791 F.3d 369
2d Cir.2015Background
- Empire Beef Co., Inc. (Empire) withdrew from a multiemployer pension plan in 2007 and incurred withdrawal liability; the Fund obtained a judgment against Empire that remains unpaid.
- Steven Levine solely controlled Empire; he and his wife Lori owned Enivel Properties, LLC (Enivel), a separate LLC that held three real-estate parcels (a Rochester condo, a Walworth unimproved lot, and an Ogden unimproved parcel).
- Enivel performed minimal activity: occasional leasing to offset carrying costs, listings for sale, and a lease of the Ogden parcel to a farmer; Enivel reported a net loss in 2007 and operated with negligible time devoted by Lori.
- The Fund sued Enivel under the MPPAA, alleging common control made Enivel jointly and severally liable as a “trade or business” under 29 U.S.C. § 1301(b)(1).
- The district court applied the Groetzinger test (primary purpose of profit; continuity and regularity) and found Enivel was not a “trade or business.” The Second Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Enivel is a “trade or business” under § 1301(b)(1) | Enivel’s separate juridical form and stated profit objective show it is a business and therefore liable | Enivel’s activities were personal, sporadic, and minimal — not primarily for profit nor continuous | Enivel is not a “trade or business”; no joint liability imposed |
Key Cases Cited
- Commissioner v. Groetzinger, 480 U.S. 23 (1987) (establishes test: primary purpose of profit and continuity/regularity for "trade or business")
- Cent. States, Se. & Sw. Areas Pension Fund v. Fulkerson, 238 F.3d 891 (7th Cir. 2001) (applies Groetzinger to distinguish investments from trades or businesses for MPPAA liability)
- Central States, Se. & Sw. Pension Fund v. White, 258 F.3d 636 (7th Cir. 2001) (renting portions of residential property held not to be a trade or business for MPPAA purposes)
- Corbett v. MacDonald Moving Servs., Inc., 124 F.3d 82 (2d Cir. 1997) (discusses common-control aggregation principles under MPPAA)
- ILGWU Nat’l Ret. Fund v. Levy Bros. Frocks, Inc., 846 F.2d 879 (2d Cir. 1988) (describes purpose of withdrawal liability to protect multiemployer plans)