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Securities and Exchange Commission v. Jones

United States District Court, Ninth Circuit

December 13, 2013

IN THE MATTER OF AN APPLICATION TO ENFORCE ADMINISTRATIVE SUBPOENAS OF THE SECURITIES AND EXCHANGE COMMISSION, Petitioner,
v.
BOBBY JONES, RAYMON CHADWICK, TERRY JOHNSON, INNOVATIVE GROUP, REDWATER FUNDING GROUP, LLC and EXPECTRUM, LLC, Respondents.

ORDER DENYING MOTIONS FOR CHANGE OF VENUE [DKT Nos. 14, 16, 17, 18, 19, 20]

DEAN D. PREGERSON, District Judge.

Before the court are motions for change of venue filed by Respondents Bobby Jones, Raymon Chadwick, Terry Johnson, Innovative Group, Redwater Funding Group, LLC, and Expectrum, LLC. The motions are briefed and suitable for adjudication without oral argument. Having considered the parties' submissions, the court now adopts the following order.

I. BACKGROUND

On November 8, 2013, the Securities and Exchange Commission (SEC) applied for an order compelling compliance by Respondents with administrative subpoenas served on Respondents on August 26, 2013. (DKT No. 1.) The court will address this application in a separate order.

During November 22 through 27, Respondents filed pro se motions for change of venue to the United States District Court for the Northern District of Texas. (DKT Nos. 14, 16-20.) With the exception of the Respondents' names, each of the six motions contain identical text.

The only relevant fact alleged by Respondent is that "the majority of defendant's/parties reside in the Northern District of Texas." (Mots. at 2.) Five of the six Respondents list addresses in various Texas cities in their moving papers, (DKT Nos. 16-20), while the sixth, Bobby Jones, lists an address in Phoenix, Arizona (DKT No. 14).

II. LEGAL STANDARD

28 U.S.C. § 1404(a) provides that "[f]or 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." In considering a motion for a change of venue, the court must consider, as a threshold matter, if venue in the requested district would have been proper. If so, the Court must then balance the convenience of the parties, the convenience of the witnesses, and the interests of justice. E. & J. Gallo Winery v. F. & P. S.p.A. , 899 F.Supp. 465, 466 (E.D. Cal. 1994).

The moving party bears the burden of showing the balance of inconveniences to it. E. & J. Gallo Winery , 899 F.Supp. at 466. "The defendant must make a strong showing of inconvenience to warrant upsetting the plaintiff's choice of forum." Decker Coal Co. v. Commonwealth Edison Co. , 805 F.2d 834, 843 (9th Cir. 1986).

III. DISCUSSION

The Court first considers whether this suit could have been brought in the district to which Respondents seek to transfer this action. Venue in a federal question case such as this one is governed by 28 U.S.C. § 1391(b). Subsection (b) provides that venue is proper only in a judicial district: (1) where any defendant resides; (2) where a substantial part of the events or omissions giving rise to the claim occurred; or (3) where any defendant may be found, if there is no district in which the action may otherwise be brought. See 28 U.S.C. § 1391(b)(1)-(3).

Respondents assert, in conclusory fashion, that this action could have been brought in the Northern District of Texas. (Mots. at 2.) The SEC does not appear to contest this assertion. The court does not have the facts before it necessary to reach a finding on this question. Nevertheless, because it will not affect the outcome of its analysis, the court assumes for the purposes of this motion that the action could have been brought in the Northern District of Texas.

The Court is next tasked with determining whether Respondents have demonstrated that the transfer is warranted. The first consideration under § 1404(a) is convenience to the parties and witnesses. The SEC asserts, and the court agrees, that such convenience factors carry little weight in the context of a summary enforcement proceeding such as the present one. (Opp. at 3.) As the SEC notes, federal securities laws authorize the SEC to seek to enforce its administrative subpoenas in streamlined enforcement proceedings. See SEC v. McCarthy , 322 F.3d 650, 655-59 (9th Cir. 2003) (explaining that the Exchange Act authorizes summary proceedings to enforce SEC subpoenas).[1] Unlike civil lawsuits, summary enforcement proceedings do not typically involve discovery, testimony from parties or witnesses, or the presentation of evidence. See U.S. v. Firestone Tire & Rubber Co. , 455 F.Supp. 1072, 1078 (D.D.C. 1978) ("A proceeding to enforce a subpoena or a special order is summary in nature, and except in the most extraordinary circumstances, discovery and testimony are not allowed."). As a result, the inconvenience to parties and witnesses associated with litigation, as may be considered under § 1404(a), is largely eliminated. See, e.g., FTC v. Carter , 464 F.Supp. 633, 637 (D.D.C. 1979 ("in summary proceedings such as this testimony from parties or witnesses is rarely necessary, " thereby "eliminat[ing] a significant convenience factor involved in the § 1404(a) determinations"). In the case at bar, Respondents have made no attempt to explain how the minimal burdens placed on them by this summary enforcement proceeding constitutes undue inconvenience so as to justify a transfer of venue.

Nor have Respondents explained how the interests of justice are in any way served by a change in venue to the Northern District of Texas. Respondents merely assert, with no explanation, that a change in venue would serve the interests of justice. (Mots. at 3.)

In sum, the court finds that Respondents have failed to meet their burden of demonstrating why Plaintiff's choice of venue should be disturbed.

III. CONCLUSION

For the foregoing reasons, the Court DENIES Respondent's motion to transfer.

IT IS SO ORDERED.


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