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Chao v. Couturier

February 10, 2009


The opinion of the court was delivered by: Ralph R. Beistline United States District Judge


I. Introduction

Before the Court is Defendant Clair R. Couturier ("Defendant") with a Motion to Transfer Venue, or in the alternative, Motion to Dismiss at Docket 15. After Plaintiff Elaine L. Chao, United States Secretary of Labor ("Plaintiff") filed an Amended Complaint at Docket 26, Defendant filed an additional Motion to Dismiss Count I of the Amended Complaint at Docket 37. Regarding his Motion to Transfer Venue, Defendant argues that the Court should transfer venue to the Western District of Washington under 28 U.S.C. § 1404(a) because it is a more convenient forum, and because Plaintiff is engaging in forum-shopping. Regarding his Motion to Dismiss, Defendant claims that Count I of the Amended Complaint, which relates to transactions occurring in 2004, is barred by ERISA's three-year statute of limitations.

Plaintiff opposes at Docket 40, arguing that transfer is improper under § 1404(a), and that the action is timely because it was filed less than three years after the Department of Labor had "actual knowledge" of the alleged 2004 ERISA violations.

II. Background

The present action was filed in this Court on November 13, 2008. The complaint alleges violations of ERISA stemming from two separate transactions. The first was a 2004 transaction in which Defendant Couturier and the other named defendants allegedly breached their fiduciary duty to the Employee Stock Ownership Plan ("ESOP") by failing to properly value the compensation granted to Defendant Couturier in his capacity as president of Noll Manufacturing Company.*fn1

The second transaction was a 2007 sale of the ESOP's assets. Plaintiffs allege that the sale was structured in such a way that ESOP participants would not be paid from the receipts of the sale until after the individual defendants had received payments under what Plaintiff characterizes as "invalid agreements to indemnify certain of the defendants in the event they were sued for, among other things, fiduciary breach."*fn2

Holly A. Holman, an investigator with the Department of Labor, made the following statements in a sworn declaration which was submitted along with Plaintiff's Opposition to the Motion to Dismiss:

[The Employee Benefit Security Administration] opened its investigation of the TEOHC ESOP on November 14, 2005, when I was told by a confidential informant of the civil complaint, Johnson v. Couturier, 2:05-cv-02046 (RRB-GGH), which is currently pending in this District. On November 16, 2005, the confidential informant forwarded to me by email a copy of the Johnson Complaint. [...]

After opening its investigation on November 14, 2005, EBSA issued multiple administrative subpoenas requesting documents and testimony from Defendant Couturier and the other defendants in this action so that EBSA could determine for itself whether violations of ERISA had occurred.*fn3 The civil complaint in the Johnson v. Couturier litigation was filed on October 11, 2005.*fn4

On September 12, 2008, Plaintiff filed a related action in the U.S. District Court located in the Western District of Washington. In that case, Plaintiff did not seek any substantive relief under ERISA. Rather, Plaintiff sought a court order requiring Defendant's compliance with certain investigative subpoenas issued during the DOL's investigation of the ERISA violations alleged in the present case.*fn5 Defendant is domiciled in the Western District of Washington.*fn6

III. Legal Standards

A. Motion to Change Venue

A motion to transfer venue under 28 U.S.C. § 1404(a) is vested in the trial court's informed discretion. Transfer is only appropriate to a district where suit could have been filed. Venue may be transferred "[f]or the convenience of parties and witnesses, [and] in the interest of justice."*fn7 Relevant factors in determining whether or not to transfer venue to another district include plaintiff's choice of forum, the convenience of the parties, location of counsel, convenience of witnesses, and location of records and other documentary evidence.*fn8 In the "interest of justice", the Court should also lend great weight to the "desire to avoid multiplicity of litigation from a single ...

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