1:22-cv-00166
D.N.D.May 24, 2023Background:
- Parties: Plaintiff Lillian Walters Kaiser (sister/beneficiary) sues William D. Walters, Jr. (brother; sole voting shareholder, president, director, co‑trustee) and Imperial Oil of North Dakota, Inc. (North Dakota corporation with principal place of business in Billings, Montana).
- Dispute: family/shareholder and trust conflict over Walters’ corporate decisions, distributions, alleged mismanagement as president/director/shareholder, breach of trust, and unjust enrichment.
- Relevant facts: Walters lives and made the challenged decisions in Billings, Montana; Imperial Oil owns 404 wells (403 in North Dakota); Williston, ND office and some ND property tie the dispute to North Dakota but decisions were made in Montana.
- Procedural posture: Defendants moved to dismiss for improper venue or, alternatively, transfer to the District of Montana; Plaintiff opposed. Walters also requested a hearing on the motions.
- Claims: Eight counts (fraud/unfairly prejudicial conduct, corporate waste, multiple fiduciary‑duty claims, breach of trust, unjust enrichment) seeking damages for conduct alleged to have occurred largely in Montana.
- Disposition: Court held venue improper in the District of North Dakota and transferred the case to the U.S. District Court for the District of Montana; motions to dismiss for improper venue denied; hearing request denied.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether venue is proper under 28 U.S.C. § 1391(b)(2) | Kaiser: substantial part of events occurred in ND (403 wells, Williston office, ND banks, ND property of trust). | Defendants: relevant actions and decisions occurred almost exclusively in Billings, Montana where Walters resides and runs Imperial Oil. | Venue is improper in ND; relevant defendant activities occurred principally in Montana. |
| Whether the property clause of § 1391(b)(2) makes ND proper | Kaiser: property subject to the revocable trust and oil wells are situated in ND, invoking the property clause. | Defendants: this is not a property or in rem action; clause does not apply. | Property clause inapplicable; case is a dispute over defendants’ conduct, not an in rem property action. |
| Whether case should be dismissed or transferred under 28 U.S.C. § 1406(a) | Kaiser: opposed transfer; argued ND has meaningful connections (implicit). | Defendants: transfer to District of Montana is in interest of justice and conserves resources; dismissal would be wasteful. | Transferred to the District of Montana in the interest of justice and judicial economy. |
| Whether an oral hearing on the motions was required | Kaiser: did not demonstrate necessity for live hearing (implicit from filings). | Walters: requested a hearing on venue/motions. | Hearing denied as unnecessary; court fully apprised by the briefing. |
Key Cases Cited
- Chevron U.S.A. Inc. v. Env’t Prot. Agency, 45 F.4th 380 (D.C. Cir. 2022) (venue is a threshold, nonjurisdictional inquiry focused on where merits should be adjudicated)
- Steen v. Murray, 770 F.3d 698 (8th Cir. 2014) (venue inquiry centers on defendant’s relevant activities; § 1391(b)(2) property clause applies only to in rem/property disputes)
- Cold Spring Harbor Lab. v. Ropes & Gray LLP, 762 F. Supp. 2d 543 (E.D.N.Y. 2011) (explains limited scope of property clause for venue)
- Pacer Glob. Logistics, Inc. v. Nat’l Passenger R.R. Corp., 272 F. Supp. 2d 784 (E.D. Wis. 2003) (venue determines the appropriate district in which an action may be filed)