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Strategic Power Systems, Inc. v. Sciemus, Ltd.

United States District Court, W.D. North Carolina, Charlotte Division

August 8, 2017

STRATEGIC POWER SYSTEMS, INC., Plaintiff,
v.
SCIEMUS, LTD; ANDRE FINN; and STEFAN GEISSE, Defendants.

          ORDER

          DAVID C. KEESLER UNITED STATES MAGISTRATE JUDGE.

         THIS MATTER IS BEFORE THE COURT on “Defendant Sciemus, Ltd. And Stefan Geisse's Motion To Transfer Pursuant To 28 U.S.C. § 1404 Or, In The Alternative, To Dismiss Pursuant To Rules 9 And 12” (Document No. 24). This motion has been referred to the undersigned Magistrate Judge pursuant to 28 U.S.C. § 636(b), and is ripe for disposition. Having carefully considered the motion, the record, and applicable authority, the undersigned finds that the pending motion to transfer should be granted.

         BACKGROUND

         Strategic Power Systems, Inc. (“Plaintiff” or “SPS”) initiated this action with the filing of a “Complaint” (Document No. 1) in the Superior Court of Mecklenburg County, North Carolina, on November 10, 2016. The original Complaint asserts that Sciemus, Ltd. (“Defendant” or “Sciemus”) breached its fiduciary duty to Plaintiff in its capacity as a director of SPS by tortiously interfering with business relationships, fraudulently concealing, and committing unfair and deceptive trade practices. (Document No. 1-1, p.1). Plaintiff further alleged that Defendant engaged in misconduct and breached its duties to Plaintiff by, among other things, engaging in “self-dealing and abuse of an “Exclusivity Clause, ” which breached its fiduciary duties to SPS. (Document No. 1-1, p.8).

         Plaintiff SPS is a North Carolina corporation with a principal place of business in Charlotte, North Carolina, and “is an engineering and information technology company providing highly specialized proprietary data collection and analytics services to various industries, including power generation.” (Document No. 1-1, pp.2-3). Defendant Sciemus is organized under the laws of England and Wales, with a headquarters in London, England, and “is a data and analytics company advising the power generation insurance sector, among others, on expected asset behavior and risk quantification, over asset lifespan.” Id.

         On November 14, 2016, this case was “designated to the North Carolina Business Court by Order of the Chief Justice of the North Carolina Supreme Court.” (Document No. 1-2, p.1).

         On December 21, 2016, Defendant filed its “Notice Of Removal” (Document No. 1) with this Court. Defendant Sciemus' “Notice…” asserted that removal to this Court was “preliminarily proper” as the “District Court in the federal judicial district encompassing the Superior Court where this suit was originally filed.” (Document No. 1, p.5).

However, Sciemus denies that venue was properly laid in the Superior Court because, inter alia, filing this action in North Carolina was in violation of the exclusive jurisdiction and venue provisions of the Shareholder Agreement. Sciemus reserves all defenses as to jurisdiction and venue which will be presented to this Court at the appropriate procedural juncture.

Id.

         On January 27, 2017, “Defendant Sciemus, Ltd.'s Motion To Transfer Pursuant To 28 U.S.C. § 1404 Or, In The Alternative, To Dismiss Pursuant To Rules 9 And 12” (Document No. 13) was filed, asserting that this matter should be transferred to the United States District Court for the Southern District of New York, or dismissed.

         On February 10, 2017, Plaintiff responded by filing an “Amended Complaint” (Document No. 16) and a “…Response In Opposition To Defendant Sciemus, Ltd.'s Motion To Dismiss” (Document No. 17). Based on Plaintiff's timely Amended Complaint, the undersigned issued a “Memorandum And Recommendation” (Document No. 19) recommending that “Defendant Sciemus, Ltd.'s Motion To Transfer Pursuant To 28 U.S.C. § 1404 Or, In The Alternative, To Dismiss Pursuant To Rules 9 And 12” (Document No. 13) be denied as moot. The “Memorandum And Recommendation” (Document No. 19) was later adopted by the Honorable Robert J. Conrad, Jr. on July 13, 2017. (Document No. 29).

         Plaintiff's Amended Complaint, inter alia, adds Finn and Stefan Geisse (“Geisse”) as Defendants. (Document No. 16, p.1). The Amended Complaint asserts the following claims: (1) breach of fiduciary duty (against all Defendants); (2) fraud (against Finn and Sciemus); (3) and unfair and deceptive trade practices (against all Defendants). (Document No. 16, pp.11-15).

         The Amended Complaint includes the following “facts applicable to all counts.”

Based on the representations of Sciemus's CEO Finn that Sciemus would use its existing business relationships to expand SPS into the insurance market, SPS agreed to begin working with Sciemus. The parties also entered into the November 15, 2010 Stockholders Agreement (the “Stockholders Agreement”), whereby Sciemus became a minority shareholder and acquired the power to appoint a Director of SPS, based on the understanding that Sciemus would follow through on its promise to promote their partnership within the insurance industry. As part of the trust placed in Sciemus as a new shareholder and de facto Director of SPS, the Stockholders Agreement provided that SPS would be prevented from licensing its valuable energy data in the insurance market without Sciemus's prior approval (“Exclusivity Clause”).
. . .
During this entire relationship, however, Sciemus never produced a single business opportunity for SPS and never promoted the partnership as promised by Finn.
. . .
The purpose of SPS's relationship with Sciemus, both as a licensee of SPS's data and as appointor of one of SPS's Directors, was to open new business opportunities in the insurance space and for Sciemus to present business opportunities to SPS through its contacts in the power generation insurance sector.

(Document No. 16, pp.5-6) (emphasis added).

         Now pending before the Court is Defendants' renewed “…Motion To Transfer Pursuant To 28 U.S.C. § 1404 Or, In The Alternative, To Dismiss Pursuant To Rules 9 And 12” (Document No. 24), filed on March 15, 2017. The pending motion has been fully briefed, and immediate review and disposition is now appropriate.

         STANDARD OF REVIEW

         Regarding a change of venue, 28 U.S.C. § 1404 provides that:

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 addition, previous decisions by this Court are instructive.

Even if venue in a jurisdiction is proper, a court may “for the convenience of parties and witnesses, in the interest of justice, ” transfer the action to another district where venue is proper. 28 U.S.C. § 1404(a) (2006). This court has noted that § 1404(a) is intended to place discretion in the district court to adjudicate motions for transfer on an “individualized, case-by-case basis” of convenience and fairness to the parties. AC Controls Co. v. Pomeroy Computer Res., Inc., 284 F.Supp.2d 357, 360 (W.D. N.C. 2003) (quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29, 108 S.Ct. 2239, 2243 (1988)). In this case, to consider the convenience and fairness to the parties of a transfer, the validity of the forum selection clause must be determined.
. . . The Supreme Court has held that forum selection clauses are prima facie valid unless the objecting party can prove that enforcement of the clause would be unreasonable. See Bremen v. Zapata, 407 U.S. 1, 10, 92 S.Ct. 1907, 1913, 32 L.Ed.2d 513 (1972). Case law has developed standards to determine when enforcement of a forum selection clause would be “unreasonable:” (1) if the formation of the clause was procured by fraud or overreaching, (2) if the complaining party will be deprived of his day in court because of the inconvenience or unfairness of the selected forum, (3) the fundamental unfairness of the chosen law will deprive the plaintiff of a remedy, or (4) enforcement of the clause would contravene a strong public policy of the state. See Allen v. Lloyd's of London, 94 F.3d 923, 928 (4th Cir. 1996) (citing Carnival Cruise Lines v. Shute, 499 U.S. 585, 595, 111 S.Ct. 1152, 1528, 113 L.Ed.2d 622, ___ (1991); See, e.g., Bremen, 407 U.S. at 12-13, 15, 18 (1972).

McLeod Addictive Disease Center, Inc. v. Wildata Systems Group, Inc., 3:08-CV-027-GCM, 2008 WL 2397614, at *1-2 (W.D. N.C. June 10, 2008) (granting Defendant's motion to transfer) (emphasis added). “The Court emphasizes that the applicable law contemplates that a court's decision to transfer or not transfer venue under 28 U.S.C. § 1404(a) is largely discretionary.” 3A Composites USA, Inc. v. United Industries, Inc., 5:13-CV-083-RLV, 2014 WL 1471075, at *1 (W.D. N.C. Apr. 15, 2014).

         “Although the presence of a forum selection clause will be a ‘significant factor that figures centrally in the district court's calculus, ' the Court guides district courts to ‘weigh in the balance a number of case-specific factors.'” Giammattei v. Bertram Yacht, Inc., ...


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