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Abbott v. Lockheed Martin Corp.

March 20, 2007


The opinion of the court was delivered by: Reagan, District Judge


I. Introduction

On September 11, 2006, Plaintiffs filed a putative class action suit in this Court against Lockheed Martin Corporation and Lockheed Martin Investment Management Company, under the Employee Retirement Income Security Act of 1974 or "ERISA," 29 U.S.C. § 1001, et seq. Plaintiffs allege breach of fiduciary duty under ERISA § 502(a)(2) and (3). At issue are two employee benefit plans: the Lockheed Martin Corporation Salaried Savings Plan ("SSP") and the Lockheed Martin Corporation Hourly Savings Plan ("HSP")*fn1 . Plaintiffs allege that the "fees and expenses paid by the Plans and thus borne by the participants, were and are unreasonable and excessive; not incurred solely for the benefit of the Plans and their participants; and undisclosed to participants." Complaint ¶ 12. Plaintiffs request that the Court find that Defendants have breached their fiduciary duties and order Defendants to make good to the Plans all losses incurred as a result of the conduct described in the complaint.

On October 23, 2006, Defendants filed motion to transfer venue pursuant to 28 U.S.C. §1404(a) (Doc. 18). A hearing was held on this matter on March 2, 2007, and the Court took the matter under advisement. Accordingly, the motion being fully briefed and the parties having been heard, the Court will now rule.

II. Discussion

The ERISA venue provision allows plaintiffs to lay venue "where the plan is administered, where the breach took place, or where a defendant resides or may be found. . . ." 29 U.S.C. § 1132(e)(2). The parties do not dispute, and the Court concurs, that venue is proper here, because the Plan "may be found" in the Southern District of Illinois.Waeltz v. Delta Pilots Retirement Plan, 301 F.3d 804, 810 (7th Cir. 2002) ("A fund can be found in a judicial district if it has the sort of 'minimum contacts' with that district that would support the exercise of personal jurisdiction under the rule of International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945)"). The Plan calculates all benefits, communicates with all Plan participants and authorizes payment of all benefits in the District of Maryland. Thus, venue is also proper in the proposed transferee District.

Under 28 U.S.C. § 1404(a), "[f]or the convenience of 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." This statute gives district courts discretion to transfer cases according to "an individualized, case-by-case consideration of convenience and fairness." Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988). 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; and (c) that transfer will serve the convenience of the parties and witnesses and promote the interest of justice. See Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219 (7th Cir. 1986); Forcillo v. LeMond Fitness, Inc., 220 F.R.D. 550, 552 (S.D.Ill. 2004) (J. Reagan). The first two elements are satisfied; accordingly, Defendants must demonstrate that transfer to the District of Maryland will serve the convenience of the parties and witnesses and will promote the interests of justice.

Defendants contend that the District of Maryland is a venue more convenient than the Southern District of Illinois because all of the Plans' documents and all witnesses associated with the Plans are located there, and all material events giving rise to Plaintiffs' complaint occurred there. Defendants assert that the case was brought in the Southern District of Illinois for the convenience of Plaintiffs' counsel, which is of no consequence in determining venue. At the hearing, Defendants argued that the three facilities*fn2 in the Southern District of Illinois have nothing to do with administering and managing the Plans.

Plaintiffs submit that deference must be accorded to their choice of forum especially in an ERISA case, albeit such deference is weakened in a class action. Plaintiffs do not concede that all important decisions are made in Maryland. Rather, according to Plaintiffs, Defendants have contracted out the service aspects of the Plans, including record-keeping and investment management. Plaintiffs assert that Defendants find it convenient to have employees in every state but only want to defend actions in their hometown. Plaintiffs argue that all of the things alleged in the Complaint, including failure to disclose and losses to Plan participants, have occurred, at least in part, in the Southern District of Illinois.

A. Plaintiffs' Choice of Forum

This Court considers the weight due plaintiffs' choice of forum on a case-by-case basis, and the moving party bears the burden of showing that the transferee forum is more convenient. See Chemical Waste Management, Inc. v. Sims, 870 F.Supp. 870, 876 (N.D.Ill. 1994). Plaintiffs' choice of forum in ERISA actions is generally accorded substantial deference. Finley v. Dun & Bradstreet Corp., 2006 WL 861920, *2 (N.D.Ill. 2006) (unpublished). However, that deference may be diminished where, as here, Plaintiffs are representatives of a class. Winnett v. Caterpillar Inc., 2006 WL 1722434, *3 (D.Tenn. 2006) (citing Koster v. Lumbermens Mut. Cas. Co., 330 U.S. 518, 524 (1947) (". . . where there are hundreds of potential plaintiffs, . . . the claim of any one plaintiff that a forum is appropriate merely because it is his home forum is considerably weakened."). The parties have not identified, nor has the Court found, a Seventh Circuit decision that squarely addresses the trade-off between the heightened degree of deference given to a plaintiff's chosen forum in an ERISA case and the diminished degree of deference accorded a plaintiff's choice in a class action.

If the class is certified, the named Plaintiffs will bear more responsibility than other members of the class. Plaintiffs Abbott and Frankhauser live in the Southern District of Illinois, and the other named plaintiffs live in the West, which is physically more convenient to the Southern District of Illinois than to the District of Maryland. The Court considers, too, that a logical extension of Defendants' argument is that ERISA class actions could be brought only where the Plans are administered, even though they may be found in the district where the action was originally filed. In the opinion of the Court, this was not contemplated by Congress when it provided for expanded venue in ERISA actions. See Trustees of Hotel Employees and Restaurant Employees Intern. Union Welfare Pension Fund v. Amivest Corp. 733 F.Supp. 1180, 1182 (N.D.Ill. 1990)(citations omitted) ("The ERISA venue provision is to be liberally interpreted; Congress intended to expand, rather than restrict, the ERISA plaintiff's choice of forum."). Accordingly, the Court finds that Plaintiffs' choice of forum remains entitled to some deference and that this factor weighs against transfer.

B. Convenience of the Witnesses

The convenience of the witnesses is "the most important factor in the transfer balance." Forcillo, 220 F.R.D. at 553 (citing Brandon Apparel Group, Inc. v. Quitman Mfg. Co., 42 F.Supp.2d 821, 834 (N.D.Ill. 1999)). "In analyzing this factor, courts must look to the nature and quality of the witnesses' testimony with respect to the issues, not just the number of witnesses in each venue." Id. (citing Vandeveld v. Christoph, 877 F.Supp. 1160, 1167 (N.D.Ill.1995)). "The Court must also consider whether these witnesses will be subject to compulsory process and the cost to obtain attendance of willing witnesses." Id. (citing Hanley v. Omarc, 6 F.Supp.2d 770, 774 (N.D.Ill. 1998)). In weighing the relative convenience of witnesses, the Court generally assigns little weight to the location of employee-witnesses. Applied Web Systems, Inc. v. Catalytic Combustion Corp., 1991 WL 70893, *5 (N.D.Ill. 1991). ...

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