The opinion of the court was delivered by: Brown, Chief Judge
This matter comes before the Court upon motions by Plaintiffs (in whole or in part) and Defendants (in whole or in part) for summary judgment (partial or total) pursuant to Federal Rule of Civil Procedure 56 [Docket Entry ##'s 101, 103, 104, 111, 116, 119, 121, 123 and 125] and a motion to dismiss [Docket Entry # 106]. The action was reassigned to the undersigned on September 26, 2006, and the Court, having read and fully considered all of the parties' submissions, has decided this matter without oral argument pursuant to Federal Rule of Civil Procedure 78. For the reasons discussed below: Defendants' motion for summary judgment seeking to have all claims of employees from terminals that employed fewer than 50 full-time employees dismissed [Docket Entry # 101] is granted; Defendants' motion for summary judgment seeking the dismissal of Counts Two and Three of the Third Amended Complaint [Docket Entry # 103] is granted; Plaintiffs' motion for summary judgment [Docket Entry # 104] is denied; Defendants' motion to dismiss [Docket Entry # 106] pursuant to Rule 12(b)(6) is denied; Defendants' motions for summary judgment regarding employer status (except for APA Transport) [Docket Entry ##'s 116, 119, 121, 123 and 125] is granted; and Defendant APA Transport's motion for summary judgment [Docket Entry # 111] regarding the faltering business exception is granted.
I. BACKGROUND - GENERAL FACTS
The general facts relevant to all pending motions addressed in this Opinion are as follows. APA Transport, a trucking business which was a regional LTL (less than truck load carrier), was founded as a company in or about 1947 and dissolved on or about February 20, 2002. On February 14, 2002, APA Transport notified its employees of its intention to close its terminals. On February 20, 2002, APA Transport closed its terminals and other facilities. Prior to its closure, APA Transport operated 25 trucking terminals in 25 different locations across 10 states and Puerto Rico, with its main offices in North Bergen, New Jersey. The owners of APA Transport also owned approximately 33 other companies at the time APA Transport closed. Those companies continued to operate at the time of APA Transport's shut down and many are still conducting business today.
On July 19, 2002, the first Complaint was filed. Numerous additional Complaints were filed by different Plaintiff groups and those Complaints were amended numerous times. The District Court granted a class certification motion filed by non-union employee Plaintiffs on November 16, 2005. The non-union Plaintiffs Third Amended Class Action Complaint [Docket Entry # 63] contains a single count that alleges violations of the WARN Act and ERISA by Defendants. The three count Third Amended Complaint by the Teamsters Pension Trust Fund of Philadelphia and Vicinity and the Teamsters Health and Welfare Fund of Philadelphia and Vicinity (Local Union No. 470) [Docket Entry # 60] alleges violations of the WARN Act and ERISA by Defendants. The single count Second Amended Complaint by Teamsters Local Union Number 560 [Docket Entry #61] alleges violations of the WARN Act and ERISA by Defendants. The single count Third Amended Complaint by Freight Drivers and Helpers Local Union Number 557 [Docket Entry # 64] alleges violations of the WARN Act by Defendants.
A party seeking summary judgment must "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Orson, Inc. v. Miramax Film Corp., 79 F.3d 1358, 1366 (3d Cir. 1996); Healy v. New York Like Ins. Co., 860 F.2d 1209, 1219, n.3 (3d Cir. 1988), cert. denied, 490 U.S. 1098 (1989); Hersh v. Allen Prod. Co., 789 F.2d 230, 232 (3d Cir. 1986). The threshold inquiry is whether there are "any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986) (noting that no issue for trial exists unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict in its favor). In deciding whether triable issues of fact exist, the Court must view the underlying facts and draw all reasonable inferences in favor of the non-moving party. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Pennsylvania Coal Ass'n v. Babbitt, 63 F.3d 231, 236 (3d Cir. 1995).
Rule 56(e) of the Federal Rules of Civil Procedure provides, in relevant part:
When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party.
Fed. R. Civ. P. 56(e). The rule does not increase or decrease a party's ultimate burden of proof on a claim. Rather, "the determination of whether a given factual dispute requires submission to a jury must be guided by the substantive evidentiary standards that apply to the case." Anderson, 477 U.S. at 255-56.
Under the rule, a movant must be awarded summary judgment on all properly supported issues identified in its motion, except those for which the non-moving party has provided evidence to show that a question of material fact remains. See Celotex, 477 U.S. at 324. Put another way, once the moving party has properly supported its showing of no triable issue of fact and of an entitlement to judgment as a matter of law, for example, with affidavits, which may be "supplemented . . . by depositions, answers to interrogatories, or further affidavits," id., "its opponent must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586, n.12; see also Anderson, 477 U.S. at 247-48 ("[B]y its very terms, this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion . . . the requirement is that there be no genuine issue of material fact.") (emphasis in original).
What the non-moving party must do is "go beyond the pleadings and by [its] own affidavits, or by the 'depositions, answers to interrogatories, and admissions on file,' designate 'specific facts showing that there is a genuine issue for trial.'" Celotex, 477 U.S. at 324: see also Lujan v. National Wildlife Fed., 497 U.S. 871, 888 (1990) ("The object of [Rule 56(e)] is not to replace conclusory allegations of the complaint . . . with conclusory allegations of an affidavit."); Anderson, 477 U.S. at 249; Big Apple BMW, Inc. v. BMW of N. Am., Inc., 974 F.2d 1358, 1363 (3d Cir. 1992) ("To raise a genuine issue of material fact . . . the [non-moving party] need not match, item for item, each piece of evidence proffered by the movant" but rather must exceed the 'mere scintilla' threshold.), cert. denied, 507 U.S. 912 (1993).
A. Summary Judgment Motion Regarding All APA Transport Locations Employing Fewer than 50 Full-Time Employees (Docket Entry # 101)
The first summary judgment motion filed is by all Defendants and seeks to have all claims of employees from terminals that employed fewer than 50 full-time employees dismissed, asserting that their WARN Act claims are excluded by statute. The non-union Plaintiffs have opposed Defendants' motion for summary judgment by asserting that those locations that contained fewer than 50 full-time employees were still "affected employees" and thus entitled to the same protections that larger work sites with more than 50 full-time employees receive.
The Worker Adjustment and Retraining Notification Act (hereinafter "WARN") is codified under Title 29 of the United States Code, Section 2101, et seq. The WARN Act functions as a protective device to prevent the surprise terminations of large groups of employees, and the social and economic consequences that result from said terminations. The WARN Act effectively bars employers with 100 or more employees from ordering a "plant closing" or a "mass lay-off" unless at least 60 days' advance written notice is provided to each employee who will be terminated as a part of, or as a reasonably foreseeable consequence of, the plaint closing or mass lay-off. 29 U.S.C. §§ 2101(a)(1) and 2102(a)(2). A plant closing or mass lay-off that occurs without the required notice for the required period of time subjects the employer to liability for pay and benefits for each "affected employee" for the number of days notice was not given, up to and including 60. 29 U.S.C. § 2104.
A "plant closing" is defined in Section 2101(a)(2) of Title 29 as:
the permanent or temporary shutdown of a single site of employment, or one or more facilities or operating units within a single site of employment, if the shutdown results in an employment loss at the single site of employment during any 30-day period for 50 or more employees excluding any part-time employees.
"Affected employees" are defined in 29 U.S.C. § 2102(a)(5) as those "employees who may reasonably be expected to experience an employment loss as a consequence of a plant closing or mass lay-off." A "part-time employee" is defined in 29 U.S.C. § 2101(a)(8) as an "employee who is employed for an average of fewer than 20 hours per week or who has been employed for fewer than 6 of the 12 months preceding the date on which notice is required."
A "single site of employment" is not defined within the statute. In an effort to define the phrase, the Third Circuit Court of Appeals turned to relevant Department of Labor regulations (see Gorini v. AMP Inc., 94 Fed.Appx. 913 C.A.3 at 10 (3d Cir. 2004) (citing Ciarlante v. Brown & Williamson Tobacco Corp., 143 F.3d 139, 145 (3d Cir. 1998)) and held that a single site of employment is defined as either a single location or a group of locations in reasonable geographic proximity under the same management with the same operational purpose. Gorini at 10 (citing 20 C.F.R. § 639.3(1) (2003)).
In Gorini, the Third Circuit held that a group of buildings in a city was a single site of employment for purposes of the WARN Act applicable to mass lay-off at a single site of employment, although the sites were not absolutely contiguous as they were separated by streets and highways. The Court opined that it was enough that the sites in question were all contained within the city of Harrisburg, were close together, and shared employees, job functions and services. Id. at 10. The Court further stated in a footnote that the defendant's claim that certain sites were not contiguous because they were separated by streets and highways was not viable because Pennsylvania law extended the title of property abutting a street to the center of the street. Id. at fn. 5.
In consideration of the circumstances at bar, the Court notes that the nineteen terminals that contained less than 50 employees each at the time of the closure were at least 31 miles away from another APA site, and as far as 296 miles from another APA site. Further, one of the terminals was located in Puerto Rico and was the only APA site located on the island. Additionally, the certification of Mr. Fred Astle submitted by Defendants asserts that neither equipment nor personnel were shared with any other APA site.
Although management and operational purposes were not specifically addressed by Defendants in the instant summary judgment motion, the apparent autonomy each site exercised due to the significant geographical distance between them can itself support a finding that the nineteen terminals in question are each single sites of employment for WARN Act purposes. See Frymire v. Ampex Corp., 61 F.3d 757, 766 (10th Cir. 1995) (noting that DOL regulations hold that proximity and contiguity "are the most important criteria" for making a single site determination and they "in fact, establish whether a site will be presumed a single or multiple site."); see also Williams v. Phillips Petroleum, 23 F.3d 930 (5th Cir. 1994) (where 600 employees were laid off at the main facility and 27 more at three satellite locations, the court determined that the 27 employees did not have WARN Act status because they were not employed at the main facility). Moreover, in the present case, the fact that none of the facilities in question shared equipment or employees further supports the conclusion that the nineteen terminals were single sites.
Although the definition of "affected employees" itself suggests that employees of sites maintaining less than 50 employees would be protected under the WARN Act, the "affected employees" definition cannot be read in isolation. It must be contemplated in conjunction with the 50-employee requirement set forth by the WARN Act. If not, the 50-employee requirement would, in most circumstances, be rendered unenforceable. Clearly, Congress intended to have a 50-employee minimum which is to be applied in every circumstance in which a single site of employment is found, whether there is one physical location in which 50 or more employees are housed, or whether there are multiple single sites of employment, with varying numbers of employees. As such, APA sites where less than 50 employees were employed are not protected under the WARN Act, and the WARN claims asserted by employees at such sites shall be dismissed as a matter of law.
B. Summary Judgment Motion Regarding Counts Two and Three of the Third Amended Complaint (Docket Entry # 103)
The second summary judgment motion filed by all Defendants seeks to have Counts Two and Three of the Third Amended Complaint filed by Plaintiffs Teamsters Pension Trust Fund of Philadelphia & Vicinity, Teamsters Health & Welfare Fund of Philadelphia & Vicinity and Teamsters Local Union No. 470 dismissed (hereinafter "Plaintiffs" or "the Funds"). Defendants assert that the WARN Act provides protection for employees, unions and local governments affected by a mass termination, lay-offs or plant closings, but not for benefit funds and that as such, the named Plaintiffs do not have standing under the WARN Act to sue and Counts Two and Three of the named Plaintiffs Third Amended Complaint must be dismissed.
The WARN Act, Title 29, United States Code, Section 2104(a)(5) provides that a "person seeking to enforce such liability, including a representative of employees or a unit of local government . . . may sue either for such person or for other persons similarly situated, or both . . .". Section 2101(a)(4) defines "representative" as labor organizations which are the "exclusive representative of employees" under federal labor law. Section 2101(a)(7) defines "unit of local government" as a "political subdivision of a State."
Employer liability under the WARN Act is governed by 29 U.S.C. § 2104(a)(1), which provides: "(1) Any employer who orders a plant closing or mass layoff in violation of section 2102 of this title shall be liable to each aggrieved employee who suffers an employment loss as a result of such closing or layoff for - (A) backpay for each day of violation . . .; and (B) benefits under an employee benefit plan described in section 1002(3) of this title, including the cost of medical expenses . . ." Section 1002(3) defines "[T]he term 'employee benefit plan' or 'plan'" as "an employee welfare benefit plan or an employee pension benefit plan or a plan which is both an employee welfare benefit plan and an employee pension benefit plan."
In consideration of the foregoing, the Court first notes the plain language of Section 1002(3) and Congress' clear intent to include employee welfare and pension benefit plans among those benefits that an aggrieved employee is entitled to under the WARN Act. See American Tobacco Company v. Patterson, 456 U.S. 63, 68 (1982) (statutory construction begins with the language of Congress and "we assume 'that the legislative purpose is expressed by the ordinary meaning of the words used' . . . "thus, '[a]bsent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive.'"). Other courts have found these benefit plans to be included in the calculations of damages under WARN as well. See United Mine Workers of America Intern. Union v. Martinka Coal Co., 45 F.Supp.2d 521 (N.D.W.Va. 1999); Gorini v. AMP Inc., 94 Fed. Appx. 913 (3d Cir. 2004); Ciarlante v. Brown & Williamson Tobacco Corporation, 1996 WL 741973 at * 3 (E.D.Pa. 1996), rev'd on other grounds, 143 F.3d 139 (3d Cir. 1998) (if continuation of payments to ERISA benefit plans was mandated by contract, such fringe benefits should be included in the damage calculation under WARN).
The Court must next consider whether the Funds are "aggrieved employees" for purposes of damages as contemplated within the WARN Act. Sections 2105(a)(4), (a)(5) and (a)(7) do not explicitly contemplate employee benefit plans as aggrieved employees when those statutory provisions are plainly read. See United Mine Workers of America, District 12, et al., v. Midwest Coal Co., 2001 WL 1385893 at * 10 (S.D.Ind. 2001) ("[n]one of the funds for which Plaintiffs seek contributions by [defendant] qualifies as an 'aggrieved employee' under the [WARN] Act"; finding "tension" between the definition of "aggrieved employee" and section 2104(a)(1) which provides damages for affected benefit plans in the calculations of damages under WARN).
Although the Court acknowledges Midwest is not precedential, its reasoning is sound. Simply, the Funds cannot be "aggrieved employees" under the WARN Act. As such, these Plaintiffs do not have standing to sue under the WARN Act. Because they cannot sue on that basis, any ERISA-type of claims Plaintiffs may have are outside the WARN Act purview. As Plaintiffs base Counts Two and Three of their Complaint upon WARN Act violations which allegedly resulted in ERISA violations, those counts cannot stand without Plaintiffs ability to allege WARN Act violations. Therefore, Counts Two and Three of Plaintiffs' Third Amended Complaint shall be dismissed.
C. Summary Judgment Motions by Plaintiffs and Individual Defendants (Docket Entry ##'s 104, 111, 116, 119, 121, 123 and 125)*fn1
All remaining summary judgment motions can be jointly addressed as they are premised under identical theories of law. Summary Judgment Motions Docket Entry ##'s 111, 116, 119, 121, 123 and 125 are by individual Defendants and are, in part, duplicative of Summary Judgment Motion Docket Entry # 104, which is the catalyst for the remaining summary judgment motions. The Court will therefore begin with Summary Judgment Motion Docket Entry # 104, and apply the established law to the individual facts applicable in the remaining summary judgment motions. The motion to dismiss filed by Defendants will be addressed thereafter.
Summary Judgment Motion Docket Entry # 104 is a motion by all Plaintiffs seeking partial summary judgment as to liability under the WARN Act against Defendants APA Transport Corp., APA Trucking Leasing Corp., APA International Corp., APA World Transport Corp., Imperial Delivery Service, Inc. and Transport Flexonomics, Inc. For purposes of this motion, Plaintiffs assert that Defendants failed to provide the required 60 day notice of closure under the WARN Act. Plaintiffs further assert that the only communication they received by Defendants regarding APA Transport's shut down were letters that were received six days prior to its closure. (Plaintiffs' Motion, p. 8). Plaintiffs argue that neither exception available under the WARN Act (the "faltering company" defense and the "unforeseeable business circumstances" defense) is applicable in the present case. (Id. at p. 9).
In support of that argument, Plaintiffs assert that Defendants were not "actively seeking" nor taking any "specific actions" to secure financing, as required under the faltering company defense. (Id. at p. 10). Plaintiffs assert that because Defendants shut down operations on February 20, 2002, they were required to provide WARN notices no later than December 20, 2001. (Id.). However, Plaintiffs argue, on December 20, 2001, Defendants were not actively seeking financing and were not taking any specific actions to obtain financing from Transamerica, Defendants then current financial source. (Id.). Further, Plaintiffs argue, due to financial covenants contained in the then-binding Loan Agreement, Defendants were contractually obligated to Transamerica as Defendants only possible source of financing. (Id.).
Specifically, Plaintiffs argue that on October 24, 2001, APA Transport's President and CEO Armand Pohan and APA Transport's Vice President and CFO Fredric Astle met with Transamerica "to determine if APA Transport could continue in business." (Id. at p. 11). Plaintiffs further argue that at that meeting Transamerica specifically indicated that it would not fund operating losses of Defendants and would not increase its financing unless APA Transport owners contributed further capital. (Id.). Plaintiffs argue that APA Transport never indicated that the owners ever intended to increase their investment in APA Transport, but rather, that Mr. Pohan was contemplating an "exit strategy" for the company by attempting to merge with competitor New Penn Motor Express, Inc. (Id.).
Plaintiffs argue that by late December, 2001, Defendants had not made any financing proposals to Transamerica. (Id.). The first communication with Transamerica occurred via written correspondence dated January 2, 2002, from Mr. Astle to Christopher Norrito, a Transamerica account executive charged with handling APA's account, which requested a five to six million dollar loan based upon the proposed mortgaging of two freight terminals owned by companies affiliated with APA. (Id.). Plaintiffs argue that this was Defendants first attempts to obtain financing and was well beyond the December 20, 2001 notification deadline, or in the alternative, the deadline by which Defendants must have been actively seeking or taking specific steps under the faltering business defense. (Id.).
Plaintiffs further argue that in May, 2001, Defendants began negotiations for an amendment to the Transamerica Loan Agreement under which Transamerica had provided additional financing. (Id. at p. 12). During the negotiations, Transamerica required mortgages on terminal facilities owned by a related company as collateral for the previous loan received. (Id.). Plaintiffs argue that negotiations which resulted in the Fourth Amendment began in December, 2000. Negotiations, preparation and execution of the Fourth Amendment to the Loan Agreement concluded on or about May 24, 2001. (Id.). After the Fourth Amendment to the Loan Agreement was signed, Plaintiffs assert there was no further "realistic opportunity to obtain financing" (as additionally required to be shown under the faltering business defense) through Transamerica as there could not have been any reasonable belief that Transamerica would agree to lend any more money to Defendants, and because APA Transport was contractually unable to attempt to obtain funding elsewhere. (Id. at p. 13). In support of that assertion, Plaintiffs demonstrate that in the year prior, in or about December, 2000, in which APA Transport had operated at a loss in all but two of its 13 reporting periods for year 1999, APA Transport had reached its limits with financing available to it through the revolving credit facility (a provision in Transamerica's Loan Agreement). (Id.).
Plaintiffs additionally assert that after the events of September 11, 2001, financial difficulties for APA Transport "profoundly worsened." Plaintiffs support that assertion by presenting comparisons of revenues and operating ratios in fiscal years ...