Summary
finding the Eighth Circuit's reasoning in In re Fed. Fountain, Inc. conferring personal jurisdiction when a statute provides for nationwide service of process also applies to ERISA's nationwide service of process provision
Summary of this case from Wellmark, Inc. v. DeguaraOpinion
Civil No. A3-01-110
February 25, 2002
MEMORANDUM AND ORDER
I. Introduction
Pending before the court is a motion made by defendant, All County Electrical Co. ("All County"), to dismiss for improper venue or for lack of personal jurisdiction, or, alternatively, to transfer venue to the Northern District of Iowa (doc. # 5). Plaintiff resists the motion (doc. # 9). As explained below, the motion is DENIED in its entirety.
II. Background
Plaintiff, Dakotas and Western Minnesota Electrical Workers Health and Welfare Fund ("the Fund"), is a multi-employer pension plan administered in Fargo, North Dakota. Pursuant to the Employee Retirement Income Security Act ("ERISA"), the Fund brought an action against All County, seeking to inspect and audit All County's payroll records to determine whether it failed to make required fringe benefit contributions to the Fund. If All County failed to make these contributions, the Fund seeks to recover amounts that are due as well as accrued interest on the unpaid contributions, liquidated damages as provided by the bargaining agreement, and attorneys fees and costs. Finally, the Fund asserts that it is entitled to damages pursuant to the Racketeer Influenced and Corrupt Organizations Act ("RICO").
According to the Complaint, defendant All County is a private business corporation located in Waterloo, Iowa and engaged in the electrical business. All County moves to dismiss or transfer, contending that some of the Fund's claims are the subject of litigation pending in the Northern District of Iowa and arguing that judicial economy would be served by transferring the present case to that venue. Further, All County asserts that a transfer to Iowa would best serve the convenience of the parties since all of the witnesses of both the employer and the Union are located in Iowa, as are the payroll documents that would be the subject of the audit.
III.Discussion A. Motion to dismiss
All County first proposes that this action be dismissed, arguing that venue is improper and, further, that the Court lacks personal jurisdiction over it. Venue, as the Fund correctly points out, is proper since ERISA specifically provides: "Where an action under this subchapter is brought in a district court of the United States, it may be brought in the district where the plan is administered." 29 U.S.C. A § 1132(e)(2). Since the plan is administered in Fargo, venue is proper in this Court. Id. All County's motion to dismiss for improper venue is DENIED.
All County's second basis for dismissal is lack of personal jurisdiction. All County contends that personal jurisdiction is lacking because it has not had minimum contacts with the state of North Dakota. The Fund argues, however, that ERISA authorizes nationwide service of process and consequently nationwide personal jurisdiction. Thus, argues the Fund, minimum contacts with the forum are unnecessary; defendants need only have minimum contacts with the United States.
A majority of circuits have adopted the Fund's view with regard to ERISA cases. See Medical Mut. of Ohio v. deSoto, 245 F.3d 561, 598 n. 4 (6th Cir. 2001) (citing cases). Moreover, the Eighth Circuit has adopted this rationale in a bankruptcy case. The court held that since a bankruptcy rule, on its face, provides for national service of process, the court could constitutionally assume personal jurisdiction over the defendant without conducting a minimum contacts analysis. In re Federal Fountain, Inc., 165 F.3d 600, 601 (8th Cir. 1999).
All County conducts its electrical business in Iowa. It is thus undisputed that All County has sufficient minimum contacts with the United States, and All County's contacts with North Dakota are irrelevant in this ERISA action. Cf. id. Therefore, this Court has personal jurisdiction over All County, and its motion to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2) is DENIED.
B. Motion to transfer venue
All County has also moved to transfer to the Northern District of Iowa. The statute governing this motion provides 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.28 U.S.C. A § 1404(a). Since the parties seem to agree that this case could have been brought in the Northern District of Iowa, the Court need only determine whether the convenience of the parties, the convenience of the witnesses, and the interests of justice would be served by granting defendant's motion to transfer. Id.
Federal courts generally give "considerable deference to a plaintiff's choice of forum, and thus the party seeking a transfer under A § 1404(a) typically bears the burden of proving that a transfer is warranted. "Terra Int'l, Inc. v. Mississippi Chem. Corp., 119 F.3d 688, 695 (8th Cir.), cert. denied, 522 U.S. 1029 (1997). This burden weighs particularly heavy here since ERISA was designed to `protect the financial integrity of employee benefit plans'" by allowing them to choose their forum to minimize costs. Central States v. Salasnek Fisheries, Inc., 977 F. Supp. 888, 890 (N.D.Ill. 1997). With these principles in mind, the Court will consider which forum best serves the convenience of the parties, the convenience of the witnesses, and is in the interests of justice.
1. Convenience of the parties
The first factor assesses the convenience of the parties in litigating at the transferee forum. All County is incorporated in the state of Iowa and conducts business in Iowa. Accordingly, a transfer to the Northern District of Iowa would be more convenient for All County, albeit at the inconvenience of the Fund, which is administered in North Dakota. This factor then weighs against transfer: "Merely shifting the inconvenience from one side to the other . . . obviously is not a permissible justification for change of venue." Terra Int'l Inc., 119 F.3d at 696-97 (citation omitted).
2. Convenience of the witnesses
As the moving party, All County bears the burden of proving that transfer is warranted. Terra Int'l Inc., 119 F.3d at 696-97. In this regard, All County has failed to make any showing that its witnesses would be inconvenienced by requiring it to litigate in North Dakota. All County has not made any showing, for example, that its witnesses might not be willing to appear in North Dakota or that if such witnesses would be unwilling to appear, their deposition testimony would be inadequate. Id. at 696 (listing factors to consider under the convenience to witnesses prong).
All County indicates that the majority of the documents necessary for the audit are located in Iowa. This factor, however, does not militate in favor of transfer. As the Fund explains in its brief, the records may be examined anywhere. Moreover, if a trial is necessary, the records can be shipped to North Dakota with slight inconvenience and cost. Boilermaker-Blacksmith National Pension Fund v. Gendron, 67 F. Supp.2d 1250, 1257 (D.Kan. 1999). Thus, the Court concludes that this factor neither favors nor disfavors the transfer of this action.
3. The interests of justice
All County argues that the interests of justice are served by transferring this case to the Northern District of Iowa, contending that transfer would promote judicial economy and avoid inconsistent verdicts. All County's argument on this point is based on the fact that currently pending in the Northern District of Iowa is a case in which the International Brotherhood of Electrical Workers has brought suit against All County and others to enforce the terms of an arbitration award. The court in Iowa granted summary judgment in favor of All County. According to All County, the Union in Iowa is now conducting an audit to ascertain the extent of All County's liability for noncompliance with the same collective bargaining agreement that is the subject of the Fund's action here.
The Fund argues in response that the case in Iowa is all but completed, asserting that the Union merely has to conclude the audit. Moreover, the Fund claims that the audit in Iowa is being conducted for a different purpose than the proposed audit here; the claim in Iowa is for back wages, while the claim here is for fringe benefit contributions. Based on these arguments, then, it seems that while the cases are somewhat related, transferring the present case would not preserve judicial resources.
Furthermore, the interests of justice are likely best served by litigating the case in North Dakota where the plan is administered. In allowing multi-employer funds to bring actions where they are administered, Congress attempted to "protect the financial integrity of employee benefit plans." Salasnek Fisheries, Inc., 977 F. Supp. at 892 (N.D.Ill. 1997). Any expenses incurred in this litigation will necessarily be passed on to the beneficiaries: thus, "it would be counterproductive to require the plans to prosecute their cases in the foreign districts where the contributing employers reside." Central States v. Lewis Michael, Inc., 992 F. Supp. 1046, 1049 (N.D.Ill. 1998) (citation omitted). The interests of justice then are best served by litigating this case in North Dakota.
IV. Conclusion
Decisions regarding transfer of venue under 28 U.S.C. A § 1404(a) rests within the discretion of the this Court. Rolscreen Co. v. Pella Products of St. Louis, Inc., 64 F.3d 1202, 1208 (8th Cir. 1995). This Court determines that All County has not met its burden of showing that a transfer is appropriate. All County has not established that transferring this case would be more convenient to the parties or witnesses, or would be in the interests of justice. Indeed, the Court's analysis has shown the opposite: The interests of justice would be best served by litigating the case in the plaintiff's choice of forum.
Accordingly, IT IS ORDERED that defendant All County's motion to dismiss or transfer is hereby DENIED (doc. # 5).