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Eckerd Corp. v. J&S

August 25, 2009

ECKERD CORPORATION, PLAINTIFF,
v.
J&S, INC., BRISTOL CONSOLIDATORS, INC., GHAZNAVI INVESTMENTS, INC., G&G INVESTMENTS, INC., AND JOHN J. GHAZNAVI, IN THEIR INDIVIDUAL CAPACITIES AND AS AGENTS FOR THE TEAMSTERS PENSION TRUST FUND OF PHILADELPHIA & VICINITY DEFENDANTS.



The opinion of the court was delivered by: Honorable Joseph E. Irenas

OPINION

Presently before the Court are Plaintiff's Motion for Summary Judgment and Defendants' Motion for Partial Summary Judgment on the Enforcement Issue. For the reasons set forth below, Plaintiff's Motion will be granted and Defendants' Motion will be denied.*fn1

I.

This case arises out of a Settlement Agreement reached in Einhorn v. J&S, Inc., 577 F. Supp. 2d 752 (D.N.J. 2008) (Irenas, S.D.J.) (hereinafter "the Fund-J&S Case"), between the Teamsters Pension Trust Fund of Philadelphia & Vicinity ("the Fund") and J&S, Inc.*fn2 ("J&S"). In the Fund-J&S Case, the Fund, through its Administrator, William J. Einhorn, sought to recover withdrawal liability from J&S pursuant to the Multiemployer Pension Plan Amendment Act ("MPPAA"), 29 U.S.C. § 1381, et seq.*fn3 The Fund sought $723,824.04 in withdrawal liability, plus prejudgment interest, attorneys fees, and costs. J&S then brought a third-party complaint against Eckerd Corporation ("Eckerd") alleging a number of common law contract claims, and that Eckerd was liable for the withdrawal liability as a joint employer under the MPPAA.

See Einhorn, 577 F. Supp. 2d at 759.

The Court granted Eckerd's motion to dismiss and held that J&S could not assert a third-party claim against Eckerd for withdrawal liability under the MPPAA because J&S had failed to follow any of the procedures afforded by the statute to adjudicate Eckerd's alleged joint employer status, and that no statutorily implied cause of action for contribution or indemnification exists. Id. at 762-64. The Court specifically declined to "comment on how it would rule if [the Fund] were to bring a claim against Eckerd for a portion of the withdrawal liability." Id. at 763 n.22. The Court also directed J&S to pursue the contractually mandated arbitration with Eckerd to resolve the remaining common-law claims. Id. at 766.

On September 29, 2008, one week after the Court issued its Opinion and Order dismissing the third party complaint, the Fund and J&S entered into the Settlement Agreement presently at issue.*fn4

As part of the Settlement Agreement, J&S paid the Fund $760,824.04 (the "Settlement Amount"), and in return J&S was to become the Fund's agent and was assigned any rights the Fund would have had to pursue Eckerd for withdrawal liability.

On November 21, 2008, J&S sent a letter to Eckerd purporting to provide notice, pursuant to 29 U.S.C. § 1399(b), on behalf of the Fund, that Eckerd was being assessed withdrawal liability as a joint employer. The letter makes demand for $723,824.04--the full amount of the withdrawal liability originally sought by the Fund against J&S--and sets forth a payment schedule. The letter also informs Eckerd of it's right to request a review of the determination, and advises that J&S maintains its right to pursue statutory arbitration if necessary. (J&S Moving Br. Ex. G.)

On December 4, 2008, Eckerd responded arguing that J&S could not commence MPPAA arbitration proceedings against Eckerd and expressed its belief that the Settlement Agreement was an attempt to circumvent the Court's September 22, 2008, Order and Opinion. (Eckerd Moving Br. Ex. B.) On December 8, 2008, the Court conducted a telephone conference with the parties, after which, on December 15, 2008, Eckerd filed the Complaint in the instant case. In its Complaint, Eckerd seeks a declaratory judgment that the settlement agreement is not enforceable against it, a permanent injunction against any attempt by J&S to enforce the settlement agreement against Eckerd, and a declaration by the Court that Eckerd is not a "joint employer" for the purposes of the MPPAA. Pursuant to a Stipulation approved by the Court on January 29, 2009, the parties have consented to bifurcate the "enforcement issue" from the remaining issues in the case, and presently move for summary judgment on that issue.*fn5

II.

"[S]ummary judgment is proper 'if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed. 2d 265 (1986) (quoting Fed. R. Civ. P. 56(c)). In deciding a motion for summary judgment, the court must construe the facts and inferences in a light most favorable to the non-moving party. Pollock v. Am. Tel. & Tel. Long Lines, 794 F.2d 860, 864 (3d Cir. 1986).

"'With respect to an issue on which the non-moving party bears the burden of proof, the burden on the moving party may be discharged by 'showing'-that is, pointing out to the district court-that there is an absence of evidence to support the nonmoving party's case.'" Conoshenti v. Public Serv. Elec. & Gas, 364 F.3d 135, 145-46 (3d Cir. 2004) (quoting Celotex). The role of the Court is not "to weigh the evidence and determine the truth of the matter, but to determine whether there ...


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