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New Jersey Building Laborers' Statewide Pension Fund and Trustees Thereof v. U.S.E.U.S.

United States District Court, D. New Jersey

March 25, 2015

NEW JERSEY BUILDING LABORERS' STATEWIDE PENSION FUND AND TRUSTEES THEREOF, Plaintiff,
v.
U.S.E.U.S., also known as U.S. ENVIRONMENTAL UNIVERSITY, Defendant.

OPINION

KEVIN McNULTY, District Judge.

The U.S. Environmental University entered into a collective bargaining agreement with the New Jersey Building Laborers District Council. As part of that agreement, the University was to make contributions to the Council's pension fund, plaintiff New Jersey Building Laborers' Statewide Pension Fund. The Pension Fund alleges that the University has failed to make those contributions. Having filed suit in this Court and received no response from the defendant, the Fund has now moved for a default judgment. The motion will be granted.

Background

Defendant U.S. Environmental University (the "University") entered into a collective bargaining agreement ("CBA") with the New Jersey Building Laborers District Council.[1] The CBA required the University to contribute to the employees' pension fund, The New Jersey Building Laborers Statewide Pension Fund (the "Pension Fund") for fringe benefits. (Castrovinci Affidavit, ¶ 3). As of April 30, 2012, Environmental University withdrew its recognition of the Council as the bargaining representative for University employees. (Id. at ¶ 4). It therefore ceased making contributions to the Pension Fund.

The Pension Fund alleges that at the time the University withdrew, there were benefits that had vested, but that the University had not yet funded. That is, the University had committed to making certain contributions to the pension fund, but had not actually made its payments. (Castrovinci Affidavit, ¶ 5). This is referred to as "withdrawal liability." 29 U.S.C. § 1391(a). See also IUE Multi-Employer Pension Fund u. M & C Vending, Inc., No. 2:11-cv-04335, 2013 WL 2007298, at *1 (D.N.J. May 13, 2013) (defining withdrawal liability as "benefits that the employer has already promised to the beneficiaries but has not yet paid into the fund").

Federal law requires that when an employer "withdraws" from participating in a pension plan, as the University allegedly did here, the plan shall determine the employer's withdrawal liability, then notify the employer and collect payment. 29 U.S.C. § 1382; 29 U.S.C. § 1399(b)(1)(A).

Here, the Fund, with the assistance of an actuary, calculated the University's withdrawal liability to be $22, 517.00. (Segal Letter, 1). The Fund notified the University of its liability, and requested payment in four quarterly installments of $5, 740, plus a final installment of $685. The Fund alleges that the University did not make any payments. (Castrovinci Affidavit, ¶ 11). Nor has the University requested to refer the matter to arbitration, as it is allowed to do under 29 U.S.C. § 1401(a)(1). Id.

The Fund filed suit in this Court to collect the withdrawal liability from the University. The Fund filed its complaint in this Court on December 11, 2013. (Dkt. No. 1). The University made no response. On July 2, 2014, the Clerk entered a default against the University pursuant to FED. R. Cw. P. 55. (Dkt. No. 7). As the University has made no appearance or otherwise defended the suit, the Fund has now moved for a default judgment (Dkt. No. 8). In addition to the unfunded contributions, the Fund requests interest, costs, attorneys' fees, and liquidated damages.

The Fund brings suit under a federal statute, 29 U.S.C. § 1401(b)(1). This Court therefore has subject matter jurisdiction over the case pursuant to 28 U.S.C. § 1331.

Discussion

Motion for default judgment

The Fund has made its request for these damages in a motion for a default judgment, so I do not have the University's side of the story. This presents obvious challenges. Applying established law, however, I find that a default judgment is appropriate.

I have examined the complaint, and I find that it sets forth a valid claim for withdrawal liability under ERISA § 4201(a), 29 U.S.C. § 1381(a). The Complaint alleges that the parties were subject to a CBA that required contributions to the Pension Fund. (Complaint ¶¶ 7-9) The University contributed to the Pension Fund until April 30, 2012, but then completely withdrew. (Id. ¶¶ 9-12, 20-21) The Pension Fund duly demanded payment of the Pension Fund's withdrawal liability and set forth a schedule of payments. (Id. ¶¶ 13-14, 23) The University did not pay the installments and is in default, and it has not demanded arbitration. (Id. ¶¶ 15-17, 24) The liability is alleged to be $22, 517, and the complaint demands the other and additional forms of relief authorized by the statute. (Id. ¶ 25, Prayer for Relief) Facially, this meets the statutory requirements, as set forth in more detail below.

In deciding whether to grant a default judgment, courts consider three factors: 1) whether the plaintiff has been substantially prejudiced by the delay involved; 2) whether the default was caused by excusable or inexcusable neglect on the part of the defendant; and 3) whether the defendant has a defense to the action. Catanzaro v. Fischer, 570 F.App'x 162, 165 (3d Cir. 2014) (non-precedential, citing ...


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