U.S. District Court In Philadelphia

PHILADELPHIA – A bottling company's motion to transfer a lawsuit filed against it by a Pennsylvania vodka manufacturer to federal court in Minnesota has been denied, the U.S. District Court for the Eastern District of Pennsylvania said in a decision this week.

In an opinion released Thursday, Judge Gene E.K. Pratter stated the consideration of factors associated with a possible transfer led the Court to determine that the case should remain in the state of Pennsylvania.

Swill Beverages, a Pennsylvania corporation described by the judge as a fledgling vodka brand, contracted with United States Distilled Products Company of Minnesota, for the latter to bottle Swill's signature brand of gluten-free vodka.

Swill claims Distilled Products manufactured “leaking vodka bottles and delivered those substandard bottles in nonconforming boxes to Swill’s customers”. 

Further, Swill says it marketed its vodka as “gluten-free” on assurances from Distilled Products, but later learned from the bottling company that the vodka may not in fact be gluten-free after all and its production requirements were “too small”. 

Swill alleged its reputation with customers was harmed to the tune of more than $400,000 in damages and filed suit against Distilled Products for breach of contract and breach of warranty, while Distilled Products moved to transfer the case to the District of Minnesota, believing it to be a more “convenient” forum.

Pratter said the events in question took place in both Minnesota and Pennsylvania, making the plaintiff’s opposition to the transfer not so easily discounted.

“Although the parties agreed at oral argument that any contract was entered into in Minnesota and that all of the bottling and packaging occurred there, the product in question was shipped to several locations, including to locations in this district,” Pratter said. 

“Swill contends that the leaking bottles – key evidence in this case – remain in the locations to which they were shipped, and that the customers who received these shipments are witnesses on both liability and damages,” Pratter added.

Though Minnesota was the origin of the contract between the parties and where the claim first arose, Pratter said the “physical and financial burdens” that Swill would be subject to, as a fledgling company pursuing litigation in Minnesota, outweigh the costs of Distilled Products defending a lawsuit against it in Pennsylvania.

In a more indeterminate fashion, the Court found both jurisdictions had an applicable stake in the lawsuit.

“Distilled Products also contends that because any allegedly bad actions must have taken place in Minnesota, Minnesota law will govern, and therefore Minnesota has a greater interest in deciding the controversy,” Pratter said. “Swill counters that because it is a Pennsylvania resident and because some of its product was sold to the Pennsylvania Liquor Control Board, Pennsylvania has at least an equal interest in this case, if not a greater interest.”

In the end, Pratter found both jurisdictions came to a draw on who had a greater interest or applicable law in the case. However, the Court selected the financial position of the two companies as the ultimate deciding factor in rejecting the motion to transfer to Minnesota.

“Overall, some factors do weigh in favor of transfer, including defendant’s preference, where the claim arose, and the potential application of Minnesota law,” Pratter explained. “However, those factors, even in combination, are not substantial enough to overcome the deference due to Swill’s choice of venue, especially given the relative financial positions of the two companies. Thus, the Court will not transfer this action to the District of Minnesota.”

The plaintiff was represented by Richard D. Gallucci Jr. of Spector Gadon & Rosen, in Philadelphia.

The defendant was represented by Lezlie Madden, Leigh Ann Benson, Thomas G. Wallrich and Heather L. Marx of Cozen O’Connor, both in Philadelphia and Minneapolis, Minn.

U.S. District Court for the Eastern District of Pennsylvania case 2:15-cv-05181

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com

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