United States District Court, D. New Jersey, Camden Vicinage
E. MARIE BUMB, District Judge.
This matter comes before the Court upon Defendants', Paperless Solutions Group, Inc., ("PSG") and H. Thomas Lane ("Lane"), Motion to Dismiss For Lack of Personal Jurisdiction or to Transfer Venue [Docket No. 81]. For the reasons below, the motion is granted to the extent it requests that the matter be transferred to the United States District Court for the Northern District of Florida.
As stated in a prior Order by this Court, Plaintiff MAX 10 MARKETING, LLC ("MAX 10") is located in New Jersey and is in the business of promoting the sales of "market variance products, " including technology services, discount benefits, and energy products. [Docket No. 36]. Defendant MARKETech Inc., ("MTI") is located in Florida and is in the business of developing electronic business forms for use by businesses that conduct business over the internet. MAX 10 alleges that MTI owes it unpaid commissions plus any future commissions for business it secured for the benefit of MTI. Previously, MTI filed a motion to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), which this Court denied.
Following that decision, Plaintiff filed a Second Amended Complaint adding two new Defendants, PSG and Lane, and additional counts for fraudulent transfer (Count III) and successor liability (Count IV). It is undisputed that, like MTI, both PSG and Lane are citizens of the State of Florida.
According to the Plaintiff's allegations, PSG's purchase of the business assets of MTI left MTI insolvent. Plaintiff further alleges that the transfer of assets was completed in an attempt by PSG and Lane to avoid liability that MTI had to the Plaintiff. In addition, Plaintiff alleges that PSG is liable for alleged breaches of contract committed by MTI as its successor-in-interest and as the assignee of the agreements forming the basis of the alleged breaches. With respect to Defendant Lane, Plaintiff contends that Lane breached his fiduciary duty to the Plaintiff by transferring assets of MTI, which was insolvent, to PSG.
Defendants PSG and Lane have moved pursuant to Federal Rule of Civil Procedure 12(b)(2) to dismiss the matter for lack of personal jurisdiction or, in the alternative, to transfer venue under 28 U.S.C. § 1404(a).
As demonstrated by the parties' papers, a determination of whether this Court has personal jurisdiction over both PSG and Lane requires a significant analysis of whether PSG is, in fact, a successor-in-interest to MTI. This, in turn, requires significant inquiry into the transfer of assets from MTI to PSG, which took place in Florida. In addition, Plaintiff cites Florida law for the proposition that Lane can be held liable as a director and/or director-stockholder of a corporation. In reply, Defendants posit that, absent piercing the corporate veil, which Plaintiff does not address, there are no grounds to assert jurisdiction over Lane. Plaintiff states that if this Court determines that it cannot exercise personal jurisdiction over PSG and Lane, then the matter should be transferred to the Northern District of Florida.
In Sinochem International Co. v. Malaysia International Shipping Corp., the Supreme Court instructed that the district court may consider whether to transfer a case based on forum non conveniens grounds without having to first address the issue of personal jurisdiction. 549 U.S. 422, 425 (2007)("a district court has discretion to respond at once to a defendant's forum non conveniens plea, and need not take up first any other threshold objection."). See Product Source International v. Leonid Nahshin, No. 13-4997, 2014 U.S. Dist. LEXIS 87664 (D.N.J. June 27, 2014)(addressing request to transfer first and declining to make a determination regarding personal jurisdiction); Axxa Commerce v. Digital Realty Trust, No. 09-653, 2009 U.S. Dist. LEXIS 94103 (D.N.J. Oct. 8, 2009)(determining whether case should be transferred without addressing issue of personal jurisdiction).
In this case, discussion of the appropriateness of transfer in the first instance is appropriate because a determination of whether this Court has personal jurisdiction over PSG and Lane would require an in depth review of the ownership of shares of PSG in an attempt to determine whether PSG is, in fact, MTI's successor-in-interest as alleged by Plaintiff. Similarly, this Court would need to first determine the basis of Plaintiff's claim against Lane before even embarking on a personal jurisdiction analysis - i.e., whether a veil piercing analysis is needed. As such, an initial determination of whether the matter should be transferred is appropriate. See Axxa Commerce, 2009 U.S. Dist. LEXIS 94103 at *6-9 (finding that first considering a motion to transfer was appropriate where determination of personal jurisdiction involved a complicated analysis of the corporate structure of the defendants).
Defendants have asked that this case be transferred pursuant to Section 1404(a). Section 1404(a) provides that: "For the convenience of parties and witnesses, 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). This action could have been filed in Florida, where MTI, PSG, and Lane are located. Because the proposed alternative forum, Florida, is appropriate, it is within the Court's discretion to transfer the action.
In deciding a transfer motion under § 1404(a), courts in the Third Circuit consider both private and public interests, as delineated in Jumara v. State Farm Ins. Co. , 55 F.3d 873, 888 (3d Cir. 1995). The private interest factors include:
1) the plaintiff's forum preference; 2) the defendant's forum preference; 3) where the claim arose; 4) the convenience of the parties as indicated by their relative physical and financial condition; 5) the convenience of the witnesses, but only to the extent they may be unavailable for trial in one of the fora; and 6) the location of books and records ...