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Starbucks Corporation v. Wellshire Farms, Inc.

United States District Court, Ninth Circuit

December 18, 2013

STARBUCKS CORPORATION, Plaintiff,
v.
WELLSHIRE FARMS, INC., Defendant.

ORDER GRANTING MOTION TO TRANSFER

MARSHA J. PECHMAN, Chief District Judge.

This matter comes before the Court on Defendant Wellshire Farms Inc.'s motion to transfer this case to the District of New Jersey. (Dkt. No. 35.) Having reviewed the motion, Starbucks Corporation's response (Dkt. No. 39), Wellshire's reply (Dkt. No. 41), and all related papers, the Court GRANTS the motion and transfers this case to New Jersey. This is a case about ham made in Maryland, sold by a New Jersey meat vendor to non-parties in Nevada, Illinois, and Pennsylvania. Those non-parties assembled the ham into sandwiches, which were sold at Starbucks' stores throughout the United States. (Dkt. No. 1). Consequently, this matter should be litigated in the District of New Jersey, whose ties to this action substantially outweigh Plaintiff's decision to file suit in this District.

Background

In 2008, Starbucks decided to introduce new warm breakfast sandwiches to its stores nation-wide. (Id. at 1) Starbucks provided non-party SK Food Group ("SK Food") with specifications for the new sandwiches. SK Food is a food assembler, who sourced the ingredients for the new sandwiches, and produced several sandwich options for Starbucks' consideration in blind taste-tests. (Id. at 2-3) Included in these samples was ham from meat vendor Wellshire. (Id.) Starbucks selected the sandwich containing ham it believed Wellshire produced. (Id.) Soon after, Starbucks decided to also redesign its chilled lunch sandwiches and followed a similar process for choosing a new ham sandwich: SK Food provided options and Starbucks again choose a sandwich it believed to have Wellshire's ham. (Id. at 3)

Wellshire is a New Jersey corporation, whose 22 employees work in its Swedesboro, New Jersey office. (Dkt. No. 36 at 1, 3.) It contracted with Hahn Bros. Inc. for the production of maple-flavored ham logs marked with Wellshire's symbols/marks. Wellshire then contracted with SK Food in Reno, Nevada, as well as other assemblers, who incorporated the ham into the sandwiches. (Id. at 2.) Wellshire negotiated its contracts Hahn and the sandwich assemblers from New Jersey. (Dkt. No. 42.) Hahn and the sandwich assemblers, including SK Food, invoiced Wellshire's New Jersey office. (Dkt. No. 36 at 2-3.) Starbucks and Wellshire have no direct contractual relationship. (Id.)

Soon after the sandwich redesign, Starbucks' customers began complaining the ham was discolored, had an unusual taste, and appeared spoiled. (Dkt. No. 1 at 3.) Starbucks issued a "Stop Sell and Discard" notices to its stores. (Id. at 4.) Starbucks issued a second, followed by a third "Stop Sell and Discard" notice to its stores. After these problems persisted, Starbucks suspended sales of the sandwiches. (Id. at 4-5.)

Starbucks' settled with the sandwich assemblers for their losses resulting from the allegedly defective ham. (Id. at 5-6) In return, the assemblers assigned their rights to bring claims against Hahn and Wellshire to Starbucks. (Id.)

Asserting the sandwich assemblers' assigned rights, Starbucks sued Hahn and Wellshire for breach of implied warranty of fitness for a particular purpose under RCW 62A.2-315, breach of contract on a third-party beneficiary rights theory, negligence, and a claim for violation of Washington's Consumer Protection Act for Wellshire's alleged misrepresentation that it made the ham. (Id. at 6-11.) Starbucks claims at least $4.8 million in damages and attorney fees. (Id. at 11.)

Hahn was already dismissed from this case for lack of personal jurisdiction. (Dkt. No. 42.)

Wellshire now moves to transfer venue to the District of Jersey under 28 U.S.C. § 1404(a) on the grounds the events occurred in New Jersey and Maryland and that court has better access to proof and witnesses. (Dkt. No. 35.) Starbucks opposes transfer. Starbucks contends a plaintiff's choice of forum is given presumption. (Dkt. No. 39.)

Analysis

A. Standard

The Court has broad discretion to transfer cases in the interest of justice. 28 U.S.C. § 1404(a). Ellis v. Costco Wholesale Corp. , 372 F.Supp.2d 530, 537 (N.D. Cal. 2005). Under section 1404(a), The Court must make two findings before granting transfer: (1) the transferee court must be one where the action "might have been brought, " and (2) the convenience of the parties and witnesses and the interest of justice favors transfer. Hatch v. Reliance Ins. Co. , 758 F.2d 409, 414 (9th Cir. 1985). The purpose of this statute is to "prevent the waste of time, energy, and money and to protect litigants, witnesses and the public against unnecessary inconvenience and ...


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