Bedrock Logistics LLC v. Braintree Laboratories Inc
3:16-cv-02815
N.D. Tex.Apr 28, 2017Background
- Braintree sent Bedrock a demand letter (Sept. 15, 2016) alleging a kickback scheme and offering settlement with a Sept. 26 deadline; Bedrock filed suit in Texas state court on Sept. 19 seeking payment of invoices.
- Braintree filed a federal suit in the District of Massachusetts on Sept. 27; Braintree later removed the Texas state action to the Northern District of Texas (Oct. 4).
- The Massachusetts court denied Bedrock’s motion to transfer that action to Texas; the Massachusetts case remains pending and addresses substantially similar transactions.
- Braintree moved to dismiss for lack of personal jurisdiction or, alternatively, to transfer this Texas action to Massachusetts under 28 U.S.C. § 1404(a).
- The Texas court evaluated the Volkswagen private and public interest factors and the first-to-file rule, addressing whether Bedrock’s earlier Texas filing was anticipatory forum-shopping.
Issues
| Issue | Plaintiff's Argument (Bedrock) | Defendant's Argument (Braintree) | Held |
|---|---|---|---|
| Whether transfer under 28 U.S.C. § 1404(a) is warranted | Venue in Northern District of Texas is proper; plaintiff’s chosen forum should be respected | Massachusetts is clearly more convenient given witnesses, local interest, and parallel litigation | Transfer granted: District of Massachusetts is clearly more convenient |
| Applicability of the first-to-file rule | Bedrock filed first (state court) so Texas should retain the case | Bedrock’s filing was anticipatory forum-shopping; rule should not apply | First-to-file rule declined because Bedrock’s suit was anticipatory |
| Availability of compulsory process for key non-party witnesses | General assertion Texas witnesses needed; did not identify specific non-party witnesses | Identified key non-party witnesses in Massachusetts who may be unwilling to travel; Texas lacks subpoena power | Factor favors transfer—Massachusetts has compulsory process over key non-parties |
| Whether to decide venue before personal jurisdiction | Plaintiff urged jurisdictional resolution; normally jurisdiction decided first | Braintree argued transfer would render jurisdictional issues moot and avoid constitutional questions | Court prudentially decided venue first because it mooted the personal jurisdiction issue |
Key Cases Cited
- Volkswagen II v. Woodson, 545 F.3d 304 (5th Cir.) (en banc) (transferee must be “clearly more convenient” under § 1404(a))
- Volkswagen I v. Robertson, 371 F.3d 201 (5th Cir.) (private and public interest factors for § 1404(a))
- Save Power Ltd. v. Syntek Fin. Corp., 121 F.3d 947 (5th Cir. 1997) (purpose of first-to-file rule to avoid duplicative litigation)
- Cadle Co. v. Whataburger of Alice, Inc., 174 F.3d 599 (5th Cir. 1999) (first-to-file rule overview)
- Mann Mfg., Inc. v. Hortex, Inc., 439 F.2d 403 (5th Cir. 1971) (exception for compelling circumstances to decline first-to-file rule)
- Leroy v. Great W. United Corp., 443 U.S. 173 (U.S. 1979) (jurisdiction and venue need not be decided in any fixed order)
- In re Volkswagen of Am., Inc., 566 F.3d 1349 (Fed. Cir. 2009) (multiple lawsuits on same issues weigh in venue analysis)