Lai v. Lu

Background

Xiaoyong Lai, an attorney representing himself, sued his client, Mengjing Lu, and Lu Zhang. Lai seeks $422,463 in fees and costs that he says Lu owes for legal services. His complaint alleges that Lu failed to pay and fraudulently transferred assets, including assets transferred to Zhang. The complaint asserts breach-of-contract and common-law claims against Lu, and fraudulent-transfer and conspiracy claims against both defendants. Lu disputes the scope and fairness of the parties’ agreements and the amount of Lai’s billed time; she contends that Lai owes her more than $175,000.

Lu moved under 28 U.S.C. § 1404(a), a federal venue-transfer statute, to transfer the case from the Northern District of California to the District of Nevada. The opinion states that Lu resides in Nevada. Lai agreed that the case could have been filed in Nevada, so the court considered only whether convenience and fairness supported transfer. The court did not consider Zhang’s residence in deciding the motion.

Analysis

The court gave some weight to Lai’s choice of the Northern District of California. Lai is located in that district, the parties’ initial retainer agreement was executed there around November 2019, and the underlying legal work involved litigation in California. The record also indicated that alleged fraudulent transfers occurred in California in 2020, although the property involved in the lawsuit is in Nevada. The court found no indication that Lai engaged in improper forum shopping.

The convenience-of-the-parties factor did not favor transfer. Lu asserted that travel to California was medically prohibitive because of her age and health conditions, including vertigo and bilateral knee osteoarthritis. She provided medical records and a doctor’s note requesting that she be excused from travel or physical activity, but she did not submit a declaration supporting her travel-related assertions. The court found that she had not provided a strong enough evidentiary basis to show that her conditions created a significant hardship or prevented her from defending herself. The court said it would consider requests for remote appearances at pretrial proceedings to reduce the burden.

The convenience-of-witnesses factor also weighed against transfer. Lu referred generally to potential witnesses in Nevada but did not identify them, describe their testimony, or explain why litigating in California would significantly burden them. The court determined that, apart from Zhang, the key witnesses appeared to be Lai and Lu themselves. Access to evidence was neutral because much of the likely evidence was electronic and accessible from either district, and neither party identified a nonparty witness who could be compelled to attend only in one district. The applicable-law and local-interest factors were also neutral. The parties provided no basis to evaluate court congestion, trial timing, litigation costs, or public-policy considerations.

Disposition

Judge Virginia K. DeMarchi concluded that Lu had not made the strong showing needed to overcome Lai’s choice of forum. The court denied Lu’s motion to transfer the action to the District of Nevada under 28 U.S.C. § 1404(a). The opinion did not decide the merits of Lai’s claims or Lu’s counterclaims.