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Down-Lite International, Inc. v. Tbaier

United States District Court, S.D. Ohio, Western Division

August 6, 2019

DOWN-LITE INTERNATIONAL, INC. Plaintiff,
v.
CHAD AL TBAIER, ET AL., Defendants.

          Dlott Judge.

          OPINION AND ORDER [1]

          Stephanie K. Bowman U.S. Magistrate Judge.

         This matter is before the Court pursuant to Defendants' motion to transfer venue and consolidate (Doc. 8) which was filed on Thursday, August 1, 2019. A phone conference was held on Monday, August 5, 2019 wherein Plaintiff was ordered to respond to the motion by 10:00am Tuesday, August 6, 2019. (See Doc. 13). Defendants were given until 1:00pm this same day to reply if necessary. (See Doc. 14).

         I. Factual Background

         Plaintiff is an Ohio family owned corporation founded by Bob Altbaier, Marvin Werthaiser and Larry Werthaiser, with its principal place of business located in Ohio. (Verified Complaint, Doc. 1-4, ¶¶ 6, 12). Down-lite's business is concentrated in the United States, Canada and Europe, but operates globally. (Doc. 1-4, ¶2). Defendant Chad Altbaier, one of three children of Bob Altbaier, was an employee at Down-Lite. Chad Altbaier began working for Down-Lite as a Management Trainee in 2001. (Declaration of Chad Altbaier, Doc. 3-2, ¶1). Starting in 2003, Chad Altbaier alleges to have worked out of his home in California. (Id. at ¶2). Most recently, Chad Altbaier was "the founder and head of Down[-]lite's Outdoor division ...". (Doc. 1-4, ¶18). Chad Altbaier is a signatory to an Employee Agreement that contains noncompete and nonsolicitation provisions and a Shareholder Agreement which also contains restrictive covenants and a forum selection clause indicating that claims be exclusively brought in Hamilton County, Ohio, courts. (Doc. 1-4, ¶9, see also Doc. 13-2).

         Chad Altbaier formed his own business, Paice Partners Global, LLC, a California limited liability company, on April 30, 2019. (Doc. 1-4, ¶8). Paice is a single-member LLC, 100% owned, controlled and managed by Chad Altbaier. (Id. ¶20). Chad Altbaier resigned from Down-lite, effective August 1, 2019. Down-lite alleges that Chad Altbaier is violating both agreements by competing with Down-lie and misappropriating its trade secrets. (Id. at ¶ 3).

         II. Procedural Background

         Plaintiff was granted an ex parte Temporary Restraining Order ("TRO") against Defendants, in Hamilton County, Court of Common Pleas, on July 22, 2019, which by its own terms expired on August 5, 2019. A preliminary injunction hearing was scheduled in state court for August 5, 2019. On July 29, 2019, Defendants removed the matter from state court to this federal district court. In conjunction with the Notice of Removal, Defendants filed a motion to dissolve the TRO and the expedited discovery that was previously ordered by the state court. This case was referred to the undersigned on July 30, 2019 and a conference was held on July 31, 2019 to schedule the preliminary injunction hearing in this court. It is scheduled for August 7, 2019. An expedited briefing schedule for the motion to dissolve the TRO was established and will be ruled on by separate order.

         Also on July 29, 2019, Defendants filed their own complaint for damages and injunctive relief and an ex parte application for a TRO in the Northern District of California, Case Number 3:19cv4348-EMC. Judge Chen set a hearing on the TRO for August 6, 2019 at 1:30 PST.

         III. Legal Analysis

         Defendants move to transfer venue to the United States District Court for the Northern District of California and to consolidate this matter with Altbaider, et al. v. Down-lite International, Inc., Case No. 3:19-CV-04348, pursuant to 28 U.S.C. § 1404(a). (Doc. 8).

         A. Standard

         In relevant part, 28 U.S.C. § 1404(a) states "[f]or 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." A decision to transfer venue is discretionary. Midwest Motor Supply Co. v. Kimball, 761 F.Supp. 1316, 1318 (S.D. Ohio 1991); Louis Dreyfus Co. Metals Merch. LLC v. PLS Logistics Servs., No. 16-cv-00777, 2017 U.S. Dist. LEXIS 218053, at *3 (S.D. Ohio Sep. 30, 2017). The moving party bears the burden of proving that a venue change is warranted. Slate Rock Constr., Co. v. Admiral Ins. Co., No. 2:10-CV-1031, 2011 U.S. Dist. LEXIS 97122, at*19 (S.D. Ohio Aug. 30, 2011). However, "unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed." Reese v. CNH Am. LLC, 574 F.3d 315, 320 (6th Cir. 2009) (quoting Dowling v. Richardson-Merreti, Inc., 727 F.2d 608, 612 (6th Cir. 1984). Moreover, a valid forum-selection clause should usually control the decision to transfer the case, unless extraordinary circumstances are present. Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist. Of Texas, 571 U.S. 49, 134 S.Ct. 568, 581-2, 187 L.Ed.2d 487 (2013); Louis Dreyfus Co. Metals Merch. LLC v. PLS Logistics Servs., No. 16-cv-00777, 2017 U.S. Dist. LEXIS 218053, at *3 (S.D. Ohio Sep. 30, 2017).

         A two-step framework should be used when determining whether to grant a motion to transfer venue. Sky Tech, Partners, LLC v. Midwest Research Inst.,125 F.Supp.2d 286 (S.D. Ohio 2000). The court must first determine whether venue would be proper in the proposed venue. Id. at 291. If yes, the court must weigh a number of private and public factors to determine whether the proposed venue is a ...


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