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Fort Transfer Co., Inc. v. Central States

June 6, 2006


The opinion of the court was delivered by: Joe Billy McDADE United States District Judge


Before the Court is Defendant Central States, Southeast and Southwest Areas Pension Fund's ("the Fund") Motion to Dismiss First Amended Complaint Or Alternatively, For Partial Summary Judgment With Respect to Counts IV and V*fn1 [Doc. # 5]; and Plaintiff Fort Transfer Company, Inc.'s ("Fort Transfer") Motion For Oral Argument [Doc. # 14]. For the reasons that follow, the Fund's motion to dismiss will be granted, and Fort Transfer's motion for oral argument will be denied as moot.


Plaintiff Fort Transfer entered into a Trust Agreement with the Fund in September, 1992, pursuant to which Fort Transfer has been a contributing employer in the multiemployer pension plan of the Central States Pension Fund. Fort Transfer is a for-hire trucking company that provides specialized services in liquid bulk chemical transportation and storage. The Trust Agreement between Fort Transfer and the Fund covers various collective bargaining agreements that Fort Transfer has entered into with the Teamsters Union Local 627, a collective bargaining representative for unionized truck drivers in the Morton, Illinois area. The current agreement with Local 627 began in September 2002 and does not expire until 2008, and sets forth that Fort Transfer shall make contributions to the pension plan on behalf of the union employees.

According to Fort Transfer, the Fund has made improper threats to expel Fort Transfer from the pension plan and has demanded payment for complete withdrawal liability based on Fort Transfer's alleged violation of an "adverse selection" policy contained in the Trust Agreement regarding its use of independent contractors. The Fund has also made two partial withdrawal liability claims against Fort Transfer in November, 2005.

Fort Transfer filed the instant five-count Complaint for Declaratory Judgment on December 9, 2005, claiming: (1) Anticipatory Breach of Contract (Count I), (2) Violation of Taft Hartley Act (Count II), (3) Violation of ERISA (Count III and IV), and (4) Retaliation and Breach of Contract (Count V). Fort Transfer requests that the Court declare, among other things, that Fort Transfer has not violated the Pension Fund's adverse selection policy, that Fort Transfer cannot and need not comply with the Pension Fund's demand to enroll independent contractor workers in the plan, and that Fort Transfer has not incurred partial withdrawals. The Fund has moved to dismiss the complaint, or alternatively, for partial summary judgment with respect to counts IV and V.

The Court shall address Defendant's first argument, that the complaint should be dismissed for lack of venue under Rule 12(b)(3) of the Federal Rules of Civil Procedure because the Trust Agreement contains a forum-selection clause that indicates that this case could only be filed in the Northern District of Illinois, Eastern Division. Because the Court agrees with the Fund on this point, it is unnecessary to deal with the Fund's other arguments.


When considering a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(3): a court takes all allegations in the complaint as true, unless contradicted by the defendant's affidavits. A court may also examine facts outside the complaint in order to determine whether venue is proper. When ruling on a motion to dismiss under Rule 12(b)(3), the court must resolve the factual conflicts in the parties' submissions in favor of the plaintiff and draw any reasonable inferences from those facts in the plaintiff's favor.

Nagel v. ADM Investor Services, 995 F. Supp. 837, 843 (N.D.Ill. 1998) (citations omitted); see also National Hydro Systems v. Summit Constructors, Inc., 731 F. Supp. 264, 265 (N.D.Ill. 1989); Murphy v. Schneider National, Inc., 349 F.3d 1224 (9th Cir. 2003); New Moon Shipping Co., Ltd. v. MAN B&W Diesel AG, 121 F.3d 24, 29 (2d Cir. 1997).


The Forum-Selection Clause in the Trust Agreement Is Valid and Enforceable

The Fund argues that the entire suit must be dismissed under Rule 12(b)(3) for improper venue, because the trust agreement contains a forum-selection clause specifying the United States District Court for the Northern District of Illinois as the appropriate forum for any lawsuit filed by an employer.*fn2 Fort Transfer argues that enforcement of the clause would be unjust and unreasonable because 1) the clause was buried in voluminous trust documents, 2) Fort Transfer had no opportunity to read the clause as it was added after the agreement was signed, and 3) this District is the more convenient forum.

When the issue of whether a forum-selection clause should be enforced is raised as a motion to dismiss, it is a matter of contract law and the forum law will apply. Faur v. Sirius Int'l Insurance Corp., 391 F. Supp. 2d 650, 657 (N.D. Ill. 2005) (citing Moore's Federal Practice § 110.01, 4(b) (3d. Ed. 1995)); see also Jones v. Weibrecht, 901 F.2d 17, 19 (2nd Cir. 1990). If the state law generally upholds such agreements, as Illinois does, the action should be dismissed. Faur, 391 F. Supp. 2d at 657. A forum- selection clause is "prima facie valid and should be enforced unless enforcement is shown by the resisting party to be unreasonable under the circumstances." Bonny v. The Soc'y of Lloyd's, 3 F.3d 156, 159 (7th Cir. 1993) (quoting M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972)). In addition, the Seventh Circuit has ...

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