Jones, Gregory v. Blue Nile Express, LLC et al
Filing
35
ORDER granting 13 Motion to Transfer to Northern District of Indiana, South Bend Division.() Signed by District Judge James D. Peterson on 7/1/2014. (voc) [Transferred from Wisconsin Western on 7/2/2014.]
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
GREGORY L. JONES,
Plaintiff,
TRANSGUARD INSURANCE COMPANY
OF AMERICA,
v.
OPINION & ORDER
14-cv-191-jdp
Intervenor Plaintiff,
BLUE NILE EXPRESS, LLC, and
EYOB BAYRU,
Defendants.
One of the defendants, Blue Nile Express, LLC, seeks to have this case transferred to
Indiana because venue is improper in this court. Dkt. 13. The motion will be granted.
Plaintiff Gregory Jones was injured when he and defendant Eyob Bayru adjusted the
tandem rear axle on Jones’s semi-trailer at a loading dock in Plymouth, Indiana. At the time,
Jones and Bayru were employed as truck drivers by different companies and they happened to
be at the loading dock at the same time. According the complaint, Bayru operated the tractor
while Jones held the axle. Jones alleges that Bayru negligently caused the tractor to jerk forward,
throwing Jones to the ground and causing him severe injuries. Following the accident, Jones
returned home to Illinois, received medical treatment, and filed a claim against his employer for
workers’ compensation benefits. His employer’s insurer, intervenor plaintiff Transguard
Insurance Company of America, began paying benefits. When the accident occurred, Bayru was
employed by defendant Blue Nile Express, LLC, which is based in Wisconsin.
Jones brought this suit against both Bayru and Blue Nile, alleging that Bayru was
negligent in helping him adjust the tandem rear axle and that Blue Nile was vicariously
responsible for the negligence of its employee. Transguard intervened, claiming that under an
Illinois workers’ compensation statute, it was entitled to reimbursement for payments already
made to Jones. Jurisdiction is proper because the parties are completely diverse and the amount
in controversy exceeds $75,000. 28 U.S.C. § 1332.
Before the court is Blue Nile’s motion to transfer to the United States District Court for
the Northern District of Indiana. Dkt. 13. Blue Nile contends that venue is improper in this
district and that under 28 U.S.C. § 1406, transfer is appropriate. The court agrees that the
federal venue statute does not allow Jones to pursue his action in this court, and will therefore
transfer the case to the Northern District of Indiana, South Bend Division.
ALLEGATIONS OF FACT
In setting forth these facts, the court has considered both the complaint and the parties’
supporting affidavits. See Cont’l Cas. Co. v. Am. Nat. Ins. Co., 417 F.3d 727, 733 (7th Cir. 2005)
(“Under Rule 12(b)(3), the district court was not obligated to limit its consideration to the
pleadings nor to convert the motion to one for summary judgment.”). The court accepts as true
the allegations set out in the complaint unless contradicted by the defendants’ affidavits. Estate
of Moore v. Dixon, 460 F. Supp. 2d 931, 935 (E.D. Wis. 2006). Where “there are disputed facts,
the court must resolve all factual disputes and draw all reasonable inferences in the plaintiff’s
favor.” Id. (internal citations omitted).
On April 26, 2012, Jones was employed as a truck driver for Del Monte Foods, Inc. 1 and
had just made a delivery to Del Monte’s plant in Plymouth, Indiana. Bayru, also a truck driver,
was employed by Blue Nile and was at the Del Monte plant to pick up a shipment. Both men
1
There are conflicting allegations regarding Jones’s employer. See Dkt. 1, ¶ 8 (“Jones worked as
a truck driver for Del Monte Foods, Inc.”) and Dkt. 1, ¶ 22 (Jones “was an employee of RT&T
Enterprises, Inc.”). The discrepancy is immaterial for purposes of Blue Nile’s motion to transfer.
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were in the loading dock area when Jones asked Bayru for help repositioning the tandem rear
axle of his semi-trailer. This adjustment, common after unloading a full trailer, rebalances the
weight of the now-empty trailer over the axle. The process involves one person, standing on the
ground, holding the axle in place while a second person, in the driver’s seat of the tractor, moves
the tractor forward or backward until the axle is in place, when the person on the ground secures
the axle with a locking pin. Jones and Bayru agreed that Jones would stay on the ground and
Bayru would operate the tractor. Jones alleges that as he was holding the axle in place, Bayru
caused the tractor to jerk suddenly and without warning. This threw Jones to the ground,
causing severe injury to his shoulders.
After the accident, Jones returned home to Illinois, where he received treatment for his
injuries, including surgery and hospitalization. In addition to incurring medical costs, Jones has
lost income and is now limited in his usual affairs and activities. He filed a claim for workers’
compensation, and his employer’s insurance carrier—Transguard—began paying benefits. To
date, Transguard has paid $159,905.72. Under a provision of the Illinois Workers’
Compensation Act, 820 ILCS 305/5(b), Transguard is entitled to reimbursement for this
amount from the responsible party, and the insurance company intervened in this case to
protect its right to payment.
Jones filed this suit in March 2014, bringing state law claims of negligence against Bayru,
and seeking to impose vicarious liability on Blue Nile by virtue of the fact that Bayru was
operating within the scope of his employment when he caused Jones’s injuries. For purposes of
establishing complete diversity, the second amended complaint alleges that: (1) Jones is a citizen
of Illinois; (2) Transguard is a citizen of Illinois and North Carolina; (3) Bayru is a citizen of
Pennsylvania; and (4) Blue Nile is a citizen of Wisconsin. The complaint further alleges that
venue is proper in this district under 28 U.S.C. § 1391(b)(1).
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Blue Nile has filed a motion to dismiss under Fed. R. Civ. P. 12(b)(3), asking the court
to transfer this case. Relying on 28 U.S.C. § 1406, Blue Nile contends that venue is improper in
this district, but that the case may be properly tried in the Northern District of Indiana.
OPINION
A. Venue is improper in the Western District of Wisconsin.
Venue is governed by statute, and absent a special venue provision, 28 U.S.C. § 1391
establishes the three means of selecting a venue for a civil action brought in federal court.
Subsection (b) provides that a plaintiff may bring suit in:
(1) a judicial district in which any defendant resides, if all
defendants are residents of the State in which the district is
located;
(2) a judicial district in which a substantial part of the events or
omissions giving rise to the claim occurred, or a substantial part of
property that is the subject of the action is situated; or
(3) if there is no district in which an action may otherwise be
brought as provided in this section, any judicial district in which
any defendant is subject to the court’s personal jurisdiction with
respect to such action.
Jones’s complaint cites paragraph (b)(1) as the basis for venue. Although citing the
specific venue provision may help to avoid venue challenges, “[a] plaintiff need not allege the
basis for filing in a particular district court because, unlike subject matter jurisdiction, venue is
not a matter that must be raised by the proponent of the forum.” Stickland v. Trion Grp., Inc.,
463 F. Supp. 2d 921, 924 (E.D. Wis. 2006). But even when a plaintiff chooses to plead venue
under a particular paragraph of § 1391(b), the court need not contain its venue inquiry to that
specific provision. See Ward v. Delaney, No. 01-cv-3074, 2002 WL 31133099, at *1 (N.D. Ill.
Sept. 20, 2002) (“[A] plaintiff need not cite any statute in support of venue, let alone cite the
correct statute.”). Instead, the court may look to see if venue is proper under any provision.
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A defendant may waive objections to venue if he does not timely raise them. Am. Patriot
Ins. Agency, Inc. v. Mut. Risk Mgmt., Ltd., 364 F.3d 884, 887 (7th Cir. 2004). But it is not wellsettled which party bears the burden of proof once venue is challenged. Compare 14D Wright et
al., Federal Practice & Procedure § 3826 (4th ed. 2013) (“[T]he weight of judicial authority
appears to be that when the defendant has made a proper objection, the burden is on the
plaintiff to establish that the chosen district is a proper venue.”) and 17 Moore et al., Moore’s
Federal Practice § 110.01[5][c] (3d ed. 2014) (“[T]he defendant has the burden of establishing
that venue is improper.”). Ultimately, the court does not need to weigh in on this discussion
because even if Blue Nile bears the burden of proof, none of the provisions of § 1391(b)
authorize venue in this district.
Venue is improper under subsection (b)(1) because not all defendants reside in this
district. For purposes of the venue statute, a defendant who is an LLC resides in “any judicial
district in which such defendant is subject to the court’s personal jurisdiction with respect to the
civil action in question,” and a natural person resides in “the judicial district in which [he] is
domiciled.” § 1391(c). Blue Nile concedes that it resides in this district, but argues that Bayru
resides in Pennsylvania. Dkt. 14, at 3. In support of its assertion, Blue Nile has submitted the
results of a public records search which confirm that, as of March 31, 2014, Bayru’s last known
address was in Philadelphia, Pennsylvania. Dkt. 16-1, at 2. Blue Nile also offers the affidavit of
its owner, Fiseha Teshite, who states that Bayru has never resided in Wisconsin. Jones does not
dispute any of this, and responds only by proposing that “were [he] to dismiss Bayru . . . or
never obtain service on him, the only defendant would be Blue Nile.” Dkt. 20, at 7. But Jones
offers no authority to support his suggested solution, and the court will not permit him to
manufacture venue with such ad hoc adjustments to his complaint.
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Venue is also improper under subsection (b)(2) because this is not a district in which a
substantial part of the events or omissions giving rise to Jones’s claim occurred. “The test of
determining whether a ‘substantial part’ of the events or omissions giving rise to a claim
occurred in a particular district is more of a qualitative, rather than quantitative inquiry.” Estate
of Moore, 460 F. Supp. 2d at 936 (citing Daniel v. Am. Bd. of Emergency Med., 428 F.3d 408, 43233 (2d Cir. 2005)). Of course, there may be more than one district that fits this requirement, in
which case the plaintiff can choose from any of them; he need not select the district where the
“majority” of the events occurred. Quarra Stone Co. v. Yale Univ., No. 13-cv-790, 2014 WL
320059, at *11-12 (W.D. Wis. Jan. 29, 2014). A plaintiff may not, however, lay venue in a
district unless the events that occurred there “have a ‘close nexus’ to the alleged claim.” Estate of
Moore, 460 F. Supp. 2d at 936 (internal citations omitted).
This is a negligence action, arising out of an accident that occurred in Indiana. The
parties agree that a substantial part of the events giving rise to Jones’s claim occurred in the
Northern District of Indiana, and that venue would easily be proper there under subsection
(b)(2). Dkt. 14, at 3 and Dkt. 20, at 4. They dispute, however, whether Blue Nile’s employment
relationship with Bayru can constitute a substantial part of the events and give rise to venue in
this district as well. Jones contends that because Blue Nile’s liability in this case turns on its
employment relationship with Bayru, “any business records or witnesses on behalf of Blue Nile
that would be intended to go to the employment relationship are in the Western District of
Wisconsin.” Dkt. 20, at 4. This argument misses the issue. Jones identifies evidence in this
district that would establish Blue Nile’s employment relationship, but does not recount events
that occurred in this district which led Bayru to negligently injure him in Indiana. The two are
not interchangeable and Jones offers no authority to suggest otherwise.
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A separate problem with Jones’s argument is that it stretches the requirement of a “close
nexus” too far. The fact that Bayru had an employment relationship with a company in
Wisconsin is simply too attenuated to the negligent operation of a truck in Indiana, and the
resulting injuries. Even if the court goes beyond the record to draw reasonable inferences in
Jones’s favor—such as the inference that Bayru signed his employment contract in this district—
Jones would not have a sufficiently close nexus to create venue here. Merely signing a contract
cannot give rise to venue unless the cause of action somehow relates to that contract. See Consol.
Ins. Co. v. Vanderwoude, 876 F. Supp. 198, 201 (N.D. Ind. 1995) (“While it is true that making
the [insurance] contract in Indiana was an event without which the present suit would not exist,
that event does not constitute a ‘substantial part’ of the events giving rise to” an action for
declaratory judgment interpreting the policy’s coverage of events that occurred in a different
district) (original emphasis). Jones’s complaint does not allege that Bayru’s employment
contract somehow authorized or created his negligence. Indeed, the only material purpose the
employment contract will serve in this case is to prove Blue Nile’s liability for Bayru’s conduct,
which is different than alleging that it “gave rise” to the accident. This purpose falls outside the
scope of (b)(2).
Jones meets the same result if the court construes his pleadings as alleging that Blue Nile
issued Bayru his work orders from this district—a fact certainly not suggested in the pleadings
but that the court will nevertheless infer in Jones’s favor. This fact would not be enough to
create venue in this district for largely the same reasons: namely, Blue Nile’s work orders did not
create the alleged negligence of its employee. In some cases, communications to or from a
district can give rise to venue in that district. See Quarra Stone Co., 2014 WL 320059, at *12;
Estate of Moore, 460 F. Supp. 2d at 936. But courts that have used this rule require “a sufficient
relationship between the communication and the cause of action.” Interlease Aviation Investors II
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(Aloha) LLC v. Vanguard Airlines, Inc., 262 F. Supp. 2d 898, 913 (N.D. Ill. 2003). Obvious
examples include suits where a communication or contract is the subject of the litigation. See, e.g.,
Citadel Grp. Ltd. v. Wash. Reg’l Med. Ctr., No. 07-cv-1394, 2008 WL 5423553, at *3 (N.D. Ill.
Dec. 29, 2008) (breach of contract); Dickerson v. Perdue, No. 07-cv-206, 2007 WL 2122418, at
*6 (S.D. Ill. July 20, 2007) (defamation); Fogelson v. Iatrides, No. 99-cv-6892, 2000 WL 631293,
at *3 (N.D. Ill. May 12, 2000) (fraudulent misrepresentation).
Jones does not offer the court any authority suggesting that this rule would apply to
routine communications to employees, and the court is not convinced that such a rule would be
appropriate, at least where the communications are not the subject of the dispute. Bayru’s work
orders may have sent him to Indiana, but they did not instruct him to help Jones move the axle,
and they certainly did not instruct him to behave negligently in doing so. Absent a
communication that originated in this district with some injurious characteristics, such as in the
case of a fraudulent or defamatory statement, or a statement that is the subject of litigation,
such as a contract might be, Jones cannot rely on Blue Nile’s employment relationship with
Bayru for purposes of laying venue in this district under (b)(2).
Finally, Jones is wrong to suggest that (b)(3) could somehow apply in this case. Venue
under (b)(3) applies only “if there is no district in which an action may otherwise be brought.”
In his brief, Jones admits that venue would be proper in the Northern District of Indiana under
§ 1391(b)(2). Dkt. 20, at 4. Thus, paragraph (b)(3) does not provide a basis for venue in this
district.
Because this case does not fit into any provision of § 1391(b), venue is improper.
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B. Transfer to the Northern District of Indiana is Appropriate.
Having determined that venue is improper here, the court must decide whether to
transfer this case or dismiss it outright. 28 U.S.C. § 1406. When a plaintiff incorrectly lays
venue, § 1406(a) authorizes the court to transfer the case to another district “if it [is] in the
interest of justice.” The Supreme Court has held that “[i]f by reason of the uncertainties of
proper venue a mistake is made . . . ‘the interest of justice’ may require that the complaint not
be dismissed but rather that it be transferred in order that the plaintiff not be penalized by . . .
time-consuming and justice-defeating technicalities.” Goldlawr, Inc. v. Heiman, 369 U.S. 463, 467
(1962). Transfer is not automatic, and the “proper penalty for obvious mistakes that impose
costs on opposing parties and on the judicial system is a heavy one.” Cont’l Ins. Co. v. M/V
ORSULA, 354 F.3d 603, 608 (7th Cir. 2003). Courts typically transfer, rather than dismiss a
case, when dismissal would create a statute of limitations issue that could effectively end the
case on the merits. Cote v. Wadel, 796 F.2d 981, 984 (7th Cir. 1986).
In responding to Blue Nile’s proposal to transfer the case, Jones does not identify any
potential problems with a statute of limitations. So, if venue were proper in more than one
district, the court would dismiss this case and let the plaintiff chose an alternative. But the
Northern District of Indiana appears to be the only proper choice. Because Blue Nile has asked
the court to transfer the case, Dkt. 13, Dkt. 14, and Dkt. 22, and transfer is in the interest of
justice, the court will transfer this case to the Northern District of Indiana.
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ORDER
IT IS ORDERED that:
1) Defendant Blue Nile’s motion to transfer, Dkt. 13, is GRANTED;
2) This case is transferred to the United States District Court for the Northern District
of Indiana, South Bend Division.
Entered this 1st day of July, 2014.
BY THE COURT:
/s/
JAMES D. PETERSON
District Judge
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