CHICAGO (LN) — U.S. District Judge Jeffrey I. Cummings transferred a putative ERISA class action against Laboratory Corporation of America Holdings to the Middle District of North Carolina on Friday, finding that the convenience of witnesses and the situs of material events outweighed the plaintiffs’ choice of forum.
The lawsuit, filed by Denise Braham, Karla Puckett, Devonna Hobbie, and Kimberly Lawton, alleges that Labcorp and Willis Towers Watson failed to exercise reasonable diligence in administering the Labcorp Group Benefits Plan, resulting in excessive premiums for accident, critical illness, and hospital indemnity policies.
Cummings granted the defendants’ motion to transfer under 28 U.S.C. §1404(a), concluding that North Carolina has a stronger relationship to the dispute than Illinois. The court noted that Labcorp is headquartered in Burlington, North Carolina, and that the Willis Towers employee overseeing the relationship with Labcorp is also based there.
While the plaintiffs argued that their choice of forum should receive substantial deference, Cummings gave it limited weight. He observed that only one of the four named plaintiffs resides in Illinois and that the claims have weak ties to the district.
“The only connection between Illinois and this dispute is the residence of one of the four putative class representatives (Braham) and the residence of some putative class members,” Cummings wrote.
The judge emphasized that the “situs of material events” strongly favored transfer. He rejected the plaintiffs’ argument that the location where they paid premiums defined the situs of the claims, instead looking to where the corporate decision-making occurred.
“Defendants made business decisions related to the Plan in North Carolina, and the Willis Towers-Labcorp relationship was managed by a Willis Towers employee located in North Carolina,” the opinion states.
Cummings also found that the convenience of witnesses favored North Carolina. He noted that at least seven Labcorp employees and key Willis Towers staff with knowledge of the plan’s administration are located in North Carolina. Additionally, nearly a fifth of the putative class members reside in North Carolina, compared to a much smaller number in Illinois.
The court further determined that the Middle District of North Carolina is more familiar with the applicable state law, as the Plan is governed by North Carolina law.
“North Carolina courts remain more familiar with interpreting their own state’s laws regardless of the nature of the claims at issue,” Cummings wrote.
The case is now pending in the Middle District of North Carolina.