Free Motion to Dismiss/Lack of Jurisdiction - 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 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 Motion to Dismiss for Improper Venue, or Alternatively to Transfer Venue and Motion to Dismiss Outrageous Conduct Claim, and in support thereof states: D.C.COLO.LCivR. 7.1 CERTIFICATION The undersigned counsel states that she has not conferred with Plaintiff's counsel regarding the relief sought by this Motion to Dismiss for Improper Venue, or Alternatively to Transfer Venue and Motion to Dismiss Outrageous Conduct Claim ("Motion") because any such conference would be fruitless given that the Motion seeks dismissal of Plaintiff's Amended Complaint.

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INTRODUCTION This case should be dismissed in accordance with Fed.R.Civ.P. 12(b)(3) for improper venue or, alternatively, should be transferred to the District Court for the Southern District of New York. Pursuant to 28 U.S.C. § 1391(a), venue is not proper in Colorado since Plaintiff GLN Compliance Group, Inc.'s claims against defendant United Air Lines, Inc. have been extinguished by its Chapter 11 bankruptcy and dismissed by this Court's Order dated October 16, 2007 (Docket #87), and no defendant resides in Colorado, and further because the events giving rise to the claims against Ross did not occur in Colorado. Importantly, the First Amended Complaint does not allege that Ross's actions giving rise to the remaining claims occurred in this judicial district. Alternatively, pursuant to 28 U.S.C. § 1404(a), this case should be transferred to the District Court for the District of Columbia because 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. Separately, pursuant to Fed.R.Civ.P. 12(b)(6), GLN's outrageous conduct claim should also be dismissed for failure to state a claim upon which relief can be granted because GLN, a corporation, cannot show that it has suffered emotional distress as required by Colorado law. BACKGROUND On August 2, 2002, GLN filed its First Amended Complaint ("Amended Complaint") in this matter asserting claims against United Airlines d/b/a United Biz Jet Holdings, Biz Jet Chargers, Inc. and Biz Jet Services, Inc. (collectively, "United") and Ross relating to the failed business relationship between GLN and United, including breach of contract against United alone, civil theft and civil conspiracy against United and Ross together, and tortious interference

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and outrageous conduct against Ross alone.

All of GLN's claims in this litigation, including its

claims against Ross, directly relate to alleged pre-bankruptcy misconduct by United and Ross. Ross is a resident of New York. See Affidavit of Jonathan Ross, attached hereto as Exhibit A. Ross conducts no business in Colorado, and, as relevant to this lawsuit, conducted no business for United or GLN in Colorado. Id. Ross performed all work in connection with his consultant duties for United in New York, Chicago and Las Vegas, and not in Colorado. Id. Ross had no access to GLN's offices, and had no obligation either express or implied, to work in Colorado. Id. None of the witnesses that Ross may call in support of his defense are located in Colorado. Id. In fact, one of the witnesses, Stuart Oran, is also located in New York. Id. All of Ross's records, including computer and paper files, are located in New York. Id. United was the only defendant in the action with connections to Colorado. Other than GLN's claims that Ross made several telephone calls to Colorado, the Amended Complaint is devoid of information or alleged facts sufficient to demonstrate that the events or omissions giving rise to the claims against Ross occurred in Colorado. Indeed, the

only actions by Ross directly linking him to Colorado are alleged telephone calls to GLN and others in the Denver area. See First Amended Complaint, ¶22(b) (in which Ross allegedly made a telephone call from New York to request a copy of certain software); ¶22(e) (in which Ross allegedly made a telephone call from New York to request a copy of certain files); ¶22(f) (in which Ross allegedly made a telephone call from New York to witness Davidson's cell phone; ¶22(g) (same, except call was made from Chicago);¶22(i) (in which Ross allegedly made a telephone call from New York to Jeppeson-Sanderson Company in Colorado). The governing statute, 28 U.S.C. § 1391(a) requires that this case be dismissed because no defendant resides here (now that GLN's claims against United have been dismissed) and,

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other than the insignificant allegations that Ross made telephone calls to Colorado, the Amended Complaint is devoid of information sufficient to demonstrate that the events giving rise to the claims against Ross occurred here. Alternatively, the governing statute, 28 U.S.C. § 1404(a) requires that this case be transferred to the Southern District of New York for the "convenience of the parties," "convenience of the witnesses" and because Ross, and at least one other defense witness are located in New York, and any discoverable information that Ross may have by way of documents or files is located in New York. The case can be tried expeditiously and for the same sum there, and the interests of justice, in light of these facts, weigh in favor transferring this action to New York. For these reasons, the case should be dismissed for improper venue pursuant to Fed.R.Civ.P. 12(b)(3) or, alternatively, transferred to the District Court for the Southern District of New York. At a minimum, the Court should dismiss GLN's claim for outrageous conduct for failure to state a claim upon which relief can be granted pursuant to Fed.R.Civ.P. 12(b)(6). As a corporation, GLN cannot maintain a claim for outrageous conduct because it cannot show that it has suffered severe emotional distress, as required by Colorado law. ARGUMENT A. Standard of Review. Pursuant to Fed.R.Civ.P. 12(b)(3), a defendant may move to dismiss a complaint for improper venue. "In reviewing the sufficiency of a complaint when tested by a motion to dismiss, the court must accept as true the complaint's allegations and view them in the light most favorable to the plaintiff. Silva v. Silva, 680 F.Supp. 1479, 1480 (D. Colo. 1988). It is well

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settled that a plaintiff has the burden of establishing that venue is proper in this district. Graymore LLC v. Gray, 2007 WL 1059004 at *14 (D. Colo. April 6, 2007) citing Gwynn v. TransCor Am., 26 F.Supp. 2d 1256, 1261 (D. Colo. 1998). "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." Id. citing Mohr v. Margolis, Ainsworth & Kinlaw Consulting, Inc., 434 F. Supp.2d 1051, 1057-1058 (D. Kan. 2006). "[V]enue statutes are generally designed for the benefit of defendants, and in determining what events or omissions give rise to a claim the `focus [is] on relevant activities of the defendant, not the Plaintiff." Id. citing Goff v. Hackett Stone Co., No. 98-7137, 1999 U.S. App. LEXIS 13351, at *4 (10th Cir. June 17, 1999) (quoting Woodke v. Dahm, 70 F.3d 983, 985 (8th Cir. 1995). B. The Court Should Dismiss This Action Because Venue Is Improper In Colorado. The Court should dismiss this action because venue is improper in Colorado. 28 U.S.C. § 1391(a) provides that a civil action founded upon diversity of citizenship may be brought only in (1) a judicial district where any defendant resides, if all defendants reside in the same State, (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 this action is situated, or (3) a judicial district in which any defendant is subject to personal jurisdiction at the time the action is commenced, if there is no district in which the action may otherwise be brought.

In Silva v. Silva, 680 F.Supp. 1479, 1483 (D. Colo. 1988), the Court stated that "[t]he prevailing test for venue under the `claim arising' provision is whether a substantial portion of the acts giving rise to the plaintiff's claim occurred in this district." Id. citing Johnson Creative Arts, Inc. v. Wool Masters, Inc., 573 F.Supp. 1106, 1112 (D. Mass 1983) (other citations omitted). In applying this test, "the court must also consider the availability of witnesses, the accessibility of other relevant evidence and the convenience of the defendant. The correct approach to venue

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under the `claim arising' provision of § 1391 `must both consider litigative efficiency and examine whether the acts which occurred in the district and gave rise to the plaintiff's claims were substantial.'" Id. citing Johnson Creative Arts, Inc., 573 F. Supp. at 1113 (other citations omitted). In Graymore, a case with similar facts concerning defendant's lack of connections linking him to Colorado, the Court considered the defendant's motion to dismiss the case for improper venue using the same standards as in deciding a motion to dismiss for lack of personal jurisdiction. Graymore, 2007 WL 1059004 at *14. In so doing, the Court found that the defendant's founding of an LLC in Colorado, being a manager of the Colorado LLC, "making some negotiations via phone and fax with Moresi in Colorado establishing Plaintiff [the Colorado LLC]" and working with a Colorado securities attorney to create some documents for Plaintiff "did not have a `close nexus to the claims,'" and, thus, lack the "substantiality necessary to support venue" in Colorado. Id. at *14. Accordingly, the Court found that Plaintiff "failed to plead sufficient facts to support a finding of proper venue." Id. Further, because Plaintiff failed to move for transfer to another district, the Court dismissed the action for improper venue. Id. Here, venue is likewise improper in Colorado now that GLN's claims against United have been extinguished by United's bankruptcy and dismissed by this Court, because no defendant resides in this judicial district. Ross resides in New York. See First Amended Complaint, ¶3 and Affidavit of Jonathan Ross, attached hereto as Exhibit A. Further, with respect to the "claim arising" provision of § 1391(a), as set forth in Ross's Affidavit, Ross performed no work on behalf of United in Colorado, but rather, performed consultant work in New York, Chicago, Illinois and Las Vegas, Nevada. See Exhibit A. Other than its meager assertions that Ross made some telephone calls to Colorado, the Amended

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Complaint is devoid of information or facts demonstrating that the events or omissions giving rise to GLN's claims against Ross occurred in Colorado. See Amended Complaint. Accordingly, Ross's actions, like in Graymore, "lack the `substantiality necessary to support venue" in Colorado, and the case should be dismissed for improper venue under Fed.R.Civ.P. 12(b)(3); Graymore, 2007 WL 1059004 at *14. C. Alternatively, The Court Should Transfer This Action To The District Court For The Southern District of New York Because The Relevant Factors Under 28 U.S.C. § 1404(a) Weigh In Favor Of Transfer. The Court should transfer this action to the District Court for the Southern District of New York because the relevant factors under 28 U.S.C. § 1404(a) weigh in favor of such transfer. 28 U.S.C. § 1404(a) provides the applicable standard where both the original and requested venue are proper.1 Specifically, Section 1404(a) provides: "For the convenience of the 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." 28 U.S.C. § 1404(a). The factors for consideration under 28 U.S.C. § 1404(a) for the "convenience of the parties" and "convenience of the witnesses" are the plaintiff's choice of forum; the accessibility of witnesses and other sources of proof, including the availability of compulsory process to insure attendance of witnesses; the cost of making the necessary proof; questions as to the enforceability of a judgment if one is obtained; relative advantages and obstacles to a fair trial; difficulties that may arise from congested dockets; the possibility of existence of questions arising in the area of conflict of laws; the advantage of having a local court determine questions of local law; and all other considerations of a practical nature that make a trial easy, expeditious and economical. Int'l Beauty Products, LLC v. Beveridge, 402 F. Supp. 2d 1261, 1279 (D. Colo. 2005) (citing Tex. Gulf Sulphur v. Ritter, 371 F.2d 145, 147 (10th Cir. 1967). The burden of establishing that
1

As set forth here, venue is not proper in Colorado.

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these factors weigh in favor of transfer is on the moving party. Id. at 1279, and the plaintiff's choice of forum should not be disturbed unless the evidence and circumstances of the case are strongly in favor of transfer. Id. citing Tex. Gulf Sulphur, 371 F.2d at 147; Cargill, Inc. v. Prudential Ins. Co.¸ 920 F.Supp. 144, 146 (D. Colo. 1996). However, "[a]lthough the plaintiff's choice of forum is entitled to respect, it is not controlling." Resources Inv. Corp. v. Hughes Tool Co., 561 F.Supp. 1236, 1238 (D. Colo. 1983) (where many of the witnesses were located in Texas and the actions giving rise to the lawsuit occurred in Texas, court transferred action to District Court for the Southern District of Texas). Here, it is clear that if this case were initiated today, the action could not be brought in Colorado because Ross is a resident of New York and the actions giving rise to the claims alleged did not occur in Colorado. See Exhibit A and Amended Complaint, generally and ¶22 (Amended Complaint devoid of information or facts demonstrating that the events giving rise the claims against Ross occurred in Colorado, but rather, demonstrating that all of Ross's actions occurred in New York or other locations). Instead, the action would properly lie in the Southern District of New York, because Ross is a resident of that state. See Exhibit A. As such, GLN's choice of forum should not be given any presumptive weight. See 28 U.S.C. § 1404(a) and Resources Inv. Corp., 561 F. Supp. at 1238 (transferring action under § 1404(a) because, among other things, many of the witnesses were located in Texas and actions giving rise to the lawsuit occurred there). With respect to the factor "convenience of the parties," because Ross, the primary witness in this case, is located in New York and any and all of Ross's documentary evidence, including his computer files and other paper files, the evidence weighs in favor of transferring this action to the District Court for the Southern District of New York. See Exhibit A; Cargill

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Inc. v. Prudential Ins. Co. of America, 920 F.Supp. 144, 148 (D. Colo. 1996) (where, among other things, all relevant documents would have to be transported to Colorado for trial, relative costs and convenience of trying case in particular forum, which are significant factors under the Texas Gulf test, weighed in favor of transferring action to Minnesota.); see also Dupre v. Spanier Marine Corp., 810 F.Supp. 823, 825 (S.D. Tex. 1993) ("The convenience of one key witness may outweigh the convenience of numerous less important witnesses." [other citations omitted]). Further, with respect to the factor "convenience of the witnesses," because key defense witness Stuart Oran is also located in New York, the evidence also weighs in favor of transferring this action to the District Court for the Southern District of New York. See Exhibit A; see also Resources Inv. Corp., 561 F. Supp. at 1238 (transferring action because, among other things, many of the witnesses were located in Texas and actions giving rise to the lawsuit occurred there). Based on the foregoing, and because GLN's choice of forum should not be given presumptive weight since venue is improper in Colorado, as an alternative to dismissal of this action, the Court should transfer this case to the District Court for the Southern District of New York. D. GLN's Claim For Outrageous Conduct Should Be Dismissed For Failure To State A Claim Upon Which Relief Can Be Granted. GLN's outrageous conduct claim fails to state a claim upon which relief can be granted pursuant to Fed. R. Civ. P. 12(b)(6). In determining whether a complaint properly states a claim for relief, a court should dismiss the claim where "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Meade v. Grubbs, 841 F.2d 1512, 1526 (10th Cir. 1988). A court reviewing the sufficiency of a complaint should presume all of the claimant's factual allegations are true and construe them in the light
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most favorable to the claimant. Morgan v. City of Rawlins, 792 F.2d 975, 978 (10th Cir. 1986). Nonetheless, a plaintiff must allege sufficient facts in its complaint to allow the court to determine whether it makes out a claim on which relief can be granted. Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991). Here, GLN cannot state a claim for outrageous conduct because it is a corporation, not an individual and, therefore, GLN cannot demonstrate that it has suffered "severe emotional distress" as required by Colorado law. The elements of outrageous conducts are: (1) the

defendants engaged in extreme and outrageous conduct, (2) recklessly or with the intent of causing the plaintiff severe emotional distress, (3) causing the plaintiff severe emotional distress. 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). It goes without saying that a corporation cannot suffer

emotional distress. Thus, GLN's claim for outrageous conduct must be dismissed for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6); McCarty, 15 P.3d at 1126. WHEREFORE, based on foregoing, Defendant Jonathan Ross respectfully 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). Defendant Jonathan Ross further requests that the Court dismiss Plaintiff's Outrageous Conduct claim for failure to state a claim upon which relief can be granted pursuant to Fed.R.Civ.P. 12(b)(6), and for such other and further relief as the Court deems just and proper under the circumstances.

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RESPECTFULLY submitted this 1st day of November, 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 1st day of November, 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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