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Takahashi v. Cuyco

United States District Court, D. New Jersey

March 27, 2018




         Plaintiff Hiroki Takahashi commenced this action for, inter alia, breach of fiduciary duty, conversion, and fraud, invoking this Court's diversity jurisdiction pursuant to 28 U.S.C. § 1332(a)(2). (Compl. (Doc. No. 1); Am. Compl. (Doc. No. 5).) Takahashi now seeks leave to file a second amended complaint to drop four diversity-destroying defendants. Alternatively, Takahashi moves for the Court to exercise its discretionary powers under Federal Rule of Civil Procedure (“Rule”) 21 to drop these diversity-destroying defendants. (Mot. Amend (Doc. No. 86, 93, 94).) Defendants Renato Cuyco, Juan C. Abuan, Dido Kim, Yin Liu, Jason Shin, Joseph Yi, and Champion Autosports Performance and Custom Creations, LLC (collectively “the Cuyco defendants”), and Lincoln Tan oppose Takahashi's motion on the grounds that the Court's lack of subject matter jurisdiction is incurable.[1] These defendants move to dismiss the complaint for, inter alia, lack of subject matter jurisdiction pursuant to Rule 12(b)(1), and failure to join a required party under Rule 19 pursuant to Rule 12(b)(7), and in the alternative, to dismiss this action under the doctrine of forum non conveniens. (Cuyco Mot. (Doc. No. 88).)

         For the reasons set forth below, this action may proceed against Cuyco and Tan only. In addition, the Court finds that venue in this district is improper, and in the interests of justice and for the convenience of parties and witnesses, transfer of this action to the United States District Court for the District of New Jersey is warranted. In light of the transfer, Takashi's motion to amend is denied without prejudice to renew in the transferee court.


         In March 2013, Takahashi and Cuyco formed non-party Champion Autosports LLC (“Champion Autosports”) in New Jersey. (Am. Compl at ¶¶ 12, 24-25.) Champion Autosports employed defendant Abuan, who assisted in the business of selling and servicing cars. (Id. at ¶ 35-37.) For purposes of that business, Takahashi entered into a lease at 1980 Route 35 in South Amboy, New Jersey (“the Lease”). (Id. at ¶ 26.) Takahashi alleges that immediately upon the creation of Champion Autosports, Cuyco began embezzling money from the business. (Id. at ¶ 40.) In November 2014, Cuyco falsely represented to Takahashi that Champion Autosports was a money losing venture when, in fact, the business was earning a profit. (Id. at ¶ 38.)

         Shortly after the inception of their joint venture, Takahashi alleges that Cuyco formed two new companies in direct competition with Champion Autosports: defendants Champion Auto Leasing LLC (“C.L.”) and Champion Autosports Performance & Custom Creations LLC (“C.P.”). (Id. at ¶¶ 10, 12.) Cuyco, with the assistance of his attorneys, former-defendant Paguiligan and current-defendant Tan, surreptitiously renegotiated the Lease to accommodate co-member of Champion Autosports; and (2) Tan's aiding and abetting Cuyco's breach of fiduciary duty.

         III. Forum Non Conveniens and Venue

         Cuyco and Tan seek dismissal of this action under the doctrine of forum non conveniens, asserting that this action must be brought in New Jersey. However, “the federal doctrine of forum non conveniens has continuing application only in cases where the alternative forum is abroad.” Am. Dredging Co. v. Miller, 510 U.S. 443, 460 n.2 (1994); accord Evolution Online Sys. v. Koninklijke PTT Nederland N.V., 145 F.3d 505 (2d Cir. 1998). While they invoke the common law doctrine, the arguments they set forth equally support transfer of this action for the convenience of the parties and witnesses under the statutory analog found at 28 U.S.C. § 1404(a).[3]

         “For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district . . . where it might have been brought.” 28 U.S.C. § 1404(a). A court has broad discretion in determining a motion for transfer and considers a variety of factors in making that determination, such as:

(1) convenience of the witnesses; (2) convenience of the parties; (3) the locus of the operative facts; (4) the availability of process to compel the attendance of unwilling witnesses, (5) the location of relevant documents and the relative ease of access to sources of proof, (6) the relative means of the parties, (7) the forum's familiarity with the governing law, (8) the weight accorded the plaintiff's choice of forum, and (9) trial efficiency and the interest of justice, based on the totality of the circumstances. v. McNulty, 123 F.Supp.2d 750, 754-55 (S.D.N.Y. 2000). The party seeking transfer has the burden of making a “clear-cut” showing that transfer is warranted. See O'Hopp v. ContiFinancial Corp., 88 F.Supp.2d 31, 34 (E.D.N.Y. 2000). Following consideration of these factors, the Court finds that Cuyco and Tan have easily carried their burden, and that transfer to the District of New Jersey is appropriate.

         The locus of the operative facts in this action is in New Jersey; none occurred in this district, or in this state. They all arise out of fraud alleged to have been committed through a New Jersey limited liability corporation. Of the original defendants, all eight were citizens of New Jersey, including Cuyco and Tan, who remain. The remaining causes of action, brought under the court's diversity jurisdiction, are all grounded in New Jersey state law.[4] Takahashi will be able to seek in New Jersey the same remedies under the same laws as here. Indeed, a New Jersey court has a much greater interest in construing and applying its state law than does an out-of-state forum.

         The vast majority if not all of the witnesses, including non-party witnesses, will be based in New Jersey, as will the bulk of the documentary and other evidence, with compulsory process available to secure it. While Takahashi suggests that technology - faxing, scanning and emailing - as well as the proximity of New Jersey to the Eastern District of New York, lessens this burden, see Doc. No. 86-22 at 1, these factors here carry little weight. First, there is no need to incur unnecessary expenses for witnesses or the defendants to travel to New York to testify or to defend this action. Second, they are far outweighed by the fact that there is absolutely no connection between the operative facts and this district.

         The only argument proffered by Takahashi to maintain this action in this court is his claim that he is a resident of Queens, New York. Assuming, for the sake of this discussion, that this fact is true, it carries little weight in the analysis. First, a plaintiff's residence cannot serve as a basis for federal venue. See 28 U.S.C. ยง 1391(b). Second, as has been revealed in this action (notwithstanding Takahashi's selective disclosures), Takahashi is a ...

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