United States of America v.The Sporn Company Inc.

Background

This case is a False Claims Act action brought by Steven Adler on behalf of the United States. Adler alleges that Sporn Company, Inc., which the opinion describes as the parent company of Bixler’s Inc., failed to mark its jewelry with Canada as the country of origin. Adler based the allegation in part on three jewelry orders he personally placed that arrived in the United States without country-of-origin markings. He seeks treble damages for unpaid marking duties and a civil fine.

Motion to Transfer

The defendants moved under 28 U.S.C. § 1404(a) to transfer the case from the Southern District of New York to the District of Vermont. That statute allows a federal court to transfer a civil case to another district where it could have been brought when transfer would make the case more convenient for the parties and witnesses and serve the interests of justice.

The court considered factors including the plaintiff’s choice of forum, witness convenience, the location of documents and other evidence, party convenience, where the key events occurred, the ability to require unwilling witnesses to attend, and the parties’ relative resources.

The court concluded that these factors strongly favored Vermont. It found that most of the events in the United States connected to the case occurred in Burlington, Vermont, and that no events related to the marking duty occurred in the Southern District of New York. The court therefore expected documentation and other evidence to be in Burlington. It also found that material witnesses with knowledge of the defendants’ marking practices would be in Vermont or Canada, and that Vermont was more convenient for the defendants because they operated their United States commerce from there. The court noted that Adler resided in Florida and would need to fly to either New York or Vermont.

The court acknowledged that the False Claims Act’s venue provision permitted the case to be brought in the Southern District of New York because Sporn is a New York corporation. But the court held that this provision did not eliminate its discretion to transfer the case under Section 1404(a).

Disposition

The court granted the defendants’ motion to transfer venue and ordered that the case be transferred to the District of Vermont. Because of the transfer, the court left the pending motion to dismiss for the District of Vermont judge to decide. The opinion did not resolve whether Adler’s False Claims Act allegations were valid.