(CN) - Claims that the security giant Brink's conspired to swap older, copper-rich pennies for newer, zinc-based coins should be heard in Ohio, a federal judge ruled.
Brian Holbrook, a former internal auditor at Brink's Cleveland branch filed a qui tam complaint under seal in New Jersey two years ago against Brink's, its subsidiary, Jackson Metals LLC and Jackson president Walter Luhrman.
He said Brink's was supposed to transport and store coins for the U.S. government but that it instead swapped truckloads of pennies minted in 1992 or before, which contain 95 percent copper, with pennies minted thereafter, which contain only 2.5 percent copper.
Jackson Metals then allegedly paid Brink's an inflated fee to melt the copper down.
Holbrook said the fraud occurred primarily in Ohio, where Jackson is based, and sometimes Maryland.
Luhrman allegedly told Holbrook in January 2010 that Jackson Metals had acquired $5 million in copper pennies as a result of his arrangement with Brink's.
After the government declined to intervene in the False Claims Act case last year, the defendants moved to dismiss or transfer to the Southern District of Ohio.
U.S. District Judge Susan Wigenton ordered the transfer Tuesday, relying on the 3rd Circuit's 1995 decision in Jumara v. State Farm Ins.
"First, defendants prefer to litigate this case in the Southern District of Ohio, as expressed in their written submissions," Wigenton wrote. "Second, Holbrook alleges that the defendants' scheme was perpetrated primarily in Ohio. Third, and finally, it is readily apparent that Ohio is the far more convenient litigation venue for both Holbrook, who is an Ohio resident, and the defendants."
The remaining private and public Jumara factors, including travel expenses and interest in deciding local controversies at home, also weigh in favor of transfer, the ruling states.
"The only factor that might arguably weigh against transfer - 'plaintiff's forum preference' - is strongly mitigated by the indisputable reality that, on the face of the complaint, this case has absolutely no substantive factual connection to the District of New Jersey," Wigenton wrote. "Indeed, neither Holbrook, nor any of the defendants, are citizens of New Jersey, or if corporate entities, have either their headquarters or their principle place of business in New Jersey. Instead, it appears that Holbrook - or more accurately, Holbrook's counsel - chose to file the complaint in the District of New Jersey based merely upon the bald assertions that one of the Brink's entity Defendants has 'branch offices throughout the country, including in Newark, N.J. and Cleveland, Ohio' and that 'the defendants transact business in this district.' Given that Holbrook is a resident of Ohio, and has no apparent connection to New Jersey, Holbrook's decision to file this district is entitled to little weight within the context of the transfer analysis."
Brink's reported $3.9 billion in revenue in 2012.
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