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Wright v. Elton Corp.

United States District Court, D. Maryland

March 17, 2017

HELENA DUPONT WRIGHT, et al., Plaintiffs,
v.
ELTON CORPORATION, et al., Defendants.

          MEMORANDUM OPINION

          Richard D. Bennett United States District Judge

         Plaintiffs Helena DuPont Wright and James Mills (the “employer-plaintiffs”) and co-plaintiffs Joseph Wright and T. Kimberly Williams (the “employee-plaintiffs”) (collectively, “plaintiffs”) have filed this action against Elton Corporation, Gregory Fields, and First Republic Trust Company of Delaware, LLC (collectively, “defendants”), the current and former trustees of the M.C. DuPont Clark Employee Pension Trust (“the Pension Trust”), seeking a judicial declaration that the Pension Trust is subject to the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et seq. (Second Amended Complaint, ECF No. 35.) Plaintiffs also seek injunctive relief pursuant to ERISA to remedy defendants' alleged non-compliance with that statute over the last forty-three years.

         Now pending before this Court is defendants' Motion to Dismiss Second Amended Complaint Pursuant to Fed.R.Civ.P. 12(b)(1), 12(b)(2), 12(b)(3), 12(b)(7), and 19 for Lack of Subject Matter Jurisdiction, Lack of Standing, Improper Venue, Lack of Personal Jurisdiction, and Failure to Join Indispensable Parties (“Defendants' Motion”). (ECF No.37.) The parties' submissions have been reviewed, and no hearing is necessary. See Local Rule 105.6 (D. Md. 2016). For the reasons stated below, Defendants' Motion is GRANTED IN PART, specifically with respect to Improper Venue, and this case shall be TRANSFERRED to the United States District Court for the District of Delaware.

         FACTUAL BACKGROUND

         The M.C. duPont Clark Employee Pension Trust (“the Pension Trust”) was created by Mary Chichester DuPont Clark (“the Settlor”), a Delaware resident, in 1947 to provide retirement benefits for household employees of designated members of the duPont family. (ECF No. 35 at ¶ 1.) The Pension Trust was created under and, by its terms, governed by the laws of the State of Delaware. (Pension Trust, ECF No. 11-1; Affidavit of Katharine Gahagan, ECF No. 11-1 at ¶ 18.)[1] Beneficiaries under the Trust may include certain employees of the employer-plaintiffs as grandchildren of the Settlor. (Id. at ¶ 14.) Only Mary Chichester DuPont funded the Pension Trust, contributing fifty (50) shares of common stock of the Christiana Securities Company. (Id. at ¶ 4.) No other person was required to make contributions to the Pension Trust, and no other person or entity has ever made contributions to the Pension Trust. (Affidavit of Katharine Gahagan, ECF No. 11-1 at ¶ 19.) Plaintiffs allege that the Pension Trust's “assets are invested solely under the control and discretion of the defendants, and all of them.” (ECF No. 35 at ¶ 74.)

         Employer-plaintiff Helena duPont Wright is a designated family member, a Maryland resident, and an “employer” under the Pension Trust: qualified employees of Mrs. Wright may be entitled to receive benefits from the Pension Trust. (ECF No. 35 at ¶¶ 1, 34.) Similarly, plaintiff James Mills is a designated family member, a Virginia resident, and an “employer” under the Pension Trust. (Id. at ¶¶ 1, 35.) As with co-plaintiff Wright, qualified employees of Mr. Mills may be entitled to receive benefits from the Pension Trust. (Id.) Both Ms. Wright and Mr. Mills are both grandchildren of Mary Chichester DuPont, the settlor of the Pension Trust.[2] See ECF No. 11-1 at ¶ 15.

         Employee-plaintiff Joseph Wright is a resident of Virginia and is currently employed by plaintiff James Mills as a personal assistant. (ECF No. 35 at ¶ 36.) Wright assists plaintiff James Mills in the management of Mills' private affairs, including secretarial, accounting, and other assistance. (Id.) Plaintiff T. Kimberly Williams is a resident of Maryland and is currently employed by plaintiff Helena duPont Wright as a personal accountant, assisting Ms. Wright with the management of her financial and other private affairs. (ECF No. 35 at ¶ 37.) Plaintiffs allege that employee-plaintiffs Wright and Williams are entitled to benefits under the Pension Trust, though they have never received notice of entitlement to such benefits. (Id. at ¶¶ 36-37.)

         Defendant Elton Corporation (“Elton”) has its principal place of business in the state of Delaware and was a trustee of the Pension Trust from October 1989 until August 7, 2015. (ECF No. 35 at ¶ 42; ECF No. 11-1 at ¶¶ 10, 12.) Elton had been the sole Trustee of the Pension Trust since the death of A. Felix duPont, Jr. in December 1996. (ECF No. 11-1 at ¶ 11.) Defendant Gregory Fields was actively involved in administering Pension Trust investments, making decisions with regard to the eligibility of duPont family employees for benefit payments, determining the amount of benefit payments, paying benefits, and denying claims for benefits.[3] (ECF No. 35 at ¶ 47.) Elton resigned as Trustee on August 7, 2015 and appointed defendant First Republic Trust Company of Delaware, LLC (“First Republic”) as successor trustee. (ECF No. 11-1 at ¶ 12.) First Republic is the current trustee of the Pension Trust. (ECF No. 35 at ¶ 45.)

         While the Pension Trust was established in 1947, plaintiffs allege that the Pension Trust became subject to ERISA upon passage of that statute in 1974. (ECF No. 35 at ¶ 56.) Plaintiffs allege that the Pension Trust has never been operated in compliance with ERISA, notwithstanding the named plaintiff-employers' efforts to persuade the trustees to do so. (Id. at ¶¶ 56-57.) Through this action, plaintiffs seek, inter alia, (1) a declaratory judgment that the Pension Trust is an ERISA Pension Plan subject to federal law and (2) an injunction ordering defendants to bring the plan into compliance with ERISA. (Prayer for Relief, ECF No. 35 at 38-42.) Failure to bring the Pension Trust into compliance with ERISA, plaintiffs allege, has “created additional and increased funding obligations for employers, including [plaintiff-employers], and created exposure to penalties and fines once the Department of Labor learns of the existence of the [Pension Trust] and the failure to follow ERISA over so many years.” (ECF No. 35 at ¶ 16.)

         PROCEDURAL BACKGROUND

         Plaintiffs filed their original Complaint on February 4, 2016. (ECF No. 1.) After defendants Elton and Fields moved to dismiss that Complaint (ECF No. 5), plaintiffs filed an Amended Complaint on March 18, 2016. (ECF No. 8.) Defendants Elton and Fields moved to dismiss the Amended Complaint on April 1, 2016. (ECF No. 11.) Co-defendants First Republic and the Pension Trust subsequently joined in Elton and Fields' Motion to Dismiss. (ECF No. 16.)

         This Court conducted a motions hearing on October 25, 2016 to address defendants' motion to dismiss. (ECF No. 27.) At the hearing, the Court denied as moot defendants' original motion to dismiss (ECF No. 5), but determined that the second motion to dismiss (ECF Nos. 11, 16) would remain pending and that plaintiffs would be permitted to file a Second Amended Complaint to address certain defects discussed during the hearing. (ECF No. 28.)

         Consistent with the Court's Order, plaintiffs filed a Second Amended Complaint on December 9, 2016. (ECF No. 35.) The Amended Complaint is the now-operative pleading in this case. On January 27, 2017, defendants filed the now-pending Motion to Dismiss Second Amended Complaint Pursuant to Fed.R.Civ.P. 12(b)(1), 12(b)(2), 12(b)(3), 12(b)(7), and 19 for Lack of Subject Matter Jurisdiction, Lack of Standing, Improper Venue, Lack of Personal Jurisdiction, and Failure to Join Indispensable Parties.[4] (ECF No. 37.) The Motion became ripe for adjudication on March 8, 2017. See ECF No. 44.[5]

         STANDARD OF REVIEW

         I. ERISA's Venue Provision, 29 U.S.C. § 1132(e)(2)

         Section 1132(e)(2) of ERISA provides that:

Where an action under this subchapter is brought in a district court of the United States, it may be brought in the district where the plan is administered, or the breach took place, or where a defendant resides or may be found… 29 U.S.C. § 1132(e)(2). In light of Congress's stated intent to provide “ready access to the Federal Courts” for ERISA claims, 29 U.S.C § 1001(b), courts generally have interpreted § 1132(e)(2) liberally. See Cross v. Fleet Reserve Ass'n Pension Plan, 383 F.Supp.2d 852, 854 (D.Md. 2005) (citing Waeltz v. Delta Pilots ...

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