The opinion of the court was delivered by: Hon. Jerome B. Simandle
SIMANDLE, District Judge:
This matter is before the Court on the motions of Defendants James F. Anthony, III and James F. Anthony, IV to dismiss for failure to state a claim upon which relief can be granted. [Docket Items 6 & 9.] Plaintiff in this matter is William J. Einhorn, administrator of the Teamsters Pension Trust Fund of Philadelphia & Vicinity. Plaintiff seeks to recover withdrawal liability assessed pursuant to ERISA and the Multi-Employer Pension Plan Amendment Act of 1980 ("MPPAA"), 29 U.S.C. § 1381 et seq. from Defendant Twentieth Century Refuse Removal Company ("20th Century Refuse") as well as the Moving Defendants Anthony III and Anthony IV. This motion requires the Court to determine three questions: first, whether Plaintiff can seek recovery of assets transferred from 20th Century Refuse to the Moving Defendants despite the fact that the Moving Defendants are not alleged to have been "employers" within the meaning of the MPPAA; second, whether funds that could have been used to pay assessed withdrawal liability are "plan assets" within the meaning of the MPPAA; and third, whether Plaintiff sufficiently pleads a cause of action or a remedy for equitable relief in Count IV of the Amended Complaint. For the reasons explained below, the Court will grant in part and deny in part Defendants' motions to dismiss.
The facts set forth here are those alleged in the Amended Complaint which the Court must accept as true for purposes of a Rule 12(b)(6) motion. Plaintiff in this matter is the administrator and fiduciary of the Teamsters Pension Trust Fund of Philadelphia & Vicinity, which is alleged to be a multiemployer pension plan within the meaning of 29 U.S.C. § 1002(2)(A),(37). Am. Compl. ¶¶ 3-4.
Plaintiff alleges that Defendant 20th Century Refuse was formerly a party to a series of successive collective bargaining agreements that obligated the company to make monthly contributions to the Pension Fund on behalf of its employees.
Id. ¶¶ 9-10. The withdrawal liability at issue in this matter arises from the sale of substantially all of Defendant 20th Century Refuse's assets to non-party Waste Management on September 30, 2009, resulting in a "complete withdrawal" from the Pension Plan. Id. ¶¶ 11-18. This withdrawal allegedly triggered MPPAA withdrawal liability under 29 U.S.C. § 1381(a) in the amount of $489,503.78. Id. ¶ 20-21. Plaintiff further alleges that, by not responding to proper notice of this assessed liability, 20th Century Refuse has waived its right to challenge the assessment of this liability, and, having failed to make any payments on the liability is currently in default under § 1399(c)(2),(5). Id. ¶¶ 22-25. No portion of the withdrawal liability has been paid to the Pension Fund, by 20th Century Refuse or any other party. Id. ¶ 33.
Plaintiff further alleges that Defendant James Anthony III is "a principal owner" of 20th Century Refuse, and Defendant James Anthony IV is "an owner" of 20th Century Refuse. Id. ¶¶ 7-8. On September 2, 2009, Anthony III and Anthony IV signed, as "owners" (and which Anthony III signed as President) a letter of intent spelling out the details of the sale of 20th Century Refuse to Waste Management. Am. Compl. Ex. A. On September 30, 2009, Plaintiff William Einhorn sent 20th Century Refuse a request for information and notice regarding possible withdrawal liability arising from the sale of the company's assets. Am. Compl. Ex. B. On December 10, 2009, Plaintiff sent a letter to 20th Century Refuse notifying it of the assessed withdrawal liability of $489,503.78. Am. Compl. Ex. C.
Plaintiff further alleges that at the time that 20th Century Refuse withdrew from the Pension Fund, it "had assets that should have been used to pay some or all of the withdrawal liability" which came from the sale to Waste Management. Am. Compl. ¶ 40. The Moving Defendants knew or had notice of the company's obligation to pay the withdrawal liability. Id. ¶ 41.
Plaintiff alleges that Defendants converted the assets of 20th Century Refuse to their own use, and have "used for their own benefit assets of 20th Century Refuse that should have been used to pay the withdrawal liability owed the Pension Fund." Id.
¶¶ 34, 42. Specifically, Plaintiff alleges that the Moving Defendants "engaged in a series of transactions to divest 20th Century Refuse" of assets to pay the withdrawal liability, which "included transferring the Assets to their own use, erroneously representing that 20th Century Refuse had no money to pay the withdrawal liability, and failing to respond to the Pension Fund's efforts to collect the withdrawal liability." Id. ¶ 43.
On March 15, 2011, Plaintiff filed his original Complaint in this matter, naming a collection of corporate defendants affiliated with 20th Century Refuse, and James F. Anthony III, individually. [Docket Item 1.] Service was effected on April 14, 2011. [Docket Item 3.] On May 24, 2011, Defendant Anthony III filed a motion to dismiss for failure to state a claim. [Docket Item 6.] On June 15, 2011, Plaintiff filed his Amended Complaint, adding as Defendant James F. Anthony IV. [Docket Item 8.] On June 29, 2011, Defendants Anthony III and Anthony IV filed the instant motion to dismiss. [Docket Item 9.] Defendant 20th Century Refuse has not entered an appearance in this matter or filed any responsive pleading, and, on September 23, 2011, the Clerk of Court entered default against it pursuant to Rule 55(a), Fed. R. Civ. P. As Defendant Anthony III's initial motion to dismiss [Docket Item 3] sought to dismiss Plaintiff's no-longer-operative initial Complaint, the Court will deny this motion as moot.
Plaintiff seeks recovery in the currently operative Amended Complaint in four Counts. Count I seeks recovery of the assessed withdrawal liability from 20th Century Refuse pursuant to 29 U.S.C. § 1381(a). Am. Compl. ¶¶ 19-25. Count II seeks recovery of the assessed withdrawal liability from Defendants Anthony III and Anthony IV on a theory of breach of fiduciary duty. Id. ¶¶ 26-38. Count III seeks recovery of assets from Anthony III and Anthony IV under 29 U.S.C. § 1392(c) for funds transferred from 20th Century Refuse to the Moving Defendants, with the intent to avoid or evade withdrawal liability. Id. ¶¶ 39-44. Count IV seeks recovery of the identified assets under the equitable theories of constructive trust and equitable subrogation. Id. ¶¶ 45-49. Defendants Anthony III and Anthony IV move to dismiss Counts II, III and IV.
In order to give defendant fair notice, and to permit early dismissal if the complained-of conduct does not provide adequate grounds for the cause of action alleged, a complaint must allege, in more than legal boilerplate, those facts about the conduct of each defendant giving rise to liability. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007); Fed. R. Civ. P. 8(a) and 11(b)(3). These factual allegations must present a plausible basis for relief (i.e., something more than the mere possibility of legal misconduct). See Ashcroft v. Iqbal, 129 S.Ct. 1937, 1951 (2009). In its review of a motion to dismiss pursuant to Rule 12(b)(6), Fed. R. Civ. P., the Court must "accept all factual allegations as true and construe the complaint in the light most favorable to the plaintiff." Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)).
The assumption of truth does not apply, however, to legal conclusions couched as factual allegations or to "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements." Iqbal, 129 S.Ct. at 1949.
The Court, in evaluating a Rule 12(b)(6) motion to dismiss for failure to state a claim, may consider the complaint, exhibits attached thereto, matters of public record, and undisputedly authentic documents if the plaintiff's claims are based upon those documents. See Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993).
1. Evade/Avoid Liability under 29 U.S.C. § 1392(c)
The Court first turns to Plaintiff's Third Count, which seeks recovery from the Moving Defendants on a theory that the funds they allegedly transferred to themselves from 20th Century Refuse intending to evade or avoid withdrawal liability can be recovered under § 1392(c). Defendants argue that the Court must dismiss this Count because the statute only permits recovery of withdrawal liability from "employers," which Plaintiff has not alleged the Moving Defendants are, under a theory of either alter ego or piercing the corporate veil.
The statute sets out the authority of a fund such as Plaintiff's Fund to recover withdrawal liability in Part I of the MPPAA. The statute provides that "[i]f an employer withdraws from a multiemployer plan in a complete withdrawal or a partial withdrawal, then the employer is liable to the plan in the amount determined under this part to be the withdrawal liability." 29 U.S.C. § 1381(a) (emphasis added). A later section of this part of the statute sets out liability for "transactions to evade or avoid liability." "If a principal purpose of any transaction is to evade or avoid liability ...