SHEET METAL WKRS'NAT. PENSION FUND v. Gallagher

• Decision Date: 17 September 1987
• Docket Number: No. 86 Civ. 8102 (DNE).,86 Civ. 8102 (DNE).
• Citation: 669 F. Supp. 88
• Parties: SHEET METAL WORKERS' NATIONAL PENSION FUND, et al., Plaintiffs, v. Edward GALLAGHER, Trustee, et al., Defendants.
• Court: U.S. District Court — Southern District of New York

669 F. Supp. 88

SHEET METAL WORKERS' NATIONAL PENSION FUND, et al., Plaintiffs, v. Edward GALLAGHER, Trustee, et al., Defendants.

No. 86 Civ. 8102 (DNE).

United States District Court, S.D. New York.

September 17, 1987.

Layne Carlough McCarthy, Huntington, N.Y. (Edgar N. James, of counsel), for plaintiffs.

Gibney, Anthony & Flaherty, New York City (Stephen F. Ruffino, John A. Craner, of counsel), for defendants.

OPINION AND ORDER

EDELSTEIN, District Judge:

Plaintiffs instituted this action in the Southern District of New York basing jurisdiction on 28 U.S.C. §§ 1331 and 1337 (1982), 29 U.S.C. § 1132 (1982), and 29 U.S.C. §§ 185 and 186 (1982). The Complaint alleges causes of action arising under the Employee Retirement and Income Security Act of 1974, 29 U.S.C. §§ 1104, 1415 (1982) ("ERISA"), and the Labor-Management Relations Act, 29 U.S.C. § 186 (1982) ("LMRA"), as well as common law claims of breach of fiduciary duty. Defendants move to dismiss the complaint under 28 U.S.C. § 1406(a) (1982) because of lack of personal jurisdiction, lack of subject matter jurisdiction and improper venue. In the alternative, defendants seek a transfer of venue to the District of New Jersey. Defendants' motion to dismiss is denied and their motion to transfer is granted.

BACKGROUND

This action concerns a dispute between competing unions over the control of a pension fund. The Sheet Metal Workers Local Union 22 of New Jersey Pension Fund ("Fund") administers retirement benefits for the members of the Sheet Metal Workers International Association Local 22 ("SMWIA Local 22"). In November, 1981, SMWIA Local 22 was dissolved. Part of its membership transferred to Sheet Metal International Association Local 27 ("SWMIA Local 27") and Sheet Metal International Association Local 28 ("SMWIA Local 28") while the remainder, including the officers of SWMIA Local 22, who also serve as trustees of the Fund, formed the Independent Union Local 22 ("Independent Local 22"). The trustees maintained control of the Fund and amended its rules to stipulate that the members of the new Independent Local 22 would elect future trustees.

Plaintiffs seek to bring this action as a class action pursuant to Federal Rule of Civil Procedure 23. Named plaintiffs, the National Pension Fund of the SMWIA and certain individual members, have filed this action seeking to gain control of the Fund. Plaintiffs claim that the individual defendants, the six trustees of the Fund, breached their fiduciary duty as trustees in violation of ERISA, 29 U.S.C. §§ 1104, 1415 (1982) and LMRA, 29 U.S.C. § 186 (1982), by amending the Local 22 Pension Fund Agreement and Declaration of Trust ("Agreement") to stipulate that new Independent Local 22 would elect future trustees of the Fund, thereby causing themselves to remain in power as trustees. The Complaint alleges that the defendant trustees of the Fund lacked authority to amend the Agreement. Plaintiffs further claim that by amending the Agreement, the individual defendants violated election rights of those SMWIA Local 22 members who joined SMWIA Local 27 and SMWIA Local 28.

In this action plaintiffs seek an order replacing the Fund's trustees with trustees elected by the members of SMWIA Local 27 and SMWIA Local 28. Plaintiffs also seek to have a portion of the Fund, the monies attributible to members of the old SMWIA Local 22 who are currently members of SMWIA Local 27 and SMWIA Local 28, transferred to the SMWIA National Pension Fund.¹

Defendants move to dismiss this action under 28 U.S.C. § 1406(a), or in the alternative to transfer this action to the District of New Jersey. Defendants claim that the court does not have jurisdiction over the action or over the defendants, and further allege that venue is not proper in this district.

In support of their motion, defendants allege "no one named in the complaint is directly or indirectly associated with New York," (Defendants' Memorandum at 10), arguing that all the defendants, the six trustees of the fund and the fund itself, as well as all the named plaintiffs, are listed in the Complaint as having addresses either in New Jersey or in Virginia. Further, defendants further allege that Independent Local 22 and the SMWIA Local 22 Pension Fund do not carry on any part of their activities in New York.

Plaintiffs, in response, allege that defendants "appear to have engaged in a sufficient course of conduct in the State of New York" to provide "minimum contacts" with New York. Specifically, plaintiffs allege that members of the plaintiff class reside within the State of New York,² and that the actuarial work of the Fund is performed by an a company located in New York. In addition, plaintiffs allege that SMWIA Local 28, which represents most of the individual plaintiffs, has its principal place of business in New York.³

DISCUSSION

As a preliminary matter, the court must determine which of plaintiffs' pleadings it will consider in this proceeding. Plaintiffs filed their Complaint on October 22, 1986. Service was not effectuated upon any defendants until Independent Local 22 and Albert O'Neill were served on January 20, 1987. The last defendants to be served were finally served on March 11, 1987.⁴ Defendants filed their motion to dismiss plaintiffs' Complaint on February 25, 1987.⁵ Plaintiffs filed their opposition to defendants' motion on February 27, 1987. Along with their response, plaintiffs also filed an Amended Complaint on February 27, 1987. Plaintiffs never requested the court's permission to amend the Complaint. Rule 15(a) of the Federal Rule of Civil Procedure allows that:

A party may amend the party's pleading once as a matter of course at any time before a responsive pleading is served.... Otherwise a party may amend the party's pleading only by leave of court or by written consent of the adverse party....

As of February 27, 1987, the date plaintiffs filed their Amended Complaint, a responsive pleading had already been filed and served by defendants. As a result, Rule 15(a) required plaintiffs to acquire leave of court or the written consent of defendants in order to amend the Complaint. Because such leave was never sought nor obtained by plaintiffs, and because no evidence of defendants' written consent was ever presented to the court, the court hereby orders that plaintiffs' Amended Complaint filed on February 27, 1987, be stricken from the court docket and removed from the file of this case. Therefore, this court is obliged to only consider the original Complaint in conjunction with the instant motion. Nevertheless, the court will remain mindful of those attempted amendments relevant to defendants' motion.

Because the Complaint alleges claims under ERISA and the LMRA this action arises under federal statute and therefore the court maintains subject matter jurisdiction to entertain the action. 28 U.S.C. § 1331 (1982). Whether there is personal jurisdiction over the defendants, and whether venue is proper in this district, raise substantial questions. However, the court need not resolve them, since it is clear that the court has "power to transfer the case even if there is no personal jurisdiction over the defendants and whether or not venue is proper in this district." Volk Corp. v. Art-Pak Clip Art Serv., 432 F.Supp. 1179, 1181 (S.D.N.Y.1977); see also, Goldlawr, Inc. v. Heiman, 369 U.S. 463, 466-67, 82 S.Ct. 913, 915-16, 8 L.Ed.2d 39 (1962); Corke v. Sameiet M.S. Song of Norway, 572 F.2d 77, 79 (2d Cir.1978); Matra et Manurhin v. International Armament Co., 628 F.Supp. 1532, 1534 n. 2 (S.D.N.Y.1986). Regardless of whether there is personal jurisdiction over the defendants, the court has power to transfer pursuant to 28 U.S.C. § 1404(a)⁶ if venue is proper and pursuant to 28 U.S.C. § 1406(a)⁷ if venue is improper. See Matra et Manurhin, 628 F.Supp. at 1534 n. 2; Troyer v. Karcagi, 488 F.Supp. 1200, 1206-07 (S.D.N.Y.1980). Moreover, it is clear that if the action is properly transferable pursuant to § 1404(a), assuming venue is proper in this district, then a fortiori the action will also be properly transferable pursuant to § 1406(a), assuming venue in this district is improper. See Volk Corp., 432 F.Supp. at 1179, 1182; Matra et Manurhin, 628 F.Supp. at 1534 n. 2. Applying the relevant standards, see Heyco, Inc. v. Heyman, 636 F.Supp. 1545 (S.D.N.Y.1986); Volk Corp., 432 F.Supp. 1179, the court has determined that this action should be transferred to the District of New Jersey.

Were the court to find venue proper in this district, the determination of whether an action should be transferred pursuant to 28 U.S.C. § 1404(a) depends upon a balancing of many factors. See Heyco, Inc., 636 F.Supp. 1545. Similarly, even if the court has neither personal jurisdiction over defendants nor venue over the action, the court can transfer the action if such transfer is in the interest of justice. See 28 U.S.C. § 1406(a); Volk Corp., 432 F.Supp. at 1181.

The decision of whether or not to grant a motion to transfer lies within the discretion of the court. Heyco, Inc., 636 F.Supp. 1545; Kirshner v. Mlotok, No. 84 Civ. 6833, slip op. (S.D.N.Y. April 24, 1985) Available on WESTLAW, DCT database. Factors to aid the court in exercising its discretion include not only convenience to the parties and witnesses but also the "relative ease of access to proof, availability of witnesses ... and `all other practical problems which make trial of a case easy, expeditious, and inexpensive.'" Heyco, Inc., 636 F.Supp. at 1548 (quoting Hall v. E.I. DuPont De Nemours & Co., 345 F.Supp. 353, 385 (E.D.N.Y.1972) (quoting Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508, 67 S.Ct. 839, 843, 91 L.Ed. 1055 (1947))); see Volk Corp., 432 F.Supp. 1179; Transnational Industries, Inc. v. Wechsler, Nos. 86 Civ. 2033 and 86 Civ. 2032, slip op. (S.D.N.Y. June 20, 1986) Available on WESTLAW, DCT database. Further, because there is "a local interest in having localized controversies decided at home," ...