Casey v. Reliance Trust Company

Filing 41

ORDER ADOPTING 29 REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE. ORDERED that Defendant Reliance Trust Company's Motion to Transfer Venue (Dkt. # 13 ) is DENIED, and the objections of Defendant are OVERRULED. Signed by District Judge Amos L. Mazzant, III on 1/17/2019. (rpc, )

United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION

JESSICA CASEY and JASON
COLEMAN, on behalf of the RVNB
Holdings, Inc. Employee Stock
Ownership Plan, and on behalf of a
class of all other persons similarly
situated,
Plaintiff,
v.
RELIANCE TRUST COMPANY, a
Georgia corporation,
Defendant.

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CIVIL ACTION NO. 4:18-CV-00424
Judge Mazzant/Magistrate Judge Craven

ORDER ADOPTING REPORT AND RECOMMENDATION
OF THE UNITED STATES MAGISTRATE JUDGE
The above-entitled and numbered civil action was heretofore referred to United States
Magistrate Judge Caroline M. Craven pursuant to 28 U.S.C. § 636. On December 12, 2018, the
Magistrate Judge issued a Report and Recommendation, recommending Defendant’s Motion to
Transfer Venue (Dkt. # 13) be denied. Defendant Reliance Trust Company (“Defendant”) filed
objections to the Report and Recommendation. Jessica Casey and Jason Coleman, on behalf of the
RVNB Holdings, Inc. Employee Stock Ownership Plan, and on behalf of a class of all other persons
similarly situated, filed a response to Defendant’s objections. The Court conducts a de novo review
of the Magistrate Judge’s findings and conclusions.
BACKGROUND
This is a putative class action under the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”). In the First Amended Complaint filed January 7, 2019, Plaintiffs Jessica

Casey and Jason Coleman (“Plaintiffs”) bring suit on behalf of the RVNB Holdings, Inc. Employee
Stock Ownership Plan (“the Plan”), and similarly situated participants in the Plan, and their
beneficiaries, against Defendant, the trustee for the Plan when the Plan acquired shares of RVNB
Holdings, Inc. (“RVNB”) in December 2012. (Dkt. # 35, ¶ 1). This action is brought under §§ 404,
406, 409, and 502(a) of ERISA, 29 U.S.C. §§ 1104, 1106, 1109, and 1132(a), for losses suffered by
the Plan and its participants, and other relief, caused by Defendant when it authorized the Plan to buy
shares of RVNB for more than fair market value. Id., ¶ 3.
Plaintiff Casey is a Maryland resident, and Plaintiff Coleman is a Georgia resident. Id., ¶¶
15-16. Defendant is a trust company chartered under Georgia law with its headquarters in Atlanta,
Georgia. Id., ¶ 17. On September 10, 2018, Defendant filed a Motion to Transfer Venue, asserting
the Northern District of Georgia is a clearly more convenient forum than the Eastern District of
Texas. (Dkt. # 13).
REPORT AND RECOMMENDATION
On December 12, 2018, the Magistrate Judge entered a Report and Recommendation
regarding proposed findings of fact and recommendations that Defendant’s motion to transfer venue
pursuant to 28 U.S.C. § 1404(a) be denied. (Dkt. # 29). After finding the case could have been
brought in the Northern District of Georgia, the Magistrate Judge considered the applicable private
and public interest factors. Id. at 5. She found two private interest factors (ease of access to sources
of proof and practical problems) and three public interest factors (court congestion, familiarity with
the governing law, and avoidance of unnecessary problems of conflict of laws) are neutral and do
not weigh for or against transfer.
The Magistrate Judge found one private interest factor (availability of compulsory process)
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weighed in favor of transfer, noting Defendant identified six non-party witnesses residing within the
compulsory subpoena power of the Northern District of Georgia. Id. at 10. However, on balance,
she found the remaining private interest factor (cost of attendance for the parties and witnesses)
weighed against transfer. Id. at 12. She also found the remaining public interest factor (local interest
in having localized interests decided at home) weighed against transferring this case to Georgia. Id.
at 15. Balancing the factors, the Magistrate Judge concluded Defendant had not shown that transfer
to the Northern District of Georgia is clearly more convenient. Id. at 16.
OBJECTIONS
In its objections, Defendant asserts the Magistrate Judge reached an erroneous conclusion
on two of the eight factors relevant to the venue transfer analysis – the cost of attendance factor and
the localized interest factor. In its first objection, Defendant asserts the Magistrate Judge incorrectly
concluded party witnesses with relevant knowledge reside in this district.1 Specifically, Defendant
takes issue with the Magistrate Judge’s consideration of RVNB chief financial officer Nick Bouras
and chief operating officer Ormando Gomez as party witnesses. (Dkt. No. 32 at 7). According to
Defendant, RVNB is not a party to this litigation; nor are any of its current or former officers.
Defendant further asserts the cost of attendance factor requires the Court accord greater weight to
the convenience of non-party witnesses, the majority of whom either live in Georgia or are closer
to that forum. Defendant argues the Northern District of Georgia would be more convenient for
them.

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In her analysis of the costs of attendance for parties and non-party witnesses, the Magistrate
Judge noted important party witnesses reside in this district and some non-party witnesses reside in
both districts; thus, she was not convinced transfer of this case to Georgia would make this suit more
convenient to material witnesses. (Dkt. # 29 at 12).
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In its second objection, Defendant contends the Magistrate Judge gave “undue weight to the
suggestion that this case ‘revolves around a plan administered’ in this district for a company
headquartered in this district.” (Dkt. # 32 at 2). Defendant asserts this case is not about plan
administration; it is about Defendant’s conduct in reviewing and approving the Plan transaction at
issue. According to Defendant, nearly all of that conduct occurred at Defendant’s headquarters in
Atlanta. Defendant also asserts that to the extent the Plan suffered any injury – which Defendant
disputes – that injury was suffered throughout the United States; thus, this district does not have a
compelling “localized” interest in adjudicating this case.
DE NOVO REVIEW
Applicable law
A district court may transfer any civil case “[f]or the convenience of parties and witnesses,
in the interest of justice, . . . to any other district or division where it might have been brought.” 28
U.S.C. § 1404(a). The party seeking transfer of venue must show good cause for the transfer. In re
Volkswagen of America, Inc., 545 F.3d 304, 315 (5th Cir.2008) (en banc) (“Volkswagen II”). The
moving party must show that transfer is “clearly more convenient.” Id.
When deciding whether to transfer venue, the Court balances the private interests of the
litigants and the public’s interest in the fair and efficient administration of justice. Id. The private
interest factors include (1) the relative ease of access to sources of proof; (2) the availability of
compulsory process to secure the attendance of witnesses; (3) the cost of attendance for willing
witnesses; and (4) all other practical problems that make trial of a case easy, expeditious and
inexpensive. Id. The public interest factors include (1) the administrative difficulties flowing from
court congestion; (2) the local interest in having localized interests decided at home; (3) the
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familiarity of the forum with the law that will govern the case; and (4) the avoidance of unnecessary
problems of conflict of laws or in the application of foreign law. Id. These factors are not exhaustive
or exclusive, and no single factor is dispositive. Id.
Discussion
Defendant first objects to the Magistrate Judge’s conclusion that “regarding party witnesses,
the Eastern District of Texas is more convenient,” arguing for the first time that RVNB officers Nick
Bouras and Ormando Gomez are not party witnesses. (Dkt. # 29 at 12). In its motion, Defendant
identified only one potential party witness – current employee Josh Marble – who resides in
Indianapolis. Id. at 11 & n. 4. In the response, Plaintiff focused on potential “sale-side witnesses,”
arguing Defendant erroneously argued that only its own current and former employees and valuator
matter to the analysis. (Dkt. # 14 at 7). Specifically, Plaintiff argued current RVNB employees
(including RVNB’s chief financial officer), who are likely to reside within the Eastern District of
Texas near RVNB’s corporate headquarters in Carrollton, Texas, will be key witnesses on the
principal issues in this case, including RVNB’s fair market value.2 Id. at 11.
Importantly, in its reply, Defendant identified two of the unnamed “sale-side witnesses”
referred to in the response as “two senior officers who were involved in the 2012 transaction – CFO
Nick Bouras and COO Ormando Gomez.” (Dkt. # 16 at 1). During its discussion of the cost of
attendance of willing witnesses factor, Defendant argued in its reply it is irrelevant that most of the
employees who worked at RVNB’s headquarters are located in this district. Id. at 2. According to

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In the response to Defendant’s motion to transfer, Plaintiff objected that she had been
prejudiced because Defendant filed its motion without serving initial disclosures identifying the
various companies and individuals who worked on the buyer and seller sides of the Plan transaction
and for RVNB. (Dkt. # 14 at 6).
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Defendant, “[s]imply because a person worked at the RVNB headquarters does not mean that he or
she has any relevant knowledge, and in fact, Plaintiff has not identified any such employees with
relevant knowledge. Moreover, this factor in the transfer analysis favors the convenience of nonparty witnesses over party witnesses.” Id. (emphasis in original). Defendant then stated that “[b]y
Plaintiff’s own admission, employees at the RVNB headquarters, even if they have relevant
knowledge, are members of the putative class and therefore are party witnesses.” Id. at 2-3.
Defendant cannot now claim the Magistrate Judge erred by considering Bouras and Gomez
party witnesses. Even if Bouras and Gomez should be considered non-party witnesses (whose
convenience is accorded greater weight as urged by Defendant and recognized by the Magistrate
Judge), this would still support the Magistrate Judge’s conclusion as to this factor. According to
Plaintiffs’ response to the objections, while Plaintiff was not able to identify members of the putative
class by name prior to the production by the Plan of its participant list, “there are more class
members in this District who were employed at RVNB’s Carrollton headquarters and will be
witnesses, as having worked on the [Plan] Transaction.” (Dkt. # 38 at 2-3). According to Plaintiffs,
there are other RVNB employee witnesses employed at the Carrollton headquarters who reside in
this district and are potential witnesses, outweighing Defendant’s potential former employee nonparty witnesses in importance and number.3 Id. at 3.

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Plaintiffs assert Defendant bloated its potential witness list with ten members of the Trust
Committee that voted on the Plan transaction. (Dkt. # 38 at 3). According to Plaintiffs, they would
provide unnecessary cumulative testimony on the Committee’s actions; thus, the Court should reduce
the weight given these witnesses.
Although Plaintiffs support the Report and Recommendation’s ultimate conclusion and did
not file an objection to the recommendation on the compulsory process factor, Plaintiffs argue in a
footnote in their response to Defendant’s objections that the Magistrate Judge erred by failing to
consider the cumulative nature of the testimony of the ten Committee members. Id. at 4 n. 4.
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The Magistrate Judge considered Defendant’s non-party witnesses residing within the
Northern District of Georgia (specifically Defendant’s former Senior Vice President Steve Martin
and five former Trust committee members), and she also appropriately considered the two non-party
witnesses identified by Plaintiff – the sellers in the Plan transaction, Robert and Vasilia Peterson,
who reside in this district. (Dkt. # 29 at 12). As noted by the Magistrate Judge, the Petersons were
officers and/or directors of RVNB, as well as shareholders, and will be key witnesses in this case.
Id. A transfer would inconvenience these witnesses.
As the Magistrate Judge correctly observed, “[w]hen inconvenience would exist in either
potential venue, merely shifting inconvenience from one party’s witnesses to the other is insufficient
to affect a transfer of venue analysis.” Id. at 11 (citing See In re Google Inc., 412 Fed. Appx. 295,
296 (Fed. Cir. 2011)). Considering all of the witnesses identified by the parties, the Court agrees with
the Magistrate Judge that this factor weighs against transfer.
Defendant also objects to the Magistrate Judge’s analysis of the localized interest factor,
stating she gave too much weight to RVNB and its headquarters within this district and she
improperly conflated plan administration in this district with an alleged injury in this district.
According to Defendant, to the extent Plaintiffs and the putative class members suffered any loss as
the result of Defendant’s alleged breach, that loss was suffered in all the states where the putative
class members reside and not just in the district where the Plan was administered. According to
Plaintiffs’ response to Defendant’s objections, the company that sponsored the Plan was located
here; the pertinent documents choose Texas law as the governing law where federal law does not
apply; all the company-side interactions with Defendant occurred here; Defendant’s representative
came to this district for an onsite visit; and Plaintiff is suing on behalf of the Plan under ERISA §
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502(a)(2) for relief to the Plan under ERISA § 409. For all these reasons, Plaintiffs assert the
Magistrate Judge correctly determined this district has a compelling interest in adjudicating this case.
In the Report and Recommendation, the Magistrate Judge considered Defendant’s argument
that the Northern District of Georgia, where Defendant is located, has an interest in adjudicating this
matter because the claims in this case center on the appropriateness of Reliance’s review and
approval of the Plan transaction at issue. (Dkt. # 29 at 14). The Magistrate Judge specifically noted
Defendant’s argument that “the fact that RVNB is based in this district and the ESOP is now
administered in this district are less relevant” because this case is not about RVNB or about plan
administration. Id. (quoting Dkt. #13 at 10) (emphasis added). The Magistrate Judge concluded as
follows:
The dispute revolves around a plan administered in the Eastern District of Texas for
a company headquartered in the Eastern District of Texas. While Defendant is
located in the Northern District of Georgia, this Court has a strong interest in
adjudicating whether the Plan, which was allegedly injured in this district, should be
compensated for any losses. The Court is not persuaded the Northern District of
Georgia has more of a local interest in adjudicating this case. As such, the interests
of justice factor weighs against transferring this case to Georgia.
(Dkt. # 29 at 15).
The Court has made a de novo review of the objections raised by Defendant and agrees with
the Magistrate Judge’s conclusion that the localized interest factor weighs against transfer. Plaintiffs
allege the Plan, located in this district, engaged in stock and loan transactions with RVNB and
selling shareholders, also located in this district. Because Plaintiffs seek losses to a Plan in this
district, this Court has a compelling local interest in adjudicating this case.
The Court is of the opinion the findings and conclusions of the Magistrate Judge are correct,
and the objections are without merit as to the ultimate findings of the Magistrate Judge. The Court
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hereby adopts the Report of the United States Magistrate Judge as the findings and conclusions of
this Court. As held by the Magistrate Judge, Defendant has not shown that transfer to the Northern
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District of Georgia is clearly more convenient.
Accordingly, it is hereby
ORDERED that Defendant Reliance Trust Company’s Motion to Transfer Venue (Dkt. #
13) is DENIED, and the objections of Defendant are OVERRULED.
SIGNED this 17th day of January, 2019.

___________________________________
AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE

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