## Facts

- Plaintiff C. Wesley Gregory, III (a New York resident) owned plaintiff Waste Stream Environmental, Inc., a New York corporation with its principal place of business in Weedsport, New York.
- Plaintiffs also included C. Wesley Gregory, Jr. (a Massachusetts resident) and Donald E. Gordon (a Maryland resident).
- Defendant Pocono Grow Fertilizer Corporation was a Pennsylvania corporation with its principal place of business in Stroudsburg/East Stroudsburg, Pennsylvania, and it held permits and licenses for a planned waste-treatment and recycling facility in Pennsylvania.
- Defendants Bruce Ecke and Karen Ecke, Pennsylvania residents, owned all of Pocono Grow’s shares.
- Beginning in February 1997, Gregory and the Eckes discussed a possible business relationship for the Pennsylvania facility through telephone, facsimile, and mail communications between New York and Pennsylvania.
- The parties had one face-to-face meeting in Pennsylvania in the summer or fall of 1997.
- On March 12, 1998, Gregory prepared and signed a letter of intent in New York proposing that (i) Waste Stream would obtain a 50% equity interest in Pocono Grow and (ii) Waste Stream would enter an operations and maintenance agreement for the Pennsylvania facility.
- The letter of intent was sent to Pennsylvania, signed there by Bruce Ecke on March 13, 1998, and returned to Gregory in New York.
- The relationship later broke down after Gregory decided not to proceed with the project.
- Plaintiffs filed a declaratory judgment action in the Western District of New York seeking a declaration that no enforceable agreement existed between the parties.
- Defendants moved to dismiss for improper venue under 28 U.S.C. § 1406(a) or, alternatively, to transfer the case to the Middle District of Pennsylvania under 28 U.S.C. § 1404(a). The court’s jurisdiction was based on diversity.

## Issues

1. Was venue improper in the Western District of New York under 28 U.S.C. § 1391, requiring dismissal or transfer under 28 U.S.C. § 1406(a)?
2. If venue was proper, should the court transfer the case to the Middle District of Pennsylvania under 28 U.S.C. § 1404(a) for the convenience of parties and witnesses and in the interest of justice?

## Decision

- Venue in the Western District of New York was proper because a substantial part of the events giving rise to the declaratory judgment claim occurred in New York.
- The court denied defendants’ motion to dismiss (or transfer) under § 1406(a) because venue was not improper.
- The court granted defendants’ alternative motion to transfer under § 1404(a) and ordered the case transferred to the Middle District of Pennsylvania.

## Legal Principles

- Under 28 U.S.C. § 1391(a)(2), venue is proper in any district where a “substantial part” of the events or omissions giving rise to the claim occurred; more than one district may qualify.
- In a declaratory judgment action about contract formation or enforceability, events tied to negotiations and execution can qualify as substantial events for venue purposes.
- Section 1406(a) applies only when the original venue is wrong; when venue is proper under § 1391, dismissal under § 1406(a) is not warranted.
- Under § 1404(a), a court may transfer a case to another district where it might have been brought if transfer serves the convenience of parties and witnesses and the interest of justice.
- Factors commonly considered under § 1404(a) include the location of witnesses, ease of access to sources of proof, the locus of operative events, each party’s connection to the forum, and practical considerations affecting trial efficiency.
- Although a plaintiff’s forum choice receives weight, that weight may be reduced when the dispute centers on another district and when key witnesses and operative events are located there.

## Conclusion

The court held that New York-based negotiation and execution activity—especially Gregory’s drafting and signing of the letter of intent in New York and related communications—made venue proper in the Western District of New York, so dismissal for improper venue was denied; however, because the planned facility, defendant corporation, and many witnesses and proof were located in Pennsylvania, the court transferred the case to the Middle District of Pennsylvania under § 1404(a).


Gregory v. Pocono Grow Fertilizer Corp., 35 F. Supp. 2d 295 (1999)