Kurisu v. Svenhard Swedish Bakery Supplemental Key Management Retirement Plan

Background

Plaintiffs Kerry Kurisu, Douglas Prola, and Bill Pruitt alleged that each worked for Swedish Bakery for more than 30 years and was promised pension benefits under the Svenhard Swedish Bakery Supplemental Key Management Retirement Plan. They alleged that the benefits they received were less than promised and that, after the Swedish Bakery sold substantially all of its assets, the monthly payments stopped. The complaint alleged that United States Bakery, Mountain States Bakeries LLC, and Central California Baking Company were successors to the Swedish Bakery and were required to assume its obligations under the Plan.

The plaintiffs asserted claims under sections 502(a)(1)(B), 502(a)(3), and 502(a)(1)(A) of the Employee Retirement Income Security Act, or ERISA, as well as a federal common-law claim based on estoppel. The case also named Ronny Svenhard, David Kunkel, James Kohles, and Michelle Barnett, who were alleged to have been Plan administrators or fiduciaries.

Motion and Venue Analysis

The order addressed only the Bakery Defendants’ motion to dismiss. They argued that venue was improper in the Northern District of California and, alternatively, that the complaint failed to state a claim because the agreements concerning the Swedish Bakery’s asset sale did not require them to assume the Plan’s obligations.

The court addressed only the venue argument. ERISA allows an action to be brought where the plan is administered, where the alleged breach occurred, or where a defendant resides or may be found. The court explained that venue had to be proper as to the Bakery Defendants specifically; venue could not be established merely because the claims against other defendants might be properly brought in the Northern District of California.

The court found that the plaintiffs had not shown proper venue against the Bakery Defendants. The plaintiffs’ work in Oakland and their receipt of communications or effects of the alleged breaches in California were not decisive. The court concluded that the relevant plan administration and alleged breaches by the Bakery Defendants occurred where their decisions were made—in Oregon—and that the Bakery Defendants did not reside in the Northern District of California.

Disposition

The court stated that it could dismiss the claims against the Bakery Defendants for improper venue. Instead, under 28 U.S.C. § 1406(a), it found that the interests of justice favored severing those claims and transferring them to the District of Oregon, where related litigation involving the Bakery Defendants was already pending.

The motion to dismiss was DENIED. The claims against the Bakery Defendants were severed and transferred to the District of Oregon, and the clerk was directed to carry out the transfer. The order did not decide the alternative argument concerning whether the Bakery Defendants assumed the Plan’s obligations, and it did not resolve the merits of the pension-benefit claims. Judge Edward M. Chen signed the order.