RESEARCH AUTOMATION v. SCHRADER-BRIDGEPORT INTERNATIONAL (November 23, 2010)
Schrader-Bridgeport International (SRI) contracted with Research Automation to custom build a high-pressure cleaning machine. A dispute arose between the parties and each filed suit against the other -- Research in Illinois and SRI in Virginia. Research asked the Illinois federal court to enjoin SRI from proceeding in Virginia, and SRI asked the Illinois federal court to transfer its case to Virginia under § 1404(a). Judge Gottschall (N.D. Ill.) denied Research's request and granted SRI's. Research appeals.
In their opinion, Seventh Circuit Judges Manion, Sykes, and Hamilton affirmed. The Court briefly addressed its appellate jurisdiction because the transfer decision would generally not be appealable as an interlocutory order. However, since the denial of the injunction is appealable, the Court exercised pendant appellate jurisdiction over the “inextricably intertwined” transfer order. On the merits, the Court identified the relevant factors the district court should consider in exercising its discretion to transfer under § 1404 (a): the availability and access to witnesses and other resources, the location of the events, docket congestion, time to trial, each court's familiarity with the law, and the local community's interest in the matter. Here, the district court considered the appropriate factors and concluded that Virginia was the more appropriate forum. The court relied principally on Virginia's connection to the events -- where the contract was negotiated and where it was to be performed. The Court concluded that the district court did not abuse its discretion in its finding. The Court rejected Research's reliance on a rigid "first-to-file" rule. The Seventh Circuit does not adhere to such a rigid rule, particularly where the cases are mirror images. In fact, it is the suit that seeks coercive (here SRI), rather than declaratory, relief that is generally favored in that situation, regardless of who filed first. Although the Court conceded that the Eleventh and Federal Circuits apply a more rigid rule, most other circuits are in accord with the Seventh Circuit. The order of filing should simply be one factor considered as part of the § 1404 (a) analysis.