Opinion
Civ. No. 99-274 (DRD)
April 13, 1999
David E. Cassidy, Esq. Grotta, Glassman Hoffman, Roseland, N.J., for Defendants
Neil H. Deutsch, Esq., Deutsch, Resnick, Green Gramigna, Hackensack, N.J., for Plaintiff
OPINION
In this ERISA and breach of contract action, a former employee is suing ROMO, ROMO's executive compensation committee, several of the committee's individual members, and the executive compensation plan for denying him benefits to which allegedly he was entitled under the plan. The defendants, ROMO Corp., the Executive Compensation Committee of ROMO Corp., the ROMO Corporation Executive Compensation Plan (the "Plan"), H. Rex Martin, and Francis B. King (collectively the "Defendants"), have moved to transfer venue pursuant to Fed.R.Civ.P. 12(b)(3) and 28 U.S.C. § 1406(a) or, in the alternative, pursuant to 28 U.S.C. § 1404(a). Oral argument was heard on April 12, 1999. For the reasons set forth below, Defendants' motion will be denied.
I. BACKGROUND
The plaintiff, John L. Bennett ("Bennett"), was employed by McBee Systems, Inc. ("McBee"), a subsidiary of defendant ROMO Corporation, from 1974 until about December 31, 1997. McBee did business in New Jersey for many years prior to the sale of its assets in 1997. Bennett worked for McBee in New Jersey and, during all relevant times, was a resident of the State.
Bennett, while employed by McBee, was a participant in the ROMO Corporation Executive Compensation Plan. The ROMO Executive Compensation Plan, which was administered by the Executive Compensation Committee of ROMO Corp., Francis B. King, and H. Rex Martin, was established for the benefit of certain of its and McBee's employees. Seven of the nine participants in the plan were McBee employees.
Bennett left the employ of McBee in December of 1997. He claims that the Defendants subsequently denied him benefits to which he was entitled under the Plan. Bennett claims that this denial was wrongful and that the Defendants defrauded him and breached their contractual obligations to him. Bennett brought this suit seeking relief under the Employee Retirement Income Security Act, as amended, 29 U.S.C. § 1001 et. seq. ("ERISA"), and certain state law claims for fraud and promissory estoppel.
Defendants assert in their moving brief that Bennett's state law claims are preempted by ERISA. Because federal jurisdiction and venue in this matter are based upon ERISA, there is no need to discuss preemption of state law claims at this time.
II. DISCUSSION
Defendants have moved pursuant to Fed.R.Civ.P. 12(b)(3) and 28 U.S.C. § 1406(a) to transfer this case to the United States District Court for the District of Colorado. In support of their motion, Defendants cite the ERISA venue provisions contained in 29 U.S.C. § 1132(e)(2) and argue that venue is not proper in New Jersey. Even if venue under ERISA is proper, however, Defendants argue that the case should be transferred pursuant to the doctrine of forum non conveniens. Plaintiff opposes the motion and argues that venue is proper in this court and New Jersey is a convenient forum.A. Venue
Defendants first argue that this case should be dismissed or transferred because venue is improper in this district. The ERISA venue provision sets forth a three-prong test to determine whether venue is proper. It provides that:
Where an action under this subchapter is brought in a district court of the United States, it may be brought [1] in the district where the plan is administered, [2] where the breach took place, or [3] where a defendant resides or may be found.29 U.S.C. § 1132(e)(2).
It is settled that the last prong, "where a defendant resides or may be found," states a test that is congruent with the minimum contacts analysis of International Shoe v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), used to determine whether personal jurisdiction over a particular defendant is consonant with the due process requirements of the United States Constitution. See Varsic v. United States District Court, 607 F.2d 245, 248-49 (9th Cir. 1979); see also I.A.M. Nat'l Pension Fund v. Wakefield Indus., 699 F.2d 1254, 1257 (D.C. Cir. 1983) (adoptingVarsic's reasoning); Turner v. CFI Steel Corp., 510 F. Supp. 537, 542 (E.D.Pa. 1981), aff'd, 770 F.2d 43 (3d Cir. 1985), cert.denied, 474 U.S. 1058, 106 S.Ct. 800, 88 L.Ed.2d 776 (1986);Folke v. Shaffer, 616 F. Supp. 1322, 1325 n. 1 (D.Del. 1985).
International Shoe held that a court may exercise personal jurisdiction over a non-resident defendant only where "minimum contacts" exist such that jurisdiction "does not offend `traditional notions of fair play and substantial justice.'" 326 U.S. at 316, 66 S.Ct. at 158 (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 343, 85 L.Ed. 278 (1940), reh'g denied, 312 U.S. 712, 61 S.Ct. 548, 85 L.Ed. 1143 (1941)). The purpose of restricting personal jurisdiction to the limits of due process is to protect the individual interests of non-resident defendants.United States v. Morton, 467 U.S. 822, 828, 104 S.Ct. 2769, 2773, 81 L.Ed.2d 680, reh'g denied 468 U.S. 1226, 105 S.Ct. 27, 82 L.Ed.2d 920 (1984); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291, 100 S.Ct. 559, 564, 62 L.Ed.2d 490 (1980).
A defendant establishes minimum contacts with a forum state by committing some act by which he purposefully avails himself of the privilege of conducting activities within the forum state, thus invoking the benefits and protection of its laws. Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 92,reh'g denied, 358 U.S. 858, 79 S.Ct. 10, 3 L.Ed.2d 92 (1958). These contacts must be of a type that the defendant "should reasonably anticipate being haled into court there." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S.Ct. 2174, 2184, 85 L.Ed.2d 628 (1985) (citing World-Wide Volkswagen, 444 U.S. at 295, 100 S.Ct. at 566). What constitutes minimum contacts varies with the "quality and nature of the defendant's activity." Hanson, 357 U.S. at 253, 78 S.Ct. at 1240. The unilateral activity of a plaintiff claiming a relationship with a non-resident defendant does not suffice to create the requisite forum contacts. Id.;Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416, 104 S.Ct. 1868, 1873, 80 L.Ed.2d 404 (1984); Kulko v. Superior Court of California, 436 U.S. 84, 93-94, 98 S.Ct. 1690, 1698, 56 L.Ed.2d 132, reh'g denied, 438 U.S. 908, 98 S.Ct. 3127, 57 L.Ed.2d 1150 (1978).
Defendants can be subject to either specific or general personal jurisdiction in a forum state. Specific personal jurisdiction may arise from particular or sporadic contacts if the cause of action arises out of, or relates to the defendant's forum related activities. Helicopteros, 466 U.S. at 414 n. 8, 104 S.Ct. at 1872 n. 8; Mellon Bank (East) PSFS v. DiVeronica Bros., Inc., 983 F.2d 551, 554 (3d Cir. 1993). There is sufficient due process contact for personal jurisdiction if the defendant purposefully has directed his activities at residents of the forum, and the litigation concerns injuries alleged to have resulted from those activities. Henry Heide, Inc. v. WRH Prods. Co., 766 F.2d 105, 108 (3d Cir. 1985).
If a plaintiff's cause of action against a defendant does not arise out of the defendant's contacts with the forum state, the plaintiff must establish general personal jurisdiction over the defendant. Significantly more of a connection to the forum is required to establish general jurisdiction. Provident Nat'l Bank v. California Fed. Savs. Loan Ass'n, 819 F.2d 434, 437 (3d Cir. 1987). Where defendant's activities in the forum are unrelated to the subject matter of the suit, plaintiff must show "continuous and substantial contacts" with the forum state. Helicopteros, 466 U.S. at 414-16 n. 9, 104 S.Ct. at 1872-73 n. 9; Provident Nat'l Bank, 819 F.2d at 437. However, with either theory of personal jurisdiction, the focus is on whether the activities in the forum are such that defendant could reasonably foresee being made to answer in its courts. World-Wide Volkswagen, 444 U.S. at 297, 100 S.Ct. at 567.
Defendants' decision to undertake the duty of administering the Plan based upon work performed within New Jersey is sufficient to establish minimum contacts. See Varsic, 607 F.2d at 248. An ERISA governed plan that intentionally places itself in an administrative capacity with regard to its beneficiaries must anticipate being sued in jurisdictions where plan members are performing work related duties. Id. Under ERISA's venue provisions, therefore, employers, ERISA plans, and trustees and administrators of those plans may be "found" in any district where an employee performs work and earns credit under the plan. Id.;see also Launer v. Buena Vista Winery, Inc., 916 F. Supp. 204, 212 (E.D.N.Y. 1996); Ransom v. Administrative Comm. for Lightnet/WTG Special Income Protection Program, 820 F. Supp. 1429, 1432-33 (N.D.Ga. 1993); Ballinger v. Perkins, 515 F. Supp. 673, 675 (W.D.Va. 1981).
Defendants argue in their reply brief that a wholly-owned subsidiary's operation in a forum state does not provide a basis for jurisdiction over the parent company. Assuming, arguendo that Defendants' contention is correct, venue of this action is still proper in New Jersey. The statute states that the case can be brought in any district "where a defendant resides or may be found." 29 U.S.C. § 1132(e)(2) (emphasis added). Regardless of whether ROMO can be "found" in New Jersey, at least one defendant can be. The Plan, acting through the Executive Compensation Committee of ROMO for the benefit of McBee's New Jersey employees, is a defendant that can be "found" in New Jersey. See Ramsom , 820 F. Supp. at 1433; Friesen v. General Motors Corp . , 759 F. Supp. 560 (E.D.Mo. 1991). Accordingly, venue is proper in New Jersey. Any arguments about whether there is personal jurisdiction over the remaining defendants should be raised by separate motion if that defense has not already been waived.
In the present case, Bennett, as well as other employees participating in the Plan, worked for the ROMO subsidiary of McBee in New Jersey. The Plan was administered for the benefit of eligible employees who lived and worked within the state. Bennett's entire eligibility period and participation in the Plan occurred while he resided and worked in New Jersey. Thus, Defendants could have anticipated being haled into this district on the very type of claim brought in this case.
Defendants argument that the "minimum contacts" analysis does not apply to this case is without merit. Defendants contend that precedent within the Third Circuit is contrary to the standard set forth in Varsic and mandates a different approach. As noted in Defendants' brief, however, the Third Circuit has yet to rule on meaning of the word "found" in the ERISA venue provision. The "contrary precedent" within the Third Circuit to which Defendants allude is a case decided by the Eastern District of Pennsylvania in 1981. In that case the court held that a company was "found" in the district for purposes of the ERISA venue provision because it registered to do business within the state and maintained offices in Philadelphia. See Turner v. CFI Steel Corp., 510 F. Supp. 537, 541 (E.D.Pa. 1981), aff'd, 770 F.2d 43 (3d Cir. 1985), cert. denied, 474 U.S. 1058, 106 S.Ct. 800, 88 L.Ed.2d 776 (1986). Defendants, however, have misinterpretedTurner. The holding in Turner is not only consistent with Varsic, but it is also an adoption of Varsic's view of the ERISA venue provision. See 510 F. Supp. at 542. The Turner court applied the International Shoe "minimum contacts" standard when it held that the defendant was "found" within the district because it was registered to do business and maintained offices in the state. Id. at 541. These are precisely the "minimum contacts" that International Shoe contemplated.
Although the published decision of a sister district court within this circuit is persuasive, it is certainly not binding on an issue that the court of appeals has yet to decide.
The Turner court cites Varsic as instructive on ERISA venue issues and discussed the opinion when it held that "minimum contacts" were present. See Turner , 510 F. Supp. at 542-43 .
Congress intended ERISA venue provisions to be applied liberally. The adoption of the "minimum contacts" approach as described in Varsic meets that end. Accordingly, Defendants' contacts with New Jersey are sufficient for them to be "found" here for purposes of venue under 29 U.S.C. § 1132(e)(2).
B. Discretionary Transfer
Defendants' alternative argument is that this case should be transferred to the District of Colorado pursuant to 28 U.S.C. § 1404(a). Section 1404(a) permits a court to transfer a federal action from one federal district to another "[f]or the convenience of the parties and witnesses, in the interest of justice." 28 U.S.C. § 1404(a). The purpose of allowing such transfers 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, 84 S.Ct. 805, 809, 11 L.Ed.2d 945 (1964); Continental Grain Co. v. Barge FBL-585, 364 U.S. 19, 26, 27, 80 S.Ct. 1470, 1474, 1475, 4 L.Ed.2d 1540 (1960); One World Botanicals v. Gulf Coast Nutritionals, 987 F. Supp. 317, 325-26 (D.N.J. 1997); Hardaway Constr. v. Conesco Indus. Ltd., 583 F. Supp. 617, 619 (D.N.J. 1983).
Defendants caption this part of their argument as a transfer pursuant to the common law doctrine of forum non conveniens. The transfer of venue function of the forum non conveniens doctrine, however, has been superseded by the discretionary transfer statute. See 28 U.S.C. § 1404(a); Quackenbush v. Allstate Ins. Co . , 517 U.S. 706, 722, 116 S.Ct. 1712, 1724 135 L.Ed.2d 1 (1996); see also American Dredging Co. v. Miller , 510 U.S. 443, 448, 114 S.Ct. 981, 985, 127 L.Ed.2d 285 (1994) (as a consequence of federal venue transfer statute, the federal doctrine of forum non conveniens has continuing application only in cases where alternative forum is abroad).
Section 1404(a) states in full that "[f]or the convenience of the 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." 28 U.S.C. § 1404(a) .
The Supreme Court has listed factors for courts to consider when deciding § 1404(a) transfer motions. See Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508, 67 S.Ct. 839, 843, 91 L.Ed. 1055 (1947); see also Ricoh Co., Ltd. v. Honeywell, Inc., 817 F. Supp. 473, 479-80 (D.N.J. 1993); Sandvik, Inc. v. Continental Ins. Co., 724 F. Supp. 303, 306 (D.N.J. 1989) (citing Derry Finance N.V. v. Christiana Companies, Inc., 555 F. Supp. 1043, 1045 (D.Del. 1983)). The private factors noted by the Court include "the relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; . . . and all other practical problems that make trial of a case easy, expeditious and inexpensive." Id. at 508. The public factors deal with such things as court congestion, burdensome jury duty in a community unrelated to the litigation, the interest of having a local dispute decided in that locality, and a preference for having a state-law governed case decided in the forum familiar with the law. Id. at 509.
The moving party on a motion to transfer bears the burden of establishing that a transfer of venue is appropriate. Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995); Long v. E.I. Du Pont de Nemours Co., 935 F.2d 604, 609 (3d Cir. 1991); Plum Tree, Inc. v. Stockment, 488 F.2d 754, 756 (3d Cir. 1973); Job Haines Home for the Aged v. Young, 936 F. Supp. 223, 227 (D.N.J. 1996). The movant, therefore, must prove that "its alternative forum is not only adequate, but more convenient than the present forum." Hudson United Bank v. Chase Manhattan Bank, 832 F. Supp. 881, 888, aff'd, 43 F.3d 843 (3d Cir. 1994). This requires something more than a mere preponderance of the evidence in favor of a transfer. Sandvik, Inc., 724 F. Supp. at 307.
Analyses of transfer under § 1404(a) are "flexible and must be made on the unique facts of each case." Piper Aircraft Co. v. Reyno, 454 U.S. 235, 249-50, 102 S.Ct. 252, 262-63, 70 L.Ed.2d 419 (1981), reh'g denied, 455 U.S. 928, 102 S.Ct. 1296, 71 L.Ed.2d 474 (1982); Van Dusen, 376 U.S. at 623, 84 S.Ct. at 812-13, 11 L.Ed.2d 945; Ricoh, 817 F. Supp. at 479. Such determinations are discretionary with the judge. Plum Tree, Inc., 488 F.2d at 756-57; Old World Botanicals, 987 F. Supp. at 326;Ricoh, 817 F. Supp. at 479.
The public and private factors in this case weigh strongly in favor of denying Defendants' motion to transfer venue. First, although ROMO is located in Colorado and most of the Plan's administrators are also located outside of New Jersey, Bennett and most of his witnesses are located in New Jersey. Additionally, Bennett worked and accrued any and all benefits under the Plan in New Jersey. The Plan, and all related documents, can easily be transported to New Jersey. In fact, most if not all of these documents will have to be reproduced in discovery and provided to Bennett's attorneys here in New Jersey. Moreover, Bennett would suffer an economic hardship if he were forced to prosecute this case in a jurisdiction far from his residence.
The public factors likewise weigh in favor of denying the motion. First, the District of New Jersey is less congested than the District of Colorado. See Administrative Office of the United States Courts, Federal Judicial Caseload Statistics, March 31, 1998, at Table C-1 (noting that the District of Colorado had 341 pending civil cases per district judge on March 31, 1998, whereas the District of New Jersey had 282 pending civil cases per district judge on that date). Second, this case does not burden a jury and community unrelated to the litigation. New Jersey is where many of the pertinent events involved in this case took place. Since Bennett is a New Jersey citizen, the people of this state have an interest in the outcome.
Defendants have not met the heavy burden of establishing that Bennett's choice of a forum should be disturbed and that a transfer to Colorado is appropriate. See Jumara, 55 F.3d at 879. Defendants have done nothing more than establish that Colorado is an adequate alternative forum. See Hudson United Bank, 832 F. Supp. at 888. They have not been successful in making a § 1404(a) showing that it is more convenient than New Jersey. See id. Accordingly, Defendants' motion will be denied.
III. CONCLUSION
For the reasons set forth above, Defendants' motion to transfer venue pursuant to Fed.R.Civ.P. 12(b)(3) and 28 U.S.C. § 1406(a) or, in the alternative, pursuant to 28 U.S.C. § 1404(a) will be denied. An appropriate order will issue.
ORDER
Defendants, ROMO Corp., the Executive Compensation Committee of ROMO Corp., the ROMO Corporation Executive Compensation Plan, H. Rex Martin, and Francis B. King (the "Defendants"), having moved to transfer venue of this action pursuant to Fed.R.Civ.P. 12(b)(3) and 28 U.S.C. § 1406(a) or, in the alternative, pursuant to 28 U.S.C. § 1404(a); and the Court having heard oral argument on April 12, 1999, and having considered all papers submitted in this matter;
IT IS this day of April, 1999, hereby
ORDERED that Defendants' motion to transfer venue be and hereby is DENIED