Federal District Court Opinions
ELAN SUISSE LTD. v. CHRIST, (E.D.Pa. 12-28-2006) ELAN
SUISSE LTD., Plaintiff, v. ROBERT D. CHRIST, Defendant.
CIVIL ACTION NO. 06-3901. United States District Court,
E.D. Pennsylvania. December 28, 2006
Memorandum and Order
GENE PRATTER, District Judge
Defendant Robert D. Christ has filed a Motion to Dismiss
plaintiff Elan Suisse Ltd.’s Complaint pursuant to Federal
Rule of Civil Procedure 12(b)(2) and (b)(3) for lack of
personal jurisdiction and improper venue, and in the
alternative, a Motion to Transfer this action to the U.S.
District Court for the District of Delaware or the U.S.
District Court for the Eastern District of Louisiana.
FACTS AND PROCEDURAL BACKGROUND
On April 27, 2006, Robert D. Christ filed a complaint in
the U.S. District Court for the District of Delaware
against Brett J. Cormick, Elan Suisse (Pty) Ltd., Elan
Suisse International Holdings (USA) LLC and other
defendants (the “Delaware Action”).[fn1] In the Delaware
Action, Mr. Christ alleges that Mr. Cormick induced Mr.
Christ to invest in a holding company that would operate to
promote and sell United States-based financial products and
investment vehicles to investors in South Africa.[fn2] Mr.
Christ alleges that, based on misrepresentations by Mr.
Cormick, Mr. Christ wired $250,000 to Mr. Cormick,
purportedly as an initial capital Page 2 infusion to help
launch the venture. In exchange for this investment, Mr.
Christ was to receive an equity interest in Elan Suisse
(Pty) Ltd., a South African corporation, and Elan Suisse
International Holdings (USA) LLC, a Delaware limited
liability company. In short, Mr. Christ alleges that
despite assurances from Mr. Cormick as to the use of the
purported “investment,” Mr. Cormick never gave Mr. Christ
any equity shares of the Elan Suisse entities, returned the
funds that Mr. Christ initially invested or provided any
return on Mr. Christ’s investment.
On May 22, 2006, the defendants in the Delaware Action,
including Mr. Cormick and the two Elan Suisse entities,
moved to dismiss that proceeding based on, among other
grounds, the District Court for the District of Delaware’s
alleged lack of personal jurisdiction over the defendants,
some of whom are citizens of, or corporations formed in,
foreign countries.[fn3]
A month after the Elan Suisse entities filed the Motion to
Dismiss for lack of personal jurisdiction in the District
of Delaware, plaintiff “Elan Suisse Ltd.” filed a complaint
in the present action against Mr. Christ in the Court of
Common Pleas of Montgomery County, Pennsylvania on June 23,
2006. On September 1, 2006, Mr. Christ removed the case to
this Court based on federal question jurisdiction inasmuch
as the Complaint alleges violations of the Lanham Act, 15
U.S.C. §§ 1125, et seq.[fn4] In the present
action, Plaintiff Elan Suisse Ltd. alleges, and Mr. Christ
admits, that he maintained a website, www.elansuisse.co.za,
based on an Internet Page 3 server located in South
Africa, in order to publish his “findings” as to Mr.
Cormick’s “misdeeds” and in order to prevent others from
being misled by Mr. Cormick as Mr. Christ had been. On his
website, Mr. Christ describes in detail Mr. Cormick’s
alleged misrepresentations and fraudulent dealings that are
the subject of the pending Delaware Action that Mr. Christ
initiated.
In the Delaware Action, Mr. Christ’s complaint stated that
he was a citizen of Pennsylvania residing in Pottstown,
Pennsylvania. See Def. Mem. Supp. Ex. C ¶ 2. Quite
appropriately then, when Elan Suisse Ltd. filed its
Montgomery County state court complaint less than two
months later, Plaintiff identified Mr. Christ as a resident
of Pottstown, Pennsylvania.
Following his removal of this action to this Court, Mr.
Christ filed a Motion to Dismiss or Transfer (Docket No.
2), Plaintiff filed a Memorandum in Response (Docket No.
3), and Mr. Christ filed a Reply Memorandum in Support of
his Motion to Dismiss or Transfer (Docket No. 6). On
December 21, 2006, the Court heard oral argument on these
motions.
In his Motion to Dismiss or Transfer, Mr. Christ claims
that on or about June 2, 2006, approximately 21 days before
Elan Suisse Ltd. filed its complaint in this action, he
moved from Pennsylvania to Abita Springs, Louisiana. Def.
Mem. Supp. 4. Mr. Christ asserts that he sold his house and
relocated his business to Louisiana so that, at the time
Elan Suisse Ltd. filed this current action, he did not
reside or operate a business in Pennsylvania. Id. at 5.
Thus, Mr. Christ argues that this Court lacks personal
jurisdiction over him. Mr. Christ also moves to dismiss the
Complaint for improper venue. As an alternative to his
Motion to Dismiss, Mr. Christ requests the Court to
transfer this action to either the District of Delaware, to
be consolidated with the Delaware Action that is currently
pending, or to the Eastern District of Louisiana, where Mr.
Christ currently resides. Plaintiff opposes both dismissal
and transfer of this action. Elan Suisse Page 4 Ltd.
argues that Mr. Christ was a resident of Pennsylvania
through at least early June 2006 which allows an inference
that Mr. Christ operated the website in question from his
home in Pennsylvania from October 2005 through June 2006.
Thus, Plaintiff argues that personal jurisdiction is
appropriate and venue is proper in the Eastern District of
Pennsylvania.
For the reasons stated below, the Court will grant Mr.
Christ’s Motion to Transfer and will transfer this action
to the U.S. District Court for the District of Delaware to
be consolidated with the related action pending in that
court. Because such a transfer is appropriate, the Court
will not address Mr. Christ’s argument that this Court
lacks personal jurisdiction over him and will deny Mr.
Christ’s Motion to Dismiss without prejudice.[fn5]
DISCUSSION
Mr. Christ asserts that venue should be transferred
pursuant to 28 U.S.C. § 1400,[fn6] § 1404(a)
Page 5 or § 1406(a). Section 1406(a)[fn7] permits a
district court to transfer venue when a case is “filed . .
. in the wrong division or district.” 28 U.S.C. §
1406(a). Mr. Christ argues that under 28 U.S.C. §
1391,[fn8] venue is “wrong” here in this district because
Mr. Christ does not reside in this district and a
“substantial part of the events or omissions giving rise to
the claim” did not occur in this district. However,
§ 1406(a), by its own terms, only applies to cases
that were “filed” in this Court, which is not the case
here; rather, Mr. Christ properly removed this action to
this Court pursuant to 28 U.S.C. § 1441(a) after it
had been “filed” elsewhere. See Notice of Removal ¶
4 (Docket No. 1). As the Supreme Court has clearly stated,
once a case is properly removed to district court, transfer
of venue pursuant to 28 U.S.C. § 1406(a) is not
available. See Page 6 Polizzi v. Cowles Magazines, Inc.,
345 U.S. 663, 665 (1953) (holding that 28 U.S.C. §
1406(a) and § 1391 had no application to an action
that had been removed from state court pursuant to 28
U.S.C. § 1441(a)); see also Wallace v. Mercantile
County Bank, 2006 U.S. Dist. LEXIS 82565 at *9 (E.D. Pa.
2006) (“If a case is properly removed pursuant to §
1441(a), venue is properly laid, and the removed action may
not be challenged under § 1391. Thus, §
1406(a), which governs improper venue, does not apply to a
properly removed action.” (citation omitted)). Therefore,
this Court may not transfer or dismiss this case pursuant
to § 1406(a).[fn9]
In a case that has been removed from state court, a
district court may, however, entertain a motion to transfer
venue pursuant to § 1404(a).[fn10] Wallace, 2006
U.S. Dist. LEXIS 82565 at *9. Requests for transfer under
§ 1404(a) may be granted when venue is proper in
both the original and the requested venue. Jumara v. State
Farm Ins. Co., 55 F.3d 873, 878 (3d Cir. 1995);
Schiller-Pfeiffer, Inc. v. Country Home Prods., 2004 U.S.
Dist. LEXIS 24180 at *28 (E.D. Pa. 2004). Under §
1404(a), district courts have broad discretion “to
adjudicate motions for transfer according to an
`individualized, case-by-case consideration of convenience
and fairness.'” Stewart Org., Inc. v. Ricoh Corp., 487 U.S.
22, 29 (1988) (quoting Van Dusen v. Barrack, 376 U.S. 612,
622 (1964)). The Court of Appeals for the Third Circuit has
outlined several factors Page 7 for the district court to
consider when adjudicating a motion to transfer.[fn11] The
Court acknowledges the familiar maxim that in considering a
transfer request, “a plaintiff’s choice of forum is
entitled to great weight and is not to be disturbed unless
the balance of convenience strongly favors the defendants’
forum.” Blanning v. Tisch, 378 F. Supp. 1058, 1060 (E.D.
Pa. 1974) (citing Shutte v. Armco Steel Corp., 431 F.2d 22
(3d Cir. 1970), cert. denied, 401 U.S. 910 (1971). However,
the pendency of a related case in its early phases in the
transferee forum is a powerful reason to grant a change of
venue. Blanning, 378 F. Supp. at 1061.
Pursuant to § 1404(a) a court may transfer a case:
(1) to a district where the case could have been brought;
and (2) where the convenience of parties and witnesses, and
the interest of justice weigh in favor of the transfer.
Wallace, 2006 U.S. Dist. LEXIS 82565 at *9 (citing 28
U.S.C. § 1404(a)). With respect to the first
requirement, this case clearly could have been brought in
the Eastern District of Louisiana, where Mr. Christ
currently resides. See 28 U.S.C. § 1391(a)
(providing that an action may be brought in “a judicial
district where any defendant resides, if all defendants
reside in the same State”). However, Mr. Christ argues that
Plaintiff’s claims also could have been brought as
counterclaims in the pending action in the District of
Delaware. See Fed.R.Civ.P. 13. Mr. Christ claims that the
parties to this action are also parties Page 8 to the
Delaware Action and that the claims pending in both actions
revolve around the same nucleus of facts.
Notwithstanding the statement in Plaintiff’s Memorandum of
Law that “the parties in the State of Delaware District
Court action, are not the same as the parties in [Plaintiff
Elan Suisse Ltd.’s] current action,” at oral argument on
this motion, counsel for Elan Suisse Ltd. admitted that
“Elan Suisse (Pty) Ltd.,” one of the defendants in the
Delaware Action, is in fact the same entity as “Elan Suisse
Ltd.,” the Plaintiff in this case. Pl.’s Mem. Response 5.
At oral argument, counsel for Mr. Christ argued that
although Plaintiff’s claims in the current action pertain to
Mr. Christ’s alleged defamatory statements on his website,
because Mr. Christ created the website as a result of Mr.
Cormick’s alleged fraudulent activity, which is the basis
of Mr. Christ’s Delaware Action, the facts and
circumstances surrounding the two actions are the same.
Counsel for Plaintiff Elan Suisse Ltd. agreed that
Plaintiff’s current claims could have been brought as
counterclaims in the Delaware Action. Counsel for Elan
Suisse Ltd. stated that one of the reasons Plaintiff
elected not to bring counterclaims in the Delaware Action
was because of concerns that the Delaware court lacked
personal jurisdiction over the Elan Suisse defendants. With
respect to Plaintiff’s choice of forum in the current
action, rather than submitting to the Delaware court’s
jurisdiction and bringing counterclaims against Mr. Christ,
the Elan Suisse defendants filed a motion to dismiss the
Delaware Action for lack of personal jurisdiction, and then
one month later, one of the same Elan Suisse defendants
filed suit in this Court against Mr. Christ, now,
ironically, defending itself against a motion to dismiss
for lack of personal jurisdiction.
Mr. Christ argues that because a similar case is currently
pending in Delaware, in the Page 9 interest of conserving
the courts’ time and resources, this action should be
transferred to the District of Delaware for consolidation
with the Delaware Action. The Court agrees. Rather than
having this Court and the District Court for the District
of Delaware each address one of the dueling motions to
dismiss for lack of personal jurisdiction, the Court finds
that the appropriate course would be to transfer this
action to the District Court for the District of Delaware
to be consolidated with the related action currently under
way there.
As noted above, the presence of a related case in the
transferee forum is a powerful reason to grant a change of
venue. Blanning, 378 F. Supp. at 1061. In addition, at oral
argument, counsel for the Plaintiff could not provide any
reason why this action should not be transferred to
Delaware, aside from Plaintiff’s argument that venue is
proper here and because of the motion to dismiss that is
pending in the Delaware court.
It would be no less convenient or more burdensome for Elan
Suisse Ltd. to assert its claims as counterclaims in the
Delaware Action than it would be to conduct a separate
action here. If anything, it should be both more convenient
and less burdensome for all parties to litigate these
issues on a consolidated basis. Elan Suisse Ltd. is a South
African corporation whose principal, Mr. Cormick, is
citizen of Australia. The non-Elan Suisse parties in the
Delaware Action are all foreign nationals or foreign
business entities.[fn12] Mr. Christ is a resident of
Louisiana. Thus, whether or not these cases continue
separately or on a consolidated basis in Page 10
Delaware, extensive travel during discovery and trial will
likely be required. Pursuing consolidated litigation will
at least decrease the need for multiple depositions of the
same parties involving the same factual issues. In
addition, in response to Mr. Christ’s motion, Plaintiff has
not offered a single reason why venue is more convenient
for the parties or witnesses in Pennsylvania than in
Delaware (or for that matter, why venue would be less
convenient in Delaware than in Pennsylvania). Plaintiff has
not argued that Elan Suisse Ltd. has any ties to
Pennsylvania that necessitate conducting litigation here.
The Court surmises that Plaintiff chose Pennsylvania as a
forum because Mr. Christ resided in Pennsylvania when he
created and, at least to some extent, maintained the
website in question.[fn13] Although the legal claims in the
current action and the Delaware Action are different, upon
consideration of a careful reading of the complaint in the
Delaware Action, the Court agrees that the facts and
circumstances surrounding both actions sufficiently align
such that consolidation of these actions would be
appropriate. See Schiller-Pfeiffer, 2004 U.S. Dist. LEXIS
24180 at *31 (transferring venue pursuant to §
1404(a), even though the claims of the two cases were not
exactly the same, because the claims arose from the same set
of facts and occurrences). Furthermore, at oral argument in
this case counsel for both parties noted that discovery had
not begun in either the current action or the Delaware
Action. As such, by transferring this action to Delaware,
the Delaware district court would be able to set a
consolidated schedule for carrying out discovery and other
matters and address discovery disputes. All things being
equal, since Wilmington, Delaware and Philadelphia,
Pennsylvania are approximately 30 miles apart, if Elan
Suisse Ltd. (or Elan Suisse (Pty) Ltd.) is Page 11 able
to maintain a lawsuit in the Eastern District of
Pennsylvania, then that entity should be able to defend a
lawsuit in the District of Delaware. Conversely, if Mr.
Christ is able to bring an action in the District of
Delaware, then he should be able to defend an action there
as well.
CONCLUSION
For the reasons stated above, Mr. Christ’s Motion to
Dismiss will be denied and Mr. Christ’s Motion to Transfer
this action to the U.S. District Court for the District of
Delaware will be granted.[fn14] An appropriate Order
follows. Page 12
ORDER
AND NOW this 28th day of December, 2006, upon consideration
of Defendant Robert D. Christ’s Motion to Dismiss or
Transfer (Docket No. 2), Plaintiff Elan Suisse Ltd.’s
Response to Defendant’s Motion to Dismiss or Transfer
(Docket No. 3), and Defendant’s Reply Memorandum (Docket
No. 6), for the reasons stated in the attached Memorandum,
it is ORDERED as follows:
1. Defendant Robert D. Christ’s Motion to Dismiss is
DENIED without prejudice;
2. Defendant Robert D. Christ’s Motion to Transfer is
GRANTED and this action is transferred to the United
States District Court for the District of Delaware, to be
docketed as related to Robert D. Christ v. Brett J.
Cormick et al., Civil Action No. 06-275.