Ferratex, Inc. v. U.S. Sewer & Drain, Inc.
121 F. Supp. 3d 432
| D.N.J. | 2015Background
- FerraTex (VA corp.) sues U.S. Sewer & Drain, Inc. and Jeremy Bowman (both PA-based) for unpaid work on three projects: Garden State Parkway (NJ), Exxon (NY), and Cayman Islands. Claims: breach of Letter Agreement, GSP and Cayman subcontracts, personal guarantee (signed by Bowman), implied covenant, quantum meruit, unjust enrichment, promissory estoppel.
- Key documents (Letter Agreement and Personal Guarantee) were negotiated and signed at a meeting in Monmouth County, New Jersey; the Letter Agreement’s price for the GSP Project incorporates sums tied to the Exxon Project, and the Personal Guarantee covers all sums owed to FerraTex.
- Defendants moved to transfer venue to the Eastern District of Pennsylvania (EDPA) and alternatively to reassign the case to the Trenton Vicinage of the District of New Jersey; defendants argue NJ has no substantial connection and that only ~8.9% of claimed sums relate to the GSP Project.
- FerraTex amended its complaint to add explicit allegations about the GSP (NJ) project and relies on the place of contract negotiation/execution and partial performance in NJ to support venue in the District of New Jersey under 28 U.S.C. § 1391(b)(2).
- The Court accepted the Amended Complaint’s factual allegations as true for venue analysis, found that contract negotiation/execution, partial performance, and alleged breach occurred in New Jersey, and therefore venue in the District of New Jersey is proper.
- Applying 28 U.S.C. § 1404(a) (since NJ venue is proper), the Court evaluated Jumara factors and denied transfer to EDPA as the balance of private and public interest factors weighed against transfer; the Court also denied (without prejudice) the reassignment request to the Trenton Vicinage for procedural reasons under Local Rule 40.1.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether venue is proper in the District of New Jersey under 28 U.S.C. § 1391(b)(2) | Venue proper: contracts were negotiated/executed in NJ, partial performance and alleged breach occurred in NJ, Letter Agreement ties other project sums to NJ meeting | Not proper: signing in NJ is not a "substantial" connection; GSP-related sums are only 8.9% of total, so NJ lacks substantial connection | Venue is proper in the District of New Jersey under § 1391(b)(2) (court accepts amended complaint facts) |
| Whether transfer to the Eastern District of Pennsylvania is warranted under 28 U.S.C. § 1404(a) | Opposes transfer: NJ has stronger connection (location of contracts, partial performance, local interest) | Seeks transfer: defendants are located in PA; EDPA is more convenient for defendants | Transfer denied: Jumara private and public interest factors, on balance, weigh against transfer |
| Whether the quantitative share of damages (e.g., 8.9%) controls the substantiality inquiry for venue | Venue depends on nature/location of events (qualitative); no fixed quantitative threshold | Argues small percentage means non-substantial connection to NJ | Court rejects a strict quantitative threshold; substantiality is qualitative and NJ connections suffice |
| Whether reassignment to the Trenton Vicinage is appropriate under Local Rule 40.1 | (FerraTex implicitly) case filed legitimately in Newark Vicinage; no showing reassignment required | Requests reassignment to Trenton Vicinage because meeting and work occurred in Monmouth/Ocean Counties | Reassignment denied without prejudice for procedural defect (Defendants did not follow Local Rule 40.1 or apply to Chief Judge) |
Key Cases Cited
- Cottman Transmission Sys., Inc. v. Martino, 36 F.3d 291 (3d Cir. 1994) (venue §1391(b)(2) substantiality test—look to nature of dispute; multiple fora may be proper)
- Jumara v. State Farm Ins. Co., 55 F.3d 873 (3d Cir. 1995) (enumeration of private and public interest factors for §1404(a) transfer analysis)
- Shore Slurry Seal, Inc. v. CMI Corp., 964 F. Supp. 152 (D.N.J. 1997) (contract signed in forum can support venue under §1391(b)(2))
- Lafferty v. St. Riel, 495 F.3d 72 (3d Cir. 2007) (when venue is proper, §1404(a) governs discretionary transfer analysis)