Lopiccolo v. American University ( 2011 )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
ADAM LOPICCOLO, :
:
Plaintiff, : CIVIL ACTION
:
v. : NO. 10-CV-3131
:
AMERICAN UNIVERSITY, et al., :
:
Defendants. :
MEMORANDUM AND ORDER
Joyner, J. March 29, 2011
Before this Court are the Motion to Dismiss Plaintiff’s
Amended Complaint Pursuant to Rule 12(b)(2), (3), and (6) of
Defendants American University, the Board of Trustees of American
University, and Robert Acunto (Doc. No. 9), Plaintiff’s response
in opposition thereto (Docs. Nos. 15, 17), and the Defendants’
reply in further support thereof (Doc. No. 20), as well as
Defendant Mark Cody’s Motion to Dismiss Plaintiff’s Amended
Complaint for Lack of Jurisdiction, Improper Venue and for
Failing to State a Claim for Which Relief Can Be Granted (Doc.
No. 10), Plaintiff’s response in opposition thereto (Docs. Nos.
16, 18), and Defendant Cody’s reply in further support thereof
(Doc. No. 19). For the reasons set forth in this Memorandum, the
Court denies the Motions to Dismiss but, finding venue improper
in the Eastern District of Pennsylvania, transfers the case to
the United States District Court for the District of Columbia.
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I. Background
Plaintiff Adam LoPiccolo was a college wrestler let go from
his team in the middle of his third year at American University,
allegedly in violation of an athletic scholarship agreement.
Plaintiff thereafter brought this diversity action against
Defendants American University, the Board of Trustees of American
University, athletic director Robert Acunto, and men’s wrestling
coach Mark Cody for (1) breach of contract, (2) breach of the
duty of good faith and fair dealing, (3) fraud in the inducement,
(4) intentional infliction of emotional distress, and (5)
negligent infliction of emotional distress. All defendants moved
to dismiss for lack of personal jurisdiction, improper venue, and
failure to state a claim; Defendant Cody also moved to dismiss
for lack of subject matter jurisdiction.
II. Discussion
A. Subject matter jurisdiction
A federal court has subject matter jurisdiction over state
law claims when there is complete diversity of citizenship and
the amount in controversy exceeds $75,000. 28 U.S.C. 1332(a)
(2006). To dismiss for failure to meet the amount in controversy
requirement, it “must appear to a legal certainty that the claim
is really for less than the jurisdictional amount.” St. Paul
Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938); see
also Suber v. Chrysler Corp., 104 F.3d 578, 583 (3d Cir. 1997)
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(“[W]hether a plaintiff’s claims pass the ‘legal certainty’
standard . . . should involve the court in only minimal scrutiny
of the plaintiff’s claims. The court should not consider . . .
the legal sufficiency of those claims or whether the legal theory
advanced by the plaintiffs is probably unsound . . . . [T]he
threshold to withstand a motion to dismiss under Fed. R. Civ. P.
12(b)(1) is thus lower than that required to withstand a Rule
12(b)(6) motion.” (internal quotation marks omitted)).
Here, there is complete diversity of citizenship: Plaintiff
is a citizen of Pennsylvania, while Defendants are citizens of
the District of Columbia or states other than Pennsylvania.
Defendant Cody maintains that the amount in controversy does not
exceed $75,000 because Plaintiff’s scholarship was valued at
$50,000 per year and Plaintiff received that amount for three of
the four years he could have wrestled. Plaintiff was let go in
the middle of his third year, however, and, unable to compete,
allegedly did not receive all the benefits of the bargain that
year (or the next year). Additionally, while Cody argues that
the tort claims should not be considered in calculating the
amount in controversy because the statute of limitations
purportedly bars them, the law is clear that defenses to claims,
including a statute of limitations bar, do not reduce the amount
in controversy for jurisdictional purposes. See Wade v. Rogala,
270 F.2d 280, 284 (3d Cir. 1959) (quoting St. Paul, 303 U.S. at
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289); Apicella v. Valley Forge Military Acad. & Junior Coll., 630
F. Supp. 20, 24 (E.D. Pa. 1985). Thus, the Court cannot conclude
at this early stage that it is legally certain that Plaintiff
could not recover more than $75,000. Subject matter jurisdiction
exists.
B. Venue
Although a challenge to personal jurisdiction is typically
decided before one to venue, a court may “reverse the normal
order” and consider venue first when there is a “sound prudential
justification for doing so.” Leroy v. Great W. United Corp., 443
U.S. 173, 180 (1979); see also Cottman Transmission Sys., Inc. v.
Martino, 36 F.3d 291, 293 (3d Cir. 1994); J.F. Lomma, Inc. v.
Stevenson Crane Servs., Inc., No. 10-3496, 2011 U.S. Dist. LEXIS
10998, at *9 (D. N.J. Feb. 3, 2011) (“As the venue issue is clear
and dispositive, this matter presents a ‘sound prudential
justification’ for deciding the issue of venue before that of
personal jurisdiction.”); Reliance Standard Life Ins. Co. v.
Aurora Fast Freight, Inc., No. 96-7488, 1997 U.S. Dist. LEXIS
1904, at *5 n.2 (E.D. Pa. Feb. 24, 1997) (finding it unnecessary
to address the motion to dismiss for lack of personal
jurisdiction because venue was clearly improper). Because venue
in the Eastern District of Pennsylvania is clearly improper in
this case, see infra, it is not necessary to address Defendants’
motions to dismiss for lack of personal jurisdiction.
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The Court notes at the outset that both parties confuse the
applicable law governing the issues in this case. Notably, venue
is concerned with the appropriate district in which to bring a
claim (in contrast to personal jurisdiction, which is concerned
with the proper state). When considering a motion to dismiss for
improper venue in a federal case based solely on diversity, the
governing statute is 28 U.S.C. § 1391(a):
A civil action wherein jurisdiction is founded only
on diversity of citizenship may, except as otherwise
provided by law, be brought only in (1) a judicial
district where any defendant resides, if all defendants
reside in the same State, (2) a judicial district in
which a substantial part of the events or omissions
giving rise to the claim occurred, or a substantial part
of property that is the subject of the action is
situated, or (3) a judicial district in which any
defendant is subject to personal jurisdiction at the time
the action is commenced, if there is no district in which
the action may otherwise be brought.
28 U.S.C. § 1391(a) (2006). Corporations, for the purposes of
the venue statute, are deemed to reside in any judicial district
in which they are subject to personal jurisdiction when the
action commenced. Id. § 1391(c). Under § 1391(a)(2), “[t]he
test for determining venue is not the defendant’s ‘contacts’ with
a particular district, but rather the location of those ‘events
or omissions giving rise to the claim.’” Cottman, 36 F.3d at
294. Events or omissions with tangential connections to the
litigation are not enough to make venue proper. Id. Thus, while
a court must accept the allegations in the plaintiff’s complaint
as true when considering a motion to dismiss for improper venue,
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Leone v. Cataldo, 574 F. Supp. 2d 471, 483 (E.D. Pa. 2008), and
though the defendant bears the burden of proving that venue is
improper, Myers v. Am. Dental Ass’n, 695 F.2d 716, 724-25 (3d
Cir. 1982), the venue statute “still favors the defendant in a
venue dispute by requiring that the events or omissions
supporting a claim be ‘substantial.’” Cottman, 36 F.3d at 294.
In this case, the critical venue provision is § 1391(a)(2),
because Defendants do not all reside in Pennsylvania and because
there is another district in which this action could be brought.
The record is clear that a very substantial part of the events
took place at American University, in Washington, D.C.—that is
where the athletic scholarship agreement was to be performed,
where the Grant-in-Aid agreement for Plaintiff’s third year was
entered into, and where Plaintiff learned he was being removed
from the team. While these events would not necessarily preclude
another venue’s also having been the location of a “substantial
part” of the events giving rise to the claims, no alleged act
giving rise to Plaintiff’s claims occurred in the Eastern
District of Pennsylvania. While Defendant Cody allegedly
attended a wrestling match in Hershey, Pennsylvania, when
attempting to recruit Plaintiff to American, Hershey is in
Dauphin County, in the Middle District of Pennsylvania.
Likewise, while the denial of Plaintiff’s university appeal to
reinstate his athletic award was sent to Plaintiff’s address in
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Glen Rock, Pennsylvania, Glen Rock is in York County, in the
Middle District of Pennsylvania. Because nothing in the record
occurred in the Eastern District of Pennsylvania, let alone a
substantial part of the acts giving rise to Plaintiff’s claims,
venue is improper. See Great Seal Moorish Sci. Temple of Am.,
Inc. v. New Jersey, No. 05-0345, 2005 U.S. Dist. LEXIS 21550, at
*7 (E.D. Pa. Sept. 28, 2005) (holding that venue was improper
when the record was devoid of any fact showing a connection with
the district); cf. Rojas v. Trans States Airlines, Inc., 204
F.R.D. 265, 267-68 (D. N.J. 2001) (finding venue improper under
the comparable Title VII standard when there was “no evidence
that the wrongful [act] was committed in [the district]”).1
C. Transfer
When a court rules that venue is improper, it can either
dismiss the action or, “if it be in the interest of justice,
transfer such case to any district . . . in which it could have
been brought.” 28 U.S.C. § 1406(a) (2006). The decision whether
to transfer under § 1406(a) is in the sound discretion of the
district court, Lafferty v. Gito St. Riel, 495 F.3d 72, 75 n.3
1
Plaintiff’s argument concerning the balance of private and public
factors is simply irrelevant; such factors are only considered in a forum non
conveniens challenge, and “the doctrine of forum non conveniens can never
apply if there is . . . mistake of venue.” Gulf Oil Corp. v. Gilbert, 330
U.S. 501, 504 (1947), superseded by statute on other grounds as stated in Am.
Dredging Co. v. Miller, 510 U.S. 443 (1994). Because venue is improper under
§ 1391(a), Plaintiff’s purported “choice” of the Eastern District of
Pennsylvania is entitled to no deference.
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(3d Cir. 2007), and does not require the same consideration of
factors as transfer under § 1404(a) for forum non conveniens.
See Rojas, 204 F.R.D. at 269. The transferring court in a §
1406(a) analysis “must simply determine a venue in which the
action originally could have been brought that serves the
interest of justice.” Id. Contrary to Defendants’ contention,
the court may transfer under § 1406(a) whether it has personal
jurisdiction over the defendants or not, Goldlawr, Inc. v.
Heiman, 369 U.S. 463, 465-66 (1962), and may do so even if the
defendants have not requested the transfer. See, e.g., Albright
& Friel, Inc. of Del. v. United States, 142 F. Supp. 607, 609
(E.D. Pa. 1956) (holding that the action should be transferred
rather than dismissed, even though the defendant only moved for
dismissal); accord Crenshaw v. Antokol, 287 F. Supp. 2d 37, 45
(D. D.C. 2003).
Because dismissal in this case could cause Plaintiff’s suit
to be time-barred, this Court finds that it is in the interest of
justice to transfer. See generally Lafferty, 495 F.3d at 79.
Because a substantial part of the events giving rise to
Plaintiff’s claims occurred in Washington D.C., see supra, the
United States District Court for the District of Columbia is an
appropriate venue, and Defendants, who reside and/or work in that
district, would all be subject to personal jurisdiction there.
Accordingly, the case will be transferred to the United States
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District Court for the District of Columbia for further
proceedings.
III. Conclusion
For the foregoing reasons, the Court denies Defendants’
Motions to Dismiss but, finding venue improper, transfers the
case to the United States District Court for the District of
Columbia pursuant to 28 U.S.C. § 1406(a).
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