United States District Court for the District of Columbia
March 24, 2004.
JOHN FLYNN et al., Plaintiffs
VEAZEY CONSTRUCTION CORP., and VEAZEY ENTERPRISES, INC., Defendants
The opinion of the court was delivered by: RICARDO URBINA, District Judge
MEMORANDUM OPINION GRANTING THE PLAINTIFFS LEAVE TO
FILE A SUR-REPLY; DENYING THE DEFENDANTS'MOTION TO DISMISS OR, IN
THE ALTERNATIVE, TO TRANSFER
This case comes before the court on the plaintiffs' motion for leave to
file a sur-reply and on the defendants' motion to dismiss or, in the
alternative, to transfer. The plaintiffs seek to recover delinquent
contributions under the Employee Retirement Income Security Act
("ERISA"), 29 U.S.C. § 1001 et seq. First, because the
defendants raise arguments for the first time in their reply, the court
grants the plaintiffs' motion for leave to file a sur-reply. Second,
because the plaintiffs have asserted fiduciary status, claims for
delinquent contributions are not benefits under ERISA, and venue is
proper in this district, the court denies the defendants' motion to
dismiss. Finally, because the convenience of the parties and the
witnesses and the interest of justice do not favor transfer, the court
denies the motion to transfer.
A. Factual Background
The plaintiffs are trustees of the Bricklayers and Trowel Trades
International Pension Fund ("IPF"), which is a multi-employer employee
benefit plan under ERISA. Compl. ¶¶ 1, 3. The plaintiffs allege that
they are authorized to effect collections on behalf of the IPF as well as
on behalf of the Bricklayers & Allied Craftworkers International
Health Fund ("IHF"), the International Masonry Institute ("IMI"), and the
Bricklayers & Allied Craftworkers International Union ("BAC").
Id. ¶ 4. In addition, the plaintiffs claim that they are
authorized, pursuant to an assignment of claims, to effect collections
for Bricklayers Local 1 Texas, Louisiana & New Mexico. funds, the
Bricklayers Gulf Coast Pension Fund, the Bricklayers Apprenticeship and
Training Fund of Houston-Galveston and BAC Processing Office
(collectively, "the Local Unions"). Id.
The plaintiffs assert that the defendants executed a
collective-bargaining agreement with the International Union of
Bricklayers and Allied Craftsmen and its affiliated Local Unions, which
obligated the defendants to make certain payments to the BAC, IPF, IHF,
IMI, and the Local Unions on behalf of their covered employees.
Id. ¶ 8, 11. Despite their obligations under the
collective-bargaining agreement, the plaintiffs contend that the
defendants failed to make all required contributions. Id. ¶
B. Procedural History
On March 24, 2003, the plaintiffs filed their complaint pursuant to
section 502(a)(3) of ERISA. 29 U.S.C. § 1132(a)(3), and section 301
of the National Labor Relations Act, 29 U.S.C. § 185. In response, on
May 21, 2003, the defendants filed a motion to dismiss under Federal
Rule of Civil Procedure 12(b)(1) for lack of subject-matter
jurisdiction and under Rule 12(b)(3) for improper venue. In the
alternative, the defendants ask the court to transfer venue pursuant to
28 U.S.C. § 1404(a) and 1406(a). On July 2, 2003, the plaintiffs
filed a motion for leave to file a sur-reply. The court now turns to
A. Legal Standard for Leave to File a Sur-Reply
The decision to grant or deny leave to file a sur-reply is committed to
the sound discretion of the court. Am. Forest & Paper Ass'n,
Inc. v. Envtl. Prot. Agency, 1996 WL 509601, at *3 (D.D.C. Sept. 4,
1996). If the movant raises arguments for the first time in his reply to
the non-movant's opposition, the court will either ignore those arguments
in resolving the motion or provide the non-movant an opportunity to
respond to those arguments by granting leave to file a sur-reply.
Ben-Kotel v. Howard Univ., 319 F.3d 532, 536 (D.C. Cir. 2003);
Natural Res. Def. Council, Inc. v. Envtl. Prot. Agency,
25 F.3d 1063, 1072 n.4 (D.C. Cir. 1994); Pa. Elec. Co. v. Fed. Energy
Regulatory Comm'n, 11 F.3d 207, 209 (D.C. Cir. 1993); see also
Herbert v. Nat'l Acad. of Scis., 974 F.2d 192, 195 (D.C. Cir. 1992)
(acknowledging that consideration of arguments raised for the first time
in a reply would be "manifestly unfair" to the respondent); Corson
& Gruman Co. v. Nat'l Labor Relations Bd., 899 F.2d 47, 50 n.4
(D.C. Cir. 1990) (requiring parties to raise all of their arguments in
their opening briefs "to prevent sandbagging"); Robinson v. Detroit
News, Inc., 211 F. Supp.2d 101, 113 (D.D.C. 2002) (denying leave to
file a sur-reply where the proposed sur-reply merely reiterated prior
arguments); Lewis v. Rumsfeld, 154 F. Supp.2d 56, 61 (D.D.C.
2001) (denying leave to file a sur-reply where the plaintiff failed
to demonstrate that the defendant's reply presented any new
B. Legal Standard for a Motion to Dismiss Pursuant
to Rule 12(b)(1)
Federal courts are courts of limited jurisdiction and the law presumes
that "a cause lies outside this limited jurisdiction." Kokkonen v.
Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); St.
Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283
, 288-89 (1938).
Because "subject-matter jurisdiction is an `Art. III as well as a
statutory requirement[,] no action of the parties can confer
subject-matter jurisdiction upon a federal court.'" Akinseye v.
District of Columbia, 339 F.3d 970, 971 (D.C. Cir. 2003) (quoting
Ins. Corp. of Ir., Ltd. v. Compagnie des Bauxite de Guinea,
456 U.S. 694
, 702 (1982)). On a motion to dismiss for lack of subject-matter
jurisdiction pursuant to Rule 12(b)(1), the plaintiff bears the burden of
establishing that the court has subject-matter jurisdiction. Evans v.
B.F. Perkins Co., 166 F.3d 642
, 647 (4th Cir. 1999); Rasul v.
Bush, 215 F. Supp.2d 55, 61 (D.D.C. 2002) (citing McNutt v.
Gen. Motors Acceptance Corp., 298 U.S. 178
, 182-83 (1936)). The
court may dismiss a complaint for lack of subject-matter jurisdiction
only if'"it appears beyond doubt that the plaintiff can prove no set of
facts in support of his claim which would entitle him to relief"
Empagran S.A. v. F. Hoffman-Laroche, Ltd., 315 F.3d 338
(D.C. Cir. 2003) (quoting Conley v. Gibson, 355 U.S. 41
Because subject-matter jurisdiction focuses on the court's power to
hear the claim, however, the court must give the plaintiff's factual
allegations closer scrutiny when resolving a Rule 12(b)(1) motion than
would be required for a Rule 12(b)(6) motion for failure to state a
claim. Macharia v. United States, 334 F.3d 61, 64, 69 (D.C. Cir.
2003); Grand Lodge of Fraternal Order of Police v. Ashcroft,
185 F. Supp.2d 9, 13 (D.D.C. 2001). Moreover, the court is not limited to
the allegations contained in the complaint. Hohri v. United
States, 782 F.2d 227,
241 (D.C. Cir. 1986), vacated on other grounds,
482 U.S. 64 (1987). Instead, to determine whether it has jurisdiction over the
claim, the court may consider materials outside the pleadings.
Herbert v. Nat'l Acad. of Scis., 974 F.2d 192, 197 (D.C. Cir.
C. Legal Standard for a Motion to Dismiss Pursuant
to Rule 12(b)(3)
To prevail on a motion to dismiss for improper venue, the defendant
must present facts that will defeat the plaintiff's assertion of venue.
2215 Fifth St. Assocs. v. U-Haul Int'l, Inc., 148 F. Supp.2d 50,
54 (D.D.C. 2001) (citing 5A FED. PRAC. & PROC.2d § 1352).
In this circuit, there is "little case law on the question of where the
burden of persuasion lies when a plaintiffs choice of venue is
challenged." Johnson v. Wash. Gas Light Co., 89 F. Supp.2d 45,
47 (D.D.C. 2000). Courts in the Fourth Circuit, however, have held that
the plaintiff usually bears the burden of establishing that venue is
proper. Gov't of Egypt Procurement Office v. M/V ROBERT E. LEE,
216 F. Supp.2d 468, 471 (D. Md. 2002); Dunham v. Hotelera Canco. S.A.
de C. V., 933 F. Supp. 543
, 550 (E.D. Va. 1996); see also
5A FED. PRAC. & PROC.2d § 1352 (noting that placing the burden
on the plaintiff "seems correct inasmuch as it is plaintiff's obligation
to institute his action in a permissible forum, both in terms of
jurisdiction and venue").
D. The Court Grants the Plaintiff's Leave to File a
As a threshold matter, the court addresses the plaintiffs' motion to
file a sur-reply. The plaintiffs contend that in their reply brief, the
defendants make a new argument that they had not previously raised. Pls.'
Mot. for Leave to File a Sur-reply at 1. Accordingly, the plaintiffs
request leave to file the sur-reply attached as an exhibit to their
motion. The court agrees that the defendants raise a new argument for the
first time in their reply brief. Specifically, the defendants argue that
ERISA's anti-alienation provision, 29 U.S.C. § 1056(d)(1), precludes
assignment of the IHF, IMI and Local Unions claims. Defs.' Reply at
2. Because the defendants did not assert the anti-alienation argument in
their opening brief, the court grants the plaintiffs' motion for leave to
file a sur-reply to address this point and considers that sur-reply in
ruling on the defendants' motion. Ben-Kotel, 319 F.3d at 536.
E. The Court Denies the Rule Defendants' 12(b)(1) and
(b)(3) Motions to Dismiss
The defendants make several arguments for dismissal, none of which the
court finds persuasive. As an initial matter, the defendants claim that
because none of the plaintiffs are a participant, beneficiary or
fiduciary of the IHF, Evil or Local Union funds, they are not the proper
parties to bring suit.*fn1
Defs.' Mot. at 6-7. Essentially, the
defendants argue that the plaintiffs do not have standing. In response,
the plaintiffs point out that in the complaint specifically alleges that
the IHF, IMI and Local Union funds assigned their claims to the
plaintiffs. Pls.' Opp'n. at 5; Compl. ¶ 4. In their reply brief, the
defendants assert the additional argument that ERISA's anti-alienation
provision, 29 U.S.C. § 1056(d)(1), bars the plaintiffs from effecting
collections on behalf of the IMI, IHF and Local Union funds. Defs.' Reply
at 3. In addition, the defendants also argue that venue is improper in
the District of Columbia for the IHF, IMI and Local Unions.
1. The Court Concludes That It Has Subject-Matter
Jurisdiction Because the Plaintiffs Have Derivative
The court first concludes that the IHF, EVII and Local Unions' may
assign their claims for delinquent contributions to the plaintiffs.
Cagle v. Bruner, 112 F.3d 1510
, 1515 (11th Cir. 1997) (noting
that "§ 1132(a) does not preclude assignees from enforcing rights
assigned to them by
those listed in the statute as permissible plaintiffs"); cf.
Tex. Life, Accident, Health & Hosp. Serv. Ins. Guar. Ass'n v. Gaylord
Entm't Co., 105 F.3d 210
, 215 (5th Cir. 1997) (granting derivative
standing to assignees of breach of fiduciary duty claims); Kennedy v.
Connecticut Gen. Life Ins. Co., 924 F.2d 698
, 700-01 (7th Cir. 1991)
(holding that an assignee of medical benefits has derivative standing to
sue under ERISA). Because the plaintiffs have asserted that the IHF, Evil
and Local Unions assigned them the right to effect collections, the
plaintiffs have asserted fiduciary status. Compl. ¶ 4; Blue Cross
& Blue Shield v. Sanders, 138 F.3d 1347
, 1352 (11th Cir. 1998)
(stating that subject-matter jurisdiction exists so long as the plaintiff
is "plausibly a fiduciary"); Flynn v. Ohio Restoration, Inc.,
260 F. Supp.2d 156, 168 (D.D.C. 2003) (noting that collection of
delinquent contributions is a fiduciary obligation); Primax
Recoveries, Inc. v. Lee, 260 F. Supp.2d 43, 46-47 (D.D.C. 2003)
(holding that at the motion to dismiss stage, the plaintiff need only
assert, not prove, fiduciary status). Thus the court cannot conclude
beyond doubt that the plaintiffs can prove no set of facts in support of
their claims which would entitle them to relief. Empagran S.A.,
315 F.3d at 343.
The defendants' second argument regarding ERISA's anti-alienation
provision fails because the anti-alienation provision explicitly applies
only to "benefits."*fn2 29 U.S.C. § 1056(d). Here, the plaintiffs
allege that the IHF, IMI and Local Unions have assigned not benefits, but
claims to recover delinquent contributions. Compl. ¶ 4. Because
claims for delinquent contributions seek to recover money for the plans
themselves, claims for delinquent contributions are not "benefits" under
§ 1056(d). Tex. Life, 105 F.3d at 215 (stating that the term
refers to a plan participants' or beneficiaries' right to receive
payments); Acosta v. Pac. Enters., 950 F.2d 611, 619 (9th Cir.
1991) (holding that the term "benefit" refers to a participant's or
beneficiary's right to receive monies from the plan administrators or
trustees); Mack Boring Parts v. Meeker Sharkey Moffitt,
930 F.2d 611, 619 (3rd Cir. 1991) (stating that "benefits," as
used under ERISA "refers only to payments due to the plan participants
or beneficiaries"). Furthermore, allowing derivative standing for
collection of delinquent payments will not frustrate the goal of ERISA's
prohibition against assignment of benefits. Hermann Hosp. v. MEBA Med.
& Benefits Plan, 845 F.2d 1286, 1289 (5th Cir. 1988)
(stating that the purpose of ERISA's proscription on assignment of
pension benefits is to insure that the employee's accrued benefits are
actually available for retirement purposes). Because the anti-alienation
provision in ERISA is inapplicable to claims for delinquent funds, it
does not appear beyond doubt that the plaintiffs can prove no set of
facts in support of their claims which would entitle them to relief.
Empagran S.A., 315 F.3d at 343. Accordingly, the court denies the
defendants' Rule 12(b)(1) motion to dismiss. Id.
2. The Court Concludes That Venue Is Proper In the
District of Columbia Because the IPF Is the Real Party
The defendants also contend that the court should dismiss the
plaintiffs' claims because venue is not proper in the District of
Columbia. Defs.' Mot. at 7. While the defendants concede that venue is
proper as to the IPF because it is administered in Washington, D.C., they
argue that venue is improper in this district with respect to the
remaining plaintiffs. Id. Specifically, the defendants claim
that the plaintiffs do not indicate where the administration of the IHF,
Evil and Local Union funds takes place. Id. The plaintiffs
respond by arguing that pursuant to the
assignment of the IHF, IMI, BAC and Local Union claims, the IPF is
the real party in interest and that as such, it is where the plaintiffs
administer the IPF that controls venue. Pls.' Opp'n at 11.
Under § 502(e)(2) of ERISA, a party may bring suit in the district
in which the plan is administered. 29 U.S.C. § 1132(e)(2). In their
submissions, the plaintiffs clearly indicate that the IHF, IMI, BAC and
Local Unions have assigned their claims for delinquent contributions to
the plaintiffs. Pls.' Opp'n Ex. 1 ¶¶ 1, 6. Accordingly, the plaintiffs
are the real party in interest. Primax Recoveries, Inc. v. Lee,
260 F. Supp.2d 43, 52 (D.D.C. 2003) (holding that the assignee of a
claim becomes the real party in interest for that claim); Honey v.
George Hyman Constr. Co., 63 F.R.D. 443, 447 (D.D.C. 1974) (stating
that it is "well settled that an assignee for purposes of collection is a
real party in interest"). Because the plaintiffs are the real party in
interest for the IHF, IMI, BAC and Local Unions claims and they
administer the IPF in this district, venue is proper in this district
under 29 U.S.C. § 1132(e)(2). Accord Dixie Portland Flour Mills,
Inc. v. Dixie Feed & Seed Co., 382 F.2d 830, 833 (6th Cir. 1967)
(concluding that where an Ohio corporation assigned its claim to a
Tennessee corporation, the Tennessee corporation was the only real party
in interest and that as a result, venue was proper in Tennessee);
Bastille Props. Inc., v. Hometels of Am., Inc., 476 F. Supp. 175,
178 (S.D.N.Y. 1979) (citing Dixie Portland for the
proposition that venue was proper in New York after the sole foreign
co-plaintiff assigned its claim to its New York co-plaintiff).
F. The Court Denies the Defendants' Motion to
Transfer Because the Convenience of the
Parties and Witness and the Interests of Justice Do Not
Finally, the defendants argue for transfer pursuant to
28 U.S.C. § 1404(a). Defs.' Mot. at 9. Section 1404(a) authorizes a
court to transfer a civil action to any other district where it could
have been brought "for the convenience of parties and witnesses, in
the interest of justice[.]" 28 U.S.C. § 1404(a). In addition, section
1404(a) vests "discretion in the district court to adjudicate motions to
transfer according to [an] individualized, case-by-case consideration of
convenience and fairness." Stewart Org., Inc. v. Ricoh Corp.,
487 U.S. 22
, 27 (1988) (quoting Van Dusen v. Barrack,
376 U.S. 612
, 622 (1964)). Under this statute, the moving party bears the
burden of establishing that transfer is proper. Trout Unlimited v. Dep't
of Agric., 944 F. Supp. 13, 16 (D.D.C. 1996).
In the ERISA context, a defendant seeking a transfer of venue has the
additional burden of surmounting ERISA's special venue provision.
29 U.S.C. § 1132(e)(2); Flynn v. Daly & Zilch Mason
Contractors, Inc., No. 00-3027, slip op. at 1-2 (D.D.C. June 6,
2001). This provision states:
[W]here an action under this subchapter is brought
in a district court of the United States, it may
be brought in the district where the plan is
administered, where the breach took place, or
where a defendant resides or may be found, and
process may be served in any other district where
a defendant resides or may be found.
29 U.S.C. § 1132(e)(2). By allowing the action to occur in the
district where the plan is administered, the special venue provision
makes collection efforts efficient, economical, and inexpensive for ERISA
funds, fufilling Congress's intent to protect the financial integrity of
such funds. Int'l B'hood of Painters & Allied Trades Union v.
Best Painting & Sandblasting Co., 621 F. Supp. 906, 907 (D.D.C.
1985); Dugan v. M&W Dozing & Trucking, Inc., 721 F. Supp. 417,
419 (N.D. Ill. 1989). Accordingly, courts give special weight to a
plaintiff's choice of forum in ERISA cases. Flynn v. Ravare Masonry,
Inc., No. 01-1236, slip op. at 1-2 (D.D.C. Jan. 3, 2002); Joyce
v. E. Concrete Paving Co., 1996 WL 762323, at *1 (D.D.C. Sept. 5,
In support of their motion, the defendants state that the parties
entered into the collective-bargaining agreement in Houston, the alleged
breach of the agreement occurred in Houston, the defendants maintain
offices and conduct business in Houston and virtually all potential
witnesses to the suit reside in Houston. Defs' Mot. at 10. The plaintiffs
respond by stressing that ERISA's specific venue provision provides that
suit "may be brought where the plan is administered," the special
deference accorded an ERISA plaintiff's choice of forum, deference
generally accorded the plaintiff's choice of forum, and the fact that,
contrary to the defendants' representations, several witnesses and
records are located in the District of Columbia. Pls.' Opp'n at 15-26.
Because of the special weight ERISA accords a plaintiff's choice of
forum, the court need not engage in a lengthy analysis to determine that
transfer is not warranted. Indeed, under similar conditions, members of
this court have cited ERISA's special venue provision in rejecting
virtually every attempt to transfer ERISA actions under § 1404(a).
See e.g., Flynn v. Fishcer Tile & Marble, Inc., No. 01-0098,
slip op. at 6-7 (D.D.C. Feb. 5, 2002) (denying motion to transfer
pursuant to § 1404(a); Ravare Masonry, No. 01-1236, slip op.
at 1-2 (same); Daly & Zilch Mason Contractors, Inc., No.
00-3027, slip op. at 1-2 (same); Joyce v. Kanphus Exterior Panel
Co., No. 99-3362, slip op. at 1-2 (D.D.C. Apr. 14, 2000) (same);
Joyce v. R&R Ceramics, Inc., No. 99-1697, slip op. at 1-3
(D.D.C. Sept. 28, 1999) (same); Joyce v. Glenn's Tile, Inc.,
No 97-1982, slip op. at 5 (D.D.C. July 16, 1998) (same); E. Concrete
Paving Co., 1996 WL 762323, at *1 (same).
The defendants' premise their asserted reasons for transfer on the fact
that the defendants' employers and records are located in Texas. Defs.'
Mot. at 10. Forcing ERISA plaintiffs to litigate claims where each
employer resides, however, would undermine the financial integrity of
the funds, defeating the goal of efficient administration of ERISA
plans. Dugan, 727 F. Supp. at 419. Further, although the
defendants assert that virtually all potential witnesses reside in Texas,
the plaintiffs indicate that, to the contrary, many of their witnesses
and records are located in the District of Columbia.*fn3 Pls.' Opp'n at
23-24. Accordingly, the court concludes that in light of the special
deference accorded ERISA plaintiffs, the convenience of parties and
witnesses and the interest of justice does not favor transfer. Daly
& Zilch Mason Contractors, Inc., No. 00-3027, slip op. at 1-2;
Stewart Org., 487 U.S. at 27.
For the foregoing reasons, the court grants the plaintiffs' motion for
leave to file a sur-reply and denies the defendants' motion to dismiss
or to transfer. An order consistent with this Memorandum Opinion is
separately and contemporaneously issued this 24th day of March, 2004.