the goals of the FAA and give effect to the intent of the Merger Agreement more indirectly, either by staying proceedings so that defendants can file anew in the Eastern District of Pennsylvania, or by transferring this action there pursuant to 28 U.S.C. §§ 1404(a) or 1406(a). See Alpert, 731 F. Supp. at 689 (staying proceedings to allow movants to petition an authorized court to compel arbitration); Bao v. Gruntal & Co., 942 F. Supp. 978, 1996 U.S. Dist. LEXIS 14597, 1996 WL 570351, at *7 (D.N.J. 1996) (transferring venue to a district authorized to compel arbitration). To conserve judicial resources and avoid multiplicitous litigation, this Court opts for the latter course, and will transfer this action to the Eastern District of Pennsylvania pursuant to 28 U.S.C. 1404(a).
"For the convenience of parties and witnesses [and] in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." 28 U.S.C. § 1404(a). The Eastern District of Pennsylvania qualifies as such a district: each defendant is a citizen of Pennsylvania--Lilex Partners is a limited partnership comprised of a Pennsylvania citizen and Lilex Corporation, a Pennsylvania corporation with its principal place of business in Pennsylvania--and thus venue is proper there under 28 U.S.C. § 1391(a)(1) (setting forth proper venue in diversity actions). See Complaint at PP 6-10.
In deciding motions to transfer venue, courts have not limited their consideration to the three factors enumerated in § 1404(a). Rather, courts have considered "'all relevant factors to determine whether on balance the litigation would more conveniently proceed and the interests of justice be better served by transfer to a different forum.'" Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995) (quoting 15 Wright et al., supra, § 3847). These include private interests--the parties' preferences, whether the claim arose elsewhere, the convenience of the parties, the convenience of the witnesses, and the location of documents (to the extent that files could not be produced in the alternative forum)--and public interests--enforceability of the judgment, practical considerations that could make the trial easy, expeditious, or inexpensive, relative administrative difficulty in the two fora resulting from court congestion, the local interest in deciding local controversies at home, relevant public policies of the fora, and the familiarity of the trial judge with state law if applicable. See Jumara, 55 F.3d at 879; 1A:2 James W. Moore & Brett A. Ringle, Federal Practice P 0.345; Wright et al., supra, § 3854.
Within this framework, arbitration clauses are manifestations of the parties' preferences as to a convenient forum. See Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 36, 101 L. Ed. 2d 22, 108 S. Ct. 2239 (1988) (Scalia, J., dissenting) (considering an arbitration clause "a kind of forum selection clause"); Scherk v. Alberto-Culver Co., 417 U.S. 506, 519, 41 L. Ed. 2d 270, 94 S. Ct. 2449 (1974) ("An agreement to arbitrate before a specified tribunal is, in effect, a specialized kind of forum-selection clause that posits not only the situs of suit but also the procedure to be used in resolving the dispute."); Jumara, 55 F.3d at 880 (deeming forum selection clauses "manifestations of parties' preferences as to a convenient forum"). As such, they are entitled to "substantial consideration." Id. (giving substantial, yet not dispositive, weight to "the parties' agreement as to the most proper forum"). Thus, while courts normally defer to a plaintiff's choice of forum and a movant normally must bear the burden of establishing a need for transfer, such deference and burden-placement are inappropriate here, where plaintiffs have already freely contractually chosen an appropriate venue. See id. (placing on plaintiff the "burden of demonstrating why they should not be bound by their contractual choice of forum").
Placing "substantial weight" on the parties' original choice of forum as expressed in the arbitration clause, the Court must now consider and balance the remaining factors. Considering the private factors first, the convenience of the parties and witnesses and the availability of documents do not favor either forum. The Eastern District of Pennsylvania, at Sixth and Market in Philadelphia, is but a short drive or train ride from this Court's Camden Vicinage, and plaintiffs do not contend that New Jersey witnesses or documents will be unavailable to Pennsylvania courts or arbitrators. See id. at 879 (considering the convenience of witnesses and the location of books and records "only to the extent that the witnesses may actually be unavailable" and "the files could not be produced" in the alternate forum).
The last private factor, where the cause of action arose, weighs against transfer to the Eastern District: although the parties negotiated the merger transaction across state lines in three states, several meetings at which defendants allegedly misrepresented and breached, took place in New Jersey, at Optopics's facility in Fairton, New Jersey, or with Nutramax Products's president in Pennsauken, New Jersey. See Nicholas Cert. at P 3.
The public factors strongly support a transfer to the Eastern District of Pennsylvania. Whereas this Court's lacks the authority to compel arbitration under 9 U.S.C. § 4, the Eastern District of Pennsylvania faces no such obstacle. By virtue of this added authority, proceedings in the Eastern District would be easier, more expeditious, and, as a result, less expensive. The remaining public factors fail to favor either forum: the public policies of both fora derive from federal law, see FAA, 9 U.S.C. §§ 1-16, and the Merger Agreement purports to be governed by Delaware law, see Merger Agreement at § 32. Moreover, it cannot be said that the sale of a New Jersey-based, Delaware-incorporated entity by Pennsylvania citizens to a Massachusetts-based, Delaware-incorporated entity is a "local controversy" of any of these states that ought be decided at home.
In sum, plaintiffs fall far short of the showing of convenience necessary to overcome the presumption established by their forum-selecting arbitration clause. See Jumara, 55 F.3d at 880 (placing on plaintiff "the burden of demonstrating why they should not be bound to their contractual choice of forum"). Neither witness convenience, nor party convenience, nor the interests-of-justice factors counsel in favor of maintaining the instant action in the District of New Jersey. Indeed, most of them either militate in favor of transferring venue or are inconclusive as to the two alternative fora. This Court will therefore transfer venue to the Eastern District of Pennsylvania pursuant to 28 U.S.C. § 1404(a) so that that court may compel arbitration before the contractually chosen Philadelphia tribunal.
This Court finds plaintiffs' first two counts within the scope of the Merger Agreement's arbitration clause and further finds that the third count should be stayed pending the outcome of that arbitration. Because it lacks the authority to compel arbitration in the contractually chosen forum of Philadelphia, the Court will transfer the case to the Eastern District of Pennsylvania pursuant to 28 U.S.C. § 1404(a). Defendants' motion to compel arbitration will therefore be granted to the extent that (a) counts one and two are determined to be arbitrable and (b) counts one, two, and three will be stayed pending completion of that arbitration. However, the court declines to order arbitration in Philadelphia for lack of statutory authority. Defendants may refile their motion to compel arbitration before the Eastern District of Pennsylvania which has the statutory authority needed to compel arbitration. An appropriate order will issue on even date herewith.
Dated: December 4, 1996
JOSEPH E. IRENAS, U.S.D.J.