Opinion
CAUSE NO. EV 01-210-C H/H
September 9, 2002
ENTRY ON DEFENDANT'S MOTION TO DISMISS OR TRANSFER
The question here is which federal district court should be the forum for an employment compensation dispute. Plaintiff Marc Beller, a citizen and resident of Ohio, filed this suit against his former employer, MacDermid, Inc., a corporation based in Connecticut, after MacDermid terminated his employment. Beller alleges that MacDermid violated the federal Family and Medical Leave Act, 29 U.S.C. § 2614 2615, and the Indiana Wage Payment Act, Ind. Code § 22-2-5-1.
MacDermid has moved to dismiss the claims against it for improper venue under Federal Rule of Civil Procedure 12(b)(3) and 28 U.S.C. § 1406, or for transfer of this action to the District of Connecticut under 28 U.S.C. § 1404(a). As explained below, the court denies defendant's motion to dismiss or transfer.
Background
Beller is a citizen of Ohio. MacDermid is incorporated in Connecticut with its principal place of business in Waterbury, Connecticut. MacDermid develops, acquires, and manufactures chemicals for use in various industries. MacDermid employed Beller for a period of about six years beginning in August 1995. During this time, Beller worked as a sales agent and was responsible for a sales territory that included Evansville, Indiana. Pl. Br. at 2. Beller's compensation consisted of a base salary plus sales commissions that ranged between 2% and 7.5%. Cplt. ¶ 7; Cordani Aff., Ex. 1. MacDermid terminated Beller's employment on June 25, 2001, two weeks after he returned to work from medical leave.
Beller's claims center upon a two-year sales contract with the Guardian Automotive Trim, Inc. ("Guardian") plant in Evansville, Indiana that he asserts he procured for MacDermid before his medical leave. Specifically, Beller asserts: (1) that MacDermid wrongfully denied him compensation for the Guardian contract in violation of the Family and Medical Leave Act, 29 U.S.C. § 2614, and wrongfully interfered with his rights under the act; and (2) that MacDermid has wrongfully denied him compensation in violation of Ind. Code § 22-2-5-1, which requires full and timely payment of employees' compensation, including sales commissions. See Licocci v. Cardinal Associates, Inc., 492 N.E.2d 48, 56 (Ind.App. 1986).
Discussion
Upon a proper objection to a federal district court's venue in a civil case, 28 U.S.C. § 1406 provides that a court must dismiss the case or, if justice so requires, may transfer the case to a proper venue. In addition, even where venue is proper, a court may transfer a case for the "convenience of parties and witnesses, in the interest of justice" to any district where the case could have been brought. 28 U.S.C. § 1404(a). Defendant MacDermid seeks dismissal or a transfer of this action to the District of Connecticut.
I. Venue
When a defendant moves to dismiss for improper venue pursuant to Rule 12(b)(3) of the Federal Rules of Civil Procedure, the plaintiff bears the burden of proving that venue is proper. See Moore v. AT T Latin America Corp., 177 F. Supp.2d 785, 788 (N.D.Ill. 2001), citing First Health Group Corp. v. Sanderson Farms Inc., 2000 WL 139474, *2 (N.D.Ill. 2000). In evaluating a Rule 12(b)(3) motion, a court may consider facts beyond the complaint. Id. Neither side has asked for an evidentiary hearing on the facts relevant to venue. Accordingly, in ruling on MacDermid's motion to dismiss, the court must accept plaintiff's allegations as true unless controverted by defendant's factual submissions, and must resolve any factual conflicts in the parties' submissions in the plaintiff's favor. Moore, 177 F. Supp.2d at 788; see generally Szabo v. Bridgeport Machines, Inc., 249 F.3d 672, 676-77 (7th Cir. 2001) (distinguishing between Rule 12(b)(6) motions, which require district court to accept plaintiff's allegations, and motions to dismiss based on lack of personal jurisdiction or venue, which permit district court to hold hearing and resolve factual disputes before allowing a case to proceed). With these standards in mind, the court examines MacDermid's motion to dismiss for improper venue.
Venue in this case is governed by 28 U.S.C. § 1391(b), which provides in part that an action in which jurisdiction is not founded solely on diversity may properly be brought in "(1) a judicial district where any defendant resides, if all defendants reside in the same State, [or] (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred." Venue is proper in this district under both provisions.
For purposes of venue under § 1391(b)(1), a corporation resides "in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced." 28 U.S.C. § 1391(c). A federal district court exercising diversity jurisdiction has personal jurisdiction over a non-resident defendant "only if a court of the state in which it sits would have such jurisdiction." RAR, Inc., v. Turner Diesel, Ltd., 107 F.3d 1272, 1275 (7th Cir. 1997). The same standard applies to claims arising under federal statutes, like the FMLA, that do not authorize nationwide service of process. Alpha Tau Omega Fraternity v. Pure Country, Inc., 185 F. Supp.2d 951, 956 (S.D.Ind. 2002) (applying general rule in trademark case); see also Pelchat v. Sterilite Corp., 931 F. Supp. 939, 943 (D.N.H. 1996) (FMLA does not provide for nationwide service of process, citing 29 U.S.C. § 2617(a)(2)). In Indiana, personal jurisdiction depends on both whether requirements of the state-long arm statute are met and whether federal due process is satisfied. Anthem Ins. Cos v. Tenet Healthcare Corp., 730 N.E.2d 1227, 1232 (Ind. 2000).
Prior to the Indiana Supreme Court's decision in Anthem, deciding personal jurisdiction in Indiana required consideration only of federal due process standards. Wilson v. Humphreys (Cayman) Ltd., 916 F.2d 1239, 1243 (7th Cir. 1990), is one of many cases in which the Seventh Circuit applied Indiana Trial Rule 4.4(A) to extend personal jurisdiction to the limits of federal due process, and so collapsed the application of the state rule and federal due process into a single inquiry. In Anthem, however, the Indiana Supreme Court reinvigorated Indiana Trial Rule 4.4(A) by requiring courts to determine separately and initially whether its provisions have been satisfied. 730 N.E.2d at 1232.
Indiana Trial Rule 4.4(A) serves as Indiana's long-arm statute and establishes two requirements for personal jurisdiction. First, the non-resident defendant's contacts with Indiana must fall within at least one of its eight enumerated categories. Second, the suit must arise from one of these enumerated contacts. Ind. Tr. R. 4.4(A) (a non-resident "submits to the jurisdiction of the courts of this state as to any action arising from the following acts"). See Sohacki v. Amateur Hockey Ass'n of Illinois, 739 N.E.2d 185, 189 (Ind.App. 2000) (holding that trial court lacked jurisdiction under Indiana Trial Rule 4.4(A) because none of the allegedly wrongful acts "arose from any action performed by [defendant] in Indiana").
Personal jurisdiction under Indiana Trial Rule 4.4(A) may be either general or specific. Alpha Tau Omega, 185 F. Supp.2d at 956; see also Anthem, 730 N.E.2d at 1240 (finding one defendant's business contacts sufficient to establish general jurisdiction). General jurisdiction makes a non-resident defendant amenable to suit within a particular forum regardless of the subject matter of the suit based on that defendant's continuous and systematic contacts with the forum. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-15 (1984). Specific jurisdiction, however, makes a non-resident defendant amenable only to suits arising out of or related to its contacts with a particular forum. Id. at 414. Specific jurisdiction may be based on relatively modest contacts with the forum if they have a substantial connection to the plaintiff's action. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-76 (1985); RAR, Inc., 107 F.3d at 1277; Anthem, 730 N.E.2d at 1235.
The parties' submissions provide evidence that MacDermid had purposeful contacts with Indiana sufficient to support at least specific jurisdiction in this case, which has arisen from those contacts. The damages that Beller claims arise in substantial part from MacDermid's purposeful activity within Indiana. MacDermid employed Beller to sell its products in a territory that included Indiana. Through Beller's efforts (the court assumes for now), MacDermid obtained a contract with the Guardian plant in Evansville, Indiana to supply the plant with MacDermid chemicals over a two-year period. Beller negotiated that contract in Evansville on MacDermid's behalf. Guardian estimates that it is likely to spend about $500,000 on MacDermid products under the two-year contract. Uziekella Dep. at 6. Beller claims that because he procured the contract with Guardian, MacDermid owes him a 2% or 7.5% sales commission. MacDermid's contacts with Guardian in Evansville thus satisfy both requirements of Indiana Trial Rule 4.4(A) because they were "in furtherance" of its business in Indiana and because Beller's claim for damages arises in substantial part from these business contacts.
The court also finds federal due process satisfied. Due process requires that a non-resident defendant have "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945), quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940). In the case of specific jurisdiction, due process requires that a non-resident defendant must have established its contacts with the forum state by purposefully availing itself of the privilege of conducting business there. Logan Productions, Inc. v. Optibase, Inc., 103 F.3d 49, 52 (7th Cir. 1996). "This `purposeful availment' requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of `random,' `fortuitous,' or `attenuated' contacts." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985), quoting Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774 (1984). In other words, the defendant's conduct and connection with the forum state should be such that it reasonably anticipates being haled into court there. Burger King, 471 U.S. at 474.
The parties' submissions provide evidence that MacDermid's contacts with Indiana were purposeful rather than random or fortuitous, and that those contacts gave MacDermid fair warning that it could be subject to suit in Indiana on disputes arising from those contacts. First, MacDermid solicited and sold goods to customers in Indiana, reporting total gross sales for the last three fiscal years of more than $10 million. Def. Interrog. Response No. 2. Second, MacDermid employed Beller as a sales agent, sent him to Indiana on MacDermid business, and paid him commissions on sales contracts he negotiated in the state. Third, when MacDermid created a contractual relationship with Guardian in Evansville, it purposefully availed itself of the privilege of conducting business in Indiana. MacDermid could reasonably anticipate being sued in Indiana for issues related to the Guardian contract, including issues related to Beller's commission for allegedly procuring the contract.
MacDermid has not come forth with evidence demonstrating that forcing it to litigate in this judicial district would violate traditional notions of fair play and substantial justice. Burger King, 471 U.S. at 477; Logan Productions Inc. v. Optibase Inc., 103 F.3d at 53 (once court finds sufficient minimum contacts, a defendant escapes jurisdiction only by making compelling case that forcing it to litigate in forum state would violate traditional notions of fair play and substantial justice). Though it is always somewhat burdensome to defend a lawsuit away from one's forum state, it is not a burden that violates due process in this instance. See Burger King, 471 U.S. at 474 (explaining that modern transportation and communications mean it is usually not unfair or too burdensome to require a party to defend itself in a state where it engages in economic activity); Logan Productions, 103 F.3d at 54; see also Board of Trustees, Sheet Metal Workers' Nat. Pension Fund v. Elite Erectors, Inc., 212 F.3d 1031, 1037 (7th Cir. 2000) ("Easy air transportation, the rapid transmission of documents, and the abundance of law firms with nationwide practices, make it easy these days for cases to be litigated with little extra burden in any of the major metropolitan areas.").
The parties' submissions show that MacDermid employees regularly travel to Indiana as part of its course of dealing with Guardian. Def. Interrog. Response No. 11; Uziekalla Dep. at 6-8. Therefore, MacDermid would not suffer a significantly greater burden in defending this suit than it takes on by sending its employees to Guardian. The court cannot conclude that Indiana has no legitimate interest in adjudicating a dispute related to contacts in the State, or that plaintiff has no interest in obtaining convenient and effective relief. See Burger King, 471 U.S. at 482-83. Finally, based on the location of potential non-party witnesses in Evansville, Indiana, considerations of efficient judicial administration weigh in favor of litigating the case in this judicial district. In light of the substantial connection between defendant's purposeful contacts with this forum and plaintiff's damage claims, Beller has demonstrated that the exercise of personal jurisdiction over MacDermid is proper in this judicial district, which means that venue is also proper here under 28 U.S.C. § 1391(b)(1).
MacDermid appears to argue that it is not subject to personal jurisdiction in Indiana in part because its employment contract with Beller expressly states that it is governed by Connecticut law. Though which state's law governs a contract can be a factor in determining personal jurisdiction, it does not control the issue. At this stage of the case, the court expresses no opinion as to which state's law will ultimately govern the substantive issues in this case.
The court also finds venue proper under § 1391(b)(2) because a substantial part of the events giving rise to this case occurred in the Southern District of Indiana. MacDermid characterizes this case as one involving an alleged breach of employment contract, and it claims venue is improper because the bulk of employment-related conduct and performance occurred outside this district. MacDermid states that Beller's employment records are maintained in Connecticut, that communications to Beller from MacDermid originated in Connecticut, that Beller's supervisor works in Connecticut, and that decisions concerning Beller were made in Connecticut. Def. Br. at 11-12. MacDermid thus limits the relevant events that count towards "a substantial part of events" to its own performance of Beller's employment contract.
However, the events comprising Beller's performance under his employment contract enter into the calculus. As Judge Plunkett noted in Moore v. AT T Latin American when applying the identical language of § 1391(a)(2), "the focus of § 1391 is the nexus between the facts and the cause of action, not the defendant and the cause of action." 177 F. Supp.2d at 789.
In this case, the dispute revolves around Beller's claims for compensation. Beller was a sales agent for MacDermid and worked within a particular sales territory that included this district. Beller thus performed employment-related responsibilities in this judicial district. Further, Beller's damages claims are based in substantial part on commissions from a contract that he alleges he procured for MacDermid with Guardian in Evansville, Indiana. Beller asserts that he was MacDermid's main contact with Guardian and that he negotiated the contract with Guardian in Evansville. Pl. Br. at 11. Under the contract, MacDermid will earn an estimated $500,000 in gross income by continuously supplying Guardian's Evansville plant with chemicals for approximately two years. Uziekalla Dep. at 6. Beller claims he is entitled to a sales commissions for this contract at the rate of either 7.5% for procuring new business or 2 % for existing business. Cplt. ¶ 7.
Section 1391(b)(2) assumes that venue under that provision may be proper in more than one district. Thus, which forum has the most substantial portion of events in a case does not control venue. To establish venue, a plaintiff must demonstrate only that "a substantial part of the events or omissions giving rise to the claim" took place in the forum district, not that a majority of the events took place there. See Pasulka v. Sykes, 131 F. Supp.2d 988, 994 (N.D.Ill. 2001) (finding venue proper under the identical language of § 1391(a)(2) where plaintiff took actions on behalf of the defendant in the district and had telephone conversations with the defendant in the district concerning their partnership).
To be "substantial," it is enough for Beller to establish that the events that occurred in the Southern District of Indiana are "`part of the historical predicate for the instant suit.'" Master Tech Products, Inc. v. Smith, 181 F. Supp.2d 910, 914 (N.D.Ill. 2002), quoting Uffner v. La Reunion Francaise, S.A., 244 F.3d 38, 42 (1st Cir. 2001). In light of the central role the Guardian contract plays in this action, Beller has demonstrated that a substantial portion of the events giving rise to his claim for compensation occurred in this district.
II. Transfer
Defendant MacDermid also seeks transfer under 28 U.S.C. § 1404(a) to the District of Connecticut based on convenience of the parties and witnesses and in the interests of justice. Under § 1404(a) MacDermid has the burden of proving that the District of Connecticut is "clearly more convenient" than the Southern District of Indiana. Coffey v. Van Dorn Iron Works, 796 F.2d 217, 220 (7th Cir. 1986).
MacDermid focuses on its own convenience in litigating this matter to demonstrate that a transfer is warranted, arguing that relevant documents are maintained in Connecticut and that MacDermid employees who will testify reside there. These are not compelling reasons for transfer, though, because such a transfer would merely shift inconvenience from MacDermid to Beller. See Moore v. AT T Latin America Corp., 177 F. Supp.2d 785, 789 (N.D.Ill. 2001) ("the effect of a transfer cannot be a mere shift of inconveniences from one party to another"), citing Promatek Med. Sys., Inc. v. Erogmetrics, Inc., 1990 WL 19491, *4 (N.D.Ill. 1990).
In addition, MacDermid appears to argue that litigating in Connecticut is no more inconvenient for Beller than litigating here, because in either case Beller must travel. The court disagrees. It is irrelevant that Beller will have to travel to this district, as he chose to litigate in this forum, and his evaluation of his own convenience in choosing this forum receives deference.
The convenient availability of non-party witnesses is the decisive factor in this case, as in many § 1404(a) issues. Beller has identified employees from Guardian as potential non-party witnesses. MacDermid argues that the testimony of Guardian employees will not become relevant until the damages phase of litigation. Perhaps so, but the court cannot say at this point that the case will not reach that phase. The court finds this argument unpersuasive for the same reasons that make venue proper in the Southern District of Indiana. Furthermore, MacDermid has failed to identify any non-party witnesses who would be more readily available for a trial in Connecticut than in Indiana.
MacDermid identified Dr. Loar, Beller's treating physician who resides in Ohio, as a potential witness in this case. Based on Dr. Loar's residence, this forum appears likely to be more convenient than the District of Connecticut.
Considerations of the interests of justice also do not weigh in favor of transfer. Beller has brought this suit against his former employer, a corporation that does millions of dollars worth of business each year in Indiana. Def. Interrog. Response No. 2. Justice would not be advanced by forcing Beller to litigate claims arising from the termination of his employment with MacDermid in a forum farther from his home. See Gallert v. Courtaulds Packaging Co., 4 F. Supp.2d 825, 833 (S.D.Ind. 1998).
Conclusion For the reasons stated above defendant's motion to dismiss is denied, and the defendant's alternative motion to transfer is also denied.
So ordered.