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Northwest Airlines, Inc. v. Filipas: US District Court : CIVIL PROCEEDURE - first-filed rule and 1404(a) transfer issues; suit stays in Minnesota1
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Northwest Airlines, Inc.,
v. Civ. No. 07-4803 (JNE/JJG)
Stephen M. Filipas, Robert F.
Mokos, Thomas E. Niederer,
Raymond B. Phillips, Grant D.
Ranum, and Michael Tanksley,
Individually, and as Representatives
of Persons Similarly Situated,
Air Line Pilots Association,
Thomas W. Tinkham, Esq., and Stephen P. Lucke, Esq., Dorsey & Whitney LLP, appeared for
Plaintiff Northwest Airlines, Inc.
Lawrence P. Schaefer, Esq., Schaefer Law Firm, LLC, appeared for Defendants Stephen M.
Filipas, Robert F. Mokos, Thomas E. Niederer, Raymond B. Phillips, Grant D. Ranum, and
Michael Tanksley, Individually, and as Representatives of Persons Similarly Situated.
Richard Seltzer, Esq., Cohen, Weiss and Simon LLP, and Marnie L. DeWall, Esq., Lindquist &
Vennum PLLP, appeared for Intervenor-Plaintiff Air Line Pilots Association.
Northwest Airlines, Inc., (Northwest) brings this declaratory judgment action against a
putative defendant class of pilots (Pilot Defendants) seeking a declaration that its recentlyadopted
pension plan complies with the Employment Retirement Income Security Act (ERISA),
29 U.S.C. § 1054. (2000), and with the Age Discrimination in Employment Act (ADEA), 29
U.S.C. § 623 (2000). The case is before the Court on the Pilot Defendants’ Motion to Stay and
Motion to Transfer or Stay. The Motion to Stay [Docket No. 24] is subsumed in the Motion to
Transfer or Stay [Docket No. 68] and will therefore be stricken For the reasons set forth below,
the Motion to Transfer or Stay is denied.
In Northwest’s recently concluded bankruptcy reorganization, Northwest and the Air
Line Pilots Association (ALPA) agreed to freeze the existing pilot benefit plan and replace it
with a new “targeted” retirement benefit plan (Target Plan), to which Northwest would make a
set contribution. Under the Target Plan, longer-serving pilots receive a smaller allocation of the
company contribution than pilots with fewer years of service because longer-serving pilots have
accrued more retirement benefits under the now frozen old plan and pilots with fewer years of
service could no longer earn benefits under that plan. The targeted allocation is allegedly
designed to ensure equitable distribution of the company-funded retirement benefits among
pilots. Some of the longest serving pilots will not receive any benefits under the Target Plan
because they have accrued close to the maximum amount of benefits possible under the frozen
During the negotiations between Northwest and ALPA, thirty-six pilots filed an ERISA
breach of fiduciary duty action in the United States District Court for the Western District of
Washington (Seattle Litigation) seeking production of documents and information regarding the
proposed pension plan changes that were then under serious consideration. The pilots in the
Seattle Litigation claimed the disclosures they sought were required under ERISA. The
Honorable Robert S. Lasnik, United States District Judge, Western District of Washington,
denied the pilots’ motion for a preliminary injunction. The pilots then moved to stay the Seattle
Litigation pending appeal. In the meantime, the Target Plan was approved and implemented.
Northwest then brought the present action (Minnesota Litigation) in this Court seeking a
declaration that the Target Plan did not violate ERISA or the ADEA’s age discrimination rules.
The pilots in the Seattle Litigation subsequently withdrew their motion to stay. They
were recently granted permission to amend their complaint to add affirmative claims against
Northwest regarding the legality of the plan under ERISA and the ADEA. The pilots also allege
age discrimination claims under Washington, California, and Minnesota law. Although Judge
Lasnik permitted the pilots to amend their complaint, he stayed the Seattle Litigation pending
resolution of this action. In doing so, Judge Lasnik concluded that the Seattle Litigation was not
the first-filed action regarding the legality of the Target Plan because “it did not raise any of the
claims asserted in the Minnesota action and was, for all intents and purposes, resolved by the
time the Minnesota action was filed.” Judge Lasnik also concluded that the Minnesota Litigation
was not filed in anticipation of the pilots’ motion to amend the complaint in the Seattle Litigation
and was not brought by Northwest for the purpose of forum shopping.
The Pilot Defendants now bring the first-filed issue before this Court seeking a transfer or
stay of the Minnesota Litigation under the first-filed rule or the exceptions to it, as set forth by
the Eighth Circuit Court of Appeals, or pursuant to 28 U.S.C. § 1404(a) (2000). In the
alternative, the Pilot Defendants request that the Court exercise its inherent power to stay this
action pending the outcome of the Seattle Litigation.
A. Transfer pursuant to the first-filed rule/exceptions
The well-established rule is that in cases of concurrent jurisdiction, “the first court in
which jurisdiction attaches has priority to consider the case.” Nw. Airlines, Inc. v. Am. Airlines,
Inc., 989 F.2d 1002, 1006-07 (8th Cir. 1993) (citing Orthmann v. Apple River Campground Inc.,
765 F.2d 119, 121 (8th Cir. 1985)). This first-filed rule “is not intended to be rigid, mechanical,
or inflexible,” but is to be applied in a manner best serving the interests of justice. Id. The
prevailing standard is that “in the absence of compelling circumstances,” the first-filed rule
should apply. Id. (quoting Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Haydu, 675 F.2d
1169, 1174 (11th Cir. 1982)).
The Eighth Circuit Court of Appeals has identified certain “red flags” that the district
court should consider in determining whether a departure from rigid application of the first-filed
rule is appropriate in a particular case. See Nw. Airlines, 989 F.2d at 1006-07. The first “red
flag” is whether the first filer had notice of the second filer’s intention to file suit, and therefore
raced to the courthouse to be first. Id. at 1007. Here, a court looks at the relative timing of the
actions and any delay by either party to determine if the second-filed lawsuit was “not truly
contemplated” until after the first-filed action was conceived. Id. The second “red flag” is
whether the first-filed action is merely for declaratory judgment, suggesting that it is a
“preemptive strike,” rather than a suit for damages or equitable relief. Id.
The Pilot Defendants claim that the Seattle Litigation was the first-filed suit and that the
Western District of Washington is thus the proper venue for the second-filed declaratory
judgment action brought by Northwest. However, this Court agrees with the well-reasoned
analysis and ultimate conclusion of Judge Lasnik that the Seattle Litigation was not the first-filed
action regarding the legality of the Target Plan. The Seattle Litigation, as originally filed in
August 2007, sought to compel production of documents and information pursuant to
Northwest’s fiduciary duties under ERISA. On the other hand, the Minnesota Litigation, filed on
December 12, 2007, seeks a declaration that the Target Plan is not age-discriminatory. As Judge
Lasnik pointed out, “[r]esolution of the original Seattle action would not adjudge or impact the
claims raised in Minnesota.” Allegations concerning the legality of the Target Plan were not
raised by the pilots in the Seattle Litigation until January 10, 2008.1 On the basis of the entire
record, the Court concludes that the Minnesota Litigation is “first” for the purposes of the firstfiled
The Pilot Defendants next argue that compelling circumstances exist in this case that
warrant a departure from the first-filed rule and a transfer of the Minnesota Litigation to the
Western District of Washington. The Pilot Defendants contend Northwest had ample notice that
they were considering age discrimination and duty of fair representation claims against
Northwest and ALPA before the Minnesota Litigation was commenced. They further assert that
Northwest then rushed to the courthouse in Minnesota to file its declaratory judgment action in
an effort to forum shop and preempt the pilots’ substantive challenges to the Target Plan in the
The Court disagrees. The correspondence between the parties presented by the Pilot
Defendants in support of their assertions of ample notice merely refers to evaluation,
investigation, and consideration of potential claims regarding the Target Plan. The July 2007
letter from the pilots’ counsel in the Seattle Litigation to Northwest states that the pilots are
“currently evaluating several additional legal claims” including a breach by ALPA of its duty of
fair representation and violation of age discrimination laws by the Target Plan if implemented.
The November 2007 letter to Northwest, alleging Northwest had a legal duty to provide fortyfive
days notice of an amendment to the pilots’ benefits plan, concludes by stating “we do not,
by raising the notice issue, intend to state or imply that we believe the targeting plan, if
1 While the pilots’ motion to amend the complaint was not filed in the Seattle Litigation
until January 23, 2008, the record indicates that a letter dated January 10, 2008, was sent to the
Court indicating the pilots’ intention to seek leave to amend their complaint to add substantive
claims against Northwest and ALPA.
implemented, will be lawful rather than age discriminatory or otherwise unlawful.” Finally, the
email dated December 5, 2007, which appears to have been sent to Northwest pilots through an
email “list_service,” contains little more than a plea to pilots to contact their ALPA
representative to voice opposition to the pending implementation of the Target Plan and a request
to the pilots for financial assistance should litigation become necessary. The email specifically
states that litigation is an avenue of action “that may be pursued.” Notwithstanding the absence
of any proof that Northwest actually received this correspondence, its contents, as well as the
contents of the July and November 2007 letters, are insufficient to convey adequate notice of a
present intent to file suit over the legality of the approved Target Plan. See Nw. Airlines, 989
F.2d at 1007 (refusing to disregard the first-filed rule where Northwest had notice that American
was considering filing a lawsuit, but did not know whether litigation was “imminent” or whether
American instead “was doing anything more than blowing smoke about a potential lawsuit”).
The Pilot Defendants place significant reliance on two unpublished cases from this
District, but this reliance is misplaced as these cases are factually distinguishable from the
circumstances of the instant action. In both ABC Teacher’s Outlet Inc. v. School Specialty, Inc.,
Civ. No. 07-159, 2007 WL 2122660 (D. Minn. July 17, 2007) and ELA Medical, Inc. v.
Arrhythmia Management Associates, Inc., Civ. No. 06-3580, 2007 WL 892517 (D. Minn. Mar.
27, 2007), the Court departed from the first-filed rule based on clear evidence that the first filer
had notice of the second filer’s intent to sue. In ABC Teacher’s Outlet, the notice of the second
filer’s intention to sue was an actual “threat to take action” and subsequent “warning about a
potential claim for enhanced damages.” In ELA Medical, the notice was the second filer’s
express rejection of an employee’s attempt to terminate a contract containing a non-competition
provision where the employee entered into a similar sales contract with another company. In
both cases, the express and implied message of the second filer regarding the imminence of
litigation against the first filer is different from the mere profession of consideration and
evaluation of potential claims by the pilots in the Seattle Litigation.
Having reviewed the full chronology of events and circumstances leading up to the filing
of the Seattle Litigation and the Minnesota Litigation, the Court reaches the same conclusion
under Northwest Airlines as Judge Lasnik reached in the Seattle Litigation:
It was clear from the outset of the Seattle litigation that the plaintiffs were
concerned that the retirement plan being negotiated by Northwest and the pilot’s
union would be unfavorable to pilots with seniority. While that concern led to
the filing of the ERISA claim, it did not necessarily reflect an intent to challenge
the plan as finally adopted or to assert an age discrimination claim against
Northwest. When the Court [in the Seattle Litigation] denied their motion for
preliminary injunction, plaintiffs treated this action as dead and filed a motion to
stay pending resolution of their appeal. The motion to stay was filed a week after
plaintiffs [the pilots] received notice that Northwest had adopted the new benefits
plan (although they did not possess a copy of the plan at that time). Given that
the plaintiffs made no attempt to expand the scope of the Seattle litigation and in
fact continued their efforts to obtain a stay in this case even after Northwest
initiated suit in Minnesota, is it not clear when the plaintiffs actually decided to
assert an age discrimination claim.
Tanksley, et al., v. Nw. Airlines, Case No. C07-1227RSL, slip op. at 3-4 (W.D. Wash. Mar. 12,
As for the second red flag identified in Northwest Airlines, the Pilot Defendants urge the
Court to conclude that Northwest’s declaratory judgment action is a preemptive action because
(1) it was filed in Minnesota despite the existence of the Seattle Litigation and Northwest’s
knowledge that the pilots in that case were very likely to file age discrimination claims in the
near future, and (2) Northwest filed its declaratory action one day after implementing the
targeting plan. These arguments are without merit.
As already discussed, Northwest did not have notice of an intent on the part of the pilots
to file a lawsuit alleging age discrimination. In addition, the circumstances and the sequence of
events leading up to the filing of the Minnesota Litigation do not support the conclusion that
Northwest filed this declaratory action merely as a preemptive strike. As Judge Lasnik
succinctly indicated in his Order:
Northwest was not under an obligation to sit quietly and wait for plaintiffs to
make up their minds: plaintiffs [pilots] did not provide express or implied notice
of their intention to sue, and Northwest’s obligations under the new plan were to
begin immediately. Because it was neither unseemly nor unreasonable for
Northwest to seek to resolve the lawfulness of the new retirement plan in the
district where the plan was negotiated and will be implemented, none of the
exceptions to the first-to-file rule applies.
In sum, the Court concludes that the instant action for declaratory judgment filed by
Northwest on December 12, 2007, is the first-filed action to raise claims regarding the legality of
the Target Plan. The Court further concludes that none of the exceptions to the first-filed rule set
forth in Northwest Airlines applies here. Accordingly, transfer of the Minnesota Litigation to the
Western District of Washington pursuant to these exceptions is unwarranted.
B. Transfer under 28 U.S.C. § 1404(a)
The Pilot Defendants also seek a transfer of the Minnesota Litigation pursuant to 28
U.S.C. § 1404(a). “For the convenience of the 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.” 28 U.S.C. § 1404(a) (2000). The party seeking a transfer ordinarily bears the
burden of establishing that a transfer is warranted. Terra Int’l, Inc. v. Miss. Chem. Corp., 119
F.3d 688, 695 (8th Cir. 1997). A motion to transfer an action to another district should be denied
unless the balance of factors strongly favors the moving party. See Graff v. Qwest Commc’ns
Corp., 33 F. Supp. 2d 1117, 1121 (D. Minn. 1999). The decision whether to transfer an action
lies within the discretion of the district court. Everett v. St. Ansgar Hosp., 974 F.2d 77, 79 (8th
The threshold question of whether venue is proper in the Western District of Washington
at Seattle is not disputed. The Court therefore turns to the second part of the analysis, whether a
transfer is warranted to serve the convenience of the parties, the convenience of the witnesses
and the interests of justice.
1. Convenience of the parties
When considering the convenience of the parties, the “normal presumption [is] in favor
of a plaintiff’s choice of forum,” especially “where the plaintiff resides in the district in which
the lawsuit was filed.” Graff, 33 F. Supp. 2d at 1121. Here, Northwest filed this action in
Minnesota, the state of its headquarters. Of the approximately 4,500 Northwest pilots
nationwide, over 1,000 reside in Minnesota.2 Approximately 300 Northwest pilots reside in
Washington.3 All of the Northwest employees who participated in the design and negotiations
relating to the Target Plan and those currently involved in its administration are located in
Minnesota. The Court concludes that this factor does not weigh in favor of transfer.
2. Convenience of the witnesses
The convenience of the witnesses is an important factor in the transfer analysis. Graff, 33
F. Supp. 2d at 1121; Nelson v. Master Lease Corp., 759 F. Supp. 1397, 1402 (D. Minn. 1991).
Considerations relevant to this factor include the number of essential nonparty witnesses, their
2 Northwest argues that five of the six pilots named as representatives of the putative
defendant class reside in Minnesota. The Court gives this fact no weight as Northwest was able
to hand-pick these pilots from the thirty-six plaintiffs in the Seattle Litigation. The Court also
notes that it is not uncommon for airline pilots to reside in one state and be assigned to fly from a
base located in another state. See Jordan v. U.S., Civ. No. 04-3800, 2006 WL 752928 (D. Minn.
March 23, 2006).
3 During oral argument, counsel for the Defendant Pilots’ stated that the majority of the
senior pilots who allegedly suffer discrimination under the Target Plan are located on the West
Coast. Other than counsel’s assertion, the Court finds no evidence in the record supporting this
location, and the preference for live testimony. Graff, 33 F. Supp. 2d at 1121; Nelson, 759 F.
Supp. at 1402. This factor is not a contest between the parties as to which one presents a longer
list of witnesses located in the potential districts. Graff, 33 F. Supp. 2d at 1121-22; Nelson, 759
F. Supp. at 1402. The party seeking the transfer must clearly specify the essential witnesses to
be called and must make a general statement of what their testimony will cover. Graff, 33 F.
Supp. 2d at 1122; Nelson, 759 F. Supp. at 1402. The court must examine the materiality and
importance of the anticipated witnesses’ testimony and determine whether the forum is
convenient for them. Graff, 33 F. Supp. 2d at 1122.
The Pilot Defendants argue that the most relevant non-party witness testimony will be
that of the ALPA witnesses, including the ALPA leadership, members of the ALPA Master
Executive Counsel (MEC), which includes the Negotiating Committee, and members of the
Retirement & Insurance Committee (R & I Committee). The Pilot Defendants contend the
location of these witnesses does not favor Minnesota. They point specifically to MEC Chairman,
David Stevens, a resident of Washington, MEC Secretary/Treasurer Mark Young, a resident of
New York and Hawaii, R & I Committee members Paul Kent, a resident of Washington, and
Bob Walker, a resident of California, and former R & I Committee member Joe Damiani, a
resident of Alaska. While the Pilot Defendants do not specifically discuss the testimony of any
one of these witnesses, they generally assert that these individuals played a central role in
developing the Target Plan and will provide testimony about negotiations with Northwest and
ALPA’s fair representation of the pilots.
A broader consideration of the geographical evidence in the record reveals that the
essential non-party witnesses in this action reside in a variety of states. All of the Northwest
representatives who participated in the negotiations and adoption of the Target Plan reside in
Minnesota. This is also true for several ALPA representatives, as the MEC maintains permanent
offices in Bloomington, Minnesota, near the Minneapolis/St. Paul International Airport. While
MEC Chairman Stevens presently resides in Washington, he testified that at all relevant times
during the negotiations of the Target Plan, he maintained an office in Bloomington, Minnesota,
and that he currently spends most of his time working there. He states that this is consistent with
the practice of his predecessor. Many of the ALPA witnesses who played central roles in the
negotiation of the Target Plan live in states other than Minnesota, but work for ALPA in
Bloomington, Minnesota, where there is dedicated office space and full-time support staff.
Although R & I Committee members Paul Kent and Bob Walker reside in Washington,
the record shows that these two committee members were elected to their positions in March
2008. Each served only as adjuncts to the R & I Committee during the negotiation of the Target
Plan, making their roles during the negotiations of that plan less significant when compared to
the longer-serving members of the R & I Committee. ALPA also identifies other ALPA
employees that were important in the negotiations of the Target Plan, including an ALPA
attorney who lives in Wisconsin and Retirement and Insurance Department employees based in
Virginia. On this record, the Court concludes that the Pilot Defendants have not met their burden
of establishing that this factor weighs in favor of transfer.
3. Interest of Justice
The last prong of the transfer analysis addresses whether the interest of justice favors
transfer. Nelson v. Soo Line R. R. Co., 58 F. Supp. 2d 1023, 1027 (D. Minn. 1999). To the
extent relevant to the facts of each case, this step typically involves considerations of judicial
economy, obstacles to a fair trial, conflict of law problems, and advantages of having a local
court determine local law. Id.
The Pilot Defendants argue that this factor weighs in favor of transfer because Judge
Lasnik has presided over the Seattle Litigation since August 2007, and he is most familiar with
the parties and the underlying facts surrounding the negotiations of the Target Plan. The Court is
not persuaded.4 There is no evidence establishing that the Seattle Litigation included anything
more than the original denial of the preliminary injunction and the more recent granting of the
pilots’ motion to amend their complaint. Northwest’s assertion that no factual discovery
occurred during the adjudication of these motions stands undisputed.
There is no apparent dispute that the operative facts surrounding the negotiation and
approval of the Target Plan occurred in Minnesota or that all of the relevant documents and
records are located in Minnesota. The parties have not raised any issues regarding obstacles to a
fair trial or issues regarding any conflicts of law. Under these circumstances, the Court
concludes that Northwest’s selection of Minnesota as the forum for its lawsuit was reasonable
and was not an exercise in forum shopping. The interests of justice do not weigh in favor of
In sum, the Court has considered the convenience of the parties, the convenience of the
witnesses, and the interests of justice in examining whether transfer of this declaratory action is
warranted. On the record before it, the Court concludes that it is not.
C. Stay of the Minnesota Litigation
Alternatively, the Pilot Defendants urge the Court to stay this action pending resolution
of the Seattle Litigation pursuant to its inherent authority and in exercise of its discretion to
decide whether and when to hear claims under the Declaratory Judgment Act. See Wilton v.
4 The Court notes that the Pilot Defendants’ position regarding Judge Lasnik’s knowledge
of the case here is not entirely consistent with their argument regarding the first-filed rule, in
which they contend Judge Lasnik did not fully consider the entire record in determining whether
Northwest had notice from the pilots in the Seattle Litigation of an actual intent to file suit.
Seven Falls Co., 515 U.S. 277, 282, 288 (1995) (indicating that district courts are not obligated
to assume jurisdiction of declaratory judgment actions and may stay or dismiss such claims in
their discretion). The undersigned declines the Pilot Defendants’ invitation to do so here.
Moreover, for the reasons stated above, the Pilot Defendants’ request for a stay based on the
first-filed rule and exceptions to it is also denied.
Based on the files, records, and proceedings herein, and for the reasons stated above, IT
IS ORDERED THAT:
1. The Motion to Stay filed by Defendants Stephen M. Filipas, Robert F.
Mokos, Thomas E. Niederer, Raymond B. Phillips, Grant D. Ranum, and
Michael Tanksley, Individually, and as Representatives of Persons
Similarly Situated [Docket No. 24] is STRICKEN.
2. The Motion to Transfer or Stay filed by Defendants Stephen M. Filipas,
Robert F. Mokos, Thomas E. Niederer, Raymond B. Phillips, Grant D.
Ranum, and Michael Tanksley, Individually, and as Representatives of
Persons Similarly Situated [Docket No. 68] is DENIED.
Dated: April 15, 2008
s/ Joan N. Ericksen
JOAN N. ERICKSEN
United States District Judge
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