Apparel Sourcing Ltd. v. Transform KM LLC
- Philip Halpern
- 7:20-cv-04651
- U.S. District Court · Southern District of New York
- 3
In Apparel Sourcing v. Transform KM, Judge Halpern transferred the case to Illinois and administratively closed it.
The 23 supplier plaintiffs and the defendants were affected because the case was transferred from the Southern District of New York to the Northern District of Illinois, and the case was administratively closed in the transferring court.
What happened
Apparel Sourcing (HK) Ltd. v. Transform KM LLC involved 23 Bangladeshi and Indian suppliers suing the “new” Sears and Kmart over agreements to buy and sell consumer goods. The suppliers alleged several contract-related claims and damages exceeding $41 million.
The suppliers and defendants each agreed that the case should be heard in the Northern District of Illinois. The suppliers also submitted terms and conditions that they said included clauses addressing Illinois court jurisdiction and venue.
Judge Philip M. Halpern canceled the scheduled hearing, transferred the case to the U.S. District Court for the Northern District of Illinois, and administratively closed the case. The parties’ letter-motions were denied without prejudice to renewal in that court.
The detailed version
- Apparel Sourcing Ltd. v. Transform KM LLC · No. 7:20-cv-04651
- Philip Halpern
- Aug. 14, 2020
Background
The plaintiffs were 23 Bangladeshi and Indian suppliers. They sued Transform KM LLC and other defendants, described in the opinion as the “new” Sears and Kmart. The plaintiffs alleged breach of contract, breach of implied contract, anticipatory breach of implied contract, and open book account claims arising from agreements to purchase and sell consumer goods. They alleged damages exceeding $41 million.
The plaintiffs filed a letter-motion seeking a conference about an anticipated request for an attachment. The defendants filed a letter-motion seeking a conference about an anticipated motion to dismiss, stay the case while arbitration proceeded, and/or transfer the case to the Northern District of Illinois.
Transfer Analysis
The Court issued an order giving the parties an opportunity to explain why it should not transfer the case under 28 U.S.C. § 1404(a), the federal statute allowing transfer to another federal district when transfer would serve convenience and the interests of justice. The plaintiffs then agreed that venue should be in the Northern District of Illinois and consented to transfer. They submitted 23 exhibits that appeared to be Transform’s Universal Terms and Conditions for each plaintiff.
The plaintiffs said those terms included provisions consenting to jurisdiction in state and federal courts in Cook County, Illinois, and provisions stating that the U.S. District Court for the Northern District of Illinois would have jurisdiction and venue over certain matters related to mediation or arbitration. The defendants did not submit additional materials.
The Court concluded that transfer would promote the interests of justice. It also noted that both sides had unequivocally consented to transfer. The Court did not decide the anticipated motion to dismiss, the request to stay for arbitration, the attachment request, or the underlying contract claims.
Disposition
Judge Philip M. Halpern canceled the hearing scheduled for August 18, 2020 and transferred the action to the U.S. District Court for the Northern District of Illinois. The Court directed the Clerk to transfer the case and administratively closed the case. The letter-motions seeking conferences were denied without prejudice to renewal in the Northern District of Illinois.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.