Air Economy Corp. v. Aero-Flow Dynamics, 122 N.J. Super. 456, 457, 300 A.2d 856 (App. Div. 1973). We have not been made aware of any public policy of the State of New Jersey that would be violated by applying the laws of the State of Minnesota to this action. Nor do we feel it would be unfair.
Applying Minnesota law will, however, have the effect of forcing a court wholly unfamiliar with that State's laws to apply the same to the instant action. This could lead to inconsistencies with the outcome of similar cases before the District of Minnesota due to our lack of familiarity with that State's law and the complex transactions at issue here which involve close interpretations of law for which we have no feel of the patterns and inclinations of Minnesota's State court decisions. We therefore find this factor to strongly weigh in favor of transfer.
5. Judicial Economy
This factor also weighs in favor of transfer. Currently, there is not one, but two separate actions stemming from basically the same underlying facts as this case, being pursued in the United States District Court for the District of Minnesota. One suit is an analogous breach of contract action, involving pooled CSCs, brought by another investor similarly situated as Security, First Federal Savings and Loan of New Castle v. Green Tree Acceptance, Inc. and Midwest Federal Savings and Loan Association of Minneapolis, Civil Action No. 4-88-609 (D. Minn. 1988). The second is a suit between Midwest and Green Tree concerning alleged breaches of the Servicing Sale Agreement of May 21, 1985, Midwest Federal Savings and Loan Association of Minneapolis v. Green Tree Acceptance, Inc. and Touche Ross & Co. and Dorsey & Whitney and Lawrence M. Coss, Civil Action No. 4-88-846 (D. Minn. 1988), which also has a bearing on the action sub judice. The economies of having all of these disputes before one court for purposes of activities such as document production, depositions and other discovery, pre-trial management, motions and trial scheduling is compelling.
6. The Availability of Process to Compel Attendance of Unwilling Witnesses
At first blush this factor does not appear compelling because both sides have asserted the existence of critical witnesses
who are not subject to service of process in the jurisdiction where they are adverse. We note, however, that regardless of the existence and significance of these witnesses, the fact that we find a lack of in personam jurisdiction over Midwest means that both parties will possibly be unable to call witnesses associated with Midwest in New Jersey, because those witnesses are not subject to process here. Thus, this factor leans toward transfer so that important witnesses who are associated with Midwest can be compelled to testify on behalf of both Security and Green Tree.
7. The Costs of Producing Willing Witnesses to the Forum
Defendant has alleged, and plaintiff has not contested, that nearly all witnesses are located in Minnesota. While plaintiff will be put to some expense to bring its witnesses to Minnesota, apparently from the papers, defendant will be put to much greater expense in transporting its witnesses to New Jersey. Thus, this factor lends support to the need for transfer.
8. The Interests of Justice
We believe that it is in the interests of justice to transfer this case to the District of Minnesota. The other two suits are already before that court and all three suits are wholly governed by Minnesota law. Because of the complexity of transactions involved in this case and the significant intertwining of the complexities of these three cases, we feel that the interests of justice are served by transfer so as to avoid undue inconsistency of decision.
B. Transfer Pursuant to 28 U.S.C. § 1406(a)
Section 1406(a) states:
(a) The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.
The portion of the action brought against Midwest could have been brought in the United States District Court for the District of Minnesota, See 28 U.S.C. §§ 1332, 1391, since Midwest is a federally chartered Savings and Loan Association with its principal place of business in Minneapolis, Minnesota.
In order for us to exert jurisdiction over Midwest, Security is required to establish that Midwest has "certain minimum contacts with [New Jersey] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' [citation omitted]." International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L. Ed. 95, 66 S. Ct. 154 (1945). This requirement is articulated as those contacts with the forum state which indicate to Midwest that it "should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 62 L. Ed. 2d 490, 100 S. Ct. 559 (1980). As we understand the long line of case law history emanating from the Supreme Court on this issue, it is the purposeful action of the defendant, rather than the unilateral actions of third parties claiming some relation to the defendant that creates the contacts with the forum state that we are searching for. Hanson v. Denkla, 357 U.S. 235, 253, 2 L. Ed. 2d 1283, 78 S. Ct. 1228 (1958); see also Asahi Metal Industry Co. v. Superior Court of California, Solano County, 480 U.S. 102, 109, 94 L. Ed. 2d 92, 107 S. Ct. 1026 (1987); Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 85 L. Ed. 2d 528, 105 S. Ct. 2174 (1985); Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774, 104 S. Ct. 1473, 79 L. Ed. 2d 790 (1984). With these guidelines firmly in mind, we examine the possible bases for jurisdiction over Midwest.
Midwest states that it has no place of business, nor any employees in New Jersey, and plaintiff has not asserted otherwise. Midwest alleges and plaintiff does not deny that Midwest owns no real or personal property in New Jersey. Midwest further asserts that it neither solicits nor transacts and has not solicited or transacted business in New Jersey; plaintiff has not shown anything to the contrary. Security, recognizing the manifest lack of traditional minimum contacts, relies on Burger King Corp. v. Rudzewicz, 471 U.S. 462, 85 L. Ed. 2d 528, 105 S. Ct. 2174 (1985) (Brennan, J.) for the principle that "so long as commercial actors' efforts are 'purposefully directed' towards residents of another State, we [the Supreme Court] have consistently rejected the notion that an absence of physical contacts can defeat jurisdiction there." Burger King, 471 U.S. at 476.
We recognize the importance of the Supreme Court's point, however, we find it factually inapplicable to the case before us. Midwest did not engage in the type of conduct by purchasing Green Tree's right, title and interest to the servicing agreements with Security that Rudzewicz did in purchasing the franchise rights directly from Burger King in that case, precisely because Green Tree remained the ultimate servicer of the loans.
Thus, whereas in Burger King, the franchisee (Rudzewicz) had direct contact with the forum State of Florida by purposefully initiating contact with the franchisor (Burger King) and by signing the franchise agreement (which provided Florida law applied and chose Florida in a valid forum selection clause
), Midwest here did not reach out beyond Minnesota to contract with Security; rather Midwest contracted with Green Tree in Minnesota in an agreement that provided a mechanism whereby Green Tree remained the outward servicer of the pooled CSCs to Security. See Article V of the Servicing Sale Agreement of May 20, 1985 between Green Tree and Midwest. We take heed of the guidance Justice Brennan so clearly articulated in Burger King, at 478:
If the question is whether an individual's contract with an out-of-state party alone can automatically establish sufficient minimum contacts in the other party's home forum, we believe the answer clearly is that it cannot. [emphasis in original].