Treppel Ex Rel. Norfolk Southern Corp. v. Reason
793 F. Supp. 2d 429
D.D.C.2011Background
- Treppe l, a California citizen, sues Norfolk Southern and current and former directors in a shareholder derivative action under Virginia corporate law.
- Plaintiff alleges the directors aided a scheme to coordinate and raise rail fuel surcharges through the AAR, causing damages to Norfolk Southern.
- The company’s Board meetings and Audit Committee meetings during 2003–2007 largely occurred in the Eastern District of Virginia; some relevant AAR activity occurred in Washington, DC.
- Plaintiff and related antitrust actions were consolidated in the DC federal court by the JPML in 2007, though no officers/directors were named in those actions.
- Defendants moved to dismiss for improper venue under 28 U.S.C. § 1391(a) or, in the alternative, to transfer to the Eastern District of Virginia.
- The court denied dismissal for improper venue but granted transfer to the Eastern District of Virginia.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether DC is a proper venue under § 1391(a)(2). | Events occurred in DC via AAR meetings and related conduct. | Most substantial events occurred in ED Va; DC is improper. | DC is a proper venue under § 1391(a)(2). |
| Whether transfer to the Eastern District of Virginia is warranted under § 1404(a). | Keep case in DC due to related antitrust proceedings and convenience. | Transfer is appropriate for convenience and justice given Virginia ties. | Transfer to the ED Va is granted. |
Key Cases Cited
- Modaressi v. Vedadi, 441 F. Supp. 2d 51 (D.D.C. 2006) (venue may be proper where substantial events occur in multiple districts)
- City of New York v. Cyco.Net, 383 F. Supp. 2d 526 (S.D.N.Y. 2005) (venue proper if substantial connection to claim exists in chosen forum)
- Setco Enterprises Corp. v. Robbins, 19 F.3d 1278 (8th Cir. 1994) ("substantial connection" test for where a claim arises)
- Berenson v. Nat'l Fin. Servs., LLC, 319 F. Supp. 2d 1 (D.D.C. 2004) (location where corporate decisions were made is relevant to 'arise' analysis)
- Trout Unlimited v. Dep't of Agric., 944 F. Supp. 2d 13 (D.D.C. 1996) (public and private transfer factors; focus on convenience and justice)
- Parkridge 6, LLC v. U.S. Dep't of Trans., 772 F. Supp. 2d 5 (D.D.C. 2009) (transfer warranted where interstate proximity and efficiency weigh)
- Davis v. Am. Soc'y of Civil Eng'rs, 290 F. Supp. 2d 116 (D.D.C. 2003) (arise where most significant events occurred)
- Starnes v. McGuire, 512 F.2d 918 (D.C. Cir. 1974) (congestion is a factor in transfer analysis)
- Hartley v. Dombrowski, 744 F. Supp. 2d 328 (D.D.C. 2010) (public-interest factors predominate when venues are close)
- Medlantic Long Term Care Corp. v. Smith, 791 A.2d 25 (D.C. 2002) (local interest and public factors support Virginia forum)
- In re Rail Freight Fuel Surcharge Antitrust Litig., 434 F. Supp. 1225 (D.D.C. 1977) (JPML transfer authority does not bind venue in later actions)
- In re Falstaff Brewing Corp. Antitrust Litig., 434 F. Supp. 1225 (J.P.M.L. 1977) (transfers considered under narrow scope of JPML orders)