Fanning v. Trotter Site Preparation, LLC

• Court: District Court, District of Columbia
• Decided: November 9, 2009
• Docket: Civil Action No. 2009-1118
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

______________________________ ) MICHAEL FANNING, ) ) Plaintiff, ) ) v. ) Civil Action No. 09-1118 (RWR) ) TROTTER SITE PREPARATION, ) LLC, ) ) Defendant. ) ______________________________)

MEMORANDUM OPINION AND ORDER

Plaintiff Michael Fanning, the Chief Executive Officer of

the Central Pension Fund of the International Union of Operating

Engineers and Participating Employers (“the Fund”), brings claims

against defendant Trotter Site Preparation (“Trotter”), alleging

that Trotter has failed to remit contractually required

contributions to the Fund. The defendant has moved to transfer

venue to the United States District Court for the District of

South Carolina. Because the defendant has shown that a transfer

of venue is in the interest of justice, the defendant’s motion

will be granted.

BACKGROUND

Trotter is a South Carolina corporation that employed

between six and ten employees at the Department of Energy’s

Savannah River Site in South Carolina to conduct site preparation

work. (Def.’s Mem. in Supp. of Mot. to Transfer (“Def.’s Mem.”), - 2 -

Ex. B ¶¶ 3, 5.) Trotter signed a collective bargaining agreement

with, among others, the International Union of Operating

Engineers Local No. 470, establishing the terms under which it

would employ its workers at the site. (Compl. ¶ 6). Trotter

agreed to remit regular payments for each hour worked by its

employees to the Fund, a multi-employer employee pension benefit

plan as defined by the Employee Retirement Income Security Act of

1974 (“ERISA”), 29 U.S.C. § 1001 et seq. (Compl. ¶¶ 1, 8.) The

Fund is established and maintained according to its Restated

Agreement and Declaration of Trust, which provides that the

Pension Fund is to be administered in Washington, D.C. and that

its terms are to be construed under the laws of the District of

Columbia. (Pl.’s Opp’n. Ex. 1A §§ 3.7, 9.1.)

Fanning alleges that Trotter failed to pay its full

contributions under the terms of the collective bargaining

agreement. (Compl. ¶ 10.) Trotter claims that the collective

bargaining agreement allowed it to employ up to four non-union

individuals as key employees for whom it did not have to make

fringe benefit contributions, such as contributions to the Fund.

(Def.’s Mem. at 3.) Other than the contributions for the key

employees, Trotter claims that it made all required payments to

the Fund. After the Fund’s auditors visited Trotter’s office in

South Carolina for an audit, the Fund sent Trotter a letter

demanding additional contributions to the Fund, liquidated - 3 -

damages, interest, and audit expenses. (Id. at 5.) Trotter did

not make the payments, and the Fund brought this suit. (Id.)

Trotter filed its own suit in the District of South Carolina

seeking, among other things, a declaratory judgment regarding its

rights and payment obligations under the collective bargaining

agreement, and indemnification from the Local and the key

employees. (Def.’s Reply at 9.) Trotter moves to transfer this

case to the United States District Court for the District of

South Carolina.

DISCUSSION

A case may be transferred to another venue under 28 U.S.C.

§ 1404(a) “[f]or the convenience of parties and witnesses, in the

interest of justice[.]” 28 U.S.C. § 1404(a). See also Piper

Aircraft Co. v. Reyno, 454 U.S. 235, 253 (1981). The moving

party carries the burden of showing that a transfer is

appropriate. Montgomery v. STG Int’l, Inc., 532 F. Supp. 2d 29,

32 (D.D.C. 2008); Onyeneho v. Allstate Ins. Co., 466 F. Supp. 2d

1, 3 (D.D.C. 2006). Because “‘it is perhaps impossible to

develop any fixed general rules on when cases should be

transferred[,]’ . . . the proper technique to be employed is a

factually analytical, case-by-case determination of convenience

and fairness.” SEC v. Savoy Indus. Inc., 587 F.2d 1149, 1154

(D.C. Cir. 1978) (quoting Starnes v. McGuire, 512 F.2d 918, 925

(D.C. Cir. 1974) (en banc)). - 4 -

“Any transfer under § 1404(a) is restricted to a venue where

the action ‘might have been brought.’” Robinson v. Eli Lilly

Co., 535 F. Supp. 2d 49, 51 (D.D.C. 2008) (quoting 28 U.S.C.

§ 1404(a)). When, as here, jurisdiction is based on a federal

question under ERISA, and an action is brought in a United States

District Court, “it may be brought in the district where the plan

is administered, where the breach took place, or where a

defendant resides or may be found[.]” 29 U.S.C. § 1132(e)(2).

The defendant is incorporated and resides in South Carolina, and

any breach occurred in South Carolina, since that is where

Trotter failed to make the payments Fanning alleges it owes under

the collective bargaining agreement. (See Def.’s Mem. at 4.)

Therefore, this action could have been brought in the potential

transferee district.

After determining that venue in the proposed transferee

district would be proper, a court then “must weigh in the balance

the convenience of the witnesses and those public-interest

factors of systemic integrity and fairness that, in addition to

[the] private concerns [of the parties], come under the heading

of ‘the interest of justice.’” Stewart Org. Inc. v. Ricoh Corp.,

487 U.S. 22, 30 (1988). The private factors to assess include

“1) the plaintiff’s choice of forum, 2) the defendant’s choice of

forum, 3) where the claim arose, 4) the convenience of the

parties, 5) the convenience of the witnesses, particularly if - 5 -

important witnesses may actually be unavailable to give live

trial testimony in one of the districts, and 6) the ease of

access to sources of proof.” Demery v. Montgomery County, Md.,

602 F. Supp. 2d 206, 210 (D.D.C. 2009). “Public interest factors

include 1) the local interest in making local decisions about

local controversies, 2) the potential transferee court’s

familiarity with applicable law, and 3) the congestion of the

transferee court compared to that of the transferor court.” Id.

I. PRIVATE INTERESTS

The plaintiff’s choice of forum is typically given special

weight in ERISA cases, particularly when, as here, the plan is

administered in the district in which the suit is filed. Flynn

v. Veazey Constr. Corp., 310 F. Supp. 2d 186, 193 (D.D.C. 2004);

Int’l Broth. of Painters and Allied Trades Union v. Rose Bros.

Home Decorating Center, Inc., Civil Action No. 91-1699 (GHR),

1992 WL 24036, at *2 (D.D.C. Jan. 14, 1992) (noting that “the

ERISA venue statute . . . evinces Congress’s intent to expand,

rather than restrict, the ERISA plaintiff’s choice of forum”)

(internal quotation marks omitted). However, deference to the

plaintiff’s choice of forum is not absolute, Gipson v. Wells

Fargo & Co., 563 F. Supp. 2d 149, 157 (D.D.C. 2008), and the

ERISA venue statute does not prohibit a transfer under 28 U.S.C.

§ 1404(a). Flynn v. Berich, 603 F. Supp. 2d 49, 50 (D.D.C.

2009); Rose Bros., 1992 WL 24036, at *2. - 6 -

The defendant has filed an action for a declaratory judgment

and indemnification in the District of South Carolina against the

plaintiffs, the Local, and the individuals designated as key

employees regarding the obligations to pay that plaintiff here

alleges the defendant violated. (Def.’s Reply at 9.) It would

be far more efficient to resolve all of these overlapping issues

in a single litigation. See Rose Bros., 1992 WL 24036, at *2

(finding that “[t]he availability of another forum in which [all]

issues could be tried in a single case” warranted transfer

because alternatively the “defendant. . . would be forced to

litigate issues of liability to the Pension Fund and

indemnification from the local in separate lawsuits in separate

fora, hundreds of miles apart, at great expense”). Because it

appears that the Local and the key employees do not have any

meaningful connection to the District of Columbia (Def.’s Reply

at 9), there may not be personal jurisdiction over them here, see

Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72 (1985),

which may prevent Trotter from impleading them on indemnification

claims in this district. The potential transferee district,

however, appears to be a venue in which the district court would

have personal jurisdiction over the Local and the key employees,

in addition to the Fund and Trotter, enabling resolution of all

of the issues relating to the obligation to contribute to the

pension plan in a single litigation in that district. Cf. Bakery - 7 -

& Confectionery Union and Indus. Int’l Pension Fund v. Ralph’s

Grocery Co., 118 F.3d 1018, 1021 (4th Cir. 1997) (observing that

“[b]efore section 515 was enacted, collection actions . . . often

were complicated by issues that had arisen between the employer

and the local union but were unrelated to the employer’s

obligation to the plan”) (emphasis added). That Trotter has

actually filed a claim in the District of South Carolina makes

this concern more salient than in a situation where additional

related claims in other courts are no more than hypothetical.

Transferring the case should reduce the costs the Fund may

otherwise incur if the litigation were split between the venues,

and should promote the special ERISA venue provision’s goal of

making “collection efforts efficient, economical, and inexpensive

for ERISA funds[.]” Flynn, 310 F. Supp. 2d at 193 (noting

“Congress’s intent to protect the financial integrity of such

funds”).

Regarding the other private factors, although the fund is

administered in the District of Columbia, the claim arose out of

a dispute about the interpretation of a South Carolina collective

bargaining agreement. (See Compl. ¶¶ 8-10; Def.’s Mem., Ex. A at

1.) Agreement terms reached in South Carolina, as well as the

adequacy of Trotter’s payments regarding its key employees in

South Carolina, will be focal points of the ongoing litigation.

(Def.’s Reply at 2-3.) All seventeen witnesses the defendant has - 8 -

identified reside in South Carolina (Def.’s Reply at 6), while

only three witnesses the plaintiff has identified reside in

Washington, D.C. (Pl.’s Opp. at 6.) While merely showing that a

transfer would “shift the balance of inconvenience from Defendant

to Plaintiff” is not sufficient to warrant a transfer, Int’l

Painters and Allied Trades Indus. Pension Fund v. Tri-State

Interiors, Inc., 357 F. Supp. 2d 54, 58 (D.D.C. 2004), selecting

a forum where both the plaintiff can call its witnesses and the

defendant can bring claims against parties from whom it seeks

relief is no mere shift of inconvenience. It is true that there

are relevant documents, such as Trotter’s monthly contribution

reports and the audit findings, in Washington, D.C. (id. at 5;

Pl.’s Supp’l Opp. at 1), but there are also relevant documents,

such as the key employees’ payroll records, located in South

Carolina. (Def.’s Mem. at 12.) The location of documents favors

neither party, but the balance of the other private factors

weighs in favor of transfer.

II. PUBLIC INTERESTS

South Carolina has a strong interest in making decisions

about what is, at bottom, a South Carolina dispute over the

interpretation of a South Carolina contract involving the payment

of South Carolina employees. The plaintiff claims, though, that

transferring the case would frustrate its interest in the uniform

interpretation of the Fund’s Trust Agreement. (See Pl.’s Opp. at - 9 -

11-12.) Because Trotter agrees that it would owe contributions

to the pension fund for its key employees but for their status

under the collective bargaining agreement (Def.’s Mem. at 4), the

dispute does not turn on an interpretation of the trust

agreement. Transferring the case to South Carolina, therefore,

would have no detrimental effect on the uniform interpretation of

the plan’s terms because the inquiry under § 515 will focus on

the meaning of the collective bargaining agreement to determine

if Trotter made contributions “in accordance with the terms and

conditions of . . . such [an] agreement.” 29 U.S.C. § 1145.

Indeed, South Carolina law likely will govern the interpretation

of the collective bargaining agreement, and the District Court

for the District of South Carolina would likely bring to the

litigation far more familiarity with South Carolina law than

would the District Court for the District of Columbia. Cf.

Demery, 602 F. Supp. 2d at 211 (noting that both the potential

transferee and transferor courts were “presumed to be equally

familiar” with federal law).

Finally, the District of Columbia has a slightly longer

median time from filing to disposition for civil cases than the

District of South Carolina has (Def.’s Mem. Ex. C at 2-31), and

the District of South Carolina has a higher number of pending

1 Defendant’s exhibit is unpaginated. Pagination, therefore, has been supplied by the Court. - 10 -

cases per judge than does the District of Columbia. (Id.)

However, even if the District of South Carolina is relatively

more congested than the District of Columbia is, transfer will

conserve overall federal judicial resources that would otherwise

be expended if the parties litigated two simultaneous actions

instead of just one. On balance, the public interests tilt in

favor of transfer.

CONCLUSION AND ORDER

Although the plaintiff’s choice of forum is due particular

deference in an ERISA action, the defendant has carried its

burden of demonstrating that the private and public interests

weigh in favor of transfer. Accordingly, it is hereby

ORDERED that the defendant’s motion [7] to transfer be, and

hereby is, GRANTED. The Clerk’s Office is DIRECTED to transfer

the case to the United States District Court for the District of

SIGNED this 9th day of November, 2009.

_________/s/________________ RICHARD W. ROBERTS United States District Judge