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Acuity v. Roadtec, Inc.

United States District Court, Seventh Circuit

December 16, 2013

ACUITY, A Mutual Insurance Company, a/s/o of JAVELINA CONSTRUCTION, INC., and of JERAMY CARBONE; Plaintiff,
v.
ROADTEC, INC., Defendant.

MEMORANDUM OPINION AND ORDER

MARVIN E. ASPEN, District Judge.

Plaintiff ACUITY, a Mutual Insurance Company ("Acuity"), as subrogee of Javelina Construction, Inc. ("Javelina"), and Jeramy Carbone ("Carbone"), filed suit in the Circuit Court of Cook County, Illinois against Defendant Roadtec, Inc. ("Roadtec"), asserting negligence, strict liability, and breach of warranty. Roadtec properly removed the case to federal court under 28 U.S.C. § 1441(a). Presently before us is Roadtec's motion to dismiss or transfer venue, pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(3), or 28 U.S.C. §§ 1404 and 1406. As set forth below, we grant the motion to dismiss under Rule 12(b)(2).[1]

BACKGROUND

This diversity action arose out of a workplace accident in Brownsburg, Indiana on August 15, 2011. (Compl. ¶ 11.) Carbone (a resident of Crystal Lake, Illinois) worked for Javelina (a roadway construction contractor and an Indiana corporation) on a road construction crew. (Resp. at 1.) Carbone was injured in the course of his employment while operating a milling machine, [2] and he filed a workers' compensation claim against Javelina on October 26, 2011. (Compl. ¶¶ 11-12.) Carbone and Javelina settled the workers' compensation claim, and Javelina then turned to Acuity (Javelina's Wisconsin-based insurer) to pay the settlement amount of $135, 991.00 to Carbone. (Compl. ¶¶ 13-14.) Javelina purchased the milling machine that injured Carbone from Roadtec (a Tennessee corporation), and Roadtec shipped the machine from its headquarters in Chattanooga, Tennessee to Javelina in Fishers, Indiana on August 6, 2009. (Compl. ¶ 10.)

Acuity sued Roadtec on August 14, 2013, in the Circuit Court of Cook County. (Compl.) Acuity alleged various theories of liability against Roadtec, including strict liability, negligence, and breach of warranty, and sought to recover the full amount of its payments to Carbone. ( Id. ¶ 19.) Roadtec removed the case pursuant to 28 U.S.C. § 1441(a), based on the diversity of the parties-Acuity and Roadtec are citizens of Wisconsin and Tennessee, respectively. (Mem. at 3.)

Properly in federal court, Roadtec has moved to dismiss or transfer the case under Rules 12(b)(2) and 12(b)(3), or 28 U.S.C. §§ 1404 and 1406(a). (Mem. at 3.) Roadtec first argues that we lack personal jurisdiction, and thus venue is improper, because Roadtec made no contacts with Illinois related to Acuity's lawsuit. ( Id. at 4.) To cure those defects, Roadtec asks for dismissal, or a transfer of the case under § 1406. In the alternative-that is, if we find proper venue and personal jurisdiction-Roadtec seeks a transfer of venue under 28 U.S.C. § 1404(a) to the Southern District of Indiana or the Eastern District of Tennessee, because either of those fora would be more convenient to the parties and witnesses and serve the interest of justice. ( Id. at 7.)

Acuity, however, argues that we may exercise personal jurisdiction over Roadtec because Roadtec's contacts with Illinois are continuous and systematic, such that they satisfy the requirements for general personal jurisdiction. (Resp. at 3.) Namely, Acuity points to Roadtec's interactive website, its sale to and maintenance of equipment for customers in Illinois, two regional representatives whose territory includes Illinois, and Roadtec's Illinois business registration and address. ( Id. ) Additionally, Acuity argues that venue is proper in this judicial district because the federal removal statute (§ 1441) controls the venue analysis in an action removed from state court, not the federal venue statute (§ 1391). ( Id. at 5.) Acuity contends that under § 1441 we must look to state law to determine venue for this removed case. ( Id. at 6.) Illinois' venue statute is satisfied when a defendant does business in the county where the claim is originally filed, and Acuity maintains that Roadtec does business within the meaning of that statute, so venue is proper. ( Id. ) Finally, Acuity emphasizes that we should honor plaintiff's forum choice and deny transfer to Indiana or Tennessee under § 1404. ( Id. at 7.)

ANALYSIS

As explained below, this case is properly venued in the Northern District of Illinois under 28 U.S.C. § 1441(a). Roadtec's motions to dismiss under Rule 12(b)(3) or transfer under § 1406 are therefore denied. We lack personal jurisdiction over Roadtec, however. Accordingly, rather than transfer the case under § 1404, we grant Roadtec's motion to dismiss under Rule 12(b)(2), so that Acuity may select the forum in which to proceed.

I. Venue

Generally, federal courts must comport with the requirements of the venue statute, 28 U.S.C. § 1391, in order to be considered an appropriate venue for a lawsuit. 28 U.S.C. § 1391(a)(1) ("[T]his section shall govern the venue of all civil actions brought in the district courts of the United States."). Section 1391(b)(3) allows a civil action to be brought in "any judicial district in which any defendant is subject to the court's personal jurisdiction." 28 U.S.C. § 1391(b)(3). Section 1441 typically governs the removal of actions from state to federal court. See 28 U.S.C. § 1441(a) (explaining the circumstances under which a case may be removed). Roadtec argues that § 1391 applies in this case, but Acuity claims § 1441, incorporating the Illinois venue statute, controls. We disagree with both parties.

Based on a literal reading, § 1441(a) governs the propriety of the Northern District of Illinois as the venue for this removed case, not § 1391.[3] See Video and Sound Serv., Inc. v. Intransa, Inc., No. 12 C 7322, 2013 WL 1568062, at *2 (N.D. Ill. Apr. 12, 2013); Kubin-Nicholson Corp. v. Gillon, 525 F.Supp.2d 1071, 1075 (E.D. Wis. 2008) (citing Pollizzi v. Cowles Magazines, Inc., 345 U.S. 663, 665-66, 73 S.Ct. 900, 902 (1953) for the proposition that "§ 1391 has no application [in a case removed from state court] because plaintiff did not bring the action in this court but rather in state court"). In Pollizzi, the Supreme Court held that § 1391 does not determine venue in a removed case, because the text of § 1391 "limits the district in which an action may be brought.'" See 28 U.S.C. § 1391(a); Pollizi, 345 U.S. at 665-66 , 73 S.Ct. at 902. Because the action was technically "brought" in state court, § 1391 lacked operative force. See Pollizzi, 345 U.S. at 665, 73 S.Ct. at 902. According to the Supreme Court, the removal statute "expressly provides that the proper venue of a removed action is the district court of the United States for the district and division embracing the place where such action is pending.'" 345 U.S. at 666 , 73 S.Ct. at 902 (quoting § 1441(a)). Thus venue is proper in a removed case as long as the state court where the plaintiff filed the original case lies in the judicial district where the federal district court sits.

In this case, Acuity filed its claim in the Circuit Court of Cook County, and Roadtec removed the case to federal court in Chicago. The United States District Court for the Northern District of Illinois embraces Cook County. As such, § 1441(a)'s requirements are satisfied, and ...


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