Bricklayers & Trowel Trades International Pension Fund v. Valley Concrete, Inc.
Civil Action No. 2016-1684
| D.D.C. | Jun 6, 2017Background
- Plaintiff Bricklayers & Trowel Trades Pension Fund is a multiemployer ERISA pension plan that seeks withdrawal liability for an employer’s complete withdrawal from the plan.
- John Heinlein Construction (a separate company) entered a CBA requiring contributions, stopped payments in 2010, and was found to have withdrawn; the Fund obtained a default judgment against Heinlein Construction in 2013 for withdrawal liability, interest, liquidated damages, and fees, which remains unpaid.
- Valley Concrete, Inc. is a Minnesota masonry/concrete company owned and operated by John E. Heinlein, Jr. and his wife; Plaintiff alleges both companies are owned and controlled by the same two individuals and operate from the same residence.
- Plaintiff brings (1) an ERISA-based claim that Valley Concrete is jointly and severally liable under the ERISA “brother-sister”/single-employer rules for Heinlein Construction’s withdrawal liability, (2) an alter-ego claim to collect the prior judgment, and (3) claims against John Heinlein individually for liability and fiduciary breach.
- Valley Concrete moved to dismiss for lack of subject-matter jurisdiction (arguing this suit merely seeks to enforce the prior judgment under state-law veil-piercing principles) and lack of personal jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether suit asserts an independent federal ERISA claim or only attempts to enforce prior ERISA judgment via veil-piercing | Fund: Count I pleads an ERISA claim that Valley Concrete is jointly/severally liable as a “brother-sister” common-control employer | Valley: This is a post-judgment enforcement action (like Peacock) and lacks an independent ERISA claim, so no federal subject-matter jurisdiction | Court: Count I states an independent ERISA claim (common-control/brother-sister theory); federal jurisdiction exists |
| Whether Court may hear alter-ego/veil-piercing claim | Fund: Even if Count II is state-law alter-ego, it is supplemental to the federal claim | Valley: Alter-ego is a nonfederal enforcement effort and Peacock bars ancillary jurisdiction | Court: Supplemental jurisdiction over any state-law alter-ego claim is proper when asserted with the federal ERISA cause |
| Whether ERISA nationwide-service/venue provision supplies personal jurisdiction over Valley Concrete | Fund: 29 U.S.C. § 1132(e)(2) permits nationwide service; Valley is a U.S. citizen with sufficient contacts | Valley: Challenges personal jurisdiction (is subject to Minnesota only) | Court: ERISA’s venue/service provision permits nationwide service; minimum contacts with the U.S. suffice, so personal jurisdiction exists |
| Whether failure to name Valley in the earlier suit precludes this action | Fund: Not necessary to join all joint-liable parties in the first suit | Valley: Plaintiff should have joined Valley earlier | Court: No preclusion; joinder of all joint tortfeasors in one action is not required |
Key Cases Cited
- Peacock v. Thomas, 516 U.S. 349 (Sup. Ct.) (federal courts lack ancillary jurisdiction to impose liability on a nonfederal defendant in a separate post-judgment enforcement action absent an independent federal claim)
- Connors v. Incoal, Inc., 995 F.2d 245 (D.C. Cir.) (discussing joint and several liability for common-control entities under ERISA)
- I.A.M. Nat'l Pension Fund v. TMR Realty Co., 431 F. Supp. 2d 1 (D.D.C.) (treating common-control entities as jointly liable for withdrawal liability)
- Ellis v. All Steel Const., Inc., 389 F.3d 1031 (10th Cir.) (alter-ego claims asserted with underlying federal claim do not trigger Peacock concerns)
- Temple v. Synthes Corp., 498 U.S. 5 (Sup. Ct.) (a plaintiff need not name every possible joint tortfeasor in the initial lawsuit)