In Re: Volkswagen AG ( 2004 )

United States Court of Appeals
Fifth Circuit
F I L E D
REVISED June 4, 2004
May 18, 2004
UNITED STATES COURT OF APPEALS
Charles R. Fulbruge III
For the Fifth Circuit Clerk
No. 04-40303
In re VOLKSWAGEN AG; VOLKSWAGEN OF AMERICA, INC.,
Petitioners,
Petition for Writ of Mandamus to the United States
District Court for the
Eastern District of Texas, Marshall
Before SMITH, DeMOSS, and STEWART, Circuit Judges.
PER CURIAM:
For the reasons more particularly set forth hereinafter,
IT IS ORDERED that the petition for writ of mandamus is
GRANTED.
IT IS FURTHER ORDERED that Petitioners' motion (i) to VACATE
the order of the United States District Court for the Eastern
District of Texas dated February 18, 2004, denying Volkswagen's
motion to transfer venue, and (ii) to REMAND this case to the
District Court with instructions to transfer this case to the San
Antonio Division of the United States District Court for the
Western District of Texas is GRANTED.
BACKGROUND
On July 24, 2001, Matthew Fuentes was operating a Toyota truck
with the permission of the owner of that truck, Carol Morrow.
Fuentes was proceeding southbound on N.W. Military Highway, a four-
lane highway in San Antonio, Texas, which is in the Western
District of Texas. Because he was intoxicated at the time, Fuentes
allowed his truck to veer off to the right side of his portion of
the highway and then swerved radically back to the left across both
lanes of his portion of the highway and into the portion of the
highway for northbound traffic where the truck collided with a
Volkswagen passenger vehicle being driven by Jennifer Anne Scott,
causing Scott to suffer serious injury. Subsequent to this
collision, Fuentes was convicted of intoxication assault, see TEX.
PEN. CODE ANN. § 49.07 (Vernon 2004), for his role in the collision
and is currently incarcerated in a jail in San Antonio, Texas.
On June 9, 2003, Jette Scott, individually and as guardian of
Jennifer Scott, an incapacitated adult who is her daughter
(hereinafter “Plaintiffs”), filed suit in the Marshall Division of
the United States District Court for the Eastern District of Texas
against Volkswagen AG, a foreign corporation organized under the
laws of Germany ("VAG"), and Volkswagen of America, Inc., a
corporation organized under the laws of the State of New Jersey
("VoAI") (collectively, “Volkswagen Defendants”), asserting that
the injuries sustained by Jennifer Scott on July 24, 2001, were
sustained because the Volkswagen vehicle which she was driving was
"not reasonably crashworthy and was not reasonably fit for
unintended, but clearly foreseeable accidents" and that such
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vehicle was "unreasonably dangerous as designed, manufactured,
assembled, marketed and tested."
On August 20, 2003, VoAI answered Plaintiffs' petition and
moved the Eastern District Court for permission to file its
original third-party complaint against Fuentes and Morrow, alleging
that "although both Fuentes and Morrow may be liable for all or
part of the damages [P]laintiffs seek to recover from VoAI,
[P]laintiffs have not sued either of these individuals."
Thereafter, VoAI filed a motion seeking to join Fuentes and Morrow
as responsible Third-Party Defendants pursuant to Texas Civil
Practices & Remedies Code, Chapter 33.004. The Eastern District
Court, on September 30, 2003, issued an order granting VoAI's
motion to join Fuentes and Morrow as responsible third-parties; and
on October 28, 2003, VAG and VoAI filed a motion with supporting
memorandum to transfer venue to the San Antonio Division of the
United States District Court for the Western District of Texas,
pursuant to the provisions of 28 U.S.C. § 1404(a), which provides
that "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." On
February 18, 2004, the Eastern District Court entered an order
denying VoAI's motion to change venue to the San Antonio Division
of the Western District of Texas.
Volkswagen filed a petition for a writ of mandamus with this
Court on March 16, 2004.
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ANALYSIS
This Court will issue a writ of mandamus to correct a denial
of a 28 U.S.C. § 1404(a) motion to transfer venue if the district
court failed to correctly construe and apply the relevant statute,
or to consider the relevant factors incident to ruling upon the
motion, or otherwise abused its discretion in deciding the motion.
Castanho v. Jackson Marine, Inc., 650 F.2d 546, 550 (5th Cir.
1981). We review all questions concerning venue under the abuse of
discretion standard. United States v. Asibor, 109 F.3d 1023, 1037
(5th Cir. 1997). This Court recently enumerated the appropriate
Pfizer standards1 for deciding the propriety of a district court's
ruling on a motion to transfer under § 1404(a), which include:
a.) Did the district court correctly construe and apply
the relevant statutes;
b.) Did the district court consider the relevant
factors incident to ruling upon a motion to
transfer; and
c.) Did the district court abuse its discretion in
deciding the motion to transfer.
In re Horseshoe Entm’t, 337 F.3d 429, 432 (5th Cir.) cert.
denied, 124 U.S. 826 (2003).
In applying the provisions of § 1404(a), we have suggested
that the first determination to be made is whether the judicial
district to which transfer is sought would have been a district in
which the claim could have been filed. Id. at 433. The Eastern
District Court did not make any determination as to this factor,
but we conclude that the San Antonio Division of the Western
1
Ex Parte Chas. Pfizer & Co., 225 F.2d 720 (5th Cir. 1955).
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District of Texas would have been an appropriate venue for
Plaintiffs' products liability suit against the Volkswagen
Defendants and likewise for VoAI's third-party complaint against
Fuentes and Morrow because jurisdiction would have been supportable
in each claim on the basis of diversity of citizenship, and venue
in the San Antonio Division of the Western District would have been
supportable on the grounds that it was the place where the accident
occurred and was also the residence of the two personal defendants
in the third-party action. See 28 U.S.C. §§ 1332 and 1391. There
is, therefore, no question in our mind that the San Antonio
Division of the Western District satisfies the requirement of
§ 1404(a), i.e., that it would have been a place where the claims
could have been originally filed.
In making a determination of whether a motion to transfer
venue is proper, we turn to the language of § 1404(a), which speaks
to the issue of "the convenience of parties and witnesses" and to
the issue of "in the interest of justice." The determination of
“convenience” turns on a number of private and public interest
factors, none of which are given dispositive weight. Action Indus.,
Inc. v. U.S. Fidelity & Guar. Co., 358 F.3d 337, 340 (5th Cir.
2004) (citing Syndicate 420 at Lloyd’s London v. Early Am. Ins.
Co., 796 F.2d 821, 827 (5th Cir. 1986)). The private concerns
include: (1) the relative ease of access to sources of proof;
(2) the availability of compulsory process to secure the attendance
of witnesses; (3) the cost of attendance for willing witnesses; and
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(4) all other practical problems that make trial of a case easy,
expeditious and inexpensive. Piper Aircraft Co. v. Reyno, 454 U.S.
235, 241 n.6 (1981). The public concerns include: (1) the
administrative difficulties flowing from court congestion; (2) the
local interest in having localized interests decided at home;
(3) the familiarity of the forum with the law that will govern the
case; and (4) the avoidance of unnecessary problems of conflict of
laws of the application of foreign law. Id.
As a general matter, the Eastern District Court abused its
discretion in determining that the only "parties and witnesses" who
needed to be considered were the parties and witnesses involved in
Plaintiffs’ products liability claim against the Volkswagen
Defendants. There is clearly nothing in § 1404(a) which limits the
application of the terms "parties" and "witnesses" to those
involved in an original complaint. Given the broad generic
applicability of the term "parties" and the term "witnesses," such
terms contemplate consideration of the parties and witnesses in all
claims and controversies properly joined in a proceeding. There is
no question that the Eastern District Court was correct in
permitting VoAI to bring the third-party claims under the relevant
Texas statutes against Fuentes and Morrow; but Fuentes and Morrow
thereby became "parties" whose convenience should be assessed on
VoAI’s motion to transfer;2 and the witnesses whom the Volkswagen
2
The docket indicates that neither Fuentes nor Morrow filed any
motions in the district court in response to Volkswagen’s transfer
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Defendants contemplate would testify in support of its claim for
contribution and/or indemnity against Fuentes and Morrow would
certainly become "witnesses" whose convenience should be assessed
in deciding the motion to transfer. The Supreme Court has clearly
indicated that either a defendant or a plaintiff can move for
change of venue under § 1404(a) and that the same treatment and
consideration should be given to the motion for transfer regardless
of who the movant of that motion may be. Ferens v. John Deere Co.,
494 U.S. 516, 530 (1990).
Plaintiffs' claim is derived from and based upon Texas law;
but, VoAI's claim to require Fuentes and Morrow to be brought in as
responsible parties and to seek a jury determination as to
proportionate responsibility is similarly derived from Texas
statutory law and is of equal dignity and import as Plaintiffs'
claim. Surely, Fuentes and Morrow are "parties" whose convenience
should have been evaluated by the Eastern District Court.
Similarly, the numerous fact witnesses, including San Antonio
policemen, San Antonio emergency medical personnel, San Antonio
hospital personnel, San Antonio treating physicians, and several
eyewitnesses and other persons who assisted at the collision scene
— all of whom live in and around the San Antonio metropolitan area
motion. Counsel for Fuentes and Morrow did communicate with this
court in a letter dated March 24, 2004, in which they stated that
they would not be filing any motions with regard to Volkswagen’s
petition for mandamus because they “are in agreement with
Volkswagen’s arguments as set forth in its petition.”
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— should have been considered as "witnesses" whose convenience
would be substantially improved by a trial of these claims in San
Antonio rather than in Marshall, Texas. The distance traveling by
car between Marshall, Texas, and San Antonio, Texas, is
approximately 390-400 miles.3 When the distance between an
existing venue for trial of a matter and a proposed venue under
§ 1404(a) is more than 100 miles, the factor of inconvenience to
witnesses increases in direct relationship to the additional
distance to be traveled.4 Additional distance means additional
travel time; additional travel time increases the probability for
meal and lodging expenses; and additional travel time with
overnight stays increases the time which these fact witnesses must
be away from their regular employment. Furthermore, the task of
scheduling fact witnesses so as to minimize the time when they are
removed from their regular work or home responsibilities gets
increasingly difficult and complicated when the travel time from
3
Moreover, there are no direct flights between San Antonio and
Marshall. The city nearest to Marshall for purposes of traveling
from San Antonio is Shreveport, Louisiana. There is, however, no
direct service between San Antonio and Shreveport, thereby
requiring passengers to make a stop either in Dallas/Fort Worth or
Houston, which comprises a total air travel time of at least two
and a half hours, in addition to the 40 mile drive from Shreveport
to Marshall.
4
We observe here that non-party witnesses in the third-party
action who are located in San Antonio are outside the Eastern
District’s subpoena power for deposition under FED. R. CIV. P.
45(c)(3)(A)(ii), and trial subpoenas for these witnesses to travel
more than 100 miles would be subject to motions to quash under FED.
R. CIV. P. 45(c)(3).
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their home or work site to the court facility is five or six hours
one-way as opposed to 30 minutes or an hour. See FED. R. CIV. P.
45(c)(1).
In its order of February 18, 2004, the Eastern District Court
expressly states that the case involves a “products liability
action aris[ing] out of a vehicle accident in San Antonio, Texas."
But instead of recognizing: (1) the relevance and materiality of
the testimony from numerous non-party fact witnesses identified in
VoAI's transfer motion upon whose testimony a jury would make its
ultimate determination as to proportionate responsibility under the
relevant Texas statutes; and (2) the obvious conclusion that it
would be more convenient for these witnesses to testify in San
Antonio rather than in Marshall, Texas, the Eastern District Court
rationalized its non-consideration of the convenience of these
witnesses with the statement that: "In a products liability suit
like this one, it is questionable just how many witnesses to the
accident itself would be necessary for the trial of this case."
Instead, the Eastern District Court concluded that the “main issue
concerns the design and manufacture of the vehicle,” thus the only
witnesses of relevance would be expert witnesses and the Volkswagen
Defendants’s company representatives, for whom it would be “just as
easy” “to travel from Germany and other parts of the United States
to Marshall as it is to travel to San Antonio.” In doing so, the
Eastern District Court failed to properly construe and apply
§ 1404(a) because it did not consider in its analysis the
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convenience of the third-party defendants Fuentes and Morrow or the
witnesses associated with VoAI’s third-party complaint.
The Eastern District Court also based its decision in part on
its finding that “the place of the alleged wrong is the design shop
and factory in Germany where the product was designed and
manufactured, not the site of the accident.” While that premise
may have been true at the initial stage of this proceeding, once
the Eastern District Court permitted the Volkswagen Defendants to
join Fuentes and Morrow as third-party defendants, it was obligated
to recognize the changed nature of the lawsuit. In other words, it
was incumbent upon the Eastern District Court to consider that the
site of the accident, i.e., the Western District of Texas, became
a relevant factor as soon as Fuentes and Morrow were made a part of
the case. By failing to consider in its calculus the situs of the
accident as it related to the Volkswagen Defendants’ third-party
claim against Fuentes and Morrow, the Eastern District Court abused
its discretion.
Likewise, in its order, the Eastern District Court states that
the “citizens and jurors of the Eastern District of Texas have as
significant an interest in the resolution of this action as do the
citizens and jurors of the Western District of Texas." Again,
while this statement may have been supportable initially, with the
addition of Fuentes and Morrow as responsible third parties, the
“local interest in having localized interests decided at home,”
Piper Aircraft, 454 U.S. at 241 n.6, weighs heavily in favor of the
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Western District of Texas. Both Plaintiffs and Third-Party
Defendants reside in the San Antonio area, the locale of the
accident. In addition, the accident produced a wide array of
witnesses who either reside or are employed in San Antonio. The
Supreme Court has determined that "[j]ury duty is a burden that
ought not to be imposed upon the people of a community which has no
relation to the litigation." Gulf Oil Corp. v. Gilbert, 330 U.S.
501, 508-09 (1947). Plaintiffs have failed to demonstrate and the
Eastern District Court has failed to explain how the citizens of
the Eastern District of Texas, where there is no factual connection
with the events of this case, have more of a localized interest in
adjudicating this proceeding than the citizens of the Western
District of Texas, where the accident occurred and where the
entirety of the witnesses for the third-party complaint can be
located. Arguably, if Plaintiffs had alleged that the Volkswagen
vehicle was purchased from a Volkswagen dealer in Marshall, Texas,
the people of that community might have had some relation, although
attenuated, to this litigation; but as it stands, there is
absolutely nothing in this record to indicate that the people of
Marshall, or even the Eastern District of Texas, have any
meaningful connection or relationship with the circumstances of
these claims.
We also conclude that the Eastern District Court reversibly
erred in considering a factor that is not part of the § 1404(a)
analysis. Specifically, in its order the district court considers
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that counsel for both parties are located in Dallas, Texas. The
word "counsel" does not appear anywhere in § 1404(a), and the
convenience of counsel is not a factor to be assessed in
determining whether to transfer a case under § 1404(a). In re
Horseshoe, 337 F.3d at 434 (finding that the “factor of ‘location
of counsel’ is irrelevant and improper for consideration in
determining the question of transfer of venue”). Similar to the
facts in In re Horseshoe, neither the plaintiffs nor the Eastern
District Court favors us with “a citation to any Supreme Court or
Circuit Court decision recognizing the appropriateness of this
factor nor have they cited any statutory text or any legislative
history indicating the intention of Congress that such a factor be
considered in deciding a motion to transfer.” Id. As such, the
Eastern District Court’s reliance on the location of counsel as a
factor to be considered in determining the propriety of a motion to
transfer venue was an abuse of discretion.
CONCLUSION
Having carefully reviewed the parties' respective briefing,
and for the reasons set forth above, we find that the Eastern
District Court abused its discretion in denying the Volkswagen
Defendants’ motion to transfer venue. Accordingly, we GRANT
Petitioners’ writ of mandamus and thereby VACATE the Eastern
District Court’s order and REMAND this case to the Eastern District
Court with instructions to transfer this case to the San Antonio
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Division of the United States District Court for the Western
District of Texas.
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