Trustees of the National Asbestos Workers Pension Fund v. KC Firestop and Insulation Co. LLC

Filing 26

MEMORANDUM OPINION. Signed by Judge Peter J. Messitte on 5/4/2015. (jf2s, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND

TRUSTEES OF THE NATIONAL
ASBESTOS PENSION FUND,
Plaintiffs,
v.
KC FIRESTOP AND INSULATION
CO., LLC,
Defendant.

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Civil No. PJM 14-3873

MEMORANDUM OPINION
The Trustees of the National Asbestos Pension Fund (the “Pension Fund”), a
multiemployer benefit plan, have sued KC Firestop and Insulation Co. LLC (“KC Firestop”), an
Ohio corporation, under the civil enforcement provisions of the Employee Retirement Income
Security Act (“ERISA”), 29 U.S.C. § 1132(g), for alleged delinquent contributions to the
Pension Fund. KC Firestop has moved to dismiss or, alternatively, to transfer venue, arguing
that venue is improper in the District of Maryland. For the reasons that follow, KC Firestop’s
Motion to Dismiss or Transfer Venue (Paper No. 5) is DENIED.
Generally, venue is only proper if an action is brought 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 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.
28 U.S.C. § 1391(b). KC Firestop argues that, under Federal Rule 12(b)(3), this case should be
dismissed for improper venue as it resides in Ohio, has no contacts with Maryland, and because
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there are no allegations that a substantial portion of the events occurred in Maryland.
Alternatively, KC Firestop argues that even if venue is proper in Maryland, the Court should
nonetheless transfer the case to the Southern District of Ohio “[f]or the convenience of the
parties and witnesses” and “in the interests of justice.” 28 U.S.C. § 1404(a). It suggests that all
the witnesses and evidence in this case are located in Ohio, as is its preferred counsel, and
therefore trial would be more efficient in Ohio. Moreover, KC Firestop notes that, as a company
of two people, its financial resources are severely limited relative to those of the Pension Fund.
The Pension Fund responds that KC Firestop relies on the wrong statute governing venue.
Specifically, it argues that, with delinquent contribution actions under ERISA, venue is
appropriate in the federal district court “where the plan is administered, where the breach took
place, or where a defendant resides or may be found.” 29 U.S.C. § 1132(e)(2). According to the
Pension Fund, this special venue provision was designed to “facilitate enforcement of ERISA
and to minimize the expense to the Trustees and the fund in collecting delinquent payments.”
Trustees of Nat. Asbestos Workers Pension Fund v. Lake Erie Insulation Co., 688 F. Sup. 1059,
1060 (D. Md. 1988); see also Flynn v. Veazey Const. Corp., 310 F. Supp. 2d 186, 193 (D.D.C.
2004) (noting that the “special venue provision makes collection efforts efficient, economical,
and inexpensive for ERISA funds, fulfilling Congress’s intent to protect the financial integrity of
such funds”). Since the Pension Fund is administered in Maryland, it argues that venue is in fact
proper here.
With respect to KC Firestop’s request to transfer venue, the Pension Fund responds that
KC Firestop has not met the heavy burden to disturb its choice of venue.

The Pension Fund

again argues that in ERISA cases there is a policy rationale in favor of according its chosen

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forum greater weight, and that a transfer would only shift the burden of inconvenience from KC
Firestop to the Pension Fund.
The Court agrees with the Pension Fund. ERISA’s special venue provision trumps the
general venue provisions of 28 U.S.C. § 1391(b). Accordingly, venue is proper here as the
Pension Fund is administered in the State of Maryland. See 29 U.S.C. § 1132(e). Regarding
possible transfer, a plaintiff’s “choice of forum should not be disturbed unless the balance of
equities is strongly in favor of the defendant.” Trustees of Nat. Asbestos Workers Pension Fund,
688 F. Supp. at 1060 (citing Gulf Oil v. Gilbert, 330 U.S. 501 (1947)). Moreover, Trustees of
ERISA funds “are given the privilege to sue employers who fail to contribute to the fund in the
district where the plan is administered without regard to the location of the employers. This
policy of Congress . . . reflect[s] the intent to facilitate enforcement of ERISA and minimize the
expense to the Trustees and the fund in collecting delinquent payments.” Id. Even though KC
Firestop may have fewer resources than the Pension Fund, the policy rationale supporting
ERISA’s special venue provision requires more than KC Firestop has argued here to justify
transferring this case away from the Pension Fund’s preferred forum.
For the foregoing reasons, the Court DENIES KC Firestop’s Motion to Dismiss or
Transfer Venue (Paper No. 5).

A separate Order will ISSUE.

/s/
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PETER J. MESSITTE
UNITED STATES DISTRICT JUDGE
May 4, 2015
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