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TRUSTEES OF THE HOTEL EMPLES. & RESTAURANT EMPLES.

February 15, 1990

TRUSTEES OF THE HOTEL EMPLOYEES AND RESTAURANT EMPLOYEES INTERNATIONAL UNION WELFARE PENSION FUND, THE OFFICERS AND EMPLOYEES OF THE LOCALS OF THE HOTEL EMPLOYEES AND RESTAURANT EMPLOYEES INTERNATIONAL UNION PENSION FUND and THE HOTEL EMPLOYEES AND RESTAURANT EMPLOYEES INTERNATIONAL UNION OFFICERS AND STAFF PLAN, Plaintiffs,
v.
AMIVEST CORPORATION, a New York corporation, Defendant



The opinion of the court was delivered by: ASPEN

 MARVIN E. ASPEN, UNITED STATES DISTRICT JUDGE

 The plaintiffs in this case are the trustees of three pension funds of the Hotel Employees and Restaurant Employees International Union ("HERIU"). The defendant, Amivest Corporation, is the former investment manager of these funds. The Trustees claim that Amivest violated the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1100 et seq. and the Rule 10b-5 of the Securities Exchange Act of 1934. The Trustees also seek recovery under various common law tort theories. Amivest has moved to dismiss the claim for lack of jurisdiction or, in the alternative, to transfer the case to the Southern District of New York. For the reasons given below, we grant the motion to dismiss in part, and deny the motion to transfer.

 BACKGROUND

 Amivest began its association with the HERIU when it became the investment manager and investment advisor of the HERIU Welfare Pension Fund ("Welfare Fund"). This fund is the largest of the three funds represented in this suit. The HERIU Officers and Employees Pension Fund ("Employee Fund") and the HERIU Officers and Staff Pension Fund ("Staff Fund") soon followed suit and began to use Amivest as an investment manager and advisor.

 Amivest invested in several mutual funds on behalf of the three HERIU pension funds. Some of these mutual funds paid Amivest substantial commissions for the investments it made on behalf of the pension funds. According to the Trustees, Amivest concealed these commissions and retained these fees despite the fact that it was already receiving a substantial fee directly from the pension funds. In August of 1986, the Trustees discovered this practice and terminated their relationship with Amivest.

 The Trustees claim that they are entitled to recovery on a number of theories. The Trustees' primary claim is that Amivest breached a fiduciary duty it owed to the funds under §§ 1104 and 1106 of ERISA. The Trustees also contend that Amivest's practice of retaining and concealing commissions entitles them to damages under § 10 (b) and Rule 10b-5 of the Securities and Exchange Act of 1934. Finally, the Trustees seek recovery under the common law theories of conversion, fraud and deceit, and breach of fiduciary duty. In addition to compensatory relief, the Trustees seek exemplary damages and an accounting.

 DISCUSSION

 A. Motion to Transfer

 Amivest moves to transfer this action to the Southern District of New York on two grounds. First, it argues that venue in this district is improper under the ERISA venue provision, 29 U.S.C. § 1132 (e)(2). Second, Amivest maintains that transfer is appropriate under 28 U.S.C. § 1404(a) because the Southern District of New York is a more convenient forum. However, we find that this district is an appropriate venue for the Trustees' claim.

 The ERISA venue provision upon which Amivest relies provides that venue is appropriate where the plan is administered, where the breach took place, or where the defendant resides or may be found. 29 U.S.C. § 1132(e). Amivest contends that New York is the only appropriate venue under the three criteria of this provision. First, it argues that because one of the funds is administered in Washington D.C., venue is not proper on the basis that this is the place where "the plan is administered." Second, it maintains that the breach "clearly" took place in New York. Finally, it notes that venue would be appropriate in New York because this is the residence of the defendant or where the defendant may be found.

 In addition to the ERISA venue provision, Amivest also relies on the language of 28 U.S.C. § 1404(a) to support its motion. According to Amivest, considerations of convenience and justice compel transfer to the Southern District of New York. It points to the fact that its principal place of business is in New York, as well as various witnesses and documentary evidence.

 We undertake our consideration of Amivest's motion against a backdrop of judicial and congressional deference to an ERISA plaintiff's choice of forum. The ERISA venue provision is to be liberally interpreted; Congress intended to expand, rather than restrict, the ERISA plaintiff's choice of forum. Varsic v. U.S. Dist. Ct. for Cent Dist. etc., 607 F.2d 245, 247 (9th Cir. 1979); Trustees v. Best Automatic Fire Protection, Inc., 578 F. Supp. 94, 95 (D.Md. 1983). A district court considering a motion to transfer an ERISA case should be sensitive to the congressional intent to protect the financial integrity of employee benefit plans and the well being of participants and beneficiaries. Dugan v. M.W. Dozing, 727 F. Supp. 417, 419 (1989); Varsic, 607 F.2d at 247. Unless it is clearly outweighed by other factors, the Trustees' choice of forum is entitled to deference. Dugan, 727 F. Supp. at 419 (citations omitted).

 Although Amivest contends that venue is inappropriate under each of the criteria set forth in § 1132(e), any of these criteria could support venue in this district. First, two of the three pension funds are administered in this district. While the third fund is administered in Washington D.C., the personnel and administration of this fund overlaps with the management of the Funds administered in Illinois, where most of the administrators and trustees reside. Moreover, the Washington fund is the smallest of the three funds. Therefore, for all practical purposes, this district is the district where the funds are administered. See Trustees v. Best Automatic Fire Protection, Inc., 578 F.Supp. at 95 (Venue was proper where the funds which were at the center of the controversy were located in the district). The second prong of § 1132(e), the district where the breach took place, also weighs against Amivest's motion. Amivest mailed monthly reports into Illinois and attended Trustees' meetings in this state. Courts have held that, under Illinois law, such activities can constitute the commission of an act in Illinois even though the defendant is not physically present. See e.g., Club Assistance Program, Inc. v. Zukerman, 594 F. Supp. 341 (N.D.Ill. 1984). Finally, venue is appropriate in this district because Amivest can be "found" in Illinois. For purposes of § 1132(e), an ERISA defendant can be found in any district that can appropriately assert personal jurisdiction. Varsic, 607 F.2d at 247. This Court has personal jurisdiction over Amivest under the Due Process Clause. As noted above, Amivest attended Trustee meetings in Illinois and mailed reports to the Trustees in Illinois. If the allegations in the complaint are true, these actions were part of an ongoing fraud, and therefore directly related to this cause of action. Furthermore, Amivest must have had knowledge that it had an ongoing business relationship with Illinois entities, in which it operated in a fiduciary capacity. In other words, the relationship between this cause of ...


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