The opinion of the court was delivered by: Bua, District Judge.
Before the Court is the defendants' Motion to Dismiss or
Transfer the instant lawsuit based on improper venue. For the
reasons stated herein, the Motion to Dismiss is denied and the
Motion to Transfer is granted.
Plaintiff Follett is a corporation with its headquarters in
Chicago, Illinois. The defendants were employees of the
plaintiff. Anthony "Tony" Fernandez was plaintiff's midwest
regional manager and maintained an office in Champaign, Illinois.
Steven Fernandez was manager of plaintiff's three bookstores in
West Lafayette, Indiana, while Brian Fernandez was plaintiff's
general merchandise coordinator for the midwest region with his
office in Champaign, Illinois.
Follett brought Count I of the instant suit in this district
under Title IX of the Organized Crime Control Act of 1970,
18 U.S.C. § 1961-68 (The Racketeer Influenced and Corrupt
Organizations Act (the "RICO Act")). In Counts II through V,
respectively, Follett sues for conversion, seeks an accounting,
alleges a breach of fiduciary duty, and seeks a decree of
formation of a constructive trust. Follett contends that the
Fernandezes used their combined control over Follett's midwest
region bookstores to falsify accounting procedures and reports
for store operations, manipulate and misrepresent store
inventory, use Follett's assets for the defendants' personal
expenses and benefit, and conceal the above conduct from Follett.
Follett argues that the RICO Act claim arose within this
district as this was where false and misleading documents were
received through the mail and where telephone calls were received
from the defendants as part of an alleged conspiracy and scheme
to defraud Follett. Venue under the RICO Act is controlled by
18 U.S.C. § 1965(a), which states:
Any civil action or proceeding under this chapter
[18 U.S.C. § 1961-68] against any person may be
instituted in the district court of the United States
for any district in which such person resides, is
found, has an agent, or transacts his affairs.
The defendants state that venue for Follett's RICO Act claim is
improper in this district under 18 U.S.C. § 1965(a) and therefore
that plaintiff's action should be dismissed. Alternatively, the
defendants state that venue should be transferred to the Central
District of Illinois for the convenience of the parties and
witnesses and in the interest of justice pursuant to 28 U.S.C. § 1404(a).
Generally, in a RICO Act claim a "weight of the contacts" test
is applied to determine proper venue under 18 U.S.C. § 1965(a).
Farmers Bank of State of Del. v. Bell Mortg. Corp., 452 F. Supp. 1278
(D.C.Del. 1978). To meet this test for venue, the plaintiff
must show that there is venue over the defendant due to the
latter's contacts with the forum district. Id. at 1281.
The defendants argue that their only contacts with this
district which relate to the subject matter of Follett's suit
were the mailing of documents and the making of telephone calls
to persons within this district. Based on a review of the
complaint and related memoranda from the parties, this Court
As shown by the complaint, it is clear that virtually all of
the alleged activities concerning Follett's cause of action took
place in either Champaign or West Lafayette. The defendants' only
contacts with this district were minimal and involved document
mailings and telephone calls originating from outside of this
Follett argues that the "weight of the contracts" rule
recognizes that venue lies, and a claim arises, in any district
where contacts are "more than miniscule."*fn1 Follett contends that
the defendants came into this district to transact their affairs.
Follett states ...