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C&J Spec Rent Services, Inc. v. LEAM Drilling Systems, LLC

United States District Court, E.D. Texas, Marshall Division

July 10, 2019

C&J SPEC RENT SERVICES, INC., Plaintiff,
v.
LEAM DRILLING SYSTEMS, LLC ET AL, Defendants.

          MEMORANDUM ORDER

          ROY S. PAYNE, UNITED STATES MAGISTRATE JUDGE

         Before the Court is Defendants' Motion to Transfer Venue. (Dkt. No. 29.)[1] Within the Motion to Transfer, Defendants assert that the Southern District of Texas (“S.D. Tex.”) would be clearly more convenient than proceeding in the Marshall Division of the Eastern District of Texas (“E.D. Tex.”).[2] Defendants also assert that parallel proceedings are pending that originated in S.D. Tex. and that the first-to-file rule makes transfer appropriate to S.D. Tex. (Id. at 1.)

         Also before the Court is Defendants' Opposed Motion for Leave to Submit Supplemental Evidence (Dkt. No. 63), which seeks to file five additional exhibits for the Court. Defendants also filed an Opposed Motion for Leave to File a Sur-Sur-Reply in Support of its Motion to Transfer Venue. (Dkt. No. 78.)

         In Defendants' Opposed Motion for Leave to Submit Supplemental Evidence (Dkt. No. 63), Defendants seek leave to file Exhibits 13 through 17. In its response, Plaintiff withdrew its objections with respect to Exhibits 13 through 16. (Dkt. No. 72 at 2.) However, Plaintiff continued to oppose the Motion to Leave with respect to Exhibit 17. (Id.) The Court GRANTS Defendants' Opposed Motion for Leave (Dkt. No. 63) with respect to all exhibits, including Exhibit 17. The Court concludes that Exhibit 17 is being submitted to rebut evidence presented by Plaintiff in its Response and that Defendants have shown good cause for this filing.

         Defendants also filed an Opposed Motion for Leave to File a Sur-Sur-Reply. (Dkt. No. 78.) After consideration, the Court GRANTS this Motion as Defendants have shown good cause for this filing.

         I. FIRST-TO-FILE RULE

         Defendants argue that they filed an earlier (by a single day) declaratory judgment action in S.D. Tex. and that the first-to-file rule mandates that this case should proceed in S.D. Tex. (Dkt. No. 29 at 4 (citing Serv. Corp. Int'l v. Loewen Grp. Inc., No. CIV. A. H-96-3269, 1996 WL 756808, at *2 (S.D. Tex. Nov. 29, 1996) (citing West Gulf Maritime Ass'n v. ILA Deep Sea Local 24, 751 F.2d 721, 729 (5th Cir. 1985); Mann Mfg., Inc. v. Hortex, Inc., 439 F.2d 403, 407 (5th Cir. 1971); California Security Co-op, Inc. v. Multimedia Cablevision, Inc., 897 F.Supp. 316, 317 (E.D. Tex.1995))).)

         The first-to-file rule is inapplicable to this case. The Southern District has already decided that the first-filed case should yield to this action. As Judge Miller ruled: “The fact that CLR filed its declaratory judgment request here one day earlier than C&J filed its claim in the Eastern District does not give CLR first-filed priority because CLR is, in essence, merely seeking a declaration that it is not at fault; the affirmative claims belong to C&J. Equity requires that the court dismiss CLR's claim and transfer the counterclaims to the Eastern District of Texas.” LEAM Drilling Systems, LLC, et al. v. C&J Spec Rent Services, Inc. No. H-19-00411 (S.D. Tex. Mar. 7, 2019) (Dkt. No. 23 at 6).

         It bears noting that Defendant's motion seeks first “that the Court allow the Southern District of Texas to rule on C&J's Motion to Transfer Venue to this Court. Alternatively, Defendants … request that the Court grant Defendants' Motion to Transfer Venue to the Southern District of Texas.” (Dkt. No. 29 at 10). Defendants obtained their primary relief, the Southern District ruled on their motion. However, unsatisfied with that ruling, they ask this Court to reverse it.

         Given that the Southern District declaratory judgment action was transferred here, considerations of judicial and litigant economy as well as the just and effective disposition of disputes suggest that the first-to-file rule should not apply. See Mobility Elecs., Inc. v. Am. Power Conversion Corp., No. 5:07-cv-00083, 2007 WL 9724768 at *3 (E.D. Tex. Oct. 10, 2007) (Craven, J.) (explaining that a party may avoid “application of the first-to-file rule” by “show[ing] the existence of compelling circumstances, ” such as “considerations of judicial and litigant economy, and the just and effective disposition of disputes”). Defendants' request to transfer the case back to the Southern District pursuant to the first- to-file rule is therefore DENIED. See Apicore U.S. LLC v. Beloteca, Inc., No. 2:19-CV-00077-JRG, 2019 WL 1746079, at *6 (E.D. Tex. Apr. 18, 2019).

         II. APPLICATION OF THE INTEREST FACTORS

         “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 or to any district or division to which all parties have consented.” 28 U.S.C. § 1404(a). To determine whether venue transfer is appropriate under § 1404(a), the Fifth Circuit has identified several private and public interest factors. In re Volkswagen of Am., Inc., 545 F.3d 304, 315 (5th Cir. 2008) (“Volkswagen II”). The private interest factors include (1) the availability of compulsory process to secure the attendance of witnesses; (2) the cost of attendance for willing witnesses; (3) the relative ease of access to sources of proof; and (4) all other practical problems that make trial of a case easy, expeditious, and inexpensive. Id. The public interest factors include (1) the administrative difficulties flowing from court congestion; (2) the local interest in having localized interests decided at home; (3) the familiarity of the forum with the law that will govern the case; and (4) the avoidance of unnecessary problems of conflict of laws. Id.

         A plaintiff's choice of venue is not an express factor in the analysis. Seven Networks, LLC v. Google LLC, 2:17-CV-00442-JRG, 2018 U.S. Dist. LEXIS 146375, at *8 (citing Volkswagen II, 545 F.3d at 315). However, a moving defendant must demonstrate that the proposed venue is clearly more convenient that the current venue. Id. (citing Volkswagen II, 545 F.3d at 315). By applying this heightened standard, the plaintiff's choice of forum is given the appropriate deference. Id. (citing Volkswagen II, 545 F.3d at 315).

         Here, Plaintiff does not dispute that S.D. Tex. is an appropriate venue and instead argues that S.D. Tex. is not clearly more convenient. (See generally Dkt. No. 29.) Accordingly, the Court will focus its analysis on the public and private interest factors. Both parties agree that the following factors are neutral: (1) the familiarity of the forum with the law that will govern the case; and (2) the avoidance of unnecessary problems of conflict of laws. (Id. at 10; Dkt. No. 56 at 14.) The Court therefore finds these factors to be neutral. The Court will address each of the remaining public and private interest factors below.

         a. The availability of compulsory process to secure the ...


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