UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

TRUK INTERNATIONAL FUND, LP,

Plaintiff, MEMORANDUM DECISIONAND ORDER

-against-

DAVID W. WEHLMANN; GERALD W. 08 Civ. 8462 (PUG)HADDOCK; RANDALL BOYD;DONALD W. NIEMIEC; ROBERT L.GAUDIN; WILLIAM 0. POWELL, III;CANACCORD ADAMS, INC.; andCANACCORD CAPITALCORPORATION,

Defendants.

PAUL G. GARDEPHE, U.S.D.J.:

Before the Court is a motion filed by David W. Wehlmann, Gerald W.

Haddock, Randall Boyd, Donald W. Niemiec, Robert L. Gaudin, and William 0. Powell,

III's ("Individual Defendants") to transfer this securities class action to the Northern

District of Texas pursuant to 28 U.S.C. § 1404(a). 1 For the reasons set forth below, the

motion is GRANTED.

BACKGROUND

Truk International Fund, LP ("Truk") is a Cayman Islands limited

partnership that has offices in New York and is managed by a New York-based

management company. (Cmplt., lf 5; Daniel Hume Declaration dated December 29,

1 By Notice of Joinder dated January 14, 2009, Defendant Canaccord Adams, Inc. joinedthe Individual Defendants' motion to transfer. (Notice of Joinder dated Jan. 14, 2009,Docket No. 28) Although Canaccord Capital Corporation was served with the Summonsand Complaint on February 17, 2009, it has not made an appearance in this action.(Request for Service Abroad of Judicial or Extrajudicial Documents, Docket No. 29)

1

2008, lf 2 ("Hume Decl."); Declaration of Jonathan J. Lerner dated November 25, 2008,

Ex. 2 )("Lerner Decl.") Truk seeks to certify a class of purchasers of Cano Petroleum,

Inc.'s ("Cano") common stock issued pursuant to a registration statement and prospectus

filed in connection with a June 26, 2008 secondary public offering. (Cmplt. tf 1, 16)

Cano sold approximately seven million shares during this secondary offering, and Truk

estimates that thousands of investors will be eligible to join their class. (Id. lf 17)

Truk's Complaint alleges that the registration statement and prospectus

filed in connection with the secondary public offering contains "statements concerning

proved reserve amounts and standards that were materially false and overstated Cano's

proved reserves." (Id. lf 26) Truk brings claims under Sections 11, 12(a)(2), and 15 of

the Securities Act of 1933. (Id. tf 28, 37, 46)

The Individual Defendants allegedly served on Cano's Board of Directors

during the relevant class period, resided in Texas while they served on Cano's Board, and

signed the registration statement for the secondary public offering. (Id., tf 6-11;

Declaration of Phillip B. Feiner dated November 25, 2008, lf 5) ("Feiner Decl.")

Canaccord Adams, Inc. and Canaccord Capital Corporation ("Underwriting Defendants")

are Canadian corporations that served as underwriters for Cano's secondary offering.

(Cmplt., tf 13, 14) One of the Underwriting Defendants, Canaccord Adams, Inc.,

maintains offices in New York and Texas. (Id. lf 13)

Cano, the securities issuer, is not a party to this action. Cano is "an

independent oil and gas company organized under the laws of Delaware with its

executive offices in Fort Worth, Texas." (Feiner Decl., lf 2) All of Cano's employees,

including the six managers identified in the prospectus and prospectus supplement, are

2

located in Fort Worth, Texas. (Id. lf 6) Three of Cano's six active project sites are

located in Texas, and the "proved reserves" at issue are located in Texas, Oklahoma, and

New Mexico. (Id., lf 2)

DISCUSSION

The Individual Defendants argue that this action should be transferred to

the Northern District of Texas because crucial party witnesses, non-party witnesses, and

the locus of operative facts are all located in Texas. Truk contends that its choice of

forum is entitled to deference, and that the locus of operative facts is evenly split between

the Northern District of Texas and the Southern District of New York.

Transfer to the Northern District of Texas is appropriate here because (1)

the case "might have been brought" in that district; (2) critical non-party witnesses are

located in that district; (3) the locus of operative facts is in that district; and (4) the

remaining interest of justice factors are either neutral or do not strongly favor retention of

this action in this district.

I. LEGAL ANALYSIS

Title 28, United States Code, § 1404(a) states that "[for the convenience

of parties and witnesses, in the interest of justice, a district court may transfer any civil

action to any other district or division where it might have been brought." "[T]he

purpose of [28 U.S.C. § 1404(a)] is to prevent the waste 'of time, energy and money' and

'to protect litigants, witnesses and the public against unnecessary inconvenience and

expense.' Van Dusen v. Barrack, 376 U.S. 612, 616 (1964) (quoting Continental Grain

Co. v. Barge F.B.L.-585 364 U.S. 19, 21 (1960)). When making a motion under 28

U.S.C. § 1404(a), the movant "has the burden of making out a strong case for a transfer."

3

Filmline (Cross-Country) Prods., Inc. v. United Artists Corp., 865 F.2d 513, 521 (2d Cir.

1989).

-A motion to transfer venue requires a two-part inquiry: first, whether the

action to be transferred might have been brought in the transferee court; and second,

whether considering the convenience of parties and witnesses, and the interest of justice,

a transfer is appropriate." Fuji Photo Film Co., Ltd. v. Lexar Media, Inc., 415 F. Supp.

2d 370, 373 (S.D.N.Y. 2006) (quotations omitted). In determining whether the interest of

justice favors transfer, courts consider the following nine factors: "(1) the convenience of

the witnesses, (2) the convenience of the parties, (3) the location of relevant documents

and the relative ease of access to sources of proof, (4) the locus of operative facts, (5) the

availability of process to compel the attendance of unwilling witnesses, (6) the relative

means of the parties, (7) the forum's familiarity with governing law, (8) the weight

accorded to plaintiffs choice of forum, and (9) trial efficiency." Id.

A. This Action Might Have Been Broughtin the Northern District of Texas

The parties agree that this action "might have been brought" in the

Northern District of Texas. (Pltff. Supplemental Br. 2, 7; Def. Supplemental Br. 1-4)

"Under the federal securities acts .. . federal courts have personal jurisdiction over any

defendant who is a United States resident or otherwise has minimum contacts with the

United States" Collier v. Stuart-James Co. Inc. No. 89 Civ. 5805 (LLS), 1990 WL

55798, at *3 (S.D.N.Y. Apr. 26, 1990). The Individual Defendants are residents of the

United States and the Underwriting Defendants have minimum contacts with the United

States by virtue of their participation in the secondary public offering. (Cmplt., tf 6-11,

4

13-14) Canaccord Adams, Inc. also maintains offices in Texas and New York. (Id. lf

13) Accordingly, there is no issue as to jurisdiction.

Venue in this action is governed by 15 U.S.C. § 77v(a), which states that

venue is proper where a defendant "is found or is an inhabitant or transacts business, or in

the district where the offer or sale took place, if the defendant participated therein."

"Given the nature of securities fraud actions, it is well-established that the special venue

provisions should be liberally construed." S.E.C. v. 800america.com , Inc. No. 02 Civ.

9046 (HB), 2006 WL 3422670, at *5 (S.D.N.Y. Nov. 28, 2006). Venue is proper in the

Northern District of Texas because all of the Individual Defendants transacted business in

that district — each attended "numerous meetings" at Cano's Forth Worth offices in

connection with the secondary public offering — and four of the Individual Defendants

also resided in the Northern District of Texas. (Phillip B. Feiner Supplemental

Declaration dated May 7, 2009, tf 2, 3) ("Feiner Supp. Decl.") The Underwriting

Defendants also transacted business in the Northern District of Texas, because their

representatives attended meetings in Forth Worth with Cano executives to discuss the

underwriting for the prospective secondary public offering with Cano executives, and it

was this underwriting that gave rise to the instant action. (Id. lf 4) The Underwriting

Defendants' representatives also had extensive contact with Cano executives in the

Northern District of Texas via telephone. (Id.); see also Brown v. Am. Broad Co., 704

F.2d 1296, 1302 (4th Cir. 1983) (finding defendant was subject to personal jurisdiction in

Virginia because defendant attended one meeting in Virginia that gave rise to her cause

of action); Sokol Holdings, Inc. v. BMB Munai, Inc., No. 05 Civ. 3749 (KMW), 2007

WL 1746904, at *2 (S.D.N.Y. June 15, 2007), vacated in part on other grounds 542 F.3d

5

354 (2d Cir. 2008) (finding defendant transacted business in New York for purposes of

the long-arm statute because defendant travelled to New York to attend meetings and

because its agent also travelled to New York); JFP Touring LLC v. Polk Theatre Inc., 07

Civ. 3341 (CM), 2007 WL 2040585, at *11 (S.D.N.Y. July 12, 2007) ("Thus, while

electronic communications, telephone calls, faxes or letters, in and of themselves, are

generally not enough to establish jurisdiction, they may be sufficient if used by the

defendant deliberately to project itself into business transactions occurring within [the]

State ") (quotation omitted). Accordingly, the Individual Defendants have established

that this action might have been brought in the Northern District of Texas, and it is

necessary to consider whether transfer is in the interest of justice.

B. Interest of Justice Factors

1. The Convenience of the Non-partyWitnesses Stronply Favors Transfer

"The convenience of the witnesses is generally considered the most

important factor in deciding a motion to transfer venue." In re Stillwater Mining Co. Sec.

Litig. No. 02 Civ. 2806 (DC), 2003 WL 21087953, at *4 (S.D.N.Y. May 12, 2003); see

also Oubre v. Clinical Supplies Mgmt. Inc. 05 Civ. 2062 (LLS), 2005 WL 3077654, at

*2 (S.D.N.Y. Nov. 17, 2005) ("The convenience of witnesses is a major factor in

evaluating a transfer motion."); In re Nematron Corp. Sec. Litig., 30 F. Supp. 2d 397, 400

(S.D.N.Y. 1998) ("The convenience of parties and witnesses is considered the essential

criteria under the venue statute, and the most significant factor.") (quotations omitted).

Moreover, "ft]he convenience of non-party witnesses is accorded more weight than that

of party witnesses." Indian Harbor Ins. Co. v. Factory Mut. Ins. Co., 419 F. Supp. 2d

395, 402 (S.D.N.Y. 2005); Fifth Ave. of Long Island Realty Assocs. v. Caruso Mgmt.

6

Co. Ltd. No. 08 Civ. 384, 2009 WL 412126, at *15 (E.D.N.Y. Feb. 17, 2009) (quoting

Indian Harbor). "When assessing the convenience of witnesses, a court does not merely

tally the number of witnesses who reside in the current forum in comparison to the

number located in the proposed transferee forum." Herbert Ltd. P'ship v. Elec. Arts Inc.

325 F. Supp. 2d 282, 286 (S.D.N.Y. 2004). "Instead, the court must qualitatively

evaluate the materiality of the testimony that the witnesses may provide." Id.

"To obtain a transfer based on convenience, the moving party must

specifically list the witnesses on whom he intends to rely in the transferee district, along

with a general statement of the topics on which each witness is expected to testify."

Mears v. Montgomery No. 02 Civ. 0407 (BSJ) (MHD), 2004 WL 964093, at *8

(S.D.N.Y. May 5, 2004); see also Orb Factory Ltd. v. Design Sci. Toys Ltd. 6 F. Supp.

2d 203, 208 (S.D.N.Y. 1998) (explaining "[t]he movant must support the transfer

application with an affidavit containing detailed factual statements relevant to the factors

[to be considered by the court in its transfer decision], including the potential principal

witnesses expected to be called and a general statement of the substance of their

testimony).

Contrary to Truk's arguments (Truk Br. 6-7), the Individual Defendants

have adequately identified multiple non-party witnesses and explained why their

testimony will be essential to this litigation. For example, it is clear that the six members

of non-party Cano's management team who are identified in the prospectus and

prospectus supplement are likely to be important witnesses. (Feiner Decl., lf 6) All work

in the Northern District of Texas. (Feiner Supp. Decl., lf 3) Cano itself is located in Fort

7

Worth in the Northern District of Texas and has no offices, employees or operations in

the Southern District of New York. (Feiner Decl., tf 2, 6)

Other critical non-party witnesses include employees of Forest A. Garb &

Associates, Inc. ("Garb"), a petroleum engineering consulting firm Cano hired to provide

an opinion concerning the "proved reserves" at issue. (Id., lf 7) Garb and its employees

are based in Dallas, within the Northern District of Texas. (Id.) Employees of non-party

Hein & Associates, LLP ("Hein") are also likely to be called as witnesses. Hein was

identified in the prospectus supplement as having audited Cano consolidated balance

sheets, statements of operations, and other Cano financial statements and reports

incorporated by reference in the prospectus supplement that Truk claims was "materially

false." 2 (Id.) Finally, the Dallas-based law firms of Haynes and Boone and Bracewell &

Giuliani advised Cano and the Underwriting Defendants in connection with their due

diligence and in the preparation of the prospectus and prospectus supplement. (Id., lf 4)

In response, Truk has vaguely identified several non-party witnesses who

are located in New York, including individuals who were involved in the preparation of

an analyst report and employees of a company that issued a press release regarding

Cano's securities. (Truk Br. 8) Truk's showing does not rebut the Individual

Defendants' detailed presentation demonstrating that the majority of non-party witnesses

2 Truk argues that the convenience of Garb and Hein employees is of little significance,citing a case which states that "the convenience of expert witnesses is entitled to littleweight or no weight in deciding a transfer motion." (Truk Br. 7 (quoting McCrystal v. Barnwell County, S.C., 422 F. Supp. 219, 224 (S.D.N.Y. 1976)). The Garb and Heinemployees at issue here are not the type of "expert witnesses" that the McCrystal courthad in mind, however. These witnesses were not hired for purposes of this litigation.Instead, they are more in the nature of fact witnesses whose expertise Cano relied on inpreparing the filings that are at issue in this litigation. As such, their convenience isrelevant to this Court's Section 1404(a) analysis.

8

are located in the Northern District of Texas. Accordingly, this Court finds that the vast

majority of non-party witnesses are located in the Northern District of Texas where Cano,

Garb, Hein and Cano's law firms are based, and that this factor strongly favors transfer.

2. The Convenience of the Parties Is a Neutral Factor

Truk is a Cayman Islands fund which has offices in New York and is

managed by a New York-based firm. (Cmplt., lf 5; Hume Decl., lf 2; Lerner Decl., Ex. 2)

Four of the Individual Defendants reside in the Northern District of Texas; two live in

Houston. (Feiner Supp. Decl., lf 2) The Underwriting Defendants are based in Canada,

with Canaccord Adams, Inc. maintaining offices in New York and Texas. (Cmplt., tf 13,

14) Because it would be most convenient for Truk to litigate this action in New York,

and most convenient for the Individual Defendants to litigate in the Northern District of

Texas, the Court finds that either side will be inconvenienced no matter where this case

proceeds. Accordingly, this factor is neutral.

3. The Location of Documents andRelative Ease of Access to Sourcesof Proof Favors Transfer

The vast majority of Cano's corporate documents and records, including

many of the documents relating to the preparation of the prospectus and prospectus

supplement, are located at Cano's headquarters in Fort Worth, Texas. (Feiner Decl., lf 9)

Additionally, three of Cano's active project sites are located in Texas, and all of Cano's

proved reserves are located in Texas, Oklahoma, and New Mexico. (Id., lf 2)

Truk properly argues, however, that the location of physical documents is

no longer a factor given great weight in a Section 1404(a) analysis. See, e.g. Oubre

2005 WL 3077654, at *3 (In today's era of photocopying, fax machines, Federal Express,

and electronic document transmission, the location of documents is entitled to little

9

weight unless the movant makes a detailed showing of the burden it would incur absent

transfer.") (quotations omitted); Lynch v. Nat'l Prescription Adm'rs, 03 Civ. 1303

(GBD), 2004 WL 385156, at *3 (S.D.N.Y. Mar. 1, 2004) ("[T]he location of documents

factor is neutral [in] today's era of photocopying, fax machines and Federal Express.")

(quotations omitted). Accordingly, this factor only slightly favors transferring this action

to the Northern District of Texas.

4. The Locus of Operative Facts Strongly Favors Transfer

The Individual Defendants allege that "Cano's Prospectus and its

Prospectus Supplement were prepared primarily at Cano's office in Forth Worth, Texas."

(Feiner Decl., lf 4) Moreover, the Individual Defendants allege that "[p]age 20 of the

Prospectus and page S-2 of the Prospectus Supplement incorporate by reference certain

other Cano public filings. Each of these documents was primarily prepared. . . in Fort

Worth, Texas." (Id. lf 9) In addition, "[d]ue diligence activities by Canaccord Adams,

Inc.'s employees and agents occurred at, and documents reviewed during that diligence

are located at. .. Fort Worth, Texas." (Affidavit of Christian B. Gibson dated January

12, 2009, lf 4) ("Gibson Aff.")

Truk concedes that "the preparation of the materials for the Secondary

Offering and other relevant filings and financial statement[s] apparently occurred in

Texas," but maintains that the "operative events occurred equally in New York and

Texas." (Truk Br. 13) In support of this argument, Truk alleges that: the secondary

offering occurred in New York; certain press releases were issued in New York; 3

3 Exhibit 3 to Daniel Hume's Declaration contains a copy of a notice that was apparentlyreleased over the Bloomberg financial news service. The release reads: "FORTWORTH, TEXAS — (BUSINESS WIRE) — June 25, 2008 — Cano Petroleum, Inc. .

10

analysts' coverage of the secondary offering took place in New York; Cano's stock is

traded on the American Stock Exchange in New York; and Cano participated in a road

show and an industry conference in New York. 4 (Id.)

Under similar factual circumstances, courts in this district have found that

transfer is appropriate. See In re Global Cash Access Holding Inc. Sec. Litig. No. 08

Civ. 3516 (SWK), 2008 WL 4344531, at *6 (S.D.N.Y. Sept. 18, 2008) (transferring a

securities litigation to the District of Nevada — despite plaintiff's argument that certain

aspects of the IPO and the secondary offering occurred in New York — because the

registration statement and prospectus were prepared in Nevada); Laborers Local 100 &

397 Pension Fund v. Bausch & Lomb Inc., Nos. 06 Civ.1942 (HB), 06 Civ.2025 (HB), 06

Civ. 2659 (HB), 06 Civ. 2916(HB), 06 Civ. 2918(HB), 06 Civ. 3106(HB), 06 Civ.

3653(HB), 2006 WL 1524590, at *5 (S.D.N.Y. June 5, 2006) (finding that the locus of

operative facts favored transferring this securities case to the Western District of New

York because the "key facts in this case involve the allegedly false and misleading

statements issued by the Company from their Rochester headquarters"); In re

AtheroGenics Sec. Litig. No. 05 Civ. 00061 (RJH), 2006 WL 851708, at *3-4 (S.D.N.Y.

Mar. 31, 2006) (finding that the locus of operative facts favored transfer even though the

sale and purchase of stock occurred in New York; the press release was disseminated in

announced today that is has offered to sell 7,000,000 shares of its common stock. .."There is no evidence on the face of the press release where it was issued, other than thedateline, which references Fort Worth, Texas, and does not reference New York.4 Truk also alleges that the underwriting activities took place in New York (Truk Br. 1,12), but offers no facts to back up this assertion. The Hume Declaration — the only sworntestimony Truk offered in support of its motion — only describes certain marketingactivities that took place in New York. (Hume Decl., tf 3, 4) In addition, Christian B.Gibson, a lead investment banker responsible for Cano's underwriting, testified that nounderwriting activities occurred in New York. (Gibson Aff., tf 1, 2)

11

New York; and the defendant CEO made two study-related appearances in New York);

In re Stillwater Mining Co. Sec. Litig. 2003 WL 21087953, at *4 (transferring action to

Montana where quarterly reports and press releases were issued in Montana, two

conference calls took place in Montana, and all decisions involving reserve estimates

were made in Montana but the Company's stock was traded on the NYSE and an

important institutional investor meeting took place in New York); In re Nematron Corp.

Sec. Litig. 30 F. Supp. 2d at 404 (finding that the transferee forum "bears a much more

intimate connection to the events underpinning this case than does New York" even

though the purchase and sale of the common stock occurred in New York).

In this action, Truk concedes that relevant secondary offering submissions

and financial statements were prepared in the Northern District of Texas (Truk Br. 12-13;

Feiner Decl., lf 4), and due diligence activities took place in the Northern District of

Texas. (Gibson Aff., lf 3) Accordingly, the Northern District of Texas is the forum that

"bears a much more intimate connection to the events underpinning this case than does

New York," see In re Nematron Corp. Sec. Litig. 30 F. Supp. 2d at 404, and thus this

factor strongly favors transfer.

5. The Availability of Process to Compel the Attendanceof Unwilling Witnesses Is a Neutral Factor

The availability of process to compel the attendance of witnesses is a

neutral factor here because the Individual Defendants have not identified any witnesses

who would be unwilling to testify without compulsion. 5 See Price v. Stossel No. 07 Civ.

5 Fed. R. Civ. P. 45(c)(3)(A)(ii) provides that a "court must quash or modify a subpoenathat requires a person who is neither a party nor a party's officer to travel more than 100miles from where that person resides, is employed, or regularly transacts business inperson. .. ."

12

11364 (SWK), 2008 WL 2434137, at *6 (S.D.N.Y. June 4, 2008) (determining defendant

"has made only a weak preliminary showing of potential subpoena difficulties" because it

has failed to demonstrate, or even allege, that any of them would be unwilling to testify

should this matter proceed to trial"); Colabufo v. Cont'l Cas. Co. No. 04 Civ. 1863

(TCP) (MLO), 2006 WL 1210919, at *4 (E.D.N.Y. Apr. 27, 2006) (finding the ability to

compel the attendance of witnesses was not a "determinative factor" partially because

Inieither Defendants nor Plaintiffs have identified any witness who would be unwilling

to attend the trial of this action absent the compulsion of a subpoena"). Additionally, the

Individual Defendants have not explained why depositions could not be used as a

substitute for live testimony. See Ernes N.V. v. Citgo Asphalt Ref Co., 08 Civ. 7313

(VM), 2009 WL 734029, at *7 (S.D.N.Y. Mar. 16, 2009) (finding the availability of

process to compel witnesses to be a neutral factor because "there has been no indication

that deposition testimony is not a viable alternative"). Thus, this factor is neutral.

6. The Relative Means of the Parties Is a Neutral Factor

In analyzing whether the relative means of the parties favors transfer, a

court should determine whether a party's "financial situation would meaningfully impede

its ability to litigate this case in either forum." In re Collins & Allman Sec. Litig., 438 F.

Supp. 2d 392, 397 (S.D.N.Y. 2006). In this action, neither side has alleged that it does

not have the financial resources to litigate this action in either forum. (Def. Br. 8 n.1;

Pltff. Br. 15) Accordingly, this factor is neutral.

13

7. The Forum's Familiarity with theGoverning Law Is a Neutral Factor

Although Truk argues that the Southern District of New York's expertise

in securities law is a factor that weighs in favor of this Court retaining jurisdiction (Truk

Br. 15), numerous courts have held, in the context of Section 1404(a) transfer motions,

that "fflederal courts throughout the nation are equally capable of applying federal

securities laws." In re Global Cash Access Holding, Inc. Sec. Litig., 2008 WL 4344531,

at *7 (quoting In re Collins & Allman Sec. Litig. 438 F. Supp. 2d at 398); Laborers

Local 100 & 397 Pension Fund, 2006 WL 1524590, at *6 ("Since all of these cases are

brought pursuant to federal law and Defendants seek transfer from one federal court to

another, this factor must also be assessed neutral."); In re Stillwater Mining Co. Sec.

Litig. 2003 WL 21087953, at *5 ("[Noth the Southern District of New York and the

District of Montana are equally capable of applying federal securities law to this

action."). Accordingly, this factor is neutral.

8. The Court Accords Less Deference to Truk's Choiceof Forum Because It Represents a Putative Class

Generally, a plaintiff's choice of forum is "a decision given great weight"

in the context of a Section 1404(a) transfer motion. See D.H. Blair & Co., Inc. v.

Gottdiener 462 F.3d 95, 107(2d Cir. 2006). Truk's choice of forum is entitled to less

deference here, however, because it represents a putative class. See Glass v. S & M

NuTec, LLC, 456 F. Supp. 2d 498, 504 (S.D.N.Y. 2006) (a court should give less weight

to plaintiff's choice of forum "in a putative class action involving plaintiffs who are

scattered throughout the country" because it will be possible for "numerous potential

plaintiffs .. . to make a showing that a particular forum is best suited for the adjudication

of the class's claim"); In re Collins & Aikman Sec. Litig., 438 F. Supp. 2d at 398

14

(plaintiffs choice of forum is entitled to "less deference" when "plaintiff brings the

present action on behalf of a purported nationwide class of investors"; "in class actions

less weight is given to the plaintiffs choice") (quotations omitted); In re Stillwater

Mining Co. Sec. Litig. 2003 WL 21087953, at *5 ("plaintiffs choice of forum is

accorded less weight in a class action where the plaintiff may represent a widely

dispersed class") (quotations omitted); Shulof v. Westinghouse Elec. Corp., 402 F. Supp.

1262, 1263 (S.D.N.Y. 1975) ("While it is axiomatic that a plaintiffs choice of forum is

entitled to great consideration, the adage has little weight in stockholder class actions.").

But see In re Geopharma Inc., No. 04 Civ. 9463 (SAS), 2005 WL 1123883, at *1

(S.D.N.Y. May 11, 2005) ("Although less deference is shown to the choice of venue of a

class representative than that of an individual plaintiff, that choice should nonetheless be

honored unless defendants make a convincing showing that venue should be changed.")

(quotations omitted).

Because Truk represents a putative class that will potentially be comprised

of "thousands of persons" from across the nation (Cmplt., lf 17), this Court will accord

less deference to Truk's choice of forum.

9. Trial Efficiency Is a Neutral Factor

The Individual Defendants argue that the docket in the Northern District

of Texas is less congested than the docket in this district (Lerner Decl., Ex. 1), and that

this factor favors transfer. Although this District's docket, as a whole, is more congested

that the docket of the Northern District of Texas, my docket is not unduly backlogged.

See Oubre, 2005 WL 3077654, at *6 ("While there may be greater overall docket

congestion in this district than in the District of North Dakota, under our individual

calendar system I could likely try this case as soon or sooner than it would be tried in

15

North Dakota."); Funke v. Life Fin. Corp. 99 Civ. 11877 (CBM), 2003 WL 194204, at

*4 (S.D.N.Y. Jan. 28, 2003) ("In terms of trial efficiency, while it is true .. . that the

Central District of California has fewer cases per judge than the Southern District of New

York, this particular court .. . has a comparatively light docket"); Dwyer v. Gen. Motors

Corp., 853 F. Supp. 690, 695 (S.D.N.Y. 1994) (explaining "this particular court's docket

is not nearly as back-logged as the majority of the docket's in this District" and "this case

could conceivably go to trial sooner than it would in Maryland.") Accordingly, this

factor is neutral.

C. Consideration of the Interest of JusticeFactors Indicates that Transfer is Appropriate

While most of the interest of justice factors are neutral, consideration of

the convenience of critical non-party witnesses and the locus of operative facts, as noted

above, indicates that this case should be transferred to the Northern District of Texas.

The two principal cases Truk relies upon, In re Geopharma Inc. 2005 WL 1123883 and

Funke v. Life Fin. Corp. 2003 WL 194204, are not to the contrary.

In Geopharma, the court denied defendants' Section 1404(a) motion to

transfer the action to the Middle District of Florida where defendant Geopharma was

located in that district, Geopharma's securities were traded on the NASDAQ in New

York, and plaintiffs alleged that the false and misleading statements were disseminated in

New York. See 2005 WL 1123883, at *1. In that case, however, the plaintiff— unlike

here — had sued the issuer, and the court noted that the "convenience of defendants' party

witnesses cannot operate to eliminate section 27 [of the Securities Exchange Act of

1934's] explicit provision for jurisdiction wherever any violation occurred." Id. at 2

(emphasis in original).

16

Here, in contrast, the securities issuer — Cano — is not a party to this action

and this Court has found that the convenience of non-party witnesses strongly favors

transferring the action to the Northern District of Texas. Geopharma does not indicate

that transfer here is inappropriate 6

In Funke plaintiffs alleged that a registration statement and prospectus

contained false and misleading information. See 2003 WL 194204, at *1. The plaintiffs

formed a securities class and sued the securities issuer (located in the Central District of

California), the underwriter (headquartered in New York), the accounting firm that

audited financial statements in California, and the issuer's individual officers and

directors, who resided in the Central District of California. See id. at *1-3. The court

denied defendants' motion to transfer, finding that the locus of operative facts was split

because the accounting calculations that gave rise to the misstatements occurred in

California, but the underwriting and the IPO took place in New York. See id. at *3.

Funke is distinguishable on three grounds. First, as explained above, the

locus of operative facts in this action is not evenly split, because the prospectus and

6 The Geopharma court also cited the fact that both parties' law firms had offices in theSouthern District of New York but only one party's law firm had offices in the MiddleDistrict of Florida. See id. at *2. Most courts do not consider the location of counsel tobe a relevant consideration in conducting a Section 1404(a) analysis. See Fuji Photo Film Co., Ltd., 415 F. Supp. 2d at 374 ("the convenience of counsel is not an appropriatefactor to consider on a motion to transfer") (quotation omitted); Glass 456 F. Supp. 2d at502 (same); Collins & Allman, 438 F. Supp. 2d at 396 n.5 (same); Varsity SpiritFashions & Supplies, Inc. v. I.I.P., Inc., 03 Civ. 2069 (LLS), 2003 WL 22772638, at *2(S.D.N.Y. Nov. 24, 2003) (same); Self Int'l (HK) Ltd. v. La Salle Nat'l Bank, Chicago,01 Civ. 4291 (RCC), 2002 WL 500372, at *6 (S.D.N.Y. Mar. 29, 2002) ("counsel'spresence is irrelevant to a transfer motion"); see also Wright, Miller & Cooper; FederalPractice and Procedure: Jurisdiction 3d § 3850 ("[s]ome cases have taken [the location ofcounsel] into account, but the great majority of cases have not done so, saying either thatit is not to be considered at all, that it is irrelevant or improper to consider, or that it is tobe given very little weight").

17

prospectus supplement were prepared in the Northern District of Texas (Feiner Decl.,

4), and the due diligence also mostly took place in Texas. (Gibson Aff., ill 3) Second,

and contrary to Funke, the underwriting for Cano's secondary public offering did not take

place in New York. (Id., if 2) Finally, the Funke court noted that the magistrate judge

"was familiar with the facts of this case, should a matter need to be referred to him."

2003 WL 194204, at *4• Here, neither this Court nor the assigned magistrate judge has

invested time in learning the facts pertinent to this action.

CONCLUSION

For the reasons set forth above, the Individual Defendants' motion to

transfer this action to the Northern District of Texas pursuant to 28 U.S.C. § 1404(a) is

GRANTED. The Clerk of the Court is directed to terminate the motion (Docket No. 14),

and to transfer the action to the Northern District of Texas.7

Dated: New York, New YorkMay 20, 2009

SO ORDERED.

gt,P. Atneheirt Paul G. GardepheUnited States District Judge

7On December 8, 2008, Truk filed an unopposed motion to be appointed lead plaintiff

(See Docket No. 6) Because this Court is transferring this action to the Northern Districtof Texas, it will not address Truk's motion.

18