CNH America LLC v. International Union United Auto Aerospace and Agricultural Implement Workers of America

Filing 2

ORDER signed by Chief Judge Rudolph T Randa on 02/12/2009 granting 5 Motion for Extension of Time to Answer ; granting 8 Motion to Transfer Case to United States District Court for the Eastern District of Michigan; granting 17 Motion to Supplement. (cc: all counsel) (Koll, J) [Transferred from wied on 2/17/2009.] Modified on 2/17/2009 (SSro).

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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN C N H AMERICA LLC, P l a i n t i f f, v. I N T E R N A T I O N A L UNION, UNITED AUTOMOBILE, A E R O S P A C E AND A G R IC U L T U R A L IMPLEMENT W O R K E R S OF AMERICA, Defendant. C a s e No. 08-C-720 DECISION AND ORDER T h is matter is before the Court on the Defendant International Union, United A u to m o b ile , Aerospace and Agricultural Implement Workers of America's ("UAW") motion to extend time to answer or otherwise respond to the complaint (Docket No. 5), the UAW's m o tio n to transfer the action to the United States District Court for the Eastern District of M ich ig a n (Docket No. 8), and the Plaintiff CNH America LLC's ("CNH") motion to s u p p le m e n t the record (Docket No. 17). These motions are addressed herein. Extension of Time and Supplementation of the Record The UAW requests an extension of time to file its answer or otherwise respond to the complaint until the Court decides its motion to transfer. CNH consents to the UAW's m o tio n for an extension of time. Therefore, the motion for the extension of time is granted. C N H wants to supplement the record with two documents attached to its motion: (1 ) the Case Corporation/UAW VEBA ("Voluntary Employee Benefit Association") Plan for P r e -I P O ("Initial Public Offering") Retirees effective October 1, 1998; and, (2) the Trust A g re e m e n t in Connection with Case Corporation/UAW VEBA Plan for Pre-IPO Retirees. The U A W does not oppose the motion to supplement the record. However, it argues that the s u p p le m e n ta l materials contradict CNH's argument that the contracts demonstrate that the p a rt ie s agreed that litigation would occur in this District. Because these documents may in f o rm the Court's decision and, in the absence of opposition by the UAW, CNH's motion to s u p p le m e n t the record is granted. Transfer to the Eastern District of Michigan The UAW moves to transfer this action to the Eastern District of Michigan p u rs u a n t to 28 U.S.C. § 1404(a). The UAW asserts that the transfer is overwhelmingly "in the in te re st of justice" because there is ongoing litigation of the same issues in that District and th e transfer would serve the convenience of the parties and the witnesses. CNH opposes the m o tio n asserting that the issues in this action differ from those in Yolton v. El Paso Tennessee P ip e lin e Co., Case Number 02-75164 (Yolton II) which is pending in the Eastern District of M ich ig a n . CNH also relies upon the following facts: its headquarters are in this District; all th e operative events underlying this action occurred in this District; and, CNH's expected w itn e ss e s live and work in this District. CNH also maintains that this District's civil docket is far less congested than that of the Eastern District of Michigan, and this Court is better able to interpret the Wisconsin law governing CNH's state law claims. 2 A brief summary of the allegations of the CNH's Complaint in this action a g a in s t the UAW provides context for the motion to transfer. By its Complaint, CNH seeks c o m p e n sa tio n for misrepresentations allegedly made by the UAW in 1998 in connection with a collective bargaining agreement that it entered into with CNH on behalf of retirees. S p e c if ic a lly, CNH's Complaint alleges that, as a part of CNH's collective bargaining a g re e m e n t with the UAW in 1998, CNH agreed to pay and paid $24.7 million into a VEBA tru s t that would defray the cost of health insurance premiums for several thousand UAWre p re se n te d retirees. The Complaint alleges that in consideration for CNH's payment into the V E B A trust, the UAW provided CNH with a full release from liability for the future cost of th e retirees' health care benefits that exceeded an agreed-upon cap. The Complaint further a ll e g e s that, at all times during the 1998 negotiations, the UAW presented itself as the b a rg a in in g agent for the retirees, with full authority to enter into the deal that was reached and th a t CNH reasonably relied upon the UAW's authority. The Complaint alleges that despite the VEBA trust and the terms of the release, in October 2002 when the VEBA trust was essentially exhausted, the retirees and the UAW s u e d CNH and El Paso Tennessee Pipeline Company ("El Paso") in the United States District C o u rt for the Eastern District of Michigan for the payment of the cost of certain health care b e n e f its for the retirees, Yolton v. El Paso Tennessee Pipeline Co., Case Number 02-40340 (" Y o lto n I"). That action was voluntarily dismissed by the plaintiffs. However, at the same tim e , the individual plaintiffs filed a new lawsuit against CNH and El Paso, Yolton II, alleging th e same facts and seeking the same relief as sought by Yolton I. The Complaint alleges that 3 th e UAW has been funding the ensuing litigation. Yolton II is pending in the Eastern District o f Michigan. The complaint alleges that an issue in Yolton II, that has not yet been decided, is whether the UAW possessed the authority to negotiate the release. CNH expects to try the re le a s e defense before that district court. The Complaint alleges that either way the issue is decided by Yolton II, the U A W 's conduct renders it liable for monetary damages. The Complaint states that if the re tire e s prevail, CNH will have been deprived of the benefit of the $24.7 million bargain. A lte rn a tiv e ly, if CNH prevails on the issue of the release, CNH will have lost millions of d o lla r s in attorneys fees and litigation costs due to the UAW's sponsorship of the retirees' la w s u it. The Complaint asserts a claim for breach of the 1998 collective bargaining agreement u n d e r 29 U.S.C. § 185(a) (Count I). It also asserts three claims under Wisconsin common law: b re a ch of an implied warranty of authority (Count II); intentional misrepresentation (Count III); and, negligent misrepresentation (Count IV).1 S e c tio n 1404(a) of Title 28 of the United States Code states: "For the c o n v e n ie n c e of parties and witnesses, in the interest of justice, a district court may transfer any c iv il action to any other district or division where it might have been brought." Section 1 4 0 4 (a ) is intended to place discretion in the district court to adjudicate motions for transfer a c co rd in g to an "individualized, case-by-case consideration of convenience and fairness." Stewart Org., Inc. v. Rioch Corp., 487 U.S. 22, 29 (1988). "The weighing of factors for and The UAW states that it will move to dismiss CNH's common law claims on the ground that they are p r e e m p t e d by 29 U.S.C. § 185(a). 1 4 a g a in st transfer necessarily involves a large degree of subtlety and latitude and, therefore, is c o m m itte d to the sound discretion of the trial judge." Coffey v. Van Dorn Ironworks, 796 F.2d 2 1 7 , 219 (7th Cir. 1986). CNH has the burden of showing that "the transferee forum is clearly more c o n v e n ie n t." Heller Fin., Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1293 (7th Cir. 1989). S e e also, Harley-Davidson Motor Co. v. Motor Sport, Inc., 960 F. Supp. 1386, 1394 (E.D. W i s . 1997). "[R]elated litigation should be transferred to a forum where consolidation is f e as ib le ." Van Dorn Ironworks, 796 F.2d at 221. A party seeking transfer under Section 1404(a) must establish that: 1) venue is proper in both the transferor court and the transferee court, and 2) the transfer is for the c o n v e n ie n c e of the parties and witnesses and in the interest of justice. Id. at 219 n.3; K&F M fg . Co. v. W. Litho Plate & Supply Co., 831 F.Supp. 661, 664 (N.D. Ind. 1993); Cent. States, S e . & Sw. Areas Pension Fund v. Stephens, 720 F.Supp. 126, 127 (N.D. Ill. 1989). In deciding w h e th e r the moving party has made the necessary showing, the Court may rely on the a lle g a tio n s of the complaint and also may receive and weigh the affidavits submitted by the p a rtie s . See Heller Fin., Inc., 883 F.3d at 1293-94. In evaluating the convenience and fairness of transfer under § 1404, the courts c o n s id e r both private and public interests. PKWare, Inc. v. Meade, 79 F.Supp. 2d 1007, 1019 (E .D . Wis. 2000); Harley-Davidson, Inc. v. Columbia Tristar Home Video, Inc., 851 F.Supp. 1 2 6 5 , 1270 (E.D. Wis. 1994). When evaluating the private interests ­ the convenience of the p a rtie s and witnesses ­ courts consider the plaintiff's choice of forum, the situs of material 5 e v e n ts , the availability of evidence in each forum, and the convenience of the parties relative to their respective residences and abilities to litigate in the respective forums. PKWare, Inc., 7 9 F.Supp.2d at 1019; Vanguard Mun. Bond Fund, Inc. v. Thomson Pub. Corp., 974 F.Supp. 1 1 5 9 , 1161 (N.D. Ill. 1997); see also, Harley-Davidson, Inc., 851 F.Supp. at 1270. "When [ th e ] plaintiff and [the] defendant are in different states there is no choice of forum that will a v o id imposing inconvenience; and when the inconvenience of alternative venues is c o m p a r a b le there is no basis for a change of venue; the tie is awarded to the plaintiff." In re N a t'l Presto Indus., Inc., 347 F.3d 662, 665 (7th Cir. 2003). The public "interests of justice" c o n sid e ra tio n s include judicial economy, the expedient administration of justice, and the a v a ila b ility of compulsory process over material witnesses. PKWare, Inc., 79 F.Supp.2d at 1 0 1 9 ; Harley-Davidson, Inc., 851 F.Supp. at 1270. Under § 1404(a) the threshold inquiry is whether the transferee district, the E a ste rn District of Michigan, is one in which the action "might have been brought." Section 3 0 1 (a ) of the Labor Management Relations Act of 1947, provides: Suits for violation of contracts between an employer and a labor o rg a n iz a tio n representing employees in an industry affecting c o m m e rc e as defined in this Act, or between any such labor o rg a n iz a tio n s , may be brought in any district court of the United S ta te s having jurisdiction over the parties, without respect to the a m o u n t in controversy or without regard to the citizenship of the p a r tie s . 2 9 U.S.C. § 185(a). CNH does not dispute that this action could have been brought in the E a s te rn District of Michigan. See 28 U.S.C. § 1391(a). Thus, the threshold requirement for tra n s f e r is satisfied. 6 T h e next issue is whether the UAW has demonstrated that the Eastern District o f Michigan is "clearly more convenient" than the Eastern District of Wisconsin. Heller Fin. In c ., 883 F.2d at 1293. The plaintiff's choice of forum is generally entitled to some weight, p a rticu lar ly because CNH's headquarters are located in this District.2 PKWare, Inc., 79 F .S u p p .2 d at 1019. The contract at issue was negotiated, executed, and largely performed in th is District. (Compl. ¶ 9). With respect to the convenience of the parties and witnesses, CNH states that " th e witnesses likely to be called at trial" include two individuals who reside in this District a n d are not employed by CNH. (Rogaczewski Decl. ¶¶ 3-5.) CNH states that it is important th a t the forum where the action is litigated have the power, if necessary, to compel their a tte n d a n ce at trial. Five out of seven of the UAW potential witnesses live in the Detroit area an d one of those individuals works at the UAW headquarters in Detroit. (Mem. Supp. Def.'s M o t. Transfer, Ex. 4 (Clark Decl.) ¶ 2.) The two other individuals are residents of Oklahoma C ity, Oklahoma and Burlington, Iowa, respectively. (Id.) There is an additional individual ­ a resident of Michigan ­ who may be a witness if the instant action raises any issues relating to the discussions with CNH leading up to the initiation of Yolton I. (Id.) The UAW states that "all relevant documents have almost certainly already been p ro d u c e d and are located at law offices in Michigan." (Mem. Supp. Def.'s Mot. Transfer 17.) According to the UAW, "[t]hese documents run to the tens of thousands of pages. They have CNH alleges that it is a Delaware limited liability company and its headquarters are located in Racine, W i s c o n s i n . (Compl. ¶¶ 4, 8.) 2 7 b e e n identified and are stored at the offices of counsel for the Yolton" (and Reese 3 ) plaintiffs in Southfield, Michigan. (Id. at 20.) The UAW asserts that it would be most efficient to begin d is c o v e r y with examination of those documents ­ they state that some are covered by p ro te c tiv e orders that would need to be modified to allow the UAW access to them and that w o u ld require involvement of the judicial officer who presided over discovery in the Detroit c a se s. (CNH indicates that it does not intend to conduct redundant discovery in this action a n d it expects that the discovery obtained in Yolton II will be usable in this litigation.) This forum is more convenient for CNH. Although the UAW has established th a t Michigan would be more convenient for it and its witnesses, the preference afforded to C N H 's choice of forum is a factor weighing against transfer. Neither the convenience of the p a rtie s nor the witnesses require the transfer of this case to the Eastern District of Michigan. It is well established that a transfer should not be granted when it would merely shift, rather th a n eliminate, the inconvenience of the parties. Generac Corp. v. Omni Energy Sys. Inc., 19 F . Supp.2d 917, 923 (E.D. Wis. 1998). The final §1404(a) factor is the public "interests of justice" consideration which fo cu ses on the efficient administration of the court system, the availability of compulsory p ro c e s s over material witnesses, and judicial economy. PKWare, Inc., 79 F.Supp.2d at 1019. T h e UAW asserts that, in the current venue, its former representatives would be beyond the su b p o e n a power of the court. If the action is transferred to Michigan, CNH maintains that its There is a second lawsuit brought by post-IPO retirees against CNH, Reese v. CNH America L.L.C., Case N u m b e r 04-cv-70592, that was litigated in the Eastern District of Michigan. (M e m . Supp. Def.'s Mot. Transfer 2.) R e e s e is now the subject of three appeals in the Sixth Circuit. (Id.) United States Court Judge Patrick J. Duggan, p r e s id e d over Reese and is currently presiding over Yolton II. 3 8 tw o material witnesses will be outside that court's subpoena power. Thus, in either venue one p a rty will be disadvantaged if its currently contemplated witnesses will not voluntarily attend th e trial. Statistics presented by the parties regarding the relative caseload in two districts a n d case disposition time establish that the median time for the disposition of actions in this D is tric t is not materially different than in the Eastern District of Michigan. Thus, the statistics d o not support or militate against transfer. However, the final consideration ­ judicial economy tips the balance in favor o f the transfer of this action to the Eastern District of Michigan where one of the central issues in this litigation is being litigated. The UAW's submissions establish that the issue of the U A W 's authority to represent the retirees was presented in Yolton II. Summary judgment on th e issue was denied. See Yolton v. El Paso Tenn. Pipeline Co., Case. No. 02-75164, 2008 WL 2 5 6 6 8 6 0 (E.D. Mich. Mar. 7, 2008). The judge who has presided over Yolton II for the past s ix years has extensive familiarity with the facts of the case and the applicable law. Given the p ro tra c te d history of the related litigation in the Eastern Michigan, the Court finds that the in te re s t of justice is too well served by transfer to deny the motion. See Van Dorn Ironworks, 7 9 6 F.2d at 220 ("The `interest of justice' is a separate component of a § 1404(a) transfer a n a lys is , and may be determinative in a particular case, even if the convenience of the parties a n d witnesses might call for a different result." (citations omitted)). Having considered all the re le v a n t factors pertinent to the determination, the Court grants the UAW's motion to transfer th is action to the Eastern District of Michigan. 9 NOW, THEREFORE, BASED ON THE FOREGOING, IT IS HEREBY O R D E R E D THAT: 1. T h e UAW's motion to extend time to answer or otherwise respond to the c o m p l a in t (Docket No. 5) is GRANTED; 2. 3. T h e UAW's motion to transfer (Docket No. 8) is GRANTED; and, C N H ' s motion to supplement the record (Docket No. 17) is GRANTED. D a te d at Milwaukee, Wisconsin this 12th day of February, 2009. BY THE COURT s / Rudolph T. Randa Hon. Rudolph T. Randa C h ie f Judge 10

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