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Niagra Bottling, LLC v. Orion Packaging Systems

May 14, 2012


The opinion of the court was delivered by: VIRGINIA A. Phillips United States District Judge



This breach of contract case arises from the alleged malfunctioning of several stretch wrapping machines used to wrap palettes of bottled water in clear plastic film for shipping. The machines were built by Defendant Orion Packaging Systems, LLC ("Orion") and sold by Defendant National Packaging Specialists, Inc. ("NPS") to Plaintiff Niagara Bottling, LLC. ("Niagara"). Niagara alleges various maladies ranging from the unusual (e.g., an uninstalled "hot knife guard") to the mundane (e.g., rust) afflicted the machines from the outset.

On April 11, 2012, Orion filed the Motion to Dismiss (Doc. No. 6) for lack of venue now before the Court; in it, Orion argues it is absent from this judicial district entirely, as are the allegedly faulty machines. Alternatively, Orion seeks a transfer of the case to a different forum, pursuant to 28 U.S.C. § 1404(a). Niagara filed a timely Opposition (Doc. No. 9) on April 23, 2012, and Orion filed a Reply (Doc. No. 10) on April 30, 2012. As discussed below, the Court GRANTS Orion's Motion and transfers this case to the United States District Court for the Eastern District of Pennsylvania.


A. Factual Background

By purchase order dated October 26, 2007, Niagara, styling itself "Buyer," requested five "Orion Model MA-44 Stretchwrapping Systems" from NPS and Orion, collectively styled "Seller." (See Ex. 1 to Compl. (Doc. No. 1).) The purchase order specified that two of the machines were to be shipped to Niagara facilities in Allentown, Pennsylvania; two to Groveland, Florida; and one to Ontario, California. (See id.) It also set forth various delivery and warranty requirements Niagara imposed on the "Vendor," though nowhere in the document was any party identified as the "Vendor." (See id.) Finally, the purchase order incorporated Niagara's "Standard Purchase Terms & Conditions," accessible to the order's recipient via the Internet, and then insisted that the order's terms control in the face of any of the Vendor's contrary terms. (See id.) Of note, the Standard Purchase Terms & Conditions contained a forum selection clause by which the parties submitted to the jurisdiction of California's state and federal courts, and agreed that the proper venue for resolution of any dispute arising out of their transaction would be "in the County of Orange, only." (See Ex. 2 to Compl. ¶ 16.)

Niagara created a revised purchase order, dated March 28, 2008, in which it noted that the two machines destined originally for Groveland, Florida, would instead be sent to Dallas, Texas, and that it would be entitled to liquidated damages of 5 percent of the purchase price per day if the machines did not arrive by April 25, 2008. (See id.) The revised purchase order otherwise retained the terms of the original order. (See id.)

Niagara contends when the stretch wrapping machines arrived, they tore plastic film excessively; lacked installed "hot knife guards," had sensors and controls that performed inadequately, and had damaged conveyor rollers and broken bolts; were rusty and cracked, overheated and seized, and otherwise failed to perform to specification. (Compl. ¶ 19.) Moreover, the machines sent to Dallas arrived late. (Id. ¶ 20.) This lawsuit followed.

B. Procedural History

On February 21, 2012, Niagara filed suit against Orion and NPS in the California Superior Court for the County of San Bernardino, apparently in contravention of its own forum selection clause. Niagara's Complaint raises claims for breach of written contract, breach of express warranty, breach of warranty of merchantability, and breach of warranty of fitness for a particular purpose. (See generally Compl.)

Orion, with NPS's concurrence, removed Niagara's Complaint to this Court on April 4, 2012, alleging that its removal was timely because Niagara did not serve Orion until March 5, 2012. (Not. of Removal ¶ 2 (Doc. No. 1).) Orion contends the Court has subject-matter jurisdiction over this action because the parties are of diverse citizenship: Orion is a Minnesota limited liability corporation whose sole member is Pro Mach, Inc., a Delaware corporation that conducts business principally in Ohio; NPS is a Delaware corporation with its principal place of business in New Jersey. Niagara is a California limited liability corporation; none of the materials before the Court at the time of removal, however, indicated the citizenship of Niagara's owners or members -- the relevant factor in determining the citizenship of a limited liability corporation when establishing diversity jurisdiction. Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006).

The Court therefore ordered the disclosure of the citizenship of Niagara's owners or members on or before Monday, May 7, 2012; those members are a California corporation and two California trusts. Consequently, it appears to the Court that the parties are of diverse citizenship.

Meanwhile, Orion filed the instant Motion to Dismiss for lack of venue, under Federal Rule of Civil Procedure 12(b)(3), or in the alternative, to transfer the action to either the Eastern District of Pennsylvania or the ...

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