Sue L. Robinson: “Small, Regional” Defendants Win Transfer to D. Ariz.

In an unusual outcome in the District of Delaware, a transfer motion has been granted. In a recent opinion, district judge Sue L. Robinson found that two affiliated defendant-companies, both located in Arizona, had overcome the strong presumption in favor of a plaintiff’s choice of forum. The winning argument? Defendants’ statement that, with only twelve employees and officers, litigating in Delaware potentially could result in the firms’ failure:

“According to defendants, the absence of these officers and/or employees from their employment would be incredibly damaging to [its] nascent business operations and could possibly result in the business losing substantial revenue and/or failing. . . . In sum, defendants present themselves as small, regional businesses; weighing the convenience of the parties under the circumstances of record, the court agrees that maintaining the litigation in Delaware presents significant hardships to defendants.”

Defendants often unsuccessfully assert inconvenience based on a lack of employees or records located in Delaware. This case is a rare example of the circumstances in which hardship stemming from location alone drives the transfer analysis.

L’Athene Inc. v. EarthSpring LLC, C.A. No. 08-114-SLR (D. Del. Aug. 7, 2008) (Robinson, J.).

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