United States District Court, D. Vermont
OPINION AND ORDER GRANTING DEFENDANT VF OUTDOOR,
LLC'S MOTION TO TRANSFER VENUE (DOC. 36)
Christina Reiss, District Judge
William and Linda Vinci (the "Vincis") bring state
law claims against Defendant VF Outdoor, LLC ("VF
Outdoor"), arising out of the Vincis' purchases of
The North Face branded products subject to a Multiparty
Guaranty Agreement ("the Agreement"). Pending
before the court is VF Outdoor's motion to transfer the
Vincis' remaining claims to the United States District
Court for the Northern District of California pursuant to 28
U.S.C. § 1404(a). The Vincis oppose the motion, which
the court took under advisement on May 31, 2018.
are represented by David E. Bond, Esq. Defendants are
represented by R. Jeffrey Behm, Esq.
Factual and Procedural Background.
court adopts as its factual and procedural background the
factual allegations set forth in its February 21, 2018
Opinion and Order. See Opinion & Order (Doc.
24), Feb. 21, 2018, at 2-4. The Vincis are husband and wife
and the sole shareholders of TNF Gear, Inc.
("TNF"), a Vermont corporation with its principal
place of business in Burlington, Vermont. In 2001, TNF opened
The North Face Store @ KL Sport in Shelburne, Vermont, which
was later moved to College Street in Burlington and then to
90 Church Street in Burlington. TNF's store sold only The
North Face branded apparel purchased at wholesale from V.F.
Corp. and VF Outdoor. Plaintiffs allege that until 2015,
"The North Face was positioned as a premium brand[,
]" and V.F. Corp. and VF Outdoor required them to adhere
to manufacturer approved pricing plans that dictated
correspondingly high retail prices. (Doc. 5 at 3, ¶ 11.)
The Vincis allege that the two companies "represented to
Plaintiffs that these policies applied to all retailers
selling The North Face products." Id. at ¶
early 2015, TNF placed its yearly order for winter apparel,
totaling approximately $1.2 million in merchandise. In the
fall of 2015, after TNF accepted delivery of those products,
V.F. Corp. and VF Outdoor allegedly dramatically reduced
their wholesale prices for sales made to third-party vendors.
These third-party vendors, in turn, sold the discounted
merchandise at significantly reduced retail prices to the
general public, in violation of the marketing policies with
which V.F. Corp. and VF Outdoor required TNF and the Vincis
to comply. The Vincis claim that they were unable to compete
with the significantly reduced prices, and that even if they
could match them, they were barred from doing so pursuant to
their promise to adhere to Defendants' manufacturer
approved pricing plans. The Vincis allege that they fell
"deeply into debt[, ]" id., ¶ 13, and
reported this to their contacts at the two companies who
promised to "reign in" the third-party
discounters. Id. at 4, ¶ 14.
2016, the Vincis purchased $650, 000 in winter apparel
inventory through TNF, and in the fall of that year V.F.
Corp. and VF Outdoor again allegedly offered the same apparel
to third-party vendors at steep discounts. The Vincis allege
that they were again substantially underpriced by other
retailers and were unable to maintain profitability. "As
a result of Defendants' actions, the Vincis exhausted
their savings and their credit, and in under 20 months saw
their business go from a successful enterprise to the verge
of failure." Id., ¶ 17. The Vincis claim
they offered to sell their business to V.F. Corp. and VF
Outdoor, but that they refused to entertain a fair market
23, 2017, the Vincis and TNF filed a Complaint naming only
V.F. Corp. as a Defendant and alleging breach of contract,
promissory estoppel, breach of the implied covenant of good
faith and fair dealing, and fraudulent nondisclosure under
Vermont common law. On June 19, 2017, the Vincis and TNF
amended their Complaint to include VF Outdoor as a Defendant,
stating that VF Outdoor "is a wholly-owned subsidiary of
[V. F. Corp.]. On information and belief, [VF Outdoor] is the
owner of The North Face brand, and operates a division under
the tradename, 'The North Face.'" Id.
at 1, ¶ 4. The Amended Complaint includes a jury demand
and seeks five million dollars in damages.
18, 2017, VF Outdoor and V.F. Corp. filed three motions
pursuant to Fed.R.Civ.P. 12. First, VF Outdoor moved to
enforce a binding forum selection clause in the Agreement
with TNF, arguing in the alternative either for dismissal of
the Vermont action or transfer of the case to the United
States District Court for the Northern District of
California. On January 12, 2018, the court granted VF
Outdoor's motion and transferred TNF's claims against
it to the Northern District of California. Those claims are
presently pending in that court's San Francisco Division
in Civil Docket No. 18-cv-00253-JSC.
V.F. Corp. sought dismissal of all Plaintiffs' claims
against it for lack of personal jurisdiction. On February 21,
2018, the court granted V.F. Corp.'s motion, dismissed
all claims against it, and dismissed it as a party to this
action. TNF was subsequently dismissed as a party because,
following transfer of its claims against VF Outdoor and
dismissal of its claims against V.F. Corp., none of TNF's
claims remained pending in this court.
both V.F. Corp. and VF Outdoor sought dismissal of the
Vincis' individual causes of action for failure to state
a claim upon which relief could be granted. Having determined
that it lacked personal jurisdiction over V.F. Corp., the
court denied V.F. Corp.'s motion as moot. VF
Outdoor's motion was thus granted in part and denied in
part. The court dismissed Counts I and III without prejudice,
which alleged breach of contract and breach of the implied
covenant of good faith and fair dealing, but denied VF
Outdoor's motion with respect to Counts II and IV, which
pleaded claims of promissory estoppel and fraudulent
nondisclosure. As a result, the Vincis' state law claims
against VF Outdoor for promissory estoppel and fraudulent
nondisclosure are the only claims that remain pending in this
court. VF Outdoor seeks transfer of those claims to the
Northern District of California so that all of the claims
arising out of the sale of The North Face Branded products to
TNF and the Vincis may be tried in a single action. The
Vincis oppose that outcome.
Conclusions of Law and Analysis.
U.S.C. § 1404 governs VF Outdoor's motion to
transfer and states that: "[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 or to any district
or division to which all parties have consented." 28
U.S.C. § 1404(a). "Section 1404(a) is merely a
codification of the doctrine of forum non conveniens
for the subset of cases in which the transferee forum is
within the federal court system; in such cases, Congress has
replaced the traditional remedy of outright dismissal with
transfer." Atl. Marine Constr. Co., Inc. v. U.S.
Dist. Ct.for the W. Dist. of Texas, 571 U.S. 49, 60
(2013). It "reflects an increased desire to have federal
civil suits tried in the federal system at the place called
for in the particular case by considerations of convenience
and justice." Van Dusen v. Barrack, 376 U.S.
612, 616 (1964) (footnote omitted).
Supreme Court has observed, § 1404 "was designed as
a federal housekeeping measure, allowing easy change of venue
within a unified federal system." Piper Aircraft Co.
v. Reyno, 454 U.S. 235, 254 (1981) (internal quotation
marks omitted). Therefore, "[district courts [are] given
more discretion to transfer under § 1404(a) than they
[have] to dismiss on grounds of forum non
conveniens[, ] id., and "motions for
transfer ... are determined upon notions of convenience and
fairness on a case-by-case basis." Cuyahoga Equip.
Corp. v. United States (In re: Cuyahoga Equip. Corp.),
980 F.2d 110, 117 (2d Cir. 1992) (citing Stewart Org,
Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988)).
no forum selection clause governs the parties' dispute,
"a district court considering a § 1404(a) motion .
. . must evaluate both the convenience of the parties and
various public-interest considerations." Atl.
Marine, 571 U.S. at 62.
Factors relating to the parties' private interests
include relative ease of access to sources of proof;
availability of compulsory process for attendance of
unwilling, and the cost of obtaining attendance of willing,
witnesses; possibility of view of premises, if view would be
appropriate to the action; and all other practical problems
that make trial of a case easy, expeditious and inexpensive.
Public-interest factors may include the administrative
difficulties flowing from court congestion; the local
interest in having localized controversies decided at home;
and the interest in having ...