526 B.R. 547
D. Del.2014Background
- Jevic Transportation and related debtors faced asset shortfalls and entered forbearance with CIT after a leveraged buyout by Sun Transportation.
- Sun Transportation acquired Jevic in 2006; a Management Services Agreement and a $2 million Sun guarantee followed to support funding.
- Jevic’s assets fell below $5 million, triggering default under the CIT facility and a decision to pursue bankruptcy in May 2008.
- Jevic filed for Chapter 11 on May 20, 2008; appellants asserted WARN Act and New Jersey WARN Act violations for insufficient 60-day notices.
- Bankruptcy court certified a WARN class in December 2008; discovery occurred 2008–2012; the court granted summary judgment finding no single-employer liability and quashed CEOs’ depositions; this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Sun was a single employer under the WARN Act. | Czyzewski argues Sun was the single employer. | Sun contends independent control limits liability under the five-factor test. | No single-employer liability; Jevic remained the decision-maker. |
| Whether the subpoenas of Sun’s co-CEOs should have been quashed. | Czyzewski seeks testimony from Krouse and Leder on management decisions. | Sun shows lack of unique knowledge and burden of testimony; lower-level sources suffice. | Subpoenas properly quashed; court acted within its discretion. |
Key Cases Cited
- Pearson v. Component Tech. Corp., 247 F.3d 471 (3d Cir. 2001) (defines single-employer analysis under WARN Act and factors)
- In re APA Transport Corp. Consol. Litig., 541 F.3d 233 (3d Cir. 2008) (applies five-factor test; unity of personnel policies key)
- NLRB v. Browning-Ferris Indus, of Pa., Inc., 691 F.2d 1117 (3d Cir. 1982) (early alter-ego/single-entity framework)
- In re Jevic Holding Corp., 492 B.R. 416 (Bankr. D. Del. 2013) (bankruptcy court decisions on control/management structure under WARN)
- In re Kiwi International Air Lines, Inc., 344 F.3d 311 (3d Cir. 2003) (discovery management standard; abuse of discretion)