Nat'l Presto v. Norgle, Charles R. ( 2003 )

In the
United States Court of Appeals
For the Seventh Circuit
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No. 03-1873
IN RE: NATIONAL PRESTO INDUSTRIES, INC.,
Petitioner.
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Petition for a Writ of Mandamus to the United States
District Court for the Northern District of Illinois, Eastern Division.
No. 02 C 5027—Charles R. Norgle, Sr., Judge.
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SUBMITTED APRIL 23, 2003—DECIDED OCTOBER 21, 2003
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Before BAUER, POSNER, and WILLIAMS, Circuit Judges.
POSNER, Circuit Judge. The Securities and Exchange
Commission has sued National Presto Industries in the
federal district court in Chicago, charging that Presto has
been operating as an unregistered investment company in
violation of Section 7(a) of the Investment Company Act of
1940, 15 U.S.C. §§ 80a-1 et seq. Presto asked the court to
transfer the case to the Western District of Wisconsin
pursuant to 28 U.S.C. § 1404(a), which authorizes changes of
venue “for the convenience of parties and witnesses, in the
interest of justice.” The district judge denied the motion,
emphasizing that the Northern District of Illinois was the
venue most convenient for the SEC and that a plaintiff’s
choice of forum is entitled to considerable deference. An
order granting or denying a motion under Rule 1404(a) is
not a final order, but Presto has filed a petition for a writ of
2 No. 03-1873
mandamus asking us to direct the district court to transfer
the action to the Western District of Wisconsin. The petition
raises the question, on which there are no cases in this court
and few elsewhere, of the weight to be given a government
agency’s appeal to convenience in resisting a motion for
change of venue.
Presto faces an uphill fight in seeking mandamus, which
is granted only upon a demonstration that the district court
“so far exceeded the proper bounds of judicial discretion as
to be legitimately considered ursurpative in character or in
violation of a clear and indisputable legal right, or at the
very least, patently erroneous” and that the injury caused by
the challenged order cannot be repaired by any means other
than mandamus, such as by waiting till the appeal from the
final judgment. In re Rhone-Poulenc Rorer Inc., 51 F.3d 1293,
1295 (7th Cir. 1995); In re Sandahl, 980 F.2d 1118, 1119 (7th
Cir. 1992). The requirement of irreparable harm is fulfilled
in this case. Granted that unrecoverable costs of litigation,
such as attorneys’ fees, do not count as irreparable harm,
FTC v. Standard Oil Co., 449 U.S. 232, 244 (1980); Renegotia-
tion Board v. Bannercraft Clothing Co., 415 U.S. 1, 24 (1974);
PaineWebber Inc. v. Farnam, 843 F.2d 1050 (7th Cir.
1988)—otherwise every interlocutory ruling in a litigation
would be subject to immediate appellate review via
mandamus—Presto would not have an adequate remedy for
an improper failure to transfer the case by way of an appeal
from an adverse final judgment because it would not be able
to show that it would have won the case had it been tried in
a convenient forum.
Whether the denial of the motion to transfer was patently
erroneous, or indeed erroneous at all, is much more doubt-
ful, especially since, “unless the balance is strongly in favor
of the defendant, the plaintiff’s choice of forum should
rarely be disturbed.” Gulf Oil Corp. v. Gilbert, 330 U.S. 501,
No. 03-1873 3
508 (1947); see also Zelinski v. Columbia 300, Inc., 335 F.3d
633, 643 (7th Cir. 2003); Pollux Holding Ltd. v. Chase
Manhattan Bank, 329 F.3d 64, 70 (2d Cir. 2003). Rarely,
however, is not never. See, e.g., Chicago Rock Island & Pac.
R.R. v. Igoe, 220 F.2d 299, 305 (7th Cir. 1955); In re Horseshoe
Entertainment, 337 F.3d 429, 434-35 (5th Cir. 2003); cf. Hustler
Magazine, Inc. v. United States District Court, 790 F.2d 69, 73
(10th Cir. 1986).
According to Presto, the only relation between the
Northern District of Illinois and the SEC’s lawsuit is that it
was the agency’s Midwest Regional Office, which is located
in Chicago, that conducted the investigation leading up to
the suit. This is a bit of an exaggeration, since Presto
operates throughout the country and at least two investors
alleged to have been harmed by its alleged violation of the
Investment Company Act are located in Chicago. But this is
just to say that Chicago is one permissible venue for the suit;
it may not be the most convenient, or the most just. A
number of Presto’s potential witnesses are located in the
Western District of Wisconsin, which is where Presto’s
headquarters is located (in the city of Eau Claire), while it
appears that the only persons who would be inconve-
nienced by having to litigate in that district rather than in
Chicago would be members of the SEC’s Midwest Regional
Office staff. Moreover, all Presto’s potential witnesses, some
of whom may be reluctant to become involved in the
litigation, are within the subpoena power of the federal
district for the Western District of Wisconsin, but are out of
subpoena range of the district court in Chicago. (Although
defendants in federal securities cases, including cases under
the Investment Company Act, can be subpoenaed wherever
located, see 15 U.S.C. §§ 77v, 78aa, 80a-49, witnesses are
subject to the usual 100-mile limitation. See Fey v. Walston &
Co., Inc., 493 F.2d 1036, 1053 n. 21 (7th Cir. 1974); Brockton
Savings Bank v. Peat, Marwick, Mitchell & Co., 771 F.2d 5, 10
4 No. 03-1873
(1st Cir. 1985).) And the original documents in the case are
located in the Western District of Wisconsin as well, at
Presto’s headquarters. The Western District of Wisconsin
also has a lighter docket than the Northern District of
Illinois, a factor relevant to the “interest of justice” criterion
in section 1404(a). So really the only thing on the side of a
Chicago venue is the convenience of the SEC, which is in
turn a function of its decision on where to locate its regional
offices. The reason that Presto was not investigated by the
SEC’s office in Wisconsin is that the SEC has no office in
Wisconsin.
We can find only two reported appellate cases (both
involving the SEC, just like this case, and neither recent) on
the weight if any that is to be given to a federal agency’s
convenience in a change of venue analysis under section
1404(a). See SEC v. Savoy Industries, Inc., 587 F.2d 1149, 1155
(D.C. Cir. 1978); Golconda Mining Corp. v. Herlands, 365 F.2d
856 (2d Cir. 1966). Given the vast resources of the federal
government, it might seem that the government would
rarely if ever be seriously inconvenienced by being com-
pelled to litigate in a district more convenient to the defen-
dant. But that would be unrealistic. Federal agencies have
limited resources, and the SEC in particular is often
outgunned by the affluent defendants that it sues. The SEC
cannot afford a regional office in every state. It has only
eleven regional offices and the only one in the midwest is
the Chicago office, which is much closer to the Western
District of Wisconsin than the next closest regional office,
which is the one in Atlanta. It is not as if the SEC were
trying to make Presto defend in Miami, where another of its
regional offices is located.
When plaintiff and defendant are in different states there
is no choice of forum that will avoid imposing inconve-
nience; and when the inconvenience of the alternative
No. 03-1873 5
venues is comparable there is no basis for a change of
venue; the tie is awarded to the plaintiff, as the cases cited
earlier make clear. See also Wyndham Associates v. Bintliff,
398 F.2d 614, 620-21 (2d Cir. 1968). We think this principle
should hold even when one of the parties is a federal agency
that will suffer inconvenience if forced to litigate in the
defendant’s district because the agency or its field office is
in another district. When government lawyers and investi-
gators incur time and travel costs to litigate in a remote
forum, the burden falls on the taxpayer, who finances the
federal government and who is no less worthy of the
protection of the law than corporate officers, shareholders,
and employees.
We doubt that the balance of convenience actually favors
the SEC or even that we have a tie. Given the location of
documents, the limited subpoena power of the Northern
District of Illinois with regard to Presto’s potential wit-
nesses, and the lighter docket in the Western District of
Wisconsin, we suspect that the balance favors the Western
District. But the balance is not so far askew as to justify the
extraordinary relief sought by Presto.
A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—10-21-03