Abercrombie v. Continental Casualty Company, 295 F.Supp.2d 604 (D.S.C. 2003) – decided December 16, 2003 – United States District Court for the District of South Carolina – Robert E. Hoskins

I represented Abercrombie.  This is a great ruling.  In Abercrombie, the claimant sought ERISA governed long term disability benefits.  We never got to the merits because the case was settled shortly after the above opinion was issued.  The published decision addresses a procedural issue.  Abercrombie lived in North Carolina, but I filed her lawsuit in South Carolina.  ERISA’s jurisdiction provision is very generous.  According to 29 U.S.C. § 1132(e), an ERISA lawsuit can be brought anywhere the defendant can be “found”.  Even though Abercrombie lived in North Carolina, I filed her lawsuit in South Carolina because Continental Casualty Company (CCC) does business in South Carolina.  The defendant filed a motion to transfer the case to North Carolina.  I argued that because it was an ERISA case that would be decided on the record the convenience of witnesses was irrelevant (because there would be no witnesses).  I also argued that pursuant to 29 U.S.C. § 1132(e) that CCC was subject to jurisdiction in South Carolina and, therefore, the motion to transfer should be denied.  The district court denied CCC’s motion and did so by way of a published decision.  The court ruled:

“Although the parties spend a great deal of time disputing the facts related to Abercrombie’s contacts with South Carolina, the court finds that even if she has no contacts with South Carolina, the exercise of personal jurisdiction over Continental is proper.  Section 502(e)(2), which provides for nationwide service of process, has been interpreted for purposes of personal jurisdiction as a national contacts test.”  Schrader v. Trucking Employees of N. Jersey Welfare Fund, Inc., 232 F.Supp.2d 560, 571 (M.D.N.C. 2002) (internal quotation omitted).  “Therefore, when a federal court asserts personal jurisdiction over a defendant in a suit based on a statute that includes a provision for nationwide service of process, the relevant inquiry is not whether the defendant has sufficient minimum contacts for the forum state, but rather, whether the defendant has sufficient contacts with the United States as a whole.”  Id.  There is no question that Continental has sufficient contacts with the United States to satisfy this test.  In addition, the court’s exercise of personal jurisdiction over Continental will not create “unfair burden or inconvenience.”  Id. at 572. 

Moreover, the court finds that Continental’s alternative argument that venue is improper without merit.2  Pursuant to § 502(e)(2), “venue is proper in any district where the plan is administered, where the alleged breach took place, or where a defendant resides or may be found.”  Id. at 573.  In its motion, Continental asserts the Plan is administered in Pennsylvania, the breach took place in North Carolina, and Abercrombie is located in North Carolina.  Assuming the latter two to be true, the third venue inquiry is where the defendant resides or may be found, not the plaintiff.

FOOTNOTES

2 The court notes that Continental does not move to transfer venue pursuant to 28 U.S.C. § 1404(a) for the convenience of the parties and witnesses.  Rather, Continental argues venue is improper pursuant to § 502(e)(2).  As such, the court’s discussion is limited to that issue.

The meaning of “may be found” has not been addressed by the United States Court of Appeals for the Fourth Circuit.  However, the court finds the United States Court of Appeals for the Seventh Circuit’s decision in Waeltz v. Delta Pilots Retirement Plan, 301 F.3d 804, 810 (7th Cir. 2002) persuasive.  In Waeltz, the court held, “A fund can be found in a judicial district if it has the sort of minimum contacts with that district that would support the exercise of personal jurisdiction under the rule of International Shoe Co. v. Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L.Ed. 95 (1945).”  301 F.3d 804 at 810; see also Ballinger v. Perkins, 515 F.Supp. 673 (W.D. Va. 1981).  Admittedly, Continental insures Plans for other employers in South Carolina.  The court finds this sufficient to establish minimum contacts under the standard set forth in International Shoe and as such Continental can “be found” in South Carolina for purposes of the ERISA venue statute. 

In the alternative, the court also finds persuasive the District of Kansas’ decision in McCracken v. Auto. Club of S. Cal., Inc., 891 F.Supp. 559 (D. Kan. 1995).  In McCracken, the court looked to the general venue statute, 28 U.S.C. § 1391, in determining where a corporation resides for purposes of § 502(e)(2).  Section 1391(c) states, “For purposes of venue …, a defendant that is a corporation shall be deemed to reside 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).  Because Continental is subject to personal jurisdiction in South Carolina as stated above, the court finds that Continental resides in South Carolina for purposes of the ERISA venue statute.  For these reasons, Continental’s alternative request to transfer venue is denied.”  (Click here to view the whole opinion)