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United States ex rel. Salomon v. Wolff

United States District Court, D. Maryland

July 24, 2017

UNITED STATES OF AMERICA ex rel. HAROLD SALOMON, Plaintiff,
v.
DERISH M. WOLFF, Defendant.

          MEMORANDUM OPINION

          ROGER W. TITUS UNITED STATES DISTRICT JUDGE

         On July 31, 2006, relator Harold Salomon (“Relator”) filed a complaint in the District of Maryland against corporate defendants including the Louis Berger Group, Inc. (“LBG”), alleging violations of the False Claims Act (“FCA”), 31 U.S.C. §§ 3729-3733. ECF No. 2. Relator filed an amended complaint (“Amended Complaint”) on July 10, 2009, adding three additional individual defendants, including Derish M. Wolff (“Wolff”) and Salvatore J. Pepe (“Pepe”). ECF No. 18. On November 5, 2010, Relator, LBG, and the United States of America (“Government”) signed an agreement settling the claims against LBG and providing for LBG's dismissal from the case.

         On July 28, 2016, the Government filed a Complaint in Intervention (“Complaint in Intervention”) against Wolff and Pepe only. ECF No. 83. On December 2, 2016, Wolff filed a Motion to Dismiss for Improper Venue Or, in the Alternative, to Transfer Venue to New Jersey [ECF No. 105], arguing that venue in Maryland was not proper when the Government filed its Complaint in Intervention in 2016 and that venue more appropriately lies in the District of New Jersey. Both parties also filed motions for leave to file sur-replies. ECF Nos. 113, 121. This Court held a hearing on the motions on July 7, 2017. For the reasons that follow, Wolff's motion will be granted in part and the case will be transferred to the United States District Court for the District of New Jersey.

         BACKGROUND

         Relator's Amended Complaint alleged that Defendants knowingly defrauded the United States by “tens of millions of dollars, ” through manipulation of overhead cost data and overhead rate proposals relating to contracts for domestic and international construction, engineering, and environmental projects. ECF No. 18 ¶ 3. It stated that venue was proper in the District of Maryland “pursuant to 31 U.S.C. § 3732(a) because LBG transacts business in, and acts proscribed by 31 U.S.C. § 3729 were committed in, the District of Maryland.” Id. ¶ 36.

         On November 5, 2010, Relator, LBG, and the United States of America signed an Agreement settling the claims against LBG. ECF No. 105-3. The agreement stipulated that all further claims between the parties to the agreement would fall under “the exclusive jurisdiction and venue” of the United States District Court for the District of Maryland. Id. ¶ 15.

         Also on November 5, 2010, in the District of New Jersey, Pepe pled guilty to conspiracy to defraud the United States. ECF No. 83 ¶ 26. On December 12, 2014, in the District of New Jersey, Wolff also pled guilty to conspiracy to defraud the United States. Id. ¶ 23. The criminal charges against both Wolff and Pepe are related to the conduct at issue in the Government's Complaint in Intervention. ECF No. 105 at 6.

         In its Complaint in Intervention against Wolff and Pepe only, the Government alleged an “East Orange [New Jersey] Office Costs Scheme” and a “Washington, D.C. Office Costs Scheme, ” pursuant to which Defendants Wolff and Pepe allegedly committed FCA violations while working at LBG's corporate headquarters in East Orange, New Jersey. ECF No. 83 ¶¶ 82-93. On May 22, 2017, this Court entered an Order dismissing with prejudice all claims against Pepe, thus leaving only the claims against Wolff remaining. ECF No. 119.

         DISCUSSION

         I. Wolff's Motion to Dismiss for Improper Venue Or, in the Alternative, to Transfer Venue to New Jersey [ECF No. 105]

         a. Legal Standards

         The FCA provides that venue for any action brought under § 3730 is proper in any judicial district in which “any one defendant can be found, resides, transacts business, or in which any act proscribed by section 3729 occurred.” 31 U.S.C. § 3732(a).

         A district court may, for the “convenience of parties and witnesses, and in the interest of justice, ” transfer a civil case to any other district or division where it might have been brought originally. See 28 U.S.C. § 1404(a); see also 28 U.S.C. § 1406(a) (“The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.”).

         A district court has discretion to decide motions to transfer based on “an ‘individualized, case-by-case consideration of convenience and fairness.'” Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (quoting Van Dusen v. Barrack, 376 U.S. 612, 622 (1964)). The party seeking transfer must establish by a preponderance of the evidence that the transfer will “better and more conveniently serve the interests of the parties and witnesses and better promote the interests of justice.” Helsel v. Tishman Realty & Constr. Co., 198 F.Supp.2d 710, 711 (D. Md. 2002) (citations and quotation marks omitted). “[U]nless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed.” Collins v. Straight, Inc., 748 F.2d 916, 921 (4th Cir. 1984) (quoting Gulf Oil v. Gilbert, 330 U.S. 501, 508 (1946)). Four factors guide the Court's evaluation of whether transfer ...


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