Three Rivers Provider Network, Inc. v. America's Choice Provider Network, Inc.
2:14-cv-00584
D. Nev.Aug 25, 2015Background
- Three Rivers (Nevada corp.) sues America’s Choice (formerly a California corp.) alleging Breeden, Ott, and Shamoun conspired to steal funds and trade secrets and funneled assets via Nevada shell companies and bank accounts to form America’s Choice. Claims include declaratory relief, civil conspiracy (breach of fiduciary duty, conversion), RICO, and unjust enrichment.
- America’s Choice moved to transfer the case to the U.S. District Court for the Southern District of California under 28 U.S.C. §§ 1404(a) and 1406(a), and asked the court to consolidate with a related Southern District of California action (Three Rivers v. Jett Integration & Ott) or stay the case pending related proceedings (including a California state action and criminal matters).
- Three Rivers opposed transfer and consolidation, arguing both parties are now Nevada corporations, key personnel are in Nevada, Nevada is the proper forum, and related actions won’t resolve claims against America’s Choice.
- The district court found venue in Nevada was proper under § 1391(b)(2) (declining to dismiss or transfer under § 1406(a)) because the complaint alleges use of Nevada bank accounts and shell corporations.
- On § 1404(a) transfer analysis, the court weighed traditional private- and public-interest factors: plaintiff’s forum choice and Nevada-law familiarity favored keeping the case in Nevada, but related litigation in the Southern District of California and the ability to compel key non-party witnesses there (e.g., Shamoun, Ott, Sodeman) weighed heavily in favor of transfer.
- The court concluded that, balancing convenience and the interests of justice (particularly avoiding duplicative litigation and inconsistent results), transfer to the Southern District of California was appropriate and granted the motion to transfer; consolidation and stay were left to the transferee court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether venue is improper such that dismissal or transfer under § 1406(a) is required | Venue is proper in Nevada; key personnel and corporate presence are in Nevada | Venue improper in Nevada because America’s Choice and relevant transactions were in California | Venue is proper in Nevada under § 1391(b)(2); no § 1406(a) transfer/dismissal granted |
| Whether transfer under § 1404(a) is appropriate (convenience & interests of justice) | Plaintiff's forum choice and Nevada law familiarity favor retaining case in Nevada | Transfer favored due to related actions in SD Cal, compulsory process for non-party witnesses there, and efficiency | Transfer under § 1404(a) granted: overall balance favors transfer to SD Cal |
| Whether consolidation with the Ott action is required | Opposes consolidation—different parties, facts, liabilities | Seeks consolidation because cases arise from same core facts and overlapping issues | Court declined to decide consolidation; left consolidation decision to transferee court |
| Whether stay (including pendency of related civil/criminal proceedings) is warranted | Opposes stay—criminal matters involve non-parties and would result in indefinite delay | Seeks stay or abstention pending related civil and criminal proceedings | Court declined to stay; left any stay decision to transferee court |
Key Cases Cited
- Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491 (9th Cir.) (plaintiff bears burden to show venue is proper)
- Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124 (9th Cir.) (prima facie showing of venue required absent evidentiary hearing)
- Jones v. GNC Franchising, Inc., 211 F.3d 495 (9th Cir.) (list of private- and public-interest factors for § 1404(a) analysis)
- In re Apple, Inc., 602 F.3d 909 (8th Cir.) (transfer courts may consider case-specific factors beyond the standard list)
- JetBlue Airways Corp. v. Helferich Patent Licensing, LLC, 960 F. Supp. 2d 383 (E.D.N.Y.) (existence of related action in transferee court weighs heavily toward transfer)
- Hoffman v. Blaski, 363 U.S. 335 (U.S.) (plaintiff must have had the right to sue in transferee district when suit was instituted)