United States District Court, W.D. North Carolina, Charlotte Division
C. KEESLER UNITED STATES MAGISTRATE JUDGE.
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.
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).
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.
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.
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.
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.
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).
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).
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
. . .
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).
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.
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
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,
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., ...