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June 6, 1994

CARMEN PAPALE, et al., Defendants.

The opinion of the court was delivered by: STANLEY S. BROTMAN


 BROTMAN, District Judge.

 Before the Court are (1) the motion of Defendants Carmen Papale and Baltimore Regional Joint Board, Amalgamated Clothing and Textile Workers Union, AFL-CIO-CLC ("Union Defendants"), to dismiss or for summary judgment, and (2) the motion of Defendants Amalgamated Life Insurance Company, Amalgamated Insurance Fund, and Jeffrey Warbet ("Fund Defendants") to dismiss, for summary judgment, or to stay the proceedings until arbitration is completed. As is detailed below, the motions are granted in part and denied in part.

 I. Background

 A. Facts

 Plaintiff Crown Clothing Company ("Crown" or "Plaintiff") is a clothing manufacturer located in Vineland, New Jersey. Defendants are (1) Baltimore Regional Joint Board, Amalgamated Clothing and Textile Workers Union, AFL-CIO-CLC, the union that formerly represented Crown's employees, (2) Mr. Papale, the manager of that union, (3) Amalgamated Life Insurance Company, the administrator of the pension fund used by Crown's union employees, (4) Amalgamated Insurance Fund, the pension fund itself, and (5) Jeffrey Warbet, the vice-president of the insurance company.

 The case arises out of liabilities imposed on Crown by the Fund Defendants after a falling out between Crown and the union. The relevant events are as follows: In 1991, Crown and the union reached an impasse in the course of negotiating a new collective bargaining agreement. Defendant Papale, unsatisfied with Crown's bargaining, apparently informed the Fund Defendants that the union no longer represented Crown's employees. As a result, the Fund Defendants informed Crown that, since it had effectively withdrawn from the pension fund by separating from the union, Crown had incurred a "withdrawal liability" of over $ 600,000, pursuant to the Multiemployer Pension Plan Amendments Act ("MPPAA"). (The relevant MPPAA provisions, 29 U.S.C. § 1381(a)(1), 1392(a), require employers withdrawing from pension funds to pay for all unfunded vested benefits of their employees.) Crown made several payments and then instituted this lawsuit, simultaneously initiating an arbitration proceeding to determine the validity of the withdrawal liability.

 B. Nature of Case

 In the instant action, Crown alleges that the imposition of "withdrawal liability" was improper, and also claims that the Union Defendants and Fund Defendants illegally conspired to use the threat of "withdrawal liability" as a bargaining chip in labor negotiations. There are five counts in Crown's complaint:

 Count One challenges the imposition of the withdrawal liability, on the basis that Crown should have been shielded by MPPAA § 1398(2), which bars liability where a labor dispute is the cause of the withdrawal.

 Counts Two through Five are all brought under federal common law pursuant to the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. ("ERISA"). In Count Two, Crown alleges that the Union Defendants breached their common law duty under ERISA by using withdrawal liability as a bargaining chip. In Count Three, Crown alleges that the Fund Defendants breached the same duty by conspiring with the union and by failing to investigate Crown's claim that a labor dispute led to the withdrawal (and thus shielded Crown from liability).

 In Count Four, Crown alleges that the Union Defendants committed an injurious falsehood, in that the union claimed to cease representing Crown's employees only to trigger the withdrawal liability and had no intention of permanently cutting its ties with Crown.

 Finally, in Count Five, Crown alleges that the Union Defendants' actions constituted an interference with an advantageous relationship between Crown and the pension fund.

 C. Motions Before Court

 As noted above, there are two motions before the court. The Union Defendants move to dismiss or for summary judgment. The Fund Defendants move to dismiss, for summary judgment, or to stay proceedings until arbitration is completed. The issues underlying these respective motions are analogous for the most part. Combined, there are four issues before the Court:

 1. MPPAA Arbitration. The Defendants argue that the MPPAA requires that all disputes relating to withdrawal liability be arbitrated prior to the initiation of an action in court. This argument directly applies only to Count One, but indirectly affects Counts Two through Five as well.

 2. NLRA Preemption. The Defendants argue that Plaintiff's claims are arguably related to Sections 7 and 8 of the National Labor Relations Act ("NLRA"), which govern bargaining tactics in labor negotiations, and are therefore subject to the exclusive jurisdiction of the National Labor Relations Board ("NLRB").

 3. Federal Common Law. Defendants make the general argument that ERISA is not intended to create common law remedies for employers suing non-fiduciaries, and that the comprehensive nature of ERISA creates a presumption against allowing separate common law remedies. Defendants then make specific challenges to Counts Two through Five, arguing that Crown has failed to state a claim or, alternatively, has provided insufficient evidence to survive summary judgment.

 4. Personal Jurisdiction Over Defendant Papale. The Union Defendants argue that this Court does not have personal jurisdiction over Carmen Papale as an individual, but only as an agent of the union.

 These arguments and Plaintiff's responses thereto are respectively addressed below.

 II. Discussion

 A. MPPAA Arbitration

 The first issue to be addressed is whether Plaintiff's first count is preempted by the MPPAA and thus must be arbitrated before any action may proceed in this Court. *fn1" As Defendants point out in their briefs, § 1401(a) of the MPPAA requires arbitration for all disputes concerning a determination made under §§ 1381-99. The obligation to pay withdrawal liability--which arises when an employer prematurely ceases to have an obligation to contribute to a multiemployer pension plan--is codified at § 1381(a)(1) and § 1392(a). Limited exceptions apply to this general rule, one of which shields employers from withdrawal liability where the employer has "suspended contributions during a labor dispute involving its employees." 29 U.S.C. § 1398 (2). As the provisions governing withdrawal liability and the labor dispute exception--together comprising the core of Plaintiff's first count--both fall within §§ 1381-99, Defendants contend that the count is preempted.

 Plaintiff contends, on the contrary, that arbitration is only required where "technical" assessments, e.g. challenges to calculations made pursuant to §§ 1381-99, are at issue. Carl Colteryahn Dairy, Inc., v. Western Pa. Teamsters & Employers Pension Fund, 847 F.2d 113, 118-19 (3d Cir. 1988), cert. denied, 488 U.S. 1041, 102 L. Ed. 2d 989, 109 S. Ct. 865 (1989). According to Plaintiff, such a determination is not present here; the core question, Crown argues, is much more basic: whether Defendants improperly used ERISA withdrawal liability to coerce Plaintiff into kowtowing to the union's demands. *fn2" Plaintiff additionally argues that the remedies available through arbitration are insufficient to redress their alleged injuries that resulted from the imposition of withdrawal liability.

 The Court finds Plaintiff's arguments unconvincing in regard to its first count. While Counts Two through Five involve non-technical factors external to §§ 1381-99, Count One does not. The core issue in that count, rather, is the propriety of imposing withdrawal liability on Plaintiff in light of the arguable fact that a labor dispute existed at the time fund payments ceased. This is a technical question and within the province of the § 1401 arbitration requirement. The Colteryahn court expressly provided that certain


sections between 1381 and 1399 deal with employers who only contributed to a plan for a temporary period; suspensions of contributions during labor disputes; actuarial assumptions; and various exceptions. All of these are technical provisions.

 847 F.2d at 118 n. 8.

 Nor is Plaintiff entitled to bypass arbitration under a recognized exception for issues solely involving statutory interpretation and devoid of factual disputes. See New York Teamsters Pen. & Ret. Fund v. McNicholas Transp. Co., 658 F. Supp. 1469 (N.D.N.Y. 1987) (rejecting application of exception in labor dispute context), aff'd, 848 F.2d 20 (2d Cir. 1988). That court observed:


In this case, there remain unresolved questions of fact concerning whether the . . . strike was in any way causally related to defendant's decision to cease its operations in New York and to stop making contributions to the Fund. This is precisely the type of fact-based determination that arbitrators, who have had more experience than judges in dealing with the realities of labor-management relations and who have been afforded the luxury of more factfinding powers than is available to a district court, are best equipped to make.

 658 F. Supp. at 1474.

 The scenario is the same in the case before this Court. Whether the impasse between Crown and the union constituted a labor dispute under the MPPAA remains unclear. Also unclear is whether the impasse--if indeed a labor dispute under the MPPAA--caused Crown to cease making fund payments. (Indeed, Crown would contend that it was Papale's unilateral communications to the Fund Defendants that led to the imposition of withdrawal liability, and that Crown in fact had no intention to cease contributing to the fund.) These issues involve disputes of fact and, like in N.Y. Teamsters, should be put to the expertise of an arbitrator. *fn3" Accordingly, Count One is deemed preempted by the § 1401 arbitration requirement and shall be dismissed. *fn4"

 B. NLRB Preemption

 Defendants next argue that Counts Two through Five constitute challenges to the bargaining tactics of the union and/or its agents and therefore are subject to the exclusive jurisdiction of the National Labor Relations Board. According to the Union Defendants, Plaintiff's common law claims essentially allege bad faith bargaining on the part of the union in general and Papale in specific. The Fund Defendants argue that the common law claim against them (Count Three) is similarly preempted by the NLRA.

 Sections 8(b)(3) and 8(d) of the NLRA, as amended by the Labor Management Relations Act, 29 U.S.C. §§ 158 (b)(3), (d), impose on parties to a collective bargaining agreement a duty to bargain in good faith. *fn5" Failure to adhere to this requirement constitutes an unfair labor practice. Id. § 158(b)(3).

 Where a dispute arises over conduct that implicates Section 8, the matter is subject to the exclusive jurisdiction of the NLRB. Golden State Transit Corp. v. Los Angeles, 493 U.S. 103, 108, 107 L. Ed. 2d 420, 110 S. Ct. 444 (1989). Federal circuit courts (and, in limited circumstances, district courts) are authorized to review NLRB adjudications, 29 U.S.C. § 160(e)-(f), but, with limited exception, federal courts are without power to rule on Section 8 disputes before the NLRB has spoken. *fn6" This jurisdictional rule is applied broadly; all matters "arguably subject" to (i.e., arguably protected or prohibited by) Section 7 or 8 must go before the NLRB, who initially must determine if jurisdiction should vest with itself or the courts. San Diego Building Trades Council v. Garmon, 359 U.S. 236, 244-45, 3 L. Ed. 2d 775, 79 S. Ct. 773 (1959) (characterizing deference to NLRB for such determinations as "essential to the administration" of the NLRA). *fn7"

 In this case, Defendants argue that Counts Two through Five, while pleaded as common law claims arising under ERISA, all relate to allegations of unfair labor practices, in that the alleged misconduct occurred during the course of a labor dispute between Crown and the union. (Crown effectively concedes this point by arguing that the existence of a labor dispute should have shielded it from withdrawal liability.) Defendants contend that the nexus between Plaintiff's allegations and the labor dispute in existence at the time is sufficient to satisfy the "arguably subject" standard created in Garmon. See Genesco, Inc. v. Joint Council 13, United Shoe Workers, 230 F. Supp. 923, 930 (S.D.N.Y. 1964) (holding standard satisfied where alleged acts of misconduct "appear to be predicated on activities that were part and parcel of . . . labor dispute"), aff'd, 341 F.2d 482 (2d Cir. 1965).

 The Garmon preemption doctrine is, as Plaintiff points out, subject to exceptions of its own. Courts have refrained from dismissing claims under Garmon where the underlying claim is not identical with, or does not fall within the normal purview of, an analogous NLRB claim. See Sears, Roebuck, 436 U.S. at 190-208 (analyzing Garmon preemption in the context of both arguably prohibited and arguably protected conduct).

 In discussing whether Garmon preemption applies to conduct arguably prohibited by Section 8 that occurs during a labor dispute, the Supreme Court in Sears, Roebuck explained why it had ruled against preemption in a similar case, Farmer v. United Brotherhood of Carpenters & Joiners, 430 U.S. 290, 51 L. Ed. 2d 338, 97 S. Ct. 1056 (1977):


[In Farmer,] although the challenged conduct occurred in the course of a labor dispute and an unfair labor practice charge could have been filed, the exercise of state jurisdiction over the tort claim [for intentional infliction of emotional distress] entailed little risk of interference with the regulatory jurisdiction of the Labor Board. Although the arguable federal violation and the state tort arose in the same factual setting, the respective controversies presented to the state and federal forums would not have been the same.

 Sears, Roebuck, 436 U.S. at 196-97. *fn8"

 According to Crown, this "peripheral relevance" test used in Farmer is not determinative in regard to Crown's complaint because Crown's claims are based upon an independent statutory basis: Section 1398(2) of ERISA. That is, Crown argues that its entire complaint stems from alleged violations of ERISA in that Defendants acted to subject Crown to withdrawal liability during a labor dispute in violation of § 1398. This characterization is, in the Court's view, only partly accurate.

 While § 1398 creates the labor dispute exception to withdrawal liability, the actions attributed to the Union Defendants do not violate § 1398 per se. A more precise analysis would be that § 1398 shields an employer from a union's efforts to impose withdrawal liability during a labor dispute, but that the section does not create an affirmative cause of action against the union for involving itself in such conduct. *fn9" The instant case is thus not analogous to cases cited by Plaintiff in which courts have allowed NLRA-related disputes to proceed on the grounds that another federal statute independently proscribed the alleged conduct. See Vaca v. Sipes, 386 U.S. 171, 17 L. Ed. 2d 842, 87 S. Ct. 903 (1967) (retaining breach of duty of fair representation claim under 29 U.S.C. § 185(a)); United States v. Boffa, 688 F.2d 919 (3d Cir. 1982) (retaining labor-related fraud claims under RICO), cert. denied, 460 U.S. 1022, 75 L. Ed. 2d 494, 103 S. Ct. 1272 (1983). Accordingly, Crown's contention that its claim escapes preemption because it arises under an independent statute is misplaced in regard to the Union Defendants. *fn10"

 The result is different, however, in regard to the Fund Defendants. While the creation of a common law cause of action is not warranted as against union representatives who seek to trigger withdrawal liability, see footnote 9, supra, such action should be available against a pension fund whose breach of fiduciary duty to an employer results in the wrongful imposition of withdrawal liability. "Precisely because withdrawal liability can visit untold ruin upon an employer . . ., any premature assertions of withdrawal liability must be scrupulously guarded against." T.I.M.E.--DC v. New York State Teamsters Conference Pension & Retirement Fund, 580 F. Supp. 621, 629 (N.D.N.Y.), aff'd, 735 F.2d 60 (2d Cir. 1984). To this end, at least one court has recast § 1398 into an affirmative obligation on any fund seeking to impose withdrawal liability:


[A] fund that seeks to assert withdrawal liability against an employer claiming to fit within the labor dispute exception has, at minimum, a duty to undertake an inquiry of the factual circumstances. This rule is derived from the long-established requirement that pension funds act independently of the interests of both management and labor.

 T.I.M.E.--DC v. Trucking Employees of North Jersey Welfare Fund, Inc., 560 F. Supp. 294, 303 (E.D.N.Y. 1983).

 Failure to conduct a good faith inquiry prior to imposing withdrawal liability is, in this Court's view, sufficient grounds for holding a fund liable under a common law breach of duty theory pursuant to ERISA. See footnote 9, supra, and cases cited therein. Unlike the Union Defendants, the Fund Defendants directly control whether or not withdrawal liability is to be imposed. Plaintiff should be entitled to recourse for any misconduct on the part of the Fund Defendants in making this determination. *fn11" Accordingly, an affirmative remedy against a pension fund for a breach of duty relating to § 1398 is deemed "necessary to effectuate the purposes of ERISA." U.S. Steel Mining Co., 897 F.2d at 153. The Court will thus dismiss the common law claims against the Union Defendants (Counts Two, Four, and Five), *fn12" but will allow the common law claim against the Fund Defendants (Count Three) to remain. *fn13"

 III. Conclusion

 For the forgoing reasons, the Court shall dismiss Counts One, Two, Four, and Five. Should the NLRB ultimately determine, however, that jurisdiction does not lie before that body, Plaintiff will be afforded the opportunity to refile Counts Two, Four, and Five in this Court.

 Additionally, because the MPPAA arbitrator's determination in regard to withdrawal liability may inform the ultimate outcome of Count Three, the Court shall stay the proceedings as to Count Three until arbitration of Count One is completed.

 Stanley S. Brotman, Senior Judge

 United States District Court

 DATED: June 6, 1994.


 This matter having come before the Court on the motion of defendants Carmen Papale and the Baltimore Regional Joint Board, Amalgamated Clothing and Textile Workers Union, AFL-CIO-CLC, (the "Union") to dismiss or for summary judgment, and on the motion of defendants Amalgamated Life Insurance Company, Amalgamated Insurance Fund, and Jeffrey Warbet to dismiss, for summary judgment, or to stay proceedings; and

  The Court having considered the submissions of the parties; and

 For the reasons stated in the Court's Opinion of this date;

 IT IS on this 6th day of June 1994 hereby

 ORDERED that the motion of defendants Papale and the Union is GRANTED ; and

 It is FURTHER ORDERED that COUNTS TWO, FOUR, and FIVE are DISMISSED, without prejudice to Plaintiff to refile the same counts should the NLRB determine that jurisdiction properly rests with this Court; and

 It is FURTHER ORDERED that the motion of Warbet and the Amalgamated defendants is GRANTED in part and DENIED in part, in that:

 (1) COUNT ONE is DISMISSED, without prejudice to either party to refile an action in this Court subsequent to arbitration, pursuant to 29 U.S.C. § 1401(b)(2), to enforce, vacate, or modify the arbitrator's findings; and

 (2) COUNT THREE is STAYED until arbitration of Count One is completed, at which time proceedings as to Count Three shall recommence.

 No costs.

 Stanley S. Brotman, Senior Judge

 United States District Court

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