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Connor v. Kotchen

United States District Court, S.D. Indiana, Indianapolis Division

March 21, 2019

JOHN M. CONNOR, Plaintiff,



         In this removed diversity case, Plaintiff sued Defendants for breach of contract and other wrongs. Now before the Court are Plaintiff's motion to transfer, see 28 U.S.C. §§ 1404(a), 1406(a), and Defendants' motion to dismiss for lack of personal jurisdiction and failure to state a claim. See Fed. R. Civ. P. 12(b)(2), (6). For the reasons given below, Plaintiff's motion is granted and Defendants' motion is granted in part.


         The First Amended Complaint (FAC), together with its attachments, alleges as follows. Plaintiff is John Connor (“Connor”), an Indiana domiciliary and professor emeritus of economics at Purdue University. Defendants are the law firms of Kotchen & Low, LLP (“Kotchen & Low”), and Boies, Schiller, Flexner, LLP (“Boies”), as well as attorneys Daniel Kotchen (“Kotchen”), a partner at Kotchen & Low, and Matthew Henken (“Henken”), a partner at Boies. Kotchen and Henken are Wisconsin and New Hampshire domiciliaries, respectively. Kotchen & Low is organized under the laws of Washington, D.C., and has its principal office there. Boies has “an office” in New Hampshire, FAC ¶ 8, and Defendants add in their notice of removal that it is organized under the laws of Nevada with its principal office in New York. Dkt. 1 ¶ 6.

         In 2014, Connor entered into a consulting agreement with OnPoint Analytics, Inc. (“OnPoint”), a California consulting services firm. Beginning in 2009, Kotchen, Henken, and their law firms represented the plaintiffs in a multidistrict litigation captioned In re Wholesale Grocery Products Antitrust Litigation, No. 09-MD-2090 ADM/TNL, in the United States District Court for the District of Minnesota. In 2016, Kotchen sought out Connor to engage him as an expert witness in the case. Connor referred Kotchen to OnPoint. Kotchen, on behalf of Kotchen & Low, entered into an agreement with OnPoint for Connor's services.

         Connor prepared his expert report from his office in Indiana in regular consultation with Kotchen and Henken. In February 2017, defendants in the Wholesale Grocery Products litigation deposed Connor in Indianapolis. Kotchen traveled to Indiana to prepare Connor and defended the deposition.

         The Minnesota federal district court, alas, did not deem Connor's expert report so expert and excluded “[p]ortions” of it three days after Connor's deposition. FAC ¶ 46. In November 2017, the Wholesale Grocery Products plaintiffs secured at least a partial settlement of their claims, but Kotchen & Low and Boies refused and continue to refuse to pay Connor for his services. On November 17, 2017, OnPoint assigned to Connor “all claims, causes of action and/or demands of every kind and description” it may have had against Kotchen and Kotchen & Low arising from their agreement for Connor's services. Dkt. 15 Ex. 4.

         This lawsuit followed. Connor filed his original complaint in Marion Superior Court in Indianapolis on March 13, 2018. Defendants filed a general appearance, moved for an extension of time in which to answer, and, on April 12, 2018, removed the action to this Court, invoking our diversity jurisdiction. Dkt. 1. Defendants promptly moved to dismiss the complaint. Dkt. 13. Rather than defend the motion, Connor filed the now operative FAC on June 4, 2018, Dkt. 15, see Fed. R. Civ. P. 15(a)(1)(B), and simultaneously moved to transfer the case under 28 U.S.C. § 1404(a) to the District of Minnesota. Dkt. 16.

         The FAC contains claims for breach of contract (Count I), unjust enrichment or quantum meruit (Count II), and constructive fraud (Count III). Defendants renewed their motion to dismiss, Dkt. 19, contending that we lack personal jurisdiction over each of them, see Fed. R. Civ. P. 12(b)(2), and that Plaintiff's complaint, with one narrow exception, fails to state a claim upon which relief can be granted. See Fed. R. Civ. P. 12(b)(6). Defendants also filed a brief in opposition to Connor's transfer motion under 28 U.S.C. § 1404(a) (transfer for convenience when venue is proper in transferor court), though they do not object to transfer under 28 U.S.C. § 1406(a) (transfer because venue is improper in transferor court). Defs.' Br. Opp. 2.


         The parties have not asked us to address their pending motions in any particular order. Because Connor's motion to transfer is unopposed in substance, and because transfer under either Section 1404(a) or Section 1406(a) may be ordered in the absence of personal jurisdiction under functionally the same standard, Cote v. Wadel, 796 F.2d 981, 985 (7th Cir. 1986), judicial restraint arguably counsels ordering transfer without decision as to personal jurisdiction (which courts of this circuit have treated as a defect in venue for transfer purposes, see, e.g., Smith v. Windy Hill Foliage, Inc., 17-cv-895-wmc, 2018 WL 1747915, at *3 (W.D. Wis. Apr. 11, 2018), perhaps imprecisely, see Ross v. Colo. Outward Bound Sch., Inc., 822 F.2d 1524, 1526-28 (10th Cir. 1987)), or failure to state a claim. See, e.g., Tomchuck v. Union Tr. Co., 875 F.Supp. 242, 243 (S.D.N.Y. 1995) (“[I]t is unnecessary to resolve th[e] [personal jurisdiction] issue in the context of the pending motion because the Court has the power to transfer the case, if appropriate, regardless of whether it has personal jurisdiction over the defendant.”).

         In the District of Minnesota, however, “[w]hen a diversity case is transferred from one federal court to another, the choice of law depends” on whether venue was proper in the transferor court. Wisland v. Admiral Beverage Corp., 119 F.3d 733, 735 (8th Cir. 1997). A Section 1404(a) transferee court applies the law of the transferor court (here, Indiana); a Section 1406(a) transferee court applies its own (here, Minnesota). Id. at 736. “If the law of the transferor court were applied, a plaintiff could deliberately file in a jurisdiction with favorable law but clearly improper venue and benefit from its choice.” Id. Because Minnesota's choice-of-law rules in contract cases differ markedly from Indiana's, compare Milkovich v. Saari, 203 N.W.2d 408 (Minn. 1973), with W.H. Barber Co. v. Hughes, 63 N.E.2d 417 (Ind. 1945), the nature of the transfer is likely material to the case. Accordingly, it is appropriate here to decide the personal jurisdiction issue, which is the only defect in “venue” Defendants point to (and the only defect they could point to in a case properly removed under 28 U.S.C. § 1441, see Polizzi v. Cowles Magazines, Inc., 345 U.S. 663, 665 (1953)).

         As for failure to state a claim, comity counsels against transferring a facially worthless case, or so much of a case as is facially worthless, no matter which transfer statute applies. To forestall this possibility, our adjudication of Defendants' Rule 12(b)(6) motion is in order as well.

         With that procedural ground cleared, we proceed to the merits of the pending motions. We conclude that the complaint fails to state a claim against Henken or Boies. Connor's claims against these Defendants are therefore dismissed with prejudice without regard to personal jurisdiction. Finding that the complaint does state a claim against Kotchen and Kotchen & Low, we next conclude that these Defendants are subject to this Court's personal jurisdiction. Finally, finding transfer to be in the interest of justice, we transfer the balance of the case to the District of Minnesota.


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