BUA, District Judge.
Between February 6, 1990, and March 14, 1990, plaintiffs Kathleen M. Paul, Pierretta Alfiera, and Bruce Gorosh purchased approximately 500 shares of Lands' End, Inc. ("Lands' End") common stock. Shortly after plaintiffs invested in Lands' End, the company's earnings declined. Having sustained a loss on their investment, plaintiffs instituted this securities action against Lands' End and its chief executive officer, Richard C. Anderson. Plaintiffs contend that defendants made numerous fraudulent misrepresentations and omissions of material fact regarding the financial prospects of Lands' End. According to plaintiffs, these misrepresentations were made in furtherance of a scheme to inflate the market price of Lands' End common stock.
In their amended complaint, plaintiffs assert a claim under sections 10(b) and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. §§ 78j(b), 78t(a). The complaint also sets forth pendent state law claims for fraud and negligent misrepresentation.
Pursuant to 28 U.S.C. § 1404(a), defendants now seek to transfer this case to the Western District of Wisconsin. For the reasons stated herein, defendants' motion to transfer is granted.
Before a district court will entertain a motion to transfer, the moving party must demonstrate that: 1) venue is proper in the transferor court; 2) venue is proper in the transferee court; and 3) the transfer is for the convenience of the parties and witnesses, in the interest of justice. Ratner v. Hecht, 621 F.Supp. 378, 381 (N.D.Ill. 1985).
The first two prerequisites for a valid transfer are easily satisfied in this case. The Securities Exchange Act contains a special venue provision, which provides that venue is proper in any district "wherein the defendant is found or is an inhabitant or transacts business." 15 U.S.C. § 78aa. Venue is proper in the Northern District of Illinois (the transferor forum) and the Western District of Wisconsin (the transferee forum) because defendants transact business in both districts.
Consequently, the motion to transfer hinges on the remaining prerequisite— whether a transfer will promote the convenience of the parties and witnesses and the interest of justice. With respect to the convenience of the parties, Illinois does not appear to be a particularly convenient forum for either party. Defendants assert that it would be more convenient for them
In evaluating the convenience of the non-party witnesses, the court must consider the number of potential witnesses in Illinois and Wisconsin, as well as the nature and quality of their testimony. Trademasters Int'l, Inc. v. Borer, 687 F.Supp. 434, 436 (N.D.Ill.1988); Web Specialties, Inc. v. Boreta, 681 F.Supp. 564, 566 (N.D.Ill.1988). Plaintiffs' cause of action is based on alleged misrepresentations regarding the company's catalogue sales, discounted sales of inventory, earnings projections, and sales forecasts. See Amended Complaint, ¶¶ 10, 11. To substantiate their claims, plaintiffs will have to rely heavily on the testimony of numerous witnesses who are employed by Lands' End. The individuals employed in the corporate finance department of Lands' End would most likely be able to verify the accuracy or inaccuracy of the representations made by defendants. Likewise, the individuals employed in the merchandising department would be able to provide testimony as to whether there was a reasonable basis for defendants' representations concerning customer sales, inventory, and product demand. Each department has over twenty employees, all of whom work and reside in Wisconsin. See Affidavit of Robert A. Geiger, ¶ 2; Affidavit of David L. Schlotterback, ¶¶ 5, 6.
Finally, the interest of justice supports a change of venue. As the court has already pointed out, the parties and witnesses have relatively insignificant contacts with the Northern District of Illinois. Moreover, the underlying cause of action does not have a close connection to Illinois. Plaintiffs do not allege that they purchased Lands' End common stock in Illinois or that they otherwise acted upon any misleading information in Illinois. In fact, there is nothing in the complaint which suggests that the misrepresentations were communicated to plaintiffs in Illinois. Although some of the misrepresentations were allegedly contained in press releases and other documents disseminated in Illinois, such documentation emanated from Wisconsin, the corporate headquarters of Lands' End. Plaintiffs' cause of action essentially stems from corporate policy and decisions made at the headquarters of Lands' End.
In opposition to defendants' motion to transfer, plaintiffs argue that their choice of forum is the "paramount consideration." While a plaintiff's choice of forum was given considerable weight under the common law doctrine of forum non conveniens, the significance of this factor has diminished somewhat since the enactment of § 1404(a). Trademasters Int'l, Inc., 687 F.Supp. at 435; Hotel Constructors, Inc. v. Seagrave Corp., 543 F.Supp. 1048, 1050 (N.D.Ill.1982). The plaintiff's choice of forum is given less deference when, as in this
Plaintiffs claim that they may not receive a fair trial in Wisconsin because Lands' End maintains a large corporate presence in that state. This assumption is unfounded and based on pure speculation. Besides, the trial court can diminish the threat of bias through the exercise of its authority to monitor and control the litigation. This court sees no reason why plaintiffs will not be able to obtain a fair and expeditious resolution of this case in Wisconsin.
Since Wisconsin has a closer relationship to this case than Illinois, a transfer would best serve the interest of justice.
For the foregoing reasons, defendants' motion to transfer is granted.
IT IS SO ORDERED.