Acosta v. AEU Benefits, LLC et al

MEMORANDUM

N.D. Ill.May 22, 2019

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION R. ALEXANDER ACOSTA, Secretary of Labor, ) United States Department of Labor, ) ) Plaintiff, ) Case No. 1:17-cv-07931-JHL-SMF ) v. ) Honorable Joan H. Lefkow ) District Judge AEU BENEFITS, LLC, et al., ) ) Honorable Sheila M. Finnegan Defendants. ) Magistrate Judge __________________________________________) ) AEU HOLDINGS, LLC and AEU BENEFITS, LLC) ) Defendants and Cross Plaintiffs, ) ) v. ) ) BLACK WOLF CONSULTING, INC. and ) SD TRUST ADVISORS, LLC, ) ) Defendants and Cross Defendants. ) __________________________________________) ) AEU HOLDINGS, LLC and AEU BENEFITS, LLC) ) Defendants and Cross Plaintiffs, ) ) v. ) ) RODNEY MAYNOR, et. al. ) ) Third-Party Defendants. ) MEMORANDUM OF LAW IN SUPPORT OF AEU DEFENDANTS’ MOTION TO DISMISS COUNTER/CROSS COMPLAINT AND THIRD PARTY COMPLAINT OF BLACK WOLF CONSULTING, INC. Case: 1:17-cv-07931 Document #: 383 Filed: 05/22/19 Page 1 of 15 PageID #:5396 1 AEU Holdings, LLC (“AEUH”), AEU Benefits, LLC (“AEUB”), Stephen M. Satler, (“Satler”) and Steven Goldberg (“Goldberg”) (collectively “the AEU Defendants” or “Movants”) submit the following Memorandum in Support of their Motion to Dismiss the Counter/Cross and Third Party Complaint of Black Wolf Consulting, Inc. (“Black Wolf”) (Doc. No. 368) (hereinafter “CCTPC”) pursuant to Federal Rules of Civil Procedure 12(b)(2), 12(b)(3) and 12(b)(6). INTRODUCTION The instant lawsuit is one of seven currently pending lawsuits, five in the Northern District of Illinois, arising out of the same “common nucleus of operative facts” involving the claimed under-funding of multiple “VEBA” (Voluntary Employees’ Beneficiary Association) trusts. In addition to the instant matter, which now includes counter-cross and third party claims by Black Wolf against the Movants, Black Wolf had previously filed a lawsuit against the Movants styled: Black Wolf Consulting, Inc. v. AEU Benefits, LLC., et. al, Case No. 18-cv-0108 (N.D. Ill. 2018), assigned to the Hon. Charles Norgle (hereinafter the “Norgle case”). The Norgle case has been stayed by Judge Norgle. Further, this Court has determined that the Norgle case should not be re- assigned to this Court’s docket. (Doc. No. 369.) The duplicative nature of the allegations in the Norgle case and the CCTPC demonstrate that Black Wolf has improperly resorted to claim splitting and those two actions are duplicative. This properly requires dismissal of Black Wolf’s subsequently filed CCTPC. Additionally, Black Wolf’s claims in the CCTPC are also subject to dismissal due to a lack of personal jurisdiction over the Movants and a lack of proper venue. To demonstrate the basis for their motion to dismiss based on claims-splitting arguments, Movants request that the Court take judicial notice of the following court documents which are matters of public record: 1) the Complaint filed in Black Wolf Consulting, Inc. v. AEU Benefits, LLC., et. al, Case No. 18-cv-0108 (N.D. Ill. 2018), attached as Ex. A; 2) the Order entered by Case: 1:17-cv-07931 Document #: 383 Filed: 05/22/19 Page 2 of 15 PageID #:5397 2 Judge Norgle on September 5, 2018 staying the Norgle case, attached as Ex. B; 3) Black Wolf’s Omnibus Opposition to Motions to Dismiss Insofar As They Are Premised On Stay Issued In DOL Action, attached as Ex. C; and 4) Black Wolf’s Motion For Reconsideration of the Court’s September 5, 2018 Order Staying This Action, attached as Ex. D.1 FACTUAL BACKGROUND Black Wolf’s Complaint in the Norgle Case Black Wolf filed its complaint in the Norgle case on January 8, 2018. (Ex. A). It named twenty-four defendants, including AEUH, AEUB, Satler and Goldberg as well as other defendants named in the Acosta case. Counts II, IV, VIII and X of Black Wolf’s complaint in the Norgle case plead causes of action for fraud, violations of the Illinois Consumer Fraud Act, an accounting, and negligent misrepresentation, respectively. Id. Black Wolf’s complaint in the Norgle case seeks damages to “compensate it for reputational harm, lost business, negligent misrepresentation, and fraud arising out of Defendants’ business relationships with Black Wolf,” but does not seek “to recover the funds Black Wolf collected from participating employer groups of the AEU Plan.” (Ex. C, p. 2.) Black Wolf further explains that “the damages sought [in the Norgle case] arise from the fraudulent, negligent, and tortious acts of Defendants, which resulted in direct harm to Black Wolf’s business” and “are based on Black Wolf’s business relationships with each of the Defendants.” (Ex. C, p. 6.) In the Norgle case, Black Wolf has admitted that it “collected contributions from clients who were accepted into the AEU Plan,” took its own compensation out of those contributions 1 It is well settled that “the District Court may . . . take judicial notice of matters of public record without converting a 12(b)(6) motion into a motion for summary judgment.” Martin v. Snyder, 2002 U.S. Dist. Lexis 5402; 2002 WL 484911, (N.D. Ill. 2002), citing Henson v. CSC Credit Servs., 29 F.3d 280, 284 (7th Cir. 1994). “Facts properly held the object of judicial notice in the context of a motion to dismiss under 12(b)(6) include, among others, records and reports of administrative bodies . . . items in the record of the case or matters of general public record”. Hamilton v. Summers, 95 F. Supp. 2d 908, at 910 (N.D. Ill. 2000). Case: 1:17-cv-07931 Document #: 383 Filed: 05/22/19 Page 3 of 15 PageID #:5398 3 before sending the funds on to Veritas, which then took its “commission from the funds sent from Black Wolf,” following which “the remaining funds” were wire transferred to the “AEU Plan Administrator who would use these funds to pay the TPAs, purchase stop loss insurance and pay management fees.” Ex. A, ¶¶55-58. Black Wolf has further admitted that Veritas selected Tall Trees Administrators to be the TPA for the plans in the AEU program, and that “Tall Trees’ mistakes affected approximately 5,000 members and/or their dependents.” Id., ¶¶ 68-69). Pursuant to the Order attached hereto as Ex. B, the Norgle case was stayed as a result of the instant action and Orders entered in this case. Black Wolf sought reconsideration of the stay order and that request for reconsideration remains pending without a ruling date being assigned. (Ex. D). Black Wolf made no effort to bring its claims in the instant case until after its lawsuit pending before Judge Norgle was stayed and its motion for reconsideration was unresolved. Black Wolf’s Cross Complaint In This Matter (the “CCTPC”) On May 1, 2019, Black Wolf filed its CCTPC directed against the Movants and Locke Lord, LLP. With respect to the Movants, the CCTPC pleads the following causes of action: Count I – Fraud; Count II – violations of the Illinois Consumer Fraud Act; Count III – an accounting; Count IV – negligent misrepresentation; and Count V – Breach of Contract Implied In Fact. (Doc. No. 368.) Not only are the causes of action set forth in the Norgle case the same as those set forth in the CCTPC, but the allegations are often identical between the two pleadings.2 The allegations of the CCTPC make clear that Black Wolf is seeking to recover against the Movants in connection with “a health insurance benefits plan (the ‘AEU Plan’) . . .” (Doc. No. 2 See, for example: i) ¶¶ 24-26, 38-40 of the CCTPC and ¶¶ 42-44 and 46-48 of Ex. A; ii) ¶¶ 47-55 of the CCTPC and ¶¶ 33-34, 36-41 and 45 of Ex. A; iii) ¶¶ 56-58 of the CCTPC and ¶¶ 50-52 of Ex. A; iv) ¶¶ 61- 62 and 64-74 of the CCTPC and ¶¶ 54-55 and 57-67 of Ex. A; v) ¶¶ 75-94 and 96-107 of the CCTPC and ¶¶ 68-87 and 89-100 of Ex. A; vi) ¶¶ 108-120 and 122-144 of the CCTPC and ¶¶ 101-113 and 115- 137 of Ex. A; and vii) ¶¶ 146-149 and 151-175 of the CCTPC and ¶¶ 139-142 and 144-168 of Ex. A. Case: 1:17-cv-07931 Document #: 383 Filed: 05/22/19 Page 4 of 15 PageID #:5399 4 368, p. 136); that it wired “millions of dollars to the AEU Plan Administrator from November 2016 to October 2017 (id, ¶ 57); that it “thrived” in its “role as recruiter and risk-taker . . .” (id, ¶ 130); that various “disparaging misstatements to third parties” were made by other entities (not the Movants) (id, ¶¶ 169-172); and that as a result of the purported conduct alleged, Black Wolf “suffered damages in the form of lost business, reputation harms and lost profits” (id, ¶¶ 196, 227). Black Wolf further alleges that it has “lost existing and future customers and suffered damages” (id, ¶ 205) and that its “business reputation was damaged” (id, ¶ 235). Thus, the damages sought by Black Wolf in the CCTPC are the same as those sought in the Norgle case. Facts Regarding The Moving Defendants Attached hereto as Exhibits E, and F respectively, are the Declarations of Statler and Goldberg. These Declarations establish the following facts for purposes of jurisdiction and venue: i) Satler is a citizen of New Jersey and has resided there since 1984, and Goldberg is a citizen of Louisiana who left the state of Illinois in 1997; ii) neither of those individuals currently or at the time at issue resides or works in Illinois; iii) neither of those individuals has any connection to Illinois as they do not own property in Illinois, have bank accounts, or store documents in Illinois; iv) neither of those individuals has ever physically, electronically, or by other means initiated contact with an Illinois entity soliciting business related to “AEU” as that term has been used by Black Wolf; and v) over the last 4 years Satler and Goldberg traveled to Illinois once or twice in 2016 and 2017 in their corporate capacities on behalf of AEU and no business contracts were entered into during those visits. (See Exhibits E and F). Attached hereto as Exhibit G is a second Declaration signed by Satler in his corporate capacity. This Declaration establishes the following facts for purposes of jurisdiction and venue: i) Satler is the CEO of AEUH and the President of AEUB; ii) AEUH is a Delaware limited liability Case: 1:17-cv-07931 Document #: 383 Filed: 05/22/19 Page 5 of 15 PageID #:5400 5 company with its principal place of business in Dallas, Texas, while AEUB is a Texas limited liability company with its principal place of business in San Antonio, Texas; iii) none of the members of AEUH or AEUB are citizens of Illinois; iv) neither AEUH nor AEUB are qualified to do business in Illinois, neither has any employees in Illinois, they have no real property in Illinois; v) they do not advertise in Illinois; vi) they have no bank accounts in Illinois; vii) they have never signed a contract to perform services in Illinois; viii) neither Satler, Goldberg nor “AEU” as that term is used by Black Wolf ever received, had possession of, or controlled the disbursement of any premium funds purportedly sent by an Illinois based entity associated with what BWC has called the “AEU Plan” and the AEU related entities never received funds directly from an Illinois aggregator or trust; and ix) neither Satler, Goldberg nor any AEU entity ever collected plan contributions, paid any fees to service providers, or otherwise participated in the transfer of funds that originated from employers’ plan contributions. (See Exhibit G). Additionally, the corporate Declaration of Satler also establishes that the VEBA Trust Agreement and Declaration of Trust involved in this matter provides that the validity, construction and administration of the trusts is to be determined under the laws of the District of Columbia. (Exhibit G, ¶ 31.) The Satler corporate Declaration describes the locations and size of the three largest concentrations of the VEBA trusts (id, ¶ 32), and confirms that all actions taken by Satler and Goldberg regarding visits they made to Black Wolf’s office in Frankfort, Illinois were done in their corporate capacities on behalf of an AEU corporate entity. (Id, ¶ 28). LEGAL ARGUMENT I. Black Wolf’s Cross Complaint (the “CCTPC”) Should be Dismissed Under the Doctrines of Claim Splitting and Duplicative Suits “Under the rule against claim-splitting, a plaintiff must allege in one proceeding all claims for relief arising out of a single nucleus of operative facts or be precluded from raising those claims Case: 1:17-cv-07931 Document #: 383 Filed: 05/22/19 Page 6 of 15 PageID #:5401 6 in the future.” Valentine v. Wideopen West Finance, LLC, 288 F. R.D. 407 (N.D. Ill. 2012), citing Shaver v. F.W. Woolworth Co., 840 F.2d 1361, 1365 (7th Cir.1988). Likewise, the 7th Circuit has held that “[a]s a general rule, a federal suit may be dismissed ‘for reasons of wise judicial administration . . . whenever it is duplicative of a parallel action already pending in another federal court.’” Serlin v. Arthur Andersen & Co., 3 F. 3d 221 (7th Cir. 1993) citing Ridge Gold Standard Liquors v. Joseph E. Seagram, 572 F. Supp. 1210, 1213 (N.D.Ill.1983). District courts are accorded “a great deal of latitude and discretion” in determining whether one action is duplicative of another, but generally, a suit is duplicative if the “claims, parties, and available relief do not significantly differ between the two actions.” Serlin at 223, citing to Ridge Gold at 1213; accord Rogers v. Desiderio, 58 F. 3d 299 (7th Cir. 1995) (“[t]his court deprecates the practice of filing two suits over one injury”). Black Wolf’s complaint in the Norgle case makes clear that there is undoubtedly a common nucleus of operative facts between the CCPTC and Black Wolf’s complaint in the first-filed Norgle case. Black Wolf’s complaint in the Norgle case sets forth claims against various entities arising out of the same facts at issue in the CCPTC claims. While there may be one cause of action in the CCPTC that is not specifically set forth in the Norgle case, that is not dispositive. Claims may be deemed duplicative where the “claims, parties, and available relief do not significantly differ between the two actions.” Serlin at 223. In the present case, the CCPTC does not significantly differ from the complaint in the Norgle case. Dismissal of the CCPTC is therefore warranted. II. The Court Lacks Personal Jurisdiction Over The Movants A. Applicable Law Once a defendant moves to dismiss a complaint pursuant to FRCP 12(b)(2), “the plaintiff bears the burden of demonstrating the existence of jurisdiction.” Purdue Research Foundation v. Case: 1:17-cv-07931 Document #: 383 Filed: 05/22/19 Page 7 of 15 PageID #:5402 7 Sanofi-Synthelabo SA, et al., 338 F.3rd 773 (7th Cir. 2003), citing Central States S.E. & S.W. Areas Pension Fund v. Reimer Express World Corporation, 230 F.3rd 934 at 939 (7th Cir. 2000) and RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1275 (7th Cir. 1997). In cases based on diversity jurisdiction, the District Court has personal jurisdiction over a defendant “only if the state in which the court sits would have jurisdiction.” RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1275 (7th Cir. 1997). “The Supreme Court . . . distinguishes between ‘general’ jurisdiction and ‘specific’ jurisdiction,” depending on whether the assertion of jurisdiction is related to the specific claims being asserted. Hyatt Intern. Corp. v. Coco, 302 F.3d 707, 713 (7th Cir. 2002). Additionally, “[t]he citizenship of an LLC for purposes of diversity jurisdiction is the citizenship of its members.” Cosgrove v. Bartolotta, 150 F.3d 729, 731 (7th Cir. 1998). Black Wolf does not allege that the Movants fit the paradigm for general jurisdiction, and in fact the jurisdictional allegations of the CCPTC establish that they do not. Therefore, only specific jurisdiction is at issue. Specific personal jurisdiction exists over a defendant “for controversies that arise out of, or are related to, the defendant’s forum contacts.” Hyatt at 714. Three requirements must be shown to support specific personal jurisdiction: “(1) the defendant must have purposely availed himself of the privilege of conducting business in the forum state or purposely directed his activities at the state; (2) the alleged injury must have arisen from the defendant’s forum activities; and (3) the exercise of jurisdiction must comport with traditional notions of fair play and justice.” Johnson v. Barrier, 2016 WL 3520157 (N.D. Ill. 2016), citing Felland v. Clifton, 682 F.3rd 665 (7th Cir. 2012). A plaintiff must allege and show that the defendant challenging personal jurisdiction purposefully directed its suit-related activities towards Illinois. See Advanced Tactical Ordinance Systems, LLC v. Real Action Paintball, Inc., 751 F.3rd 796 at 800 (7th Cir. 2014). Case: 1:17-cv-07931 Document #: 383 Filed: 05/22/19 Page 8 of 15 PageID #:5403 8 Furthermore, with respect to both AEUH/AEUB and the individual Movants, all but one of Black Wolf’s claims in the CCPTC sound in tort. With respect to those claims, Subsection (a)(2) of the Illinois long-arm statute applies and requires proof of “the commission of a tortious act within this State.” 735 ILCS 5/2-209(a)(2). Accordingly, the question before the Court with respect to those tort-based claims is whether the Movants’ alleged tortious actions were committed within Illinois; it is not enough to show merely that injury occurred in Illinois. Green v. Advance Ross Elecs. Corp., 86 Ill. 2d 431, 432–33, 427 N.E.2d 1203, 1204 (1981). B. The Court Lacks Personal Jurisdiction Over The Individual Movants Black Wolf’s allegations do not tie the claimed injuries to the individual Movants’ contacts with Illinois. Indeed, the only allegations tying any part of this controversy to Illinois are: (1) that Black Wolf’s principal place of business is in Monee, Illinois (Doc. No. 368, ¶ 1); and (2) that two weeks after a September 2016 meeting Satler and Goldberg visited Black Wolf’s office in Frankfort, Illinois (id. at ¶ 111). In fact, Black Wolf and its principal Rod Maynor state in response to AEUH and AEUB’s claims that: “Black Wolf and Maynor have no personal knowledge of the source and/or accuracy of the Secretary’s statistics regarding the percentage of Illinois residents or the percentage of unpaid claims . . .”. (id. at ¶ 13). These allegations are insufficient to establish personal jurisdiction over the individual Movants. The Individual Movants’ Declarations establish that they have no connection with the State of Illinois. (Exhibits E and F). Black Wolf presents no facts to establish any substantial connection between the Individual Movants and the State of Illinois. While Black Wolf references a visit to Illinois by Mr. Satler and Mr. Goldberg in the second half of 2016 “to discuss the AEU Plan’s financial situation” (Doc. No. 368, ¶ 111), that trip occurred over 2.5 years after the DOL alleges that “aggregators” began enrolling Participating Plans in the Program and Black Wolf was Case: 1:17-cv-07931 Document #: 383 Filed: 05/22/19 Page 9 of 15 PageID #:5404 9 allegedly hired by Veritas as a sub-broker to “market the AEU Plan to employers and enroll new Participating Plans.” (Id. at ¶¶ 44 and 50). The CCTPC does not allege that the Individual Movants entered into written contracts with an Illinois entity for purposes of the Participating Plans; it does not allege that the Individual Movants received funds from Illinois employers or Plan members; it does not allege that the Individual Movants sent such funds into Illinois; and it does not state any tortious conduct on the part of the Individual Movants which they undertook in Illinois. On the contrary, the allegations all appear to be focused on a purported adverse financial impact felt in Illinois as a result of conduct that occurred outside of Illinois. This is the very situation addressed by the Illinois Supreme Court in Green v. Advance Ross Elecs. Corp, supra, which establishes that this Court lacks personal jurisdiction over the Individual Movants. C. The Fiduciary Shield Doctrine Applies To The Individual Movants Black Wolf’s allegations of contact with Mr. Satler and Mr. Goldberg also make clear the actions of those individuals were undertaken in their capacities as the principals/officers of the corporate AEU entities. (See for example Doc. No. 368, ¶¶ 111-113.) The CCPTC’s allegations about the individual Movants supports application of the Fiduciary Shield Doctrine. In Alpert v. Bertsch, 235 Ill. App. 3rd 452, 601 N.E. 2nd 1031, 1037 (1st Dist. 1992), the court explained that “[t]he Fiduciary Shield Doctrine provides that ‘if an individual has contact with a State only by virtue of his acts as a fiduciary of a corporation’ such acts may not form the predicate for the exercise of jurisdiction over him as an individual.” The court further noted that the foundation supporting this doctrine is that “it is unfair to force an individual to defend a suit brought against him personally in a forum in which his only relevant contacts are acts performed not for his own benefit but for the benefit of his employer.” Id. at 1037. Case: 1:17-cv-07931 Document #: 383 Filed: 05/22/19 Page 10 of 15 PageID #:5405 10 Similarly, in Telesphere Communications, Inc. v. U.S. Operators, Inc., 1991 WL144197 (N.D. IL. 1991), the plaintiff argued that because an individual defendant had a “large personal stake” in a corporate defendant the inference was strong that the individual was acting for personal gain rather than for the benefit of the corporate entity. In rejecting the personal interest exception to the Fiduciary Shield Doctrine, the Telesphere court emphasized that it would not take personal jurisdiction over an individual merely because he is part owner or major stockholder of the company on whose behalf he acts. Similar to the present case, the Telesphere court emphasized that the plaintiff in that case had not alleged that the individual defendant “acted solely as an individual for his personal gain”. (Such an allegation is also missing from Black Wolf’s CCPTC in this case.) Just as in Telesphere, there is no basis in the instant case to drop the Fiduciary Shield protection afforded to the Individual Movants with respect to personal jurisdiction. Black Wolf alleges that Mr. Satler and Mr. Goldberg travelled to Frankfort, Illinois in the second half of 2016 in order to “discuss the AEU Plan’s financial condition.” (Doc. No. 368, ¶ 111.) These allegations confirm the trip was in the corporate capacity of Mr. Satler and Mr. Goldberg. If any additional support for this proposition is needed the Declaration of Mr. Satler attached hereto as Ex. D and the Declaration of Mr. Goldberg attached as Exhibit E confirm, respectively at paragraphs 11 and 9, that Mr. Satler and Mr. Goldberg were acting in their corporate capacities when they made this visit to Illinois. The Fiduciary Shield doctrine is, therefore, applicable to bar personal jurisdiction from attaching to either of the Individual Movants. D. Personal Jurisdiction Is Lacking As To AEUH And AEUB The Declaration of Mr. Satler attached as Ex. G establishes that AEUH and AEUB are not qualified to do business in Illinois; have never signed a contract to perform services in Illinois; have no employees in Illinois; do not advertise in Illinois; own no property in Illinois; never Case: 1:17-cv-07931 Document #: 383 Filed: 05/22/19 Page 11 of 15 PageID #:5406 11 received funds directly from an Illinois entity; never received, had possession of, or controlled disbursement of any premium funds purportedly sent by an Illinois based entity associated with what Black Wolf has called the “AEU Plan”; and never received funds directly from an Illinois based aggregator or trust. (Ex. “G”, paragraphs 8, 9, 10, 11, 12, 13, 18, 19, 22, 23, 27, 29 and 30.) Just as with Black Wolf’s claims against the Individual Movants, the claims against AEUH/AEUB sound in tort, with an “implied in fact” breach of contract claim also being asserted, so the same provision of the Illinois long-arm statute is applicable to such tort-based claims as discussed above. So too, the same law regarding conduct in Illinois and minimum contacts is applicable to AEUH/AEUB for purposes of personal jurisdiction. This Court does not have personal jurisdiction over AEUH/AEUB with respect to Black Wolf’s CCPTC. The only activity alleged to have occurred in Illinois is the visit by Mr. Satler and Mr. Goldberg, in the Fall of 2016, to BlackWolf’s Illinois office to “discuss the AEU Plan’s financial situation”. (Doc. No. 368, p. 156, para.111.) Once again, there is no allegation of any tortious conduct in Illinois, and particularly no mention of AEUH/AEUB in that regard. In light of the allegations of the CCPTC, the facts as set forth in the Declarations submitted herewith, and applicable law, the Court lacks personal jurisdiction of AEUH/AEUB with respect to the claims of Black Wolf in the CCPTC. III. Venue Is Improper In Illinois For Black Wolf’s Claims A. Applicable Law The Movants also seek dismissal of the CCPTC pursuant to FRCP 12(b)(3). A plaintiff bears the burden of proving that venue is proper in the Northern District of Illinois. (See Pfeiffer v. Insty Prints, 1993 WL 443403 (N.D. Ill. 1993).) “The test for a determination of proper venue under Section 1391(b)(2) is not whether a majority of the activities pertaining to the case were Case: 1:17-cv-07931 Document #: 383 Filed: 05/22/19 Page 12 of 15 PageID #:5407 12 performed in a particular district, but whether a substantial portion of the activities giving rise to the claim occurred in a particular district.” Allstate Insurance Company v. Stanley W. Burns, Inc., 80 F. Supp. 3rd 870 (N.D. Ill. 2015), citing Jackson v. N’Genuity Enters., Company, 2014 WL 4269448 (N.D. Ill. 2014). Furthermore, it is not sufficient, for venue purposes, that the economic harm a plaintiff complains of has been felt in Illinois. Financial Management Services, Inc. v. Coburn Supply Inc., 2003 WL 25532 (N.D. Ill. 2003.) B. Venue Is Improper In The Northern District of Illinois as to the CCPTC In the present case, venue is not proper in the Northern District of Illinois as to the CCPTC because it fails to set forth facts which establish that a substantial portion of the activities giving rise to the claim occurred in the Northern District of Illinois. As discussed with regard to personal jurisdiction, the CCPTC does not allege any tortious conduct by the Movants within the state of Illinois. On the contrary, the CCPTC focuses on the purported financial impact of the alleged conduct on Black Wolf in Illinois--which is not sufficient. While the CCPTC alleges that venue is proper in the Northern District of Illinois “because a substantial part of the events or omissions giving rise to the claim occurred in this District,” (Doc. No. 368, ¶ 9) that conclusory statement is not supported by any facts alleged in the CCPTC. On the contrary, the allegations of the CCPTC fail to show that the purported conduct of the Movants either took place in Illinois or relates to the claims for damages being made by Black Wolf. Movants refer the Court to Ex. A, ¶¶ 51 and 56, describing the collection of premiums from employers and the sending of them to the “AEU Plan” Manager, who in turn forwarded the funds to the AEU Plan Administrator. In sum, according to Black Wolf’s own allegations, the funds gathered by Black Wolf were immediately and permanently transferred out of Illinois (if they ever Case: 1:17-cv-07931 Document #: 383 Filed: 05/22/19 Page 13 of 15 PageID #:5408 13 came into Illinois in the first place). Thus, any alleged mismanagement of funds—which is the core event allegedly giving rise to the claims—did not occur in Illinois. Accordingly, venue is not proper in this District. Based upon the allegations of the CCPTC, read in its entirety, all of the events giving rise to the claims occurred outside of Illinois and, therefore, the CCPTC is subject to dismissal pursuant to FRCP 12(b)(3). CONCLUSION For all of the above reasons, Black Wolf’s CCPTC against AEU Holdings, AEU Benefits, Stephen M. Satler, and Steven Goldberg should be dismissed due to claim-splitting/duplicative pleadings, lack of personal jurisdiction, and improper venue. Respectfully submitted, By:/s/Daniel Hildebrand On behalf of AEU HOLDINGS, LLC; AEU BENEFITS, LLC; STEPHEN M. SATLER; and STEVEN GOLDBERG GREENBERG TRAURIG, LLP Daniel Hildebrand (ARDC #: 6217127) Email: hildebrandd@gtlaw.com Tiffany S. Fordyce (ARDC #: 235063) Email: fordycet@gtlaw.com 77 West Wacker Dr., Suite 3100 Chicago, IL 60601 Telephone: 312-456-8400 GROTEFELD HOFFMANN, LLP Howard L. Lieber (ARDC #: 6185701) 311 S Wacker Drive, Suite 1500 Chicago, IL 60606 Telephone: 312-551-0200 Email: hlieber@ghlaw-llp.com Attorneys for AEU Defendants Case: 1:17-cv-07931 Document #: 383 Filed: 05/22/19 Page 14 of 15 PageID #:5409 14 CERTIFICATE OF SERVICE I certify that I filed this document on May 22, 2019 through the Court’s ECF system, which automatically transmits the filing to all counsel of record for all parties in this litigation. /s/ Daniel Hildebrand Case: 1:17-cv-07931 Document #: 383 Filed: 05/22/19 Page 15 of 15 PageID #:5410