Opinion
For Frank Jorgensen, as trustee of the Southern California United Food and Commercial Workers Unions and Food Empoyers Joint Pension Trust Fund, Greg Conger, as trustee of the Southern California United Food and Commercial Workers Unions and Food Employers Joint Pension Trust Fund, Plaintiffs: Stuart Libicki, LEAD ATTORNEY, Schwartz Steinsapir Dohrmann and Sommers LLP, Attorneys at Law, Los Angeles, CA.
For Scolari's of California, Inc., Scolari's Food and Drug Company, Scolari's Warehouse Markets, Inc., doing business as Scolari's Food and Drug Company, Pyramid Shopping Center, LLC, Orcutt Boys Enterprises, LP, Two/Twenty-One, Inc., Defendants: Karl R Lindegren, LEAD ATTORNEY, Fisher and Phillips LLP, Irvine, CA; Nathan Vern Okelberry, Fisher & Phillips LLP, Los Angeles, CA.
ORDER DENYING DEFENDANTS' MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION AND MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION OR, IN THE ALTERNATIVE, TO TRANSFER VENUE
CORMAC J. CARNEY, UNITED STATES DISTRICT JUDGE.
I. INTRODUCTION & BACKGROUND
Plaintiffs Frank Jorgensen and Greg Conger, as trustees of the Southern California United Food and Commercial Workers Unions and Food Employers Joint Pension Trust Fund (the " Fund"), bring this action against Defendants Scolari's of California, Inc. dba Scolari's Food and Drug Company and Scolari's Warehouse Markets, Inc. dba Scolari's Food and Drug Company (together, " Scolari's Food and Drug Company") and against Defendants Pyramid Shopping Center, LLC, Orcutt Boys Enterprises, LP, and Two/Twenty-One, Inc. (collectively, " Nevada Defendants"). (Dkt. No. 1 [" Compl." ].) For many years, Scolari's of California was involved in the retail food industry and was a contributor to the Fund, a multiemployer pension fund as defined by ERISA Section 3(2), 29 U.S.C. § 1002(3). (Compl. ¶ 8.) The Fund alleges that around June 2012, Defendants made its final payment to the Fund and then " completely withdrew" from participation. (Compl. ¶ 9.) As a result, in December 2013 and again in February 2014, the Fund notified Scolari's of California that they owed the Fund over 4 million dollars in withdrawal liability pursuant to ERISA, 29 U.S.C. § 1001 et seq., as amended by the Multiemployer Pension Plan Amendment Act of 1980 (" MPPAA"), 29 U.S.C. § 1381 et seq . (Compl. ¶ 9.) Defendants made none of the requested liability payments, but initiated arbitration proceedings on July 17, 2014 pursuant to ERISA § 4221(a), 29 U.S.C. 1401(a). (Compl. ¶ 10.) On July 31, 2014, the Fund brought the present action under ERISA seeking recovery of the interim withdrawal liability payments. Before the Court are (1) Defendants' motion to dismiss the Complaint for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1), (Dkt. No. 13 [" Defs.' SMJ Mot." ]), and (2) the Nevada Defendants' motion to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2) or, in the alternative, Defendants all move to transfer venue to the Federal District Court for the District of Nevada in Reno pursuant to 28 U.S.C. § 1404(a), (Dkt. No. 12 [" Defs.' PJ Mot." ]). For the following reasons, both motions are DENIED.
Defendants Scolari's Warehouse Markets, Inc. dba Scolari's Food and Drug Company, Pyramid Shopping Center, LLC, Orcutt Boys Enterprises, LP, and Two/Twenty-One, Inc. are joined in this action as members of Scolari's of California's controlled group under the Employee Retirement Income Security Act of 1974 (" ERISA") § 4001(b)(1), 29 U.S.C. § 1301(b). ( See Dkt. No. 16-2 Pls.' Opp'n to Defs.' PJ Mot. Exh. A [attaching a letter from Defendants' counsel informing the Fund that Scolari's Warehouse Markets, Inc. dba Scolari's Food and Drug Company, Pyramid Shopping Center, LLC, Orcutt Boys Enterprises, LP, and Two/Twenty-One, Inc. are members of Scolari's of California's controlled group].) Under § 4001(b)(1), all trades or businesses that are under common control shall be treated as a single employer in accordance with Internal Revenue Code § 414(c), and each member of the control group is jointly and severally liable for their own and each other member's withdrawal liability.
When referring to all five defendants, the Court will use " Defendants" as a convenient shorthand.
II. ANALYSIS
A. Subject Matter Jurisdiction
Defendants first contend that this Court lacks subject matter jurisdiction over the present action because the parties are currently in arbitration. Under ERISA, however, the Court may exercise jurisdiction over a plaintiff's claim when the plaintiff is seeking to recover delinquency payments from the defendant, notwithstanding any pending arbitration. 29 U.S.C. § § 1145, 1401(d), 1451(b), (c). Where, as here, a contributing employer stops contributing, or " withdraws, " from a multiemployer pension plan without paying its share of the plan's unfunded vested benefit liability, the pension plan may request withdrawal liability payments. 29 U.S.C. § 1381 et seq . More specifically, ERISA, as amended by the MPPAA, establishes a statutory system for computing and assessing the liability of such employers, and sets procedures for the plan's sponsor to follow to obtain payments. 29 U.S.C. § § 1381, 1399. The plan's sponsor must first notify the employer of the amount owed, provide a schedule of the withdrawal liability payments, and then the employer must begin making those payments " no later than 60 days after the date of the demand notwithstanding any request for review or appeal of determinations of the amount of such liability of the schedule." 29 U.S.C. § 1399(c)(2) (emphasis added).
While any dispute between the plan sponsor and the employer regarding liability should be resolved through arbitration, the employer is still required to pay interim withdrawal liability payments until the arbitrator issues a final decision. 29 U.S.C. § 1401; see also Trustees of Amalgamated Ins. Fund v. Geltman Indus., Inc., 784 F.2d 926 (9th Cir. 1986) (finding that an employer must make withdrawal liability payments, regardless of the pendency of arbitration). If the employer fails to make an interim withdrawal liability payment, then the employer " shall be treated as being delinquent in making a contribution required under the plan (within the meaning of section 1145 of this title)." 29 U.S.C. § 1401(d); see also 29 U.S.C. § 1145. If an employer is delinquent in making its payments, then an action may be brought in federal or state court to compel payment from the employer. See 29 U.S.C. 1451 (b), (c); see also Galgay v. Beaverbrook Coal Co., 105 F.3d 137, 139 (3d Cir. 1997).
Defendants do not dispute that the Fund notified and demanded withdrawal liability payments from Defendants in December 2013 and again in February 2014. Furthermore, Defendants do not dispute that they have never made and are thus delinquent on their withdrawal liability payments, which they are required to pay notwithstanding the pending arbitration. Under the MPPAA, the Fund is entitled to compel these interim withdrawal liability payments from Defendants in a court of law while awaiting the outcome of arbitration. See 29 U.S.C. 1451 (b), (c); see also Galgay, 105 F.3d at 139; Debreceni v. Merchants Terminal Corp., 889 F.2d 1, 5 (1st Cir. 1989). Accordingly, the Court has proper subject matter jurisdiction over this action.
B. Personal Jurisdiction
The Nevada Defendants move to dismiss for lack of personal jurisdiction arguing, that they are Nevada companies and conduct business solely in Nevada. (Defs.' PJ Mot. at 3-4.) In federal question cases, the Constitution does not require that a defendant have " minimum contacts" with the forum state in order to confer personal jurisdiction over that defendant. See Sec. Investor Prot. Corp. v. Vigman, 764 F.2d 1309, 1315 (9th Cir. 1985) (finding that while due process requires some contacts with the forum state for diversity jurisdiction, " minimum contacts" is not a limitation imposed on courts in federal question cases). Consequently, some federal statutes such as ERISA provide for a nationwide service of process. Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992) (citing 29 U.SC. § 1132(e)(2)). In such cases, the question becomes whether the party has sufficient contacts within the United States, and not any particular state where the court sits. Vivien v. Worldcom, Inc., 2002 WL 31640557, at * 2 (N.D. Cal. July, 26, 2002); see also Vigman, 764 F.2d at 1315 (finding that where federal statutes such as Section 27 of the Securities Exchange Act confers a nationwide service of process, a national contacts analysis is appropriate). The Nevada Defendants are entities operating in Nevada and therefore have sufficient contacts within the United States. (Defs.' PJ Mot. at 3-4.)
Additionally, exercising personal jurisdiction over the Nevada Defendants does not offend traditional notions of fair play and substantial justice. The Nevada Defendants' status as controlled group members of Scolari's of California, an entity that operated in and contributed to the Fund in California, afforded the Nevada Defendants fair warning that they could be subject to jurisdiction in California for ERISA liability. Exercising personal jurisdiction here is also consistent with the policies underlying ERISA. ERISA provides a nationwide service of process provision that removes jurisdictional and procedural obstacles because it aims to provide participants in employee benefit plans easy access to federal courts to enforce their pension rights. See Vigman, 764 F.2d at 1315 (" It is clear that Congress can provide for nationwide service of process in federal court for federal question cases without falling short of the requirements of due process.").
C. Venue
Finally, Defendants move to transfer venue to the Federal District Court for the District of Nevada in Reno. A district court has discretion under 28 U.S.C.§ 1404(a) to " transfer any civil action to any other district or division where it might have been brought" when transfer would serve " the convenience of parties and witnesses" and would be " in the interest of justice." Under § 1404(a), two findings are required for proper transfer: (1) the transferee district court is one where the action might have been brought, and (2) the convenience of the parties and witnesses and the interest of justice favor transfer. Hatch v. Reliance Ins. Co., 758 F.2d 409, 414 (9th Cir. 1985). As to the second prong, a court may consider multiple factors in determining whether the interests of justice favor transfer, including: " (1) the location where the relevant agreements were negotiated and executed, (2) the state that is most familiar with the governing law, (3) the plaintiff's choice of forum, (4) the respective parties' contacts with the forum, (5) the contacts relating to the plaintiff's cause of action in the chosen forum, (6) the differences in the costs of litigation in the two forums, (7) the availability of compulsory process to compel attendance of unwilling non-party witnesses, and (8) the ease of access to sources of proof, " in addition to the relevant public policy of the forum state. Jones v. GNC Franchising, Inc., 211 F.3d 495, 498-99 (9th Cir. 2000). The moving party bears the burden of demonstrating that transfer is appropriate. Williams v. Bowman, 157 F.Supp.2d 1103, 1106 (N.D. Cal. 2001). District courts have broad discretion to adjudicate motions for transfer through an individualized, case-by-case consideration. Jones, 211 F.3d at 498.
The Court finds that transfer is not warranted here. Although venue in Federal District Court for the District of Nevada in Reno is proper under ERISA's service of process provision, the relevant factors in determining the interest of justice weigh against transfer. First, transferring this case to Reno is not efficient and in the interests of justice, because the Court is only issuing a preliminary injunction compelling Defendants to pay interim payments and then staying the action pending completion of the arbitration proceedings. Also, the factors assessing the availability of non-party witnesses and the ease of access to sources of proof are not really pertinent or applicable given the limited nature of the relief requested. Next, while district courts in Nevada and California are equally equipped to adjudicate ERISA claims, California has a strong interest in protecting the rights of its citizens and monitoring the pension plans its citizens anticipate receiving benefits from in the future. Finally, the Fund's choice of forum in California is entitled to deference.
ERISA's service of process provision provides that an ERISA action may be brought in a district court where (1) the plan is administered, (2) the breach took place, (3) a defendant resides, or (4) a defendant may be found. 29 U.S.C. 1132(e)(2).
III. CONCLUSION
For the foregoing reasons, Defendants' motions are DENIED.