Ham-Let, USA, Inc. v. Guthrie

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF ALABAMA

NORTHERN DIVISION

HAM-LET, USA, INC., )

)

Plaintiff, )

)

v. ) CIVIL ACT. NO. 3:18-cv-679-ECM

) (WO)

BARBARA GUTHRIE, and )

COMPART SYSTEMS CORP., )

)

Defendants. )

MEMORANDUM OPINION and ORDER

Plaintiff Ham-Let, USA, Inc. (“Ham-Let”) filed this action on July 20, 2018, against

defendants Barbara Guthrie (“Guthrie”) and Compart Systems Corporation (“Compart”)

asserting claims of breach of contract, misappropriation of trade secrets under the Federal

Defend Trade Secrets Act pursuant to 18 U.S.C. § 1836, and misappropriation of trade

secrets under the Alabama Trade Secrets Act, ALA. CODE § 8-27-3 (1975). Specifically,

Ham-Let alleges that Guthrie, prior to the termination of her employment with Ham-Let,

accessed, downloaded, and retained Ham-Let’s confidential and proprietary trade secrets,

and then used that information in her new employment with Compart, Ham-Let’s direct

competitor. The Court granted the Plaintiff’s motion for a temporary restraining order

(doc. 8), restraining the Defendants from using Ham-Let’s confidential, proprietary

information. (Id.).

The Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331 and the

specific statutory grant of jurisdiction contained in 18 U.S.C. § 1836(c). In addition to the

general federal question jurisdiction, the Defend Trade Secrets Act contains a specific grant

of jurisdiction. “The district courts of the United States shall have original jurisdiction of

civil actions brought under this section.” 18 U.S.C.§ 1836(c). Finally, the Court has

supplemental jurisdiction over the Plaintiff’s state law claims pursuant to 28 U.S.C. § 1367.

Now pending before the court is the Defendants’ motion to transfer venue to the

United States District Court for the Western District of Texas (doc. 39). The Plaintiff

opposes the motion to transfer venue (doc. 41). The motion has been fully briefed and is

ripe for resolution. After careful consideration of the motion, the Plaintiff’s responses, and

the arguments in favor of and against the motion, the Court concludes that the motion to

transfer venue should be DENIED.

DISCUSSION

Ham-Let is a corporation formed under the laws of the State of California with its

principal place of business in Sugarland, Texas. (Doc. 44, at 1, para. 1). Guthrie is a citizen

of the state of Alabama. (Id. at para. 2). Compart is a corporation existing under the laws

of the state of Delaware, with its principal place of business in Austin, Texas. (Id. at 2,

para. 3).

The Defendants argue that this case should be transferred to the Western District of

Texas for the convenience of parties and witnesses because Ham-Let has “no apparent

connection to this District” and it primarily does business in Sugarland, Texas which is

significantly closer to the Western District of Texas than the Middle District of Alabama.

(Doc. 39 at 2). The Defendants further argue that they “have substantial connections to the

2

Western District of Texas,” and the Western District of Texas is significantly closer for

potential witnesses than the Middle District of Alabama. (Id., at 2-3). The Defendants

contend that “[a]lthough Guthrie resides in Alabama, she . . . spends most of the work week

in Austin, Texas, or traveling to California for Compart,” and Guthrie “consents to personal

jurisdiction in the Western District of Texas.” (Id. at 3). Finally, the Defendants argue that

“Texas is home to potential third-party witnesses.” (Id.) According to the Defendants, the

Western District of Texas is a “clearly more convenient” forum. (Id. at 10).

Ham-Let opposes transfer to that court because venue is proper in this District, and

is its chosen forum. (Doc. 41). In addition, Ham-Let contends that the motion to transfer

is untimely because the Defendants waited over six months to file the motion, has actively

defended the case in this District, and that the motion is a delaying tactic. (Id. at 2). More

importantly, Ham-Let argues that this forum is more convenient because the principal

witness, Guthrie, resides in this District, and she downloaded and retained proprietary

confidential information in this District. (Doc. 41 at 5-6; Doc. 74 at 1). Finally, Ham-Let

asserts that the Defendants fail to identify a single non-party witness located in the Western

District of Texas. (Doc. 41 at 4). Thus, Ham-Let contends the case should remain in the

Middle District of Alabama.

The parties do not dispute that venue is proper in the Middle District of Alabama.

Instead, the Defendants’ motion is pursuant to 28 U.S.C. § 1404(a) which provides, in

pertinent part, that “[f]or the convenience of the parties and witnesses, in the interest of

justice, a district court may transfer any civil action to any other district or division where

3

it might have been brought or to any district or division to which all parties have

consented.” (emphasis added). Usually, the Court accords “considerable deference” to the

Plaintiff’s choice of forum and “in the usual motion for transfer under section 1404(a), the

burden is on the [Defendants] to establish that the suggested forum is more convenient.”

In re Ricoh Corp., 870 F.2d 570, 573 (11th Cir. 1989).

In the typical case not involving a forum-selection clause, a district court

considering a § 1404(a) motion (or a forum non conveniens motion) must

evaluate both the convenience of the parties and various public-interest

considerations. Ordinarily, the district court would weigh the relevant

factors and decide whether, on balance, a transfer would serve “the

convenience of parties and witnesses” and otherwise promote “the interest of

justice.” § 1404(a).

Atl. Marine Const. Co., Inc. v. U.S. Dist. Court for W. Dist. of Texas, 571 U.S. 49, 62–63

(2013) (footnote in original omitted).

In this case, the Defendants do not seek to enforce a forum-selection clause, and

thus, the Plaintiff’s choice of forum weighs in favor of Ham-Let. The Court recognizes

that “when the plaintiff’s choice is not [its] home forum, . . . the presumption in the

plaintiff’s favor ‘applies with less force,’ for the assumption that the chosen forum is

appropriate is in such cases ‘less reasonable.’” Sinochem Int't Co., Ltd. v. Malaysia Int'l

Shipping Corp., 549 U.S. 422, 430 (2007) (quoting Piper Aircraft Co. v. Reyno, 454 U.S.

235, 255-56 (1981)). It is undisputed that the Middle District of Alabama is not the home

forum of Ham-Let. Thus, while Ham-Let’s choice of this form is entitled to less weight,

it is still entitled to more weight than the Defendants have attributed to it.

4

The decision to transfer a case is within the discretion of the trial court with the

propriety of transfer being decided based on the facts of each individual case. See Brown

v. Connecticut General Life Ins. Co., 934 F.2d 1193, 1196 (11th Cir. 1991). And the burden

is on the Defendants to establish the suggested forum is more convenient, and would be

“in the interest of justice.” In re Ricoh Corp., 870 F.2d at 572-73. In considering whether

the Defendants have demonstrated that their suggested forum is more convenient and

serves the interest of justice, the court considers a variety of case-specific factors such as

(1) the convenience of the witnesses; (2) the location of relevant documents

and the relative ease of access to sources of proof; (3) the convenience of the

parties; (4) the locus of operative facts; (5) the availability of process to

compel the attendance of unwilling witnesses; (6) the relative means of the

parties; (7) [the suggested] forum’s familiarity with the governing law; (8)

the weight accorded a plaintiff's choice of forum; and (9) trial efficiency and

the interests of justice, based on the totality of the circumstances.

Manuel v. Convergys Corp., 430 F.3d 1132, 1135 n.1 (11th Cir. 2005); see also Stewart

Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (holding that a motion to transfer

venue requires the court to “balance a number of case-specific factors” in an

“individualized, case by-case consideration of convenience and fairness” (citation and

internal quotation marks omitted)).

In evaluating the factors, the Court considers that the individual defendant, Guthrie,

is a resident of this District, notwithstanding the fact that she often works in Austin, Texas.

The events giving rise to the Plaintiff’s claims occurred in the Middle District of Alabama.

Guthrie is alleged to have accessed, downloaded, retained, and stored confidential and

proprietary trade secrets in the Middle District of Alabama. The fact that Guthrie

5

subsequently went to work in the Western District of Texas does not substantially tilt this

factor in the Defendants’ favor. Guthrie voluntarily terminated her employment with Ham-

Let in the Middle District of Alabama, and her actions after her employment ended

occurred in the Middle District of Alabama. These facts weigh in favor of the case

remaining in this District.

A critical factor for the court’s consideration is the convenience of witnesses. See

Owens v. Blue Tee Corp., 177 F.R.D. 673, 679 (M.D. Ala. 1998). “The convenience of

non-party witnesses is important, if not the most important, factor in determining whether

a motion for transfer should be granted.” Conseal Int’ Inc. v. Econalytic Sys., Inc., 2009

WL 1285865 (S.D. Fla. 2009) (discussing transfer under § 1404(a)). The Defendants argue

that the convenience of non-party witnesses weigh in favor of transferring this case to the

Western District of Texas, which is significantly closer than the Middle District of

Alabama. However, the Defendants have not identified any individual non-party witness

from the Western District of Texas who would be inconvenienced by traveling to the

Middle District of Alabama.1 This factor does not weigh in favor of the case being

transferred to the Western District of Texas.

1 The Defendants assert that the neutral expert and Ham-Let’s expert reside in Texas and thus, the Western

District of Texas would be more convenient. The Court has considered that factor, but as the experts were

hired with the understanding that the case was filed in the Middle District of Alabama, does not accord the

factor much weight.

The Court has also considered the Defendants’ argument that potential witnesses from Applied

Materials “could testify,” and the Western District of Texas would be a more convenient forum. However,

because the Defendants have failed to identify any individual non-party witness who would actually testify,

the Court accords this factor less weight.

6

While pertinent documents appear to have been recently removed from this District

to the Western District of Texas, those documents can just as easily be made available in

this District. (Doc. 75 at 5). “[I]n this current era of technology, document production is

not as onerous as it once was, and scores of file boxes filled with paper (if they exist) need

not travel across the country.” Conseal Int’l Inc., supra. Thus, the location of relevant

documents is not a significant factor weighing in favor of transfer to another district.

The crux of Ham-Let’s claims against Guthrie and Compart stem from allegations

that Guthrie accessed, downloaded, and retained confidential and proprietary trade secrets

and took that information with her when she went to work for Compart. Those alleged

actions took place in the Middle District of Alabama, and thus, the Court concludes that

the locus of operative facts weighs in favor of this district.

Finally, Ham-Let alleges a claim under the Alabama Trade Secrets Act, ALA. CODE

§ 8-27-3 (1975). The Defendants do not address why the Western District of Texas would

be a more convenient forum to litigate this claim, and this Court’s “familiarity with the

governing law” weighs in favor of this claim being litigated in this District.

“The plaintiff’s choice of forum should not be disturbed unless it is clearly

outweighed by other considerations.” Robinson v. Giarmarco & Bill, P.C., 74 F.3d 253,

260 (11th Cir. 1996). Undisputedly, the Western District of Texas would be more

convenient to Compart. However, under the present circumstances, the Court concludes

that the Defendants have failed to establish that the interests of justice demand that this

7

case be transferred to the Western District of Texas as a more convenient forum for all the

parties.

CONCLUSION

Accordingly, for the reasons as stated, it is

ORDERED that the motion to transfer (doc. 39) is DENIED.

Done this 27th day of August, 2019.

/s/ Emily C. Marks

EMILY C. MARKS

CHIEF UNITED STATES DISTRICT JUDGE

8