Free Reply to Response to Motion - District Court of Colorado - Colorado

Case 1:01-cv-02313-JLK

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 01-CV-2313-JLK-CBS GLN COMPLIANCE, INC., Plaintiff, v. UNITED AIRLINES, INC, d/b/a UNITED BIZJET HOLDINGS, BIZJET CHARTERS, INC., AND BIZJET SERVICES, INC., and JONATHAN ROSS, Defendants.

DEFENDANT JONATHAN ROSS'S REPLY IN SUPPORT OF MOTION TO DISMISS FOR IMPROPER VENUE, OR ALTERNATIVELY TO TRANSFER VENUE AND MOTION TO DISMISS OUTRAGEOUS CONDUCT CLAIM

Defendant Jonathan Ross ("Ross"), through his undersigned counsel, pursuant to Fed.R.Civ.P. 12(b)(3) and 12(b)(6), 28 U.S.C. § 1391(a) and 28 U.S.C. § 1404(a) hereby files his Reply in Support of Motion to Dismiss for Improper Venue, or Alternatively to Transfer Venue and Motion to Dismiss Outrageous Conduct Claim, and in support thereof states: INTRODUCTION First, Plaintiff failed to respond to Ross's argument that Plaintiff's outrageous conduct claim fails to state a claim upon which relief can be granted because a corporation cannot suffer emotional distress. Thus, in accordance with Fed.R.Civ.P. 12(b)(6) and 12(h)(2), the Court should dismiss the outrageous conduct claim because it fails as a matter of law. Second, the Court may entertain and should grant Ross's motion to dismiss for improper venue pursuant to 28 U.S.C. § 1391 because venue is not proper in Colorado as no defendant resides in Colorado and the acts or omissions giving rise to Plaintiff's claims against Ross did

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not occur in Colorado. Plaintiff's assertion that Ross waived his right to assert the defense of improper venue ignores the exception to that rule as applicable here, i.e., Rule 12(g) specifically requires only that defenses "then available" must be raised at the time of the party's first defensive move. Federal courts interpreting this rule under similar circumstances agree that a party cannot be deemed to have waived a defense that was not "then available." Here, because Ross's defense of improper venue became "available" only upon the Court's dismissal of Plaintiff's claims against defendant United Air Lines, Inc. d/b/a United Biz Jet Holdings, Biz Jet Charters, Inc. and Biz Jet Services, Inc., and because Ross moved immediately to assert the defense, Ross cannot be deemed to have waived the defense. Further, the facts raised in Ross's affidavits support his alternative request that the case be transferred, pursuant to 28 U.S.C. § 1404(a), to the District Court for the Southern District of New York. Each of the relevant factors under Section 1404(a), including "convenience of the parties," "convenience of the witnesses," and "interest of justice" weigh in favor of such transfer. Ross will respond separately to Plaintiff's Application for Entry of Default. BACKGROUND Briefly, and in response to certain of Plaintiff's un-verified contentions, Ross submits additional information for purposes of background. First, in its Response, Plaintiff wrongly contends that on November 30, 2001, Mark Barnes, Esq. filed a Notice of Removal alleging that "[a]ll defendants," including Ross, agreed that venue was proper in this district. Instead, and importantly, the Notice of Removal was filed on behalf of the various United defendants only. See Docket #1, stating that "Defendant United Airlines, Inc., d/b/a United Biz Jet Holdings, Biz Jet Charters, Inc., and Biz Jet Services, Inc. request that this matter be moved from the District Court for the County of Arapahoe, Colorado to the United States District Court for the District of

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Colorado..." At the time of that filing, Jonathan Ross had not been served with a copy of the Complaint and United's counsel did not represent Ross. Further, in support of Ross's alternative motion to transfer venue to the District Court for the Southern District of New York, Ross's Supplemental Affidavit in Support of Motion to Dismiss For Improper Venue, Or, Alternatively, To Transfer Venue ("Ross's Supplemental Affidavit"), attached hereto, establishes that in addition to Stuart Oran, defense witness Robert Irwin resides in New York. The witnesses Ross identifies in his Affidavits, and listed here, are, on information and belief, domiciled in other states as follows: · · · · · · · · · Stuart Oran and Robert Irwin reside in New York; Robert Brooks resides in California; Tom Davis and Howard Hackney reside in Michigan; Jim Davidson resides in Texas; David Hobgood and Rick Wright reside in Florida; Leo Venier resides in Missouri; Ed Soliday resides in Illinois; Robert Rowland resides in Arizona; and John Krear and Terri Tackett reside in Nevada.

See Ross's Original Affidavit and Supplemental Affidavit.

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ARGUMENT A. GLN's Claim For Outrageous Conduct Should Be Dismissed For Failure To State A Claim Upon Which Relief Can Be Granted. As set forth in Ross's motion, GLN cannot demonstrate that it has suffered "severe emotional distress" as required by Colorado law, and, therefore, its claim for outrageous conduct fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6); McCarty v. Kaiser-Hill Co., LLC, 15 P.3d 1122, 1126 (Colo. 2000); Archer v. Farmer Bros. Co., 70 P 3d 495, 499 (Colo. App. 2002). For these reasons, and because Ross's motion can be considered by this Court as a motion for judgment on the pleadings, the Court should dismiss Plaintiff's outrageous conduct claim. Fed.R.Civ.P. 12(b)(6) and 12(h)(2). B. Pursuant to Rule 12(g), Ross Cannot Be Deemed To Have Waived The Defense Of Improper Venue Because Such Defense Was Not "Available" At The Time He Made His First Defensive Move. Ross cannot be deemed to have waived the defense of improper venue because that defense was not "then available" at the time Ross filed his initial Rule 12 motion.1 At that time, United, a resident of Colorado, was a co-defendant in the case. When the Court dismissed GLN's claims against United on October 16, 2007 (Docket #87), the defense of improper venue became "available" for the first time, and Ross immediately raised it. Accordingly, under Rule 12(g), the Court may properly entertain Ross's motion to dismiss, and for the reasons set forth therein, should dismiss Plaintiff's claims against Ross for improper venue.

United's consent to venue in this district cannot be imputed to Ross because of the "personal nature of the privilege." O'Brien v. Weber, 137 F.Supp. 684, 685 (D. Pa. 1955) (other citations omitted) (finding that one defendant's waiver of the right to object to venue does not deprive another defendant of the right to object to venue and stating, "[a] venue statute gives a `personal privilege to a defendant which he may assert or waive at his election.'"); See also United's Notice of Removal (Docket # 1).
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Fed.R.Civ.P. 12(g) provides an exception to the waiver rule articulated in Fed.R.Civ.P. 12(h)(1) that "[a] defense of lack of jurisdiction over the person, improper venue, insufficiency of process, or insufficiency of service of process is waived (A) if omitted from a motion in the circumstances described in subsection (g)..." Fed.R.Civ.P. 12(g) provides in relevant part, [i]f a party who makes a motion under this rule may join with it any other motions herein provided for and then available to the party. If a party makes a motion under this rule but omits therefrom any defense or objection then available to the party which this rule permits to be raised by motion, the party shall not thereafter make a motion based on the defense or objection so omitted, except a motion as provided in subdivision (h)(2) hereof on any grounds there stated." (emphasis added). As such, the plain language of Rule 12(g) requires that only defenses "then available" must be included in party's motion. Federal courts that have considered the issue of a party's alleged waiver of a Rule 12 defense have found, in accordance with the language of Rule 12(g) that no waiver of such a defense may occur if the defense is not known to be available at the time the first defensive motion is made. For example, in Holzsager v. Valley Hospital, 646 F.2d 792, 795-796 (2d Cir. 1981), the Second Circuit determined that defendant Valley Hospital did not waive its defense of lack of personal jurisdiction by seeking removal of the case to federal court and by earlier seeking dismissal of the case on other grounds. Specifically, the Court stated, "[i]n any event a party cannot be deemed to have waived objections or defenses which were not known to be available at the time they could first have been made, especially when it does raise the objections as soon as their cognizability is made apparent." Holzsager, 646 F.2d at 796. In Glater v. Eli Lilly & Co., 712 F.2d 735, 738 (1st Cir. 1983), the First Circuit found that defendant Eli Lilly & Co. did not waive its defense of lack of personal jurisdiction by failing to raise it in its answer because "[i]t could not waive a defense involving facts of which it was not,
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and could not have been expected to have been, aware." Id. at 738. In that case, Glater's complaint did not put Eli Lilly & Co. on notice that Glater's New Hampshire domicile was at least questionable ­ which would have justified the defense of lack of personal jurisdiction.2 The First Circuit agreed that Eli Lilly could not be deemed to have waived a defense that was unavailable when it answered the complaint. Id. citing Holzsager, 646 F.2d at 796 and C. Wright & A. Miller, Federal Practice and Procedure § 1391, at 853-854 ("Rule 12(h) does not provide for waiver if the omitted defense was unavailable when the party answered..."). In contrast, but in accordance with the policy set forth in Fed.R.Civ.P. 12(g), in Clark v. Assoc. Comm'l Corp., 149 F.R.D. 629, 631-632 (D. Kan. 1993), the District Court found that a waiver of the defense of lack of personal jurisdiction had occurred where a party filed an amended motion for a more definite statement under Fed.R.Civ.P. 12(e) but failed to raise an objection to the district court's personal jurisdiction, where there was no additional information in the response to suggest that they could not have raised the defense of lack of personal jurisdiction at the time they made the motion for more definite statement. Clark, 149 F.R.D. at 632. Here, in accordance with the reasoning set forth in Holzsager, Glater and Clark, and in contrast to the facts in Clark, Ross could not have raised the defense of improper venue in this Court until that defense was "then available," i.e., when the Court dismissed GLN's claims against United on October 16, 2007. Order, Docket # 87; Fed.R.Civ.P. 12(g); Holzsager, 646 F.2d at 796; Glater, 712 F.2d at 738-739; Clark, 149 F.R.D. at 632. It was not until United was dismissed from this litigation that the defense of improper venue became "available." See Order.

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Cases involving the defense of lack of personal jurisdiction are analogous to the instant case because the standards for deciding a motion to dismiss for improper venue are generally the same as for deciding a motion to dismiss for want of personal jurisdiction. Graymore LLC v. Gray, 2007 WL 1059004 at *14 citing Mohr v. Margolis, Ainsworth & Kinlaw Consulting, Inc., 434 F. Supp.2d 1051, 1057-1058 (D. Kan. 2006).

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Because no defendant now resides in this district and the events giving rise to the claims against Ross did not occur in Colorado, venue is not now proper. See Ross's Motion and Ross's Original Affidavit, Docket # 89. As such, in accordance with Rule 12(g), this Court may now properly entertain Ross's motion to dismiss on the basis of improper venue and, for the reasons set forth here and in Ross's motion, should dismiss this case for improper venue. C. Ross Has Met His Burden Of Establishing, In Accordance With 28 U.S.C. § 1404(a), That Transfer Of This Case To The District Court For The Southern District Of New York Is Proper. As an alternative to dismissal of this action, Ross moves to transfer this case to the United States District Court for the Southern District of New York, the district where Ross resides and where at least two key witnesses for the defense resides, namely Stuart Oran and Robert Irwin. 28 U.S.C. §1391(a); See Motion and Original Affidavit of Jonathan Ross (stating that witness Stuart Oran is a resident of New York); Supplemental Affidavit (stating that Robert Irwin resides in New York). As an initial matter, Plaintiff's logic in assuming that its choice of forum should be given substantial weight, given that United has been dismissed and venue is no longer proper in this district, is seriously flawed. Section 1404(a) provides for transfer of a case to any other district "where it might have been brought," which assumes that venue is proper in the district where it is pending. However, as shown here, venue is not proper in Colorado now that United has been dismissed from the litigation. Plaintiff's Response is completely silent on that point because Plaintiff cannot refute these facts. Moreover, and contrary to Plaintiff's assertions, Ross has met the burden of demonstrating that transfer of this case is warranted under 28 U.S.C. § 1404(a). See Motion and Ross's Affidavit delineating reasons why New York is proper forum under the "convenience of

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the parties," "convenience of the witnesses" and "interests of justice" factors. Ross further submits that at least one other defense witness, Robert Irwin, is domiciled in New York. See Ross's Supplemental Affidavit, attached hereto. Other witnesses ­ including former FAA, Avolar and United employees are in states other than Colorado. These witnesses include, on information and belief, Robert Brooks who resides in California; Tom Davis and Howard Hackney who reside in Michigan; Jim Davidson who resides in Texas; David Hobgood and Rick Wright who reside in Florida; Leo Vernier who resides in Missouri; Ed Soliday who resides in Illinois; Robert Rowland who resides in Arizona; and John Krear and Terri Tackett who reside in Nevada. See Ross's Supplemental Affidavit, attached hereto. As such, there can be no argument that Colorado is any more convenient than New York for these witnesses. Plaintiff, in contrast to Ross, has submitted no proof, via affidavit or otherwise, that New York is not the proper forum for this case now that there is no defendant that resides in this district. Instead, Plaintiff merely makes arguments of counsel and contends that it would be more convenient for Plaintiff for the litigation to occur in Colorado because Plaintiff is here and Plaintiff's files are here. Moreover, once venue has been challenged, the plaintiff bears the burden to show that venue is proper. Ervin and Assoc., Inc. v. Cisneros, 939 F.Supp. 793, 796 (D. Colo. 1996) citing Andrean v. Secretary of the United States Army, 840 F.Supp. 1414, 1422 (D. Kan. 1993). Plaintiff has not met its burden. Under these facts, the Court should not give weight to Plaintiff's unfounded assertions and should accept Ross's attestations as truth of the matters asserted there. WHEREFORE, based on the foregoing Reply and the Motion to Dismiss For Improper Venue, Or, Alternatively, To Transfer Venue And Motion To Dismiss Outrageous Conduct Claim, defendant Jonathan Ross respectfully requests that the Court dismiss Plaintiff's

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Outrageous Conduct claim for failure to state a claim upon which relief can be granted pursuant to Fed.R.Civ.P. 12(b)(6). Additionally, defendant Jonathan Ross requests that the Court dismiss this case for improper venue pursuant to Fed.R.Civ.P. 12(b)(3) and 28 U.S.C. § 1391(a), or, alternatively, transfer this case to the Southern District of New York pursuant to 28 U.S.C. § 1404(a), and for such other and further relief as the Court deems just and proper under the circumstances. RESPECTFULLY submitted this 3rd day of December, 2007. KAMLET SHEPHERD & REICHERT, LLP

Amy E. Arlander___________________ Stephen D. Gurr, No. 19789 Amy E. Arlander, No. 33200 Kamlet Shepherd & Reichert, LLP 1515 Arapahoe Tower One, Suite 1600 Denver, CO 80202 Attorneys for Defendant Jonathan Ross

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CERTIFICATE OF SERVICE The undersigned hereby certifies that on this 3rd day of December, 2007, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to: Mark T. Barnes, Esq. Brownstein Hyatt & Farber, P.C. 410 17th Street, 22nd Floor Denver, CO 80202 Telephone: 303-223-1100 Fax: 303-223-1111 E-mail: [email protected] Michah E. Marcus, Esq. Kirkland & Ellis LLP 200 E. Randolph Drive Chicago, IL 60601 Telephone: 312-861-2165 Fax: 312-861-2200 E-mail: [email protected] Elizabeth A. Starrs Daniel A. Wartell STARRS MIHM & CASCHETTE LLP 707 Seventeenth Street, Suite 2600 Denver, CO 80202 Telephone: 303-592-5900 Fax: 303-592-5910 E-mail: [email protected] [email protected]

/s/ Diana L. Brechtel

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