INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 68, AFL-CIO et al v. INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 68 APPRENTICE TRAINING FUND AND THE TRUSTEES THEREOF et al
Filing
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MEMORANDUM OPINION. Signed by Judge Michael A. Shipp on 1/29/2013. (gxh)
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NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
INTERNATIONAL UNION OF
OPERATING ENGINEERS,
LOCAL 68, AFL-CIO, et al.,
Plaintiffs,
No. 11-3932 (MAS) (TJB)
v.
RAC ATLANTIC CITY HOLDINGS,
LLC, et al.,
Defendants.
NEW JERSEY REGIONAL COUNCIL
OF CARPENTERS, et al.,
Plaintiffs,
No. 11-4585 (MAS) (TJB)
v.
RAC ATLANTIC CITY HOLDINGS,
LLC, et al.,
MEMORANDUM OPINION
Defendants.
SIDPP, District Judge
These cases arise out of the near failure of the Atlantic City Resorts Casino Hotel
("Resorts") located in Atlantic City, New Jersey, and the effects of several transactions related
thereto. The International Union of Operating Engineers (the "Engineers") and the New Jersey
Regional Council of Carpenters (the "Carpenters") (collectively, "Plaintiffs"), represent certain
employees at Resorts. On July 7 and August 4, 2011, the Engineers and the Carpenters,
respectively, along with their associated welfare, pension, apprentice training and annuity funds,
filed separate complaints against Resorts International Hotel ("RIH") and Resorts Atlantic City
Holdings, LLC ("RAC") (collectively, "Defendants"), which for a period of time, co-operated
Resorts. (Complaints, 11-3932 ECF No. 1; 11-4585 ECF No. 1.) Both of those Complaints were
dismissed without prejudice as to RAC by the Honorable Freda L. Wolfson, U.S.D.J. ("Judge
Wolfson"), on February 14, 2012. (11-3932 ECF No. 28-29, 11-4585 ECF No. 31-32.) As part of
those decisions, Judge Wolfson granted Plaintiffs leave to amend their Complaints.
Plaintiffs' First Amended Complaints were filed on March 2, 2012. (11-3932 ECF No. 30,
11-4585 ECF No. 33.) RAC filed Motions to Dismiss the Amended Complaints on March 30,
2012. (11-3932 ECF No. 34; 11-4585 ECF No. 38.) On May 23, 2012, Plaintiffs filed Opposition
to RAC's Motions to Dismiss and filed Cross Motions for Leave to File Second Amended
Complaints. (11-3932 ECF No. 43, 11-4585 ECF No. 47.) RAC submitted its Opposition to the
Cross Motions and Reply on July 30, 2012. (11-3932 ECF No. 49; 11-4585 ECF No. 53.) The
Court has carefully considered the Parties' submissions and decided the matter without oral
argument pursuant to Federal Rule of Civil Procedure ("Rule") 78. For the reasons stated below,
and good cause shown, RAC's Motions to Dismiss are GRANTED and Plaintiffs' Motions for
Leave to Amend are GRANTED IN PART and DENIED IN PART.
I.
Background
A.
Procedural History
Plaintiffs' initial Complaints alleged that Defendants breached the terms of the Parties'
respective collective bargaining agreements ("CBAs") and violated various provisions of the
Employment Retirement Income Security Act ("ERISA"), the Labor Management Relations Act
("LMRA") and the Federal Arbitration Act ("FAA"). These alleged violations flowed from
2
Defendants' alleged failure to (1) pay employees at Rill contractually bargained for vacation time,
(2) make contractually required contributions to each union's respective pension and annuity
funds, (3) implement an arbitration award benefiting Plaintiffs, and (4) pay the "withdrawal
liability" due to Plaintiffs' pension funds pursuant to § 4201 of ERISA, codified at 29 U.S.C
§ 1381 (2012). 1
On October 28, 2011, RAC filed motions to dismiss pursuant to Rule 12(b)(4) and
12(b)(5). (RAC's Initial Motions to Dismiss, 11-3932 ECF No. 16; 11-4585 ECF No. 18.) Those
motions argued that RAC, which is a cancelled limited liability company, is unable to be served
with a summons and that the Court therefore lacked jurisdiction over RAC. Judge Wolfson
granted those motions on February 14, 2012. (Wolfson Op., 11-3932 ECF No. 28; 11-4585 ECF
No. 31.) Judge Wolfson, however, dismissed the complaints without prejudice and granted
Plaintiffs leave to amend their Complaints to reflect arguments they raised solely in their briefing
papers, namely whether RAC's cancellation as an LLC should be voided pursuant to§ 4212(c) of
ERISA. (ld. 9-10.) Plaintiffs filed their Amended Complaints on March 2, 2012. (First Amended
Complaints, 11-3932 ECF No. 30, 11-4585 ECF No. 33.) The Engineers' First Amended
Complaint contains eight counts. The Carpenters' First Amended Complaint contains thirteen
counts.
On March 30, 2012, RAC responded by filing Motions to Dismiss both First Amended
Complaints pursuant to Rule 12(b)(4) and 12(b)(5). Plaintiffs responded on May 23, 2012, by
filing opposition and cross-moving for leave to file Second Amended Complaints. The proposed
1
"Withdrawal liability" arises when an employer withdraws from a multiemployer pension plan
and the employer has not fully funded its employees' vested benefits with the plan. See 29 U.S.C.
§§ 1381, 1391; SUPERVALU, Inc. v. Bd. ofTrs. of Sw. Pa. & W. Md. Area Teamsters & Emp'rs.
Pension Fund, 500 F.3d 334, 336 (3d Cir. 2007), cert. denied, 128 S. Ct. 1231 (2009).
3
Second Amended Complaints both contain additional counts that: 1) RAC's cancellation should
be nullified under New Jersey state law, and 2) Plaintiffs should be entitled to pierce the corporate
veil of RAC. (Pis.' Proposed Second Amended Compls., 11-3932 ECF No. 40-3, Ex. B
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