Board of Trustees v. Sullivant Ave.

• Decision Date: 17 May 2007
• Docket Number: No. 1:07cv11 (JCC).,1:07cv11 (JCC).
• Citation: 508 F.Supp.2d 473
• Parties: BOARD OF TRUSTEES, Sheet Metal Workers' National Pension Fund, Plaintiff, v. SULLIVANT AVENUE PROPERTIES, LLC, et al., Defendants.
• Court: U.S. District Court — Eastern District of Virginia

508 F.Supp.2d 473

BOARD OF TRUSTEES, Sheet Metal Workers' National Pension Fund, Plaintiff, v. SULLIVANT AVENUE PROPERTIES, LLC, et al., Defendants.

No. 1:07cv11 (JCC).

United States District Court, E.D. Virginia, Alexandria Division.

May 17, 2007.

Kendra Leigh Kosko, Slevin & Hart, P.C., Washington, DC, for Plaintiff.

Michael Joseph Thompson, Wright & Talisman PC, Washington, DC, for Defendants.

MEMORANDUM OPINION

JAMES C. CACHERIS, District Judge.

This matter is before the Court on Defendants' motion to dismiss and motion to transfer venue to the Southern District of Ohio pursuant to 28 U.S.C. § 1404. For the reasons stated below, the Court will deny both motions.

I. Background

This case arises under the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended by the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), 29 U.S.C. §§ 1001 et seq. (1982). Board of Trustees of the Sheet Metal Workers' National Pension Fund ("Plaintiff') has brought this action against Sullivant Avenue Properties ("Sullivant") and Trio Leasing Partnership ("Trio") (collectively "Defendants"). Plaintiff seeks withdrawal liability, interest, and liquidated damages from trades or businesses under common control with Accurate Fabrications, Inc. ("Accurate") pursuant to ERISA §§ 4201(b) and 4001(b)(1); 29 U.S.C. §§ 1381(b)(1). The facts as alleged by Plaintiff are as follows:

Until the date of withdrawal from the Sheet Metal Workers' National Pension Fund ("Fund"), Accurate employed members of the Sheet Metal Workers' International Association Local Union No. 24 ("Local 24"). Accurate was a signatory to a collective bargaining agreement with Local 24, which required it to make contributions to the Fund on behalf of employees covered by the agreement. On February 1, 2006, Accurate `permanently ceased contribution to the Fund. Plaintiff alleges that a complete withdrawal occurred on this date, resulting in withdrawal liability of $1,388,145.72. Plaintiff also alleges joint and several liability against Defendants Sullivant and Trio as trades or businesses under common control with Accurate. Plaintiff bases common control on the allegation that they are "wholly owned by Gerald Miller or other wise are a `brother-sister group of trades or businesses under common control'" (Amend.Compl., ¶ 11).

Defendants are all Ohio corporations headquartered in Columbus with offices and business records located in the Columbus area. Defendants' officers and employees are located in the Columbus area and are residents of Ohio. Defendants do not manage any locations or transact business in the Commonwealth of Virginia.¹ Plaintiff is charged under law and by contract with the administration of various employee benefit plans for members of the National Sheet Metal Workers Union. Plaintiffs members meet, transact business, and administer the funds in this district. Plaintiffs business offices and records are located primarily in Alexandria, .Virginia. However, the actions giving rise to this suit occurred in the Southern District of Ohio. On April 6, 2007, Defendants filed a motion to dismiss Plaintiffs Amended Complaint for failure to state a claim, or in the alternative, to transfer the case to the Southern District of Ohio. This motion is currently before the Court.

II. Standard of Review

A) Motion to Dismiss

A Rule 12(b)(6) motion to dismiss tests the legal sufficiency of the complaint, see Randall v. United States, 30 F.3d 518, 522 (4th Cir.1994), and should be denied unless "it appears beyond doubt that the [P]laintiff can prove no set of facts in support of his claim which would entitle him to relief." De Sole v. United States, 947 F.2d 1169, 1177 (4th. Cir.1991) (citations omitted); see also Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957).

In passing on a motion to dismiss, "the material allegations of the complaint are taken as admitted." Jenkins v. McKeithen, 395 U.S. 411, 421, 89 S.Ct. 1843, 23 L.Ed.2d 404 (1969) (citations omitted). Moreover, "the complaint is to be liberally construed in favor of Plaintiff." Id. In addition, a motion to dismiss must be assessed in light of Rule 8's liberal pleading standards, which require only "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R.Civ.P. 8.

B) Motion to Transfer

Section 1404(a) addresses motions to transfer. With respect to transfer, the relevant portion of the statute instructs that:

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.

28 U.S.C. § 1404(a). This rather ambiguous standard has been interpreted to require consideration of the following four factors: (1) Plaintiff's choice of venue; (2) witness convenience and access; (3) the convenience of the parties; and (4) the interest of justice. Bd. of Trs., Sheet Metal Workers Nat'l Fund v. Baylor Heating & Air Conditioning, Inc., 702 F.Supp. 1253, 1256-62 (E.D.Va.1988). The interest of justice factors include such circumstances as the pendency of a related action, the Court's familiarity with the applicable law, docket conditions, access to premises that might have to be viewed, the possibility of unfair trial, the ability to join to other parties, and the possibility of harassment. GTE Wireless, Inc. v. Qualcomm, Inc., 71 F.Supp.2d 517, 519 (E.D.Va.1999).

III. Analysis

Defendants first move to dismiss Plaintiff's Amended Complaint pursuant to Rule 12(b)(6) for failure to state a claim for which relief can be granted, and for improper venue under 28 U.S.C. § 1391(a). Defendants argue in a separate motion that this litigation should be transferred under 28 U.S.C. § 1404(a) to the Southern District of Ohio based upon convenience to the parties and witnesses. Id. at 12.

A) Motion to Dismiss For Failure to State a Cause of Action

Defendants first move to dismiss Defendants Sullivant and Trio on the ground that the Amended Complaint does not properly allege common control over Accurate, Sullivant, and Trio. The Amended Complaint states:

Defendants, Sullivant, Trueline and Trio, are trades or businesses under common control with Accurate within the meaning of Section 414(c) of the Internal Revenue Code and the regulation thereunder, because they are wholly owned by Gerald Miller or otherwise are a "brother-sister" group of trades or businesses under common control.

(Amend.Compl., ¶ 11)(emphasis added). Defendants argue that this allegation is legally conclusive and does not plead facts properly alleging common control. This assertion is incorrect. The question of membership in a controlled group is an issue of fact rather than law. See Central States, Southeast & Southwest Areas Pension Fund v. Slotky, 956 F.2d 1369, 1373 (7th Cir.1992); Central States, Southeast & Southwest Areas Pension Fund v. White, 258 F.3d 636, 641 n. 6 (7th Cir.2001)(holding that the MPPAA does not require a business nexus between two businesses owned by the same persons to establish common ownership). Plaintiff pled that the three businesses are commonly owned and commonly controlled by Gerald Miller, and this pleading is more than sufficient to satisfy Rule 8 of the Federal Rules of Civil Procedure's notice pleading requirement. Accordingly, Defendants' motion to dismiss will be denied.

B) Motion to Transfer

Defendants concede both personal jurisdiction and proper venue, but move this Court to transfer the case to the Southern District of Ohio, pursuant to 28 U.S.C. § 1404(a). There are two prerequisites to the application of Section 1404(a), both of which are satisfied in this case. First, the Section applies only where venue is proper in the transferor forum, and venue is proper in this district because Plaintiff administers its funds here. See 29 U.S.C. § 1132(e)(2); see also Sprinzen v. Supreme Court of New Jersey, 478 F.Supp. 722 (S.D.N.Y.1979)(an employee benefit plan is administered where the plan's offices are located, where its affairs are conducted, where its trustees meet, and where its records are kept).

Second, the proposed transferee forum must be one `where the suit might have been brought. ERISA's venue provision, 29 U.S.C. § 1132(e)(2) provides for venue where the Defendants reside — in this case within the proposed transferee forum. Accordingly, this prerequisite is met and the Court will proceed with an analysis under 1404(a), and address each of the § 1404(a) factors: (1) Plaintiff's choice of venue; (2) witness convenience and access; (3) the convenience of the parties; and (4) the interest of justice. Baylor, 702 F.Supp. at 1256-62.

(1) Plaintiffs Choice of Venue

While Plaintiffs choice of venue is entitled to substantial weight in determining whether transfer is appropriate, the amount of weight varies depending on the significance of the contacts between the venue chosen by Plaintiff and the underlying cause of action. See id. at 1256. Naturally, the stronger the contacts between the Plaintiffs chosen venue and the cause of action, the greater weight given to Plaintiffs choice of venue. Id. However, in ERISA cases where Plaintiff brings suit in the district where the plan at issue is administered, Plaintiff's choice of forum is afforded greater weight than would typically be the case.² Id.; see also Int'l Bhd. of Painters & Allied Trades Union v. Best Painting & Sandblasting Co., Inc., 621 F.Supp. 906, 907 (D.D.C.1985).

Plaintiff's choice of forum is the district in which the Plan is administered, but the actions giving rise to the complaint occurred in Ohio. Thus, the nexus between this district and the cause of action is limited to the administrative functions carried on by Plaintiff in determining Defendants' liability with respect to the Plan. On the other hand, the transferee forum is more closely connected with the cause of action. Thus, the weight of Plaintiff's choice of forum is...