Cox v. ING Investments LLC
MEMORANDUM OPINION. Signed by Judge Sue L. Robinson on 6/6/2014. (nmfn)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
JEREMIE COX, Derivatively on Behalf )
of lNG GLOBAL REAL ESTATE FUND, )
Civ. No. 13-1521-SLR
lNG INVESTMENTS LLC,
Joel Friedlander, Esquire and Jaclyn Levy, Esquire of Friedlander & Garris, P.A.,
Wilmington, Delaware. Counsel for Plaintiff. Of Counsel: Stephen J. Oddo, Esquire,
Edward B. Gerard, Esquire, and Justin D. Rieger, Esquire of Robbins Arroyo LLP.
Patricia R. Uhlenbrock, Esquire and Seton G. Mangine of Pinckney, Weidinger, Urban
& Joyce LLC, Wilmington, Delaware. Counsel for Defendant. Of Counsel: James N.
Benedict, Esquire and Sean M. Murphy, Esquire, of Milbank, Tweed, Hadley & McCloy
Dated: June (p, 2014
On August 30, 2013, plaintiff Jeremie Cox ("Cox") filed a complaint derivatively
on behalf of lNG Global Real Estate Fund ("the Fund") against defendant lNG
Investments LLC ("lNG") alleging that lNG breached its fiduciary duty under Section
36(b) of the Investment Company Act of 1940, as amended 15 U.S.C. § 80a-35(b)
("Section 36(b)"), by charging the Fund excessive management fees. (D.I. 1) Presently
before the court is ING's motion to transfer this action to the District of Arizona. (D.I.
12) The court has jurisdiction over this matter pursuant to 15 U.S.C. §§ 80a-43 and
80a-35(b)(5), and 28 U.S.C. § 1331. For the reasons that follow, the motion is denied.
Cox is a shareholder of the Fund. (D.I. 1 at ,-r 9) The Fund is a management
investment company within the lNG Mutual Funds, a Delaware statutory trust ("the
Trust"). (/d. at ,-r,-r 2, 10) Its executive offices are located at 7337 East Doubletree
Ranch Road, Suite 100, Scottsdale, Arizona. (/d. at ,-r 10) The Fund does not have any
employees. (D.I. 13 at 5) Shares of the Fund are sold nationwide. (/d.) Moreover,
34% of the Fund's shares are held by Delaware entities, with additional shares held by
individuals residing in Delaware. (D. I. 15 at 7)
The Trust is organized pursuant to Delaware law. (D.I. 1 at ,-r 7) It maintains a
registered agent in Delaware and any amendments to the Trust's Certificate of Trust
would be filed in Delaware. (D.I. 13 at 5)
lNG acts as investment manager and advisor to the Fund, providing services for
which the Fund pays lNG fees. (D.I. 1 at ,-r 2; D. I. 13 at 4) lNG is an Arizona limited
liability company and maintains its principal place of business at 7337 East Doubletree
Ranch Road, Suite 100, Scottsdale, Arizona. (D. I. 13 at 4) It does not have any offices
in Delaware, and none of its officers live or work in Delaware. (/d.) Many of ING's
officers and employees who provide services to the Fund live and work in Arizona. (!d.
The Fund's board of trustees ("the Board") oversees the Fund and approves the
annual management agreement between the Fund and lNG. (/d. at 2, 6) The
management agreement is governed by Delaware law. (D.I. 15 at 7) The Board is
made up of eleven independent trustees, who are located throughout the country,
including in Georgia, Tennessee, Florida, and North Carolina. (D. I. 13 at 6) None of
the independent trustees are located in Delaware or Arizona. (/d.; D. I. 15 at 12)
Ill. STANDARD OF REVIEW
Section 1404(a) of Title 28 of the United States Code grants district courts the
authority to transfer venue "[f]or the convenience of parties and witnesses, in the
interests of justice ... to any other district or division where it might have been
brought." 28 U.S.C. § 1404(a). Much has been written about the legal standard for
motions to transfer under 28 U.S.C. § 1404(a). See, e.g., In re Link_A_Media Devices
Corp., 662 F.3d 1221 (Fed. Cir. 2011); Jumara v. State Farm Ins. Co., 55 F.3d 873 (3d
Cir. 1995); Helicos Biosciences Corp. v. //lumina, Inc., 858 F. Supp. 2d 367 (D. Del.
Referring specifically to the analytical framework described in Helicos, the court
starts with the premise that a defendant's state of incorporation has always been "a
predictable, legitimate venue for bringing suit" 1 and that "a plaintiff, as the injured party,
generally ha[s] been 'accorded [the] privilege of bringing an action where he chooses."'
858 F. Supp. 2d at 371 (quoting Norwood v. Kirkpatrick, 349 U.S. 29, 31 (1955)).
Indeed, the Third Circuit in Jumara reminds the reader that "[t]he burden of establishing
the need for transfer ... rests with the movant" and that, "in ruling on defendants'
motion, the plaintiff's choice of venue should not be lightly disturbed." 55 F.3d at 879
The Third Circuit goes on to recognize that,
[i]n ruling on§ 1404(a) motions, courts have not limited their
consideration to the three enumerated factors in§ 1404(a)
(convenience of parties, convenience of witnesses, or interests
of justice), and, indeed, commentators have called on the courts
to "consider all relevant factors to determine whether on
balance the litigation would more conveniently proceed and the
interests of justice be better served by transfer to a different
/d. (citation omitted). The Court then describes some of the "many variants of the
private and public interests protected by the language of§ 1404(a)." /d.
The private interests have included: plaintiff's forum of preference
as manifested in the original choice; the defendant's preference;
whether the claim arose elsewhere; the convenience of the parties
as indicated by their relative physical and financial condition; the
convenience of the witnesses - but only to the extent that the
witnesses may actually be unavailable for trial in one of the
fora; and the location of books and records (similarly limited to
the extent that the files could not be produced in the alternative
The public interests have included: the enforceability of the
In the court's view, a statutory trust is an analogous artificial entity to a
corporation. Therefore, the framework for analyzing the proper venue for a corporation
is applicable to the Delaware statutory trust at issue in this case.
judgment; practical considerations that could make the trial
easy, expeditious, or inexpensive; the relative administrative
difficulty in the two fora resulting from court congestion; the
local interest in deciding local controversies at home; the
public policies of the fora; and the familiarity of the trial judge
with the applicable state law in diversity cases.
/d. (citations omitted) (emphasis added).
With the above "jurisdictional guideposts" in mind, the court turns to the "difficult
issue of federal comity" that transfer motions present. E.E.O.C. v. Univ. of Pa., 850
F.2d 969, 976 (3d Cir. 1988). Cox has not challenged ING's assertion that the instant
action could have been brought in the District of Arizona. See 28 U.S.C. § 1404(a);
(D.I. 15 at 2)
The parties have all chosen legitimate forums in which to pursue the instant
litigation. Given that "convenience" is separately considered in the transfer analysis,
the court declines of elevate a defendant's choice of venue over that of a plaintiff based
on defendant's convenience. Therefore, the fact that plaintiffs have historically been
accorded the privilege of choosing their preferred venue for pursuing their claims
remains a significant factor.
With respect to where the claim arose, lNG argues that many of the operative
facts relating to Cox's Section 36(b) claim occurred in Arizona, such as the services
provided by lNG to the Fund and the negotiation and execution of the management
agreement, while none occurred in Delaware. (D.I. 13 at 14) Cox, however, contends
that the claim has nationwide scope since it arises entirely under the federal securities
laws. (D.I. 15 at 9) The underlying facts are connected to all fora where shares of the
Fund were acquired or held, including Delaware. (!d. at 8)
The Third Circuit in Jumara indicated that, in evaluating the convenience of the
parties, a district court should focus on the parties' relative physical and financial
condition. In this case, lNG is a large company and Cox is a single shareholder;
therefore, it follows that lNG has greater resources to bear the cost of litigating in
Delaware. Additionally, ING's litigation history shows that it has litigated in several
Considering the convenience of the witnesses and specifically whether witnesses
"actually may be unavailable for trial in one of the fora," lNG has not argued that any
potential witness would be unavailable for trial in Delaware, only that none of these
witnesses reside or work in Delaware and that many are located in Arizona. 3 (D. I. 13 at
17-18); see Smart Audio Techs., L.L.C. v. Apple, Inc., 910 F. Supp. 2d 718, 732 (D.
Del. 2012) ("[T]his factor is only given weight when there is some reason to believe that
a witness actually will refuse to testify absent a subpoena."). However, lNG does not
disclose the residency of the three named personnel witnesses, and acknowledges that
the independent trustees live throughout the country with none residing in Arizona. (/d.
at 6, 18)
lNG claims that "virtually all" of the documents that pertain to the complaint are
stored in Arizona. (!d. at 19) However, lNG fails to show how these documents are
A search for "lNG Investments" in the PACER case locator reveals lNG has
been a party to three cases in Massachusetts and one case in Indiana.
Depositions in the cases over which this judicial officer presides are generally
taken where the deponents reside or work. There is no suggestion that this case will be
incapable of being presented at trial in Delaware. 4
As to practical considerations, the court recognizes that trial in Arizona would
likely be less expensive and easier for lNG. As Cox has not disclosed his residency, it
is unclear as to whether Delaware would be an easier and less expensive forum than
With respect to administrative difficulty, trial in this case will be scheduled
consistent with the parties' proposals. Local interest in deciding local controversies is
not a dispositive factor, as securities litigation does not constitute a local controversy in
most cases. Indeed, securities litigation is governed by federal law and affects national
markets. In this regard, the instant litigation involves an investment fund that has
shareholders nationwide, including many entities and individuals in Delaware.
The remaining Jumara public interest factors -the enforceability of a judgment,
the public policies of the fora, and the familiarity of the judge with state law - carry no
weight in this transfer analysis.
In sum, lNG has the burden of persuading the court that transfer is appropriate,
not only for its convenience but in the interests of justice. For the foregoing reasons,
ING's motion to transfer venue (D. I. 12) is denied. An order shall issue.
Indeed, ING's chosen counsel are based in New York, and presumably will be
reviewing documents transmitted electronically.