District Court Transfers Pension Fund’s Lawsuit from Maryland to Pennsylvania
A trade industry pension fund sued two glass and metal companies in the District of Maryland, alleging that the companies failed to make contributions to the fund that were required by their collective bargaining agreements. The companies were incorporated in Pennsylvania. The complaint alleged that the companies operated “a single integrated business enterprise.”
Similar claims had been litigated in two earlier lawsuits filed in the Eastern District of Pennsylvania. In one lawsuit, the companies sued several union entities, including the pension fund, but later agreed to dismiss the pension fund from the suit. In the other lawsuit, several union entities (but not the pension fund) sued the two companies, alleging that the companies failed to make payments required by the collective bargaining agreements.
The two Pennsylvania cases were consolidated. They eventually settled. The union entities that had not been dismissed agreed to release their claims against the companies as a condition of the settlement agreement.
The companies moved to transfer this case to the Eastern District of Pennsylvania pursuant to 28 U.S.C. § 1404(a). The companies contended that the Maryland lawsuit should be consolidated with the two lawsuits that were filed in Pennsylvania. They also argued that it would be more convenient for the parties and witnesses to litigate the dispute in Pennsylvania, since neither company had any tie to Maryland.
The companies had earlier asked the district judge who presided over the Pennsylvania cases to enforce the settlement agreement against the pension fund and to enjoin the continuation of the lawsuit in Maryland. The judge declined to do so. The pension fund argued that the judge’s decision, in addition to federal law favoring the plaintiff’s choice of forum in cases involving pensions, entitled them to litigate their claims in Maryland.
It was undisputed that the pension fund could have initiated its federal lawsuit in Pennsylvania rather than Maryland. Since the defendant companies were Pennsylvania corporations that transacted business in Pennsylvania, a federal court in Pennsylvania would be an appropriate venue for the lawsuit.
The question before the court was whether the defendant companies met their burden under § 1404(a) of proving that the proposed transfer was “convenient to the parties and witnesses” and “in the interest of justice.” The court also recognized that a plaintiff’s choice of forum is usually entitled to substantial weight.
Choice of Forum
The policy favoring the plaintiff’s choice of forum is strongest when there is a substantial connection between the facts of the case and the chosen forum, or when the plaintiff resides in the forum. The pension fund is administered from its Maryland offices. The fund maintained that its choice of forum should be respected for that reason, and because keeping all fund-related litigation in the same circuit would promote uniformity of results. Pennsylvania is in the Third Circuit while Maryland is in the Fourth Circuit.
The district court was unpersuaded by the fund’s arguments. The location of the
pension fund’s offices was outweighed by the absence of any connection between the alleged breach of the collective bargaining agreement, which occurred in Pennsylvania, and the state of Maryland. In addition, the Fund’s desire for uniform results was undermined by the fact that a District Court in Pennsylvania had already ruled on lawsuits arising out of the same cluster of facts. Litigating the issue in Pennsylvania was therefore more likely to achieve uniform results.
Convenience of Parties and Witnesses
The court noted that the distance between Baltimore and Philadelphia, where the respective courts are located, is not great. It would be just as inconvenient for the companies to travel to Baltimore as it would be for the pension fund to travel to Philadelphia. In addition, the fund was represented by a law firm with offices in Pennsylvania. Convenience of the parties was not a factor favoring either a transfer or the denial of a transfer.
Most of the witnesses who would testify about the companies’ alleged contract breach live in Pennsylvania. The fund apparently made no showing that it planned to call a significant number of witnesses who resided outside of Pennsylvania. The convenience of witnesses therefore favored a transfer.
Interests of Justice
The court decided that the interests of justice favored Pennsylvania as a forum for two reasons. First, the district court in Pennsylvania was familiar with the underlying facts of the litigation, including the settlement agreement that the companies raised as a defense to the pension fund’s lawsuit. Transferring the case to Pennsylvania would avoid a duplication of judicial effort, while keeping it in Maryland would require the judge in Maryland to become familiar with facts that were already known to the judge in Pennsylvania. Conserving judicial resources promotes the interest of justice.
Second, it takes cases in the District of Maryland about a year longer, on average, to proceed to trial than cases in the District of Pennsylvania. While crowded court dockets are not a weighty factor, the likelihood that the case would be resolved more quickly in Pennsylvania was a final factor weighing in favor of a transfer. Accordingly, the court granted the transfer motion. See International Painters and Allied Trade Industry Pension Fund, et al. v. Marrero Glass & Metal Inc., et al., Case No. Civil No. ELH-18-452 (D. Md., Feb. 1, 2019).
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