1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 STOER CONSTRUCTION INC., Case No. 21-cv-08692-JD

8 Plaintiff, ORDER RE TRANSFER v. 9 Re: Dkt. No. 2 10 BENSON SECURITY SYSTEMS, INC., et al., 11 Defendants.

12 13 Defendants’ motion to transfer venue, Dkt. No. 2, is suitable for decision without oral 14 argument. Civil L.R. 7-1(b). The hearing set for March 10, 2022, is vacated. The parties’ 15 familiarity with the record is assumed, and the motion is granted.1 16 The transfer request may be analyzed under

, and the parties do not 17 dispute that an analysis under

(a) would not be substantively different. Dkt. 18 No. 2 at 7-9; Dkt. No. 11. Under

, “[a] district court may transfer a case or 19 proceeding under title 11 to a district court for another district, in the interest of justice or for the 20 convenience of the parties.” 21 Section 1412 transfers have been found to be appropriate for proceedings that are related to 22 a bankruptcy case. See, e.g., SenoRx, Inc. v. Coudert Brothers, LLP, No. C-07-1075-SC, 2007

, at *1 (N.D. Cal. Aug. 27, 2007); Jackson v. Fenway Partners, LLC, No. C 13- 24 00005 JSW,

, at *3 (N.D. Cal. Apr. 8, 2013). A proceeding is “related to” a 25 bankruptcy case, and the bankruptcy court has jurisdiction, if “the outcome of the proceeding 26

27 1 Defendants’ motion for administrative relief to file a supplement to the motion to transfer, 1 could conceivably have any effect on the estate being administered in bankruptcy.” In re Pegasus 2 Gold Corp.,

(9th Cir. 2005) (quotations and citation omitted). Significantly, 3 the proceeding “need not necessarily be against the debtor.”

4 That is the situation here. Plaintiff Stoer Construction, Inc., has sued defendants Benson 5 Security Systems, Inc., Shawn Benson, Eric Benson, and Cory Benson. Dkt. No. 1-1. At the heart 6 of Stoer’s complaint is a dispute with Benson Systems of Northern California, LLC, which is an 7 entity that is not named as a defendant but which is alleged to be a “wholly owned subsidiary of 8 the Benson Defendants.” Dkt. No. 1-1 ¶ 8. Stoer alleges a passel of claims including breach of 9 contract, intentional and negligent misrepresentation, and negligence, relating to six subcontracts it 10 entered into with Benson Systems of Northern California, and for which Stoer asserts it paid 11 Benson Systems of Northern California an amount in excess of $6.2 million. Dkt. No. 1-1 ¶¶ 39, 12 44. 13 The complaint acknowledges that Benson Systems of Northern California has “a pending 14 bankruptcy action in the United States Bankruptcy Court for the District of Arizona, case number 15 2:21-bk-04680-MCW, filed June 16, 2021.” Id. ¶ 2. Plaintiff’s opposition brief adds that “[t]he 16 point of this suit is that it is apparent that the meager bankruptcy estate of the insolvent debtor is 17 insufficient to make plaintiff whole and that plaintiff believes others are also liable.” Dkt. No. 11 18 at 4 (emphasis and typo omitted). Plaintiff asks, “Though remedies in the bankruptcy court are 19 being pursued through local bankruptcy counsel in Arizona, why spend all of one’s time and 20 money to drill an empty well when there are other claims to prospect?” Id. While this was 21 undoubtedly intended to be rhetorical, it is plain as day that this case is, at a minimum, “related to” 22 the bankruptcy case in Arizona, as the outcome of this case “could conceivably have an[] effect on 23 the estate being administered in bankruptcy.” In re Pegasus,

. 24 A transfer to the District of Arizona is warranted under

if a transfer 25 would serve “the interest of justice or [] the convenience of the parties.” No particular test has 26 been developed for this inquiry, and one is not needed. Traditional guidelines include “the 27 economics of estate administration, the presumption in favor of the ‘home court,’ judicial 1 decided within its borders by those familiar with its laws, the enforceability of the judgment, and 2 || plaintiff's original choice of forum.” SenoRx,

, at *1 (citation omitted). 3 “[W ]hether the requested transfer would promote the economic and efficient administration of the 4 || estate” has been considered particularly important,

(quoting In re Commonwealth Oil Refining 5 Co., Inc.,

(Sth Cir. 1979)), and the “home court” for purposes of this analysis 6 || is “the bankruptcy court in which the debtor’s case is pending.”

7 Overall, these factors support a transfer. Plaintiff's claim arising from its dispute with the 8 || debtor is in excess of $6.2 million, which is not an insignificant sum. If plaintiff cannot recover 9 || that sum from the nondebtor entities it has named in its complaint, then plaintiff will seek recovery 10 || from the debtor, and the priority of plaintiffs claim and the amount, if any, plaintiff can recover 11 are among the issues that will most efficiently be worked out by the District of Arizona 12 || Bankruptcy Court as part of the bankruptcy proceeding. The District of Arizona is indisputably 5 13 || the home court for this related proceeding, and judicial efficiency will be promoted by 14 administering all claims against Benson Systems of Northern California in the same forum. 3 15 || Although some of the other factors, such as plaintiffs original choice of forum, do weigh against 16 || transfer, they do not cumulatively outweigh the interests of justice in favor of the transfer. Nor do 3 17 considerations of convenience for the parties or witnesses support a denial of transfer. This is 18 || especially so given that “[iJn our digital world, document collection, review, and production, and 19 other discovery tasks, are readily accomplished without much regard for the geographic location 20 of the records or the witnesses.” McCarthy v. Intercontinental Exchange, Inc., No. 20-cv-05832- 21 || JD,

, at *2 (N.D. Cal. June 3, 2021). 22 Defendants’ motion is granted, and the case is ordered transferred to the United States 23 District Court for the District of Arizona, for referral to the Bankruptcy Court. 24 IT IS SO ORDERED. 25 Dated: March 9, 2022 26 27 28 JAME NATO. Unitedf$tates District Judge