UNITED STATES DISTRICT COURT WESTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION
________________________________________________ | | DONALD D. CARSTENS, | Case No. 1:09-cv-664 | Plaintiff, | | HONORABLE PAUL L. MALONEY v. | | MICHIGAN DEPARTMENT OF TREASURY and | PENSION BENEFIT GUARANTY CORPORATION, | | Defendants. | | ________________________________________________
OPINION and ORDER
Granting the Defendant’s Motion for Transfer of Venue; Terminating and Closing the Case
According to plaintiff Donald D. Carstens (“Carstens”), a Michigan corporation called Union
Steel Products, Inc. (“Union Steel”) established the Union Steel Products, Inc., Union Employees
Pension Plan (“the plan”) in 1971, and in 1987 the plan purchases a single-premium group annuity
contract from Principal Mutual Life Insurance Company (“Principal Mutual”) for the purpose of
providing retirement payments to plan participants. See Complaint filed June 16, 2009 in the Circuit
Court of Ingham County, Michigan (“Comp”) ¶¶ 1 and 8-9.
Defendant Pension Benefit Guaranty Corporation (“PBGC”) is a federal agency and
federally-owned corporation which administers the defined-benefit pension plan termination
insurance program under Title IV of the Employee Retirement Income Security Act of 1974, 29
U.S.C. § 1301 et seq., as amended (“ERISA”). When an underfunded pension plan covered by ERISA Title IV terminates, the PBGC generally becomes the plan’s trustee and pays the plan’s
unfunded benefits with its insurance funds. See 29 U.S.C. § 1322 and 29 C.F.R. § 4044.3(a).
Pursuant to a written agreement between the PBGC and the Union Steel Plan, the Plan terminated
on December 31, 1995 and the PBGC became its statutory trustee in September 1999. See Comp
¶ 10 and Ex A (Agreement for Appointment of Trustee & Termination of Plan); accord MTD at 2.
Principal Mutual became a publicly-held company in October 2001, and in conjunction with
that change, compensation in the form of 5,985 shares of stock in, was credited to the plan (“the
Compensation”). See Comp 11 and Ex C.
Again according to Carstens, in October 2004 defendant PBGC executed a document
releasing him, Union Steel, and other parties from any and all claims it had or may have with regard
to the plan. See Comp ¶ 12 and Ex B.
On an unspecified date, the Compensation (5,985 shares in the Principal Financial Group)
escheated to the State of Michigan as unclaimed property. See Comp ¶ 13; accord MTD at 2. As
trustee of the plan, the PBGC has asserted a claim to the Compensation, but Carstens contends that
the Compensation should be paid to him as the sole remaining shareholder of Union Steel, which
was dissolved at an unspecified time prior to the filing of this action. See Comp ¶¶ 14-15.
Carstens brought this action in Michigan state court on June 16, 2009. PBGC was served
on June 22 and timely filed a notice of removal to this court on July 20, 2009 pursuant to 28 U.S.C.
§ 1441, attaching a letter wherein co-defendant State of Michigan gives its consent to the removal.
See Notice of Removal Ex 1 (complaint), Ex 2 (summons). The removal was authorized by 29
U.S.C. § 1303(f)(7). See Koken v. PBGC, 383 F. Supp.2d 712, 717 (E.D. Pa.) (Robreno, J.), recon.
denied, 381 F. Supp.2d 437 (E.D. Pa. 2005).
-2- On Tuesday, July 28, 2009, the PBGC filed a FED. R. CIV. P. 12(b)(3) motion to dismiss the
complaint without prejudice for lack of venue or, in the alternative, to transfer the case to a district
where proper venue exists. After being served with these non-dispositive motions,1 Carsten had 14
days to file a response. See W.D. MICH. LCIVR 7.3(c). The period began on Wednesday, July 28,
the day after the PBGC electronically filed the motion. See FED. R. CIV. P. 6 (when calculating a
time period, it does not start until the day after the event which triggers the right or duty). The
fourteenth day was Tuesday, August 11, so Carstens had to e-file any opposition by midnight on that
date. See FED. R. CIV. P. 6 (when calculating a period longer than ten days, court includes weekends
and federal holidays). Carstens did not file an opposition brief by the deadline, nor has he sought
an extension of time. Accordingly, the court proceeds to consider the PBGC’s motions without
waiting further for an untimely response from Carstens.
When an ERISA plan is adversely affected by the PBGC’s actions, title 29 U.S.C. § 1303(f)
W.D. MICH. LCIVR 7.2(a) lists motions are considered dispositive, and the only type of motion to dismiss listed is a motion to dismiss for failure to state a claim on which relief can be granted. W.D. MICH. LCIVR 7.3(a) provides that any motion not listed in Rule 7.2 is non- dispositive. Therefore, the motion to dismiss without prejudice for lack of venue is non-dispositive.
Under these local rules, the motion to transfer venue is also a nondispositive motion. Other courts have reached this conclusion without reference to comparable rules. Accord Consolidated Coal Co. v. Marion Docks, Inc., 2009 WL 2031774, *2 n.1 (W.D. Pa. July 10, 2009) (McVerry, J.) (“[A] motion to transfer venue is not a dispositive motion . . . .”);
Benjamin v. Exxon Mobil Corp., 2009 WL 1918370, *2 (D.V.I. July 2, 2009) (same);
Siteworks Solutions, LLC v. Oracle Corp., 2008 WL 4415075, *1 n.1 (W.D. Tenn. Sept. 22, 2008) (Pham, M.J.) (citing, i.a., Cain v. MDOC, 2007 WL 1647883 (E.D. Mich. June 5, 2007));
Cf. Harris v. Edward Hyman Co., 664 F.2d 943, 945 n.7 (5th Cir. 1981) (acknowledging that motion to remand case to state court could be referred by district judge to magistrate judge under 28 U.S.C. § 636(b)(1)(A), which authorizes outright ruling on nondispositive matters, rather than 28 U.S.C. § 636(b)(1)(B), which authorizes reports and recommendations on dispositive matters).
-3- authorizes an employer or contributing sponsor to bring a civil action against the PBGC for
appropriate equitable relief. See A-T-O, Inc. v. Pension Ben. Guar. Corp., 634 F.2d 1013, 1020
n.10 (6th Cir. 1980) (citing 29 U.S.C. § 1303(f) ). Title 29 U.S.C. § 1303(f)(1) then provides that it
“shall be the exclusive means for bringing actions against [the PBGC] under this title, including
actions against [the PBGC] in its capacity as a trustee under [29 U.S.C. § 1342 or 29 U.S.C. §
1349].” See Ass’n of Flight Attendants, CWA, AFL-CIO v. PBGC, 372 F. Supp.2d 91, 97 (D.D.C.
2005).
Venue for an action brought pursuant to 29 U.S.C. § 1303(f), such as this one, lies only in
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UNITED STATES DISTRICT COURT WESTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION
________________________________________________ | | DONALD D. CARSTENS, | Case No. 1:09-cv-664 | Plaintiff, | | HONORABLE PAUL L. MALONEY v. | | MICHIGAN DEPARTMENT OF TREASURY and | PENSION BENEFIT GUARANTY CORPORATION, | | Defendants. | | ________________________________________________
OPINION and ORDER
Granting the Defendant’s Motion for Transfer of Venue; Terminating and Closing the Case
According to plaintiff Donald D. Carstens (“Carstens”), a Michigan corporation called Union
Steel Products, Inc. (“Union Steel”) established the Union Steel Products, Inc., Union Employees
Pension Plan (“the plan”) in 1971, and in 1987 the plan purchases a single-premium group annuity
contract from Principal Mutual Life Insurance Company (“Principal Mutual”) for the purpose of
providing retirement payments to plan participants. See Complaint filed June 16, 2009 in the Circuit
Court of Ingham County, Michigan (“Comp”) ¶¶ 1 and 8-9.
Defendant Pension Benefit Guaranty Corporation (“PBGC”) is a federal agency and
federally-owned corporation which administers the defined-benefit pension plan termination
insurance program under Title IV of the Employee Retirement Income Security Act of 1974, 29
U.S.C. § 1301 et seq., as amended (“ERISA”). When an underfunded pension plan covered by ERISA Title IV terminates, the PBGC generally becomes the plan’s trustee and pays the plan’s
unfunded benefits with its insurance funds. See 29 U.S.C. § 1322 and 29 C.F.R. § 4044.3(a).
Pursuant to a written agreement between the PBGC and the Union Steel Plan, the Plan terminated
on December 31, 1995 and the PBGC became its statutory trustee in September 1999. See Comp
¶ 10 and Ex A (Agreement for Appointment of Trustee & Termination of Plan); accord MTD at 2.
Principal Mutual became a publicly-held company in October 2001, and in conjunction with
that change, compensation in the form of 5,985 shares of stock in, was credited to the plan (“the
Compensation”). See Comp 11 and Ex C.
Again according to Carstens, in October 2004 defendant PBGC executed a document
releasing him, Union Steel, and other parties from any and all claims it had or may have with regard
to the plan. See Comp ¶ 12 and Ex B.
On an unspecified date, the Compensation (5,985 shares in the Principal Financial Group)
escheated to the State of Michigan as unclaimed property. See Comp ¶ 13; accord MTD at 2. As
trustee of the plan, the PBGC has asserted a claim to the Compensation, but Carstens contends that
the Compensation should be paid to him as the sole remaining shareholder of Union Steel, which
was dissolved at an unspecified time prior to the filing of this action. See Comp ¶¶ 14-15.
Carstens brought this action in Michigan state court on June 16, 2009. PBGC was served
on June 22 and timely filed a notice of removal to this court on July 20, 2009 pursuant to 28 U.S.C.
§ 1441, attaching a letter wherein co-defendant State of Michigan gives its consent to the removal.
See Notice of Removal Ex 1 (complaint), Ex 2 (summons). The removal was authorized by 29
U.S.C. § 1303(f)(7). See Koken v. PBGC, 383 F. Supp.2d 712, 717 (E.D. Pa.) (Robreno, J.), recon.
denied, 381 F. Supp.2d 437 (E.D. Pa. 2005).
-2- On Tuesday, July 28, 2009, the PBGC filed a FED. R. CIV. P. 12(b)(3) motion to dismiss the
complaint without prejudice for lack of venue or, in the alternative, to transfer the case to a district
where proper venue exists. After being served with these non-dispositive motions,1 Carsten had 14
days to file a response. See W.D. MICH. LCIVR 7.3(c). The period began on Wednesday, July 28,
the day after the PBGC electronically filed the motion. See FED. R. CIV. P. 6 (when calculating a
time period, it does not start until the day after the event which triggers the right or duty). The
fourteenth day was Tuesday, August 11, so Carstens had to e-file any opposition by midnight on that
date. See FED. R. CIV. P. 6 (when calculating a period longer than ten days, court includes weekends
and federal holidays). Carstens did not file an opposition brief by the deadline, nor has he sought
an extension of time. Accordingly, the court proceeds to consider the PBGC’s motions without
waiting further for an untimely response from Carstens.
When an ERISA plan is adversely affected by the PBGC’s actions, title 29 U.S.C. § 1303(f)
W.D. MICH. LCIVR 7.2(a) lists motions are considered dispositive, and the only type of motion to dismiss listed is a motion to dismiss for failure to state a claim on which relief can be granted. W.D. MICH. LCIVR 7.3(a) provides that any motion not listed in Rule 7.2 is non- dispositive. Therefore, the motion to dismiss without prejudice for lack of venue is non-dispositive.
Under these local rules, the motion to transfer venue is also a nondispositive motion. Other courts have reached this conclusion without reference to comparable rules. Accord Consolidated Coal Co. v. Marion Docks, Inc., 2009 WL 2031774, *2 n.1 (W.D. Pa. July 10, 2009) (McVerry, J.) (“[A] motion to transfer venue is not a dispositive motion . . . .”);
Benjamin v. Exxon Mobil Corp., 2009 WL 1918370, *2 (D.V.I. July 2, 2009) (same);
Siteworks Solutions, LLC v. Oracle Corp., 2008 WL 4415075, *1 n.1 (W.D. Tenn. Sept. 22, 2008) (Pham, M.J.) (citing, i.a., Cain v. MDOC, 2007 WL 1647883 (E.D. Mich. June 5, 2007));
Cf. Harris v. Edward Hyman Co., 664 F.2d 943, 945 n.7 (5th Cir. 1981) (acknowledging that motion to remand case to state court could be referred by district judge to magistrate judge under 28 U.S.C. § 636(b)(1)(A), which authorizes outright ruling on nondispositive matters, rather than 28 U.S.C. § 636(b)(1)(B), which authorizes reports and recommendations on dispositive matters).
-3- authorizes an employer or contributing sponsor to bring a civil action against the PBGC for
appropriate equitable relief. See A-T-O, Inc. v. Pension Ben. Guar. Corp., 634 F.2d 1013, 1020
n.10 (6th Cir. 1980) (citing 29 U.S.C. § 1303(f) ). Title 29 U.S.C. § 1303(f)(1) then provides that it
“shall be the exclusive means for bringing actions against [the PBGC] under this title, including
actions against [the PBGC] in its capacity as a trustee under [29 U.S.C. § 1342 or 29 U.S.C. §
1349].” See Ass’n of Flight Attendants, CWA, AFL-CIO v. PBGC, 372 F. Supp.2d 91, 97 (D.D.C.
2005).
Venue for an action brought pursuant to 29 U.S.C. § 1303(f), such as this one, lies only in
these three federal judicial districts: (1) the district where plan-termination proceedings are pending,
or (2) the district where the plan has its principal office, or (3) the District of Columbia. See 29
U.S.C. § 1303(f)(2). There are no plan-termination proceedings pending with regard to the Union
Steel Plan, because termination occurred in 1995 and the PBGC became statutory trustee of the Plan
in 1999, so the first venue option is not available. The second venue option is not available either,
because the plan was long ago terminated and no longer has a “principal office.”
“Defendants argue, and the Court agrees, that where there are no current proceedings under
§§ 1341 or 1342, and the plan’s principal office has closed, the statute compels venue in the District
of Columbia.” United Steel, Paper, Forestry, Rubber, Mfg., Energy, Allied Indus. & Serv. Workers
Int’l Union, AFL-CIO-CLC v. Pension Ben. Guar. Corp., 602 F. Supp.2d 1115, 1119 (D. Minn.
2009) (James Rosenbaum, J.); see also Stephens v. US Airways Group, No. 4:2000-cv-144, slip op.
at 4 (N.D. Ohio June 28, 2007) (Dan Polster, J.) (not in F. Supp.2d or on WestLaw) (same).
The court has discretion to dismiss Carstens’ action without prejudice for lack of venue, or
-4- to transfer it to a federal district where he could have brought the action. See Kerobo v.
Southwestern Clean Fuels Corp., 285 F.3d 531, 533 (6th Cir. 2002) (“We review for abuse of
discretion a district court’s decision whether to dismiss or transfer a complaint for improper venue.”)
(citing First of Michigan Corp. v. Bramlet, 141 F.3d 260, 262 (6th Cir. 1998)); see, e.g., Miles v.
WTMX Radio, 15 F. App’x 213 (6th Cir. 2001) (Martin, Nelson, S.D. Ohio D.J. Rice) (district court
did not abuse discretion by dismiss complaint without prejudice for lack of venue rather than
transferring case to a proper venue).
“Generally, transfer is favored over a dismissal because a transfer facilitates the adjudication
of a dispute on the merits.” LGT Enters., LLC v. Hoffman, 614 F. Supp.2d 825, 842 (W.D. Mich.
2009) (Paul L. Maloney, C.J.) (citing Roberts v. Paulin, 2007 WL 3203969, *7 (E.D. Mich. Oct. 31,
2007) (citing Goldlawr, Inc. v. Heiman, 369 U.S. 463, 466-67 (1962))). “Unless there is evidence
that the plaintiff brought the case in this district [in the absence of personal jurisdiction or venue]
in bad faith or to harass the defendant, the interest of justice generally requires a transfer rather than
dismissal.” LGT, 614 F. Supp.2d at 842 (citing Roberts, 2007 WL 3203969 at *7 (citation omitted)).
The court determines that the most efficient and just course of action is to transfer this action to the
United States District Court for the District of Columbia.
-5- ORDER
Defendants’ motion to dismiss without prejudice due to improper venue, or in the alternative
for transfer of venue [#5] is GRANTED in part & DENIED without prejudice as moot in part.
Pursuant to 28 U.S.C. § 1406(a) and 28 U.S.C. § 1631, this case is TRANSFERRED to the
This is not a final order. “It is settled that an order granting a transfer or denying a transfer
is interlocutory and not appealable.” Dearth v. Mukasey, 516 F.3d 413, 416 (6th Cir. 2008)
(Suhrheinrich, Rogers, Chief D.J. Bell) (citing Lemon v. Druffel, 253 F.2d 680, 683 (6th Cir. 1958)).
IT IS SO ORDERED on this 18th day of August 2009.
/s/ Paul L. Maloney Honorable Paul L. Maloney Chief United States District Judge
-6-