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Spinello Companies v. Silva

United States District Court, D. New Jersey

September 30, 2014

SAMAN K. SILVA, et al. Defendants.


CLAIRE C. CECCHI, District Judge.

Before the Court is Defendants' motion to dismiss or alternatively transfer venue to the Central District of California. (ECF No. 12). The Court decides this matter without oral argument pursuant to Rule 78 of the Federal Rules of Civil Procedure.[1] For the reasons set forth below, the Court will deny the motion.


This case arises out of allegations that Defendant Silva used his position within Plaintiff's organization to divert customers to his own business, Defendant Lucas Builders, Inc. ("LBI"). Once Defendants moved to dismiss on jurisdictional and venue wounds, the Court ordered the Parties to take jurisdictional discovery, The following facts are taken from that discovery and the assertions in the Complaint.

Plaintiff is a California corporation with its principal place of business and headquarters in New Jersey. (Compl. ¶ 4). Defendants are California residents. ( Id. at ¶¶ 5-6). Plaintiff originally hired Silva in 2001 to work in its New Jersey office. ( Id. at ¶ 12). In 2006, Silva transferred to Plaintiff's California field office, reporting back to the New Jersey headquarters. (P1. Opp. at 4). Silva resigned from Plaintiff in May 2009, but continued to work part-time for Plaintiff in California, reporting to the New Jersey office. ( Id. at 5). In February 2010, Silva rejoined Plaintiff full-time in Plaintiff's California field office. (Id.) Silva again resigned from Plaintiff in March, 2013. (Compl. ¶ 55).

Plaintiff alleges that from 2007 onward Silva: (1) engaged in self-dealing when he awarded subcontracts to LBI without disclosing his financial interest in the company (Compl. ¶ 60; P1. Opp. 6); (2) diverted Plaintiff's confidential bid opportunities to LBI (Compl. ¶ 61; P1. Opp. 6); and (3) diverted Plaintiff's confidential information to LBI by forwarding the confidential information from his work email address to his personal email address, and by improperly modifying files on Plaintiffs servers. (Compl. ¶¶ 51-54). From this final allegation, Plaintiff contends that Silva and LBI violated the Computer Fraud and Abuse Act ("CFAA"), 18 U.S.C. § 1030.

Defendants move to dismiss on two grounds, venue and failure to state a claim.[2] First, Defendants argue a lack of venue and, in the alternative, that the more appropriate forum for this action is the Central District of California under 28 U.S.C. 1404. Second, they argue the complaint fails to state a CFAA claim, and that the court should decline pendant jurisdiction over the remaining state law claims. (Def. Br. at 5).


A. Venue

There appears to be no dispute that the only provision that might confer venue on this court is 28 U.S.C. § 1391(b)(2). which provides that venue is proper in any district where "a substantial part of the events or omissions giving rise to the claim occurred." (Def. Opp. 26). In this circuit, the test to determine whether an event or omission arose in a particular district focuses on "the location of those events or omissions giving rise to the claim." Cottman Transmission Systems. Inc. v. Martino , 36 F.3d 291, 294 (3d Cir. 1994)). In order to determine whether these events or omissions are substantial "it is necessary to look at the nature of the dispute." Id. at 295. In the Third Circuit, "the defendants bear the burden of showing improper venue." Bockman v. First Am. Marketing Corp. , 459 F.App'x. 157, 160 (3d Cir. 2012) (quoting Myers v. Am. Dental Ass'n , 695 F.2d 716, 724-25 (3d Cir. 1982)).

Defendants argue that venue is improper because "Plaintiff does not allege that actionable conduct occurred in New Jersey." (Def Br. at 23). However, even if that were so, Defendants would not have met their burden to show improper venue because "it is not necessary for the plaintiff to include allegations in his complaint showing that venue is proper." Great Western Min. & Mineral Co. v. ADR Options, Inc. , 434 F.App'x 83, 86-87 (3d Cir. 2011) (citing Myers, 695 F.3d at 724). Because they have not demonstrated that the events underlying the dispute occurred outside of New Jersey, Defendants 12(b)(3) motion fails, Id. at 87 (venue proper when defendant had "presented no evidence" in support of its underlying venue argument).

In any event. Plaintiff has supported its claim that venue is proper in this district. Plaintiff has introduced evidence that Defendant Silva: (1) was a high-ranking employee who often worked from the New Jersey office (Silva Tr. 30:8-31:20. 86:14-25; P1. op. 10-11); (2) reported directly to the New Jersey office for approval of contracts and bids (Black Cert. ¶¶ 7-8); (3) regularly traveled to Plaintiff's New Jersey headquarters on behalf of Plaintiff (Black Cert. ¶¶ 10-11); and (4) that LBI and Silva accepted a loan from Plaintiff in New Jersey (Compl. 99-100; Black Cert. ¶ 14). "Courts have upheld venue where an illegal action was repeated in more than one state and venue was laid in a state that accounted for only a small number of those actions." Calkins v. Dollarland, Inc. , 117 F.Supp.2d 421, 427 (D.N.J. 2000). Thus, Plaintiffs have shown that substantial events or omissions underlying the dispute occurred in New Jersey, and venue is proper here. 28 U.S.C. § 1391(b)(2).

B. 28 U.S.C. § 1404(a)

28 U.S.C. § 1404(a) permits transfer to a more convenient forum "[f]or the convenience of parties and witnesses, in the interest of justice." To guide the trial court's inquiry, "the Supreme Court has prescribed a balancing of private interest factors affecting the convenience of the litigants and public interest factors affecting the convenience of the forum." Windt v. Qwest Commc'n Int'l, ...

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