SOLVE TOGETHER, LLC v. FEDEX CORPORATION

CourtDistrict Court, E.D. Pennsylvania
DecidedOctober 4, 2022
Docket2:22-cv-02090
StatusUnknown

This text of SOLVE TOGETHER, LLC v. FEDEX CORPORATION (SOLVE TOGETHER, LLC v. FEDEX CORPORATION) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
SOLVE TOGETHER, LLC v. FEDEX CORPORATION, (E.D. Pa. 2022).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

SOLVE TOGETHER, LLC, et al., CIVIL ACTION

Plaintiffs, NO. 22-2090-KSM v.

FEDEX CORPORATION, et al.,

Defendants.

MEMORANDUM

MARSTON, J. October 4, 2022

Plaintiff Solve Together, LLC (“Solve Together”), a Philadelphia-based limited liability corporation, contracted with Defendants FedEx Corporate Services, Inc. and FedEx Corporation (together, “FedEx”) to supply facemasks and other personal protective equipment (“PPE”) to FedEx’s headquarters in Memphis, Tennessee. (Doc. No. 36 ¶¶ 7–8, 30.) Although FedEx accepted delivery of millions of dollars’ worth of PPE, it refused to accept all of the PPE that Solve Together delivered. (Id. ¶ 11.) Plaintiffs Solve Together and its parent company, the Fine Companies, LLC (“FineCo”), bring suit against FedEx, claiming that FedEx breached eight contracts and caused Solve Together to lose over $500 million. (See generally Doc. No. 36.) Presently before the Court is FedEx’s motion to transfer this action to the United States District Court for the Western District of Tennessee. (Doc. No. 12.) Plaintiffs oppose the motion. (Doc. No. 23.) For the reasons below, FedEx’s motion is granted. I. BACKGROUND Because the Court writes primarily for the benefit of the parties, we provide an abbreviated recitation of the facts alleged in Plaintiffs’ First Amended Complaint.1 At the onset of the COVID-19 pandemic, global supply chains were struggling to keep up with the demand for PPE. (Doc. No. 36 ¶ 3.) FineCo recognized the gap in the market and formed a new entity, Solve Together, to supply “millions of dollars’ worth of PPE to major organizations and institutions, like hospital systems, government agencies, and major

corporations.” (Id. ¶¶ 4–5.) FedEx was one of those corporations. (Id. ¶¶ 7–8.) It contracted with Solve Together for custom facemasks and other PPE, and in the Spring and Summer of 2020, FedEx accepted delivery of and paid for over $65 million worth of PPE. (Id.) In the Summer of 2020, FedEx’s “need for PPE began to wane and the market prices for these goods declined,” so it “made the strategic choice to breach several agreements it had previously made with [Solve Together] for PPE at the height of global demand.” (Id. ¶ 10.) Specifically, FedEx “failed to pay shipping and storage charges associated with FedEx’s orders of . . . disinfecting wipes.” (Id. ¶ 11.) FedEx also refused to accept delivery of or pay for” nearly three million packs of disinfecting wipes, two million FedEx-branded facemasks, four

million pairs of gloves, and 48 million canisters and packs of “EPA-registered disinfectant wipes.” (Id.) FedEx also allegedly breached a “non-circumvention, non-disclosure agreement” by “circumventing Plaintiffs . . . and engaging with Plaintiffs’ suppliers of facemasks” directly. (Id.) Additionally, FedEx used or lost in their warehouses roughly 100,000 packs of disinfectant wipes they refused to pay for, and because FedEx used or lost these wipes, Solve Together was unable to resell them. (Id.) FedEx’s failure to satisfy its contractual obligations restricted Solve Together’s liquidity.

1 In deciding a motion to transfer venue, the Court accepts as true the allegations in the complaint. See Consol. Risk Servs., Inc. v. Auto. Dealers WC Self Ins. Tr., Civil Action No. 05-6827, 2006 WL 1737471, at *1 (E.D. Pa. June 21, 2006). Solve Together was unable to pay sales tax, so the State of Tennessee assessed a $1 million penalty. (Id. ¶ 26.) Solve Together was also forced to cancel orders from other clients, which caused the company to lose an expected $107 million in profits. (Id. ¶¶ 11, 28.) In sum, Plaintiffs seek over $500 million in damages from FedEx. II. LEGAL STANDARD

In federal court, venue transfers are governed by 28 U.S.C. §§ 1404(a) and 1406(a). Jumara v. State Farm Ins. Co., 55 F.3d 873, 878 (3d Cir. 1995). Section 1404(a) governs transfer when “both the original and the requested venue are proper.” Id. Under Section 1404(a), a district court may, “[f]or the convenience of parties and witnesses, in the interest of justice, . . . transfer any civil action to any other district or division where it might have been brought.” 28 U.S.C. § 1404(a). A court must conduct a two-step inquiry in considering a motion governed by Section 1404(a). See Vt. Juvenile Furniture Mfg., Inc. v. Factory Direct Wholesale, Inc., 317 F.R.D. 16, 20 (E.D. Pa. 2016). It must first determine whether venue is proper in the transferee district and,

if so, it must then determine whether transfer would be in the interests of justice. The Third Circuit has enumerated a non-exhaustive list of public and private interests a court must consider in determining whether a transfer is in the interests of justice. Jumara, 55 F.3d at 879–80. The private interests include: (1) “plaintiff’s forum preference as manifested in the original choice”; (2) “the defendant’s preference”; (3) “whether the claim arose elsewhere”; (4) “the convenience of the parties as indicated by their relative physical and financial condition”; (5) “the convenience of the witnesses—but only to the extent that the witnesses may actually be unavailable for trial in one of the fora”; and (6) “the location of books and records (similarly limited to the extent that the files could not be produced in the alternative forum).” Id. at 879. The public interests include: (1) “the enforceability of the judgment”; (2) “practical considerations that could make the trial easy, expeditious, or inexpensive”; (3) “the relative administrative difficulty in the two fora resulting from court congestion”; (4) “the local interest in deciding local controversies at home”; (5) “the public policies of the fora”; and (6) “the familiarity of the trial judge with the applicable state law in diversity cases.” Id. at 879–80.

“In addressing a motion to transfer, all well-pleaded allegations in the complaint are generally taken as true unless contradicted by the defendant’s affidavits, and the Court may examine facts outside the complaint to determine proper venue.” Cigna Corp. v. Celgene Corp., CIVIL ACTION NO. 21-90-KSM, 2021 WL 2072210, at *2 (E.D. Pa. May 24, 2021) (internal quotations omitted). The party seeking transfer “bears the burden of persuasion.” In re McGraw-Hill Glob. Educ. Holdings LLC, 909 F.3d 48, 57 (3d Cir. 2018). “[U]nless the balance of convenience of the parties is strongly in favor of the defendant, the plaintiff’s choice of forum should prevail.” Shutte v. Armco Steel Corp., 431 F. 2d 22, 25 (3d Cir. 1970). III. ANALYSIS

FedEx seeks transfer pursuant to Section 1404(a), so the Court first considers whether venue is proper in the Western District of Tennessee and then considers whether the interests of justice weigh in favor of transfer. A. Venue Is Proper in the Western District of Tennessee Section 1404(a) permits a court to transfer an action to a district “where it might have been brought.” 28 U.S.C. § 1404(a). Accordingly, the Court may transfer this action to the Western District of Tennessee only if venue is proper there and that court can exercise both personal and subject matter jurisdiction over this action. See Smart Audio Techs., LLC v.

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SOLVE TOGETHER, LLC v. FEDEX CORPORATION, Counsel Stack Legal Research, https://law.counselstack.com/opinion/solve-together-llc-v-fedex-corporation-paed-2022.