Sandvik, Inc. v. Continental Ins. Co.

• Decision Date: 18 October 1989
• Docket Number: Civ. A. No. 89-1916.
• Citation: 724 F. Supp. 303
• Parties: SANDVIK, INC., Plaintiff, v. The CONTINENTAL INSURANCE COMPANY, Liberty Mutual Insurance Company, Granite State Insurance Company and National Union Fire Insurance Company of Pittsburgh, P.A., Defendants.
• Court: U.S. District Court — District of New Jersey

724 F. Supp. 303

SANDVIK, INC., Plaintiff, v. The CONTINENTAL INSURANCE COMPANY, Liberty Mutual Insurance Company, Granite State Insurance Company and National Union Fire Insurance Company of Pittsburgh, P.A., Defendants.

Civ. A. No. 89-1916.

United States District Court, D. New Jersey.

October 18, 1989.

Kevin J. Bruno, Hannoch Weisman, Roseland, N.J., and Neal R. Brendel, and James R. Segerdahl, Kirkpatrick & Lockhart, Pittsburgh, for plaintiff.

Phillip C. Landrigan, and Marjorie H. Mintzer, Sheft & Sweeney, Jersey City, N.J., for defendants Granite State Ins. Corp. and National Union Ins. Co. of Pittsburgh, Pa.

Martha J. Koster, and Kim Marrkand, Gaston & Snow, Boston, Mass., for defendant Liberty Mut. Ins. Co.

Patricia L. Noll, Bumgardner, Hardin & Ellis, Springfield, N.J., for defendant Continental Ins. Co.

LECHNER, District Judge.

This matter is before the court on the motion of defendants National Union Fire Insurance Company of Pittsburgh, Pa. ("National Union"), Granite State Insurance Company ("Granite State"), Liberty Mutual Insurance Company ("Liberty") and The Continental Insurance Company ("Continental") (collectively the "defendants")¹ to transfer this action filed by Sandvik, Inc. ("Sandvik")² to the Eastern District of Pennsylvania pursuant to 28 U.S.C. § 1404(a). For the reasons that follow, the motion is granted.

Facts

Sandvik filed this environmental insurance coverage action on 2 May 1989 seeking, among other things, declaratory judgment to the effect that insurance policies issued to it by the defendants provide coverage for claims against Sandvik associated with the release of industrial wastes in Pennsylvania. Jurisdiction is founded on diversity of citizenship under 28 U.S.C. § 1332. Complaint, ¶ 6. Sandvik asserts venue is proper in this district as the place where the claim arose under 28 U.S.C. § 1391(c). Complaint, ¶ 7.

National Union is a Pennsylvania corporation with its principal place of business in New York. None of the other defendants are Pennsylvania corporations and their principal places of business are located outside Pennsylvania. Complaint, ¶¶ 2-5. The defendants are each registered to do business in New Jersey and are subject to personal jurisdiction in this district. Id. The record does not indicate whether the defendants are registered to do or are doing business in Pennsylvania.

Sandvik is a Delaware corporation headquartered in Fair Lawn, New Jersey since 1955. It is engaged in the manufacture of cemented carbide cutting inserts and specialty steel products. Hodgen Aff., ¶ 3. Sandvik's Fair Lawn headquarters includes a facility for the manufacture of cemented carbide cutting inserts. Sandvik is also registered and doing business in Pennsylvania under the name Sandvik Steel Company ("Sandvik Steel"). Landrigan Aff., ¶ 2. Sandvik Steel has a facility in Scranton, Pennsylvania, which generated the industrial waste underlying this action.

The waste generated by Sandvik Steel in Scranton was disposed at an industrial waste disposal site located in Upper Merion Township, Pennsylvania, (the "site") which is within the Eastern District of Pennsylvania. Landrigan Aff., ¶¶ 2, 9. Sandvik asserts it maintains no facility in the Eastern District of Pennsylvania and has no employees there. Hodgen Aff., ¶ 10. Scranton, Pennsylvania is located in the Middle District of Pennsylvania.

Prior to commencement of this action, the United States Environmental Protection Agency, Region III, Philadelphia, Pennsylvania (the "EPA") notified Sandvik it was a potentially responsible party pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9601, et seq. in connection with contamination at the site. The site appears to have been owned by the O'Hara Sanitation Company, Inc. ("O'Hara Sanitation") since 1975 and operated as a recycling center accepting waste from various companies. Sandvik has neither owned nor operated the site. Hodgen Aff., ¶ 10. The EPA alleged Sandvik contracted in the 1970s with a waste hauler to transport industrial waste from Sandvik's Scranton, Pennsylvania facility to be disposed at the site. The EPA also identified several other potentially responsible parties for the contamination at the site.

The EPA's claims concerning Sandvik were settled pursuant to a Partial Consent Decree, executed by Sandvik in December 1988. Complaint, ¶ 18. Under the settlement plan, Sandvik is liable for $248,000 of the estimated $5,500,000 cost of the cleanup of the site described in the EPA's Remedial Design/Remedial Action plan. Complaint, ¶ 20. The EPA filed an action to enforce the Partial Consent Decree and the remedial action plan in the Eastern District of Pennsylvania on 24 February 1989. Complaint, ¶ 22.

Under the terms of the Partial Consent Decree, the remedial action program will be performed over an estimated thirty years. The full extent of Sandvik's liability in connection with clean-up of the site is not yet determined; the Partial Consent Decree provides the ultimate liability of Sandvik may be revised upward or downward depending on actual costs of the remedial action program. Complaint, ¶ 21; Landrigan Aff., ¶ 4. In addition, the EPA has reserved the right to proceed against Sandvik for additional remedial action. Complaint, ¶ 23.³

The Pennsylvania Suburban Water Company ("PSWC") also made claims against Sandvik and others regarding contamination at the site. Landrigan Aff., ¶ 5 & Ex. C. PSWC's claims were based on migration of pollutants from the site to the Upper Merion water reservoir.⁴ Id. PSWC asserted its claim in connection with an action commenced against O'Hara Sanitation in the Eastern District of Pennsylvania, but PSWC did not institute legal proceedings against Sandvik. Sandvik entered into a settlement agreement with PSWC in February 1989 under which Sandvik's share of settlement is $28,600. Complaint, ¶ 25.

Sandvik claims all the defendants were notified of the EPA and PSWC claims prior to settlement of those claims. Complaint, ¶¶ 15, 25. Each defendant provided Sandvik with comprehensive general liability insurance ("CGL") policies⁵ insuring Sandvik against liabilities arising out of various risks at any of Sandvik's locations in the United States.⁶ The CGL policies were not specific to particular sites or states. Hodgen Aff., ¶ 7. Sandvik claims all the CGL policies were purchased, negotiated and received by Sandvik through its headquarters at Fair Lawn, New Jersey. Hodgen Aff., ¶ 8. Sandvik also indicates its broker during the time the CGL policies were purchased was a New York firm called Sterling & Sterling. Id.

In this action Sandvik seeks a declaratory judgment to the effect that the CGL policies issued to it by the defendants provide coverage for release of industrial wastes at the site. Sandvik asserts that the defendants are obligated to defend and indemnify it in connection with: (1) the enforcement action brought by the EPA in the Eastern District of Pennsylvania, (2) PSWC's claim for contamination of the water reservoir, and (3) potential future pollution claims.

Discussion

The defendants have moved to transfer this action to the Eastern District of Pennsylvania pursuant to the provisions of 28 U.S.C. § 1404(a). Section 1404(a) permits a district court to transfer a case to any other district where the action "might have been brought." Id. Transfer is appropriate under this statute when made "for the convenience of the parties and witnesses, in the interest of justice...." Id.

The purpose of section 1404(a) "is to prevent waste of `time, energy and money' and `to protect litigants, witnesses and the public against unnecessary inconvenience and expense....'" Van Dusen v. Barrack, 376 U.S. 612, 616, 84 S.Ct. 805, 809, 11 L.Ed.2d 945 (1964) (quoting Continental Grain Co. v. Barge FBL-585, 364 U.S. 19, 26-27, 80 S.Ct. 1470, 1474-75, 4 L.Ed.2d 1540 (1960)); Hardaway Constr. v. Conesco Indus. Ltd., 583 F.Supp. 617, 619 (D.N.J. 1983). The terms of the statute suggest three factors must be considered in transferring a case: (1) the convenience of the parties, (2) the convenience of the witnesses and (3) the interests of justice. Derry Finance N.V. v. Christiana Companies, Inc., 555 F.Supp. 1043, 1045 (D.Del.1983). In addition, the transferee forum must be one where the suit "might have been brought." 28 U.S.C. § 1404(a); see Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3d Cir.1970), cert. denied, 401 U.S. 910, 91 S.Ct. 871, 27 L.Ed.2d 808 (1971); Derry Finance, 555 F.Supp. at 1045.

The only alternative forum proposed for transfer is the Eastern District of Pennsylvania, where the site is located. The defendants have conceded venue is appropriate in the Eastern District of Pennsylvania. Defendants' Brief at 8 n. 4. ("From the face of the complaint diversity jurisdiction exists and venue is proper in the Eastern District of Pennsylvania"). Sandvik has not contested this point.⁷ No "real question" exists as to the appropriateness of venue in the Eastern District of Pennsylvania. Shutte, 431 F.2d at 24. Therefore, transfer is appropriate if other relevant considerations weigh in favor of transfer under 1404(a).

In enacting section 1404, Congress intended to lessen the harsh effects of dismissal of an action under the common law doctrine of forum non conveniens. Norwood v. Kirkpatrick, 349 U.S. 29, 32, 75 S.Ct. 544, 546-47, 99 L.Ed. 789 (1955). Because a motion to transfer an action to a more convenient forum does not result in dismissal of the case, the defendant is required to make "a lesser showing of inconvenience" than would be required for a dismissal at common law. Id. Accordingly, federal courts have broader discretion to transfer an action under section 1404(a) than to dismiss under the doctrine of forum non conveniens. Id.; All State Freight v. Modarelli, 196 F.2d 1010, 1011 (3d Cir.1952); Rutherford v. Sherburne Corp., 616 F.Supp. 1456, 1463 (D.N.J.1985).

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