1:14-cv-01116
N.D. Ill.Aug 8, 2014Background
- Builders Bank (Illinois) sued former employee/director Dan Ruvalcaba (California resident) for state-law claims arising from alleged misconduct after he learned his California office would close.
- Ruvalcaba worked principally in Los Angeles, attended some board meetings in Chicago, and traveled to Illinois multiple times in 2013.
- The Bank alleges business disparagement, tortious interference, usurpation of corporate opportunities, and breach of a Separation Agreement Ruvalcaba signed in California.
- The alleged wrongful acts (shopping a profitable loan, misleading competitors, releasing documents, interfering with California client relationships) occurred in California.
- Ruvalcaba moved to dismiss for lack of personal jurisdiction and improper venue; alternatively to transfer venue or dismiss for failure to state a claim. The court addressed venue first.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether venue proper in N.D. Ill. under 28 U.S.C. § 1391(b) | Some defendant actions related to board meetings in Chicago, so substantial part occurred in this district | Most or all wrongful acts occurred in California; no substantial part occurred in Illinois | Venue improper in N.D. Ill.; no substantial events occurred here |
| Whether complaint may be supplemented by briefs to show venue | Omitted alleged nondisclosure at Chicago board meetings supports venue | Complaint controls; cannot amend by briefing | Court rejects Plaintiff’s new factual theory raised only in brief; pleadings govern |
| Appropriate remedy for improper venue under 28 U.S.C. § 1406(a) | Case should proceed; likely in California forum | Transfer to a district where case could have been brought | Court transfers case to Central District of California rather than dismissing |
| Whether personal jurisdiction and choice-of-law favor California forum | (Not extensively argued on venue) | California has personal jurisdiction; California law likely governs some claims | Transfer favored because California is appropriate forum with witnesses and governing law considerations |
Key Cases Cited
- Cote v. Wadel, 796 F.2d 981 (7th Cir.) (district court may transfer for improper venue even if it lacks personal jurisdiction)
- Armstrong v. LaSalle Bank Nat’l Ass’n, 552 F.3d 613 (7th Cir.) (venue may be proper in more than one district)
- Bissessur v. Ind. Univ. Bd. of Trs., 581 F.3d 599 (7th Cir.) (complaint may not be amended by briefs opposing a motion to dismiss)
- Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101 (7th Cir.) (consideration of a motion to dismiss is limited to the pleadings)
- Hanyuan Dong v. Garcia, 553 F.Supp.2d 962 (N.D. Ill.) (venue improper where alleged tortious acts occurred out of state)
- Georgouses v. NaTec Res., Inc., 963 F.Supp. 728 (N.D. Ill.) (courts generally prefer transfer over dismissal when another appropriate forum exists)