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J & L Management Corp. of Ohio v. ArcelorMittal Wierton

November 25, 2008


The opinion of the court was delivered by: Judge Blanche M. Manning


The plaintiff has filed suit against the defendants alleging various state law causes of action based on a business deal gone bad. Defendants move to transfer this action pursuant to 28 U.S.C. § 1404(a), which provides that, "[f]or the convenience of the parties and witnesses, in the interests of justice, a district court may transfer any civil action to any other district or division where it might have been brought." A decision to transfer an action is committed to the district court's sound discretion. Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219 (7th Cir. 1986). Background

"When deciding a motion to transfer venue, the court must accept as true all of plaintiff's well-pleaded facts in the complaint, unless they are contradicted by affidavits or other appropriate evidence from the defendant." Andrade v. Chase Home Finance, LLC, No. 04 C 8229, 2005 WL 3436400, at *2 (N.D. Ill. Dec. 12, 2005)(citation omitted). The court in footnote number 1 below has noted the defendants' disagreement with certain allegations.

The relevant facts, taken from the well-pled complaint, are as follows. Plaintiff J&L Management Corporation of Ohio ("JLM) is a corporation organized under the laws of Ohio, with its principal place of business in Mt. Clemens, Michigan. JLM is a demolition contractor.

Defendant ArcelorMittal Weirton, Inc. ("ArcelorMittal Weirton") is a corporation organized under the laws of Delaware, with its principal place of business in Weirton, West Virginia. ArcelorMittal Weirton is a steel company. Likewise, defendant ArcelorMittal U.S.A., Inc. ("ArcelorMittal U.S.A.") is a corporation organized under the laws of Delaware, but with its principal place of business in Chicago, Illinois. ArcelorMittal U.S.A. is also a steel company.

In or about the early fall of 2007 until in or about December 2007, JLM was one of the bidders for a job to demolish the majority of the ArcelorMittal Weirton Complex in Weirton, West Virginia. At some time before the bidding process had concluded, ArcelorMittal Weirton decided not to go forward with the demolition. In early 2008, ArcelorMittal Weirton's procurement specialist John Mihalyo encouraged JLM to bid on another job, the demolition of the ArcelorMittal Weirton's coal handling system in Weirton, West Virginia ("the Project"). JLM alleges that Mihalyo was, at all times relevant to this action, ArcelorMittal Weirton's agent for the purposes of hiring a demolition company for the Project, with the actual or, in the alternative, apparent authority to bind ArcelorMittal Weirton to retaining a demolition contractor with respect to the same. JLM bid on the Project in early 2008.

On several occasions in April, 2008 Mihalyo orally advised JLM management that ArcelorMittal Weirton had accepted JLM's bid, contingent on JLM delivering certain technical documents and plans to ArcelorMittal Weirton. Shortly thereafter, JLM provided said technical documents and plans to ArcelorMittal Weirton. Mihalyo confirmed in writing that JLM had won the job in an email string dated April 24, 2008, in which Mihalyo wrote that "Weirton will be issuing a PO to J&L for the demolition work to be performed." JLM maintained personnel onsite at the Project. In reliance upon being awarded the contract for the Project, JLM forewent other work and did not bid on other projects that would conflict with the manpower and equipment it was required to commit to the Project.

On May 2, 2008, subsequent to accepting the bid, ArcelorMittal Weirton filed an asbestos abatement notification ("NESHAP") with West Virginia environmental authorities. The NESHAP identifies JLM as a contractor and was signed by an agent of ArcelorMittal Weirton. On information and belief, during this time frame, Arcelormittal U.S.A. decided that it wanted another demolition contractor to undertake the Project.*fn1 On information and belief, Arcelormittal U.S.A. informed Arcelormittal Weirton that it was to withdraw the contract from JLM. On May 8, 2008, ArcelorMittal Weirton requested that JLM change the scope of work to allow ArcelorMittal Weirton to retain scrap metal from the coal handling job. Mihalyo assured JLM that the change was for accounting purposes only, and that it would not affect the award of the coal handling project to JLM. JLM agreed to reformat the bid, but only on the condition that doing so would not affect its role as the project contractor. Again, Mihalyo assured JLM that this was a "mere formality" and that the coal handling job belonged to JLM.

In reliance on this representation, JLM refrained from bidding on other jobs that would have conflicted with the need for manpower and equipment at the Project.

On May 15, 2008, JLM emailed Mihalyo, asking for an update on the "revised coal handling system information." Mihalyo replied in a subsequent e-mail, stating that "the approved contractor will be notified as well as those not being awarded the job." On June 10, 2008, Mihalyo advised JLM that JLM was "not the low bidder on the revised bid scope," and would therefore not be awarded the Project.

JLM then brought the instant suit based on diversity jurisdiction alleging the following claims: (1) Count I--breach of contract; (2) Count II--intentional interference with contract; (3) Count III--intentional interference with business expectancy; (4) Count IV--promissory estoppel, in the alternative to Count I. As noted above, the defendants now move to transfer the case to the Northern District of West Virginia pursuant to 28 U.S.C. § 1404(a).


Under § 1404(a), the party seeking transfer must demonstrate that (1) venue is proper in the transferor court; (2) venue would be proper in the transferee court; and (3) transfer will serve the convenience of the parties and witnesses and promote the interests of justice. Van Dusen v. Barrack, 376 U.S. 612, 616 (1964). In evaluating the third prong-the convenience and fairness of the proposed transfer-the court considers relevant private and public interests. In addition, "the movant has the burden of establishing by reference to particular circumstances, that the transferee forum is clearly more convenient." Coffey, 796 F.2d at 219-20 (citations omitted).

The parties agree that the first two prongs of the ยง 1404(a) analysis are satisfied, that is, that venue is proper in this district as well as the proposed transferee district. Thus, the court will focus on the third prong: whether transfer will serve the ...

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