Yowie Natural World, Inc. v. Whetstone Chocolate Factory
1:16-cv-04320
| E.D.N.Y | Dec 23, 2016Background
- Yowie Group Ltd (Australia) and subsidiary Yowie Natural World, Inc. (Delaware/Missouri) contracted with Florida entities Whetstone Chocolate Factory, Inc. (WCF), Atlantic Candy Company (ACC), and Henry Whetstone to manufacture Yowie-branded chocolate toys; the Manufacturing Agreement contained a Florida venue clause (St. John’s County).
- Yowie later contracted with Madelaine, a New York chocolate maker (Far Rockaway), and allegedly disclosed WCF’s proprietary information to Madelaine during negotiations in New York.
- After Yowie terminated the Florida defendants in December 2015, defendants allegedly made statements and distributed Yowie images to trade press and online forums (originating in Florida) that harmed Yowie’s business and investor reputation.
- Yowie sued in New York state court asserting tortious interference, Lanham Act trademark misappropriation, and defamation; WCF removed to federal court and counterclaimed for breach of the Manufacturing Agreement’s nondisclosure clause.
- Defendants moved under 28 U.S.C. § 1404(a) to transfer venue to the Middle District of Florida; the district court evaluated the § 1404(a) factors and geographic ties of the claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether transfer to Middle District of Florida is warranted under 28 U.S.C. § 1404(a) | Plaintiffs chose Eastern District; key events (negotiations, one witness, distribution of magazine) tie case to New York | Most operative facts, witnesses, and defendants are in Middle District of Florida; forum-selection clause in Manufacturing Agreement points to Florida | Transfer granted: defendants met burden by clear and convincing evidence; Middle District is locus and more convenient |
| Weight to give plaintiff’s choice of forum when plaintiff sued away from home and agreed to a forum-selection clause | Plaintiffs argue their choice should be respected | Defendants argue reduced deference because plaintiffs sued away from home and contracted to litigate in Florida for related claims | Court gave reduced deference; venue clause and out-of-home forum choice undermined plaintiff’s forum preference |
| Convenience of witnesses and availability of process for compulsory attendance | Plaintiffs emphasize importance of non-party NY witness (Madelaine CEO) | Defendants show majority of anticipated witnesses are Florida residents; Australian witnesses travel regardless; depositions are viable alternative | Court found convenience favors Florida; process availability was neutral and did not defeat transfer |
| Relative means of parties | Plaintiffs claim travel burden to Florida is greater | Defendants note plaintiffs are a public company with substantial resources while defendants are small Florida firms | Court found relative means favor transfer (plaintiff better able to bear costs) |
Key Cases Cited
- N.Y. Marine & Gen. Life Ins. Co. v. Lafarge N. Am., Inc., 599 F.3d 102 (2d Cir. 2010) (party seeking transfer under § 1404(a) must produce clear and convincing evidence)
- D.H. Blair & Co., Inc. v. Gottdiener, 462 F.3d 95 (2d Cir. 2006) (enumerating § 1404(a) balancing factors)
- Eres N.V. v. Citgo Asphalt Refining Co., 605 F. Supp. 2d 473 (S.D.N.Y. 2009) (deposition testimony can be a viable alternative to live testimony)
- Romano v. Banc of Am. Ins. Servs., 528 F. Supp. 2d 127 (E.D.N.Y. 2007) (trial by videotape concern where vast majority of witnesses would testify by deposition)