Bennett v. Romo Corp.
| Decision Date | 01 January 1999 |
| Docket Number | Civ. No. 99-274 (DRD) |
| Parties | JAMES L. BENNETT, Plaintiff, v. ROMO CORP., H. REX MARTIN, EXECUTIVE COMPENSATION COMMITTEE OF ROMO CORP., ROMO CORP. EXECUTIVE COMPENSATION PLAN, FRANCIS P. KING, JOHN DOE, and MARY DOE, Defendants. |
| Court | U.S. District Court — District of New Jersey |
David E. Cassidy, Esq., Grotta, Glassman & Hoffman, P.C., Roseland, NJ, Attorneys for Defendants.
Neil H. Deutsch, Esq., Deutsch, Resnick, Green & Gramigna, Hackensack, NJ, Attorneys for Plaintiff.
In this ERISA and breach of contract action, a former employee is suing ROMO, ROMO's executive compensation committee, several of the committee's individual members, and the executive compensation plan for denying him benefits to which allegedly he was entitled under the plan. The defendants, ROMO Corp., the Executive Compensation Committee of ROMO Corp., the ROMO Corporation Executive Compensation Plan (the "Plan"), H. Rex Martin, and Francis B. King (collectively the "Defendants"), have moved to transfer venue pursuant to Fed.R.Civ.P. 12(b)(3) and 28 U.S.C. § 1406(a) or, in the alternative, pursuant to 28 U.S.C. § 1404(a). Oral argument was heard on April 12, 1999. For the reasons set forth below, Defendants' motion will be denied.
The plaintiff, John L. Bennett ("Bennett"), was employed by McBee Systems, Inc. ("McBee"), a subsidiary of defendant ROMO Corporation, from 1974 until about December 31, 1997. McBee did business in New Jersey for many years prior to the sale of its assets in 1997. Bennett worked for McBee in New Jersey and, during all relevant times, was a resident of the State.
Bennett, while employed by McBee, was a participant in the ROMO Corporation Executive Compensation Plan. The ROMO Executive Compensation Plan, which was administered by the Executive Compensation Committee of ROMO Corp., Francis B. King, and H. Rex Martin, was established for the benefit of certain of its and McBee's employees. Seven of the nine participants in the plan were McBee employees.
Bennett left the employ of McBee in December of 1997. He claims that the Defendants subsequently denied him benefits to which he was entitled under the Plan. Bennett claims that this denial was wrongful and that the Defendants defrauded him and breached their contractual obligations to him. Bennett brought this suit seeking relief under the Employee Retirement Income Security Act, as amended, 29 U.S.C. § 1001 et. seq. ("ERISA"), and certain state law claims for fraud and promissory estoppel.1
Defendants have moved pursuant to Fed.R.Civ.P. 12(b)(3) and 28 U.S.C. § 1406(a) to transfer this case to the United States District Court for the District of Colorado. In support of their motion, Defendants cite the ERISA venue provisions contained in 29 U.S.C. § 1132(e)(2) and argue that venue is not proper in New Jersey. Even if venue under ERISA is proper, however, Defendants argue that the case should be transferred pursuant to the doctrine of forum non conveniens. Plaintiff opposes the motion and argues that venue is proper in this court and New Jersey is a convenient forum.
Defendants first argue that this case should be dismissed or transferred because venue is improper in this district. The ERISA venue provision sets forth a three-prong test to determine whether venue is proper. It provides that:
Where an action under this subchapter is brought in a district court of the United States, it may be brought [1] in the district where the plan is administered, [2] where the breach took place, or [3] where a defendant resides or may be found.
29 U.S.C. § 1132(e)(2).
It is settled that the last prong, "where a defendant resides or may be found," states a test that is congruent with the minimum contacts analysis of International Shoe v. Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L.Ed. 95 (1945), used to determine whether personal jurisdiction over a particular defendant is consonant with the due process requirements of the United States Constitution. See Varsic v. United States District Court, 607 F.2d 245, 248-49 (9th Cir. 1979); see also I.A.M. Nat'l Pension Fund v. Wakefield Indus., 699 F.2d 1254, 1257 (D.C. Cir. 1983) (adopting Varsic's reasoning); Turner v. CF&I Steel Corp., 510 F. Supp. 537, 542 (E.D. Pa. 1981), aff'd, 770 F.2d 43 (3d Cir. 1985), cert. denied, 474 U.S. 1058, 106 S. Ct. 800, 88 L.Ed.2d 776 (1986); Folke v. Shaffer, 616 F. Supp. 1322, 1325 n.1 (D. Del. 1985).
International Shoe held that a court may exercise personal jurisdiction over a non-resident defendant only where "minimum contacts" exist such that jurisdiction "does not offend `traditional notions of fair play and substantial justice.'" 326 U.S. at 316, 66 S. Ct. at 158 (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S. Ct. 339, 343, 85 L.Ed. 278 (1940), reh'g denied, 312 U.S. 712, 61 S. Ct. 548, 85 L.Ed. 1143 (1941)). The purpose of restricting personal jurisdiction to the limits of due process is to protect the individual interests of non-resident defendants. United States v. Morton, 467 U.S. 822, 828, 104 S. Ct. 2769, 2773, 81 L.Ed.2d 680, reh'g denied 468 U.S. 1226, 105 S. Ct. 27, 82 L.Ed.2d 920 (1984); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291, 100 S. Ct. 559, 564, 62 L.Ed.2d 490 (1980).
A defendant establishes minimum contacts with a forum state by committing some act by which he purposefully avails himself of the privilege of conducting activities within the forum state, thus invoking the benefits and protection of its laws. Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228, 1240, 2 L.Ed.2d 92, reh'g denied, 358 U.S. 858, 79 S. Ct. 10, 3 L.Ed.2d 92 (1958). These contacts must be of a type that the defendant "should reasonably anticipate being haled into court there." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S. Ct. 2174, 2184, 85 L.Ed.2d 628 (1985) (citing World-Wide Volkswagen, 444 U.S. at 295, 100 S. Ct. at 566). What constitutes minimum contacts varies with the "quality and nature of the defendant's activity." Hanson, 357 U.S. at 253, 78 S. Ct. at 1240. The unilateral activity of a plaintiff claiming a relationship with a non-resident defendant does not suffice to create the requisite forum contacts. Id.; Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416, 104 S. Ct. 1868, 1873, 80 L.Ed.2d 404 (1984); Kulko v. Superior Court of California, 436 U.S. 84, 93-94, 98 S. Ct. 1690, 1698, 56 L.Ed.2d 132, reh'g denied, 438 U.S. 908, 98 S. Ct. 3127, 57 L.Ed.2d 1150 (1978).
Defendants can be subject to either specific or general personal jurisdiction in a forum state. Specific personal jurisdiction may arise from particular or sporadic contacts if the cause of action arises out of, or relates to the defendant's forum related activities. Helicopteros, 466 U.S. at 414 & n.8, 104 S. Ct. at 1872 & n.8; Mellon Bank (East) PSFS v. DiVeronica Bros., Inc., 983 F.2d 551, 554 (3d Cir. 1993). There is sufficient due process contact for personal jurisdiction if the defendant purposefully has directed his activities at residents of the forum, and the litigation concerns injuries alleged to have resulted from those activities. Henry Heide, Inc. v. WRH Prods. Co., 766 F.2d 105, 108 (3d Cir. 1985).
If a plaintiff's cause of action against a defendant does not arise out of the defendant's contacts with the forum state, the plaintiff must establish general personal jurisdiction over the defendant. Significantly more of a connection to the forum is required to establish general jurisdiction. Provident Nat'l Bank v. California Fed. Savs. & Loan Ass'n, 819 F.2d 434, 437 (3d Cir. 1987). Where defendant's activities in the forum are unrelated to the subject matter of the suit, plaintiff must show "continuous and substantial contacts" with the forum state. Helicopteros, 466 U.S. at 414-16 & n.9, 104 S. Ct. at 1872-73 & n.9; Provident Nat'l Bank, 819 F.2d at 437. However, with either theory of personal jurisdiction, the focus is on whether the activities in the forum are such that defendant could reasonably foresee being made to answer in its courts. World-Wide Volkswagen, 444 U.S. at 297, 100 S. Ct. at 567.
Defendants' decision to undertake the duty of administering the Plan based upon work performed within New Jersey is sufficient to establish minimum contacts. See Varsic, 607 F.2d at 248. An ERISA governed plan that intentionally places itself in an administrative capacity with regard to its beneficiaries must anticipate being sued in jurisdictions where plan members are performing work related duties. Id. Under ERISA's venue provisions, therefore, employers, ERISA plans, and trustees and administrators of those plans may be "found" in any district where an employee performs work and earns credit under the plan.2 Id.; see also Launer v. Buena Vista Winery, Inc., 916 F. Supp. 204, 212 (E.D.N.Y. 1996); Ransom v. Administrative Comm. for Lightnet/WTG Special Income Protection Program, 820 F. Supp. 1429, 1432-33 (N.D. Ga. 1993); Ballinger v. Perkins, 515 F. Supp. 673, 675 (W.D. Va. 1981).
In the present case, Bennett, as well as other employees participating in the Plan, worked for the ROMO subsidiary of McBee in New Jersey. The Plan was administered for the benefit of eligible employees who lived and worked within the state. Bennett's entire eligibility period and participation in the Plan occurred while he resided and worked in New Jersey. Thus, Defendants could have anticipated being haled into this district on the very type of claim brought in this case.
Defendants argument that the "minimum contacts" analysis does not apply to this case is without merit. Defendants contend that precedent within the Third Circuit is contrary to the standard set forth in Varsic and mandates a different approach. As noted in Defendants' brief, however, the Third Circuit has yet to rule on meaning of the word "found" in the ERISA venue provision. The "contrary precedent" within the...
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