Suspecting "forum shopping," SDOH judge denies defendants' motion to transfer venue to Virginia

by Ben Vernia | June 19th, 2013

On May 23, District Judge S. Arthur Spiegel of the Southern District of Ohio denied the defendants’ motion to transfer U.S. ex rel. Daugherty v. Bostwick Labs, a declined qui tam alleging false claims for laboratory services (including services performed without a physician’s order, and services referred to the defendants in violation of the Antikickback Statute).

Judge Spiegel noted that the defendants had obtained new counsel after he denied their motions to dismiss in December 2012, and had moved to transfer venue to Virginia. The defendants argued that there was nothing to tie the case to Ohio (where relator’s counsel are based), that company witnesses and one of the defendants were in Virginia, which is also where corporate-wide policies were developed and documents were stored. The relator argued that he was entitled to his choice of venue, that the defendants’ national fraud scheme created ties to Ohio, and that the defendants merely wanted to shift the inconvenience from themselves to the relator.

The Court noted that nobody disputed that the case could have been properly brought in Virginia, but that the issue was not whether that locale was more convenient for the defendants, but whether not transferring the case would strongly inconvenience them — and he concluded that they had not met that burden, since the final witness list might include witnesses from many states, and the documents were to be provided electronically. He concluded, however:

Finally, the Court cannot escape the concern that the instant motion is merely an attempt to forum shop. To be seeking a new venue just after this Court denied Defendants’ motions to dismiss simply raises this red flag. It may be a purely innocent motion, but the Court nevertheless cannot help but question the timing.

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