Free Opening Brief in Support - District Court of Delaware - Delaware

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELA WARE
MP VISTA, INC., HABID PETROLEUM, and: WARREN'S SHELL, INC. INDIVIDUALLY : AND ON BEHALF OF THOSE SIMILARLY : SITUATED
vs.

No. 1:07-CV-00099-***

MOTIV A ENTERPRISES LLC and SHELL OIL COMPANY

OPENING BRIEF IN SUPPORT OF MOTION TO TRANSFER VENUE

PAUL M. LUKOFF (I.D. No. 96) PRICKETT, JONES & ELLIOTT, P.A. 1310 King Street P. O. Box 1328 Wilmington, DE 19899 (302) 888-6500
(302) 658-8111 (Facsimile)

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TABLE OF CONTENTS

Table of Citations and Authorities...................................................... ............................................ ii
Statement of the Nature and Stage of Proceeding..................... ................... ................... ......... ...... 1

Summar of Argument................................ ................................................................................... 2
Statement of Facts........................................................................................................................... 3
Argument................ ........, """" ..... ........... ...... ..... ........ ............. .... ... .... .... """"" ....... "'" .................. 6
1.

The Eastern District of Louisiana is a Proper Venue.......................................................... 7

2.
3.

The Public Interest Strongly Weighs in Favor of Transferrng This Action. ..................... 8
The Private Interests Weigh in Favor of Transferring This Action. ................................. 10

The Private Interests Weigh in Favor of Transferring This Action. ............................................. 10
Conclusion.................................... ............................................. ..... ........ .......... ........ ........ ............ 11

Certificate of Service.................................................................................................................... 13

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TABLE OF CITATIONS AND AUTHORITIES

CASES

Affmetrix, Inc. v. Synteni, Inc.,
28 F. Supp. 2d 192 (D. DeL. 1998).......................................................................6,9,10,11

Burroughs Wellcome Co. v. Giant Food, Inc., 392 F. Supp. 761 (D. DeL. 1975)........................................................................................10

In re High Sulfr Content Gasoline Prods. Liab. Litig.,
344 F. Supp. 2d 755 (J.P .M.L. 2004)...... ................... ............................................... ...........4

In re ML-Lee Acquisition Fund II, L.P., 816 F. Supp. 973 (D. DeL. 1993)........ ........ ......... .......... ........................................ ...............7
Jurnara v. State Farm Ins. Co.,

55 F.3d 873 (3rd Cir. 1995) .................................................................................................6
Kirschner Bros. Oil, Inc. v. Pannil,
697 F. Supp. 804 (D. DeL. 1988)........................................................................................10

Nilssen v. Osrarn Sylvania, Inc., No. 00-695-JJF, 2001 WL 34368395 (D. DeL. May 1,2001)............................................10
Schwarzkopf

Tech. Corp. v. Ingersoll Cutting Tool Co.,
820 F. Supp. 150 (D. DeL. 1992)..........................................................................................7

Waste Distilation Tech., Inc. v. PanArn. Res., Inc.,
775 F. Supp. 759 (D. DeL. 1991)..........................................................................................7 Yang v. adorn, 409 F. Supp. 2d 599 (D.N.J. 2006) ....................................................................6, 7,8,9, 10

STATUTES
28 U.S .C. § 98( a) .............................................................................................................................8
28 U .S.C. § 1391 (a)(2)..................................................................................................................... 7
28 U.S .C. § 1404( a) .............................................................................................................. ...1, 6, 7

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STATEMENT OF THE NATURE AND STAGE OF PROCEEDING

Plaintiffs' Complaint was fied on February 21, 2007. Defendants' Answer was fied on

April 2, 2007. Defendants have fied a motion to transfer venue. This is defendants' Opening
Brief in support of that motion.

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SUMMARY OF ARGUMENT

All relevant factors militate in favor of a transfer of this case to the district where it
would be more conveniently heard and the interests of justice would be served.

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STATEMENT OF FACTS

Motiva is an LLC that is jointly owned by Shell Oil Company and Saudi
Refining, Inc. Motiva refines and distributes gasoline under the Shell brand in the Gulf Coast
and East Coast regions of the United States. Motiva distributes gasoline through a variety of

"channel partners," including dealers who lease or own independent service station businesses,

contract operators who run company-owned stores under various types of contractual

arangements, and wholesale distributors who supply their own networks of branded and
unbranded stations.

In May 2004, Motiva discovered that some of the gasoline produced at its refinery

in Norco, Louisiana, contained trace amounts of elemental sulfur and hydrogen sulfide. By the
time Motiva discovered the issue, some of this gasoline had already been distributed to channel

parners in Louisiana, Mississippi, and Florida for resale to the public. The small amounts of
elemental sulfur and hydrogen sulfide were not hazardous, but they did cause malfunctions in the

fuel gauges of some consumers' automobiles. Upon learning of the issue, Motiva immediately
alerted its channel partners in the impacted area and advised them to stop selling the potentially

affected grades of gasoline. Motiva began takng steps to dilute or replace the affected gasoline
at stations in its distribution network. The disruption at many service stations lasted only a few
hours; at other stations, certain pumps were down for a few days. Since premium gasoline often

was not affected, Motiva granted its retailers and wholesalers price concessions so that they

could market premium gasoline at regular-grade prices, thus minimizing lost sales.

Most

retailers also received voluntar financial credits from Motiva to help them recover from the
incident.

Finally, Motiva established an extensive claims process to complete repairs on

consumers' vehicles. Motiva also sent a $20 gift card and a written apology to all customers
with fuel-gauge problems, as well as a $5 gift card to all Shell credit card holders.
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Despite the voluntary efforts by Motiva, within days of the announcement of the
sulfur incident, multiple class action suits were filed on behalf of separate classes of consumers
and retailers. A total of 26 consumer class action suits were filed, all of which were either stayed
by the state courts or, if in federal court, transferred by the Judicial Panel on Multi-District

Litigation to the Eastern District of Louisiana and assigned to Judge Ivan Lemelle. See In re
High Sulfr Content Gasoline Prods. Liab. Litig., 344 F. Supp. 2d 755, 756-57 (J.P.M.L. 2004)
(transfer of four consumer class suits in order to "eliminate duplicative discovery; prevent

inconsistent pretrial rulings, especially with respect to class certifcation; and conserve resources
of the paries, their counsel and the judiciary") (emphasis added).

In addition to the consumer suits, a single Louisiana retailer brought a putative

class action under the Louisiana Products Liabilty Act on behalf of the channel parners in all
three states who were required to parially or entirely shut down during the sulfur incident.

Liberty Shell, Inc. v. Motiva Enterprises, LLC, No. 04-1770, in the United States District Court,
1 Eastern District of Louisiana.

Liberty Shell was also assigned to Judge Lemelle and to

Magistrate Judge Karen Wells Roby, who presided over the case through several pleading
amendments, discovery disputes, and finally a motion for class certification. (See App. at A-1A-12.)
While Liberty Shell was pending, a group of Florida retailers-including two of

the named Plaintiffs here2 -sought leave to join that case as named class representatives. (Id. at

A-9, Doc. No. 76.) However, Magistrate Judge Roby denied the request as untimely because

1 Liberty Shell was originally filed in state court in Louisiana and removed to the Eastern District

of Louisiana based on diversity of citizenship. (Docket Sheet, attached as App. at A-5.) 2 The two common plaintiffs are Habib Petroleum and Waren's Shell.

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these retailers had waited until after discovery had closed and after the class certification motion
had been briefed. (App. at A-20.)

Ultimately, following a class certification hearing, Judge Lemelle denied
certification in Liberty Shell on July 27, 2006. (App. at A-22.) Judge Lemelle concluded that,
under Fifth Circuit standards for class certification, the element of predominance could not be
established because issues of causation and damages would be higWy individualized. (App. at

A-24.) In makng his ruling, Judge Lemelle focused on the wide variety of businesses in the
proposed class as well as the range of ancilary services provided by some, but not all, of the
retailer gas stations. (Id.) Likewise, Liberty Shell did not demonstrate how damages could be
calculated on a class-wide basis. (Id.) In denying the motion for class certification, however,
Judge Lemelle invited the plaintiff to attempt to cure the inadequacies that he pointed out

at the

class certification hearing:
So the motion is denied, but again, I really mean that its without

prejudice because, you know, who knows. I might get something that would convince me to do something else.
(App. at A-27.)

Rather than try to cure the predominance problems or move again for class
certification before Judge Lemelle, Liberty Shell elected to settle its individual claims, and the
case was voluntarily dismissed on March 20, 2007. In the interim, however, the instant group of

Plaintiffs-all of whom are Florida retailers-fied suit in this District proposing a putative class
essentially identical to the one rejected by Judge Lemelle.

The negligence and breach of

warranty claims asserted here overlap substantially with the Louisiana products liability claims

asserted in Liberty Shell. Remarkably, two days after Liberty Shell was dismissed, Mr. Andre

LaPlace, the lead attorney for Liberty Shell, filed a motion to appear pro hac vice in this case.

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Thus, it is now clear that the instant case represents nothing more than a gambit by putative class

counsel to avoid Judge Lemelle's ruling by re-filng essentially identical claims in a far-away
district in hopes of finding a friendlier forum.
ARGUMENT

On a motion to transfer, this Court should exammne "all relevant factors to
determne whether on balance the litigation would more conveniently proceed and the interests

of justice be better served by transfer to a different forum." Jurnara v. State Farm Ins. Co., 55
F.3d 873, 879 (3rd Cir. 1995) (citation omitted); see also 28 U.S.c. § 1404(a) ("For the
convenience of paries 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."). Among the
public and private interests that courts typically weigh when considering a motion to transfer
venue are:
(1) (2) (3) (4)

the plaintiff's initial choice of forum;

the defendant's preference as to forum;
where the claim arose;
the convenience of the paries as indicated by their relative physical and financial position;

(5) (6) (7)
(8)

the location of the sources of proof;

practical considerations makng trial easy, expeditious, or inexpensive;
local interest in deciding local controversies at home; and

the familiarity of the trial judge with the applicable state law in diversity
cases.

Affrnetrix, Inc. v. Synteni, Inc., 28 F. Supp. 2d 192, 197 (D. DeL. 1998); Yang v. adorn, 409 F.
Supp. 2d 599,606 (D.N.J. 2006) (citing Jurnara, 55 F.3d at 879).

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The statute expressly allows transfer "in the interests of justice," which authorizes

consideration of such factors as 'judicial economy, cost to the paries, access to proof, and the
subpoena power of the court." Schwarzkopf Tech. Corp. v. Ingersoll Cutting Tool Co., 820 F.

Supp. 150, 152 (D. DeL. 1992). Also important are the "interests of consistency of judgments,"
the systemic need to reduce duplicative litigation, and any "paricular local interest in deciding (a

specific) dispute." Yang, 409 F. Supp. 2d at 609. Thus, Section 1404(a) is designed to prevent
"forum shopping" by plaintiffs who seek to avoid prior rulings or governing precedents in other
jurisdictions. See id. at 605.
Although courts normally grant deference to the plaintiffs choice of forum, "(t)he
plaintiffs choice. . . becomes substantially less important. . . when he sues representatively on

behalf of a class." Yang, 409 F. Supp. 2d at 606 (citing Job Haines Home for the Aged v. Young,

936 F. Supp. 223, 228 (D. N.J. 1996)). Thus, Plaintiffs simply cannot rely on their own initial

preference to defeat a motion to transfer venue. In re ML-Lee Acquisition Fund II, L.P., 816 F.

Supp. 973, 976 (D. DeL. 1993). "Courts wil not blindly prefer the plaintiffs choice of forum."
Waste Distilation Tech., Inc. v. Pan Am. Res., Inc., 775 F. Supp. 759, 765 (D. DeL. 1991).

1.

The Eastern District of Louisiana is a proper venue.
Under Section 1404(a), a court may transfer a case to "any other district. . . where

it might have been brought." 28 U.S.c. § 1404(a).

Indisputably, the Eastern District of

Louisiana satisfies that criteria here because "a substantial par of the events. . . giving rise to the
claim occurred" in that district. 28 U.S.c. § 1391(a)(2) (defining proper venues for diversity

cases). The Motiva refinery where the gasoline at issue was produced is in Norco, St. Charles
Parish, Louisiana. It is events at this refinery which give rise to Plaintiffs' claims for negligence
and breach of waranty. Therefore, the Eastern District of Louisiana is a proper venue to which

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this case may be transferred. See 28 U.S.c. § 98(a) (providing that St. Charles Parsh is in the

Eastern District of Louisiana).
2.

The public interest strongly weighs in favor of transferring this action.
Not only is the Eastern District of Louisiana where the underlying events

occurred, but that court has already expended substantial judicial resources on retailer and

consumer class actions arising out of the sulfur incident, including a putative class virtually
identical to the one proposed here. Judge Lemelle and Magistrate Judge Roby have dealt with

this litigation for almost three years, and they have ruled on discovery disputes, joinder issues,

and a motion for class certification. The docket sheet for the Liberty Shell retailer class action

contains 112 entries dating back to June 2004. (App. at A-11.) In the MDL case involving
consumer claims, the docket sheet contains 163 entries. (App. at A-51.) Judge Lemelle has
already considered and denied a motion to certify a class encompassing all of Motiva's "channel
parners. . . that were required to stop selling gasoline between May 26, 2004 and June 7, 2004,"

a class that is essentially identical with the proposed class definition here of all "channel parners

of Motiva Enterprises, LLC and Shell Oil Company (who were) directed by defendants on May

26, 2004 to close their fuel pumps" after the sulfur incident. Compare Liberty Shell's Mot. for
Class Cert. (App. at A-23-A-24) with Plfs.' Compl. !) V.

It would be a "gross waste of judicial resources" for the current group of
Plaintiffs-two of whom unsuccessfully tried to join the Liberty Shell case-to be allowed to

relitigate retailer class claims from scratch before a new judge when a court in the Eastern
District of Louisiana has almost three years of experience with the issues.3 See Yang, 409 F.
Supp. 2d at 608. More significantly, "the important interests of consistency of judgments weighs

3 This is paricularly true given the current judicial vacancy in this District following Judge
Jordan's appointment to the Court of Appeals.
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in favor of transferring this case" because Judge Lemelle has already denied a motion to certify a
class that is virtually identical to the one proposed here. See id. at 609. Plaintiffs should not be

allowed to avoid the impact of Judge Lemelle's ruling by fiing a new case in a distant forum that

has no connection to the underlying events, no connection to the named plaintiffs or any of the
absent class members, and no knowledge of the history of the litigation.

Another important factor in the transfer analysis is the famliarity of the trial
judge with the applicable state law. Here, Plaintiffs purport to bring a negligence action solely
under the Louisiana Civil Code and a claim for breach of warranty under the Uniform

Commercial Code, which has been adopted in Mississippi and Florida, but not in Louisiana. A

court in the Eastern District of Louisiana wil necessarily have more practical experience and
greater familiarity with the substantive law contained in the Louisiana Civil Code. Moreover,

Judge Lemelle and Magistrate Judge Roby have already wrestled with the complications of a

putative class involving retailers from Louisiana and nearby common-law states.

Such

famliarity and practical experience in applying the law of Louisiana militates strongly in favor
of transfer.

Finally, there is a public policy interest in having local issues determined close to

where they arose. Affmetrix, Inc., 28 F. Supp. 2d at 197. Plaintiffs' claims arose by virtue of a

problem with gasoline refined in Louisiana.

That gasoline was distributed to retailers in

Louisiana, in nearby Mississippi, and in Florida. All of the members of the putative class are
from those three Gulf Coast states. Two of the three impacted states are in the Fifth Circuit,

whose class certification standard Judge Lemelle expressly applied in Liberty Shell. By contrast,
none of the class members--ither named or absent-has any particular connection to Delaware.

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Accordingly, the public interest in deciding controversies close to home weighs in favor of
transfer.
3.

The private interests weigh in favor of transferring this action.

The private interests applicable to venue analysis also militate in favor of
transferring to the Eastern District of Louisiana. Because Plaintiffs are seeking to proceed as a
class, their choice of forum is "substantially less" important than in a typical case. Yang, 409 F.

Supp. 2d at 606. Plaintiffs' election not to sue on their own "home tud' also lessens the
deference this Court should give Plaintiffs' venue choice. See Affmetrix, 28 F. Supp. 2d at 198

n.6 (defining the plaintiffs "home turf" as "the forum closest to the plaintiffs residence or
principal place of business" where personal jurisdiction would exist). "If the plaintiff chooses a

forum which is not his 'home tud and which has no connection to any of the acts giving rise to
the lawsuit. . . the convenience to the plaintiff of litigating in his chosen forum is not as great."
Kirschner Bros. Oil, Inc. v. Pannil, 697 F. Supp. 804, 806 (D. DeL. 1988); Burroughs Wellcome
Co. v. Giant Food, Inc., 392 F. Supp. 761, 763 (D. DeL. 1975). Defendants' forum choice

outweighs Plaintiffs' initial selection because Plaintiffs' choice has no connection with the facts

of this case. This is especially true here where it is not just the named class representatives, but
also the absent class members, who are all from states other than Delaware.

A Louisiana forum is more convenient for all parties. The named Plaintiffs are

located in Florida, which is a short and inexpensive plane ride from New Orleans. Likewise
Defendants, although they are organized in Delaware,4 have their principal places of business in

4 The mere fact that Defendants are organized under the laws of Delaware does not weigh in
favor of retaining the suit here. Cf Nilssen v. Osram Sylvania, Inc., No. 00-695-JJF, 2001 WL
34368395 at * 2 (D. DeL. May 1, 2001) (concluding that the convenience of the paries weighed

in favor of transfer when the contacts with Delaware were minimal and consisted of (1)
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Houston, Texas, which is an hour from New Orleans by plane. Moreover, should it become

necessary, the court in the Eastern District of Louisiana wil have subpoena power over
witnesses working at or living near the Norco refinery, whereas this Court would not. See
Affmetrix, Inc., 28 F. Supp. 2d at 203 ("Traditionally, the location of potential witnesses and,

thus, their abilty to be subject to compulsory process has weighed heavily in the 'balance of
convenience' analysis."). Accordingly, the private interests in the venue analysis weigh in favor
of transferring this action to the Eastern District of Louisiana.
CONCLUSION

Defendants' motion to transfer should be granted. The interests of justice would

be better served by transferring this litigation to a forum with more experience with the facts and

the law, and one in a location closer to the origins of the dispute. The only contact Delaware has

with this dispute is that Defendants are incorporated here. This contact alone is simply not
enough given the countervailing interests of judicial economy, consistency of judgments and
rulings, the convenience of paries and witnesses, and practical trial issues such as the reach of

the subpoena power. Accordingly, this action should be transferred to the Eastern District of
Louisiana.

incorporation, (2) one salesperson working out of a Delaware home office, and (3) that some of the products at issue were sold in Delaware). (App. at A-78)
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PRICKETT, JONES & ELLIOTT, P.A.

BY,-(('~,1. d ~
PAUL M. LUKOFF (I.D. No. 96) 1310 King Street P. O. Box 1328 Wilmington, DE 19899 (302) 888-6500
(302) 658-8111 (Facsimile)
A TIORNEYS FOR DEFENDANTS MoTIV A ENTERPRISES LLC AND SHELL OIL COMPANY

Of Counsel:

David M. Rodi State Bar No. 00797334 Jennifer A. Powis State Bar No. 24041716 BAKER BOTTS L.L.P. 910 Louisiana St. Houston, TX 77002 (713) 229-1234 (713) 229-1522 (Facsimile)
Ann Spiegel State Bar No. 061223 1300 S.W. 5th Avenue Suite 2500 Portland, OR 97201 (503) 295-4033
(503) 778-5299 (Facsimile)

Dated: April 2, 2007

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CERTIFICATE OF SERVICE
I hereby certify that on April 2, 2007, a true and correct copy of the foregoing was sent via electronic mail to all counsel of record.

Jonathan B. O'Neil, Esq. Morton R. Kimmel, Esq. Michael D. Bednash, Esq. Kimmel, Carer, Roman & Peltz, P.A.
200 Biddle Avenue, Suite 101

Springside Plaza
Newark, Delaware 19702

PAULM. LUKOFF (I.D. ~o. 96) Prickett, Jones & Elliott, P.A. 1310 King Street P. O. Box 1328 Wilmington, DE 19899 (302) 888-6500

f~M~

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