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Rock Hill Dairy, LLC v. Genex Cooperative, Inc.

United States District Court, D. New Mexico

October 2, 2019

ROCK HILL DAIRY, LLC, Plaintiff,
v.
GENEX COOPERATIVE, INC. and ALTA GENETICS, INC., Defendants.

          MEMORANDUM OPINION AND ORDER

         On July 23, 2019, Defendants Genex Cooperative, Inc. and Alta Genetics, Inc. filed a MOTION TO TRANSFER VENUE PURSUANT TO 28 U.S.C. § 1404(a) (Doc. No. 6) (“Motion”) requesting that the Court transfer this case to the United States District Court for the Western District of Wisconsin. On August 19, 2019, Plaintiff Rock Hill Dairy filed a RESPONSE TO MOTION TO TRANSFER VENUE (Doc. No. 13) (“Response”) opposing the Motion. Plaintiff argues that Defendants have not proved that the District of New Mexico is sufficiently inconvenient to transfer venue. Having carefully considered the briefing and the controlling law, the Court will grant Defendant's Motion and will transfer this case to the Western District of Wisconsin.

         Background

         Plaintiff Rock Hill Dairy, LLC (“Rock Hill Dairy”) is a New Mexico-based dairy business that supplies breeding bulls to customers in the dairy and cattle industries. Motion at 3. Defendant Genex Cooperative, Inc. (“Genex”) is a Wisconsin-based cattle genetics and herd management service. Id. at 2. Defendant Alta Genetics, Inc (“Alta”) is a Canadian cattle genetics and herd management service operating in Wisconsin. Id. On October 16, 2017, Defendant Genex and Plaintiff entered into a contract for the sale of breeding bull #HO840M003145780899 currently named “Leaninghouse Titan.” Id. at 3. The contract provides that Plaintiff would transfer the bull to Defendant Genex in exchange for incremental payments based on the output and quality of the bull's semen. Compl. Ex. A, ¶ 2. The contract also provides for refund of payments and reclamation of the bull if it does not meet the specified output and quality conditions. Id.

         On December 17, 2017, Defendant Alta and Plaintiff entered into an option contract for the sale of breeding bull #HO840M003145780923, currently named “Leaninghouse AltaLonzo.” Motion at 5. The contract provides that if Defendant Alta paid the $34, 512 purchase price, Plaintiff would transfer “sole ownership” and “all genetic products” of the bull. Compl. Ex. B, ¶ 2. The contract also contains a bonus payment clause which triggers if Defendant Alta releases the bull for public sale. Id. Plaintiff claims that “subsequent to delivery and acceptance of the goods but during the executory period of the contracts, Defendant Genex sold its business to Defendant Alta.” Compl. ¶ 7. According to Defendants, both are subsidiaries of URUS Group LP, a limited partnership with its principal place of business in Madison, Wisconsin. Motion at 2.

         On May 9, 2019, Plaintiff filed its complaint in the Fifth Judicial District Court, Chaves County, alleging: (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; (3) violation of unfair trade practices under NMSA 1978 § 57-12-3; (4) breach of fiduciary duty; (5) debt and money due; (6) violation of the uniform commercial code under NMSA 1978 § 55-2-101; (7) estoppel; and (8) negligent misrepresentation. Compl. ¶¶ 14-54. Plaintiff alleges that “despite Plaintiff's complete performance of its obligations under the contract, Defendants failed to perform its remaining obligations under the contracts.” Compl. ¶ 11. On July 02, 2019, Defendants filed a NOTICE OF REMOVAL (Doc. No. 1) alleging diversity jurisdiction under 28 U.S.C. § 1332. On July 23, 2019, Defendants moved to transfer the case to the Western District of Wisconsin.

         Legal Standard

         “For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.” 28 U.S.C. § 1404(a). Whether to transfer a case is within the discretion of the trial court. William A. Smith Contracting Co. v. Travelers Indem. Co., 467 F.2d 662, 664 (10th Cir. 1972). In determining whether a venue change is appropriate, courts consider:

(1) the plaintiff's choice of forum; (2) the accessibility of witnesses and other sources of proof, including the availability of compulsory process to insure attendance of witnesses; (3) the cost of making the necessary proof; (4) questions as to the enforceability of a judgment if one is obtained; (5) relative advantages and obstacles to a fair trial; (6) difficulties that may arise from congested dockets; (7) the possibility of the existence of questions arising in the area of conflict of laws; (8) the advantage of having a local court determine questions of local law; and, (9) all other considerations of a practical nature that make a trial easy, expeditious and economical.

Chrysler Credit Corp. v. Country Chrysler, Inc., 928 F.2d 1509, 1516 (10th Cir. 1991). The party moving to transfer a case under 28 U.S.C. § 1404(a) bears the burden of establishing that the suit should be transferred. Id. at 1515. Merely shifting the inconvenience from one side to the other is not a permissible justification for a change of venue. Scheidt v. Klein, 956 F.2d 963, 966 (10th Cir. 1992).

         “Venue is appropriate in a district in which any defendant resides, if all defendants are residents of the State in which the district is located, ” or “a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred or a substantial part of property that is the subject of the action is situated.” 28 U.S.C. § 1391(b)(1), (2). “[V]enue is not limited to the district with the most substantial events or omissions, ” rather, more than one district may be an appropriate venue. Employers Mut. Cas. Co. v. Bartile Roofs, Inc., 618 F.3d 1153, 1165 (10th Cir. 2010). The Tenth Circuit requires a two-part analysis when reviewing appropriate venue under 28 U.S.C. § 1391(b)(2) (venue based on substantial events in the forum). Id. at 1166. First, the court must “examine the nature of the plaintiff's claims and the acts or omissions underlying those claims.” Id. (citing Gulf Ins. Co. v. Glasbrenner, 417 F.3d 353, 356 (2d Cir. 2005)). Second, the court must determine “whether substantial ‘events material to those claims occurred' in the forum district.” Id. Parties may satisfy the substantiality requirement by showing “acts and omissions that have a close nexus to the alleged claims.” Id. (internal quotes omitted). Once proper venues have been identified, this Court may transfer to an appropriate venue by agreement or in the interests of justice. See 28 U.S.C. § 1404(a).

         Discussion

         1. Proper Venue

         a. District of New Mexico

         The District of New Mexico is an appropriate venue for this case. Plaintiff raises claims primarily in breach of contract, but also in tort. While the record does not detail with much clarity where the underlying events took place, Plaintiff claims that New Mexico is “where the calves were born and where the contract was signed.” RESPONSE TO MOTION TO TRANSFER VENUE (Doc. No. 13, p. 7). The contract formation is material to Plaintiff's claims. The signing of the contract has a “close nexus” to a material event in these claims, namely contract formation. ...


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