1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 NORTHERN DISTRICT OF CALIFORNIA 8 9 BEHRING REGIONAL CENTER LLC, Case No. 20-cv-09263-JSC
10 Plaintiff, ORDER RE: MOTION FOR 11 v. PRELIMINARY INJUNCTION; MOTION TO TRANSFER 12 CHAD WOLF, et al., Re: Dkt. Nos. 10, 18 Defendants. 13
14 15 Behring Regional Center, LLC, a California-based Regional Center that sponsors capital 16 investment projects using funds from foreign investors who are EB-5 Immigrant Investor Program 17 applicants brings this Administrative Procedures Act (“APA”) action against Defendants. 18 Plaintiff contends that the Department of Homeland Security (DHS) violated the APA when it 19 issued a final rule amending its regulations for the EB-5 Program in November 21, 2019. Plaintiff 20 has moved for a preliminary injunction and Defendants have moved to transfer this action to the 21 U.S. District Court for the District of Columbia.1 (Dkt. Nos. 10, 18.2) Having considered the 22 parties’ briefs and having the benefit of oral argument on March 25, 2021, the Court DENIES the 23 motion to transfer, converts the motion for preliminary injunction on the appointments issue to a 24 motion for summary judgment, and holds the rest of the preliminary injunction motion in 25 abeyance pending resolution of the converted summary judgment motion. 26 1 All parties have consented to the jurisdiction of a magistrate judge pursuant to 28 U.S.C. § 27 636(c). (Dkt. Nos. 8, 16.) 1 MOTION TO TRANSFER 2 Defendants move to transfer this action to the District Court for the District of Columbia in 3 light of the pendency of Florida EB5 Investments, LLC v. Wolf et al., Case 1:19-cv-03573-RJL 4 (D.D.C. filed Nov. 26, 2019) or, alternatively, pursuant to 28 U.S.C. § 1404(a) in the interests of 5 justice. 6 A. First-to-File Rule 7 The principle of federal comity refers to a court’s discretion to decline jurisdiction when 8 the same issues are already pending before another federal court. “[T]hough no precise rule has 9 evolved, the general principle is to avoid duplicative litigation” in the interests of judicial 10 economy and avoiding inconsistent results. Colorado River Water Conservation Dist. v. United 11 States, 424 U.S. 800, 817 (1976). The Ninth Circuit employs a “first-to-file” rule to implement 12 the principle: district courts have discretion to transfer, stay, or dismiss an action if the same 13 parties and issues are already at issue in a proceeding before another district court. Pacesetter Sys., 14 Inc. v. Medtronic, Inc., 678 F.2d 93, 94-95 (9th Cir. 1982). In determining whether to apply the 15 rule, courts must consider the “chronology of the lawsuits, similarity of the parties, and similarity 16 of the issues.” Kohn Law Grp., Inc. v. Auto Parts Mfg. Mississippi, Inc., 787 F.3d 1237, 1240 (9th 17 Cir. 2015). The issues in each action “need not be identical, only substantially similar.” Id. at 18 1240-41 (9th Cir. 1989). 19 The court’s analysis “should be driven to maximize economy, consistency, and comity,” 20 and the first-to-file rule “should not be disregarded lightly.” Id. at 1239-40 (internal quotation 21 marks and citation omitted). That said, the rule is not a “rigid or inflexible rule to be mechanically 22 applied, but rather is to be applied with a view to the dictates of sound judicial administration.” 23 Pacesetter, 678 F.2d at 95. Thus, “[t]he most basic aspect of the first-to-file rule is that it is 24 discretionary.” Alltrade, Inc. v. Uniweld Prods., Inc., 946 F.2d 622, 628 (9th Cir. 1991). 25 Defendants contend that this action should be transferred to the District Court for the 26 District of Columbia in light of the earlier-filed Florida EB5 case which is “a separate, almost 27 identical lawsuit, preliminary injunction motion, and discovery motion” that makes identical 1 same counsel as here. (Dkt. No. 18 at 5.) Plaintiff counters that transfer is not proper because the 2 “the parties are different, the parties’ underlying businesses are different, the material adverse 3 impacts of the Rule and facts supporting the injunctive relief are different, the timing of the 4 actions is different, and the substantive causes of action include claims not yet addressed in the 5 D.C. case.” (Dkt. No. 23 at 6:14-17.) 6 The Court declines to exercise its jurisdiction to transfer this action under the first-to-file 7 rule. While there is no dispute that the District of Columbia action was filed over a year before 8 this action, the difference in the parties—namely, the plaintiffs—satisfies the Court it should not 9 order transfer. The plaintiffs are wholly separate and unrelated entities doing business in different 10 states and thus impacted by the Rule change in different ways. Defendants have not identified any 11 case, and the Court is not aware of any, where a court transferred a case under the first-to-file rule 12 when there was no overlap in parties on one side of the “v”. Defendants’ reliance on Kohn Law 13 Group is unpersuasive as there Kohn Law Group was a party in the California action and a party 14 in the Mississippi action. 787 F.3d at 1239. While the Ninth Circuit stated that the parties needed 15 to be only “substantially similar” and not identical, it so stated in the context of whether every 16 party in each action had to be present in the other action. Id. at 1240 (rejecting argument that the 17 parties were not substantially similar because one of the defendants in the Mississippi action was 18 not a party to the California action). Further, the court reasoned that resolution of the Mississippi 19 action would resolve the California action. Not so here. Defendants do not and cannot argue that 20 the decision of the D.C. District Court will resolve this action. 21 The first-to-file rule is not a rigid mandate. It should not “be mechanically applied, but 22 rather is to be applied with a view to the dictates of sound judicial administration.” Pacesetter Sys. 23 v. Medtronic, Inc., 678 F.2d 93, 95 (9th Cir. 1982). Sound judicial administration does not 24 warrant its application here. Accordingly, Defendants’ motion to transfer under the first-to-file 25 rule is denied. 26 B. Transfer in the Interests of Justice Under Section 1404(a) 27 Alternatively, Defendants seek transfer of this action under 28 U.S.C. § 1404(a). The 1 provides: “For the convenience of parties and witnesses, in the interest of justice, a district court 2 may transfer any civil action to any other district or division where it might have been brought or 3 to any district or division to which all parties have consented.” 28 U.S.C. § 1404(a). To determine 4 convenience and fairness, this District commonly articulates the following relevant factors in a 5 motion to transfer venue:
Free access — add to your briefcase to read the full text and ask questions with AI
1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 NORTHERN DISTRICT OF CALIFORNIA 8 9 BEHRING REGIONAL CENTER LLC, Case No. 20-cv-09263-JSC
10 Plaintiff, ORDER RE: MOTION FOR 11 v. PRELIMINARY INJUNCTION; MOTION TO TRANSFER 12 CHAD WOLF, et al., Re: Dkt. Nos. 10, 18 Defendants. 13
14 15 Behring Regional Center, LLC, a California-based Regional Center that sponsors capital 16 investment projects using funds from foreign investors who are EB-5 Immigrant Investor Program 17 applicants brings this Administrative Procedures Act (“APA”) action against Defendants. 18 Plaintiff contends that the Department of Homeland Security (DHS) violated the APA when it 19 issued a final rule amending its regulations for the EB-5 Program in November 21, 2019. Plaintiff 20 has moved for a preliminary injunction and Defendants have moved to transfer this action to the 21 U.S. District Court for the District of Columbia.1 (Dkt. Nos. 10, 18.2) Having considered the 22 parties’ briefs and having the benefit of oral argument on March 25, 2021, the Court DENIES the 23 motion to transfer, converts the motion for preliminary injunction on the appointments issue to a 24 motion for summary judgment, and holds the rest of the preliminary injunction motion in 25 abeyance pending resolution of the converted summary judgment motion. 26 1 All parties have consented to the jurisdiction of a magistrate judge pursuant to 28 U.S.C. § 27 636(c). (Dkt. Nos. 8, 16.) 1 MOTION TO TRANSFER 2 Defendants move to transfer this action to the District Court for the District of Columbia in 3 light of the pendency of Florida EB5 Investments, LLC v. Wolf et al., Case 1:19-cv-03573-RJL 4 (D.D.C. filed Nov. 26, 2019) or, alternatively, pursuant to 28 U.S.C. § 1404(a) in the interests of 5 justice. 6 A. First-to-File Rule 7 The principle of federal comity refers to a court’s discretion to decline jurisdiction when 8 the same issues are already pending before another federal court. “[T]hough no precise rule has 9 evolved, the general principle is to avoid duplicative litigation” in the interests of judicial 10 economy and avoiding inconsistent results. Colorado River Water Conservation Dist. v. United 11 States, 424 U.S. 800, 817 (1976). The Ninth Circuit employs a “first-to-file” rule to implement 12 the principle: district courts have discretion to transfer, stay, or dismiss an action if the same 13 parties and issues are already at issue in a proceeding before another district court. Pacesetter Sys., 14 Inc. v. Medtronic, Inc., 678 F.2d 93, 94-95 (9th Cir. 1982). In determining whether to apply the 15 rule, courts must consider the “chronology of the lawsuits, similarity of the parties, and similarity 16 of the issues.” Kohn Law Grp., Inc. v. Auto Parts Mfg. Mississippi, Inc., 787 F.3d 1237, 1240 (9th 17 Cir. 2015). The issues in each action “need not be identical, only substantially similar.” Id. at 18 1240-41 (9th Cir. 1989). 19 The court’s analysis “should be driven to maximize economy, consistency, and comity,” 20 and the first-to-file rule “should not be disregarded lightly.” Id. at 1239-40 (internal quotation 21 marks and citation omitted). That said, the rule is not a “rigid or inflexible rule to be mechanically 22 applied, but rather is to be applied with a view to the dictates of sound judicial administration.” 23 Pacesetter, 678 F.2d at 95. Thus, “[t]he most basic aspect of the first-to-file rule is that it is 24 discretionary.” Alltrade, Inc. v. Uniweld Prods., Inc., 946 F.2d 622, 628 (9th Cir. 1991). 25 Defendants contend that this action should be transferred to the District Court for the 26 District of Columbia in light of the earlier-filed Florida EB5 case which is “a separate, almost 27 identical lawsuit, preliminary injunction motion, and discovery motion” that makes identical 1 same counsel as here. (Dkt. No. 18 at 5.) Plaintiff counters that transfer is not proper because the 2 “the parties are different, the parties’ underlying businesses are different, the material adverse 3 impacts of the Rule and facts supporting the injunctive relief are different, the timing of the 4 actions is different, and the substantive causes of action include claims not yet addressed in the 5 D.C. case.” (Dkt. No. 23 at 6:14-17.) 6 The Court declines to exercise its jurisdiction to transfer this action under the first-to-file 7 rule. While there is no dispute that the District of Columbia action was filed over a year before 8 this action, the difference in the parties—namely, the plaintiffs—satisfies the Court it should not 9 order transfer. The plaintiffs are wholly separate and unrelated entities doing business in different 10 states and thus impacted by the Rule change in different ways. Defendants have not identified any 11 case, and the Court is not aware of any, where a court transferred a case under the first-to-file rule 12 when there was no overlap in parties on one side of the “v”. Defendants’ reliance on Kohn Law 13 Group is unpersuasive as there Kohn Law Group was a party in the California action and a party 14 in the Mississippi action. 787 F.3d at 1239. While the Ninth Circuit stated that the parties needed 15 to be only “substantially similar” and not identical, it so stated in the context of whether every 16 party in each action had to be present in the other action. Id. at 1240 (rejecting argument that the 17 parties were not substantially similar because one of the defendants in the Mississippi action was 18 not a party to the California action). Further, the court reasoned that resolution of the Mississippi 19 action would resolve the California action. Not so here. Defendants do not and cannot argue that 20 the decision of the D.C. District Court will resolve this action. 21 The first-to-file rule is not a rigid mandate. It should not “be mechanically applied, but 22 rather is to be applied with a view to the dictates of sound judicial administration.” Pacesetter Sys. 23 v. Medtronic, Inc., 678 F.2d 93, 95 (9th Cir. 1982). Sound judicial administration does not 24 warrant its application here. Accordingly, Defendants’ motion to transfer under the first-to-file 25 rule is denied. 26 B. Transfer in the Interests of Justice Under Section 1404(a) 27 Alternatively, Defendants seek transfer of this action under 28 U.S.C. § 1404(a). The 1 provides: “For the convenience of parties and witnesses, in the interest of justice, a district court 2 may transfer any civil action to any other district or division where it might have been brought or 3 to any district or division to which all parties have consented.” 28 U.S.C. § 1404(a). To determine 4 convenience and fairness, this District commonly articulates the following relevant factors in a 5 motion to transfer venue:
6 (1) the plaintiff’s choice of forum; (2) the convenience of the parties; (3) the convenience of the witnesses; (4) ease of access to evidence; 7 (5) familiarity of each forum with applicable law; (6) feasibility of consolidation of other claims; (7) any local interest in the controversy; 8 and (8) the relative court congestion and time to trial in each forum. 9 Martin v. Global Tel*Link Corp., No. 15-cv-00449-YGR, 2015 WL 2124379, at *2 (N.D. Cal. 10 May 6, 2015) (collecting cases); see also Williams v. Bowman, 157 F.Supp.2d 1103, 1106 (N.D. 11 Cal. 2001) (same). “No single factor is dispositive.” Ctr. for Biological Diversity v. Kempthorne, 12 No. C 08-1339 CW, 2008 WL 4543043, at *2 (N.D. Cal. Oct. 10, 2008). Instead, “[w]eighing of 13 these factors for and against transfer involves subtle considerations and is best left to the discretion 14 of the trial judge.” Ventress v. Japan Airlines, 486 F.3d 1111, 1118 (9th Cir. 2007). Further, 15 “[t]his list is non-exclusive, and courts may consider other factors, or only those factors which are 16 pertinent to the case at hand.” Martin, 2015 WL 2124379, at *5. 17 “It is not enough for the defendant to merely show that it prefers another forum, and 18 transfer will also not be allowed if the result is merely to shift the convenience from one party to 19 another.” Lax v. Toyota Motor Corp., 65 F.Supp.3d 772, 776 (N.D. Cal. 2014); see also Catch 20 Curve, Inc. v. Venali, Inc., No. CV 05-04820 DDP, 2006 WL 4568799, at *2 (C.D. Cal. Feb. 27, 21 2006) (stating that the defendant “must demonstrate that the present forum will result in a clear 22 balance of inconvenience to him or her”). Vague generalizations or conclusory declarations are 23 insufficient to meet this burden. See Forte Capital Partners v. Harris Cramer, No. C07-01237 24 MJJ, 2007 WL 1430052, at *2 (N.D. Cal. May 14, 2007). 25 Defendants argue that transfer is proper here because otherwise it would “permit a 26 situation in which two cases involving precisely the same issues are simultaneously pending in 27 different District Courts leads to the wastefulness of time, energy, and money that § 1404(a) was 1 emphasize that a substantial part of the events or omissions giving rise to Plaintiffs’ APA claims 2 || occurred in the District of Columbia and local interest exists there because that is where “policies 3 || related to the EB-5 program and all other immigration issues are developed.” (Dkt. No. 18 at 15.) 4 || By Defendants’ reasoning nearly all APA action should be decided in the District of Columbia, 5 || but there is no such rule. Defendants also fail to address that “a plaintiffs choice of forum is 6 afforded substantial weight.” Carolina Cas. Co. v. Data Broad. Corp., 158 F.Supp.2d 1044, 1048 7 (N.D. Cal. 2001). Typically, the Court recognizes a “strong presumption in favor of plaintiff’ □ 8 choice of forum.” See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255 (1981). Defendants’ motion 9 to transfer under Section 1404(a) is also denied. 10 MOTION FOR PRELIMINARY INJUNCTION 11 As discussed at the hearing on March 25, 2021, and after giving notice to the parties, the 12 || Court converts the motion for preliminary injunction on the issue of whether the appointment of 5 13 Mr. McAleenan was valid to a motion for summary judgment. See Fed. R. Civ. P. 65(a)(2). 14 || Defendants may file an additional submission on the de facto officer doctrine on or before April 1, 3 15 |) 2021. Plaintiff shall file its response on the same issue by April 8, 2021. By or before April 8, a 16 || 2021 Plaintiff shall file a brief addressing what remedy the Court should impose if it grants 3 17 || Plaintiff's motion for summary judgment on the appointment issue. Defendants’ remedies brief is S 18 due April 22, 2021 and the Court will hold oral argument on May 6, 2021 at 9:00 a.m. 19 CONCLUSION 20 For the reasons stated above, Defendants’ motion to transfer is DENIED, Plaintiffs 21 motion for preliminary injunction is converted to a summary judgment motion on the 22 || appointments issue, and the remaining preliminary injunction motion is held in abeyance pending 23 resolution of the summary judgment motion. 24 This Order disposes of Docket No. 18. 25 IT IS SO ORDERED. 26 Dated: March 26, 2021 ' ol) ne 27 / : JACQUELINE SCOTT CORLE 28 United States Magistrate Judge