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CROWN CLOTHING CO. v. PAPALE

June 6, 1994

CROWN CLOTHING COMPANY, Plaintiff,
v.
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.

 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 ...


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