In Re: Volkswagen AG

• Court: Court of Appeals for the Fifth Circuit
• Decided: June 4, 2004
• Docket: 04-40303
• Status: Published

Opinion

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

2 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.

3 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).

4 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

5 (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

6 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.”

7 — 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).

8 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

9 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

10 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

11 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

12 Division of the United States District Court for the Western

District of Texas.