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Rolls-Royce North American Technologies Inc. v. Dynetics, Inc.

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

November 19, 2019

DYNETICS, INC., Defendant.



         This matter is before the Court on Defendant Dynetics, Inc.'s (“Dynetics”) Motion to Transfer Venue under 28 U.S.C. § 1404(a). (Filing No. 14). Plaintiff Rolls-Royce North American Technologies, Inc. (“Rolls-Royce”) initiated this action in state court, asserting a claim to enforce an arbitration provision of a contract and multiple claims for breach of that contract (Filing No. 1-2). Dynetics removed the case to federal court and promptly filed the instant Motion, requesting that this action be transferred to the United States District Court for the Northern District of Alabama. For the following reasons, Dynetics' Motion to Transfer Venue is denied.

         I. BACKGROUND

         Rolls-Royce, a corporation that principally builds aircraft engines and other machinery is headquartered in Indianapolis, Indiana. (Filing No. 1-2 at 3.) In addition to providing goods to private sector consumers, Rolls-Royce provides its goods, services, and expertise to the United States Government pursuant to Government contracts and subcontracts, often with branches of the military. Id. at 4. LibertyWorks, also based in Indianapolis, is a wholly-owned Rolls-Royce subsidiary that performs a number of these Government contracts, particularly those focused on developing advanced technology for propulsion and power often involving classified data and programs important to United States national security. Id.

         LibertyWorks frequently partners with other businesses to provide comprehensive research and development services to the United States military. These partnerships are often formalized with “teaming agreements” under which LibertyWorks and its partner agree to work together to submit a proposal in response to a Government solicitation and perform any resulting contract. These teaming agreements generally require the parties to work exclusively with each other for the duration of the contract.

         Defendant Dynetics is a corporation organized under the laws of the State of Alabama with its principal place of business in Huntsville, Alabama. In 2017, the United States Army released a Request for Proposals for development of a vehicle-based high-energy laser. On April 21, 2017, LibertyWorks entered into a teaming agreement (the “Teaming Agreement”) with Dynetics, in which Dynetics would submit a proposal to the Army as the prime contractor, and LibertyWorks would serve as the exclusive subcontractor for the power and thermal energy portion of the project.

         The Teaming Agreement includes an exclusivity provision that states

Dynetics agrees that where Subcontractor can meet: (1) pricing targets established by [Dynetics]; (2) schedule requirements; and (3) technical capabilities, Subcontractor shall be Dynetics' exclusive source for the scope listed in Exhibit A Section 6 (Power and Thermal Management) and shall not pursue or use other proposals for this scope (Power and Thermal Management) of the Contract during the term of this Agreement subject [sic] the exceptions noted above.

(Filing No. 1-2 at 5.) The Teaming Agreement also provides that the parties will resolve any disputes by binding arbitration under the Federal Arbitration Act. The United States Army awarded Dynetics a contract in August 2017, and the two parties began working together to fulfill that contract.

         In September 2019, a dispute arose between the parties, the intricacies of which are immaterial to this Motion. It suffices to say that Dynetics believes LibertyWorks has failed to meet the exclusivity requirements of the Teaming Agreement. In their Complaint, Rolls-Royce alleges that Dynetics manufactured a dispute as a pretext to avoid its own requirement of exclusivity under the Teaming Agreement and that Dynetics ignored the arbitration provision of that agreement. The Complaint, originally filed in the Marion Superior Court on October 20, 2019, brings claims for breach of contract and seeks declaratory judgment to enforce the arbitration provision.

         LibertyWorks has initiated arbitration and on October 23, 2019, Rolls-Royce filed a Motion for Temporary Restraining Order and Preliminary Injunction, seeking immediate injunctive relief from this Court to preserve the status quo. (Filing No. 1-2 at 2). In particular, Rolls-Royce is asking the Court to enjoin Dynetics from (1) terminating the Teaming Agreement, (2) treating the exclusivity provision of the Teaming Agreement as of no effect, (3) negotiating with any other entities regarding the work to be exclusively performed by LibertyWorks under the Teaming Agreement, and (4) sharing any of LibertyWorks's confidential and/or proprietary trade secrets with any other entities. (Filing No. 11.) The Court has scheduled a hearing on that Motion for December 4, 2019. Also on October 23, 2019, Dynetics filed this Motion to Transfer Venue to the United States District Court for the Northern District of Alabama. (Filing No. 14.)


         “Congress enacted the federal change of venue statute, codified at 28 U.S.C. § 1404, to allow a district court to transfer an action filed in a proper, though not necessarily convenient, venue to a more convenient district.” Research Automation, Inc. v. Schrader-Bridgeport Int'l, Inc., 626 F.3d 973, 977 (7th Cir. 2010). A party may seek change of venue pursuant to 28 U.S.C. § 1404(a), which states, “[f]or 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 or to any district or division to which all parties have consented.” Id. at 977.

         District courts have substantial deference when deciding Section 1404(a) motions to transfer venue. Research Automation, 626 F.3d at 976-77. “Section 1404(a) is intended to place discretion in the district court to adjudicate motions for transfer according to a case-by-case consideration of convenience and fairness.” Id. at 977 (quoting Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988)) (internal punctuation omitted). “The statute permits a flexible and individualized analysis and affords district courts the ...

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