Waeltz, John A. v. Delta Pilots Retire ( 2002 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 01-1838
JOHN A. WAELTZ and HERBERT A. JOHNSON, JR.,
Plaintiffs-Appellants,
v.
DELTA PILOTS RETIREMENT PLAN,
Defendant-Appellee.
____________
Appeal from the United States District Court
for the Southern District of Illinois.
No. 01 C 87—Michael J. Reagan, Judge.
____________
ARGUED SEPTEMBER 20, 2001—DECIDED AUGUST 23, 2002
____________
Before RIPPLE, KANNE and ROVNER, Circuit Judges.
RIPPLE, Circuit Judge. Plaintiffs John Waeltz, a retired
Delta Airlines pilot, and Herbert Johnson, a current Delta
pilot, brought this action against the Delta Pilots Retirement
Plan (“the Plan”) under Title I of the Employee Retirement
Income Security Act of 1974 (“ERISA”). They sought to
recover benefits allegedly due to Mr. Waeltz and to chal-
lenge the method that the Plan used to calculate benefit
distributions. The Plan is administered in Atlanta, Georgia,
and conducts all of its business there. Plaintiffs chose to lay
venue, however, in the Southern District of Illinois. Upon
motion by the Plan, the district court dismissed the action
for improper venue. Mr. Waeltz and Mr. Johnson appeal
2 No. 01-1838
that dismissal. For the reasons set forth in the following
opinion, we affirm the district court’s dismissal for improp-
er venue.
I
BACKGROUND
A. Facts
Mr. Waeltz resided in the Southern District of Illinois from
1977 to December 2000; he then moved to Florida. He had
worked as a pilot for Delta Airlines from 1970 until his
retirement in 1997. Mr. Johnson resides in the Southern
District of Illinois and has worked as a pilot for Delta Air-
lines since 1987. He has not yet retired. The Plan provides
pension benefits for Delta pilots and is administered entirely
in Atlanta, Georgia. Neither plaintiff has received any ben-
efits in the Southern District of Illinois. The Plan has de-
posited Mr. Waeltz’s monthly benefit payments into his
account at the Delta Employees Credit Union in Atlanta,
Georgia. Mr. Waeltz received some of his benefits in a lump
sum distribution, which the Plan sent to Harris Trust Bank
in Chicago, Illinois. See R.32, Supp. Affidavit of Leon A.
Piper, ¶¶ 3-4. Mr. Johnson has not yet retired and therefore
has received no benefits. Neither plaintiff has earned any
benefits in the Southern District of Illinois because nei-
ther pilot has performed any work for Delta there. There is
no work-related reason for pilots to live in the Southern
District of Illinois. Mr. Johnson is currently based in Atlanta,
Georgia.
B. District Court Proceedings
The plaintiffs brought their action against the Plan in the
United States District Court for the Southern District of
Illinois. Pursuant to 28 U.S.C. §§ 1406(a) and 1404(a), the
No. 01-1838 3
Plan moved to transfer the case to the Northern District of
Georgia. The Plan contended that the Southern District of
Illinois was not a proper venue under 29 U.S.C. § 1132(e)(2),
the venue provision governing actions brought under Title
I of ERISA. The Plan also submitted that the Northern
District of Georgia offered the most convenient venue to
litigate the case because all of the Plan’s documents and all
witnesses associated with the Plan were located there and
all of the events giving rise to the plaintiffs’ complaint oc-
curred there. At the hearing on the Plan’s motion to transfer,
the Plan amended its motion to ask the court to dismiss the
case for improper venue if the court decided not to transfer
the case to Georgia.
The venue provision of Title I of ERISA allows plaintiffs
to lay venue “where the plan is administered, where the
breach took place, or where a defendant resides or may be
found . . . .” 29 U.S.C. § 1132(e)(2). Mr. Waeltz and Mr.
Johnson contended that the Plan could “be found” in the
Southern District of Illinois, either because the district court
had personal jurisdiction over the Plan or because several
plan participants lived in the district. The district court
determined, however, that the authorities relied upon by the
plaintiffs did not support either of their positions. More-
over, it pointed out that of the 2,740 retired Delta Airlines
pilots, only two resided in the Southern District of Illinois,
and of the two plaintiffs, only Mr. Johnson resided in the
district, and he had not retired. Therefore, because the Plan
carried on all of its business in Atlanta, because the plain-
tiffs had earned no benefits while in the Southern District of
Illinois, and because neither plaintiff received any benefit
payments in the Southern District of Illinois, the district
court concluded that the Plan did not reside and could not
“be found” in the Southern District of Illinois. Therefore, the
court dismissed the case for improper venue.
4 No. 01-1838
II
DISCUSSION
This court ordinarily defers to a district court’s venue
determinations unless the district court has abused its
discretion. See Milwaukee Concrete Studios, Ltd. v. Fjeld Mfg.
Co., Inc., 8 F.3d 441, 445 (7th Cir. 1993). When, as here, a case
involves the statutory interpretation of a venue statute,
however, and not the discretionary interpretation of dis-
puted facts, this court reviews venue determinations de
novo. See id.Title 29, § 1132(e)(2) of the United States Code specifies
where plaintiffs may bring actions under Title I of ERISA. It
provides:
Where an action under this subchapter is brought in a
district court of the United States, it may be brought in
the district where the plan is administered, where the
breach took place, or where a defendant resides or may
be found, and process may be served in any other dis-
trict where a defendant resides or may be found.
29 U.S.C. § 1132(e)(2). Mr. Waeltz claims only that, for the
purpose of venue, the Plan “may be found” in the Southern
1
District of Illinois.
1
In a one-sentence footnote in which he cites no authority, Mr.
Waeltz states in his brief that the fact that he lived in the Southern
District of Illinois when the Plan paid out an allegedly undervalued
lump sum to his bank account in the Northern District of Illinois
“arguably supports that the ‘breach took place’ in the Southern
District of Illinois . . . .” Appellant’s Br. at 15 n.5. We shall not
consider this undeveloped argument. See United States v. Berkowitz,
927 F.2d 1376, 1384 (7th Cir. 1991) (“We repeatedly have made clear
that perfunctory and undeveloped arguments, and arguments that
are unsupported by pertinent authority, are waived . . . .”).
No. 01-1838 5
A.
We have not had occasion in our earlier cases to address
the meaning of “may be found” in § 1132(e)(2) for purposes
2
of venue. Mr. Waeltz submits that, in determining venue,
a defendant “may be found” in any district in which the
defendant is subject to personal jurisdiction. He reasons as
follows. Section 1132(e)(2) provides for nationwide service
of process that simply requires minimum contacts with the
United States as a whole. Therefore, the statute provides for
nationwide personal jurisdiction, see Board of Trustees, Sheet
Metal Workers’ Nat’l Pension Fund v. Elite Erectors, Inc., 212
3
F.3d 1031, 1035 (7th Cir. 2000). Because the defendant is
2
This court has addressed the meaning of § 1132(e)(2)’s service of
process provision (“and process may be served in any other district
where a defendant resides or may be found”). See Bd. of Trustees,
Sheet Metal Workers’ Nat’l Pension Fund v. Elite Erectors, Inc., 212 F.3d
1031, 1035-37 (7th Cir. 2000) (holding that § 1132(e)(2) allows for
nationwide service of process (and thus jurisdiction) and that the
nationwide service of process provision “comports with the Consti-
tution”). Elite Erectors did not determine, however, what it means to
“be found” in a particular district. In that case, the pension fund was
the plaintiff, and it laid venue where it was administered, the Eastern
District of Virginia. See id. at 1033. The defendant, which was from
Indiana, did not challenge the venue of the action. Instead, it de-
faulted, and when the pension plan filed an action in the Southern
District of Indiana to collect on its default judgment, Elite Erectors
contended that the Eastern District of Virginia had lacked personal
jurisdiction. See id. The Southern District of Indiana agreed and
considered the prior judgment void. We reversed on appeal, holding
that the Eastern District of Virginia had had personal jurisdiction
pursuant to the nationwide service of process clause and that the
exercise of that jurisdiction was constitutional. See id. at 1035-37.
3
Service of process is a prerequisite to a district court’s exercise of
personal jurisdiction over a defendant. See Omni Capital Int’l, Ltd. v.
(continued...)
6 No. 01-1838
3
(...continued)
Rudolf Wolff & Co., Ltd., 484 U.S. 97, 104 (1987); Swaim v. Moltan Co.,
73 F.3d 711, 719 (7th Cir. 1996). It is the mechanism “by which a court
having venue and jurisdiction of the subject matter of the suit asserts
jurisdiction over the person of the party served.” Omni Capital, 484
U.S. at 104 (quoting Miss. Publ’g Corp. v. Murphree, 326 U.S. 438, 444-
45 (1946)). Under the Federal Rules of Civil Procedure, the service of
a summons upon a defendant is effective to establish personal
jurisdiction over the defendant in certain situations. See Fed. R. Civ.
P. 4(k)(1). Ordinarily, such service establishes a district court’s per-
sonal jurisdiction only if a court of the state in which the district
court sits would have personal jurisdiction over the defendant. See
Fed. R. Civ. P. 4(k)(1)(A); Janmark, Inc. v. Reidy, 132 F.3d 1200, 1201
(7th Cir. 1997); Cent. States, Southeast & Southwest Areas Pension Fund
v. Reimer Express World Corp., 230 F.3d 934, 939 (7th Cir. 2000).
Where, as here, the federal statute creating the cause of action pre-
scribes its own rules for service of process, however, the Federal
Rules provide that service made according to the statute is effective
to establish personal jurisdiction over the defendant, regardless of
whether a court of the state encompassing the federal district could
exercise personal jurisdiction over the defendant. See Fed. R. Civ. P.
4(k)(1)(D); Reimer Express, 230 F.3d at 941-42 (“Rule 4(k)(1)(D)
provides for jurisdiction whenever a statute explicitly authorizes
service of process.”); Peay v. Bellsouth Med. Assistance Plan, 205 F.3d
1206, 1210 (10th Cir. 2000) (“When a federal statute provides for
nationwide service of process, it becomes the statutory basis for
personal jurisdiction.” (internal quotation marks omitted) (citing Fed.
R. Civ. P. 4(k)(1)(D))). A district court’s exercise of personal jurisdic-
tion over a defendant is constitutional, notwithstanding a complete
lack of contact between the defendant and the forum district, so long
as the defendant has sufficient contacts with the United States as a
whole. See Elite Erectors, 212 F.3d at 1035-37; United Rope Distrib., Inc.
v. Seatriumph Marine Corp., 930 F.2d 532, 534 (7th Cir. 1991). See
generally Jason A. Yonan, Note, An End to Judicial Overreaching in
Nationwide Service of Process Cases: Statutory Authorization to Bring
Supplemental Personal Jurisdiction within Federal Courts’ Powers, 2002
U. Ill. L. Rev., 557, 559-62. Thus, any district court in which a plaintiff
(continued...)
No. 01-1838 7
subject to jurisdiction throughout the United States, it “may
be found” throughout the United States and venue is proper
in whatever district court assumes jurisdiction. We turn
now to an evaluation of this argument.
In interpreting the statute, we look first to the language of
the statute itself. See Consumer Prod. Safety Comm’n v. GTE
Sylvania, Inc., 447 U.S. 102, 108 (1980); Milwaukee Concrete
Studios, 8 F.3d at 445. Nothing in the language of § 1132(e)(2)
suggests the construction urged by Mr. Waeltz. Most nota-
bly, the construction that he urges would render superflu-
ous the other clauses of ERISA’s venue provision. To allow
venue wherever personal jurisdiction exists would allow
nationwide venue, because § 1132(e)(2)’s nationwide service
of process clause creates nationwide jurisdiction. If such
were the intent of Congress, there would have been no
reason for Congress to provide specifically for venue where
a plan is administered or where a breach took place. See
3
(...continued)
brings an action under Title I of ERISA will have personal jurisdic-
tion over the defendant, if the defendant is properly served under
§ 1132(e)(2) and has sufficient contacts with the United States. Of
course, it may be that sufficient contacts will exist whenever a de-
fendant is served within the United States. See Lorelei Corp. v. County
of Guadalupe, 940 F.2d 717, 719 (1st Cir. 1991) (“[S]ufficient contacts
exist whenever the defendant is served within the sovereign territory
of the United States.”). If that is the case, proper service according to
§ 1132(e)(2) will always establish personal jurisdiction, because the
defendant must be in the United States to be properly served under
§ 1132(e)(2). See Reimer Express, 230 F.3d at 941 (“The RICO and
ERISA service of process provisions state that service may be made
in ‘any district,’ which indicates that Congress authorized service
only in the judicial districts of the United States and not world-
wide.”); see also Stauffacher v. Bennett, 969 F.2d 455, 460-61 (7th Cir.
1992) (holding that RICO’s nationwide service of process provision
did not authorize service outside the United States).
8 No. 01-1838
McFarland v. Yegen, 699 F. Supp. 10, 14 (D.N.H. 1988). As
this court often has stated, “we are loathe to adopt construc-
tions that render a statutory provision superfluous.” Kopec
v. City of Elmhurst, 193 F.3d 894, 902 (7th Cir. 1999); see
Gendron v. United States, 154 F.3d 672, 674 (7th Cir. 1998); In
re Lifschultz Fast Freight Corp., 63 F.3d 621, 628 (7th Cir.
1995).
Moreover, in the general federal venue statute, Congress
has defined the word “resides,” in terms of a defendant’s
amenability to personal jurisdiction, see 28 U.S.C. § 1391(c).
By contrast, it has never defined the clause “may be found”
in those terms. Indeed, Congress’ equating “resides” with a
defendant’s amenability to personal jurisdiction in the gen-
eral venue statute suggests strongly that Congress did not
intend the “may be found” clause to carry such meaning
4
here.
Nor do we believe that Mr. Waeltz can find support for
his reading of the phrase “may be found” from the leading
case interpreting § 1132(e)(2)’s venue provision, Varsic v.
United States District Court for the Central District of California,
607 F.2d 245 (9th Cir. 1979). In Varsic, the Ninth Circuit
rejected the contention that a fund could be found only
where it was administered. See id. at 248. Judge Wallace
noted that Congress did not intend to restrict venue, but to
create a liberal venue provision “to remove jurisdictional
and procedural obstacles which in the past appear to have
hampered effective enforcement of fiduciary responsibilities
under state law for recovery of benefits due participants.”
4
Cf. Omni Capital, 484 U.S. at 106 (failure to authorize nationwide
service of process for particular cause of action under the Commod-
ity Exchange Act after Congress authorized such process for other
causes of action under the same act “argues forcefully that such
authorization was not its intention”).
No. 01-1838 9
Id. at 247-48 (quoting the report of the House Committee on
Education and Labor, H.R. Rep. No. 93-533, at 17 (1973),
reprinted in 1974 U.S.C.C.A.N. 4639, 4655). The court found
it significant that the term “found” had been construed
liberally when used in other venue provisions. For example,
the Fifth Circuit interpreted the term “found” in the anti-
trust venue provision, 15 U.S.C. § 15, to allow venue in a
district in which a defendant “ ‘continuously carries on any
substantial part of its activities . . . .’ ” Varsic, 607 F.2d at 248(quoting Braun v. Berenson, 432 F.2d 538, 544 (5th Cir. 1970)).
Similarly, courts interpreting the copyright venue provision,
28 U.S.C. § 1400(a), had concluded that a “ ‘corporation is
“found” in any district in which personal jurisdiction might
be obtained over it.’ ” Id. (quoting Mode Art Jewelers Co. v.
Expansion Jewelry Ltd., 409 F. Supp. 921, 923 (S.D.N.Y. 1976)).
Thus, in light of § 1132(e)(2)’s legislative history and Con-
gress’ choice of the word, Judge Wallace concluded in Varsic
that a defendant “may be found” in any district in which the
defendant’s contacts would be sufficient to support per-
sonal jurisdiction in that district over the defendant. See id.
at 248-49.
Mr. Waeltz and Mr. Johnson insist that Varsic holds that
a defendant “may be found” wherever personal jurisdiction
exists over the defendant, regardless of whether that jur-
isdiction is premised upon the existence of “minimum
contacts” with the districts in question. The court in Varsic
did state, “if personal jurisdiction is properly asserted over
the Fund, it is ‘found’ there.” Id. at 248. That phrase ought
not to be read out of context, however. Notably, Judge Wal-
lace went on to consider whether the defendant fund’s
contacts with the district were “sufficient to satisfy the ‘min-
imum contacts’ test for personal jurisdiction.” Id. at 248-49.
Indeed, the defendant in Varsic had not challenged the
personal jurisdiction of the district court. Thus, if the bare
existence of personal jurisdiction was all that was required,
10 No. 01-1838
there would have been no reason for the court to consider
the defendant’s contacts with the district. Under Varsic,
“may be found” is defined not in raw terms of whether
personal jurisdiction exists on any basis whatsoever, but on
whether the defendant has sufficient contacts with the
particular district to support a conclusion that the defendant
“may be found” there. Accord I.A.M. Nat’l Pension Fund v.
Wakefield Indus., Inc., 699 F.2d 1254, 1257 (D.C. Cir. 1983)
(“The Ninth Circuit held [in Varsic] that Congress intended,
by allowing venue wherever a defendant might be ‘found,’
to permit suit in any district where a defendant entity’s
contacts ‘are sufficient to satisfy the “minimum contacts”
test for personal jurisdiction’ as defined by International Shoe
Co. v. Washington.” (citation omitted)); McFarland v. Yegen,
699 F. Supp. 10, 14 (D.N.H. 1988) (applying minimum con-
tacts test to determine whether defendant may be found in
district); Turner v. C.F. & I. Steel Corp., 510 F. Supp. 537, 542
(E.D. Pa. 1981) (same); Ballinger v. Perkins, 515 F. Supp. 673,
676 (W.D. Va. 1981) (same); Wallace v. Am. Petrofina, Inc., 659
F. Supp. 829, 832 (E.D. Tex. 1987) (same).
We believe that the decision in Varsic is correct. A fund
can be found in a judicial district if it has the sort of “mini-
mum contacts” with that district that would support the
exercise of personal jurisdiction under the rule of Interna-
tional Shoe Co. v. Washington, 326 U.S. 310 (1945). This ap-
proach, we believe, is most compatible with the text and the
structure of the statute as well as with the pattern that
5
Congress took in formulating the general venue rule.
5
Mr. Waeltz also argues that the district court’s opinion in Mc-
Cracken v. Auto. Club of S. Cal., Inc., 891 F. Supp. 559 (D. Kan. 1995),
supports his construction of the “may be found” clause. McCracken,
however, construed § 1132(e)(2)’s “resides” clause, not the “may be
(continued...)
No. 01-1838 11
B.
Mr. Waeltz contends that the residence in the district of
Plan participants constitutes sufficient contact of the Plan
with the district to support the conclusion that the Plan
“may be found” in the district. The record indicates that
there are 2,740 retired Delta Airlines pilots and that only
two live in the Southern District of Illinois, neither of whom
are plaintiffs here. The mere residence in the district of two
Plan participants out of 2,740, absent any other contact
between the Plan and the district, does not justify the
exercise of personal jurisdiction over the Plan under the
minimum contacts approach of Varsic that we have en-
dorsed today.
None of the cases that Mr. Waeltz cites support his con-
tention that the mere presence in a district of participants in
a retirement plan renders the plan “found” in the district. In
each case, the court held that the defendant had sufficient
contacts with the forum district to support venue, but in
none of them was the mere residency of plan participants in
a district considered a sufficient contact by itself to support
a conclusion that the defendant could be found in the
district. See Jansen v. Greyhound Corp., 692 F. Supp. 1022, 1024
(N.D. Iowa 1986) (applying Varsic; defendant found in dis-
trict where plaintiffs worked, where plaintiffs earned their
benefits, and to which defendants sent plaintiffs’ benefit
checks); Doe v. Connors, 796 F. Supp. 214, 220-22 (W.D. Va.
1992) (sufficient contacts where defendant, a multiemployer
bargaining group, represented coal mines in the forum
district that employed the plaintiffs); Wallace v. Am. Petro-
5
(...continued)
found” clause. See id. at 561-62. Mr. Waeltz claims only that a de-
fendant “may be found” wherever it is subject to personal jurisdic-
tion.
12 No. 01-1838
fina, Inc., 659 F. Supp. 829, 832 (E.D. Tex. 1987) (applying
minimum contacts test; defendant “found” in district from
which contributions were sent to defendant, where plaintiff
was employed, in which plaintiff received pension check,
and in which effect of benefits cut back was felt); Ballinger v.
Perkins, 515 F. Supp. 673, 676 (W.D. Va. 1981) (applying
Varsic; defendant found in district in which defendant fund
participated with plaintiff’s union local, in which plaintiff
made his contributions to the fund, and in which effect of
benefit denial was felt).
We must conclude that the residence of only two Plan
participants in the Southern District of Illinois, without
more, does not constitute sufficient contact between that
district and the Plan for the court to determine that the Plan
may be “found” there for purposes of § 1132(e)(2). There-
fore, because the Plan cannot be found in the Southern
District of Illinois, the district court appropriately dismissed
the case for improper venue.
Conclusion
In accord with the decisions of the other circuits that have
addressed the question, we hold that, for purposes of venue
under the ERISA statute, 29 U.S.C. § 1132(e)(2), a defendant
“may be found” in a district with which it has minimum
contacts as that term has been employed in International Shoe
and its progeny. The mere presence in a district of two
participants in a retirement plan covering 2,740 retirees does
not constitute sufficient contact between the district and the
Plan to support a conclusion that the Plan “may be found”
in the district. Therefore, because the Plan cannot be found
in the Southern District of Illinois, the district court appro-
priately dismissed the case for improper venue.
No. 01-1838 13
Accordingly, the judgment of the district court is affirmed.
AFFIRMED
A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-97-C-006—8-23-02