The opinion of the court was delivered by: Elizabeth D. Laporte United States Magistrate Judge
ORDER DENYING MOTION TO TRANSFER TO SOUTHERN DISTRICT OF TEXAS AND GRANTING MOTION TO TRANSFER TO THE CENTRAL DISTRICT OF CALIFORNIA
In this commercial contract cross-action, Defendants have filed a Motion to Transfer Venue, arguing alternatively that: (1) the action should be transferred to the Southern District of Texas pursuant to 28 U.S.C. § 1404; or (2) the action should be transferred to the Central District of California because it was filed in an improper district under 28 U.S.C. § 1391. Plaintiff counters that venue is proper in the Northern District of California, and that this is a more convenient forum and there is no basis for the Court to transfer the case to the Southern District of Texas. For the following reasons, the Motion to Transfer to the Southern District of Texas pursuant to 28 U.S.C. § 1404 is DENIED, and the Motion to Transfer to the Central District of California on the basis of improper venue is GRANTED.
Plaintiff Zhejiang Ouhai International Trade Corp. ("Ouhai") is China-based corporation. Compl. ¶ 1; Li Decl. ¶ 3. Ouhai's July 22, 2009 Complaint brought claims against Defendants Southern California Valve, Inc., Southern California Valve Equipment Company, Inc., Southern California Valve Management Company, Inc., and Southern California Valve Property Holdings, Inc. (collectively "SVC"). SVC is a California corporation with its principal place of business in Santa Fe Springs, California. Compl. ¶¶ 2-6; Bullard Decl. ¶¶ 7, 11, 15, 19. The Complaint is based on diversity jurisdiction and generally alleges that, pursuant to a series of purchase orders by SVC, Ouhai delivered valve products to SVC's authorized agent in China where they were inspected and accepted and then sent on to SVC in Long Beach, California. Compl. ¶¶ 12-29. The Complaint states that SVC has not paid Ouhai in full for these valves and brings claims for breach of contract, unjust enrichment, common counts and fraud. Id.
In response to Ouhai's Complaint, on August 12, 2009 SVC filed an Answer and Counterclaim. SVC's Counterclaim for breach of contract and breach of warranty relates to a transaction for the sale of valves, allegedly between Ouhai and SVC's sales office in Houston, Texas, which SVC claims were defective and did not operate properly in the field during customary operation. Counterclaim at ¶¶ 4-6. On November 14, 2009, SVC filed an Amended Answer and Counterclaim stating identical counterclaims but changing its response to some of the allegations in the Complaint. Notably, in SVC's initial Answer, it admitted the allegations of paragraph 7 of the Complaint, that it "is one of the largest West Coast full range, field service companies, and supplies products and/or services in this judicial district." See Answer and Counterclaim at ¶ 4. In its Amended Answer, SVC changed its response to deny this allegation in its entirety. See Amended Answer and Counterclaim at ¶ 4. Counsel for SVC states that the initial response was an error as he had always intended to deny this factual allegation. See Caballero Decl. ¶ 4. Mr. Caballero notes that he made clear to Plaintiff's counsel from the beginning that SVC intended to challenge venue, and SVC denied that venue was proper even in its initial answer. Id. ¶¶ 5, 7.
On November 3, 2009, this Court held a Case Management Conference in which it set an expedited briefing and hearing schedule on the Motion to Transfer, and SVC timely filed its Motion on November 20, 2009.
SVC argues that the case should be transferred to the Southern District of Texas pursuant to 28 U.S.C. § 1404(a): "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." Under this statute, whether an action should be transferred involves a two-step inquiry. The transferor court must first determine whether the action "might have been brought" in the transferee court, and then the court must make an "individualized, case-by-case consideration of convenience and fairness." Inherent.com v. Martindale-Hubbell, 420 F. Supp. 2d 1093, 1098 (N.D. Cal. 2006) (Judge Patel) (citing Hatch v. Reliance Ins. Co., 758 F.2d 409, 414 (9th Cir.1985); Jones v. GNC Franchising, 211 F.3d 495, 498 (9th Cir. 2000)). The burden is on Defendants to show that transfer is needed. See Commodity Futures Trading Comm'n v. Savage, 611 F.2d 270, 279 (9th Cir.1979).
With respect to the second prong of the analysis, the statute instructs the Court to consider at least three factors in deciding whether to transfer a case to another court: (1) convenience of parties; (2) convenience of witnesses; and (3) the interest of justice. Ninth Circuit precedent requires that a fourth factor be weighed: the plaintiff's choice of forum. See Securities Investor Prot. Corp. v. Vigman, 764 F.2d 1309, 1317 (9th Cir. 1985). "Weighing of these factors for and against transfer involves subtle considerations" and is left to the discretion of the transferor court. Savage, 611 F.2d at 279. In determining the convenience of the parties and witnesses and the interests of justice, a court may consider a number of factors, including: (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 the chosen forum, (6) the differences in the costs of litigation in the two forums, (7) the availability of compulsory process to compel attendance of unwilling non-party witnesses, and (8) the ease of access to sources of proof. Jones, 211 F.3d at 498-99.
In the usual case, unless the balance of the section 1404(a) factors weighs heavily in favor of the defendants, "the plaintiff's choice of forum should rarely be disturbed." Securities Investor, 764 F.2d at 1317; see also Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986) ("defendant must make a strong showing... to warrant upsetting the plaintiff's choice of forum"). However, "[i]f the operative facts have not occurred within the forum of original selection and that forum has no particular interest in the parties or the subject matter, the plaintiff's choice is entitled only to minimal consideration." Pacific Car and Foundry Co. v. Pence, 403 F.2d 949, 954 (9th Cir. 1968).
Alternatively, SVC argues that venue is improper in the Northern District of California under 28 U.S.C. § 1391, and the case should have been filed in the Central District of California. Pursuant to 28 U.S.C. § 1391(a):
A civil action wherein jurisdiction is founded only on diversity of citizenship may, except as otherwise provided by law, be brought only in (1) a judicial district where any defendant resides, if all defendants reside in the same State, (2) 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, or (3) a judicial district in which any defendant is subject to personal jurisdiction at the time the action is commenced, if there is no district in which the action may otherwise be brought.
Pursuant to section 1391(c):
A "corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced. In a State which has more than one judicial district and in which a defendant that is a corporation is subject to personal jurisdiction at the time an action is commenced, such corporation shall be deemed to reside in any district in that State within which its ...