Partida v. Schenker Inc.

1

DIEGA PARTIDA, Plaintiff, v. SCHENKER INC., et al., Defendants.

No. 22-cv-09192-AMO

United States District Court, N.D. California

March 29, 2024

ORDER DENYING MOTION TO TRANSFER AND GRANTING MOTION TO DISMISS RE: DKT. NOS. 24, 39

ARACELI MARTÍNEZ-OLGUÍN UNITED STATES DISTRICT COURT JUDGE

Defendants' motion to transfer venue and motion to dismiss were heard before this Court on October 26, 2023. Having read the papers filed by the parties and carefully considered their arguments therein and those made at the hearing, as well as the relevant legal authority, the Court hereby DENIES the motion to transfer and GRANTS the motion to dismiss for the following reasons.

I. BACKGROUND^[1]

Plaintiff Diego Partida is a California resident and former employee of Defendant

Schenker Inc. (“Schenker”) who participates in Schenker's 401(k) Savings and Investment Plan (the “Plan”). First Amended Complaint (“FAC”) (ECF 32) ¶¶ 1, 9. Schenker sponsors and administers the “defined contribution” retirement plan, which enables participants to select their own investments from the plan investment options chosen by the plan sponsor. FAC ¶¶ 14, 61, 85. Schenker maintains its principal place of business in Chesapeake, Virginia. FAC ¶ 14.

The Schenker, Inc. Retirement Plans Committee (“Committee”) is responsible for overseeing the Plan's investment options and expenses. DeGalleford Decl. (ECF 24-1) ¶ 8. The Committee is comprised of thirteen members, employed at Schenker's locations in Virginia, Florida, New York, and Illinois. Id. Since 2016, the Committee has held meetings in Virginia, Florida, and New York. Id. ¶ 9. Schenker's Human Resources personnel who engage in administrative activity on behalf of the Plan are employed at Schenker's headquarters in Chesapeake, Virginia. Id. ¶ 3. As of December 31, 2022, the Plan covers 9,694 participants in 46 states, 7.59% of whom live in California. Id. ¶ 4.

On December 30, 2022, Plaintiff Diego Partida filed a putative class action under the Employee Retirement Income Security Act of 1974 (“ERISA”) against Schenker, The Administrative Committee of Schenker, Inc. 401(K) Savings and Investment Plan (“Committee”), and DOES 1-50 (collectively, “Defendants”). ECF 1. Partida filed the First Amended Complaint (“FAC”) on May 1, 2023 on behalf of current and former employees, participants, and beneficiaries of the Plan to recover losses for Defendants' mismanagement of the Plan. FAC ¶ 2. Partida alleges that Defendants failed to employ a prudent process for selecting and monitoring funds, which had significantly higher expense-ratios and underperformed in comparison with then-available benchmarks. FAC ¶¶ 33, 158-168, 170-171, 175, 236-38, 241.

On March 3, 2023, Defendants filed a motion to transfer venue to the Eastern District of Virginia. ECF 24. On May 26, 2023, Defendants moved to dismiss the FAC for lack of standing and failure to state a claim. ECF 39. The Court first considers the motion to transfer before turning to the motion to dismiss.

II. MOTION TO TRANSFER

Defendants move to transfer the case to the Eastern District of Virginia. ECF 24. A court may transfer an action to another district “where it might have been brought” “[f]or the convenience of the parties and witnesses, in the interest of justice.” 28 U.S.C. § 1404(a); see also Hatch v. Reliance Ins. Co., 758 F.2d 409, 414 (9th Cir. 1985) (internal citation and quotation marks omitted) (“[S]ection 1404(a) requires two findings-that the district court is one where the action might have been brought and that the convenience of parties and witnesses in the interest of justice favor transfer.”).

A motion for transfer lies within the broad discretion of the district court and must be determined on an individualized basis. Jones v. GNC Franchising, Inc., 211 F.3d 495, 498 (9th Cir. 2000). “Section 1404(a) requires the court to make a threshold determination of whether the case could have been brought where the transfer is sought. If venue is appropriate in the alternative venue, the court must weigh the convenience of the parties, the convenience of the witnesses, and the interest of justice.” State v. Bureau of Land Mgmt., 286 F.Supp.3d 1054, 1059 (N.D. Cal. 2018) (“Bureau of Land Mgmt.”) (citing 28 U.S.C. § 1404(a)).

In considering whether to transfer venue, courts consider several factors, 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.

Jones, 211 F.3d at 498-99. Also relevant are “the presence of a forum selection clause” and “the relevant public policy of the forum state.” Id. at 499; see also Lax v. Toyota Motor Corp., 65 F.Supp.3d 772, 776 (N.D. Cal. 2014) (the court may also consider local interest in the controversy and the relative court congestion in each forum).

The party seeking to transfer bears the burden of showing that “the balance of convenience clearly favors transfer.” Lax, 65 F.Supp.3d at 776 (citing Commodity Futures Trading Comm'n v. Savage, 611 F.2d 270, 279 (9th Cir. 1979)). “The defendant must make a strong showing of inconvenience to warrant upsetting the plaintiff's choice of forum.” Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986) (citation omitted).

A. Section 1404(A) Factors

Under 28 U.S.C. § 1404(a), the Court must first determine whether the case could have been brought in the district where transfer is sought, i.e., where venue is proper, before assessing the convenience of parties and witnesses and the interest of justice. 28 U.S.C. § 1404(a); see Bureau of Land Mgmt., 286 F.Supp.3d at 1059. Partida does not dispute that this action could have been brought in the Eastern District of Virginia, and thus concedes the issue. See Ardente, Inc. v. Shanley, No. C 07-4479 MHP, 2010 WL 546485, at *6 (N.D. Cal. Feb. 9, 2010) (“Plaintiff fails to respond to this argument and therefore concedes it through silence.”). The Court therefore turns directly to the case-specific analysis of convenience and fairness. Because most of the Jones factors do not weigh in favor of transfer, the Court ultimately finds transfer not appropriate under the facts and circumstances of this case.

1. Plaintiff's Choice of Forum

“Although it is not a statutory requirement, the Supreme Court has placed a strong emphasis on the plaintiff's choice of forum.” Bureau of Land Mgmt., 286 F.Supp.3d at 1063; see Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255 (1981) (“there is ordinarily a strong presumption in favor of the plaintiff's choice of forum, which may be overcome only when the private and public interest factors clearly point towards trial in the alternative forum”); see also Ravelo Monegro v. Rosa, 211 F.3d 509, 513 (9th Cir. 2000) (noting the “strong presumption in favor of a domestic plaintiff's forum choice”); Ctr. For Biological Diversity v. McCarthy, No. 14-cv-05138-WHO, 2015 WL 1535594, at *3 (N.D. Cal. Apr. 6, 2015) (“a plaintiff's choice of forum receives substantial deference, especially when the forum is within the plaintiff's home district or state”) (citing Lou v. Belzberg, 834 F.2d 730, 739 (9th Cir. 1987) (“Belzberg”)).

Despite the “great weight [] generally accorded plaintiff's choice of forum, when an individual brings a derivative suit or represents a class, the named plaintiff's choice of forum is given less weight.” Belzberg, 834 F.2d at 739 (citations omitted). Moreover, “[i]f the operative facts have not occurred within the forum and the forum has no interest in the parties or subject matter, [the plaintiff's] choice is entitled to only minimal consideration.” Id.; see Burgess v. HP, Inc., No. 16-CV-04784-LHK, 2017 WL 467845, at *6 (N.D. Cal. Feb. 3, 2017) (“deference is substantially diminished in several circumstances, including where . . . the conduct giving rise to the claims occurred in a different forum [or where] . . . the plaintiff sues on behalf of a putative class”).

Here, though Partida filed the case in the district in which resides, his choice of forum is afforded less weight because he brings a putative class action challenging the Plan's administration, which occurred in Schenker's corporate headquarters in Chesapeake, Virginia. DeGalleford Decl. ¶¶ 1, 3, 5. Thus, this factor weighs against transfer, but is entitled to only minimal consideration.^[2] See Reyes v. Bakery & Confectionery Union & Indus. Int'l Pension Fund, No. 14-CV-05596-JST, 2015 WL 1738269, at *3 (N.D. Cal. Apr. 9, 2015) (affording plaintiff's choice of forum less weight in class action where plaintiff filed suit in the district where he resides); see also Brown v. Abercrombie & Fitch Co., No. 4:13-CV-05205 YGR, 2014 WL 715082, at *4 (N.D. Cal. Feb. 14, 2014) (reducing deference given to plaintiff's choice of forum in putative class action where plaintiff did not reside in the district and the majority of the activities alleged in the complaint did not occur in the district).

2. Familiarity with Relevant Law and Ease of Access to Evidence

As ERISA is a federal statute that is uniform across the United States, neither forum has more familiarity with the relevant law. See Reyes, 2015 WL 1738269, at *4. Similarly the ease of access to evidence does not weigh heavily in either direction. Defendants argue that witnesses are not in California, and hard copy and electronic records are stored in Virginia. DeGallefor...