United States District Court, E.D. Missouri, Eastern Division
MEMORANDUM AND ORDER DENYING MOTION TO
D. Noce UNITED STATES MAGISTRATE JUDGE.
action is before the court on the motion of defendants
Resource Converting, LLC, Tim Danley, and Rick Kersey to
transfer this action to the United States District Court for
the Southern District of Iowa. (ECF No. 55). Following the
hearing held on November 30, 2016, the court denies
defendants' motion to transfer the case.
judicial complaint plaintiff Tom Dunne alleges the following
facts. In May 2015, defendant Gary Brinkmann contacted Dunne
to sell him certain license agreements. (ECF No. 1, ¶
16). These agreements would authorize and obligate plaintiff
to acquire for resale "PAD systems" developed by
defendants Resource Converting, LLC; Sebright Products, Inc.;
and JWR, Inc., and sold by defendant New Way Global Energy,
LLC. (Id. at ¶ 17). The PAD systems are devices
that would purportedly convert municipal solid waste into
renewable fuels. (Id. at ¶ 16). The systems
were advertised to plaintiff as "using proven and tested
technology to create a homogenous dried fuel stock that can
be converted into different forms of energy."
(Id. at ¶ 19). Defendant Jerry Flickinger gave
plaintiff a "budgetary quote for a single line
processing system to take municipal solid waste and prepare
it for conversion to fuel, " stating a single system was
"capable of processing 250 tons per day."
(Id. at ¶ 20). Brinkmann and Flickinger
allegedly assured plaintiff repeatedly of the PAD
systems' proven function and the substantial value of the
license agreements. (Mat¶21).
alleges that defendants Brinkmann, Flickinger, Danley, and
Kersey solicited payment from him for the PAD systems and
license agreements, and that they employed high-pressure
sales pitches. (Id. at ¶ 22). As a result of
defendants' assurances and representations, plaintiff
entered into license agreements with Resource Converting in
August 2015 and made an initial payment of $400, 000 with an
additional payment of $600, 000 to be made in November 2015.
(Id. at ¶¶ 22-24). Between May and October
2015, plaintiff and defendants met with many individuals in
Missouri to solicit the sale and purchase of the PAD Systems.
(ECF No. 77, Ex. A, ¶ 6). Between August and November
2015, plaintiff insisted on seeing a demonstration of an
operational PAD system. (ECF No. 1, ¶ 25). Brinkmann,
Kersey, and Flickinger showed plaintiff a partially assembled
piece of non-functioning equipment in a building located in
Iowa, stating that it had previously been in operation but
was being prepared for relocation. (Id. at ¶
25). Defendants were never able to show plaintiff a working
PAD system. (Id. at ¶¶ 28-30). On December
1, 2015, defendants demanded full payment of the remaining
$600, 000 due from plaintiff. (Id. at ¶ 29). In
June 2016, defendant Brinkmann stated to plaintiff that the
PAD Systems never functioned as promised. (Id. at
license agreements contain a section captioned, 12.5
Governing Law, that provides, "[t]he sole jurisdiction
and venue for actions related to the subject matter hereof
shall be the State of Iowa and U.S. Federal courts located in
Iowa. Both parties consent to the jurisdiction of such courts
. . . [.]" (Id., Ex. B. § 12.5). On June
20, 2016, counsel for plaintiff submitted a demand letter to
Brinkmann, Resource Converting, Sebright, JWR, NewWay,
Kersey, and Danley, demanding return of the $400, 000 paid by
plaintiff and threatening legal action if the sum was not
repaid by June 30, 2016. (ECF No. 77, Ex. E). Resource
Converting filed a breach of contract claim against Dunne on
June 30, 2016 in Iowa state court. (Id. at Ex. F).
On August 19, 2016, Dunne removed that case to the United
States District Court for the Southern District of Iowa and
also commenced the instant action in this district court.
MOTION TO TRANSFER
Resource Converting, LLC, Tim Danley, and Rick Kersey move to
transfer this action to the federal district court for the
Southern District of Iowa pursuant to 28 U.S.C. § 1404
or, in the alternative, to transfer or dismiss the action for
improper venue under Fed.R.Civ.P. 12(b)(3). (ECF No. 55).
Defendants invoke the first-filed rule, the forum selection
clause in the license agreements, and the equitable factors
to be considered under § 1404.
courts determining whether to grant a motion to transfer
under § 1404(a) must consider three statutory factors:
"1) the convenience of the parties; 2) the convenience
of the witnesses; and 3) the interest of justice."
Dube v. Wyeth LLC, 943 F.Supp.2d 1004, 1007 (E.D.
Mo. 2013). "In general, federal courts give considerable
deference to a plaintiffs choice of forum and thus the party
seeking a transfer under section 1404(a) typically bears the
burden of proving that a transfer is warranted."
Terra Int'l, Inc. v. Miss. Chem. Corp., 119 F.3d
688, 695 (8th Cir. 1997).
convenience of the parties, witnesses, and the interest of
justice weigh in favor of keeping this case in this district,
where plaintiff commenced it. While the license agreements at
issue provide that "[t]he sole jurisdiction and venue
for actions related to the subject matter hereof shall be [in
Iowa], " (ECF No. 77, Ex. C. § 12.5), a forum
selection clause is but one factor a court considers in
deciding whether or not to transfer a case-albeit a
significant factor. Terra Int'l, Inc., 119 F.3d
at 696 (citing Stewart Org., Inc. v. Ricoh Corp.,
487 U.S. 22, 29 (1955)). The parties' contractual
selection of the state of Iowa as the venue for dispute
litigation relates primarily to the statutory prong of the
"convenience of the parties:"
The other factors-the convenience of witnesses and the
interest of justice-are third party or public interests that
must be weighed by the district court; they cannot be
automatically outweighed by the existence of a purely private
agreement between the parties. Such an agreement does not
obviate the need for an analysis of the factors set forth in