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Trucking Employees of North Jersey Welfare Fund, Inc. v. James Construction, Co.

United States District Court, D. New Jersey

August 5, 2014

TRUCKING EMPLOYEES OF NORTH JERSEY WELFARE FUND, INC. PENSION FUND, Plaintiff,
v.
JAMES CONSTRUCTION, CO., INC., Defendant.

OPINION

KEVIN McNULTY, District Judge.

This matter comes before the Court on the motion of the defendant, James Construction Co., to dismiss the complaint (Docket No. 12), and the cross-motion of the plaintiff, Trucking Employees of North Jersey Welfare Fund, Inc. Pension Fund to strike the motion to dismiss (Docket No. 13). For the reasons set forth below, both motions are DENIED.

I. BACKGROUND

Trucking Employees of North Jersey Welfare Fund, Inc. Pension Fund (hereinafter, "Trucking, " or "the sponsor plan") brought this action against James Construction Co. ("James") pursuant to the Multiemployer Pension Plan Amendments Act ("MPPAA"), 29 U.S.C. § 1399(c)(5), for failure to remit withdrawal liability payments required by a collective bargaining agreement. Compl. (Docket No. 1) ¶¶ 7-15.

Trucking is a multi-employer pension plan within the meaning of Section 3(2) of ERISA, 29 U.S.C. § 1002(2). The fund is governed by a Board of Trustees made up of union and employer representatives. The fund is administered pursuant to a trust agreement, the provisions of ERISA, and regulations promulgated under ERISA. Compl. ¶ 3. Trucking is located in Union City, New Jersey. Id. Defendant James is a New Jersey corporation with its principal place of business in Oakland, New Jersey. Id. ¶ 4.

Over the course of several years, James entered into multiple collective bargaining agreements with Local 560, International Brotherhood of Teamsters. Id. ¶ 5. The agreements required James to remit pension contributions to Trucking on a monthly basis on behalf of all employees performing bargaining unit work at its construction sites and at its Oakland, New Jersey facility. Id. ¶ 6.

By about December 1, 2010, James no longer employed anyone covered by the collective bargaining agreements. Id. ¶ 7. Accordingly, on or about December 1, 2010, Trucking determined that James had completely withdrawn from the fund as described in Section 4203(a) of the MPPAA, 29 U.S.C. § 1383(a). Id. ¶ 8. Trucking then calculated James's share of Trucking's unfunded vested liability in accordance with Sections 4202 and 4211 of the MPPAA, 29 U.S.C. §§ 1382 and 1391. Id. ¶ 9. Trucking notified James of that calculation in a letter dated March 14, 2012. Id. ¶ 10. The letter stated that James's total withdrawal liability amount was $285, 376.00. The letter also set forth a payment schedule of $3, 005.37 per month for 134 months starting on May 1, 2012, plus a final payment of $1, 700.01. Id. The letter notified James of its right to request a review of the withdrawal liability assessment and the right to arbitrate the liability determination or the amount. Id. As discussed further below, James responded by filing a demand for arbitration with the New Jersey State Board of Mediation on April 5, 2012. Def. Ex. 3 (Docket No. 12-2).

Trucking alleges that James failed to remit its first withdrawal liability payment due on May 1, 2012, and failed to make payments thereafter. Compl. ¶ 11.[1] In a letter dated May 23, 2012, Trucking advised James that if no payments were received within 60 days, James would be in default and the entire amount of its withdrawal liability would come due. Id. ¶ 12. James did not submit any payments. Trucking alleges it James is in default and owes the full amount of withdrawal liability. Id. ¶¶ 13-15.

Trucking further alleges that under Section 4219(b)(2) of MPPAA, James's monthly withdrawal liability payments would not be suspended by a request for review or an appeal. Id. ¶ 10. James did file an arbitration request, but Trucking alleges that James did not adequately specify its objections and at any rate did not proceed with the arbitration. James subsequently defaulted on the required instalment payments and Trucking alleges that this failure "waived or forfeited [James's] opportunity to proceed to arbitration." Id.

Trucking filed this Complaint on March 19, 2013. (Docket No. 1). Trucking seeks judgment against James for the full sum of withdrawal liability with interest, liquidated damages, and attorney's fees and costs. Id.

On May 21, 2013, James and Trucking entered into a stipulated agreement under which James has paid Trucking all past due monthly withdrawal payments, and it continues to make current monthly payments as they fall due. Stipulation (Docket No. 11); Def. Br. (Docket No. 12-3) at 3. The parties have agreed that payments will continue until the Court enters final judgment on the merits of this action. Stipulation at 2.

On June 7, 2013, James moved to dismiss the complaint for lack of subject matter jurisdiction under Fed.R.Civ.P. 12(b)(1). James argues that under the MPPAA, until the parties have exhausted arbitration, the Court is not empowered to hear the merits of claims arising from its withdrawal liability. Def. Br. at 1. Trucking has cross-moved to strike the motion to dismiss. (Docket No. 13-1). That "cross-motion" is in substance an opposition brief, and I treat it as such.

II. ANALYSIS

James argues that arbitration is required under the MPPAA to resolve factual and legal disputes as to withdrawal liability under multiemployer plans, and that this Court therefore lacks subject matter jurisdiction to adjudicate the dispute prior to arbitration. Def. Br. at 3. Trucking does not disagree with that as a statement of the law. Trucking contends, however, that James forfeited its right to ...


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