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Hill v. Keliher

United States District Court, S.D. Texas, Houston Division

August 14, 2019

MARGARET KELIHER, et al, Defendants.



         Pending before the Court is Defendants' Motion to Transfer Venue, [Doc. No. 5 ("Defendants' Motion to Transfer Venue to the Northern District of Texas (Dallas Division)")], [hereinafter "Defendants' Motion"].[1] After considering the motion, response, and relevant law, The Court herein grants Defendants' Motion to Transfer the above-referenced action to the Northern District of Texas, Dallas Division.

         I. BACKGROUND

         This case is one of a long line of cases involving different permutations of the same parties. Most, if not all, of the prior cases were filed in Dallas County (state courts and the Northern District of Texas) because that is where all the underlying events took place. Plaintiff Hill III (hereinafter "Hill III" or "Plaintiff), a descendant of famed oilman H.L. Hunt, became embroiled in a string of lawsuits related to Hunt's estate and other somewhat related disputes with other family members. This litigation history involves at least fifteen state court cases, all of which were brought and heard in Dallas, Texas.[2] This case is also related, at least in terms of the involved parties, to Civil Action No. 3:07-cv-02020, Hill v. Schilling et al, Northern District of Texas (Dallas Division), and Civil Action No. 3:17-cv-494, Hill v. Watkins et al, Northern District of Texas (Dallas Division).

         In Hill v. Schilling et al., Civil Action No. 3:07-cv-02020 (the "02020 Action"), the parties reached a settlement agreement, the General Settlement Agreement ("GSA"), which was entered by the Court as the final judgment to resolve the disputes related to the estate with finality. In the GSA, the Court (the Northern District of Dallas) expressly retained continuing and exclusive jurisdiction over its Final Judgment, the GSA, and the parties. (02020 Action ECF No. 999 ¶ 45). The GSA contained various provisions releasing the Defendants from future lawsuits related to the same underlying actions at issue in that case amongst other agreed clauses in the GSA.

         On June 5, 2019, Hill III brought this suit against fifteen individuals, asserting claims for malicious prosecution; conspiracy related to malicious prosecution; and aiding, abetting, and providing substantial assistance relating to malicious prosecution. These claims arise out of two different lawsuits against Hill III, one civil and the other criminal. The first lawsuit, the civil dispute, was brought against Hill III in the Northern District of Texas by attorneys who had briefly represented him in a prior lawsuit to collect unpaid attorney's fees. Because of the pendency of the second criminal case, Hill III's attorneys advised him not to testify and the court entered judgment against Hill III and his wife for $21.9 million. [Doc. No. 1, Ex. Plaintiffs Original Petition ¶ 51]. Beyond that, the record is not clear whether that judgment has been appealed. The second lawsuit was a criminal charge for claims of felony mortgage fraud, which was brought in state court in Dallas, Texas. When the criminal court dismissed the charges against Hill III, Texas appealed to the Dallas Court of Appeals. Hill III contends that the affirmance of the dismissal of those charges demonstrated that the prosecution was "based upon the taint of prosecutorial misconduct and the undue influence exercised over Dallas District Attorney Craig Watkins by Lisa Blue, Hill Jr., and those working in concert with them." [Doc. No. 21 at 5]. Hill III insists that the instant suit is related to those cases and the alleged malicious misconduct only. The Defendants contend that this lawsuit is just another attempt to collaterally attack the GSA. [Doc. No. 5 at 7].

         Hill III filed the instant case in the 127th District Court of Harris County, Texas. Defendants removed it to federal court based on federal question jurisdiction. Defendants argue that Hill III is actually bringing legal challenges to the 2010 settlement, the GSA, and the Final Judgment of the Northern District of Dallas. They argue that his Original Petition makes clear that the actions leading up to the alleged malicious prosecution are related to the family's prior lawsuits, the actions of attorneys related to those prior lawsuits, and are intended to unseat the GSA and Final Judgment.[3]

         On July 19, 2019, Defendants filed a Motion to Transfer Venue to the Northern District of Texas, Dallas Division, pursuant both to 28 U.S.C. § 1404(a) and to a forum-selection clause they contend is in the GSA and Final Judgment governing this dispute. [Doc. No. 5]. Plaintiff filed a timely response opposing any transfer of venue in compliance with the scheduling order entered by the Court. [Doc. No. 21]. In his response, Hill III argues that the motion should be denied for four reasons: (1) that this Court does not have jurisdiction in the first instance; (2) that no valid forum selection clause covers his claims and the parties in this case; (3) that even if a forum selection clause is found to apply, that is should be disregarded on other grounds; and (4) that his choice of forum is entitled to substantial deference and the other private and public interest factors do not weigh it. [Doc. No. 21 at 1-2].


         A. The Order of Deciding Questions Unrelated to the Merits

         The Supreme Court has explained that "a federal court generally may not rule on the merits of a case without first determining that it has jurisdiction over the category of claim in suit (subject-matter jurisdiction) and the parties (personal jurisdiction)." Sinochem Int'l Co. v. Malay. Int'l Shipping Corp., 549 U.S. 422, 430-31 (2007) (citing Steel Co. v. Citizens for Better Env't, 523 U.S. 83, 93-102 (1998)). When multiple challenges are present before the Court, there is no mandatory sequence for resolving non-merits based issues. Id. at 435-36 (holding in the forum non conveniens context that "where subject-matter or personal jurisdiction is difficult to determine, and forum non conveniens considerations weigh heavily in favor of dismissal, the court properly takes the less burdensome course.").

         This Court presently has two non-merits motions pending before it: Plaintiffs Motion to Remand [Doc. No. 4] and the instant motion, Defendants' Motion to Transfer [Doc. No. 5]. Hill III has urged this Court to rule first on the Motion to Remand. [Doc. No. 21 at 2 n.1]. Although the Fifth Circuit has not expressly ruled on the issue, courts within the Fifth Circuit have held that, in accordance with Sinochem, a court may exercise its discretion in determining the order in which to address decisions not affecting the merits. Hardwick v. Factor, N. H-10-5249, 2011 WL 1831706, at *2 (S.D. Tex. May 9, 2011) (Rosenthal, J.) ("A court may decide a motion to transfer to another district before ruling on other options, and deciding the motion to transfer first is 'particularly appropriate where a related suit is already pending in the transferee district.'") (quoting Doubletree Partners, L.P. v. Land Am. Am. Title Co., No. 3-08-CV-1547-O, 2008 WL 5119599, at *2 (N.D. Tex. Dec. 3, 2008)); Curtis v. BP Am., Inc., 808 F.Supp.2d 976, 983 (S.D. Tex. 2011) (Rosenthal, J.) ("But while the absence of subject matter jurisdiction prevents a court from reaching a case's merits, a court may transfer a case without first determining whether it has subject matter jurisdiction over the case.") (citing In re LimitNone, LLC, 551 F.3d 572, 277-78 (7th Cir. 2008)); see also Tesoro Ref & Mktg. Co. LLC v. C.A.R. Enters., Inc., No. SA-18-CV-820-XR, 2018 WL 6050603, at *8 (W.D. Tex. Nov. 19, 2018) (Rodriguez, J.) ("[T]he Court may decide to proceed with determining venue before resolving the jurisdictional issue.").

         Accordingly, the Court finds it appropriate to first decide the issue of venue before the question of federal jurisdiction.

         B. Section 1404(a) Factors

         The general venue statute, 28 U.S.C. § 1391 controls a plaintiffs choice of venue. Under that section, a diversity action may be brought in "(1) a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is location; [or] (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 . . . ." 28 U.S.C. § 1391(b)(1)-(2). As the Fifth Circuit has explained, Congress tempered the effects of this general venue statute by enacting the venue transfer statute, 28 U.S.C. § 1404, the statute under which Defendants seek to transfer venue. In re Volkswagen of Am., Inc., 545 F.3d 304, 313 (5th Cir. 2008) (hereinafter "In re Volkswagen II”). "The underlying premise of § 1404(a) is that courts should prevent plaintiffs from abusing their privilege under § 1391 by subjecting defendants to venues that are inconvenient under the terms of § 1404(a)." Id. (citing Norwood v. Kirkpatrick, 349 U.S. 29, 32(1955)).

         28 U.S.C. § 1404(a) provides as follows:

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). "In order to obtain a new federal [venue], the statute requires only that the transfer be '[f]or the convenience of the parties, in the interest of justice.'" In re Volkswagen II, 545 F.3d at 314 (quoting Veba-Chemie A.G. v. M/V Getafix, 711 F.2d 1243, 1247 (5th Cir. 1983)). The movant must show "good cause" to transfer, which the Fifth Circuit has explained in the context of § 1404(a) means that

a moving party, in order to support its claim for a transfer, must satisfy the statutory requirements and clearly demonstrate that a transfer is "[f]or the convenience of parties and witnesses, in the interest of justice." Thus, when the transferee venue is not clearly more convenient than the venue chosen by the plaintiff, the plaintiffs choice should be respected. When the movant demonstrates that the transferee venue is clearly more convenient, however, it has shown good cause and the district court should therefore grant the transfer.

Id. at 315. To guide trial courts in this inquiry, the Supreme Court has established a list of both private interest factors and public interest factors affecting the convenience of the litigants and of the forum:

The factors pertaining to the private interests of the litigants included the "relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; possibility of view of premises, if view would be appropriate to the action; and all other practical problems that make trial of a case easy, expeditious and inexpensive." Gilbert, 330 U.S. at 508, 67 S.Ct. at 843. The public factors bearing on the question included the administrative difficulties flowing from court congestion; the "local interest in having localized controversies decided at home"; the interest in having the trial of a diversity case in a forum that is at home with the law that must govern the action; the avoidance of unnecessary problems in conflict of laws, or in the application of foreign law; and the unfairness of burdening citizens in an unrelated forum with jury duty. Id. at 509, 67 S.Ct. at 843.

Piper Aircraft Co. v. Reyno, 454 U.S. 235, 242 n.6 (1981) (citing Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947)). Accordingly, the Court weighs these factors as they apply to this case.

         Before turning to the individual factors, the Court notes the following: All the actions in the underlying dispute took place in Dallas. All Defendants mentioned in the Petition except one are in Dallas.[4] Defendants defenses' and federal jurisdiction claims are based on federal and state court rulings in Dallas. Dallas state court injunctions also exist governing portions of this wide web of legal disputes, whether relevant to this litigation or not.

         i. Private Interests Factors

         Defendants argue that transfer is warranted because the alleged wrongful conduct occurred in Dallas, the people involved in that alleged wrongful conduct are located in Dallas (as this dispute involved the Dallas County District Attorney's office and Hill's family, all of whom are in Dallas), all of the witnesses except for Hill III (the plaintiff, who now lives in Atlanta, Georgia) are in Dallas, and all of the Defendants except for one are located in Dallas. The Defendant who lives outside of Dallas, Tatham, is located in Houston, Texas. However, the Defendants point out that ...

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