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Troyer v. Heneghan

United States District Court, N.D. Indiana, Fort Wayne Division

December 22, 2016

DENNIS TROYER, Plaintiff,
v.
THOMAS HENEGHAN, et al., Defendants.

          OPINION AND ORDER

          Susan Collins, United States Magistrate Judge

         On July 8, 2016, Defendant National Futures Association (“NFA”) filed a motion to transfer this suit advancing violations of the Commodity Exchange Act (“CEA”) to the Northern District of Illinois, the district in which NFA maintains its principal place of business. (DE 4). Plaintiff Dennis Troyer filed a brief in opposition to the motion on July 21, 2016 (DE 5), and NFA replied on August 4, 2016 (DE 6). At the time these briefs were filed, Troyer had yet to serve Defendants Thomas Heneghan, Olivier Livolsi, and Portfolio Managers, Inc. (“PMI”).

         Troyer has now served PMI (DE 10) and has voluntarily dismissed Heneghan and Livolsi (DE 9; DE 11). PMI has not filed a response brief to the motion to transfer, [1] and the motion is ripe for ruling. For the following reasons, NFA's motion to transfer venue will be DENIED.

         A. Factual and Procedural Background

         Troyer, a resident of LaGrange County, Indiana, filed this suit against NFA, PMI, Heneghan, and Livolsi on May 8, 2016, alleging various violations of the CEA. (DE 1). In his complaint, Troyer alleges that he entered into a series of commodities futures trades based upon solicitations made by Heneghan. (DE 1 ¶¶ 10-18, 24-29, 38-49). Troyer did so by placing checks in the mail in Indiana that were addressed to Heneghan's attention in Chicago or to Livolsi's attention. (DE 1 ¶¶ 12-18, 24-29, 38-49).

         NFA is a national, self-regulatory organization for the U.S. derivatives industry. (DE 4-3 ¶¶ 4, 6). NFA develops and enforces rules, and provides programs and services that safeguard market integrity, protect investors, and help members meet their regulatory responsibilities. (DE 4-3 ¶ 9). NFA's membership consists of approximately 4, 100 firms and 57, 000 associates. (DE 4-3 ¶ 8). NFA's principal place of business is located in Chicago, Illinois; NFA does not maintain any offices or document repositories in Indiana. (DE 4-1 at 3).

         NFA performs “screening checks” to determine a market participant's fitness to be an NFA member; all NFA documents relating to such screen checks are located in Chicago. (DE 4-3 ¶ 11). All of NFA's registration functions are performed in Chicago, and all documents relating to that function are located in Chicago. (DE 4-3 ¶ 11). The activity of establishing and enforcing rules and standards for customer protection is conducted either in NFA's New York or Chicago offices. (DE 4-3 ¶ 11). Customer arbitrations and audit field work and surveillance to enforce compliance with financial and other audit requirements are performed throughout the United States, including in Indiana. (DE 4-3 ¶ 11; DE 6 at 1).

         PMI is a for-profit, Illinois corporation, and its principal place of business is located in Illinois. (DE 1 ¶ 5; DE 4-1 at 8). PMI is allegedly an introducing broker registered with the NFA until it was permanently barred from membership in February 2016. (DE 1 ¶ 5). Heneghan, a California resident, worked as an NFA associate member and as an associated person for various introducing brokers registered with the NFA until being permanently barred from NFA membership in March 2016. (DE 1 ¶ 6). Livolsi, a California resident, also worked as an NFA associate member. (DE 1 ¶ 7).

         B. Legal Standard

         “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 . . . .” 28 U.S.C. § 1404(a). “The statutory language guides the court's evaluation of the particular circumstances of each case and is broad enough to allow the court to take into account all factors relevant to convenience and/or the interests of justice.” Research Automation, Inc. v. Schrader-Bridgeport Int'l, Inc., 626 F.3d 973, 978 (7th Cir. 2010). “The statute permits a ‘flexible and individualized analysis' and affords district courts the opportunity to look beyond a narrow or rigid set of considerations in their determinations.” Id. (quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988)). The party moving for the transfer bears “the burden of establishing, by reference to particular circumstances, that the transferee forum is clearly more convenient.” Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219-20 (7th Cir. 1986) (citations omitted).

         “With respect to the convenience evaluation, courts generally consider the availability of and access to witnesses, and each party's access to and distance from resources in each forum.” Research Automation, Inc., 626 F.3d at 978 (citations omitted). “Other related factors include the location of material events and the relative ease of access to sources of proof.” Id. (citations omitted).

         “The ‘interest of justice' is a separate element of the transfer analysis that relates to the efficient administration of the court system.” Id. (citing Van Dusen v. Barrack, 376 U.S. 612, 622 (1964)). “For this element, courts look to factors including docket congestion and likely speed to trial in the transferor and potential transferee forums; each court's relative familiarity with the relevant law; the respective desirability of resolving controversies in each locale; and the relationship of each community to the controversy.” Id. (citations omitted). “The interest of justice may be determinative, warranting transfer or its denial even where the convenience of the parties and witnesses points toward the opposite result.” Id. (citation omitted).

         C. Analysis

         NFA argues that the situs of material events, the convenience of the witnesses, the convenience of the parties, and the interests of justice all outweigh Troyer's choice of forum and support a transfer of this action to the Northern District of Illinois. The Court will discuss each of these factors in ...


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