UNIVEST CAPITAL, INC. v. NAIDU MHT LLC
2:17-cv-01204
E.D. Pa.Sep 7, 2017Background
- Univest Capital, a Pennsylvania corporation, sued multiple physicians and guarantors (none located in Pennsylvania) on loan/guarantee contracts after alleged defaults; many defendants and the loan-funded practices are in Texas.
- Plaintiff filed 26 related suits in the Eastern District of Pennsylvania; several related cases had previously been filed in the Northern District of Texas and consolidated there by Judge Lindsay.
- Defendants moved to dismiss and/or transfer venue to the Northern District of Texas under 28 U.S.C. § 1404(a); Univest opposed relying on a forum-selection clause in the contracts specifying Bucks County, Pennsylvania as an optional forum for plaintiff.
- The forum-selection clause was permissive (gave plaintiff the option to litigate in Bucks County) and thus was accorded reduced weight by the court.
- The court considered Jumara factors (convenience and interest of justice), emphasizing the presence of related consolidated litigation in Texas, location of operative facts and parties, local interest, and efficiency.
- The court granted the motions to transfer the consolidated matters to the Northern District of Texas.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether transfer under 28 U.S.C. § 1404(a) is appropriate | Plaintiff relied on a forum-selection clause allowing litigation in Bucks County, PA and argued to keep venue in E.D. Pa. | Defendants argued convenience, efficiency, and that related cases and operative facts are in the Northern District of Texas | Transfer granted to N.D. Tex. as in interest of justice under § 1404(a) |
| Effect of forum-selection clause | Clause requires or strongly favors Pennsylvania forum | Clause is permissive (plaintiff’s option), so it should receive reduced weight | Clause is permissive and given little weight in transfer analysis |
| Weight of related/consolidated litigation in transferee forum | Plaintiff’s choice of forum should be respected | Existence of related consolidated Texas actions strongly favors transfer to avoid inconsistent results and inefficiency | Presence of related cases in Texas is a powerful reason to transfer |
| Convenience of parties, witnesses, records, and local interest | Plaintiff asserted ability to litigate in Pennsylvania | Defendants showed most parties, witnesses, records, and local regulatory interests are in Texas | These practical factors (location of parties, records, local interest) favor transfer; witness unavailability not shown but overall balance favors transfer |
Key Cases Cited
- Jumara v. State Farm Ins. Co., 55 F.3d 873 (3d Cir. 1995) (sets out the private and public factors for § 1404(a) transfer analysis)
- Lafferty v. Gito St. Riel, 495 F.3d 72 (3d Cir. 2007) (transfer discretion presupposes proper jurisdiction and venue)
- Ferens v. John Deere Co., 494 U.S. 516 (1990) (concurrent suits in different districts risk waste and inconsistent results)
- Continental Grain Co. v. Barge FBL-585, 364 U.S. 19 (1960) (transferring to avoid duplicative litigation promotes judicial economy)
- Synthes, Inc. v. Knapp, 978 F. Supp. 2d 450 (E.D. Pa. 2013) (distinguishes permissive vs. mandatory forum-selection clauses and accords less weight to permissive clauses)