Ultraflex Sys. of Fla. v. Veritiv Operating Co. - Civil Action No. 19-13308 (KM) (MAH), 2019 U.S. Dist. LEXIS 221506 (D.N.J. Dec. 27, 2019)

Rule:

Under 28 U.S.C. § 1404, a district court may transfer a civil action to another district where the case might have been brought, or to which the parties have consented, for the convenience of the parties and witnesses and in the interest of justice. Factors the court must consider include the three enumerated under the statute—convenience of the parties, convenience of the witnesses, and the interests of justice—along with all other relevant private and public factors, including the plaintiff's choice of forum and the local interest in deciding local controversies close to home. More specifically, the private interests to be balanced include the plaintiff's forum preference as manifested in the original choice; the defendant's preference; whether the claim arose elsewhere; the convenience of the parties as indicated by their relative physical and financial condition; the convenience of the witnesses; and the location of books and records, well as all other practical problems that make trial of a case easy, expeditious and inexpensive.

Facts:

This action arises out of allegedly unpaid invoices for the sale of commercial substrate materials for digital printing. Ultraflex maintains a distribution warehouses and offices in New Jersey. Veritiv, a Delaware corporation, also conducts business in New Jersey. The parties have regularly done business together for the past decade. "At all times, the parties exchanged routine documents such as purchase orders, sales order confirmations, and invoices." Veritiv would initiate the parties' transactions by electronically sending purchase orders that contained Veritiv’s Terms and Conditions of Purchase ("Veritiv Terms and Conditions"). Paragraph One of the Terms and Conditions prescribes: “Unless otherwise agreed to in writing, these Terms and Conditions of Purchase ("Terms") apply to all purchases by Veritiv Operating Company ("Buyer") from the supplier of any goods and/or services ("Seller") hereunder. These Terms constitute Buyer's offer and may be accepted by Seller only in accordance with the terms hereof. Seller's acceptance of these Terms and any order hereunder shall occur either through commencement of performance or acknowledgment of the order. By accepting an order hereunder, Seller waives all terms and conditions contained in its quotation, acknowledgment, invoice or other documents which are different from or additional to those contained herein and all such different or additional terms and conditions shall be null and void. No addition to, waiver or modification of, any provisions herein contained shall be of any force or effect unless made in writing and executed by Buyer's authorized representative.”  Paragraph Seventeen, titled "Miscellaneous," contains both a choice-of-law provision and a forum-selection clause: “These terms, any order hereunder, and the rights and obligations of the parties thereto, shall be governed by the laws of the State of Delaware, without giving effect to its principles of conflicts of law. Seller agrees to subject itself to the courts of Delaware and such venue shall be exclusive regarding disputes arising out of these Terms.” Upon receipt of a purchase order, Ultrafex would promptly transmit to Veritiv a sales order confirmation that included a copy of its own terms and conditions of sale ("Ultraflex Terms and Conditions"). The final provision of the Ultraflex Terms and Conditions prescribes: “This agreement is effective upon shipment of the Product by Ultraflex. This agreement is governed by New Jersey law and Purchaser agrees that in the event of any dispute arising under or relating to this purchase and sale agreement that Purchaser shall submit to the exclusive personal jurisdiction of the state and federal courts situated in the State of New Jersey.”

Veritiv submitted multiple purchase orders for substrate materials to Ultraflex between September 2018 and March 2019. Following delivery, Ultraflex issued invoices to Defendant from its New Jersey office. However, Veritiv refused to pay those invoices on the basis that an October 2017 order was deemed defective by one of Veritiv’s customers, Circle Graphics, Inc. Ultraflex avers that it provided an appropriate credit for the allegedly defective shipment towards Veritiv’s unpaid balance from the 2018-19 purchases. As a result, Ultraflex filed this breach-of-contract action in the District Court of New Jersey, seeking the unpaid balance plus interest, attorneys' fees, and late charges pursuant to the Ultraflex Terms and Conditions. Veritiv now moves to have this case transferred to the United States District Court for the District of Delaware pursuant to the forum-selection clause in the Veritiv Terms and Conditions or, in the alternative, dismissed on the grounds of forum non conveniens.

Issue:

Should the case be transferred to Delaware courts?

Answer:

No.

Conclusion:

Aside from Veritiv’s preference to sue and be sued in Delaware, this Court finds that many of the private factors weighs against transfer. Ultraflex filed this breach-of-contract action in New Jersey and the parties issued the purchase orders and invoices in this state. Both parties operate on a national scale and do business in New Jersey. At least some of Ultraflex’s witnesses and its books and records are associated with its Randolph, New Jersey facility. With respect to Veritiv’s counterclaim, the client who allegedly received the defective good is based in Colorado and has no clear ties to either desired forum. Accordingly, it would not inconvenience the parties and witnesses to litigate this matter in New Jersey where they engaged in many of the commercial dealings at issue as opposed to Delaware, which has little to no connection to the disputed transactions. Nor is the Court convinced that the balancing of the public interest factors weighs in favor of transfer. Although this Court's docket is busy, there are no other administrative burdens in resolving this relatively straight-forward breach of contract and warranty action that is governed by the Uniform Commercial Code. Accordingly, venue is proper in New Jersey.