National Union Fire Insurance Company of Pittsburgh, Pa. v. Smith Tank & Steel, Inc.
2:11-cv-03054
E.D. La.Mar 29, 2013Background
- NUFIC, as subrogee of LBC, sues Smith Tank for breach of contract and redhibition arising from the design/manufacture of four storage tanks.
- Tanks were built at LBC’s Sunshine, Louisiana facility for $3,495,404; damage to a floating roof allegedly caused by defect prompted repairs and loss of use costs totaling over $1 million.
- NUFIC’s action is predicated on diversity jurisdiction; parties are diverse and the amount in controversy exceeds $75,000.
- NUFIC initially intended to file in the Middle District of Louisiana; pleadings show an original caption referring to the Middle District, but the suit was filed in the Eastern District.
- NUFIC later filed an amended complaint asserting venue is proper under 28 U.S.C. § 1391(c) (2011), as amended, and Smith Tank moved to dismiss for improper venue.
- The Magistrate Judge granted discovery on venue, including consideration of a declaration (Hubbard) showing substantial Eastern District revenue for Smith Tank; Smith Tank objected.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether discovery on Smith Tank’s contacts is proper for venue determination | NUFIC contends discovery is appropriate to establish venue. | Smith Tank argues discovery is improper and venue should be resolved on pleadings alone. | Overruled; discovery on venue is permitted. |
| Whether the Hubbard Declaration may be used to establish a prima facie case for venue | NUFIC may rely on record evidence (Hubbard Declaration) to support venue. | Smith Tank seeks to limit consideration to pleadings only, excluding Hubbard. | Affirmed; Hubbard can be considered in assessing venue and related discovery. |
| Whether NUFIC is entitled to discovery regarding Smith Tank’s Eastern District contacts | NUFIC should be allowed to conduct discovery to flesh out the EDLA contact data. | Smith Tank argues discovery is unnecessary given the declaration already suffices. | Allowed; discovery to contextualize EDLA revenue is permissible. |
| Whether venue lies in this district or the Middle District given § 1391(c) and the FCJVCA changes | Venue can be proper under 1391(c) based on Smith Tank’s contacts; discovery may affect this determination. | Venue should be in the Middle District where contract performance occurred. | The court remains open to venue questions; discovery will affect the later ruling. |
| Whether the motion to dismiss for improper venue should be denied without prejudice pending discovery | NUFIC requests denial of the motion to dismiss pending discovery. | Smith Tank seeks dismissal now if venue is improper. | Denied without prejudice; leave to re-urge after discovery |
Key Cases Cited
- Bonvillain v. La. Land & Exploration Co., 702 F.Supp.2d 667 (E.D. La. 2010) (discovery inappropriate when plaintiff fails to present prima facie case of personal jurisdiction)