Edelson PC v. Lira

Background

Edelson PC, described as the law-firm assignee of five families bereaved by the 2018 Lion Air plane crash, sued nine defendants. The complaint alleged a scheme to defraud settlement funds belonging to Girardi Keese’s Lion Air clients. The claims included federal racketeering claims, California claims involving stolen property, money had and received, conversion, unfair business practices, consumer-protection violations, and deceit.

Edelson alleged that venue was proper in the Northern District of California because it maintained an office and conducted business there and because a substantial part of the events occurred there. The complaint identified several visits or activities in the district, including business trips by David Lira and Keith Griffin and an email Griffin sent while physically present in the district.

Seven defendants moved to dismiss for improper venue or to transfer the case. The conclusion specifically addressed motions by George Hatcher, David Lira, Keith Griffin, and California Attorney Lending II, Inc.

Court’s analysis

Under 28 U.S.C. § 1391(b)(2), venue is proper where a substantial part of the events or omissions giving rise to the claims occurred. The court found that the September 11, 2020 email sent by Griffin from the district was not enough to make venue proper for the deceit claims, which alleged a larger scheme occurring over several years.

The court also rejected venue under the racketeering venue statute, 18 U.S.C. § 1965(a). Even assuming the complaint’s allegations were true, the court found that Lira’s and Griffin’s alleged contacts with the district were scattered and too limited to show that either defendant substantially transacted affairs there.

Venue was also unavailable under 28 U.S.C. § 1391(b)(1), which permits venue in a district where a defendant resides when all defendants reside in the state containing that district. The court relied on the complaint’s allegation that Joseph DiNardo was a New York resident and concluded that not all defendants resided in California.

The court further stated that, even if venue had been proper, discretionary transfer under 28 U.S.C. § 1404(a) would have been appropriate. It found that the Central District of California was the case’s “center of gravity” because most events occurred there and most parties and witnesses were located there.

Disposition

The court concluded that Edelson had not shown that venue was proper in the Northern District of California. Under 28 U.S.C. § 1406(a), the court determined that transfer, rather than dismissal, was in the interest of justice. Judge Jacquelyn Corley granted the motions of Hatcher, Lira, Griffin, and California Attorney Lending II, Inc., and transferred the case to the Central District of California. The order did not decide whether Edelson’s underlying allegations or claims were legally valid.