Relman, Dane & Colfax Pllc v. Fair Housing Council of San Fernando Valley ( 2019 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
RELMAN, DANE & COLFAX PLLC,
Plaintiff,
v. Case No. 1:18-cv-00495 (TNM)
FAIR HOUSING COUNCIL OF SAN
FERNADO VALLEY, et al.,
Defendants.
MEMORANDUM OPINION
The Fair Housing Council of San Fernando Valley (“FHC”) and Mei Ling (collectively,
“the Clients”) retained Relman, Dane & Colfax PLLC (“Relman”), a Washington, D.C. law firm,
to represent them in a False Claims Act suit against the City of Los Angeles and its Community
Redevelopment Agency. But the attorney-client relationship soured, and the Clients told Relman
that they were voiding their contingency fee agreements (“the Agreements”) with the firm.
Relman sued, alleging anticipatory breach and seeking a declaration that the Clients remained
bound by the Agreements. The Clients moved to dismiss Relman’s Complaint or to transfer this
matter to the Central District of California (“CDCA”). The Court referred this case to Magistrate
Judge Meriweather for full case management, and she has submitted a Report and
Recommendation (“Report”) on the Clients’ motions. Relevant here, the Magistrate Judge
recommends transferring this matter to the CDCA. For the reasons below, the Court will adopt
the Report and transfer this matter over Relman’s objections.
I.
The Report thoroughly recounts the background of this case. See R. & R. at 2–7, ECF
No. 33. 1 Only a brief procedural history is necessary. After Relman filed its Complaint, FHC
moved to dismiss. FHC argued that Relman’s claims were not ripe, the Court lacked personal
jurisdiction over FHC, and venue was improper. FHC Mot. to Dismiss at 23–29, 32–46, ECF
No. 10. Ms. Ling also moved to dismiss, raising similar arguments. Ling Mot. to Dismiss at 15–
24, 26–30, ECF No. 22-1. In the alternative, the Clients requested that the Court transfer this
matter to the CDCA under 28 U.S.C. § 1404(a). 2 See id. at 29 n.14; FHC Mot. to Dismiss at 46.
Relman opposed both motions on all fronts. Opp’n to FHC Mot. to Dismiss, ECF No. 14; Opp’n
to Ling Mot. to Dismiss, ECF No. 26.
The Magistrate Judge largely agreed with Relman. She found that Relman’s claims were
ripe, that the Court had personal jurisdiction over the Clients, and that venue was proper. 3 R. &
R. at 10–36. The Magistrate Judge, however, agreed with the Clients that the interest of justice
supported transferring this matter to the CDCA. Id. at 36–45.
Weighing the private interests in transfer, the Magistrate Judge concluded that the
parties’ choice of forum “slightly weighs against transfer,” but the convenience of the parties and
witnesses “tilts . . . slightly in favor of transferring the case to California.” Id. at 39, 41. The
other private interest factors—where the claim arose and the ease of access to sources of proof—
according to the Magistrate Judge, are neutral. Id. at 39, 41.
1
All citations are to the page numbers generated by the Court’s CM/ECF system.
2
Relman complains that the Clients’ arguments for transfer under Section 1404(a) were cursory. But the Clients
explicitly requested transfers under that section. Ling Mot. to Dismiss at 29 n.14, ECF No. 22-1; FHC Mot. to
Dismiss at 46, ECF No. 10. The grounds for those requests largely overlap with the arguments raised in the Clients’
discussions on personal jurisdiction and venue—e.g., “requiring Ling to litigate this action in the District of
Columbia would impose an inequitable and onerous burden,” Ling Mot. to Dismiss at 30 (arguing forum non
conveniens). The Magistrate Judge did not error by considering them.
3
Neither FHC nor Ms. Ling objected to the Report.
2
As for the public interest in transfer, the Magistrate Judge concluded that the related
False Claims Act litigation pending in the CDCA—the litigation underlying the Agreements at
issue—“favors transfer.” Id. at 43. The other public interest factors—the relative congestion of
the courts, the local interest in resolving the controversy, and the courts’ familiarity with
governing law—are neutral, according to the Magistrate Judge. Id. at 42–45. Finally, she
determined that the balance of public and private interests favors transfer. Id. at 45.
Relman objects. Objs. to R. & R., ECF No. 34. It argues that it was improper for the
Magistrate Judge to consider the public interest factors after finding that the private interest
factors were in equipoise. Id. at 12–13. More, Relman objects to the Magistrate Judge’s
findings on several individual private and public interest factors. Id. at 14–22.
II.
The Court’s review is limited to “only those issues that the parties have raised in their
objections to the Magistrate Judge’s report.” Taylor v. District of Columbia, 205 F. Supp. 3d 75,
79 (D.D.C. 2016). “The decision whether to stay or transfer a case is a non-dispositive matter
committed to the broad discretion of a district court.” Am. Ctr. for Civil Justice v. Ambush, 794
F. Supp. 2d 123, 129 (D.D.C. 2011). And “[w]here, as here, a party timely objects to a
magistrate judge’s decision with respect to a non-dispositive matter, the Court must modify or
set aside all or part of that decision if it is ‘clearly erroneous’ or ‘contrary to law.’” Id. (quoting
Fed. R. Civ. P. 72(a)).
III.
Relman objects to the Magistrate Judge’s recommendation to transfer this matter. But the
Magistrate Judge’s determinations were neither clearly erroneous nor contrary to law.
First, Relman argues that it was “contrary to law” for the Magistrate Judge to evaluate the
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public interest factors after finding that the private interest factors tipped in neither direction.
Objs. to R. & R. at 12–13. Not so. Indeed, the cases that Relman cites betray its argument.
According to Relman, under Section 1404(a), “transfer is permitted only ‘[i]f the balance
of the private and public interests favors a transfer of venue.’” Id. at 13 (quoting Flick v.
Sessions, 298 F. Supp. 3d 205, 207 (D.D.C. 2018)) (emphasis added by Relman). Exactly. The
decision whether to transfer a matter depends on a balance of private and public interest factors.
Nothing in Flick precludes a court from considering public interest factors where the private
interest factors are unclear. Indeed, courts often consider public interest factors when the private
interest factors are inconclusive. See, e.g., Douglas v. Chariots for Hire, 918 F. Supp. 2d 24, 33
(D.D.C. 2013) (“Finding that the private-interest factors do not tilt strongly in favor of either
venue, the Court now turns to the public-interest ones.”); see also Bederson v. United States, 756
F. Supp. 2d 38, 50 (D.D.C. 2010) (considering the public interest factors even after
“conclud[ing] that the private interest factors weigh against transfer”).
But Relman argues that where “the private interest factors do not support the transfer” the
Court “is not required to weigh the public interest factors.” Objs. to R. & R. at 13 (quoting
Ingram v. Eli Lilly & Co., 251 F. Supp. 2d 1, 5 (D.D.C. 2003)). Perhaps. But this is not a case in
which the private factors clearly weigh against transfer. And even the court in Ingram
considered the public interest factors after determining that the private interest factors did not
support the transfer. 251 F. Supp. 2d at 5–6. More still, even if a court may stop its inquiry after
finding that the private interest factors do not favor transfer, Relman has cited no authority
requiring the Court to give the private interest factors alone dispositive weight. So it was not
contrary to law for the Magistrate Judge to consider the public interest factors after concluding
that the private interest factors were in equipoise.
4
Next, Relman objects to the Report’s findings on individual private interest factors.
Relevant here, the private interest factors courts consider when weighing whether to transfer a
matter include the parties’ choice of forum, the convenience of parties and witnesses, and where
the claim arose. Bederson, 756 F. Supp. 2d at 46. The Magistrate Judge’s findings on those
factors were neither clearly erroneous nor contrary to law.
The Magistrate Judge correctly recognized that “[t]he plaintiff’s choice of forum is
typically a ‘paramount consideration’” and thus Relman’s “choice of forum weighs strongly
against transferring venue.” R. & R. at 38–39 (quoting Aishat v. U.S. Dep’t of Homeland Sec.,
288 F. Supp. 3d 261, 268 (D.D.C. 2018)). Even so, the Magistrate Judge determined that, given
the Clients’ legitimate interest in transfer, their choice of forum somewhat counterbalanced
Relman’s interest. Id. at 39. Indeed, while it is true that “a defendant’s choice of forum is . . .
not ordinarily entitled to deference . . . to the extent th[at] factor carries any heft . . . it weighs in
favor of transfer.” Aishat, 288 F. Supp. 3d at 269. Summing up these considerations, the
Magistrate Judge determined that Relman’s choice of forum still controlled: on balance, the
parties’ choice of forum “weigh[ed] slightly against transfer.” R. & R. at 39. So the Magistrate
Judge correctly gave Relman’s choice of forum “paramount consideration,” finding that the
Clients’ choice of forum did not neutralize or overtake Relman’s preference.
The Magistrate Judge also correctly determined that where the claim arose is a neutral
factor here. Relman argues that for purposes of the transfer analysis, claims arise where most of
the significant events giving rise to the claims occurred. Objs. to R. & R. at 14. And, according
to Relman, that is Washington, D.C. Id. at 15. To support its argument, Relman points to the
Magistrate Judge’s analysis of whether venue is proper in this District. Id. But, of course,
considering only D.C.’s connection to the litigation is a unidirectional examination. That
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analysis does not consider whether other substantial events might have occurred elsewhere. R. &
R. at 34–35 (citing 28 U.S.C. § 1391(b)). Thus, that venue is proper in this District does not
establish that most of the substantial events occurred here.
True, the Magistrate Judge concluded that “a substantial portion of the events concerning
[the Clients’] retention of [Relman] . . . occurred in D.C.” R. & R. at 35. But she also found that
several significant events occurred in California. For example, the Clients signed the
Agreements in California, and while Relman did legal work here, it did so to further the Clients’
interest in the California-based litigation. Id. at 39. And “pertinent communications were sent
from California to D.C. and vice versa.” Id. The Magistrate Judge did not clearly err in finding
that both forums, this District and the CDCA, hosted significant events relevant to Relman’s
claim, and “[w]here claims arise from actions in several fora, ‘this factor does not weigh in favor
or against transfer.’” Douglas, 918 F. Supp. 2d at 32 (quoting Bederson, 756 F. Supp. 2d at 48).
More, the convenience of the parties and witnesses favors transfer. The Magistrate Judge
recognized that “[l]itigating in a particular forum is likely to inconvenience one party or another
unless all parties reside in the chosen district.” R. & R. at 40 (quoting Defs. of Wildlife v. Jewell,
74 F. Supp. 3d 77, 85 (D.D.C. 2014)). According to Relman, traveling to California would
inconvenience it. Meanwhile, FHC claims it would be inconvenient for it to defend against
Relman’s suit in this District. If those were the only considerations this factor would probably
not favor transfer. See Fanning v. Capco Contractors, Inc., 711 F. Supp. 2d 65, 70–71 (D.D.C.
2010) (where transferring an action “would merely shift the balance of inconvenience from [the
defendants] to [the plaintiff] . . . , such a shift is insufficient to warrant a transfer to the
defendant’s favored venue”). But the Magistrate Judge appropriately found that the convenience
for Ms. Ling of litigating this matter in the CDCA tips the scale toward transfer. R. & R. at 41.
6
Ms. Ling is wheelchair-bound, and she is “in poor physical health.” Ling Decl. ¶ 26,
ECF No. 22-2. The Magistrate Judge did not clearly err in finding that cross-country travel
would pose a considerable hardship on Ms. Ling. Indeed, “[a] moving party’s medical disability
can support a motion to transfer venue.” Elemary v. Philipp Holzmann A.G., 533 F. Supp. 2d
144, 153 (D.D.C. 2008). Even though Relman has offered to take Ms. Ling’s deposition in
California, that does not relieve the hardship she would face attending hearings and, if necessary,
trial. Transferring this matter would allow Ms. Ling to be present for the case brought against
her and thereby better participate in her defense. The Court agrees with the Magistrate Judge’s
conclusion that Ms. Ling’s interest in properly defending the case against her tipped the scale in
favor of transfer.
As for the convenience of witnesses, the Report correctly noted that “[t]he witnesses are
based in both D.C. and California.” R. & R. at 40. Relman does not dispute that there are
witnesses in both forums, but it claims that the greater number of “important witnesses” are in
the District. Objs. to R. & R. at 15–16. But it is not clear why Relman’s D.C.-based witnesses
would be more important than the many California-based witnesses whom FHC has identified,
see R. & R. at 40. At this pre-discovery stage, the relative importance of witnesses is a guessing
game the Court declines to play.
To the extent the Court can identify an “important witness,” Ms. Ling certainly qualifies,
and “[w]hen considering the convenience of witnesses, a court must pay particular attention to
whether important witnesses will be available to give live trial testimony.” United States ex rel.
Westrick v. Second Chance Body Armor, Inc., 771 F. Supp. 2d 42, 48–49 (D.D.C. 2011). As
discussed above, if this matter proceeds here, it will be difficult for Ms. Ling to participate at
trial. Ultimately, Relman has not shown that the Magistrate Judge’s conclusion that the
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convenience of the parties and witnesses slightly favors transfer was either clear error or contrary
to law.
Relman also objects to the Magistrate Judge’s findings on the public interest factors. The
public interest factors include the potential transferee court’s familiarity with applicable law and
the congestion of the transferee court compared to that of the transferor court. Id. at 46. More,
the Magistrate Judge considered the related litigation pending in the CDCA. R. & R. at 43–44.
None of the Magistrate Judge’s findings on those factors was clearly erroneous or contrary to
law.
First, Relman contends that the Magistrate Judge wrongly found that the relative
congestion of the courts is a neutral factor. See Objs. to R. & R. at 17–18. Relman notes that, on
average, 442 cases are pending before each judge in the CACD while judges here have an
average of only 280 cases. Id. (citing 2017 statistics from the U.S. Courts’ website). But those
statistics tell only part of the story.
“When considering the congestion of the courts,” courts in this District often “compare[]
the districts’ median times from filing to disposition or trial.” Bartolucci v. 1-800 Contacts, Inc.,
245 F. Supp. 3d 38, 49 (D.D.C. 2017) (cleaned up). Under those metrics, this District is more
congested that the CDCA. This District has a longer median time from filing to disposition—5.6
months compared to 5 months—and a longer median time from filing to trial—48.7 months
compared to 22 months. 4 Ultimately, the Court declines to choose between the competing
metrics here. 5 Both districts are busy. It was neither clearly erroneous nor contrary to law for
4
See U.S. District Courts Combined Civil and Criminal Federal Court Management Statistics,
https://www.uscourts.gov/statistics/table/na/federal-court-management-statistics/2019/06/30-1 (last updated June 30,
2019).
5
Raw statistics provide “only a rough measure of the relative congestion of the dockets in the two districts.”
Aishat, 288 F. Supp. 3d at 271. “Any disparities between the lengths of time from filing to trial may also reflect
differences other than congestion, such as differences in the types of cases that are likely to be tried in each district
8
the Magistrate Judge to conclude that this factor is neutral. See, e.g., Defs. of Wildlife, 74 F.
Supp. 3d at 88.
Nor was it clear error or contrary to law for the Magistrate Judge to conclude that the
related litigation pending in the CDCA favors transfer. There is a clear, strong relationship
between this case and the litigation in California. The Agreements at issue relate to Relman’s
representation of the Clients in the False Claims Act case pending in the CDCA, and the Client’s
merits defenses rely largely on Relman’s conduct in that case and in a related case also brought
in the CDCA. See, e.g., Ling Mot. to Dismiss at 14–15, 27 (citing Relman’s representation in
CDCA as grounds for her voiding her Agreement with the firm). Even so, Relman argues that
proceeding to the merits here—determining whether to enforce the Agreements—does not create
the potential for inconsistent judgments on the same legal issues. Objs. to R. & R. at 21–22.
But overlapping legal claims are not required for a finding that cases are related enough
to favor transfer. “[C]ourts have transferred cases to jurisdictions with related pending matters
even when the cases merely shared similar facts, rather than similar legal claims.” Barham v.
UBS Financial Servs., 496 F. Supp. 2d 174, 180 (D.D.C. 2007) (citing Reiffin v. Microsoft Corp.,
104 F. Supp. 2d 48, 58 (D.D.C. 2000)). The relevant facts here are largely what happened during
Relman’s representation before the CDCA in the two related lawsuits. Those suits have been
pending in the CDCA for nearly a decade. As the Magistrate Judge pointed out, the CDCA is
uniquely well-positioned to know and to resolve any disputes about those facts. See R. & R. at
43.
And the CDCA is already familiar with the issues presented here. Relman filed a Notice
of Lien against Ms. Ling highlighting the dispute over the Agreements. See Notice of Lien,
and the level of discovery and pre-trial motion practice required in those cases.” Id. (quoting United States v. H&R
Block, Inc. 789 F. Supp. 2d 74, 84–85 (D.D.C. 2011)).
9
United States ex rel. Ling v. City of L.A. (C.D. Cal. Sept. 15, 2017), No. 2:11-cv-00974-PSG-JC,
ECF No. 119. And Relman informed CDCA that it would ask that court to resolve its fee dispute
with Ms. Ling if she stands to recover anything in that case. See id. at 7. Ms. Ling opposed that
lien. She raised arguments that Relman had violated its fiduciary duties, much like her proposed
defenses here. See Mem. in Supp. of Consent to Leave & Obj. to Notice of Lien, United States
ex rel. Ling v. City of L.A. (C.D. Cal. Aug. 4, 2017), No. 2:11-cv-00974-PSG-JC, ECF No. 103.
This case is more entangled with the CDCA litigation than Relman admits. For example,
even if the Agreements are enforceable, the CDCA will need to determine what fees Relman
should receive. FHC argues that Relman’s entitlement to fees depends on the terms of any
settlement in the False Claims Act litigation. See FHC Resp. to Objs. at 23–25, ECF No. 35.
Indeed, in supplemental briefing, FHC and Relman argue whether a pending partial settlement in
the CDCA firms up Relman’s claims or potentially renders them moot. See Relman Suppl., ECF
No. 31; FHC Suppl. Resp., ECF No. 32. CDCA will be better positioned to assess the outcome
of the litigation pending before it and the terms of any settlement it approves. Cf. In re Nonparty
Subpoenas Duces Tecum, 327 F.R.D. 23, 26 (D.D.C. 2018) (finding that “given the close factual
relationship between the two motions” and that a ruling on one might influence the merits of
another, it is best to have one court consider all the issues).
And to assess Relman’s application for fees, the Clients’ arguments about the propriety of
the firm’s conduct may again become relevant. It is best to have a court that is intimately
familiar with the parties and the underlying facts and circumstances evaluate the full picture. See
Weinberger v. Tucker, 391 F. Supp. 2d 241, 245 (D.D.C. 2005) (noting courts consider “whether
one circuit is more familiar with the same parties and issues or related issues than other courts”).
Given the CDCA’s familiarity with the underlying litigations, Relman’s conduct representing the
10
Clients in those litigations, and many of the issues the parties raise here, the Court agrees with
the Magistrate Judge’s determination that the related litigation in CDCA favors transfer. Cf.
Wyandotte v. Salazar, 825 F. Supp. 2d 261, 267 (D.D.C. 2011) (noting a transferee court’s
“specialized knowledge of both the parties, their history of litigation, and the statute as issue”
weighs toward transfer).
Finally, it was not clear error or contrary to law for the Magistrate Judge to conclude that
the familiarity with governing law is a neutral factor. The Magistrate Judge noted that the
Agreements contain a choice-of-law provision suggesting that D.C. law applies. R. & R. at 28.
But the enforceability of that provision hinges on whether its enforcement would “contravene a
‘fundamental policy’” of California. See Orchin v. Great-West Life & Annuity Ins. Co., 133 F.
Supp. 3d 138, 148 (D.D.C. 2015). 6 The Clients have cited several potential conflicts, and
California courts are better situated to resolve that policy question. In any event, even if local
law applies as Relman argues, this factor would still not fully offset the finding that the related
litigation favors transfer. This is a diversity case, and federal courts sitting in diversity often
apply laws from outside their district. See, e.g., Fawhinmi v. Lincoln Holdings, LLC, 895 F.
Supp. 2d 148 (D.D.C. 2012) (applying Virginia law in a diversity case). Nothing suggests that
D.C. contract law is particularly complex or unique. So the relative familiarity with the
governing law carries little weight. The Magistrate Judge’s conclusions that this factor was
neutral and that the overall balance of factors favored transfer were neither clear error nor
contrary to law.
6
Relman argues that the Magistrate Judge ignored that D.C.’s choice-of-law rules will govern even if the case is
transferred. Objs. to R. & R. at 18–19. But the Magistrate Judge’s analysis suggests otherwise. See R. & R. at 41–
42. The Magistrate Judge acknowledged that the Agreements’ choice-of-law provision will control unless
“enforcing the choice-of-law provisions would ‘contravene a fundamental policy’ of California.” Id. at 42 (citing
Orchin v. Great-West Life & Annuity Ins. Co., 133 F. Supp. 3d 138 (D.D.C. 2015) (applying D.C. choice-of-law
rules)).
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Of all the factors, the salient ones here are the plaintiff’s choice of forum, the
convenience of the parties, and the related litigation. The Magistrate Judge did not clearly err by
determining that the weight of these factors favored transfer.
IV.
For all these reasons, the Court will adopt the Report in full. The Court will grant in part
and deny in part the Clients’ Motions to Dismiss and will transfer this case to the Central District
of California. A separate order will issue.
2019.09.27
10:31:26 -04'00'
Dated: September 27, 2019 TREVOR N. McFADDEN
United States District Judge
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