United States District Court, District of Columbia
MEMORANDUM OPINION AND ORDER
BERMAN JACKSON United States District Judge.
Securities and Exchange Commission ("SEC") has
brought this action for securities violations under the
Securities Act of 1933 ("Securities Act"), the
Securities Exchange Act of 1934 ("Exchange Act"),
and Exchange Act Rules, against defendants RPM International,
Inc. ("RPM") and RPM's General Counsel and
Chief Compliance Officer Edward W. Moore ("Moore").
Compl. [Dkt. #1] ¶¶ 1, 3 8-9, 85-105. Plaintiff
alleges that defendants fraudulently failed to disclose loss
contingencies on certain SEC filings after the Department of
Justice ("DOJ") conducted an investigation into a
complaint against RPM under the False Claims Act.
Id. ¶¶ 1-2. Defendants moved to transfer
this case to the United States District Court for the
Northern District of Ohio under 28 U.S.C. § 1404(a) on
the grounds that private and public interests favor transfer.
After consideration of all of the facts, the Court will deny
a Delaware corporation headquartered in Medina, Ohio that
"manufactures and sells various chemical product lines,
including paints, protective coatings, roofing systems,
sealants, and adhesives" Compl. ¶ 14. Beginning in
2007, Moore served as RPM's General Counsel and Corporate
Secretary, and in 2011, he assumed his current position of
Chief Compliance Officer. Id.¶ 15.
instant action stems from a previous lawsuit against RPM and
one of its wholly-owned subsidiaries, Tremco, Inc.
("Tremco"), a company that "provides roofing
materials and services." Compl. ¶¶ 1-2, 14. In
July 2010, a former Tremco employee filed a complaint under
the False Claims Act, 31 U.S.C. § 3729 et seq.,
alleging that Tremco overcharged the United States under
certain government contracts by failing to provide required
price discounts. Compl. ¶¶ 2, 17. The DOJ initiated
an investigation during which Moore oversaw the responses of
both RPM and Tremco and kept RPM and auditors informed.
Id. ¶¶ 2, 17-20. RPM and the DOJ
eventually settled the False Claims allegations for
approximately $61 million. Id. ¶¶ 2, 71.
to plaintiff, the ongoing DOJ investigation described above
amounted to a "loss contingency, " which is defined
as "an existing condition, situation, or set of
circumstances involving uncertainty as to a possible loss
that will be resolved when one or more future events occurs
or fails to occur, " including "actual or possible
claims and  pending or threatened litigation." Compl.
¶ 23. If a material loss was reasonably possible,
plaintiff alleges that RPM had to disclose this loss
contingency and record it as a charge against income in order
to comply with its reporting obligations under the securities
claims that defendants did not publicly disclose this loss
contingency until the "fiscal third quarter end[ing]
February 28, 2013, " Compl. ¶¶ 64-65, even
though defendants were allegedly required to account for the
loss contingency beginning in March 2011. Id. ¶
23. As a result, plaintiff alleges that defendants
"submitted multiple materially false and misleading
filings to the SEC" between October 2012 and December
2013 because the filings did not account for a loss
contingency and continued to be misleading even after the
company disclosed the DOJ investigation and recorded an
accrual. Id. ¶¶ 4-5.
September 9, 2016, the SEC brought this securities action
against RPM and Moore in the District Court for the District
of Columbia. See Compl. Defendants filed a motion to
transfer this action to the District Court for the Northern
District of Ohio on October 4, 2016. See Notice of
Defs.' Mot. to Transfer This Case to the United States
District Court for the Northern District of Ohio [Dkt. # 19]
("Defs.' Mot."); Mem. of P. & A. in Supp.
of Defs.' Mot. [Dkt. # 19-1] ("Defs.'
Mem.") at 10-19. Defendants argue that private and
public interest factors favor transfer because the most
important events took place in the Northern District of Ohio;
the Northern District of Ohio is the most convenient forum
for the parties and witnesses; the relevant evidence is
located at RPM's headquarters; the District Court for the
Northern District of Ohio has a shorter time to trial than
the District Court for the District of Columbia; and Ohio has
the stronger local interest in seeing the case resolved.
Defs.'Mem. at 11-19. Plaintiff opposed
defendants'motion. Pl.'s Opp. to Defs.' Mot.
[Dkt. # 22] ("Pl.'s Opp."). It contends that
defendants have not met their burden to justify the transfer
because plaintiffs choice of forum is "entitled to
deference-significant events took place in the District of
Columbia, and it will take less time to try the case here.
See Id. at 1-2, 13-22. On November 15, 2016,
defendants filed a reply in support of their motion.
See Reply Mem. of P. & A. in Supp. of Defs.'
Mot. [Dkt. # 23] ("Defs.' Reply").
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 28 U.S.C. § 1404(a). The defendant, as the
moving party, bears the burden of establishing that transfer
is proper. Greater Yellowstone Coal. v. Bosworth,
180 F.Supp.2d 124, 127 (D.D.C. 2001). The Court has broad
discretion in deciding whether transfer from one jurisdiction
to another is appropriate. See Norwood v.
Kirkpatrick, 349 U.S. 29, 31 (1955); Sec. &
Exch. Comm'n v. Savoy Indus., Inc., 587 F.2d 1149,
1154 (D.C. Cir. 1978). The decision to transfer requires an
"individualized, case-by-case consideration of
convenience and fairness." Van Dusen v.
Barrack, 376 U.S. 612, 622 (1964).
threshold question under section 1404(a) is whether the
action "might have been brought" in the transferee
district. 28 U.S.C. § 1404(a); see also Lentz v. Eli
Lilly & Co., 464 F.Supp.2d 35, 36 (D.D.C. 2006). An
action may be brought in any judicial district in which
"any defendant resides, if all defendants are residents
of the State in which the district is located" or in a
district where "a substantial part of the events or
omissions giving rise to the claim occurred." 28 U.S.C.
§ 1391(b)(1)-(2). The venue provisions of the Securities
Act and the Exchange Act also provide that venue is proper
where "the defendant is found or is an inhabitant or
transacts business." 15 U.S.C. §§ 77v(a),
establishing that the threshold requirement has been met, the
Court "must balance case-specific factors which include
the private interests of the parties as well as public
interests such as efficiency and fairness." See
Wilderness Soc'y v. Babbitt, 104 F.Supp.2d 10, 12
(D.D.C. 2000). The private interest considerations include:
(1) the plaintiffs choice of forum, unless the balance of
convenience is strongly in favor of the defendants; (2) the
defendants' choice of forum; (3) whether the claim arose
elsewhere; (4) the convenience of the parties; (5) the
convenience of the witnesses of the plaintiff and defendant
but only to the extent that the witnesses may actually be
unavailable for trial in one of the fora; and (6) the ease of
access to sources of proof
Trout Unlimited v. U.S. Dep't of Agric, 944
F.Supp. 13, 16 (D.D.C. 1996) (internal citations omitted).
Public interest considerations include: "(1) the
transferee's familiarity with the governing laws; (2) the
relative congestion of the calendars of the potential
transferee and transferor courts; and (3) the local interest
in deciding local controversies at home." Id.
undisputed that this action could have been brought in the
Northern District of Ohio. Defs.' Mem at 10; Pl.'s
Mem. at 10; see also 28 U.S.C. § 1331(b)(1); 15
U.S.C. §§ 77v(a), 78aa. Therefore, the Court need
only examine and balance the private and public interest
factors. See Lentz, 464 F.Supp.2d at 37 (determining
on a motion to transfer that only the second inquiry ...