Buso v. Penguin Trading, Inc.
1:17-cv-07488
E.D.N.YDec 22, 2017Background
- Plaintiff (Buso) sued Penguin Trading, Inc. under California’s CLRA alleging slack-fill in packaging; filed FAC and then moved for leave to file a second amended complaint (removing fraud allegations and adding a UCL claim).
- Defendant moved to dismiss or, alternatively, to transfer or stay the action to the Eastern District of New York (E.D.N.Y.).
- Plaintiff filed here (C.D. Cal.) though he resides in Poway (Southern District of California); Defendant headquartered in New York and had already filed a declaratory/anticipatory action in E.D.N.Y. against unnamed plaintiffs.
- The court granted Plaintiff’s motion for leave to file the second amended complaint because Defendant failed to oppose, rendering dismissal arguments moot as to the operative pleading.
- The court evaluated Defendant’s alternative §1404(a) transfer request, considering Jones factors and the first-to-file rule; concluded the New York action was anticipatory and declined to apply the first-to-file rule.
- Balancing transfer factors, the court found witness convenience, compulsory process, and public interest favored transfer and therefore granted transfer to E.D.N.Y., while denying as moot the stay request.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Motion for leave to amend | Amendment cures defects, removes fraud allegations, adds UCL claim | Opposed but failed to file timely opposition | Grant — motion granted for failure to oppose; Plaintiff to file amended complaint |
| Dismissal under Rule(s) (as in MTD) | Opposed dismissal; sought to fix pleading defects via amendment | Sought dismissal of FAC | Dismissal request denied as moot after granting leave to amend |
| Applicability of first-to-file rule | New York action was anticipatory; therefore the first-to-file rule should not bar this action | Argued first-to-file favored transfer to E.D.N.Y. because Defendant filed earlier | Court declined to apply first-to-file rule — found New York action anticipatory |
| Transfer under 28 U.S.C. § 1404(a) | California forum has connections: plaintiff’s investigator and many CA retail stores; plaintiff’s convenience and class of CA residents favor CA | E.D.N.Y. is defendant’s HQ, key nonparty witnesses in New York/Turkey, inability to compel witnesses, and public interest favor New York | Grant transfer to E.D.N.Y. — weightiest factors (witness convenience, compulsory process, public interest) favor transfer despite some factors favoring CA |
Key Cases Cited
- Sparling v. Hoffman Constr. Co., 864 F.2d 635 (9th Cir. 1988) (district court has broad discretion to transfer venue)
- Commodity Futures Trading Comm. v. Savage, 611 F.2d 270 (9th Cir. 1979) (transfer involves weighing of factors and is within court’s discretion)
- Jones v. GNC Franchising, Inc., 211 F.3d 495 (9th Cir. 2000) (individualized, case-by-case consideration of convenience and fairness; articulation of transfer factors)
- Stewart Org. v. Ricoh Corp., 487 U.S. 22 (U.S. 1988) (standard for adjudicating motions to transfer venue)
- Alltrade, Inc. v. Uniweld Prods., Inc., 946 F.2d 622 (9th Cir. 1991) (first-to-file doctrine is discretionary and may be displaced for equity, including anticipatory suits)
- Ravelo Monegro v. Rosa, 211 F.3d 509 (9th Cir. 2000) (importance of compulsory process in transfer analysis)
- Securities Investor Protection Corp. v. Vigman, 764 F.2d 1309 (9th Cir. 1985) (plaintiff’s choice of forum should rarely be disturbed unless factors strongly favor defendants)