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Acosta v. Wilmington Trust, N.A.

United States District Court, N.D. Ohio

December 20, 2017

R. ALEXANDER ACOSTA, Secretary of Labor, U.S. Department of Labor Plaintiff,
v.
WILMINGTON TRUST, N.A., et al. Defendants.

          OPINION & ORDER [RESOLVING DOC. 10]

          JAMES S. GWIN, UNITED STATES DISTRICT JUDGE.

         The U.S. Department of Labor (“the Department”) alleges that Defendant Wilmington Trust, N.A. (“Wilmington Trust”) violated ERISA by improperly approving the Graphite Sales, Inc. Employee Stock Ownership Plan's (“ESOP”) purchase of the outstanding stock of Graphite Sales, Inc. (“Graphite”).

         Defendant Wilmington Trust moves to transfer this case to the District of Delaware.[1]The Department opposes.[2]

         For the following reasons, the Court DENIES Defendant Wilmington Trust's motion to transfer venue.

         I. Background

         The Department brought suit in this Court against Defendant Wilmington Trust. Wilmington Trust has its principal place of business in Wilmington, Delaware.[3]

         According to the Department's complaint, Defendant Wilmington Trust violated its fiduciary duties under ERISA by approving the ESOP's purchase of Graphite's outstanding stock based on a faulty valuation opinion and after a lack of due diligence.[4] Because of Defendant's alleged failings, the ESOP arguably overpaid for Graphite's stock by approximately $6 million.[5]

         Defendant Wilmington Trust now moves to transfer this case to the District of Delaware.[6]Defendant argues that the District of Delaware is a more convenient forum for key party witnesses and for potential third-party witnesses, [7] who reside in Delaware, New York, or Washington, D.C.[8] Defendant also argues that all of the business records relevant to the Department's claims are in or near Delaware.[9]

         The Department opposes Defendant's motion to transfer.[10] The Department argues that Wilmington Trust overstates the convenience gains for the witnesses it identified.[11] The Department argues that Defendant ignores the additional burden transferring venue will place on the Department, as well as on additional witnesses and interested parties located in or near Ohio.[12] Further, the Department argues that the tangible evidence in this case is documentary, and is therefore easily transferred.[13] The Department also argues that Wilmington Trust bore the risk of litigating in Ohio when it chose to conduct business with the Ohio-based ESOP.[14]

         II. Legal Standard

         Under 28 U.S.C. § 1404(a), “[f]or the convenience of 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.” When considering a motion to transfer, the Sixth Circuit typically requires “a district court [to] consider the private interests of the parties, including their convenience and the convenience of potential witnesses, as well as other public-interest concerns, such as systemic integrity and fairness, which come under the rubric of ‘interests of justice.'”[15] A district court has broad discretion over whether to transfer a case under § 1404.[16]

         If the original venue is proper, “a plaintiff's choice of forum is given substantial weight, ” unless the defendant shows that convenience and the interests of justice “strongly favor transfer.”[17] Ultimately, “[t]he defendant, because it is the party requesting a transfer of venue, bears the burden of proof to show the factors weigh ‘strongly' in favor of transfer.”[18] When a defendant makes such a showing, transfer is appropriate. “But unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed.”[19]

         Typically, where venue is proper in more than one forum, either party will face some inconvenience no matter which venue is chosen. Consequently, if a change of venue merely shifts the inconvenience from one party to another, a change of venue is not warranted.[20]

         “Consistent with that principle, a generalized assertion by a defendant that witnesses reside in, and documents are located in, the proposed transferee district, is generally insufficient to merit transfer.”[21]

         III. Discussion

         As an initial matter, the parties do not dispute that venue is proper both here and in the District of Delaware. Therefore, the Court will only transfer venue if Defendant Wilmington Trust can establish that convenience and ...


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