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1 All parties have consented to the jurisdiction of a

United States Magistrate Judge for all proceedings including

entry of final judgment pursuant to 28 U.S.C. § 636(c).

1

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ST. PAUL REINSURANCE COMPANY

LIMITED LONDON,

Plaintiff(s),

v.

THE FORT MILLER GROUP, INC.

and BEECHE SYSTEMS

CORPORATION,

Defendant(s).

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No. C05-1912 BZ

ORDER DENYING MOTION TO

DISMISS OR TRANSFER

Defendants The Fort Miller Group, Inc. (Fort Miller) and

Beeche Systems Corporation (Beeche), move to dismiss the

complaint for lack of personal jurisdiction and for improper

venue.1 In the alternative, defendants move to transfer this

action to the Northern District of New York on the grounds of

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improper venue or for the convenience of parties and

witnesses.

To the extent that Beeche has moved to dismiss for lack

of jurisdiction, its motion is DENIED as it has admitted in

paragraph 7 of its answer that this court has personal

jurisdiction over it. The motion of Fort Miller is also

DENIED. Plaintiff has submitted unopposed evidence that John

Hedbring, the President of Fort Miller, came to California to

negotiate the sale of the platforms which ultimately resulted

in the lawsuits. Such lawsuits produced the claims for

indemnity and defense which gave rise to the plaintiff's

complaint for rescission and declaratory relief. As such,

Fort Miller can be said to have purposefully availed itself of

the privilege of doing business in California such that it

could expect to be sued here. See Republic Intern. Corp., v.

Amco Engineers, Inc., 516 F.2d 161, 167 (9th Cir. 1975)

(citing Hanson v. Denckla, 357 U.S. 235, 253 (1958)); Cal.

Civ. Proc. Code § 410.10. 

The record is also replete with uncontroverted evidence

that Fort Miller exercised substantial control over Beeche’s

day to day operations and business dealings, including the

transaction which gave rise to the underlying actions, down to

the level of pricing and delivery decisions. See e.g.

Declarations of Gordon and Piermarini. California law is

clear that where a parent company exercises more than ordinary

control over the subsidiary such that the subsidiary may be

considered an agent, “jurisdiction over the parent may be

grounded in the acts of the subsidiary[.]” See Wells Fargo &

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Co. v. Wells Fargo Exp. Co., 556 F.2d 406, 419-20 (9th Cir.

1977); Sonora Diamond Corp., v. Superior Court of Tuolumne

County, 83 Cal.App.4th 523, 541 (2000); Rollins Burdick Hunter

of So. Cal. Inc., v. Alexander, 206 Cal.App.3d 1, 9-10 (1988);

Mathes v. National Utility Helicopters Ltd., 68 Cal.App.3d

182, 189-90 (1977). Based on the record before me, Fort

Miller’s relationship with Beeche exceeds mere ownership and

directorship, such that Beeche’s activities are imputed to

Fort Miller for jurisdictional purposes.

The motions for improper venue filed by each defendant

are likewise DENIED. Having found that each defendant

corporation is subject to personal jurisdiction in the

Northern District of California, venue is proper here. See 28

U.S.C. § 1391(c). 

The motion to transfer to the Northern District of New

York is also DENIED. If the complaint pled only the first and

second claims, transfer would likely be warranted, as all or

most of the witnesses on those claims, especially the thirdparty brokerage witnesses, appear to reside in the Northern

District of New York. However, the complaint pleads a third

claim which seeks a declaration that the events for which the

defendants seek coverage do not constitute an occurrence

within the meaning of the policy and that some of the damages

for which defendants seek coverage are otherwise not subject

to any insuring agreement. Those events, and the events

giving rise to those damages, appear to have occurred in the

Northern District of California. Many of the witnesses on

these matters are third-party witnesses located in this

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district, including officers and employees of the entities

that have sued defendants in California for breach of contract

and related claims. 

Wherever this action is tried, someone will be

inconvenienced. Based on the record presented by the

plaintiff, which is largely unopposed by the defendants, I

find that the inconvenience to third-party witnesses will be

about the same regardless which district hears this case. 

Given the respect due the plaintiff’s choice of forum, I find

that defendants have not met their burden of making a strong

showing of inconvenience justifying transfer. See Decker Coal

Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir.

1986); Los Angeles Memorial Coliseum Comm'n v. National

Football League, 89 F.R.D. 497, 499 (C.D. Cal. 1981); Judge

William W. Schwarzer, et al., Federal Civil Procedure Before

Trial, § 4:296 (Rutter Group 2005).

For the foregoing reasons, IT IS ORDERED that defendants'

motion to dismiss or in the alternative to transfer is DENIED. 

Dated: November 10, 2005

 Bernard Zimmerman 

 United States Magistrate Judge

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