United States District Court, E.D. Virginia, Alexandria Division
BOARD OF TRUSTEES, SHEET M WORKERS' NATIONAL PENSION FUND, Plaintiff,
BOESER, INC., et al., Defendants.
JAMES C. CACHERIS, District Judge.
This matter is before the Court on Defendant Lawrence Boeser's ("Boeser") Motion to Dismiss for Lack of Personal Jurisdiction, or in the alternative, to Transfer Venue [Dkt. 11] and Boeser, Inc.'s Motion to Transfer Venue [Dkt. 15]. For the following reasons, the Court will deny both motions.
The Board of Trustees, Sheet M Workers' National Pension Fund ("Plaintiff") brought this action against Boeser, Inc., a Minnesota corporation with its principal place of business in Minnesota (Compl. [Dkt. 1] ¶ 9]), and Boeser,  a Minnesota resident and president and sole shareholder of Boeser, Inc. ( Id. ¶¶ 10-11), alleging violations of the Employment Retirement Income Security Act of 1974 ("ERISA") and Minnesota state law. Specifically, Plaintiff alleges six counts in its complaint, all against Boeser unless otherwise noted: withdrawal liability, in violation of 29 U.S.C. § 1145, against Boeser, Inc. ("Count 1"); evading or avoiding withdrawal liability, in violation of 29 U.S.C. § 1392(c) ("Count 2"); shareholder liability for violation of the trust fund doctrine, subject to recovery under 29 U.S.C. § 1132(a)(3)(B) ("Count 3"); fraudulent transfer, under federal common law ("Count 4"); fraudulent transfer, in violation of Minnesota's Uniform Fraudulent Transfers Act ("Count 5"); and breach of fiduciary duty, in violation of Minnesota common law ("Count 6"). ( Id. ¶¶ 29-74.)
Boeser moves to dismiss for lack of personal jurisdiction, or in the alternative, to transfer the case to the District of Minnesota. (Boeser's Mot. at 1.) Boeser, Inc. moves to transfer venue to the District of Minnesota. (Boeser, Inc.'s Mot. at 1.) Having been fully briefed and argued, this motion is ripe for disposition.
A. Boeser's Motion to Dismiss for Lack of Personal Jurisdiction
When personal jurisdiction is properly challenged by motion under Federal Rule of Civil Procedure 12(b)(2), a plaintiff bears the burden "to prove grounds for jurisdiction by a preponderance of the evidence." Mylan Laboratories, Inc. v. Akzo, N.V., 2 F.3d 56, 59-60 (4th Cir. 1993). Yet, where, as here, such a motion is decided without an evidentiary hearing, "plaintiff need prove only a prima facie case of personal jurisdiction." Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989). And, in deciding whether a plaintiff has proven a prima facie case, "the district court must draw all reasonable inferences arising from the proof, and resolve all factual disputes, in the plaintiff's favor." Id .; Wolf v. Richmond Cnty. Hosp. Auth., 745 F.2d 904, 908 (4th Cir.1984), cert. denied, 474 U.S. 826 (1985).
To exercise personal jurisdiction over a non-resident defendant in a federal question case, a federal court must: (i) initially establish whether defendant is amenable to service of summons under an applicable statute or rule and (ii) determine if that service comports with the Fifth Amendment's due process principles. In other words, personal jurisdiction analysis in federal question cases calls for a two-step inquiry. The first step is to determine whether a defendant is amendable to service under Federal Rule of Civil Procedure Rule 4(e). The second step requires a determination whether the exercise of personal jurisdiction is consistent with the Due Process Clause of the Fifth Amendment. Bd. of Trustees Sheet M Workers' Nat. Pension Fund v. McD Metals, Inc., 964 F.Supp. 1040, 1044-45 (E.D. Va. 1997) (""[I]t is the Fifth Amendment, not the Fourteenth Amendment, that controls due process analysis in non-diversity, or federal question, cases.").
Federal Rule of Civil Procedure 4 governs service of summons in the federal courts. "Unless federal law provides otherwise, an individual... may be served in a judicial district of the United States by following state law... [.]" Fed.R.Civ.P. 4(e). Where service is authorized by federal statute, serving a summons or filing a waiver of service establishes personal jurisdiction over a defendant. Fed.R.Civ.P. 4(k)(1). ERISA contains a nationwide service of process provision that permits an enforcement action to be brought in federal court in a district "where the plan is administered" and process to be "served in any other district where a defendant resides or may be found." 29 U.S.C. § 1132(e).
Furthermore, since ERISA authorizes nationwide service of process, the Fifth Amendment's "national contacts" theory is applicable here. Strategic Outsourcing, Inc. v. Commerce Benefits Grp. Agency, Inc., 54 F.Supp.2d 566, 570 (W.D. N.C. 1999) (stating that ERISA's nationwide service of process has been interpreted for the purposes of personal jurisdiction as a "national contacts test"); McD Metals, 964 F.Supp. at 1045. The national contacts inquiry under the Fifth Amendment asks whether a defendant has sufficient aggregate contacts with the United States as a whole. McD Metals, 964 F.Supp. at 1044. Courts have held that ERISA's nationwide service provision comports with the Fifth Amendment's due process guarantees. See Bd. of Trs., Sheet M Workers' Nat'l Pension Fund v. Elite Erectors, Inc., 212 F.3d 1031, 1037 (7th Cir. 2000) ("[Section] 1132(e) comports with the Constitution and provided the Eastern District of Virginia with personal jurisdiction over [defendants] even on the assumption that neither [defendant] has any contacts' with Virginia."); see Weese v. Savicorp, Inc., No. 2:13-cv-41, WL 6007499 (N.D. W.Va. Nov. 13, 2013), at *3 (collecting Fourth Circuit cases applying national contacts test where a federal statute authorizes nationwide service of process).
In this case, the Plan is administered at Plaintiff's principal place of business in Fairfax, Virginia. (Compl. ¶ 3.) Boeser is a citizen of Minnesota and was served there. (Boeser's Mem. in Supp. [Dkt. 12] at 5; see also [Dkt. 10].) As a Minnesota resident, Boeser has sufficient contacts with the United States to be subject to suit in this country. Accordingly, this Court has personal jurisdiction over Boeser under the national contacts theory. See Denny's, Inc. v. Cake, 364 F.3d 521, 524 (4th Cir. 2004) (stating a district court in South Carolina had personal jurisdiction over California defendant where plan was administered in South Carolina). Therefore, Boeser's motion to dismiss for lack of personal jurisdiction is denied.
B. Boeser and Boeser, Inc.'s Motions to Transfer Venue
Defendants seek to transfer venue to the District of Minnesota. Motions to transfer are governed by 28 U.S.C. § 1404. The relevant portion of the statute instructs: "For the convenience of the parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." 28 U.S.C. § 1404(a). There are two prerequisites to application of this statute. First, § 1404(a) only applies where venue is proper in the transferor forum. Bd. of Trs. v. Sullivant Ave. Prop., LLC, 508 F.Supp.2d 473, 476 (E.D. Va. 2007). Second, the proposed transferee forum must be one where the suit might have been brought. Id. Both prerequisites are met here. Venue is proper in this Court because Plaintiff administers the fund here. 29 U.S.C. § 1132(e)(2). Venue would also be ...