Einhorn v. M.L. Ruberton Construction Co.
632 F.3d 89
| 3rd Cir. | 2011Background
- Funds administer ERISA multiemployer plans; Statewide had CBAs requiring contributions.
- Statewide faced financial hardship in 2005, with delinquencies near $600,000 discovered during a Funds audit.
- Ruberton agreed to purchase Statewide’s assets after a TRO and subsequent negotiations with Local 676.
- Two agreements: (i) Statewide’s cooperation with payroll audit and future contributions; (ii) Ruberton would hire Statewide’s workforce and be governed by a new CBA for Ruberton employees.
- Sale of Statewide’s assets to Ruberton occurred Oct. 10, 2005; Ruberton began contributions in Dec. 2005; related entities leased Statewide facilities and assisted Ruberton’s ongoing operations.
- District Court granted Ruberton summary judgment, finding no successor liability; Einhorn appealed seeking ERISA successor liability to recover delinquencies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Ruberton may be liable as successor for Statewide’s ERISA delinquencies. | Einhorn seeks liability under federal common law for asset-sale successor. | Ruberton contends no successor liability under asset-sale; no de facto merger or continuation. | Remand to apply Golden State framework; liability not decided on this record. |
| Whether the case fits Artistic Furniture’s expanded successor liability standard in asset-sale context. | Einhorn argues extended liability appropriate due to policy goals and continuity. | Ruberton argues not a merger; insufficient continuity. | Court adopts Artistic Furniture framework as applicable under ERISA; remand to assess continuity. |
| What test governs continuation and the balance of equities on remand. | Continuity of operations, notice, and equity favor imposing liability. | Continuity not proven; assets sale weakly linked to Statewide’s ongoing operations. | Remand for district court to apply substantial continuity factors and notice; decide on remand. |
Key Cases Cited
- Golden State Bottling Co. v. NLRB, 414 U.S. 168 (Supreme Court 1973) (expanded labor-policy-based successor liability balancing protections for employees)
- Littlejohn v. Teamsters Pension Trust Fund, 155 F.3d 206 (3d Cir. 1998) (ERMISA successor liability after merger; policy goals; framework for ERISA context)
- Artistic Furniture of Pontiac v. Upholsterers' Int'l Union Pension Fund, 920 F.2d 1323 (7th Cir. 1990) (expanded successor liability in asset-sale ERISA cases with notice and continuity requirements)
- Brzozowski v. Corr. Physician Servs., Inc., 360 F.3d 173 (3d Cir. 2004) (extended labor-policy successor liability to employment discrimination context; notice and continuity considerations)
- Rego v. ARC Water Treatment Co. of Pa., 181 F.3d 396 (3d Cir. 1999) (ERISA successor liability framework applied beyond NLRA contexts)
- McCormick Dray Line, Inc. v. Central Pa. Teamsters Pension Fund, 85 F.3d 1098 (3d Cir. 1996) (ERISA policy-driven rejection of mutual mistake defense; supports expanding successor liability)