United States District Court, D. Columbia
November 16, 2005.
IN RE: AT&T ACCESS CHARGE LITIGATION.
The opinion of the court was delivered by: ELLEN HUVELLE, District Judge
This case is a coordinated action relating to defendant AT&T
Corp.'s alleged failure to pay required charges for its use of
plaintiffs' local telephone network facilities to receive and
complete long-distance telephone calls. Before the Court is AT&T
Corp.'s and AT&T Communications, Inc.'s (collectively "AT&T" or
"defendants") Motion to Transfer Venue to the United States
District Court for the District of New Jersey, which is opposed
by plaintiffs. For the reasons discussed below, the Court will
grant defendants' motion.
This coordinated action currently includes eleven complaints
brought by seventeen plaintiffs a number that is likely to
grow.*fn1 Each plaintiff claims that AT&T underpaid federal and state mandated switched access charges to local exchange
carriers for the use of local exchange facilities to originate
and terminate long-distance calls. Plaintiffs allege that
defendants began disguising long-distance calls as interexchange
calls sometime in 2000 in order to avoid detection and thereby
avoid the applicable switched access charges. Plaintiffs contend
defendants orchestrated and implemented two fraudulent schemes,
one using phone-to-phone Internet Protocol telephony technology
and the other using AT&T's prepaid calling cards, through
concerted action by employees at AT&T corporate headquarters in
Two years after implementing these allegedly fraudulent
schemes, AT&T filed two petitions with the Federal Communications
Commission ("FCC") requesting that specific types of
long-distance calls, calls matching the types alleged by the
plaintiffs, be exempt from access charges. The FCC ultimately
rejected both of AT&T's petitions on April 21, 2004 and February
23, 2005. See Petition for a Declaratory Ruling that AT&T's
Phone-to-Phone IP Telephony Services are Exempt from Access
Charges, WC Docket No. 02-361, Order, 199 F.C.C.R. 457 (2004);
AT&T Corp. Petition for Declaratory Ruling Regarding Enhanced
Prepaid Calling Card Services, WC Docket Nos. 03-313 and 05-68,
Order and Notice of Proposed Rulemaking, 20 F.C.C.R. 4826 (2005).
Furthermore, the FCC instructed local exchange carriers to pursue collection actions against AT&T for any unpaid access charges
with an appropriate court.
ITCD and BTI initiated this action on July 7, 2005. Several
additional plaintiffs subsequently filed identical complaints,
causing the Court on September 23, 2005, to issue a Case
Management Order coordinating the actions for pre-trial purposes.
In response to the Case Management Order, AT&T withdrew the
Motion to Transfer Venue it had previously filed on September 12,
2005, in the individual actions and re-filed it ("Defs.' Mot.")
on September 30, 2005 as part of the coordinated action.
Plaintiffs filed a joint Opposition to the Motion to Transfer
Venue ("Pls.' Opp'n") on October 14, 2005, to which defendants
filed a Reply ("Defs.' Reply") on October 24, 2005.
Defendants seek to transfer this case pursuant to
28 U.S.C. § 1404(a), which states: "For 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." The moving party bears the burden of
showing that transfer is proper. Trout Unlimited v. U.S. Dep't
of Agric., 944 F. Supp. 13, 16 (D.D.C. 1996). Section 1404(a)
grants the district court discretion to "adjudicate motions to
transfer according to individualized, case-by-case consideration
of convenience and fairness.'" Reiffin v. Microsoft Corp.,
104 F. Supp. 2d 48, 50 (D.D.C. 2000) (quoting Stewart Org., Inc. v.
Ricoh Corp., 487 U.S. 22, 29 (1988)). Courts retain broad
discretion in balancing the asserted convenience and fairness to
the parties. Sheraton Operating Corp. v. Just Corporate Travel,
984 F. Supp. 22, 25 (D.D.C. 1997).
To succeed in a motion to transfer, defendants must make two
showings. First, they must establish that this action might have
been brought in the proposed transferee district, i.e., the District of New Jersey. DeLoach v. Philip Morris Co.,
132 F. Supp. 2d 22, 24 (D.D.C. 2000). Second, they must "demonstrate
that the balance of convenience of the parties and witnesses and
the interest of justice are in their favor." Consol. Metal
Prods., Inc. v. Am. Petroleum Inst., 569 F. Supp. 773, 774
(D.D.C. 1983). In analyzing the relative convenience of the
competing venues, a court must weigh a number of private and
public interest factors. Reiffin, 104 F. Supp. 2d at 51-52.
Private interest factors include, but are not limited to: (1)
plaintiffs' privilege of choosing the forum; (2) defendants'
preferred forum; (3) location where the claim arose; (4)
convenience of the parties; (5) convenience of witnesses, but
only to the extent that witnesses may be unavailable for trial in
one of the fora; and (6) ease of access to sources of proof.
Airport Working Group of Orange County, Inc. v. U.S. Dep't of
Def., 226 F. Supp. 2d 227, 229 (D.D.C. 2002) (citing Trout
Unlimited, 944 F. Supp. at 16). Public interest considerations
include: (1) the transferee's familiarity with the governing law;
(2) the relative congestion of the courts of the transferor and
potential transferee; and (3) the local interest in deciding
local controversies at home. Id. Courts may also consider the
availability of compulsory process to compel the attendance of
unwilling witnesses and other practical aspects of expeditiously
and conveniently conducting a trial. See Reiffin,
104 F. Supp.2d at 52; SEC v. Page Airways, Inc., 464 F. Supp. 461, 463
(D.D.C. 1978); accord 15 Charles Alan Wright & Arthur R.
Miller, Federal Practice and Procedure §§ 3848-3854 (2d ed.
Given the substantial ties of defendants to the District of New
Jersey, there can be no dispute that all of the cases that have
been coordinated here could have been brought in the District of
New Jersey. AT&T maintains corporate headquarters in Bedminster,
New Jersey, is subject to personal jurisdiction in that district,
and venue is proper there under 28 U.S.C. § 1391(b) and (c) as its relevant entities reside in New Jersey.
Plaintiffs do not dispute that venue would be appropriate in the
District of New Jersey. Thus, the only question before the Court
is whether the public and private factors outlined above weigh
heavily enough in favor of New Jersey to warrant transfer to that
The first private factor, plaintiffs' choice of forum, is a
"paramount consideration" in any determination of a transfer
request. Sheraton Operating Corp., 984 F. Supp. at 25.
Typically, courts accord plaintiffs' choice of forum "substantial
deference" when analyzing a transfer motion. Gross v. Owen,
221 F.2d 94, 95 (D.C. Cir. 1955) ("It is almost a truism that a
plaintiff's choice of a forum will rarely be disturbed . . .
unless the balance of convenience is strongly in favor of the
defendant."); see also Reiffin, 104 F. Supp. 2d at 52. While a
court may not transfer simply because it thinks another forum may
be superior to plaintiffs' chosen forum, Shapiro, Lifschitz &
Schram, P.C. v. Hazard, 24 F. Supp. 2d at 66, 71 (D.D.C. 1998),
such deference is substantially diminished where the chosen forum
is neither their home forum nor has any meaningful ties to the
controversy. Trout Unlimited, 944 F. Supp. at 17. Defendants
argue that none of the plaintiffs is located within the District
of Columbia and therefore plaintiffs' choice of forum "deserves
no deference." (Defs.' Mot. at 7.) Plaintiffs maintain their
principal places of business in Alabama, Arkansas, Florida,
Illinois, Massachusetts, New Jersey, North Carolina, Ohio, Texas
and Virginia. The sole plaintiff that is incorporated under the
laws of the District of Columbia, RCN Telecom Services of
Washington, D.C. ("RCN DC"), maintains its principal place of business in New Jersey.*fn2 Indeed, a plurality of
the plaintiffs maintain New Jersey as their principal place of
Plaintiffs' claim to substantial deference is further vitiated
by the lack of any meaningful ties between the chosen forum and
the substance of the dispute. See Trout Unlimited,
944 F. Supp. at 17. First, of the 17 plaintiffs, eight ITCD, McClure,
Lexcom, Supra, Prairie Grove, ICTC, CCFB and CCTX provide
absolutely no services within the District of Columbia. Of the
six RCN plaintiffs, only one provides any services in D.C. The
remaining plaintiffs maintain what can best be described as only
minimal business operations within the District. BTI, which
provides local phone service on 53 lines (Pls.' Opp'n at 8 n. 9),
did not bill AT&T for any services provided in the District of
Columbia during the year preceding the filing of its complaint.
(Defs.' Mot. at 6.) Between August 2004 and July 2005, Granite
billed AT&T only $2670.00 for switched access services, which
amounted to only 0.14 percent of Granite's nationwide bill to
AT&T during that time. (Defs.' Mot., Decl. of Geri Lancaster Ex.
1.) The one RCN entity to service D.C. accounted for only 5.64 percent of
RCN's total nationwide bills to AT&T. (Defs.' Mot., Decl. of Geri
Lancaster Ex. 2.)
Lacking substantial financial or business ties to the District
of Columbia, plaintiffs attempt to fashion an argument based on
regulatory ties: AT&T filed petitions regarding switched-access
tariffs with the Federal Communications Commission ("FCC") in the
District of Columbia and the FCC issued its rulings, which form
the basis for plaintiffs' claims, from its headquarters in the
District of Columbia. (Pls.' Opp'n at 5-7, 9-14.) This Court has
ruled on several occasions, however, that "mere involvement on
the part of federal agencies, or some federal officials who are
located in Washington D.C. is not determinative" of the question
of venue. Shawnee Tribe v. United States, 298 F. Supp. 2d 21,
25-26 (D.D.C. 2002). Particularly appropos is the case of
DeLoach v. Philip Morris Co., 132 F. Supp. 2d 22 (D.D.C. 2000),
where tobacco producers brought suit in the District of Columbia
against Philip Morris under the Sherman Anti-Trust Act,
15 U.S.C. §§ 1 and 2, for allegedly anti-competitive actions. The Court
granted defendant's motion to transfer venue, finding that "the
only real connection this lawsuit has to the District of Columbia
is that a federal agency headquartered here . . . is charged with
generally regulating and overseeing" the process Philip Morris
was accused of manipulating. Id. at 25. Similarly, even if
defendants made fraudulent misrepresentations in their FCC
filings, as plaintiffs allege, this is not sufficient to create
venue since the FCC has not had any "significant day-to-day role
in observing, managing, or running" switched access usage or
billing within the telecommunications industry, id., as
compared to the extensive level of agency involvement in
Wilderness Soc'y v. Babbitt, 104 F. Supp. 2d 10, 13-14 (D.D.C.
2000). Moreover, to accept plaintiffs' argument would amount to
an open invitation to litigants to sue private parties in this jurisdiction whenever the case has some relationship to an agency
action. Such an expansive view of venue finds no support in the
law and therefore will not be adopted here. See Cameron v.
Thornburgh, 983 F.2d 253, 256 (D.C. Cir. 1993) ("Courts in this
circuit must examine challenges to . . . venue carefully to guard
against the danger that a plaintiff might manufacture venue in
the District of Columbia" by alleging the involvement of
government officials.); see also Airport Working Group of Orange
County, 226 F. Supp. 2d at 230-31 ("Given the lack of any
meaningful ties to this jurisdiction, this Court is particularly
mindful of the admonition that courts `must be especially
cautious in allowing [cases] to remain in the District of
Columbia.'") (alteration in original) (citing Trout Unlimited,
983 F. Supp. at 17).
Nor does this case rise to the level of "national significance"
present in Wilderness Soc'y. There, the Court found that the
Secretary of the Interior's extensive involvement in the conduct
of various environmental studies relating to the development of
oil and gas resources in Alaska supported venue in the District
of Columbia because of "the national scope of the environmental
issues." 104 F. Supp. 2d at 14. By contrast, while AT&T's alleged
actions may have taken place all over the country, this case does
not involve a "national policy decision" or a significant "public
interest." Id. at 13-14.
Therefore, because the District of Columbia has "no meaningful
ties to the controversy and no particular interest in the parties
or subject matter," Chung v. Chrysler Corp., 903 F. Supp. 160,
165 (D.D.C. 1995) (internal quotation marks omitted), the Court
finds that deference to the plaintiffs' choice of forum is not
Turning to the other factors relevant to a transfer
determination, the Court concludes that New Jersey constitutes a
far more appropriate forum. After considering the plaintiffs' and defendants' choice of fora, courts typically look to whether the
claim arose in the district in which suit was filed. Trout
Unlimited, 944 F. Supp. at 16. In this case, plaintiffs accuse
AT&T of "orchestrat[ing] and implement[ing] at least two
fraudulent schemes in an attempt to avoid plaintiffs' `access
charges'." (Compl. ¶ 2.) While the manifestations of defendants'
alleged actions were felt by local carriers nationwide, the
conduct forming the basis of plaintiffs' suit took place
primarily in New Jersey. As plaintiffs' allege: "AT&T coordinates
and controls one overarching position concerning all of these
issues from its corporate headquarters." (Compl. ¶ 14.) It is
therefore clear that the conduct that underlies plaintiffs'
claims and caused their alleged harms occurred in New Jersey.
Next, courts consider "the convenience of the parties." Trout
Unlimited, 944 F. Supp. at 16. As none of the individual
plaintiffs has the District of Columbia as its principal place of
business, and the majority are not located in New Jersey, the two
fora appear to be of equal inconvenience for plaintiffs. But as
plaintiffs' counsel candidly admitted at the initial scheduling
conference, plaintiffs' choice of forum is driven by their
counsel's location in the District of Columbia.*fn4
Typically, the "location of counsel carries little, if any,
weight in an analysis under § 1404(a)," Armco Steel Co. v. CSX
Corp., 790 F. Supp. 311, 324 (D.D.C. 1991), since this factor
can easily be manipulated thereby permitting forum shopping.
Nevertheless, where "convenience of counsel bears directly on the
cost of litigation, it becomes a factor to consider." Blumenthal v. Mgmt. Assistance, 480 F. Supp. 470, 474 (N.D.
Ill. 1979); see also Green v. Footlocker Retail, Inc., Civ.
Action No. 04-1875, 2005 WL 1330686 (D.D.C. 2005). Although
plaintiffs' argument rests on this cost factor, they do no more
than merely assert that a transfer to the District of New Jersey
will drive up litigation costs by requiring local counsel to be
hired and increasing travel expenses. (Pls.' Opp'n at 16-17.)
There is no showing that plaintiffs collectively are not in a
position to absorb the difference in cost.*fn5 Furthermore,
a substantial amount of pre-trial discovery must be conducted in
New Jersey as defendants' documents and witnesses are located
there. Thus, travel expenses will be significant whether the case
remains here or is transferred. Additionally, since the majority
of witnesses and relevant documents are found in New Jersey, the
ease of access to the sources of proof will be improved if the
case is transferred.
Considering the public interest factors, the Court finds that
New Jersey has a much stronger interest in resolving this dispute
as compared to the District of Columbia. Though the case involves
alleged damages in a multitude of states, the actions in question
were undertaken by a New Jersey corporation and implemented by
New Jersey-based employees. The State of New Jersey has a
significant interest in allegations of fraudulent activity by its
corporations and certainly has a greater interest than the District of Columbia,
where very few of the alleged harms were manifested and most of
the parties have virtually no ties.
Plaintiffs had a decision to make when filing their lawsuits:
either file in each plaintiff's home district and protect their
venue choice or file a multitude of lawsuits in one jurisdiction
and conserve costs. Having reaped the benefit of cost-sharing,
plaintiffs have less standing to complain that their choice of
venue is not being honored. The coordination of these cases in a
single venue is no doubt more cost-efficient than trying each of
them separately. That New Jersey may not be as cost-efficient a
location for plaintiffs because they have chosen to hire D.C.
counsel is simply not enough to tip the balance when the
remaining factors weigh heavily in favor of transfer.
For the foregoing reasons, defendants' Motion to Transfer Venue
shall be GRANTED. An appropriate Order accompanies this
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