904 F. Supp. 2d 249
E.D.N.Y.2012Background
- Trustees sue Oakfield and related entities under ERISA §502(a)(3) and §515 for unpaid contributions across multiple Funds; Oakfield was bound by the MTA CBA and the Funds audited or attempted to audit related entities; Coral was not signatory but allegedly integrated with Oakfield; dispute over whether audit requests were made and whether the single-employer doctrine can bind Coral and Michael Jr.; plaintiffs seek liability, interest, liquidated damages, and fees; court grants liability but limits damages for Coral’s employees and permits renewal for those damages.
- Oakfield failed to remit contributions for Oct 2008–Sept 2009 and was the signatory to CBAs requiring contributions; remittance reports referenced MTA terms and the Trust Agreement allowed audits; the Funds pursued an estimated audit when Oakfield refused to submit to an audit; the court accepts the estimated audit methodology for Oakfield.
- Coral and Oakfield acted with interrelated operations, common management/ownership, centralized labor relations, and a shared bargaining unit; corporate veil piercing is pursued against Michael Jr. to hold him personally liable; Coral has not issued stock and both operate trucking services with shared customers and drivers.
- The court finds Oakfield liable under ERISA §515 and that Coral and Oakfield constitute a single employer with a single bargaining unit, making Coral liable for Oakfield’s employees and vice versa; veil-piercing against Michael Jr. is warranted; audit obligations extend to Coral as an affiliated entity.
- Damages for Coral’s employees are denied without prejudice pending renewal with proper calculations; damages for Oakfield’s and Coral’s employees are awarded, with $336,751.49 in delinquent contributions, $78,600.14 in interest plus per-diem interest, $78,600.14 in liquidated damages, and $3,160.00 in audit costs; attorney’s fees and costs to be determined, with a proposed schedule due by December 7, 2012.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| ERISA liability for Oakfield’s delinquent contributions | Oakfield liable under §515 | Oakfield does not dispute audit/amount | Oakfield liable under ERISA §515 |
| Whether Coral and Oakfield are a single employer | Single employer means joint/separate liability | No single-employer finding | Coral and Oakfield are a single employer |
| Whether Coral is bound by Oakfield’s CBA for Coral's employees | Single bargaining unit binds Coral | Non-signatory; not bound | Coral bound; joint and several liability for Coral's employees |
| Whether Michael Jr. can be pierced for personal liability | Pierce corporate veil due to lack of separate identity | No veil-piercing without fraud or alter ego | veil pierced; Michael Jr. personally liable |
| Oakfield's books/records availability for audit | Oakfield refused audit; audit required | Dispute about audit requests | Oakfield failed to submit to audit; audit required and ordered |
Key Cases Cited
- Local 627 v. Central Transport, Inc., 472 U.S. 559 (U.S. Supreme Court 1985) (ERISA single-employer concepts and piercing liability foundations)
- South Prairie Construction Co. v. Local No. 627, 425 U.S. 800 (U.S. Supreme Court 1976) (single bargaining unit and single employer standards)
- Passalacqua Builders v. Resnick Developers, Inc., 933 F.2d 131 (2d Cir.1991) (federal veil-piercing principles in ERISA claims)
- Sasso v. Cervoni, 985 F.2d 49 (2d Cir.1993) (officer liability under ERISA for fiduciary breach; piercing sometimes warranted)
- Lowen v. Tower Asset Mgmt., Inc., 829 F.2d 1209 (2d Cir.1987) (ERISA officer liability; piercing may follow intermingled assets and personal benefit)
- Alman v. Danin, 801 F.2d 1 (1st Cir.1986) (corporate disregard for public convenience and equity in ERISA context)
- Greenblatt v. Delta Plumbing & Heating Corp., 68 F.3d 561 (2d Cir.1995) (ERISA liability and related enforcement principles)
- United Food & Commercial Workers Union v. Fleming Foods East, Inc., 105 F. Supp. 2d 379 (D.N.J.2000) (ERISA fiduciary/contractual obligation enforcement)