2:12-cv-00358
E.D. Va.Jun 28, 2012Background
- Polygroup Limited (Macau) and Nixan International sue General Foam Plastics Corp. in the Richmond Division for breach of contract, breach of the Separation Agreement, and constructive trust.
- General Foam moves to dismiss for improper venue or, in the alternative, to transfer to the Norfolk Division.
- The Separation Agreement allegedly included a non-compete and a provision that General Foam would loan Polygroup $12 million in 2012.
- General Foam has no offices, employees, or property in the Richmond Division; its registered agent is in the Norfolk Division; shipments into the Richmond Division constitute a substantial portion of the transaction at issue.
- Plaintiffs contend a substantial part of the events occurred in the Richmond Division and that General Foam regularly transacts business there.
- The court ultimately transfers the case to the Norfolk Division for proper venue.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether venue is proper in the Richmond Division | Polygroup argues venue lies where substantial events occurred. | General Foam asserts no substantial Richmond Division contacts; venue improper here. | Venue improper in Richmond; transfer to Norfolk granted. |
| Whether General Foam's Norfolk venue is proper under 1391 and 1406(a) | Plaintiffs contend venue should be maintained in Richmond; suspects transfer unnecessary. | Norfolk Division is proper venue; 1406(a) permits transfer when venue is improper. | Transfer to Norfolk appropriate; Richmond venue dismissed. |
| Whether defendant waived venue objections by filing a counterclaim | Plaintiffs claim permissive counterclaim waives venue challenge. | Counterclaim is compulsory and not a waiver; scheduling order allowed it. | No waiver; counterclaim deemed compulsory, not a waiver of venue objections. |
| Whether the court should analyze transfer under 1404(a) (convenience) after ruling on improper venue | If venue were proper, transfer could be considered for convenience. | Venue is improper; 1404(a) analysis unnecessary if transfer under 1406(a) is appropriate. | Transfer warranted under 1406(a); 1404(a) not dispositive given improper venue. |
Key Cases Cited
- LG Elecs., Inc. v. Advance Creative Computer Co., 131 F. Supp. 2d 804 (E.D. Va. 2011) (residence not tied to state incorporation for personal jurisdiction)
- Mullins v. Equifax Info. Servs., LLC, 2006 WL 1214024 (E.D. Va. 2006) (burden-shifting on establishing venue and personal jurisdiction)
- Koh v. Microtek Int'l Inc., 250 F. Supp. 2d 627 (E.D. Va. 2003) (transfer considerations under 1404(a) and proper forum)
- McGee v. Int'l Life Ins. Co., 355 U.S. 220 (1957) (contract claims with substantial connection to a forum can arise there)
- Dee-K Enters v. Heveafil Sdn. Bhd., 985 F. Supp. 640 (E.D. Va. 1997) (counterclaims and waiver considerations in venue challenges)
- Medicenters of Am., Inc. v. T&V Realty & Equip. Corp., 371 F. Supp. 1180 (E.D. Va. 1974) (discussion of waiver of Rule 12(b) defenses in context of counterclaims)