M & N Plastics, Inc. v. Sebelius , 997 F. Supp. 2d 19 ( 2013 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
M&N PLASTICS, INC., et al.,
Plaintiffs,
Civil Action No. 13-819
v.
Judge Beryl A. Howell
KATHLEEN SEBELIUS, Secretary, United
States Department of Health and Human
Services, et al.,
Defendants.
MEMORANDUM OPINION
This action challenges the “contraceptive mandate” in the Patient Protection and
Affordable Care Act (“ACA”), Pub. L. 111-148, March 23, 2010, 124 Stat. 119, as a violation of
the Free Exercise of Religion, Free Speech, and Free Association Clauses of the First
Amendment to the United States Constitution, U.S. CONST. AM. I, the Religious Freedom
Restoration Act, 42 U.S.C. § 2000bb et seq., and the Administrative Procedure Act, 5 U.S.C. §
706(2), see Compl. ¶¶ 173–264, ECF No. 2. Pending before the court is the defendants’ Motion
to Transfer this case, ECF No. 8, under 28 U.S.C. § 1404(a), to the plaintiffs’ home district, the
Eastern District of Michigan. For the reasons set forth below, the defendants’ motion is granted
and the case is transferred.
I. BACKGROUND
The plaintiffs, M & N Plastics, Inc., Terrence Nagle, Jr., Christopher Nagle, James Nagle,
and John Martin Nagle (collectively “the plaintiffs”) filed this action for declaratory and
injunctive relief on May 31, 2013. The plaintiffs seek to enjoin the defendants, the United
States Department of Health and Human Services, the Secretary of Health and Human Services,
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the United States Department of the Treasury, the Secretary of the Treasury, the United States
Department of Labor, and the Secretary of Labor (collectively “the defendants”), from enforcing
the ACA’s contraceptive coverage mandate (“the contraceptive mandate”). 1 The corporate
plaintiff is a Michigan corporation and the individual plaintiffs, who own and operate the
corporation, appear to be Michigan residents. See Compl. ¶¶ 24–25, 30–38 (listing registration
of corporate defendant and religious and organizational memberships of individual plaintiffs in
Michigan based groups).
This is the second time the plaintiffs have filed this action. The plaintiffs first filed their
complaint in their home district, the Eastern District of Michigan, on May 8, 2013. Defs.’ Mot.
to Transfer Ex. 1 (“Compl., Nagle v. Sebelius, No. 2:13-cv-12036, ECF No. 1) (“Michigan
Complaint”) at 1, ECF No. 8-1. The Michigan Complaint is, in all relevant aspects, identical to
the instant complaint. Compare Michigan Complaint with Compl. The plaintiffs voluntarily
dismissed the Michigan Complaint just over two weeks later, on May 24, 2013. Defs.’ Mot. to
Transfer Ex. 2 (“Notice of Voluntary Dismissal, Nagle v. Sebelius, No. 2:13-cv-12036, dated
May 24, 2013) at 1, ECF No. 8-2. Almost immediately thereafter, on May 31, 2013, the
plaintiffs re-filed their Complaint before this Court. See Compl.
The plaintiffs’ declarant explains that after the plaintiffs filed the Michigan Complaint,
they were informed, on May 23, 2013, that their health plan was “grandfathered” and did not
have to comply with the contraceptive mandate. Declaration of Mark Merucci, President, M&M
Benefit Group, LLC (“Merucci Decl.”) ¶ 11, ECF No. 10-2. The plaintiffs consequently
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“Part of the [ACA] directs all group health plans and health insurance issuers to provide, without cost-sharing
requirements, preventive care as determined by the Health Resources and Services Administration. In turn, the
Administration issued guidelines requiring coverage for all Food and Drug Administration-approved contraceptive
methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity, as
prescribed by a healthcare provider. There are exceptions—some ephemeral, some permanent—for grandfathered
plans, religious organizations, and small businesses.” Gilardi v. U.S. Dep’t of Health & Human Servs., 13-5069,
2013 WL 5854246, at *1 (D.C. Cir. Nov. 1, 2013) (internal citations and quotation marks omitted).
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dismissed the Michigan Complaint on May 24, 2013. See Defs.’ Mot. to Transfer Ex. 2 at 1.
The plaintiffs’ declarant further explains that on May 30, 2013, he was “informed by [the
plaintiffs’ insurance carrier] that Plaintiffs’ plan is not grandfathered and is subject to the
mandate.” Merucci Decl. ¶ 12. The plaintiffs then promptly filed the instant action in this Court
on May 31, 2013. See Compl.
The defendants move to transfer this case to the Eastern District of Michigan “in the
interest of justice” under 28 U.S.C. § 1404(a). This motion is now ripe for decision.
II. LEGAL STANDARD
A case may be transferred to another venue “[f]or the convenience of parties and
witnesses, in the interest of justice.” 28 U.S.C. § 1404(a). As the Supreme Court has noted,
“Section 1404(a) is intended to place discretion in the district court to adjudicate motions for
transfer according to an ‘individualized, case-by-case consideration of convenience and
fairness.’” Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (quoting Van Dusen v.
Barrack, 376 U.S. 612, 622 (1964)). “[T]ransfer in derogation of properly laid venue” in the
District of Columbia “must . . . be justified by particular circumstances that render the transferor
forum inappropriate by reference to the considerations specified in that statute.” Starnes v.
McGuire, 512 F.2d 918, 925 (D.C. Cir. 1974). In deciding a motion to transfer venue under §
1404(a), a court must first determine whether the transferee district is one where the action
“might have been brought,” 28 U.S.C. § 1404(a), and then must balance the private and public
interests involved in the proposed transfer to determine “whether the defendant has demonstrated
that considerations of convenience and the interest of justice support a transfer,” Barham v. UBS
Fin. Servs., 496 F. Supp. 2d 174, 178 (D.D.C. 2007).
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III. DISCUSSION
There is no dispute that this action “might have been brought” in the Eastern District of
Michigan; indeed, it was brought there the first time the complaint was filed. See Michigan
Complaint. Thus, at issue is whether the convenience of the parties and the interest of justice, as
encompassed by the various public and private interest factors, support a transfer.
Courts generally look to six private interest factors in evaluating transfer motions: “1) the
plaintiff’s choice of forum, 2) the defendant’s choice of forum, 3) where the claim arose, 4) the
convenience of the parties, 5) the convenience of the witnesses, particularly if important
witnesses may actually be unavailable to give live trial testimony in one of the districts, and 6)
the ease of access to sources of proof.” Montgomery v. STG Int’l, Inc., 532 F. Supp. 2d 29, 32–
33 (D.D.C. 2008) (citing Akiachak Native Cmty. v. U.S. Dep’t of Interior, 502 F. Supp. 2d 64, 67
(D.D.C. 2007)). In the instant case, the first and second factors weigh against the plaintiffs.
Although courts may give deference to the plaintiff’s choice of forum, this general rule
gives way when that choice is not their “home forum” and “where there is an insubstantial
factual nexus between the case and the plaintiff’s chosen forum, deference to the plaintiff’s
choice of forum is . . . weakened.” Fed. Hous. Fin. Agency v. First Tenn. Bank Nat’l Ass’n, 856
F. Supp. 2d 186, 192 (D.D.C. 2012); see also Sinochem Int’l Co. v. Malay Int’l Shipping Corp.,
549 U.S. 422, 430 (2007) (“When the plaintiff’s choice is not its home forum, however, the
presumption in the plaintiff’s favor applies with less force, for the assumption that the chosen
forum is appropriate is in such cases less reasonable.”) (internal quotation marks and citations
omitted); Pac. Maritime Ass’n v. NLRB, 905 F. Supp. 2d 55, 60–61 (D.D.C. 2012). Indeed, the
D.C. Circuit has cautioned that “[c]ourts in this circuit must examine challenges to . . . venue
carefully to guard against the danger that a plaintiff might manufacture venue in the District of
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Columbia. By naming high government officials as defendants, a plaintiff could bring a suit here
that properly should be pursued elsewhere.” Cameron v. Thornburgh, 983 F.2d 253, 256 (D.C.
Cir. 1993); see also Western Watersheds Project v. Pool, No. 12-1113, 2013 WL 1800238, at *4
(D.D.C. Apr. 30, 2013) (“‘[T]he mere fact that a case concerns the application of a federal statute
by a federal agency does not provide a sufficient nexus to the District of Columbia to weigh
against transfer.”’) (quoting Preservation Soc. of Charleston v. U.S. Army Corps of Eng’rs, 893
F. Supp. 2d 49, 55 (D.D.C. 2012); cf Oceana, Inc. v. Pritzker, No. 13-770, 2013 WL 5801755, at
*3–4 (D.D.C. Oct. 28, 2013) (declining to transfer case involving application of federal statute
where plaintiffs were District of Columbia residents despite effects of statute occurring mainly in
alternative forum).
The defendants correctly point out that the “plaintiffs do not address this Court’s
observation—cited in defendants’ initial brief—that, while plaintiffs’ choice of forum would
ordinarily be entitled to some deference, ‘that choice is conferred less deference by the court
when a plaintiff’s choice of forum is not the plaintiff’s home forum.’” Defs.’ Reply Supp. Mot.
to Transfer at 2 n.2, ECF No. 12 (quoting Pac. Maritime Ass’n, 905 F. Supp. 2d at 60 (D.D.C.
2012)). Here, as the plaintiffs admit, their home forum is the Eastern District of Michigan. See
Pls.’ Opp’n to Defs.’ Mot. to Transfer (“Pls.’ Opp’n”) at 4, ECF No. 10, (“Plaintiffs reside in
Michigan”). Thus, their choice of forum is subject to less deference because they have selected a
venue that is not their home forum and that bears an “insubstantial factual nexus” to the case,
since the only connection to this forum relied upon by the plaintiffs is the fact that the
contraceptive mandate is a federal action, ostensibly originating in Washington, D.C. See id.
The third factor, regarding where the claim arose, clearly favors venue in Michigan
because all the plaintiffs are in Michigan and the effects of the contraceptive mandate on the
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plaintiffs will be felt in Michigan. The only event at issue in this suit to have happened in this
District is the issuance of the contraceptive mandate itself. See id. at 4.
The fourth, fifth, and sixth factors also favor venue in Michigan. With respect to the
convenience of the parties, the plaintiffs argue that this District is the venue most convenient to
the defendants, since the “Defendants reside in this district [and the] Defendants’ attorneys reside
in this district.” Id. at 5. While it is certainly true that the defendants are all present in this
District, it is also true that they are present in the Eastern District of Michigan and every other
district in the country. The defendants are all either federal agencies, which operate across the
United States, or the Secretaries of those agencies in their official capacities, who also operate
across the United States. See FTC v. Cephalon, Inc., 551 F. Supp. 2d 21, 28 (D.D.C. 2008)
(finding presence of federal agency in the District of Columbia insufficient reason to deny
transfer out of District of Columbia, especially where government agency “offers no reason why
it could not conduct this litigation just as effectively” in the transferee district). In cases where,
as here, “the action involves administrative review that the court is likely to determine on the
papers” the convenience factors carry little weight in the transfer analysis. Sierra Club v.
Flowers, 276 F. Supp. 2d 62, 69 (D.D.C. 2003). To the extent that live witnesses will have to
testify or produce evidence, those witnesses and evidence will likely come from the plaintiffs,
who are all located in Michigan. See Cephalon, 551 F. Supp. 2d at 28 (finding that venue in
corporation’s home district “would be somewhat more convenient for [the corporation’s]
witnesses, who are likely to comprise a large portion of the fact witnesses in this case”). Thus,
the private interest factors favor venue in Michigan.
The public interest factors also favor transfer of this action. Courts typically look to three
factors in evaluating the public interest: “(1) the transferee forum’s familiarity with the
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governing laws and the pendency of related actions in that forum; (2) the relative congestion of
the calendars of the potential transferee and transferor courts; and (3) the local interest in
deciding local controversies at home.” Foote v. Chu, 858 F. Supp. 2d 116, 123 (D.D.C. 2012)
(citing Ravulapalli v. Napolitano, 773 F. Supp. 2d 41, 56 (D.D.C. 2011)). Since this is an issue
of federal law, the first factor is effectively neutral; all federal courts should have the requisite
familiarity with federal law. See In re Korean Air Lines Disaster of Sept. 1, 1983, 829 F.2d
1171, 1175 (D.C. Cir. 1987) (noting that federal courts “are presumptively competent to decide”
issues of federal law) (internal quotation marks omitted). The plaintiffs attempt to show that the
second factor favors venue in this District by noting that the Eastern District of Michigan has
more pending cases per judge. The plaintiffs’ own statistics, however, show that cases move to
trial faster, a median of twenty-eight months, in Michigan, than in the District of Columbia,
where it takes a median time of forty months. See Pls.’ Opp’n at 7. 2
As for the third public interest factor, although this is a matter of federal law, it affects a
Michigan company owned by Michigan citizens that employs Michigan residents. Thus, the
third factor favors resolving this case in Michigan. Although the plaintiffs characterize this suit
as one with “national significance,” id. at 6, it will have inherently local effects. See Pac.
Maritime Ass’n, 905 F. Supp. 2d at 61–62 (D.D.C. 2012) (transferring case involving federal
statute where plaintiff had no “offices or other ties to the District of Columbia” and the local
population would suffer the effects of the government action); Wyandotte Nation v. Salazar, 825
F. Supp. 2d 261, 269 (D.D.C. 2011) (transferring case involving federal defendants to venue
where decision “considerably affects the local interests”).
In sum, evaluation of both the private and public interest factors demonstrates that
transfer of this case to Michigan is both appropriate and warranted. What further tips the balance
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According to the plaintiffs, the median time from filing to disposition in civil cases is identical in the two districts.
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in favor of transfer here is the issue the defendants spend the lion’s share of their briefing on and
the issue the plaintiffs attempt to gloss over: forum shopping. The plaintiffs fail to address the
defendants’ argument that re-filing the action in this district instead of their home district was
motivated by an attempt to take advantage of favorable precedent here, see Gilardi v. U.S. Dep’t
of Health and Human Servs., No. 13-5069 (D.C. Cir. Mar. 29, 2013), affirmed by 2013 WL
5854246 (D.C. Cir. Nov. 1, 2013) (reversing lower court’s denial of preliminary injunction in
challenge to the contraceptive mandate because plaintiffs had shown substantial likelihood of
success on the merits), and avoiding unfavorable precedent in their home district, see Autocam
Corp. v. Sebelius, 730 F.3d 618 (6th Cir. 2013) (affirming denial of preliminary injunction in
similar case). See Defs.’ Reply at 1. 3
Recently, another judge on this Court addressed a transfer motion on closely analogous
facts: a plaintiff brought suit in this District instead of its home district; precedent was favorable
here but not favorable in the home district; and the only connection to this forum was the fact
that the federal action giving rise to the claim occurred here. See Lab. Corp. of Am. Holdings, v.
NLRB, No. 13-276, 2013 WL 1810636, at *2–3 (D.D.C. Apr. 4, 2013) (“Lab. Corp.”). In Lab.
Corp., the court noted that “[i]t is not ‘in the interest of justice to encourage, or even allow, a
plaintiff to select one district exclusively or primarily to obtain or avoid specific precedents,
particularly in circumstances such as these where the relevant law is unsettled and the choice of
forum may well dictate the outcome of the case.’” Id. at *3 (quoting Schmid Labs., Inc. v.
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The plaintiffs cite, in a footnote, two out-of-circuit cases as support for their position that their filing in this district
after a voluntary dismissal in another court is permitted by Federal Rule of Civil Procedure 41(a)(1), which
“essentially permits forum shopping.” See Pls.’ Opp’n at 2 n.2. As the defendants correctly point out, Rule 41 is
not at issue here. See Defs.’ Reply at 1. In any event, neither of the cases cited by the plaintiffs addressed the public
interest weight to be given, during consideration of a venue transfer motion, to the plaintiffs’ apparent forum
shopping in choosing a forum for the re-filing of a voluntarily dismissed complaint. For example, Harvey Specialty
and Supply, Inc. v. Anson Flowline Equipment Inc., 434 F.3d 320, 324 (5th Cir. 2005) addressed, in dicta, the
practice of adding non-diverse plaintiffs to defeat federal jurisdiction in a case removed from state court. Similarly
inapposite is Merit Insurance Company v. Leathersby Insurance Company, 581 F.2d 137, 142–43 (7th Cir. 1978),
which addressed the propriety of notice dismissal in light of motions to stay proceedings or to compel arbitration.
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Hartford Accident & Indem. Co., 654 F. Supp. 734, 737 (D.D.C. 1986)); see also Schmid Labs.,
Inc., 654 F. Supp. at 737 (holding transfer proper under nearly identical factual circumstances).
The Court finds the analysis in Lab. Corp. both persuasive and directly applicable here and, as
the defendants point out, the plaintiffs have made no effort to distinguish this case from the
circumstances of the instant case.
Although the plaintiffs argue they have not engaged in forum shopping, their actions
stretch the Court’s credulity. The plaintiffs dismissed this suit in their home district after
receiving certain advice about the application of the contraceptive mandate to their health plan.
See Pls.’ Opp’n at 1. Yet, after learning their plan was not grandfathered, rather than re-filing
their case in their home district where they initially brought the action, they chose to bring the
case here, where precedent is more favorable but the connections to the action are tenuous at
best. This smacks of the type of forum shopping that 28 U.S.C. § 1404(a) is designed to prevent.
See Schmid Labs., Inc., 654 F. Supp. at 737; see also Milanes v. Holder, 264 F.R.D. 1, 6 (D.D.C.
2009) (transferring case to plaintiff’s home district because of forum shopping concerns);
Onyeneho v. Allstate Ins. Co., 466 F. Supp. 2d. 1, 5 (D.D.C. 2006) (transferring case to
plaintiffs’ home district due to concern plaintiffs were bringing suit in venue only to take
advantage of favorable precedent). “The point has been cogently made that venue provisions are
designed with geographical convenience in mind, and not to ‘guarantee that the plaintiff will be
able to select the law that will govern the case.’” In re Korean Air Lines Disaster of Sept. 1,
1983, 829 F.2d at 1175 (quoting Piper Aircraft Co. v. Reyno, 454 U.S. 235, 257 n.24 (1981)); see
also Van Dusen, 376 U.S. at 636–37 (explaining that if parties regarded § 1404(a) “primarily as a
forum-shopping instrument,” this would “frustrate the remedial purposes . . . as a federal judicial
housekeeping measure, dealing with the placement of litigation in the federal courts and
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generally intended, on the basis of convenience and fairness, simply to authorize a change of
courtrooms.”). The plaintiffs’ choice to litigate this action here, over 550 miles away from
home, is clearly not being done for “geographical convenience.”
The plaintiffs point to their awareness of the unfavorable precedent in the Sixth Circuit
when they decided to file their initial suit there as evidence that they are not engaging in forum
shopping. Pls.’ Opp’n at 2. This begs the question, however, since the plaintiffs never address
why they did not simply re-file their case in their home district, where venue is indisputably
proper and more convenient, instead of re-filing here.
IV. CONCLUSION
For the foregoing reasons, the Court finds that both the private and public interest factors,
particularly the law’s aversion to forum shopping, heavily favor transfer of this case to the
Eastern District of Michigan, where the case was initially filed. Accordingly, the defendants’
Motion to Transfer is granted.
An appropriate Order accompanies this Memorandum Opinion.
Digitally signed by Beryl A. Howell
DN: cn=Beryl A. Howell, o=District
Date: November 5, 2013 Court for the District of Columbia,
ou=District Court Judge,
email=howell_chambers@dcd.usc
ourts.gov, c=US
__________________________
Date: 2013.11.05 11:40:23 -05'00'
BERYL A. HOWELL
United States District Judge
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