IN RE UMWA EMPLOYEE BEN. PLANS LITIGATION

• Decision Date: 07 June 1994
• Docket Number: Misc. No. 91-386.
• Citation: 854 F. Supp. 914
• Parties: In re UNITED MINE WORKERS OF AMERICA EMPLOYEE BENEFIT PLANS LITIGATION.
• Court: U.S. District Court — District of Columbia

854 F. Supp. 914

In re UNITED MINE WORKERS OF AMERICA EMPLOYEE BENEFIT PLANS LITIGATION.

Misc. No. 91-386.

United States District Court, District of Columbia, Civil Division.

June 7, 1994.

Julia Penny Clark, Bredhoff & Kaiser, Washington, DC.

Dannie B. Fogelman, Coleman, Coxon, Penello, Fogelman & Cowan, P.C., Washington, DC.

MEMORANDUM OPINION

THOMAS F. HOGAN, District Judge.

Nineteen defendants¹ in five of the cases, which have been transferred to this Court pursuant to 28 U.S.C. § 1407 for multidistrict proceedings, have filed motions to dismiss, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, or motions for judgment on the pleadings, pursuant to Rule 12(c), on the ground that plaintiffs' claims as alleged are barred by the applicable limitations period. The issue presently before the Court is whether the transferor fora statutes of limitations periods, the District of Columbia's three-year statute of limitations period or an analogous federal limitations period apply to these multidistrict litigation cases.²

I. Standard of Review

The Court may dismiss a complaint under Fed.R.Civ.P. 12(b)(6) only when it appears beyond doubt that the plaintiff can prove "no set of facts in support of his claims that would entitle him to relief in this court." Doe v. United States Dep't of Justice, 753 F.2d 1092, 1102 (D.C.Cir.1985). In its review, the Court must construe the complaint in the light most favorable to plaintiff and must accept as true all reasonable factual inferences drawn from well-pleaded factual allegations. Johnson v. Computer Technology Servs., Inc., 670 F.Supp. 1036, 1038 (D.D.C.1987).

The legal standard that applies to a motion for judgment on the pleadings is essentially the same as that applied to a motion to dismiss. "Rule 12(c) requires that the movant show, at the close of the pleadings, that no material issue of fact remains to be solved, and that he or she is clearly entitled to judgment as a matter of law." Haynesworth v. Miller, 820 F.2d 1245, 1249 (D.D.C. 1987). "Judgment on the pleadings ... is appropriate upon a showing that the plaintiff cannot prevail even if all the allegations in his Complaint are taken as true." Rafeedie v. Immigration and Naturalization Service, 795 F.Supp. 13, 18 (D.D.C.1992).

II. Discussion

Plaintiffs bring their claims under § 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, and § 515 of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1145. Neither statute contains an express limitations period. In such circumstances, federal courts generally apply the most analogous state statute of limitations, although "the choice of limitations period for a federal cause of action is itself a question of federal law." DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151, 159 n. 13, 103 S.Ct. 2281, 2287 n. 13, 76 L.Ed.2d 476 (1983). In ERISA delinquency actions such as these, the state statute of limitations selected is typically the limitations period for contract claims.³

Plaintiffs filed the above cases in the federal district courts of Kentucky (West Ken, Dorton Coal), Virginia (Big Star), West Virginia (A.M. Trucking), and Utah (Energy West). The Judicial Panel on Multidistrict Litigation transferred these cases to the District of Columbia pursuant to 28 U.S.C. § 1407.⁴ The applicable limitations periods for breach of contract actions in Kentucky, Virginia, West Virginia, and Utah are 15, 5, 10 and 6 years, respectively. The limitations period for breach of contract actions in the District of Columbia is three years.

In their various motions, defendants argue that the Court should apply the District of Columbia's three-year limitations period to the above cases because in § 1407 transfer cases, the transferee forum's statute of limitations should control. Defendants further argue that the choice of law provision contained in the applicable trust documents requires the Court to apply the District of Columbia's limitations period.

Plaintiffs contend that the Court should apply the limitations periods of the transferor fora because the § 1407 transfer orders should have no effect on the applicable limitations period. Alternatively, plaintiffs argue that should the Court decide to apply a uniform limitations period to these multidistrict cases, it should apply the analogous six-year limitations period contained in § 4301(f) of ERISA. 29 U.S.C. § 1451(f).

A. Does the transferor or transferee forum's limitations period apply to a multidistrict litigation case transferred pursuant to § 1407?

The Court of Appeals for the District of Columbia has not addressed whether a transfer order affects the applicable statute of limitations period. Two circuits, the Seventh and the Second, have addressed this issue and have reached conflicting conclusions. See Eckstein v. Balcor Film Investors, 8 F.3d 1121, 1126-27 (7th Cir.1993), cert. denied, ___ U.S. ___, 114 S.Ct. 883, 127 L.Ed.2d 78 (1994); Menowitz v. Brown, 991 F.2d 36, 40-41 (2d Cir.1993), aff'g, In re General Development Corp. Bond Litigation, 800 F.Supp. 1143 (S.D.N.Y.1992).

Most recently, in Eckstein v. Balcor Film Investors, the Seventh Circuit considered whether to apply the transferee or transferor circuit's statute of limitations period to a Securities and Exchange Act claim which had been transferred to a federal district court in Wisconsin for consolidated pretrial proceedings pursuant to 28 U.S.C. § 1404(a).⁵ Section 27A of the Securities and Exchange Act provided that "the limitation period ... shall be the limitation period provided by the laws applicable in the jurisdiction, including principles of retroactivity, as such laws existed on June 19, 1991."⁶ The Seventh Circuit interpreted § 27A's instruction to use the "laws applicable in the jurisdiction" on June 19, 1991, as requiring courts to apply federal law (i.e., the appropriate statute of limitations) as the different circuits understood it at a point in the past, rather than directing the courts to make their own independent judgments. Id. at 1127. Thus, the Seventh Circuit approached the limitations question from the perspective of the transferor court, the Ninth Circuit, and applied California's three-year statute of limitations for fraud. Id. Writing for the Seventh Circuit, Judge Easterbrook stated:

when the law of the United States is geographically non-uniform, a transferee court should use the rule of the transferor forum in order to implement the central conclusion of Van Dusen and Ferens: that a transfer under § 1404(a) accomplishes `but a change of courtrooms.' Van Dusen, 376 U.S. at 639, 84 S.Ct. at 820.

8 F.3d at 1127.

Van Dusen and Ferens are cases in which the Supreme Court held that a federal district court must apply the law of a transferor forum following a § 1404(a) transfer, see Van Dusen v. Barrack, 376 U.S. 612, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964), even if the plaintiff initiates the transfer, see Ferens v. John Deere Co., 494 U.S. 516, 110 S.Ct. 1274, 108 L.Ed.2d 443 (1990). In Eckstein, Judge Easterbrook recognized that Van Dusen and Ferens arose under the federal courts' diversity jurisdiction. 8 F.3d at 1127. Nonetheless, he found it appropriate to apply Van Dusen and Ferens "whenever different federal courts use different federal rules." Id.⁷ He stated:

although both of those cases arose under the diversity jurisdiction, their references to Erie v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), do not imply a ruling limited to state law. Erie is itself part of national law, interpreting the Rules of Decision Act, 28 U.S.C. § 1652.

Id. Because the court interpreted § 27A's reference to "the jurisdiction" as implying a non-uniform federal law, it concluded that the law of the transferor forum governed.

The Second Circuit reached a contrary conclusion in an earlier Securities and Exchange Act case, Menowitz v. Brown, 991 F.2d 36, 40-41 (2d Cir.1993). Addressing the same issue, the Second Circuit held that when determining "the jurisdiction" under § 27A of the Securities and Exchange Act of 1934, a transferee court should apply the statute of limitations of its circuit and ignore the law of the transferor court. 991 F.2d at 40. The court reasoned that the rule of Van Dusen does not apply when a case is transferred under § 1407 to a federal court that has a different construction of relevant federal law than the federal court in which the action was filed. Id. The court continued, "applying Van Dusen by analogy to issues of federal law also runs contrary to the principle that, until the Supreme Court speaks, the federal circuit courts are under duties to arrive at their own determinations of the merits of federal questions presented to them." Id. In reaching this conclusion, the Second Circuit relied principally on this Circuit's decision in In re Korean Air Lines Disaster, 829 F.2d 1171 (D.C.Cir.1987), aff'd on other grounds, Chan v. Korean Air Lines, 490 U.S. 122, 109 S.Ct. 1676, 104 L.Ed.2d 113 (1989).

In In re Korean Air Lines Disaster, the District of Columbia Circuit Court of Appeals considered whether the Van Dusen rule applied to federal claims transferred under § 1407. At the district court level, Chief Judge Robinson had denied the plaintiffs' motion for partial summary judgment and had held that the defendant, Korean Air Lines ("KAL"), could avail itself of the $75,000 per passenger damage limitation imposed by the Warsaw Convention/Montreal Agreement, despite the fact that KAL's tickets were defective. In re Korean Air Disaster, 664 F.Supp. 1463 (D.D.C.1985). In so ruling, Chief Judge Robinson had considered and rejected contrary precedent from the Second Circuit, the circuit from which the case had been transferred. On appeal, the Circuit affirmed Chief Judge Robinson's "independent interpretation" of the Warsaw Convention/Montreal Agreement. Now Justice Ruth Bader Ginsburg stated, "`the transferee court should be free...