Delaware Business Litigation Report

Federal Court Transfers Venue Under The Jumara v. State Farm Ins. Co. Articulation Of 28 U.S.C. Section 1412 Multifactor Considerations.

Bank of America, N.A. (USA) v. US Airways, Inc., No. Civ. A. 05-793-JJF, 2005 WL 3525680 (D.Del. Dec. 21, 2005). This is an action founded on tort and breach of contract. The Court granted defendants' motion to transfer the action to the Eastern District of Virginia and denied, without ruling, plaintiff's motion for expedited remand to the Delaware Court of Chancery. Defendants include three Delaware entities: US Airways, Inc., US Airways Group, Inc., and America West Airlines, Inc. The first two defendants maintained their principal place of business in Virginia. America West, Inc., maintained its principal place of business in Arizona. Additionally, Juniper Bank intervened as a defendant. Plaintiff and US Airways, Inc., entered into a 2003 co-branded credit card agreement with the former as the sole issuer of the latter's credit cards to US residents until 2008. Subsequently, US Airways Group merged with America West Holdings in accordance with Chapter 11 proceedings, taking on the US Airways name. In 2005, America West, US Airways Group and Juniper Bank entered into an agreement permitting Juniper to issue co-branded credit cards for US Airways. Bank of America then filed suit alleging breach of contract and tortious interference with contract and prospective economic relations. Plaintiff also claimed monetary damages, injunctive relief prohibiting Juniper from issuing US Airways credit cards and specific performance of the co-branding card agreement. The action was first filed in the Delaware Court of Chancery. Defendants and Juniper removed the action to this Court. The Court ruled that it had subject matter jurisdiction under 28 U.S.C. §1334(b) read with 28 U.S.C. §157(b) and under authority of In re Resorts Intern., Inc., 372 F.3d 154, 164 (3d Cir. 2004) (permitting "related" actions under Chapter 11 for subject matter jurisdiction). The Court also granted defendants' motion ruling that Virginia was a more appropriate venue under 28 U.S.C. §1412 because it would be in the interests of justice and party convenience under the multifactor considerations of Section 1412 relating to the transfer of civil actions, citing In re Centennial Coal, Inc., 282 B.R. 140, 144 (Bankr. D.Del. 2002) and Jumara v. State Farm Ins. Co., 55 F.3d 873, 879-80 (3d Cir. 1995)(listing the factors for consideration for transfer of venue) in support. Defendants successfully demonstrated that the balance of interests dipped substantially in their favor permitting transfer to the Eastern District of Virginia, where related bankruptcy matters were pending. Authored by: Raj Srivatsan 302-888 6831 rsrivatsan@morrisjames.com Share