United States District Court, D. Massachusetts
MEMORANDUM AND ORDER ON DEFENDANTS' MOTION TO TRANSFER VENUE
ALLISON D. BURROUGHS, District Judge.
Before the Court is a Motion to Transfer Venue filed by four Defendants: XTRA Intermodal, Inc.; X-L-Co., Inc.; XTRA Corporation; and XTRA LLC (collectively, the "XTRA Defendants"). These Defendants argue that the Southern District of Illinois is a more appropriate and convenient venue for litigating this insurance coverage dispute, and that transfer would serve the interests of justice. For the reasons set forth herein, the XTRA Defendants' Motion is granted, and this litigation will be transferred to the Southern District of Illinois for further proceedings.
I. FACTS AND PROCEDURAL HISTORY
This case involves an insurance coverage dispute arising out of the environmental cleanup of a Superfund site known as the "Old American Zinc Plant" in Fairmont City, Illinois (the "Site"). Between approximately 1916 and 1967, the Site was owned by the American Zinc Company, which conducted smelting operations on the property [Second Amended Complaint ¶¶ 17-19, ECF No. 6]. These operations produced slab zinc, zinc oxide, zinc carbonate, cadmium, lead, and sulfuric acid, some of which allegedly contaminated the Site [Id. ¶¶ 19, 24]. From 1967 to 1976, the Site was unoccupied [Id. ¶ 20]. In 1976, Defendant XTRA Intermodal leased the Site, using it to store semi-trailer trucks. XTRA Intermodal eventually purchased the Site in 1992 [Id. ¶¶ 21-22]. Since the 1990s, the Site has been investigated by both the United States Environmental Protection Agency ("U.S. E.P.A.") and the Illinois Environmental Protection Agency ("Illinois E.P.A.") [Id. ¶ 23]. In 2012, the U.S. E.P.A. issued a Record of Decision setting forth a pollution remediation plan for the Site [Id. ¶¶ 24-25].
In 2013, the Blue Tee Corporation, successor to the American Zinc Company, filed a civil action against XTRA Intermodal and the other XTRA Defendants in the U.S. District Court for the Southern District of Illinois (the "Blue Tee Litigation") [Id. ¶ 14; see also Blue Tee Corp. v. XTRA Intermodal, Inc., No. 3:13-cv-00830-DRH (S.D. Ill.)]. Blue Tee Corporation seeks contribution from the XTRA Defendants for costs that it has incurred - or will incur - in performing response, investigation, and remedial activities at the Site [Second Amended Complaint ¶ 15].
When the Blue Tee Litigation was filed, the XTRA Defendants requested that Plaintiff Federal Insurance Company ("Federal") provide a defense to the suit, pursuant to various policies of liability insurance that Federal issued to XTRA Corporation in the 1980s and 1990s [Id. ¶ 26]. Although Federal has "agreed to participate" in the defense of the Blue Tee Litigation, it has reserved all rights with respect to whether and to what extent it may have a duty to defend and/or provide coverage [Id. ¶ 40]. In particular, Federal notes that the coverage provided by the policies was subject to various exclusions. For example, the policy in effect between 1984 and 1986 allegedly contained an exclusion for injury or damage arising out of the discharge of contaminants or pollutants into or upon land, the atmosphere, or water, but further stated that such exclusion would not apply if the discharge was "sudden and accidental." [Id. ¶ 37]. Federal alleges that beginning in 1985, this exclusion was superseded by an "absolute" pollution exclusion, which contained no exception for sudden and accidental discharges [Id. ¶¶ 38-39]. Federal's position is that these exclusions apply to the pollution occurring at the Site, and that consequently, Federal is not obligated to defend or indemnify the XTRA Defendants in connection with the underlying Blue Tee Litigation.
To resolve this coverage dispute, Federal filed a Complaint for Declaratory Relief with this Court on October 28, 2014, seeking a judicial determination of the parties' respective rights and responsibilities under the insurance policies [ECF No. 1]. Federal filed an Amended Complaint on December 8, 2014 [ECF No. 5], and a Second Amended Complaint on December 12, 2014 [ECF No. 6]. Federal seeks a declaration that it has no duty to defend or indemnify the XTRA Defendants in connection with the Blue Tee Litigation, on the grounds that such losses are excluded by the policies at issue [Second Amended Complaint ¶¶ 50-56]. Alternatively, if Federal is determined to owe coverage, Federal seeks a judicial declaration that its obligations are restricted to its "time on the risk, " and that all damages and costs of defense should be allocated amongst all of the XTRA Defendants' insurers, on a "time on the risk" basis [Id. ¶¶ 57-60]. Accordingly, Federal's Second Amended Complaint names, in addition to the XTRA Defendants, five other insurance companies who allegedly issued liability insurance to one or more of the XTRA Defendants. Those insurer defendants are (1) American Insurance Company; (2) Arrowood Indemnity Company; (3) Associated Indemnity Company; (4) Fireman's Fund Insurance Company; and (5) Providence Washington Insurance Company.
Federal contends, and defendants do not dispute, that venue is proper in this judicial district pursuant to 28 U.S.C. § 1391(b). Federal alleges that at the time it issued the primary and excess insurance policies to the XTRA Corporation, the XTRA Corporation's headquarters were located in Boston, Massachusetts [Second Amended Complaint ¶ 32]. In addition, some the policies were brokered by insurance agencies located within the Commonwealth of Massachusetts [Id. ¶¶ 32-33]. Thus, this judicial district is a district in which "a substantial part of the events or omissions giving rise to the claim occurred...." 28 U.S.C. § 1391(b)(2).
Those insurance policies, however, were issued more than twenty years ago, and there do not appear to be any modern-day connections linking the parties to the Commonwealth of Massachusetts. The XTRA Corporation moved its principal executive office out of Boston in 1999. Between 1999 and 2004, XTRA Corporation's principal offices were located in Connecticut. Since 2004, they have been located in Clayton, Missouri, which is a suburb of St. Louis [Declaration of Michael Dreller ¶ 7, ECF No. 29-2]. XTRA Corporation, X-L-Co., and XTRA Intermodal are all Delaware corporations with principal places of business in Clayton, Missouri. XTRA LLC is a Maine corporation, also with a principal place of business in Clayton, Missouri [Id. ¶¶ 2-14]. Therefore, it appears that the XTRA Defendants' corporate officers and corporate records are now located in the St. Louis area [Id. ¶¶ 10-11]. The other insurer defendants are headquartered in various locations across the United States, although none in Massachusetts. Plaintiff Federal is an Indiana corporation headquartered in Warren, New Jersey [Second Amended Complaint ¶ 1]. Therefore, apart from the fact that some of the operative insurance policies were issued in Massachusetts in the 1980s and 1990s, there is no obvious connection between the parties' dispute and this judicial district.
In support of their motion to transfer venue, the XTRA Defendants argue that this case should be transferred to the Southern District of Illinois, where the Blue Tee Litigation is pending and the contaminated Site is located. The XTRA Defendants note that in addition to being a more convenient, centrally-located venue for the majority of the parties, the federal courthouse in the Southern District of Illinois is located 6 miles from the Site, and that the witnesses and documents at issue in this case are more likely to be situated in Illinois or nearby St. Louis, Missouri. In support of this argument, the XTRA Defendants have identified a number of potential witnesses who may need to testify in this case, and who are located in the Illinois area. These witnesses include a former employee of a third-party construction company located in Fairmont City, Illinois, who allegedly has knowledge about the movement of materials on the Site and has not given live testimony in the Blue Tee Litigation [ECF No. 66 ¶ 4(B)]. Another potential witness is a former XTRA Intermodal employee currently residing in Kansas City, Missouri, who allegedly has knowledge of XTRA Intermodal's operations at the Site [Id. ¶ 4(C)]. In addition to these non-party witnesses, the XTRA Defendants have identified certain corporate officers of the XTRA Corporation, and potential expert witnesses, who are located in either St. Louis or Chicago. According to the XTRA Defendants, these witnesses have knowledge about whether XTRA released any pollution on the Site, when such pollution was released, and whether or not that release was intentional, or sudden and accidental [Id. ¶¶ 4(A), 4(D), 5]. Further, the XTRA Defendants have identified five representatives from the U.S. E.P.A. and the Illinois E.P.A., all of whom are located in Illinois, who have knowledge of the Site's investigation and remediation [Id. ¶ 6].
Finally, the XTRA Defendants argue that venue should be transferred because the State of Illinois has a strong interest in the adjudication of this coverage dispute, to ensure that funds are available for the clean-up of the contaminated Site and to protect the health and welfare of its residents. They contend that Massachusetts has no genuine interest in the resolution of an insurance coverage dispute between foreign parties regarding the clean-up of property in Illinois, and that Federal was forum shopping when it chose to file this action in this judicial district [ECF No. 29, pp. 5, 13]. The XTRA Defendants believe that by filing in Massachusetts, Federal is attempting to secure the application of Massachusetts law - specifically, state law regarding the "sudden and accidental" exception to the pollution exclusion contained in the insurance policies [Id. p. 13].
Defendant Arrowood Indemnity Company ("Arrowood") supports the XTRA Defendants' Motion to Transfer, citing substantially similar reasons [ECF No. 48]. Arrowood concurs that "whether and how" its policies provide coverage "will depend in part upon what activities took place at the Illinois site" during the years that its policies were in effect [Id. p. 2]. It notes that documents, physical evidence, and witnesses relating to these factual questions "are expected to be located in close proximity to [the Site]." [Id.].
The other four insurer defendants, however, oppose the XTRA Defendants' efforts to transfer this action. The American Insurance Company, Associated Indemnity Corporation, and Fireman's Fund Insurance Company have filed a consolidated Opposition to the Motion to Transfer [ECF No. 49]. Providence Washington Insurance Company filed a separate Opposition [ECF No. 46], as did the Plaintiff, Federal [ECF No. 47]. Federal and the other insurer defendants argue that Boston is a more convenient and appropriate venue to litigate this coverage dispute. In its Opposition, Federal notes that a plaintiff's choice of forum is entitled to considerable deference. The parties opposing transfer also dispute the XTRA Defendants' claim that this case will require documents, live witnesses, and other evidence located in Illinois. Rather, Federal argues that "this is a documents case, " which will hinge on the interpretation of insurance contracts issued to a Massachusetts company and brokered through Massachusetts insurance agents [ECF No. 47-1 p. 10]. Federal notes that even assuming witnesses and evidence were necessary, the pollution in question occurred so long ago that there are unlikely to be any remaining witnesses with percipient knowledge [Id.]. In addition, Federal insists that there is a strong connection between Massachusetts and the insurance policies at issue. Specifically, Federal argues that where Massachusetts law will ultimately govern the interpretation of the insurance policies, Massachusetts has a ...