In Re United Mine Workers of America Employee Benefit Plans Litigation
MEMORANDUM OPINION
Nineteen defendants
1
in five of the cases, which have been transferred to this Court pursuant to
I. Standard of Review
The Court may dismiss a complaint under
The legal standard that applies to a motion for judgment on the pleadings is essentially the same as that applied to a motion to dismiss. “
II. Discussion
Plaintiffs bring their claims under § 301 of the Labor Management Relations Act (“LMRA”),
Plaintiffs filed the above eases in the federal district courts of Kentucky
(West Ken, Dorton
Coal), Virginia
(Big
Star), West Virginia (AM Trucking), and Utah
(Energy West).
The Judicial Panel on Multidistrict Litigation transferred these eases to the District of Columbia pursuant to
In their various motions, defendants argue that the Court should apply the District of Columbia’s three-year limitations period to the above cases because in
Plaintiffs contend that the Court should apply the limitations periods of the transfer- or fora because the
A. Does the transferor or transferee forum’s limitations period apply to a multidistrict litigation case transferred pursuant to
The Cоurt of Appeals for the District of Columbia has not addressed whether a transfer order affects the applicable statute of limitations period. Two circuits, the Seventh and the Second, have addressed this issue and have reached conflicting conclusions.
See Eckstein v. Balcor Film Investors,
Most recently, in
Eckstein v. Balcor Film Investors,
the Seventh Circuit considered whether to apply the transferee or transferor circuit’s statute of limitations period to a Securities and Exchange Act claim which had been transferred to a federal district court in Wisconsin for consolidated pretrial proсeedings pursuant to
[w]hen the law of the United States is geographically non-uniform, a transferee court should use the rule of the transferor forum in order to implement the central conclusion of Van Dusen and Ferens: that a transfer under§ 1404(a) accomplishes ‘but a change of courtrooms.’ Van Dusen,376 U.S. at 639 ,84 S.Ct. at 820 .
Van Dusen
and
Ferens
are cases in which the Supreme Court held that a federal district court must apply the law of a transferor forum following a
[although both of those cases arose under the diversity jurisdiction, their references to Erie v. Tompkins,304 U.S. 64 , [58 S.Ct. 817 ,82 L.Ed. 1188 ] (1938), do not imply a ruling limited to state law. Erie is itself part of national law, interpreting the Rules of Decision Act,28 U.S.C. § 1652 .
Id. Because the court interpreted § 27A’s reference to “the jurisdiction” as implying a non-uniform federal law, it concluded that the law of the transferor forum governed.
The Second Circuit reached a contrary conclusion in an earlier Securities and Exchange Act ease,
Menowitz v. Brown,
In
In re Korean Air Lines Disaster,
the District of Columbia Circuit Court of Appeals considered whether the
Van Dusen
rule applied to federal claims transferred under
Other lower courts have applied the reasoning of
In re Korean Air Lines Disaster
to cases transferred under
[i]n the MDL context, the statute of limitations may not be a matter of state law at all, and as such, the limitation period should be decided by a federal transferee court in accordance with its own interpretation of federal law ‘without deference to any contrary interpretation of a transferor circuit.’
Id.
(quoting
In re General Development Corp. Bond Litigation,
Defendants cite a decision by the Judicial Panel on Multidistrict Litigation to further support their argument that the three-year limitatiоns period for the District of Columbia, the transferee forum, should govern these claims. Although the Panel has not yet decided the precise issue before the Court, it has confronted the issue. In
In re General Motors Class E Stock Buyout Securities Litigation,
Any suggestion to the contrary in dictum found in In re Plumbing Fixtures Litigation,342 F.Supp. 756 , 758 (J.P.M.L.1972), is withdrawn. Indeed, the dictum inPlumbing Fixtures is itself questionable given that Plumbing Fixtures was a litigation arising under the federal courts’ federal question jurisdiction and Van Dusen v. Barrack, 376 U.S. 612 ,84 S.Ct. 805 ,11 L.Ed.2d 945 (1964), on which the Panel relied in support of its dictum, was an action arising under the federal courts’ diversity jurisdiction.
Id.
n. 1. Previously, in
Plumbing Fixtures,
the Panel had stated, “pit is clear that the substantive law of the transferor forum will apply after transfer.”
Like the Judicial Panel on Multidistrict Litigation, the Court accepts the basic
Korean Air Lines
principle that a transferee court should normally use its own best judgment about the meaning of federal law when evaluating a federal claim.
See In re Korean Air Lines,
The Court recognizes that
Eckstein
was transferred from California to Wisconsin pursuant to
The federal issue before this Court is distinguishable from the issue this Circuit considered in
In re Korean Air Lines Disaster
in two primary respects. First, although the applicable limitations period is an issue of federal law,
see DelCostello,
[o]ur system contemplates differences between different states’ laws; thus a multi-district judge asked to apply divergent state positions on a point of law would face a coherent, if sometimes difficult, task. But it is logiсally inconsistent to require one judge to apply simultaneously different and conflicting interpretations of what is supposed to be a unitary federal law.
Second, unlike the situation in In re Korean Air Lines, where different rulings on the federal issue (whether the Warsaw Convention’s maximum no-fault liability of $75,000 per passenger was a bar to full compensatory damages) would have bifurcated the pending cases into two groups with diverging litigation paths, applying different limitations periods to the cases before this Court will not result in different case tracks. Once the Court mаkes its threshold determinations as to whether plaintiffs have filed their actions in a timely manner under the statutes of limitations of the transferor fora, the Court will apply the substantive law of the District of Columbia law to resolve the remaining issues.
Defendants have directed the Court’s attention to a fairly recent American Law Institute (“ALI”) publication,
Complex Litigation Project
(Proposed Final Draft April 5, 1993) (“Draft”).
11
In their reply brief, defendants cite section 6.08 of the Draft which recommends having federal courts handling
Plaintiffs have pointed out another section of the Draft that addresses state-created claims and discusses the choice of law for limitations. In this section, the ALI proposes legislation that would direct the courts to apply the limitations period of the transferor fora. One of the reasons behind the recommendation is that “it would be particularly inappropriate for the transferee court to bar an action that is viable under the law of another jurisdiction or to allow it to go forward when it would have been barred elsewhere simply because the suit would have been barred or permitted by local law in the transferee сourt.” Draft at 472. The ALI continues:
the transferee court must select the governing statute of limitations law so as to protect the rights of the parties gathered there neither by choice nor pursuant to the court’s traditional jurisdiction reach but as a result of the complex litigation statute. If a designated court were to bar or allow the consolidated action purely as a matter of local limitations law, it would impede the Complex Litigation Panel’s selection of a convenient forum.
Draft at 472. 12 Although this section also fails to address the issue before the Court, the Court agrees with plaintiffs that the rationale behind the ALI recommendation applies here.
The Court considers the ALI’s recommendations to be consistent with In re Korean Air Lines decision and this Court’s holding. As noted above, the difference in limitations periods is not due to different interpretations of federal law; rather, it is inherent in the varying state statutes of limitations. As long as Congress continues to instruct federal courts implicitly to apply state-law limitations periods, the federal law will remain geographically non-uniform.
While the Court recognizes that applying the law of the transferor fora may well mean that even though plaintiffs assert essentially the same claims against this common group of defendants, some of plaintiffs’ claims may be time barred and others will not, based solely on where plaintiffs elected to file suit. However, as the ALI suggested in its Complex Litigation Project, it seems inherently unfair to deprive a plaintiff who properly files an action in a jurisdiction with personal jurisdiction and venue of its cause of action simply because the case is consolidated with a multidistrict litigatiоn taking place in another jurisdiction. Clearly, plaintiffs advantageously filed these actions in jurisdictions which have limitations periods longer than the three-year limitations period of this transferee forum. However, given that these jurisdictions are ones in which defendants are incorporated and/or conduct their operations, defendants cannot contend that this Court’s ruling unfairly and unexpectedly subjects them to the laws of remote jurisdictions.
The Court also recognizes that applying the limitations periods of the transferor fora will sacrifice some degree of uniformity as well as efficiency; the Court will have to apply at least six different statutes of limitations to determine whether plaintiffs filed their actions in a timely manner and whether the actions survive under the various statutes’ borrowing provisions. For this reason, it is with reluctance that the Court holds that the transferor fora’s statutes of limitations
B. Does the choice of law provision in the trust documents govern the limitations period?
The Court rejects defendants’ argument that the District of Columbia choice of law provision contained in the 1974 and 1950 UMWA Benefit Trusts mandates that this Court apply the District of Columbia’s three year limitations period. To support their argument, defendants rely heavily on
Wang Laboratories v. Kagan,
C. If a uniform rule of federal law governs the limitations period in these multidistrict litigation cases, should the Court adopt an analogous federal limitations period?
Plaintiffs argue that if the Court decides that a uniform rule of federal law should govern the statute of limitations in § 515 actions, the Court should adopt the most analogous
federal
limitations period — the six-year period provided by ERISA § 4301(f),
III. Conclusion
Having considered the arguments and authorities cited in the parties’ briefs and during the hearing held on April 8, 1994, the Court denies defendants’ motions in part. For the reasons stated in this Memorandum Opinion, the Court holds that plaintiffs’ claims against the above defendants are governed by the respective statutes of limitations supplied by the transferor jurisdictions in which the cases were filed. The Court will arrange a briefing schedule to resolve the remaining issues relating to defendants’ motions to dismiss and motions for judgment on the pleadings at the next multidistrict litigation hearing.
SO ORDERED.
Notes
. These defendants are MC Mining, Inc., Dorton Coal Co., and V & M Mining Co. in UMWA, et al. v. Dorton Coal, et al., No. 93-2447; Oglebay Norton Co., Bluestone Coal Corp., LoMing Coal Corp., Inc., Vica Coal, A.M. Trucking, and Perry & Hylton in UMWA, et al. v. A.M. Trucking, et al., No. 93-2448; Doss Fork Coal Co., Inc., San West Coal Co., Inc., Patty Chandler Trucking, Inc., McKinney Trucking Co. Inc., Right Fork Coal Co., Inc., and Stoney Fields Trucking, Inc., in UMWA, et al. v. Big Star Coal Co., et al., No. 93-1746; West Ken Coal Corp. in UMWA, et al. v. West Ken Coal, et al., No. 93-1818; Utah Power & Light and Energy West Co. in UMWA v. Energy West Mining, et al., No. 93-2498.
. Some of the defendants also argue that plaintiffs did not file these actions in a timely manner even under the limitations periods of the trans-feror fora. This Court’s Order of March 15, 1994 puts this issue on hold pending resolution of the issue presently before the Court.
Defendant Perry & Hylton further argue that the D.C. limitations period should apply to its action because it filed a declaratory judgment action in the District of Columbia before the Funds properly achieved service in the evergreen suit they filed in the Southern District of West Virginia. The Court will not consider which limitations period governs the Perry & Hylton case until it resolves plaintiffs’ pending motion to dismiss Perry and Hylton's declaratory judgment action.
.
See
Annotation,
Limitatiоn of Actions Applicable to Action by Trustees of Employee Benefit Plan to Enforce Delinquent Employer Contributions under ERISA,
90 A.L.R.Fed. 374 (1988 & 1993 Supp.) (in actions arising under § 515 of ERISA, virtually every federal court of appeals has applied the state-law limitations period to breach of contract claims).
See also Connors v. Hallmark & Son Coal Co.,
. Section 1407 authorizes the transfer of actions "involving one or more common questions of fact” for "coordinated or consolidated pretrial proceedings.”
. Section 1404(a) authorizes the transfer of actions "for the convenience of the parties and witnesses, in the interest of justice."
. Congress had enacted this amendment to protect claimants who had relied upon an earlier statute of limitations that the Supreme Court rejected in
Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson,
. Judge Easterbrook noted two types of cases in which federal courts routinely apply different rules: (1)
. As plaintiffs have argued, the Supreme Court's lengthy discussion of
H.L. Green, Inc. v. MacMahon,
The Court is aware of the tension between its holding and some of the language in the
In re Korean Air Lines
decision.
See In re Korean Air Lines,
. Nor does the Court believe that efficiency and uniformity considerations mandate application of an analogous federal limitations period, as plaintiffs have argued in the alternative.
. As noted above, in § 515 ERISA cases, federal courts consistently apply the statute of limitations period for breach of contract actions in the state in which the federal court sits.
.Plaintiffs note in their supplemental memorandum that unlike most other ALI publications which describe рrevailing law, this ALI Draft Report recommends radical changes in both the substantive law and the procedures that courts would apply to cases transferred under
. Appendix C of the ALI Draft contains a copy of the Uniform Transfer of Litigation Act. Section 209 of that Act is consistent with the ALI's recommendation. It provides: “[i]f the transferring court had jurisdiction over the subject matter and the parties, the receiving court may not dismiss because of a state statute of limitations claim that would not be dismissed on that ground by the transferring court.”
. Under this holding, a future multidistrict court could be faced with the unenviable task of applying fifty different statutes of limitations. Perhaps this Court's decision will prompt the appropriate body, legislative or judicial, to take a closer look at this issue.
. Section 1451(f) applies to the collection of withdrawal liability payments that employers owe to multiemployer plans.