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Central States, Southeast and Southwest Areas Pension Fund v. O'Brien & Nye Cartage Co.

February 22, 2007

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND; CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS HEALTH AND WELFARE FUND; AND HOWARD MCDOUGALL, TRUSTEE, PLAINTIFFS,
v.
O'BRIEN & NYE CARTAGE CO., AN OHIO CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Honorable David H. Coar

MEMORANDUM OPINION AND ORDER

This is an action brought under the Employee Retirement Income Security Act, 29 U.S.C. §1001, et seq. ("ERISA"), to collect unpaid contributions and interest allegedly owed by O'Brien & Nye Cartage Co. ("O'Brien") to the Central States, Southeast and Southwest Areas Pension Fund; the Central States, Southeast and Southwest Areas Health and Welfare Fund (collectively referred to as "Central States" or individually referred to as the "Pension Fund" or the "Health and Welfare Fund"). Plaintiff Howard McDougall, is a Trustee and a "fiduciary" of both the Pension Fund and the Health and Welfare Fund, as that term is defined in Section 3(1) of ERISA, 29 U.S.C. §1002(2). Before this Court is O'Brien's Motion to Transfer Venue pursuant to 28 U.S.C. §1404(a). For the following reasons, O'Brien's motion is DENIED.

Background

Central States are employee benefit plans and trusts that maintain their respective administrative offices and exclusive offices in the Northern District of Illinois. Central States were established by and are operated in accordance with trust agreements. O'Brien is an Ohio corporation engaged in the meat and grocery business. O'Brien's only place of business is in northeastern Ohio, just outside of Cleveland. O'Brien employs members of the Local Union No. 407 of the International Brotherhood of Teamsters ("IBT"). In 1998, O'Brien entered into a Participation Agreement ("participation agreement")with the IBT, in which O'Brien agreed to make contribution payments to Central States in conjunction with the terms of certain collective bargaining agreements negotiated and entered into between O'Brien and IBT.

The participation agreement does not contain a venue selection clause (also known as a forum selection clause). However, under the terms of the participation agreement, O'Brien agreed to be bound by the terms of the Central States' trust agreements. O'Brien claims it never received copies of these trust agreements, amendments thereto or notification of any agreement to sue or be sued in Chicago, Illinois. On December 10, 2003, the trust agreements were amended by including clauses stating that each employer and union consented to personal jurisdiction and venue in the United States District Court for the Northern District of Illinois, Eastern Division with respect to any suit filed by Central States and agreed that the Northern District of Illinois, Eastern Division was the most convenient forum for any such suit. The participation agreement and the trust agreements provide that they are governed by Illinois law to the extent that not preempted by federal law.

O'Brien contends that the venue selection clauses are invalid and that in the interests of justice, this Court should transfer this suit to the Northern District of Ohio, Eastern District.

Analysis

A motion to transfer venue is governed by 28 U.S.C. §1404(a), which states: "For the convenience of the parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." A district court will engage in an "individualized, case-by-case consideration of convenience and fairness" when adjudicating a motion for transfer subject to its own considerable discretion. Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (citing Van Dusen v. Barrack, 376 U.S. 612, 622 (1964)). The Supreme Court regards the presence of a forum selection clause as but a single, albeit significant, factor among several in a district court's analysis. Id.

The party seeking transfer of venue must show that 1) venue is proper in the transferor court; 2) venue is proper in the transferee court; and 3) the transfer is for the convenience of the parties and witnesses, and 4) in the interests of justice. Central States Southeast and Southwest Areas Pension Fund v. Brown, 587 F.Supp. 1067, 1069 (N.D.Ill.1984). The party seeking to transfer venue also "has the burden of establishing, by reference to particular circumstances, that the [proposed] transfer forum is clearly more convenient" than the transferring court. Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219-20 (7th Cir.1986). In making a transfer determination, a court must consider both the private interests of the parties and the public interests involved. Factors for assessing the private interests include: (1) plaintiff's choice of forum; (2) site of the material events; (3) availability of evidence in each forum; (4) convenience of the parties; and (5) convenience of the witnesses. Amoco Oil Co. v. Mobil Oil Corp., 90 F.Supp.2d 958, 960 (N.D.Ill.2000). Public interest factors "relate to the court's familiarity with the applicable law, the speed at which the case will proceed to trial, and the desirability of resolving controversies in their locale," Von Holdt v. Husky Injecting Molding System, Ltd., 887 F.Supp. 185, 188 (N.D.Ill.1995), as well as a fund's interest in minimizing transaction costs in ERISA cases. Finley v. Dun & Bradstreet Corp., 2006 WL 861920 at *2 (N.D.Ill.). This Court will address each factor below and then assess whether Defendants have met their burden of establishing that transfer would be "clearly more convenient."

Proper Venue in Transferor and Transferee Courts

In this case, venue is proper in the Northern District of Illinois, Eastern Division. This action was brought under ERISA. ERISA provides that venue is proper when an ERISA action is brought in a district court where the plan is administered. 29 U.S.C. §1132(c)(2). So even if this Court disregarded the venue selection clauses contained in the trust agreements, venue is nonetheless proper in the Northern District of Illinois, Eastern Division because Central States are administered here. Venue would also be proper in the Northern District of Ohio if this Court were to disregard the venue selection clauses in the trust agreements. ERISA also provides that venue is proper when an ERISA action is brought in a district court where the defendant resides or the breach (giving rise to the action) took place. 29 U.S.C. §1132(c)(2).

Here, the parties have entered into agreements that mandate the appropriate venue for actions involving disputes between the parties. O'Brien executed a participation agreement which included the following provision:

The Union and the Employer agree to be bound by, and hereby assent to, all of the terms of the Trust Agreement(s) creating said CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION AND/OR HEALTH AND WELFARE FUND, as amended, all of the rules and regulations heretofore and hereafter adopted by the Trustees of said Trust Fund(s) pursuant to said Trust Agreement(s), and all of the actions of the Trustees in administering such Trust Fund(s) in accordance with the Trust Agreement(s) and rules adopted.

O'Brien does not allege that it was unaware of or mistaken about the terms of the participation agreement at the time of execution, nor does it claim any defect in the participation agreement. Neither the participation agreement nor the trust agreements (as they existed at the time) included venue selection ...


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