United States District Court, Southern District of Illinois
March 30, 2001
JOHN A. WAELTZ AND HERBERT A. JOHNSON, JR., PLAINTIFFS,
THE DELTA PILOTS RETIREMENT PLAN, DEFENDANT.
The opinion of the court was delivered by: Reagan, District Judge.
MEMORANDUM AND ORDER
On February 9, 2001, John Waeltz and Herbert Johnson, Jr.
filed a putative class action suit in this Court against the
Delta Pilots Retirement Plan, a defined benefit plan under the
Employee Retirement Income Security Act of 1974 or "ERISA,"
29 U.S.C. § 1001, et seq.*fn1
Waeltz, a retired Delta pilot who (until recently) resided in
Belleville, Illinois, and Johnson, an active Delta pilot who
resides in O'Fallon, Illinois, allege that the Delta Pilots
Retirement Plan uses a method for calculating lump sum
distributions which results in Plan participants receiving less
than the total accrued benefits to which they are
entitled.*fn2 Moreover, Waeltz and Johnson claim that the
Plan's computation of lump sum distributions violates ERISA, the
Internal Revenue Code, and regulations issued by the Department
of the Treasury.
Approximately 9,500 active Delta pilots and 2,740 retired
Delta pilots participate in the Plan (see Piper Affidavit,
Exh. 7 to Doc. 11). Waeltz and Johnson ("Plaintiffs") seek to
represent two classes of Plan participants: (1) those who have
received, or will have the right to receive, a
lump sum distribution from the Plan; and (2) those who accrued
benefits under the "Minimum Benefit" formula used by the Plan
but did not receive the full value of the Minimum Benefit at
retirement. Each of the two proposed classes contains thousands
of Plan participants.
The Court has granted extensions of the briefing deadlines on
Plaintiffs' motion for class certification. Now before the
Court, fully briefed, is the Plan's February 22, 2001 motion to
transfer venue (Doc. 4).
In their complaint, Plaintiffs assert that venue is proper in
the Southern District of Illinois under 29 U.S.C. § 1132(e)(2),
"in that the Plan may be found here." This assertion lies at the
heart of the dispute presented to the Court in numerous
pleadings (memoranda, affidavits, exhibits, and related
documents) and further advanced through oral arguments at a
hearing conducted on March 29, 2001. Having taken the motion
under advisement at the conclusion of the hearing, and having
carefully reviewed the voluminous record before it, the Court
now rules as follows.
II. Analysis of Motion to Transfer
The ERISA venue provision, 29 U.S.C. § 1132(e)(2), states:
Where an action under this subchapter is brought in a
district court of the United States, 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. . . .
As mentioned above, Plaintiffs' complaint asserts that venue is
proper here, because the Plan "may be found" in the Southern
District of Illinois (Complaint, Doc. 1, p. 1, ¶ 5). More
specifically, Plaintiffs contend that the Plan may be found
here, because (a) this Court has personal jurisdiction over the
Plan, and (b) several Plan participants reside here (see Doc.
12, pp. 5-6).
The Plan contends that venue is not proper here, that this
lawsuit has no connection whatsoever with the Southern District
of Illinois, and that this Court should dismiss this case or
transfer it to the United States District Court for the Northern
District of Georgia (Atlanta Division). For the reasons stated
below, on the specific facts of the ERISA case before it, the
Court finds that venue is not proper in this Judicial District
under § 1132(e)(2).
The Southern District of Illinois is not the district where
the Plan is administered. The Plan is administered in Atlanta,
Georgia. The Southern District of Illinois is not the district
where the alleged breach took place. The Plan calculates all
benefits, communicates with all Plan participants, and
authorizes payment of all benefits in Atlanta, Georgia.
Obviously, the Plan does not "reside" here.
Nor is the Court persuaded that the Plan "may be found" in the
Southern District of Illinois. Plaintiffs first argue that venue
exists here, because the Court has personal jurisdiction over
the Plan (see Doc. 12, pp. 3-4). For this argument, Plaintiffs
rely on Board of Trustees, Sheet Metal Workers' National
Pension Fund v. Elite Erectors, Inc., 212 F.3d 1031, 1037 (7th
Cir. 2000). Elite Erectors did not hold that § 1132(e)(2)
provides for nationwide venue in an ERISA case. Rather, Elite
Erectors focused on personal jurisdiction and ERISA's
nationwide service-of-process provision.
In Elite Erectors, the plaintiffs filed suit and obtained a
default judgment against two defendants in the United States
District Court for the Eastern District of Virginia. After
registering the judgment in the United States District Court for
the Southern District of Indiana, the plaintiffs initiated
collection proceedings. The defendants then moved the Indiana
federal court to declare the Virginia judgment void on the
ground that the Eastern District of Virginia lacked personal
jurisdiction over the defendants.
The Seventh Circuit concluded that the Virginia District Court
had personal jurisdiction, so the Indiana district court must
enforce the judgment. In the context of discussing personal
jurisdiction, Judge Easterbrook distinguished limitations on
state sovereignty from concerns about litigant convenience. He
held that the service-of-process component of § 1132(e)(2)
"comports with the Constitution." Id., 212 F.3d at 1037. The
Seventh Circuit did not directly address the venue provision
of § 1132(e)(2), so that case does not stand for the proposition
urged by Plaintiffs here.
Plaintiffs next argue that the Plan "may be found" in this
District, because several Plan participants reside here. To
support this proposition, Plaintiffs cite District Court
decisions, such as Doe v. Connors, 796 F. Supp. 214 (W.D.Va.
1992), Foster G. McGaw Hospital v. Pension Trust District # 9,
1992 WL 309571 (N.D.Ill. 1992), and Wallace v. American
Petrofina, Inc., 659 F. Supp. 829, 831 (E.D.Tex. 1987).
Contrary to the suggestion made in Plaintiffs' parenthetical
description of Connors, that case did not hold that an ERISA
"plan `may be found' where one or more of its participants is
located" (Doc. 12, p. 5). Connors was a class action suit
filed by beneficiaries of two coal mine worker trusts. The
Western District of Virginia concluded that "a substantial
contacts test is proper to determine venue" and rejected a
defendant's argument that no "substantial nexus" existed between
the beneficiaries and the forum. The Court emphasized that 9,000
plan beneficiaries lived in the forum state. Id., 796 F. Supp.
at 222. No such nexus has been demonstrated between this
District and the Plan participants in the case sub judice.
McGaw Hospital, an unpublished decision from the Northern
District of Illinois, did involve the ERISA venue provision, but
the Court found venue to exist under the second prong of §
1132(e)(2), which allows venue where the breach occurred.
Indeed, the Court broadly hinted that venue did not lie under
the "resides or may be found" prong of § 1132(e)(2).
This Court recognizes that plaintiffs need to satisfy
just one of the ERISA venue provisions articulated in
§ 1132(e)(2). . . . Welfare Trust presents convincing
arguments as to why the Northern District of
Illinois does not qualify as a proper forum under the
first and third options articulated in § 1132(e)(2).
We need not address these arguments, however, because
we conclude that the Hospitals satisfy the second
forum option under § 1132(e)(2), which provides for
proper venue in the "district where the breach took
Id., 1992 WL 309571 at *2-*3 (emph. added).
In Wallace, the Eastern District of Texas held that an ERISA
plan could "be found" in that Judicial District. But the
Wallace plaintiff/participant was employed in the Eastern
District and received his pension checks in the Eastern District
of Texas. Id., 659 F. Supp. at 832. That cannot be said of the
Plaintiffs in the case before this Court, who did not work in
the Southern District of Illinois, did not earn pension credits
in the Southern District of Illinois, and did not receive
pension checks in the Southern District of Illinois.
In the case at bar, the record discloses that of the 2,740
retired Delta pilots, only two reside in the Southern District
of Illinois (see Piper Affidavit, p. 8). As to the two named
Plaintiffs herein (one retired, one active), the record does not
even clearly establish that they both reside within this
District. The complaint states that John Waeltz lives in
Belleville, Illinois, within this Judicial District. But Waeltz,
who retired from Delta in August 1997, recently moved to the
State of Florida.
He never received a single benefit check in the State of
Illinois. He receives his benefits in University Park, Florida.
The record before this Court indicates that no benefits were
ever paid in this District.
Herbert Johnson, Jr. resides within this Judicial District,
but he is actively employed by Delta as an MD88 Captain based in
Atlanta, Georgia (see Piper Affidavit, p. 8). Since he is not
yet retired, he has never received a single pension check in
this Judicial District.
Neither Waeltz nor Johnson (nor any other putative class
member) worked or performed any employment-related duties in the
Southern District of Illinois. Clearly, the largest number of
retired Delta pilots live in Georgia. 585 retired pilots reside
there. Another 499 retired pilots live in Florida (see Piper
Affidavit, p. 9). The Plan is administered in Atlanta, Georgia.
The documents related to administration of the Plan (including
the determination of lump sum distributions and other benefits)
are maintained in Atlanta, Georgia. Consultants from Northern
Trust Retirement Consulting, the independent actuaries who
assist the Plan in calculating lump sum payments due Plan
participants, reside and maintain their offices and records in
On the record before it, this Court simply cannot conclude
that the Plan "resides or may found" in this District.
28 U.S.C. § 1406(a) provides that when venue is improper where a case was
filed, the district court "shall dismiss, or if it be in the
interest of justice, transfer such case to any district or
division in which it could have been brought." Section 1406
gives district courts broad discretion on whether to dismiss or
transfer a case with improper venue. See, e.g., Cote v. Wadel,
796 F.2d 981, 985 (7th Cir. 1986). Because venue does not lie in
this Court, and because this action could have been brought in
the Northern District of Georgia, this Court shall dismiss this
At the March 29th hearing, counsel also presented arguments
for and against transfer under 28 U.S.C. § 1404(a). The Court
has found that venue is not proper in this District under §
1132(e)(2). Assuming, arguendo, that (as Plaintiffs
strenuously urge) venue is proper here, transfer then would be
appropriate under § 1404(a), which provides that a district
court may transfer any civil action to any other district or
division where it might have been brought, for the convenience
of the parties and witnesses, and in the interest of justice. To
secure a § 1404(a) transfer, the movant must demonstrate: (a)
that venue is proper in the transferor district; (b) that venue
and jurisdiction are proper in the transferee district
(N.D.Georgia); and (c) that transfer will serve the convenience
of the parties and witnesses and promote the interest of
justice. See, e.g., Coffey v. Van Dorn Iron Works,
796 F.2d 217, 219 (7th Cir. 1986). Thus, even if venue were proper here,
the Court would not keep this case but would transfer it to the
Northern District of Georgia, which is a "clearly more
convenient" forum than this District. Id.*fn3
Because venue is not proper here, the Court GRANTS in part
and DENIES in part the Plan's motion to transfer or
dismiss (Doc. 4). The motion is denied in that it seeks
transfer of the case to the Northern District of Georgia. The
motion is granted in that the Plan alternatively seeks (and
the Court now grants) dismissal of this case. The Court hereby
DISMISSES this action pursuant to 28 U.S.C. § 1406(a).
Dismissal shall be without prejudice.
For docketing purposes, this dismissal renders MOOT
Plaintiffs' motion for class certification (Doc. 2) and
Plaintiffs' motion for partial summary judgment (Doc. 46).
IT IS SO ORDERED.