MICHELS CORPORATION et al v. TRUCKING EMPLOYEES OF NORTH JERSEY WELFARE FUND, INC.- PENSION FUND
Filing
47
OPINION. Signed by Judge John Michael Vazquez on 12/15/2016. (ld, )
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
MICHELS CORPORATION, eta!,
Plaintiffs,
Civil Action No. 16-00073
v.
OPINION
TRUCKING EMPLOYEES OF NORTH
JERSEY WELFARE FUND, INC.
PENSION FUND,
-
Defendant.
John Michael Vazguez, U.S.D.J.
This matter comes before the Court by way of the motion to dismiss for lack of subject
matter jurisdiction filed by Defendant Trucking Employees of North Jersey Welfare Fund, Inc.
-
Pension Fund (the “Fund” or “TENJ Fund”). D.E. 37. Plaintiffs Michels Corporation, Henkels &
McCoy, Inc., Phillips & Jordan, Inc. (collectively the “Contributing Employers”),’ and the Pipe
Line Contractors Association (individually the “PLCA” and collectively “Plaintiffs”) filed a brief
in opposition to which the Fund replied. D.E. 41, 43. The Court reviewed the submissions in
support and in opposition, and considered the motion without oral argument pursuant to Fed. R.
Civ. P. 78(b) and L. Civ. R. 78.1(b). For the reasons stated below, the TENJ Fund’s motion is
DENIED.
I.
BACKGROUND2
After the TENJ Fund submitted this motion, Plaintiffs filed their First Amended Complaint
(“FAC”), to, among other things, add an additional Contributing Employer, Phillips & Jordan,
Inc., as a plaintiff The parties agreed that the current motion would apply to the FAC, and that
the briefing schedule and return date for the pending motion would remain unchanged. D.E. 40.
2
The factual background is taken from the FAC. D.E. 38.
Plaintiffs seek to recover contributions that they claim to have mistakenly made to the
TENJ Fund, a multiemployer pension plan under ERISA, 29 U.S.C.
§
1001 et seq. FAC
¶1J
1, 23.
The PLCA is a trade organization whose members “are engaged in the construction and
maintenance of pipe lines for natural gas and petroleum.” Id.
engaged in construction projects throughout the country. Id.
¶11
¶ 29.
2, 19.
PLCA members are
The Contributing Employers
are members of the PLCA as well as “employers” under the Labor Management Relations Act, 29
U.S.C.
§
141 er seq. (“LMRA”) and the Employment Retirement Income Security Act of 1974,29
U.S.C.
§
1001 etseq. (“ERISA”). Id. 992.20-22.
By way of background, if an ERISA employer stops contributing to an underffinded
multiemployer pension plan, in frill or partially, that employer is usually liable to the plan for
withdrawal liability, or in other words, for its pro rata share of the plan’s underfunding. Id.
see also 29 U.S.C.
§
¶ 26;
1381, 1383, 1385. Due to the nature of the construction industry, however,
Congress created the “Construction Rule” to protect employers in the industry from incurring
withdrawal liability under certain circumstances. FAC
1
7. The rule was created because upon
the completion of a construction project, which are often of limited duration, an employer stops
paying its employees and stops making contributions to the applicable find for union employees.
In doing so, the employer technically “withdraws” from the find, such that it could be responsible
for withdrawal liability. Id.
¶ 28.
Without the benefit of the Construction Rule, employers may
be liable for large withdraw liability penalties at the end of every completed construction project.
Itt
¶ 32.
The Construction Rule applies to employers that have “an obligation to contribute under a
plan for work performed in the building and construction industry.” Id.
¶ 27.
The rule also permits
“[e]ach non-construction industry multiemployer plan wanting the Construction Rule to apply to
7
its construction employees [to) amend its plan ‘to provide that [the Construction Rule] applies to
its construction industry employers.” Id. (citing 29 U.S.C.
§
1383(b)(1)(B)) (internal brackets
omitted).
The PLCA and the International Brotherhood of Teamsters (the “IBT”) operate under a
collective bargaining aEreement (the “CBA”) that addresses, among other things, the conditions
of employment for IBT members who work on PLCA member jobs. Id.
¶ 3-4.
The Contributing
Employers, as members of the PLCA, are subject to the CBA. When IBT members work on these
jobs, the CBA provides that “PLCA members are required to contribute to the pension plan
designated by the local union where the work is being performed.” ld
¶ 5.
The CBA, however,
also indicates that “PLCA Members [are] obligated to contribute to a multiemployer pension plan
only if the plan [is] covered by the Construction Rule.” Id.
¶
33. As a result, “PLCA members
have no obligation to contribute to a multiemployer pension plan if it is not covered by the
construction industry withdrawal liability rule.” Id.
¶flJ
6; 33. Thus, the CBA protects PLCA
members, including the Contributing Employers, by ensuring that they are subject to the
Construction Rule and not subject to the withdrawal liability.
During “pre-job conferences required by the CBA,” IBT officials identified the TENJ Fund
as the multiemployer pension find that the Contributing Employers were required to contribute to
on behalf of “non-traveler employees.” Id.
13.
Non-traveler employees are local union members.
Plaintiffs claim that they “reasonably and mistakenly believed that the Fund had adopted the
Construction Rule.” Id.
¶ 40.
In reality, however, the Fund had not adopted the rule. Id.
¶ 34.
In late 2012, the Contributing Employers learned that the TENJ Fund had not adopted the
Construction Rule and subsequently stopped contributing to the Fund.
Id.
9
43.
IBT
acknowledged that pursuant to the CBA, PLCA members were not obligated to contribute to the
3
TENJ Fund because the Fund had not adopted the Construction Rule. Id.
¶ 44.
After realizing
their mistake, Plaintiffs repeatedly asked the TENJ Fund to conclude that the contributions were
made under “a mistake of fact,” and return the money. The TENJ Fund, however, has not returned
the money or made a decision as to whether there was a mistake. Id.
¶1J
12-16.
Plaintiffs filed their Complaint on January 6,2016. D.E. I. Plaintiffs seek a declaratory
judgment stating that the Contributing Employers had no obligation to contribute to the TENJ
Fund and that the Fund must return all contributions to the Contributing Employers because the
payments were made under a “mistake of fact.” FAC
¶11
17, 47-54. Plaintiffs also bring claims
for restitution and unjust enrichment pursuant to federal common law. Id.
indicate that the Court has jurisdiction pursuant to 28 U.S.C.
29 U.S.C.
§
185; and Section 4301(a)(l) of ERISA, 29 U.S.C.
§
¶J
55-64. Plaintiffs
1331; Section 301 of the LMRA,
§
1451. Id.
¶ 24.
The TENJ Fund filed its answer followed by the current motion to dismiss. D.E. 37. The
Fund argues that the Court lacks subject matterjurisdiction. The TENJ Fund argues that Plaintiffs
cannot bring this action under Section 1451 of ERISA because the section is limited to withdrawal
liability, which is not directly addressed in this matter. Del s Br. at 5, DePs Reply at 6-7. The
TENJ Fund also contends that Plaintiffs cannot bring claims pursuant to Section 301 of the LMRA
because the Fund is not a labor organization, it is not a signatory to the CBA, and this is not an
action for breach of a CBA. Del’s Br. at 5-9; Del’s Reply at 7-9.
Plaintiffs counter that the TENJ Fund ignores clear Third Circuit precedent that establishes
subject matter jurisdiction, under 28 U.S.C.
§
1331, for federal common law claims seeking to
Plaintiffs originally pled that the Court also had subject matter jurisdiction pursuant to Section
502 of ERISA, 29 U.S.C. § 1132. The FAC, however, omits Section 502, and Plaintiffs confirmed
that they are no longer relying on Section 502 to establish subject matter jurisdiction. Plfs’ Br. at
9 n.2. Therefore, the Court will disregard the parties’ arguments as to Section 502.
4
recover mistaken ERISA contributions. Plfs’ Br. at 12-15. Plaintiffs also argue that the TENJ
Funds’ arguments regarding Section 1451 are merits based, not jurisdictional.
Id. at 20-23.
Regardless, Plaintiffs assert that their claims fall squarely within the purview Section 1451, which
permits parties to bring claims “regarding the operation and administration of multiemployer
pension plans.” Id. at 21. Finally, Plaintiffs maintain that the Court has subject matter jurisdiction
pursuant to Section 301 of the LMIt4, and that the TENJ Fund’s arguments misconstrue the
Amended Complaint and “conflict with controlling statutory and judicial authority.” Plfs’ Br. at
23-26.
II.
LEGAL STANDARD
The Fund argues that the FAC should be dismissed in its entirety pursuant to Fed. R. Civ.
P. 1 2(b)( 1) for lack of subject matterjurisdiction. Pursuant to Fed. R. Civ. P. 1 2(h)(3), a complaint
must be dismissed whenever the Court determines that it lacks subject matter jurisdiction.
Iwanowa v. Ford Motor Co.,67 F. Supp. 2d 424,437 (D.N.J. 1999). Consequently, a Rule I 2(b)( I)
motion may be brought at anytime. Id.
In deciding a Rule 12(b)(I) motion, a court must first determine whether the party presents
a facial or factual attack because the distinction determines how the pleading is reviewed. A facial
attack “contests the sufficiency of the complaint because of a defect on its face,” whereas a factual
attack “asserts that the factual underpinnings of the basis for jurisdiction fails to comport with the
jurisdictional prerequisites.” Elbeco Inc.
‘i’.
Nat ‘1 Ret. Fund, 128 F. Supp. 3d 849, 854 (ED. Pa.
2015) (quoting Moore i’. Angie’s List, Inc., 118 F. Supp. 3d 802, 806 (E.D. Pa. 2015)). For a facial
attack, “the Court must consider the allegations of the complaint as true,” much like a Rule I 2(b)(6)
motion to dismiss. Bd. of Trs. of Trucking Emps
f N.
Jersey Welfare Finid, Inc. v. Caliber Auto
Transfer, Inc., No. 09-6447, 2010 WL 2521091, at *8 (D.N.J. June 11,2010) (quoting Petruska
5
1’.
Gamion Univ., 462 F.3d 294, 302 (3d Cir. 2006)). For a factual attack, “the allegations of the
complaint have no presumptive truthfulness and the court must weigh the evidence presented by
the parties.” Id. (citing Mccann v. Newman Jrrnvcable Trust, 458 F.3d 281, 290-91 (3d Cir.
2006)). Regardless of whether the attack is facial or factual, “the Plaintiff has the burden to prove
that the Court has jurisdiction.” Id. (citing Petruska, 462 F.3d at 302).
The TENJ Fund fails to state whether it is mounting a facial or factual jurisdictional attack.
Yet, the TENJ Fund does not appear to be raising a factual attack because it does not provide any
evidence outside the pleadings to support its argument. Instead, the TENJ Fund argues that the
Court does not have subject matter jurisdiction due to the nature of Plaintiffs’ claims. This
amounts to a facial attack. See, e.g., id. (conducting a facial attack due to argument that the type
of claims plaintiffs asserted did not arise under federal law).
III.
DISCUSSION
Plaintiffs allege that the TENJ Fund “ignores binding Third Circuit precedent that
unequivocally provides this Court with jurisdiction over Plaintiffs’ claims” under 28 U.S.C.
Section 1331.
Plfs’ Br. at 2. The Court agrees.
Section 1331 provides district courts with
jurisdiction “of all civil actions arising under the Constitution, laws, or treaties of the United
States.” 28 U.S.C.
§ 1331. In Airco Inc/us. Gases, Inc. Dfr oldie BOC Grp., Inc.
i’.
Teamsters
Health & Welfare Pension Fund of Phi/a. & V7cinth’. 850 F.2d 1028, 1033-34 (3d Cir. 1988), the
Third Circuit upheld the district court’s determination that it had jurisdiction over an employer’s
claims to recover mistaken contributions to an ERISA hind. The Third Circuit determined that
Section 1331 “conferred upon [the federal courts] subject matter jurisdiction to determine the
existence of a federal common law cause of action based on unjust enrichment.” Airco Inc/us., 850
F.2d at 1034. Because the issue was not presented on appeal, however, the Third Circuit did not
6
address the validity of the employer’s federal common law claim for unjust enrichment. Airco
Indirs., 850 F.2d at 1034.
A year later, the Third Circuit concluded that “there is an equitable cause of action by
employers for the recovery of contributions erroneously paid to pension ifinds due to a mistake of
factor law.” Phrcinski v. LAM. Nat? Pension Fund, 875 F.2d 1052, 1057 (1989); see also Lubv
i’.
Tean,sters Health, Welfare, & Pension Trust Funds, 944 F.2d 1176, 1186 (3d Cir. 1991)
(concluding that ERISA frnd had a federal common law right to restitution to recover mistaken
payments from trust); Mazza
i’.
Sheet Metal Workers ‘Nat ‘I Pension Fund, 410 F. App’x 464,467-
68 (3d Cir. 2020) (reiterating that there is a federal common law equitable remedy for mistaken
contributions in the context of Section 403(c) of ERISA). Consequently, the Court has subject
matter jurisdiction over Plaintiffs’ claims to recover their mistaken payments to the TENJ Fund.
The TENJ Fund concedes that this Court has jurisdiction over Count Three, the federal
common law unjust enrichment claim.
The TENJ Fund, however, takes the position that
jurisdiction is lacking for Counts One and Two, Plaintiffs’ claims for a declaratory judgment and
restitution, respectively. Del’s Reply at 4.
The Fund’s argument, however, lacks merit. First, Counts Two and Three appear to be
essentially the same. as the typical remedy for an unjust enrichment claim is restitution. See hi re
Mercedes-Benz Tele Aid C’ontracr Litig., 257 F.R.D. 46, 58 (D.N.J. 2009) (“It has long been
recognized that unjust enrichment is an equitable cause of action meant to provide restitution to a
party who has conferred a benefit on another under circumstances where the retention of that
benefit would be inequitable.” (citing Restatement (First) ofRestitution
§ 1(1937)); see also Lubi,
944 F.2d at 1186 (recognizing that plaintiff may be entitled to restitution pursuant to the federal
common law doctrine of unjust enrichment).
7
In addition, the fact that Plaintiffs included a claim for declaratory judgment does not
impact the Court’s decision as to jurisdiction. The Declaratory Judgment Act does not grant courts
subject matterjurisdiction because it “is procedural: it enlarges the range of remedies available to
the federal courts, but does not extend their jurisdiction.” Levy-Taturn v. Navient Sols., Inc.,
F. Supp. 3d
---,
2016 WL 1696811, at *4 (E.D. Pa. Apr. 28, 2016) (citing Skellv Oil Co. v. Phillips
Petroleum Co., 339 U.S. 667, 671 (1950)).
In other words, the Declaratory Judgment Act
“presupposes the existence ofajudicially remediable right,” and cannot be used as an independent
jurisdictional basis. Id. In Levy-Tatiun, for example, the court concluded that the plaintiff could
not use the Declaratory Judgment Act to obtain relief under statutes that did not provide a private
right of action. Id. In contrast, it is clear that the Court has jurisdiction here through the federal
common law, as discussed above.
Thus, the Court has subject matter jurisdiction over the
declaratory judgment claim. Plaintiffs’ use of the Declaratory Judgment Act is an attempt to obtain
additional relief, in addition to the return of their mistaken contributions.
Finally, the TENJ Fund’s arguments in this regard attack the adequacy of Plaintiffs’
pleading rather than the Court’s subject matter jurisdiction. But whether a party’s claims are
sufficiently pled is a separate issue from a determination as to the Court’s ability to exercise
jurisdiction. See Airco Inc/us., 850 F.2d at 1032 (“The question of whether the district court had
subject matter jurisdiction pursuant to this statute is not whether Airco had a valid cause of action
against the Fund under federal common law.”). Here, all three claims in the FAC are equitable
causes of action through which Plaintiffs’ attempt to have the mistaken contributions returned;
they all allegedly arise under the laws of the United States. The Court, therefore, has subject matter
jurisdiction over this matter.
Because the Court has subject matter jurisdiction, the Court does not address the other
8
arguments raised by the Fund.
IV.
CONCLUSION
For the foregoing reasons, Defendant Trucking Employees of North Jersey Welfare Fund,
Inc.
-
Pension Fund’s motion is DENIED. An appropriate order accompanies this opinion.
Dated: December 15, 2016
John Michael Vazqu, U.J.
9
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