The opinion of the court was delivered by: MARILYN PATEL, Chief Judge, District
MEMORANDUM AND ORDER Re: Defendant's Motion to Remand;
Plaintiff's Motion to Transfer
On August 13, 2004, plaintiff Frank Engels filed a complaint
seeking recovery of his unpaid sales commissions in Alameda
County Superior Court. On September 17, 2004, defendant Exel
Global Systems, Inc. ("Exel") removed the action to this court,
asserting jurisdiction based on diversity of citizenship. Now
before the court are Engels' motion to remand and Exel's motion
to transfer venue to the United States District Court for the
Northern District of Texas. Having considered the parties'
arguments and for the reasons set forth below, the court enters
the following memorandum and order.
Defendant Exel is a supply chain management company that
provides freight forwarding, warehousing, distribution services,
and other "logistics solutions" to customers in the manufacturing
and retail sectors. First Kelly Decl., Exh. F ¶ 6. Until his
resignation in February 2004, Engels was employed at Exel's
Hayward, California office and served as the company's Director
of Sales and Pricing for Latin America and the Carribean. Id. ¶
9; Notice of Removal, Exh. A ¶ 4. As part of his compensation,
Engels received a commission based on "his performance as an
employee." Notice of Removal, Exh. A ¶ 4. Engels now asserts that Exel refused to pay
him the full amount of the commissions due to him under his
contract of employment. Id. ¶ 10.
Exel disputes its liability for the unpaid commissions and
raises a host of claims against Engels, albeit not in this forum.
These claims arise out of Engels' relationship with Velocita
World Wide Logistics, Inc. ("Velocita"), one of Exel's
competitors in the market for logistics management services.
First Kelly Decl., Exh. F ¶¶ 6-7. According to Exel, Engels
provided Velocita with Exel's confidential marketing and pricing
data prior to his resignation from the company, thereby giving
Velocita an unfair competitive advantage in the logistics
management services market. Id. ¶ 7. Based on these
allegations, Exel filed suit against Engels in the District Court
of Dallas County, Texas on June 14, 2004, asserting numerous
causes of action relating to Engels' alleged misappropriation of
confidential business information. See generally id., Exh. A.
Exel's Texas action also seeks declaratory judgment as to the
amount of commissions owed to Engels. Id., Exh. F ¶¶ 50-53.
On August 12, 2004, Engels entered a special appearance in the
Dallas County District Court for the purpose of challenging that
court's exercise of jurisdiction over his person or property.
Id., Exh. D. In his pleadings, Engels asserted that he was a
resident of California and that his contacts with Texas were
insufficient to establish personal jurisdiction over him. Id.
¶¶ 1-7. However, before the Texas court could rule on the merits
of his defense of lack of personal jurisdiction, Engels filed a
Withdrawal of Special Appearance and Entry of Appearance and thus
consented to the court's jurisdiction with respect to the subject
matter of Exel's claims. Third Kelly Decl. ¶ 1 & Exh. A. Those
claims are currently pending in Dallas County District Court.
On August 13, 2004, the day after entering his special
appearance, Engels filed a complaint in Alameda County Superior
Court seeking to recover his unpaid sales commissions. Notice of
Removal, Exh. A. In addition to alleging breach of his contract
of employment, Engels' complaint asserts causes of action for
willful failure to pay wages due in violation of the California
Labor Code and unfair business practices in violation of
California Business & Professions Code § 17200. Id. ¶¶ 5-16.
Engels now alleges that Exel owes him $5 million in unpaid
commissions. Id., Exh. B at 1. On September 17, 2004, Exel removed the California action to
this court, asserting jurisdiction based on diversity of
citizenship. Notice of Removal ¶ 9. Specifically, the notice of
removal alleged that Exel is a New York corporation with its
principal place of business in Irving, Texas and that Engels is a
citizen of the state of California. Id. ¶¶ 5-6. Following the
removal of this action, on September 24, 2004, Exel filed a
motion to transfer venue pursuant to 28 U.S.C. § 1404(a), arguing
that the convenience of the parties and witnesses and the
interest of justice favored transferring the instant action to
the United States District Court for the Northern District of
Engels opposed Exel's motion to transfer, and on December 3,
2004, he filed a motion to remand the instant action to Alameda
Country Superior Court. Engels concedes that he was a resident of
California at all times during his employment with Exel. Second
Engels Decl. at 1. However, after Engels resigned from Exel, he
accepted an offer of employment from UTi, Inc. and served as
UTi's Vice President of Sales and Marketing for Latin America
from April 13, 2004 until September 23, 2004. First Engels Decl.
¶¶ 4-5 & Exh. A. On June 22, 2004, UTi transferred Engels to its
office in São Paolo, Brazil. Id. ¶ 3. After his transfer,
Engels served as the managing director of UTi's São Paolo office
and resided in Brazil until he was fired by UTi on September 23,
2004. Id. ¶¶ 3-5 & Exh. A at 1. Engels subsequently returned to
the United States and began working in Chicago, where he is
presently employed. Id. ¶ 10.
Engels now contends that because he resided in Brazil with the
intent to remain permanently at the time that this action was
filed, he was not a citizen of California or of any other state
at that time. Thus, according to Engels, this court lacks subject
matter jurisdiction and must remand this action to Alameda County
Superior Court. The discussion that follows addresses Engels'
motion to remand as well as Exel's motion to transfer venue.
As a general rule, an action is removable to a federal court
only if it might have been brought there originally.
28 U.S.C. § 1441(a). The removal statute is strictly construed, and the court
must reject federal jurisdiction if there is any doubt as to whether
removal was proper. Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th
Cir. 1996). The defendant bears the burden of proving the
propriety of removal. Id. (citing Harris v. Provident Life &
Accident Ins. Co., 26 F.3d 930, 932 (9th Cir. 1994)). Thus,
where removal jurisdiction is premised upon diversity of
citizenship, the defendant must establish that the court would
have had original jurisdiction over the action pursuant to
28 U.S.C. § 1332, which grants district courts the authority to
entertain any civil action "where the amount in controversy
exceeds the sum or value of $75,000 . . . and is between . . .
citizens of different States." 28 U.S.C. § 1332(a)(1). For
removal purposes, diversity of citizenship must exist at both the
time that the action was commenced in state court and at the time
of removal. Strotek Corp. v. Air Transp. Ass'n of Am.,
300 F.3d 1129, 1131 (9th Cir. 2002) (citation omitted).
II. Motion to Transfer Venue
A motion to transfer venue to another federal court may be
brought under 28 U.S.C. § 1404, which provides: "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."
28 U.S.C. § 1404(a). In adjudicating a motion to transfer, the court must
first determine that venue would be appropriate in the transferee
district. Id.; see also Goodyear Tire & Rubber Co. v.
McDonnell Douglas Corp., 820 F. Supp. 503, 506 (C.D. Cal. 1992).
Once the propriety of venue in the transferee district is
established, the court must then consider whether the criteria
set forth in section 1404(a) favor adjudicating the plaintiff's
claims in that forum. See Goodyear, 820 F. Supp. at 506. The
Ninth Circuit has characterized these criteria as embodying an
"individualized, case-by-case consideration of convenience and
fairness." Jones v. GNC Franchising, Inc., 211 F.3d 495, 498
(9th Cir.) (quoting Stewart Org., Inc. v. Ricoh Corp.,
487 U.S. 22, 29 (1988)), cert. denied, 531 U.S. 928 (2000). Among the
factors that a district court may consider in deciding whether
transfer is appropriate are: (1) the location where the relevant
agreements were negotiated and executed; (2) the state that is
most familiar with the governing law; (3) the plaintiff's choice
of forum; (4) the respective parties' contacts with the forum;
(5) the contacts relating to the plaintiff's cause of action in