Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_05-cv-05264/USCOURTS-cand-4_05-cv-05264-1/pdf.json

Nature of Suit Code: 720
Nature of Suit: Labor Management Relations Act
Cause of Action: 29:185 Labor/Mgt. Relations (Contracts)

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

BERENICE ANGOTTI, DANIEL BORRERO,

RALPH E. COWLEY, JACK GRIFFITH,

DONALD S. MUELLER, KENT D. RUSSELL,

BERNARD W. SCHREINER and RAYMOND

VALLI, on behalf of themselves and

others similarly situated,

Plaintiffs,

v.

REXAM, INC., and REXAM, INC., PENSION

AND BENEFITS COMMITTEE,

Defendants. /

No. C 05-5264 CW 

ORDER GRANTING IN

PART AND DENYING

IN PART

DEFENDANTS’

MOTION TO

TRANSFER

Defendants Rexam, Inc., and Rexam, Inc., Pension and Benefits

Committee (collectively, Rexam) move to transfer this entire case

to the District of Minnesota, or, in the alternative, for an order

(a) severing and transferring Classes I and II to Minnesota; or

(b) transferring the entire case or Classes I and II to Missouri;

or (c) staying the case pending resolution of the related Minnesota

action and any associated appeals. Plaintiffs Berenice Angotti,

Daniel Borrero, Ralph E. Cowley, Jack Griffith, Donald S. Mueller,

Kent D. Russell, Sr., Bernard W. Schreiner and Raymond Valli oppose

the motion. The matter was heard on January 27, 2006. 

Having considered all of the papers filed by the parties and

oral argument on the motion, the Court grants Rexam’s motion in

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1

Although IAM is not a party to this lawsuit, it is a

defendant in related suits, and its attorneys, the law firm of

O'Donoghue & O'Donoghue, represent Plaintiffs in this action. 

2

part and denies it in part, as described below. 

BACKGROUND

Plaintiffs are retired former Rexam employees who were

informed in September, 2005 that their company-provided health

benefits would be discontinued. Plaintiffs seek to represent three

classes of retirees, formerly represented by the International

Association of Machinists and Aerospace Workers, AFL-CIO1 (IAM),

and their dependents: Class I, those who retired from a facility

covered by a "Basic Agreement" negotiated between IAM and Rexam or

a Rexam predecessor; Class II, those who retired from San Leandro

or Modesto, California facilities covered by an "independent

agreement" between an IAM affiliate and Rexam or a Rexam

predecessor; and Class III, those who retired from Kent or

Vancouver, Washington or Gary, Indiana facilities covered by an

"independent agreement" between an IAM affiliate and Rexam or a

Rexam predecessor. Complaint ¶ 29. 

Plaintiffs estimate that there are approximately 1,418

prospective members of Class I, 182 members of Class II and 40

members of Class III. Id. ¶ 31. Drawing on the results of its own

September, 2004 census, Rexam states that of all IAM retirees

(Classes I, II and III), approximately 296 live in California (more

than any state other than New York). Of those California IAM

retirees, Rexam states that 273 retired from the San Leandro or

Modesto plants, i.e. are members of Class II. It believes that

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four California retirees retired under a Basic Agreement and thus

are members of Class I, and that the status of the remaining

fifteen California retirees is unknown. 

According to the testimony supporting Plaintiffs’ motion for a

restraining order, potential witnesses reside across the country,

although not in Minnesota or Missouri. Herman Howell, a resident

of Oakland, California, was involved in all of the Class II

negotiations as a union shop steward, business representative and

later chief negotiator, and thus is a likely witness living in

California. Howell Decl. ¶¶ 4-5. The union records relating to

Class II negotiations are maintained in the Oakland IAM office. 

Id. ¶ 7. 

The underlying dispute here is already the subject of

litigation in other fora. In May, 2003, Rexam filed suit in the

District of Minnesota against the United Steelworkers of America

(USWA), the IAM, nine individual steelworker retirees and one

machinist retiree, Lloyd Erickson, a retiree from the San Leandro

plant (and thus a member of Plaintiffs’ proposed Class II) now

living in Minnesota. See Martorana Decl., Ex. 1, Am. Complaint,

Rexam, Inc., v. United Steelworkers of Am., No. 03-CV-2998-ADM/AJB

(D. Minn., filed May 20, 2003) (hereinafter Rexam I Complaint). 

Rexam seeks a declaratory judgment allowing it to modify the terms

of its retirees' health benefit plans. 

In Rexam I, Rexam sought to certify a defendant class of

retired former employees and their dependents covered under the

benefit plans. On May 25, 2005, Judge Ann D. Montgomery denied

Rexam's motion for certification of a single defendant class. She

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found that "the individualized differences between the eleven

different groups of plans and CBAs, the companies who negotiated

them, the separate unions and the individual bargaining groups

override any common factual or legal questions." Martona Decl.,

Ex. 21, Rexam I May 25, 2005 Memorandum Opinion and Order. In

considering whether certification of defendant subclasses could

cure this deficiency, Judge Montgomery found that Rexam's proposed

representative of the IAM subclasses was inadequate; she denied as

untimely Rexam's motion to amend its complaint to add new proposed

IAM representatives, and thus denied the motion to certify the IAM

subclasses. Id. at 12-16. Judge Montgomery certified only three

USWA subclasses, and denied certification of four other USWA

subclasses. Mr. Erickson is therefore the only defendant in the

Minnesota action who is also a member of a proposed Plaintiff class

here. 

After the May 25, 2005 partial denial of Rexam’s motion for

class certification, the USWA and three steelworker retirees filed

a lawsuit in the Northern District of Ohio seeking to bring suit on

behalf of three steelworker subclasses for which Judge Montgomery

had denied certification. On September 6, 2005, Rexam moved to

dismiss or transfer the USWA’s Ohio case. Tedrow Decl., Ex. 22,

Docket, Baker v. Rexam, Inc., No. 3:05cv07247-DAK (N. D. Ohio,

filed June 8, 2005). Rexam asked Judge Montgomery to hold the USWA

in contempt on the grounds that the filing of Baker violated an

earlier 2003 order enjoining a similar Ohio lawsuit. Rexam also

requested leave to file a motion for reconsideration of the denial

of class certification. While generally affirming the order

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denying certification of a single defendant class, Judge Montgomery

granted Rexam’s motion for reconsideration with respect to the

certification of two additional steelworker subclasses. Tedrow

Decl., Ex. 6, Rexam I, Sept. 22, 2005 Order Denying Certain

Portions of Rexam’s Motion to Reconsider and Rexam’s Motion to Show

Cause (hereinafter Rexam I, Sept. 22, 2005 Order). As a result,

Judge Montgomery expected the newly-certified subclass to withdraw

its claims in Baker; however, she also declined to enjoin the rest

of the Ohio case (i.e. the claims of the “USWA Managed Care

Election Subclass”) on the grounds that “this case and a portion of

the Ohio case no longer involve the same factual or legal issues. 

Enjoining Baker and the USWA from filing the recent action in Ohio

federal court would leave them without a forum for the case to be

heard.” Rexam I, Sept. 22, 2005 Order. 

In Rexam I, Rexam moved for summary judgment of its claims

against the USWA subclasses and against the IAM, but not those

against Mr. Erickson. The summary judgment motion has been argued

and submitted, and concerns the same Basic Agreement that would be

involved in the adjudication of Plaintiffs’ Class I claims. 

Shortly after its Minnesota motion for class certification was

denied, Rexam filed suit in the Eastern District of Missouri for

declaratory judgment against nine defendants individually and as

representatives of a class of retirees formerly represented by IAM. 

Matrona Decl., Ex. 23, Complaint, Rexam, Inc., v. Mueller, No. 4

05-CV-00868-DJS (E.D. Mo., filed May 27, 2005) (hereinafter Rexam

II). Plaintiff Donald Mueller is one of those named individual

defendants in Rexam II, and the defendant class Rexam sought to

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certify there overlaps with Plaintiffs' proposed Class I here. In

an October 7, 2005 order, the Missouri court dismissed Rexam II. 

It declined to exercise jurisdiction over Rexam's claims for

declaratory judgment because the necessity of declaratory relief

was based on contingencies which had not yet occurred, including

the termination of health benefits, and thus Rexam's action would

require the court to issue an advisory opinion. Rexam II, Oct. 7,

2005 Order at 5. The Missouri court reasoned, "[Rexam]'s history

of changes to the plans, recent amendments to the plans without a

ruling from the Court, and [Rexam]'s inital selection of a forum

where only two members of the proposed defendant class reside,

Rexam, 2005 WL 1260914, at *7, belie the immediacy and the

necessity of the relief." Id. at 6. Alternatively, the court

found that Rexam lacked standing to bring the case. Id. at 8. 

On October 10, 2005, in the Eastern District of Missouri,

Rexam then filed a third declaratory judgment action also against a

proposed class of retired former IAM-represented employees and

their dependents. Matrona Decl., Ex. 25, Complaint, Rexam, Inc.,

v. Mueller, No. 4 05-CV-00868-DJS (E.D. Mo., filed May 27, 2005)

(hereinafter Rexam III). Rexam alleged that "in the Fall, 2005,

effective January 2006," it had notified retirees of the following

changes to their welfare plan benefits:

All prescription drug coverage terminated effective January

2006 to be replaced by the new Medicare Part D drug coverage;

the Welfare Plans will no longer pay for Medicare Part A

deductibles; and the Welfare Benefit Plans will no longer pay

any portion of a premium for Medicare Part B coverage. 

Further, the Welfare Benefit Plans will provide no

supplemental coverage to Medicare Part A, Part B, or Part D. 

Rexam III Complaint ¶ 30. Rexam claims that its fall, 2005 notice

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to retirees of termination of medical benefits renders that

controversy ripe for adjudication. 

After Plaintiffs filed their lawsuit and request for a

temporary restraining order and preliminary injunction, Rexam filed

in Missouri a motion to enjoin the action in this Court. On

December 29, 2005, after a hearing, Judge Donald J. Stohr denied

Rexam’s motion to restrain the action here temporarily. He found

that compelling circumstances, namely Rexam’s “race to the

courthouse” for the purpose of preempting Plaintiffs’ suit in their

preferred jurisdiction, rendered the usual “first-filed” rule

inapplicable. 

LEGAL STANDARD

Title 28 U.S.C. § 1404(a) provides as follows: "For the

convenience of parties and witnesses, in the interest of justice, a

district court may transfer any civil action to any other district

or division where it might have been brought." The statute,

therefore, identifies three basic factors for district courts to

consider in determining whether a case should be transferred: 

(1) convenience of the parties; (2) convenience of the witnesses;

and (3) the interests of justice. 28 U.S.C. § 1404(a). 

The Ninth Circuit has held that a fourth factor for the court

to consider is the plaintiff's choice of forum. See Securities

Investor Protection Corp. v. Vigman, 764 F.2d 1309, 1317 (9th Cir.

1985). The Securities Investor court held that, unless the balance

of the § 1404(a) factors "is strongly in favor of the defendants,

the plaintiff's choice of forum should rarely be disturbed." Id.;

see also Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834,

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843 (9th Cir. 1986) ("defendant must make a strong showing . . . to

warrant upsetting the plaintiff's choice of forum"). 

The plaintiff’s choice of forum is given less weight when an

individual represents a class. Lou v. Belzberg, 834 F.2d 730, 739

(9th Cir. 1987). In judging the weight to be accorded to the

plaintiff’s choice of forum, consideration must be given to the

extent of the parties’ contacts with the forum, including those

related to the plaintiff’s cause of action. Id. The plaintiff’s

choice is accorded only “minimal” consideration if “the operative

facts have not occurred within the forum and the forum has no

interest in the parties or subject matter.” Id. 

The burden is on the defendant to show that the convenience of

parties and witnesses and the interest of justice require transfer

to another district. See Commodity Futures Trading Comm'n v.

Savage, 611 F.2d 270, 279 (9th Cir. 1979). 

DISCUSSION

I. Transfer to Minnesota

Rexam moves for a transfer of this action to the District of

Minnesota pursuant to § 1404(a). Rexam asserts, and Plaintiffs do

not deny, that they could have chosen to bring their action in

Minnesota. Therefore, the Court’s decision must rest on a

balancing of the relevant factors. 

Rexam urges the Court to transfer the action to Minnesota

based on the interests of justice, in order to conserve judicial

resources and to avoid potentially inconsistent results. 

With respect to proposed Class I, this factor weighs heavily

in favor of transferring the claims to Minnesota. The contracts

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underlying Class I’s claims are already at issue in Minnesota. The

fact that the same Basic Agreement must be considered in both

lawsuits means that judicial resources would be greatly conserved

if Judge Montgomery, who is familiar with the factual issues

relating to the Basic Agreement, were to decide both cases. 

Furthermore, transfer of Class I’s claims would avoid a risk of

inconsistent rulings, based on the law of two different circuits. 

Both Rexam and Plaintiffs’ claims would be reviewed by the same

circuit court. 

None of arguments raised by Plaintiffs negates these strong

interests in judicial efficiency and consistency. Plaintiffs’

argument that they had no affirmative obligation to bring suit in

Minnesota attacks a strawman. The question is not whether

Plaintiffs were obliged to bring suit in Minnesota, but whether

Minnesota is the superior forum. Plaintiffs provide no support for

their argument that transferring the case would necessarily force

Judge Montgomery to reopen class certification proceedings in Rexam

I, or to delay adjudication of Rexam I. It would be for the

Minnesota court to decide whether and how to consolidate the two

cases in light of their differing stages. If the case were

randomly assigned to a judge other than Judge Montgomery, it could

presumably be related to Rexam I. 

With respect to Classes II and II, however, the interests of

justice do not weigh so strongly in favor of transfer to Minnesota. 

Judge Montgomery’s denial of Rexam’s motion for certification of a

single defendant class in Rexam I demonstrates her view that the

various agreements and groupings of retirees involve varying legal

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and factual issues. Rexam’s claims against Mr. Erickson, the only

Class II member who is a defendant in Rexam I, are not currently

under consideration by Judge Montgomery, and Rexam has not shown

that the Minnesota court has significant familiarity with the

particular claims against Mr. Erickson. Either party could move to

transfer Rexam’s claims against Mr. Erickson to California. With

respect to Class III, Defendants concede in their reply that

“neither the Minnesota court nor the Missouri court is poised to

resolve the benefit modification issue.” Defs.’ Reply at 4. 

Different outcomes for retirees under the Basic Agreements and

those under Independent Agreements are possible, and thus the

consideration of Classes II and III in California would not pose

the same risk of inefficiency and inconsistency. 

In this case, the convenience of the parties and convenience

of the witnesses are relatively less significant factors. It is

true that the individual Plaintiffs who are members of Class II

live in California, and it would be more convenient to them to

litigate in California. Otherwise, the convenience of the parties

will not be affected by transfer: Rexam, an international company

with U.S. headquarters in North Carolina, will have to travel

regardless of where Plaintiffs’ claims are heard, and most of the

individual Plaintiffs representing proposed Classes I and III would

also have to travel. In terms of witnesses, Class II claims could

be more conveniently tried in northern California because at least

one witness and some documents are located here. On the other

hand, any witnesses testifying at trial in Minnesota may be twice

inconvenienced by having to appear in California. Overall,

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convenience weighs in favor of keeping Class II’s claim here, and

may weigh in favor of transfer for Classes I and III. 

The final factor to be considered is Plaintiffs’ choice of

forum. Because this is a proposed class action, the Court looks at

extent of the parties’ contacts with the forum. Here, the members

of Class II, who all retired from the San Leandro and Modesto

plants, have significant contacts with California: this is the

jurisdiction where the independent agreements now in dispute were

negotiated. In contrast, the claims of members of Classes I and

III have no particular connection to the Northern District of

California, and those Plaintiffs’ choice of forum is accorded

minimal consideration. Therefore, this factor weighs strongly

against transfer of Class II’s claims but only weakly against

transfer of the remaining claims. 

In sum, Rexam has met its burden to show that transfer of

Class I’s claims is required to serve the judicial goals of

efficiency and consistency, overcoming the weak factor of

Plaintiffs’ choice of forum. With respect to Class II, however,

Rexam has not met its burden to show that the interests of justice

favor transfer, and the choice of those predominantly-Californian

Plaintiffs to file suit here favors denial of Rexam’s motion. The

claims of Class III are not presently at issue in Minnesota. 

Without the countervailing weight of the avoidance of inconsistent

rulings on the same agreement, the balance of factors with respect

to Class III also tips in favor of Plaintiffs’ preferred forum. 

Rexam’s motion to stay the proceedings in this case is denied. 

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II. Transfer to Missouri Court

In the alternative, Rexam moves to transfer this case to

Missouri under the “first filed” rule. 

"There is a generally recognized doctrine of federal comity

which permits a district court to decline jurisdiction over an

action when a complaint involving the same parties and issues has

already been filed in another district." Pacesetter Systems, Inc.

v. Medtronic, Inc., 678 F.2d 93, 94-95 (9th Cir. 1982). This

doctrine, known as the first-to-file rule, "gives priority, for

purposes of choosing among possible venues when parallel litigation

has been instituted in separate courts, to the party who first

establishes jurisdiction." Northwest Airlines, Inc. v. American

Airlines, Inc., 989 F. 2d 1002, 1006 (8th Cir. 1993). A court in

which the second suit was filed may transfer, stay or dismiss that

proceeding in order to allow the court in which the first action

was filed to decide whether to try the case. Alltrade Inc. v.

Uniweld Products, Inc., 946 F.2d 622, 625 (9th Cir. 1991). 

However, circumstances in which an exception to the first-to-file

rule will “typically” be made include bad faith, anticipatory suit

and forum shopping. Id. at 628 (citations omitted). 

Here, the Missouri court has already found that Rexam was

engaged in a “race to the courthouse.” Therefore, deference to the

opinion of the court in which an earlier case was filed suggests

that the Court should deny Rexam’s motion to transfer. Nor do the

interests of justice compel transfer to Missouri, where the court

is not significantly more familiar with the factual issues than

this Court is. Therefore, Rexam’s motion in the alternative to

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transfer the case to Missouri is denied. 

CONCLUSION

For the reasons described above, the Court hereby severs the

claims of Mr. Cowley, Mr. Mueller and Mr. Valli, who are members of

proposed Class I, from those of Ms. Angotti, Mr. Borrero, Mr.

Griffith, Mr. Russell and Mr. Schreiner, who are members of

proposed Classes II and III. The Court GRANTS Rexam’s motion to

transfer with respect to the former Plaintiffs’ claims, and hereby

transfers their claims to the District of Minnesota, but DENIES the

motion to transfer with respect to the latter groups (Docket No.

54). The clerk shall send a copy of the case file to the District

of Minnesota. 

The remaining Plaintiffs shall file a renewed memorandum,

addressing the claims of Classes II and III, in support of their

motion for a preliminary injunction, and shall notice the motion

for hearing at least five weeks thereafter. Rexam may file an

additional memorandum in opposition and Plaintiffs may file an

additional reply, as provided by the Local Rules. 

 IT IS SO ORDERED.

Dated: 2/14/06

 

CLAUDIA WILKEN

United States District Judge

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