Spectrum Scientifics, LLC v. Celestron Acquisition, LLC

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 SPECTRUM SCIENTIFICS, LLC, et al., 8 Case No. 5:20-cv-03642-EJD Plaintiffs, 9 ORDER DENYING MOTION TO v. TRANSFER 10 CELESTRON ACQUISITION, LLC, et al., Re: Dkt. No. 14 11 Defendants. 12

13 On June 26, 2020, Defendants Celestron Acquisition, LLC (“Celestron”), SW Technology 14 Corp. (“SW”), Corey Lee, David Anderson, and Joseph Lupica (together, the “Moving 15 Defendants”) filed a Motion to Transfer Venue Pursuant to 28 U.S.C. §1404(a) to the Central 16 District of California (Dkt. No. 14, “Motion to Transfer”), as well as a Motion to Dismiss Pursuant 17 to Federal Rule of Civil Procedure 12(b)(6) (Dkt. No. 13, the “Motion to Dismiss”). Plaintiffs 18 Spectrum Scientifics LLC (“Spectrum”) and Radio City, Inc. (“Radio City”) oppose the Motion to 19 Transfer (Dkt. No. 27, “Opposition”). The Motion to Dismiss was terminated as moot following 20 Plaintiffs’ filing of an amended complaint. 21 The Court took the matter under submission without oral argument pursuant to Civil Local 22 Rule 7-1(b). For the reasons below, Plaintiffs’ motion is DENIED. 23 I. Background 24 Plaintiffs Spectrum and Radio City are consumer telescope distributors. Defendants are a 25 group of allegedly related telescope manufacturers and distributors, including the Moving 26 Defendants as well as Defendants Synta Canada Int’l Enterprises, Ltd., Sky-Watcher USA, Sky- 27 Watcher Canada, Olivon Manufacturing Co. Ltd., Olivon USA, LLC, Sylvia Shen, Jean Shen, and 1 Laurence Huen. Plaintiffs allege that Defendant Celestron and its parent company in China, 2 Synta, conspired with their competitor Ningbo Sunny Electronic Co., Ltd. to “fix prices, divide the 3 market, retaliate against competitors, mislead U.S. authorities, illegally acquire assets and 4 dominate the U.S. market in violation of Sections 1 and 2 of the Sherman Act, Section 7.” Opp. at 5 2. Plaintiffs, who seek to represent a nation-wide class of direct purchasers, allege that this 6 conspiracy involved overcharging telescope distributors like them for the last decade. First 7 Amended Complaint (“FAC”), Dkt. No. 30, ¶ 2. 8 Plaintiffs brought this action after a jury found Defendants’ alleged co-conspirator Ningbo 9 Sunny liable on similar, if not identical, claims brought by telescope retailer Optronic 10 Technologies, Inc. (“Orion”). See Optronic Technologies, Inc. v. Ningbo Sunny, et al., Case No. 11 16-cv-6370-EJD, Dkt. No. 501 (the “Orion Action”). Post-judgment proceedings in the Orion 12 Action are still pending before this Court. Although the allegations and claims in the two actions 13 are overlapping, none of the parties to this action are parties in the Orion Action. 14 The Moving Defendants filed this Motion to Transfer arguing that none of the named 15 parties are located in this District, and “the vast majority of the Moving Defendants and witnesses 16 identified in the complaint” reside in the Central District of California. There is no dispute that 17 Celestron and Sky-Watcher USA are headquartered within the Central District in Southern 18 California. FAC ¶¶ 22, 30. Plaintiffs oppose the Motion to Transfer. Dkt. No. 24. The non- 19 moving Defendants did not take a position. 20 Plaintiffs’ allegations in this case are also substantially identical to those asserted in the 21 related action Hightower, et al. v. Celestron Acquisition, LLC, et al., No. 20-cv-3639, which is 22 pending before this Court, except that Mr. Hightower is a consumer and seeks to represent a class 23 of indirect purchasers. Following the filing of that action, five other indirect purchasers filed suit. 24 All indirect purchaser actions have now been consolidated. On August 17, 2020, the Court 25 ordered that the consolidated indirect purchaser actions be coordinated with the direct purchaser 26 action. Dkt. No. 42. Defendants in Hightower brought a similar motion to transfer venue, which 27 this Court denied. 1 II. Legal Standard 2 A court may transfer an action to another district where the action might have been brought 3 for the convenience of the parties, the convenience of the witnesses, and in the interest of justice. 4 28 U.S.C. § 1404(a). In determining whether to transfer an action pursuant to section 1404(a), a 5 court considers the following factors: (1) the plaintiff’s choice of forum, (2) the convenience of the 6 parties, (3) the convenience of the witnesses, (4) ease of access to the evidence, (5) familiarity of 7 each forum with the applicable law, (6) feasibility of consideration of other claims, (7) any local 8 interest in the controversy, and (8) the relative court congestion and time of trial in each forum. 9 Stovall v. Align Tech., Inc., No. 5:18-CV-07540-EJD, 2019 WL 3945104, at *2 (N.D. Cal. Aug. 10 21, 2019). “The burden is on the party seeking transfer to show that when these factors are 11 applied, the balance of convenience clearly favors transfer.” Alul v. American Honda Motor 12 Company, Inc., No. 16-04384 JST, 2016 WL 9116934 (N.D. Cal. Dec. 7, 2016) (citing 13 Commodity Futures Trading Comm’n v. Savage, 611 F.2d 270, 279 (9th Cir. 1979)). A transfer is 14 not appropriate if the result is merely to shift the inconvenience from one party to another. Van 15 Dusen v. Barrack, 376 U.S. 612, 645-46 (1964). 16 III. Discussion 17 Because the parties do not dispute that this action might have been brought in the Central 18 District, or that it was properly brought in the Northern District, the Court focuses on whether the 19 balance of convenience and the interest of justice clearly weigh in favor of transfer. 20 The Moving Defendants first argue that the Central District would be more convenient for 21 the parties and the witnesses because the majority of the Moving Defendants are located there, 22 whereas none of them, and none of the non-moving Defendants, are located in this District. 23 Specifically, the Moving Defendants argue that the convenience for the witnesses, including 24 Celestron employees, weighs in favor of transfer. Plaintiffs argue that other vital witnesses, 25 including Orion employees, are located in this District. Thus, although some of Defendants’ 26 employees, who may be called as witnesses, are located in the Central District, the convenience 27 for witnesses overall does not clearly weigh in favor of transfer. 1 The Moving Defendants further argue the majority of documents, including all Celestron 2 records, are located in the Central District and, therefore, the ease of access to evidence weighs in 3 favor of transfer. Plaintiffs point out that the vast majority of evidence is likely to be produced 4 through electronic discovery. Moreover, depending on health regulations related to the COVID- 5 19 pandemic, depositions may take place virtually as well. Courts in this District have noted that 6 “[i]n the age of electronically stored information, the ease of access to evidence is neutral because 7 much of the evidence in this case will be electronic documents, which are relatively easy to obtain 8 in any district.” Prescott v. Bayer HealthCare LLC, No. 5:20-CV-00102 NC, 2020 WL 3505717, 9 at *5 (N.D. Cal. June 29, 2020) (quoting Doe v. Epic Games, Inc., 435 F. Supp. 3d 1024, 1042 10 (N.D. Cal. 2020)). Thus, the Court does not find that access to evidence favors transfer. 11 The Moving Defendants next argue that the interests of justice require this Court to 12 transfer the action in light of this Court having presided over the Orion Action. They argue that 13 “[p]utting these cases in the same court, . . . is a transparent effort to prejudice Moving 14 Defendants by trying to bind them to the findings in the Orion Lawsuit, even though they were not 15 parties in that action.” Mot. at 8. Plaintiffs argue that, on the contrary, this Court is “especially 16 well-suited to adjudicate the claims because this Court presided over the Orion litigation and is 17 already familiar with many of the facts and legal issues.” Opp. at 7. Although the stars aligned to 18 place these actions before this Court following the Orion action, the Court already held that the 19 Orion Action is not related to the present dispute. See Orion Action, Dkt. No. 700. Thus, the 20 Court finds that its familiarity with the issues is not relevant to the transfer analysis, but neither 21 does it weigh in favor of transfer. This Court is capable of considering each action on its 22 individual merits. To the extent that Plaintiffs intend to invoke rulings from the Orion Action, 23 relevant doctrines of preclusion will operate to ensure that Defendant is not improperly bound to 24 any prior ruling. 25 Finally, the Moving Defendants argue that Plaintiffs’ choice of forum should not given 26 much weight because they purport to represent a nationwide class. Lou v. Belzberg, 834 F.2d 730, 27 739 (9th Cir. 1987) (where “an individual . . . represents a class, the named plaintiff's choice of 1 forum is given less weight.”). Plaintiffs bring this action on behalf of “all similarly situated 2 || consumers who purchased a telescope manufactured or sold by Defendants.” Given the 3 geographically unlimited proposed class, the Court agrees that Plaintiffs’ individual residences are 4 || not particularly relevant to the transfer analysis. Nevertheless, even if Plaintiffs’ choice of forum 5 || is immaterial, the Moving Defendants have not otherwise met their burden of showing that the 6 || balance of convenience weighs in favor of transfer. 7 The Moving Defendants have, at best, demonstrated that the Central District would be an 8 equally convenient forum for all parties, given that many Defendants reside there and that the 9 Plaintiffs’ proposed class does not have significant ties to the Northern District. But “Section 10 1404(a) exists to permit transfers to a more convenient forum, not to a forum likely to prove 11 equally convenient or inconvenient.” Adobe Sys. Inc. v. Childers, No. 5:10-cv-03571-JF/HRL, 12 2011 WL 566812, at *9 (N.D. Cal. Feb. 14, 2011). Moreover, litigating this case in a different 13 || district than the consolidated indirect purchaser action would eliminate any efficiency gained by 14 || coordinating the two suits, create the possibility of inconsistent rulings, and unnecessarily burden 15 the Court and the parties. 16 Thus, the Moving Defendants have not met their burden to show that transfer is 3 17 appropriate in this case. 18 IV. Conclusion 19 For the reasons stated above, the Moving Defendants’ Motion to Transfer is DENIED. 20 IT IS SO ORDERED. 21 Dated: September 11, 2020 22 OG 0 — EDWARD J. DAVILA 23 United States District Judge 24 25 26 27 28 Case No.: 5:20-cv-03642-EJD ORDER DENYING MOTION TO TRANSFER