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Fanning v. Capco Contractors

May 13, 2010

MICHAEL R. FANNING, AS CHIEF EXECUTIVE OFFICER OF THE CENTRAL PENSION FUND OF THE INTERNATIONAL UNION OF OPERATING ENGINEERS AND PARTICIPATING EMPLOYERS, ET AL., PLAINTIFFS,
v.
CAPCO CONTRACTORS, INC., DEFENDANT.



The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge

MEMORANDUM OPINION

Plaintiffs filed this action on November 25, 2009, against Defendant Capco Contractors, Inc. ("Capco") alleging violations of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), 29 U.S.C. §§ 1001 et seq. Plaintiffs are fiduciaries of two employee benefit funds, the Central Pension Fund of the International Union of Operating Engineers and Participating Employers ("Central Pension Fund") and the International Union of Operating Engineers and Pipe Line Employers Health and Welfare Fund ("Health and Welfare Fund") (collectively, the "Funds"). See Compl. ¶¶ 1-2. Plaintiffs claim that Capco failed to make plan contributions to the Funds as required under a collective bargaining agreement with Local Union 178 of the International Union of Operating Engineers ("Local 178") and participating agreements with Plaintiffs. See Compl. ¶¶ 7-12. On December 28, 2009, Capco filed its Answer to the Complaint and a [6] Motion to Transfer Venue to the United States District Court for the Eastern District of Texas, Marshall Division, pursuant to 28 U.S.C. § 1404(a). Plaintiffs filed an opposition brief, and Defendant filed a reply. For the reasons explained below, the Court shall DENY Defendant Capco's Motion to Transfer Venue.

I. FACTUAL BACKGROUND

The Central Pension Fund is an employee benefit plan funded according to various collective bargaining agreements between participating employers and local unions affiliated with the International Union of Operating Engineers and is administered in Washington, D.C. See Compl. ¶ 1. The Health and Welfare Fund is an employee benefit plan that transacts business in Washington, D.C. Id. ¶ 2. Capco is a signatory to a collective bargaining agreement ("CBA") with Local 178governing wages, benefits, and terms and conditions of employment for certain employees hired by Capco who perform work covered by the CBA. See Answer ¶ 7. Capco is a Texas corporation with its principal place of business in Henderson, Texas. See id. ¶ 3. Capco is also a signatory to certain participating agreements with Plaintiffs. Id. ¶ 8. Plaintiffs allege that pursuant to the CBA and the participating agreements, Defendant agreed to pay Plaintiffs a certain sum of money for each hour worked or paid to Capco employees performing work covered by the CBA and/or participating agreements. See Compl. ¶ 10. Capco admits that it agreed to make payments under the CBA but denies that it was obligated to do so under the participating agreements. See Answer ¶ 10.

Plaintiffs hired auditors from the Calibre CPA Group to conduct an audit of Capco's books and records for the period of January 2005 through December 2007. Compl. ¶ 18. The results of the audit revealed that Capco owed contributions to the Central Pension Fund in the amount of $330,525.30 and the Health and Welfare Fund in the amount of $669,004.85. Id. The audit report indicated that Capco had failed to report employees in covered job classifications, i.e., non-union operators. See Decl. of Michael R. Fanning (hereinafter, "Fanning Decl."), Ex. E (May 26, 2009 Compliance Audit Report). Cacpo denies that this review was an "audit" and claims that it failed to comply with accepted standards for audit procedures. Answer ¶ 18. Capco also contends that representatives of Local 178 have consistently represented to Capco that it would only be required to pay contributions to Plaintiffs for specific employees hired through the Local 178 hiring hall and agreed upon by the parties. See Answer, Aff. Defs. ¶ 1. It is Capco's position that the claim for unpaid contributions is largely attributable to employees who were not covered by the CBA. See Decl. of Billy Torrence ¶ 3.

Plaintiffs have attached a copy of excerpts from the CBA (also known as the "Universal Agreement") to their opposition to the motion to transfer. See Fanning Decl., Ex. C. The CBA states that Capco agrees to be bound by the agreements and declarations of trust establishing the Central Pension Fund and the Health and Welfare Fund. See id., Art. XIV. Plaintiffs have also attached a participating agreement signed by the President of Capco, which states, "The EMPLOYER further agrees that contributions are to be paid to the Funds for all employees who work within the jurisdiction of the International Union of Operating Engineers, Local 178, whether or not such employees are members of Local 178." See Fanning Decl., Ex. D (Participating Agreement).

On February 19, 2010, Capco filed a separate lawsuit against the Central Pension Fund, the Health and Welfare Fund, and Local 178 in the U.S. District Court for the Eastern District of Texas. See Capco Contractors, Inc. v. Cent. Pension Fund of the Int'l Union of Operating Eng'rs & Participating Employers, Civ. A. No. 1:10-CV-0058 (E.D. Tex. filed Feb. 19, 2010) (hereinafter, "Texas Lawsuit").*fn1 Capco alleges in that lawsuit that an agent of Local 178 represented to Capco that Local 178's occupational jurisdiction was limited to specific foremen/operators hired through the union's hiring hall. See Texas Lawsuit, Complaint ¶ 10. The Court takes judicial notice of the allegations in this related case.

II. LEGAL STANDARD

Under 28 U.S.C. § 1404(a), a court may transfer a case to any other district where it might have been brought "[f]or the convenience of parties and witnesses, in the interests of justice." In considering whether transfer would be proper, the court may consider the following factors:

[C]onvenience of the witnesses of plaintiff and defendant; ease of access to sources of proof; availability of compulsory processes to compel the attendance of unwilling witnesses; the amount of expense for willing witnesses; the relative congestion of the calendars of the potential transferee and transferor courts; and other practical aspects of expeditiously and conveniently conducting a trial.

SEC v. Page Airways, Inc., 464 F. Supp. 461, 463 (D.D.C. 1978). The Court may also consider public interest considerations such as (1) the transferee court's familiarity with the governing laws and the pendency of the related actions in the transferee's forum; (2) the relative congestion of the calendars of the potential transferee and transferor courts; and (3) the local interest in deciding local controversies at home. Greater Yellowstone Coalition v. Bosworth, 180 F. Supp. 2d 124, 128 (D.D.C. 2001). Section 1404(a) vests discretion in the district court to conduct an individualized, case-by-case analysis. Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988). "A plaintiff's choice of forum is ordinarily entitled to deference." Nat'l Ass'n of Home Builders v. U.S. Envt'l Prot. Agency, 675 F. Supp. 2d 173, 179 (D.D.C. 2009). However, where the plaintiff does not have a substantial connection to his chosen forum, his choice of forum is entitled to less deference. Sierra Club v. Van Antwerp, 523 F. Supp. 2d 5, 11 (D.D.C. 2007). To justify a transfer of venue, a defendant must establish that the plaintiffs originally could have brought the action in the proposed transferee district. Van Dusen v. Barrack, 376 U.S. 612, 622 (1964). The moving party also bears the burden of establishing that the considerations of convenience and the interests of justice weigh in favor of a transfer to that district. See Int'l Bhd. of Painters & Allied Trades Union & Indus. Pension Fund v. Rose Bros. Home Decorating Ctr., Inc., Civ. A. No. 91-1699, 1992 WL 24036, at *2 (D.D.C. Jan. 14, 1992).

Courts give "special weight to a plaintiff's choice of forum in ERISA cases." Flynn v. Veazey Constr. Corp., 310 F. Supp. 2d 186, 193 (D.D.C. 2004). This is because ERISA contains a special venue provision explicitly authorizing plaintiffs to bring actions "in the district 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). "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, fulfilling Congress's intent to protect the financial integrity of such funds." Veazey, 310 F. Supp. 2d at 193. "A defendant requesting a transfer of venue in an ERISA case filed in the pension fund's home district faces an uphill battle, as the defendant must persuade the court that either the convenience of the parties or the witnesses, or the interest of justice, strongly outweigh[s] the substantial deference given to a plaintiff's choice of forum in these cases." Int'l Painters & Allied Trades Indus. Pension Fund v. Tri-State Interiors, Inc., 357 F. Supp. 2d 54, 58 (D.D.C. 2004).

III. DISCUSSION

There is no dispute between the parties that this action could have been filed in the Eastern District of Texas, where Capco resides and where any breach would have occurred. See 29 U.S.C. ยง 1132(e)(2) (stating that ERISA actions may be brought where the plan is administered, where the breach took place, or where a defendant resides or may be found). Thus, the only question is whether Capco has met its burden of showing that the Eastern District of Texas is a much more convenient forum for the adjudication of this action. Capco argues that transfer is appropriate because most of the witnesses and evidence relevant to this case can be found in or near that district, whereas the only relevant connection between this case and the District of Columbia is the fact that the Funds' administrative offices are located ...


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