United States District Court, W.D. Virginia, Harrisonburg Division
Michael F. Urbanski Chief United States District Judge
matter comes before the court on a multitude of motions.
Defendants G4S Technology LLC ("G4S") and Liberty
Mutual Insurance Company ("Liberty Mutual, " and
collectively with G4S, "Defendants") have each
filed a Motion to Stay, or in the Alternative, Dismiss or
Transfer, Based Upon the First-to-File Rule, ECF Nos. 19
& 25, and a Motion to Transfer Venue Pursuant to 28
U.S.C. § 1404(a), ECF Nos. 21 & 27. The motions to
stay concerned litigation in the United States District Court
for the District of Nebraska, G4S Technology. LLC v. WCC
Cable. Inc.. 5:17-cv-00109-MFU (the "Nebraska
Action").Additionally, Defendants have each filed a
Motion to Dismiss for Failure to State a Claim, ECF Nos. 23
& 29, each of which seeks dismissal of plaintiff WCC
Cable, Inc's ("WCC") Complaint, ECF No. 1 (the
"Complaint" or "Compl"). On October 10,
2017, on a motion by WCC, the District of Nebraska
transferred the Nebraska Action to this court. See G4S
Technology. LLC v. WCC Cable. Inc., 8:17CV182, 2017 WL
4564726 (D. Neb. Oct. 10, 2017). For the reasons set forth
below, the court will sua sponte
CONSOLIDATE this action with the Nebraska
Action. The court will GRANT the motions to
transfer venue, DENY AS MOOT the motions to
stay, and declines to rule on the motions to dismiss, which
may be taken up with the District of Nebraska.
Factual and Procedural Background
entered into a contract with die Virginia Department of
Transportation ("VDOT") for the design and
construction of a traffic and safety management system for
parts of Interstate 64 in Western Virginia (the
"Project"). Compl.¶ 7. G4S and WCC entered
into a Subcontract Agreement (the "Subcontract"),
ECF No. 1 Ex. A, under which WCC agreed to perform a portion
of the work G4S was required to perform for VDOT. Compl.
¶ 9; Subcontract § 1 & Ex. A. The Subcontract
contained a choice-of-law and forum-selection clause (the
This Subcontract shall be governed by the law of the State of
Nebraska (other than its choice or conflict of laws
provisions). Any dispute arising directly or indirectly from
this Subcontract shall be resolved solely and exclusively in
a state or federal court located in Douglas County, Nebraska.
§ 37. While the Subcontract generally appears to be
G4S' form contract, the parties appear to have dickered
certain terms. For instance, WCC negotiated an accelerated
payment schedule, id § 3(f), and, notwithstanding the
Nebraska choice-of-law provision, incorporated Virginia Code
§ 2.2-4354's interest-payment provisions, id §
3(a)2. The parties do not, however, appear to have negotiated
the Forum-Selection Clause.
G4S, as principal, and Liberty Mutual, as surety, entered
into a Contract Payment Bond and Contract Performance Bond,
ECF No. 1 Ex B. (the "Liberty Mutual Payment
Bond"), for the benefit of VDOT and all parties
providing labor and materials for the Project. The obligation
of the Liberty Mutual Payment Bond is guaranteed jointly and
severally by G4S and Liberty Mutual. The Liberty Mutual
Payment Bond does not include a forum-selection clause.
WCC, as principal, and Ironshore Indemnity, Inc.
("Ironshore"), as surety, entered into a
Performance and Payment Bond, Complaint Ex. A at 49-51,
5:17-cv-00109-MFU (the "Ironshore Payment Bond"),
for the benefit of G4S. The obligation of the Ironshore
Payment Bond is guaranteed jointly and severally by WCC and
Ironshore. The Ironshore Payment Bond does not contain a
working relationship between WCC and G4S soured, with each
side claiming the other side breached the Subcontract.
Compare Compl. ¶¶ 14-39 (WCC allegations
against G4S), with Complaint, 5:17-cv-00109-MFU, ECF No. 1
Ex. A, ¶¶ 9-14 (the "Nebraska Complaint")
(G4S allegations against WCC). According to WCC, G4S
improperly sent a "Notice to Cure, " despite WCC
performing all work as expeditiously as G4S' mandated
working parameters would allow. Compl. ¶ 26. After
sending the Notice to Cure, G4S continued to interfere
improperly with WCC's work. Compl. ¶ 27. Finally,
G4S sent WCC a "Notice of Default and Bond Claim, "
to which WCC promptly objected. Compl. ¶¶ 28-29.
2016, WCC asked G4S to meet in person "in an attempt to
avoid protracted legal action." Mem. Opp. G4S' Mot.
Stay, ECF No. 32, at 2. G4S agreed, and while the meeting was
initially set for January 25, 2017, on January 20, 2017,
counsel for G4S asked to postpone the meeting for thirty
days, while claiming the delay "was not an intentional
delay tactic." Id. at 2-3. The parties
rescheduled the meeting for March 9, 2017. Id.
March 6, 2017, counsel for G4S confirmed the details of the
March 9, 2017 meeting. Id. at 3. Two hours later on
the same day, G4S filed the Nebraska Action against WCC and
Ironshore in the District Court of Douglas County, Nebraska,
yet did not reveal its preemptive filing at the March 9, 2017
meeting. Id. Instead, G4S only revealed it had filed
the lawsuit on May 1, 2017. Id. WCC filed its own
Complaint in this court on May 25, 2017, setting off the
litany of motions before the court.
The Nebraska Action
after G4S revealed it filed the Nebraska Action, WCC and
Ironshore removed the action to the United States District
Court for the District of Nebraska. Notice of Removal,
5:17-cv-00109-MFU, ECF No. 1. WCC moved to dismiss the
Nebraska Complaint on two grounds: improper venue and lack of
personal jurisdiction, while Ironshore moved to dismiss under
Federal Rule of Civil Procedure 19(b). Motion to Dismiss,
5:17-cv-00109-MFU, ECF No. 6.
first argued that 28 U.S.C. § 1391(b) did not provide
for proper venue in Nebraska. None of the Nebraska defendants
were incorporated or headquartered in Nebraska, and the
events at issue all took place within the Western District of
Virginia. Id. at 5. Under this set of facts, WCC
argued that venue was only proper the Western District of
Virginia, and certainly not proper in the District of
next proceeded to argue that the Forum-Selection Clause was
invalid. Id. at 6-8. WCC contended that since the
Forum-Selection Clause is invalid, the District of Nebraska
lacked jurisdiction over WCC. Id. at 9. This
argument in large part mirrored WCC's venue discussion in
the present Section 1404(a) motions, which the court will
admitted that venue was not proper in the District of
Nebraska. See Plaintiffs Brief in Response to
Defendants' Motion to Dismiss ("Neb. Opp."),
5:17-cv-00109-MFU, ECF No. 11, at 13. G4S argued that even if
venue were improper in the District of Nebraska, the
Forum-Selection Clause would mandate that the action be
brought in a court in Douglas County, Nebraska. Citing
Atlantic Marine Construction Co. v. United States
District Court for the Western District of Texas. __
U.S. __, 134 S.Ct. 568, 581 (2013), G4S contended that,
notwithstanding Section 1391(b), the District of Nebraska
"must enforce a forum selection clause to protect[ the
parties'] legitimate expectations and further vital
interests of the justice system." Neb. Opp. at 13
(internal quotations omitted) (quoting Atl
Marine. 134 S.Ct. at 581). To this end, relying on
Servpro Industries. Inc. v. JP Penn Restoration
Services. No. 3-16-0298, 2016 WL 5109947 (M.D. Tenn.
Sept. 20, 2016), G4S claimed that WCC necessarily waived its
objections to venue by agreeing to the Forum-Selection
Clause. Neb. Opp. at 15.
District of Nebraska rejected G4S' arguments. The
District of Nebraska found Servpro distinguishable,
as, unlike the contract in Servpro. the Subcontract
did not contain an express venue-waiver clause. G4S
Tech.. 2017 WL 4564726, at *3. Instead, the District of
Nebraska found Atlantic Marine to be on point:
"An application of Servpro's holding in
situations where there is no express waiver of objections to
venue would allow virtually all forum-selection clauses to
override the § 1391 venue analysis-precisely what
Atlantic Marine prohibits." Id. The
District of Nebraska held that Atlantic Marine
required venue to be analyzed under Section 1391(b), and
"[t]he presence of a forum-selection clause has no
bearing on the propriety of venue." Id. at *2.
venue was not proper under Section 1391(b), the District of
Nebraska transferred the Nebraska Action to this court.
Id. at *3. The District of Nebraska held open the
possibility that this court may, after undertaking a Section
1404(a) analysis, determine . that a transfer of the Nebraska
Action back to the District of Nebraska would be appropriate.
"actions before the court involve a common question of
law or fact, " Federal Rule of Civil Procedure 42 allows
the court to "consolidate the actions."
Fed.R.Civ.P. 42(a)(2). Consolidation is a "managerial
device" that "makes possible the streamlined
processing of groups of cases, often obviating the need for
multiple lawsuits and trials." 8 Moore's Federal
Practice § 42.10[l][a]. The court has wide
discretion to consolidate actions. A/S J. Ludwig
Mowinckles Rederi v. Tidewater Constr. Co.. 559 F.2d
928, 933 (4th Cir. 1977). That discretion extends to
consolidating actions sua sponte. 8 Moore's
Federal Practice § 42.10[a]-[b]; see also
Beach Mart. Inc. v. L & L Wings. Inc.. Nos.
2:11-CV-44-F & 2:14-CV-52-F, 2014 WL 4635450, at *1 (E.D.
N.C. Sept. 15, 2014) (consolidating cases sua
exercising its discretion to consolidate, the court must
whether the specific risks of prejudice and possible
confusion were overborne by the risk of inconsistent
adjudications of common factual and legal issues, the burden
on parties, witnesses and available judicial resources posed
by multiple lawsuits, the length of time required to conclude
multiple suits as against a single one, and the relative
expense to all concerned of the single-trial, multiple-trial
Arnold v. E. Ait Lines. Inc., 681 F.2d 186, 193 (4th
Or. 1982); see also Antoine v. Amick Farms. LLC. Civ
Nos. ELH-16-2444 & ELH-16-2938, 2017 WL 68646, at *14 (D.
Md. Jan. 6, 2017) (consolidating actions after considering
"duplication of discovery" and "trial
testimony, " "conservation] [of] judicial
resources, . . . reduction] [of] expenses associated with
trial, " and the "inconvenience to witnesses for
Nebraska Action has been transferred to this court, the court
now has before it two actions that involve the same ultimate
sets of facts, law, and witnesses. G4S' Nebraska
Complaint reads like a counterclaim to WCC's Complaint.
Discovery and trial testimony in the two actions will almost
assuredly be duplicative, as, at base, both this action and
the Nebraska Action ask the same question: Which party, if
either, breached the Subcontract? Not only do the two actions
"present a common question of either law or fact, "
Fed.R.Civ.P. 42(a), all or nearly all questions of law or
fact are shared between the two actions.
one hand, because "the cases constitute mirror images of
one another, " the court finds that there is no risk of
prejudice or confusion if the cases are consolidated.
Certain Interested Underwriters Subscribing to Policy No.
B1262P20017013 v. Am. Realty Advisors. Nos.
5:16-CV-940-FL & 5:17-CV-74-FL, 2017 WL 1331245, at *2
(E.D. N.C. Apr. 11, 2017). On the other hand, if the court
does not consolidate the cases, there will exist a
significant risk that the parties will be subject to
inconsistent adjudication of the same issues, duplicative
discovery (and costs incurred in discovery), and a waste of
the judicial system's time and money. See Id.
The court therefore finds that this case should be
consolidated with the Nebraska Action for all purposes.
question remains how the court should treat the dueling
complaints. Consolidation "does not merge the suits into
a single cause, or change the rights of the parties, or make
those who are parties in one suit parties in another."
Johnson v. Manhattan Ry. Co.. 289 U.S. 479, 496-97
(1933): see also Intown Props. Mgmt. Inc. v. Wheaton Van
Lines. Inc.. 271 F.3d 164, 168 (4th Cir. 2001) (applying
Johnson). "It is generally accepted
; that consolidated cases 'retain their
separate characters.'" Yelverton v.
Edmundson, Nos. 5:15-CV-00134-F & 5:16-CV-00031-F,
2017 WL 414175, at *1 (E.D. N.C. Jan. 30, 2017) (quoting
Ramirez-Rodriguez v. Wal-Mart Stores E.. L.P.. No.
5:12-CV-585-BO, 2013 WL 5885459, at *2 (E.D. N.C. Oct. 31,
2013)); see also Am. Realty Advisors. 2017 WL
1331245, at *2. Yet, other than the identity of the
bondholders in the each action, it is difficult to identify
what the "separate character" of each action is. As
the court has already noted, each complaint is essentially a
mirror of the other complaint. It is clear that in the
absence of dueling complaints in dueling actions, G4S'
claims against WCC in the Nebraska Action would otherwise be
compulsory counterclaims in this action, and WCC's claims
against G4S in this action would otherwise be compulsory
counterclaims in the Nebraska Action. See Fed. R.
Civ. P. 13(a).
the court is cognizant that it can order consolidated
pleadings and appoint one of the parties as plaintiff in the
consolidated action. While the court will ultimately hold
that Nebraska is the only proper forum for this action, the
court expresses its deep concern about G4S' litigation
tactics in Nebraska. From the record before the court, it
appears that G4S misled WCC into thinking G4S was a willing
partner in settlement negotiations when, in fact, G4S
purposefully engaged in dilatory tactics to gain an unfair
advantage in the dispute. Further, it appears that G4S
deliberately withheld the existence of the Nebraska Action.
On March 6, 2017, G4S filed the Nebraska Action a scant two
hours after confirming the details of the March 9, 2017
meeting with WCC. G4S made no mention of an anticipated
filing. Nor did G4S reveal the already-filed Nebraska Action
to WCC at the March 9, 2017 meeting. The court refuses to
condone G4S' actions.
this in mind, the court appoints WCC as plaintiff and
construes its Complaint as the lead complaint in the
consolidated action. The court construes G4S' Nebraska
Complaint as a counterclaim in the consolidated action. See
Norfolk & W. Ry. Co. v. Bhd. of R.R. Signalmen.
164 F.3d 847, 851 (4th Cir. 1998) (noting that related cases
were consolidated and the original claims of one consolidated
defendant "were taken as a counterclaim" in the
consolidated action); see also Norfolk & W. Ry. Co.
v. Bhd. of R.R. Signalmen. 11 F.Supp.2d 833, 836 (W.D.
Va. 1998) ("That action was subsequently transferred to
this Court, docketed . . ., and consolidated with the instant
case ... as a compulsory counterclaim to plaintiff
railroads' complaint."), rev'd in part on
other grounds. 164 F.3d 847 (1998).
provided for in the accompanying order, this action and the
Nebraska Action shall proceed for purposes of discovery,
dispositive motions, and trial under one consolidated case
number, 5:17-cv-00052 (the "Consolidated Action").
Given the present posture of the case, the following parties
are parties to the Consolidated Action:
• WCC, as plaintiff and counter-defendant;
• G4S, as defendant and counter-plaintiff;
• Liberty Mutual, as defendant; and
• Ironshore, as third-party defendant.
Venue and Forum Statutes
patties' disagreements on the motions to transfer
ultimately involve the interplay between three statutes: 28
U.S.C. § 1391(b), 28 U.S.C. § 1406(a), and 28
U.S.C. § 1404(a). Section 1391 governs proper venue, and
A civil action may be brought in-
(1) a judicial district in which any defendant resides, if
all defendants are residents of the State in which the
district is located;
(2) a judicial district in which a substantial part of the
events or omissions giving rise to the claim occurred, or a
substantial part of property that is the subject of the
action is situated; or
(3) if there is no district in which an action may otherwise
be brought as provided in this section, any judicial district
in which any defendant is subject to the court's personal
jurisdiction with respect to such action.
28 U.S.C. § 1391(b). Section 1391(b) does not take the
presence of a forum-selection clause into account. See
Atl. Marine, 134 S.Ct. at 577 ("Whether the
parties entered into a contract containing a forum-selection
clause has no bearing on whether a case falls into one of the
categories of cases listed in § 1391(b).").
1406(a) provides: "The district court of a district in
which is filed a case laying venue in the wrong division or
district shall dismiss, or if it be in the interest of
justice, transfer such case to any district or division in
which it could have been brought." 28 U.S.C. §
1406(a). A court may only invoke Section 1406(a) when venue
is "wrong" under Section 1391(b)-that is, "a
district other than 'those districts in which Congress
has provided by its venue statutes that the action
may be "brought."'" Atl. Marine.
134 S.Ct. at 578 (quoting Van Dusen v. Barrack. 376
U.S. 612, 618 (1964)).
Section 1404(a) provides: "For the convenience of
parties and witnesses, in the interest of justice, a district
court may transfer any civil action to any other district or
division where it might have been brought or to any district
or division to which all parties have consented." 28
U.S.C. § 1404(a). Section 1404(a) is broader than
Section 1406(a), and allows a court to transfer a case
"to any other district where venue is proper ... or to
any district to which the parties have agreed by contract or
stipulation." Atl. Marine. 134 S.Ct. at 579.
The Forum-Selection Clause
base their motions to transfer solely on the Forum-Selection
Clause. As the District of Nebraska determined, this district
is the only district in which a substantial part of the
events underlying this suit occurred. G4S Tech.,
2017 WL 4564726, at *2. In the absence of the Forum-Selection
Clause, it is unquestionable that the Consolidated Action
should be heard here. It follows that if the Forum-Selection
Clause is invalid, as WCC suggests, then Defendants'
motions to transfer necessarily fail. The court finds,
however, that the Forum-Selection Clause is
Enforceability of Forum-Selection Clause
clauses have historically been disfavored. See M/S Bremen
v. Zapata Off-Shore Co.. 407 U.S. 1, 9 (1972). The
Bremen, which instructed federal courts to recognize
forum-selection clauses as "prima facie valid and [to]
be enforced unless enforcement is shown by the resisting
party to be 'unreasonable' under the circumstances,
" marked a sea change in federal law. Id. at
10. This is because "enforcement of valid forum-
selection clauses, bargained for by the parties, protects
their legitimate expectations and furthers vital interests of
the justice system." Stewart Org, v. Ricoh
Corp., 487 U.S. 22, 33 (1988) (Kennedy, J., concurring).
Bremen recognized that an otherwise-valid
forum-selection clause may be invalidated if it is
unreasonable. Interpreting the Supreme Court's analysis
in The Bremen, the Fourth Circuit has identified
four factors that may render a forum-selection clause
(1) [its] formation was induced by fraud or overreaching; (2)
the complaining party "will for all practical purposes
be deprived of his day in court" because of the grave
inconvenience or unfairness of the selected forum; (3) the
fundamental unfairness of the chosen law may deprive the
plaintiff of a remedy; or (4) [its] ...