This week, we’ll take a look at an often-overlooked facet of class-action practice: venue.

In Gresser v. Wells Fargo Bank, 2012 U.S. Dist. LEXIS 44074, (N.D. Cal. Mar. 29, 2012), Anne Gresser, a Florida resident, sued Wells Fargo on behalf of a class of corporate bondholders. She did not bring the case in Florida, where she lived, in Maryland, where most of the witnesses were, or in South Dakota, the defendant’s principal place of business. Instead, she sued in the Northern District of California, San Francisco, where the defendant was incorporated. (Not coincidentally, it was also where plaintiff’s counsel resided.)

So the defendant moved (under 28 USC §1404(a)) to transfer venue to Maryland, where most of the witnesses (and almost half of the bondholders) resided, and whose law governed the notes at issue. Plaintiff (more specifically, her counsel) opposed the motion, relying on the plaintiff’s prerogative to bring the lawsuit where she chose.

The court articulated the standard for a change-of-venue motion:

Determining whether an action should be transferred pursuant to § 1404(a) is a two-step process. The transferor court must first determine whether the action "might have been brought" in the transferee court, and then the court must make an "individualized, case-by-case consideration of convenience and fairness." The burden is on the defendant to show that transfer is appropriate.

(Internal citations omitted.) But, as the court went through each of the factors (noting, among other things, that almost none of the events at issue happened in San Francisco), it pointed out an important exception to this standard for class actions:

"If the operative facts have not occurred within the forum of original selection and that forum has no particular interest in the parties or the subject matter, [a] plaintiff’s choice is only entitled to minimal consideration." Id. Further, in class actions, a plaintiff’s choice of forum is often accorded less weight. See Lou v. Belzberg, 834 F.2d 730, 739 (9th Cir.1987) [("Although great weight is generally accorded plaintiff’s choice of forum … when an individual … represents a class, the named plaintiff’s choice of forum is given less weight."). Nonetheless, even in a class action,

"[i]n judging the weight to be accorded [plaintiff’s] choice of forum, consideration must be given to the extent of both [plaintiff’s] and the [defendants’] contacts with the forum, including those relating to [plaintiff’s] cause of action…. If the operative facts have not occurred within the forum and the forum has no interest in the parties or subject matter, [plaintiff’s] choice is entitled to only minimal consideration."

Lou, 834 F.2d at 739 (citations omitted); see also Foster v. Nationwide Mut. Ins. Co., 2007 WL 4410408, at *3 (N.D. Cal. Dec. 14, 2007) (giving no deference to a plaintiff’s choice of forum in a putative class action case where the operative facts did not occur within the chosen forum, the named plaintiff did not reside in the chosen forum, and there was an inference of forum shopping).

The fact that this case is a putative class action lessens the weight given to Plaintiff’s choice of forum. Further, Plaintiff purports to represent a nationwide class, which does not necessarily justify filing suit in California rather than any other state. In fact, there is evidence that 45% of the Series 3 Note holders are in Maryland, as compared to 0.3% in California."

(Emphases added.) The court also noted that the plaintiff appeared to have maintained a Maryland address until 2010. As a result, the court decided that Maryland was in fact a more appropriate venue than San Francisco, and transferred the case.

What’s the takeaway here for class action defendants? Challenge venue when appropriate, but particularly when it appears that the choice of venue favors no one but the lawyers suing you.