Division 1181 Amalgamated Transit Union - New York Employees Pension Fund et al v. R and C Transit, Inc.
MEMORANDUM OF DECISION & ORDER granting 31 Motion to Dismiss for Failure to State a Claim. For the above stated reasons, the NYCDOE's motion to dismiss the third party complaint is granted in its entirety. The Clerk of the Court is respectf ully directed to terminate the third party action, and to amend the official caption to reflect the following: SEE ATTACHED DECISION for details. New York City Department of Education and R and C Transit, Inc. terminated. SO ORDERED by Judge Arthur D. Spatt on 2/7/2018. (Coleman, Laurie)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
DIVISION 1181 AMALGAMATED TRANSIT
UNION - NEW YORK EMPLOYEES PENSION
FUND, AND ITS TRUSTEES,
-againstR AND C TRANSIT, INC.,
R AND C TRANSIT, INC.,
-againstNEW YORK CITY DEPARTMENT OF
Slevin & Hart, P.C.
Attorneys for the Plaintiffs
1625 Massachusetts Avenue NW
Washington, DC 20036
David Mohl, Esq.,
Jeffrey S. Swyers, Esq.,
Richard S. Siegel, Esq.,
Owen Marc Rumelt, Esq., Of Counsel
Law Offices of Lloyd Somer
Attorneys for the Defendant/Third-Party Plaintiff
330 Seventh Avenue
New York, NY 10001
Lloyd Somer, Esq., Of Counsel
DECISION & ORDER
Morgan, Lewis & Bockius, LLP
Attorneys for the Third-Party Defendant
101 Park Avenue
New York, NY 10178
Andriette A. Roberts, Esq.,
Hanna Elizabeth Martin, Esq.,
Laura C Rowntree, Esq.,
Melissa D. Hill, Esq., Of Counsel
SPATT, District Judge:
This action was brought by the Plaintiffs Division 1181 Amalgamated Transit Union - New
York Employees Pension Fund (the “Fund”) and its Trustees (collectively, the “Plaintiffs”) against
the Defendant R and C Transit, Inc. (“R and C”) for monies owed pursuant to the Employee
Retirement Income Security Act of 1974 (“ERISA”), as amended by the Multiemployer Pension
Plan Amendments Act of 1980, 29 U.S.C. §§ 1001 et seq. (the “MPPAA”).
R and C subsequently brought a third-party action against the Third-Party Defendant New
York City Department of Education (the “NYCDOE,” the “DOE” or the “Department”), claiming
that the NYCDOE is liable for any monies owed by R and C to the Plaintiffs.
Presently before the Court is a motion by the NYCDOE to dismiss the third-party
complaint pursuant to Federal Rule of Civil Procedure (“FED. R. CIV. P.” or “Rule”) 12(b)(6) . For
the following reasons, the NYCDOE’s motion is granted in its entirety.
A. The Relevant Facts
The following facts are drawn from the third-party complaint, and, for the purposes of the
instant motion, are presumed to be true. Some facts are also drawn from the collective bargaining
agreement (the “CBA”) between the Fund and R and C. See Cortec Indus., Inc. v. Sum Holding
L.P., 949 F.2d 42, 47–48 (2d Cir. 1991) (holding that a court may take a document into
consideration which is relied upon by the plaintiff, even if the document is not attached to the
complaint, or incorporated by reference).
The Plaintiffs allege that R and C owes $1,413 in delinquent contributions, and is liable for
$173,156 for its withdrawal from the Fund. R and C claims that the NYCDOE was the alter ego
of R and C during the relevant period.
R and C signed a contract with the NYCDOE in 1979 to transport school children (the
“Agreement”). The Agreement has been extended and amended throughout the years. The
Agreement states that R and C was required to hire escorts to staff any school buses which
transported certain children with disabilities. Furthermore, the Agreement directed R and C to
“sign an agreement with [the Fund] to participate in such plan on behalf of all operators . . . and
escorts  in the event the contractor employs escorts . . . .” (Agreement ¶ 4). Despite that
statement, the Agreement states that “[t]his requirement shall not be interpreted to require a
contractor to enter into a collective bargaining agreement with the union . . . .” (Id.). R and C
was to provide contributions to the Fund on behalf of covered employees pursuant to the
R and C subsequently entered into a collective bargaining agreement with the Fund. R and
C’s escort employees and drivers were covered by the CBA. The DOE is not a party to the CBA.
Since 1979, R and C has only provided transportation services for the NYCDOE. That is,
the NYCDOE is R and C’s sole source of revenue. Each month, the NYCDOE would pay R and
C enough money to cover wages and contributions to the Fund on behalf of covered employees.
If R and C did not pay the Fund, the Fund had a right to notify the NYCDOE, and the NYCDOE
would pay the delinquent contributions directly to the Fund.
The NYCDOE required that escorts be certified, and retained the right to decertify escorts.
The Department established rules, regulations, duties, responsibilities, policies, and procedures for
R and C and its escorts. R and C had to hire escorts from a pool of escorts created by the DOE.
The escorts were subject to alcohol and drug testing by the NYCDOE.
R and C alleges that, upon information and belief, the DOE employs individuals to
investigate escort misconduct; that escorts must be interviewed at the DOE by these investigators;
that disciplinary letters sent to escorts refer to escorts as “Department of Education school bus
escorts”; that the Department investigators can recommend that escorts’ employers take certain
actions against escorts, including terminating them; and that the employer must abide by the
The NYCDOE provided R and C with vehicle liability insurance and discounted fuel for a
period of time. R and C and the NYCDOE were linked by computer applications and programs
at all times. R and C accessed these applications and programs through a link and credentials
supplied by the NYCDOE. The Department inspected buses, drivers, and escorts, and directed R
and C to communicate on a daily basis with the Department.
B. The Relevant Procedural History
On May 16, 2016, the Plaintiffs filed their complaint against R and C, seeking delinquent
contributions, damages, attorneys’ fees, and injunctive relief for violations of ERISA.
Specifically, the Plaintiffs allege that R and C owes money for delinquent contributions, and is
liable for its withdrawal from the Fund.
On September 15, 2016, R and C served a notice of claim upon the NYCDOE pursuant to
N.Y. GEN. MUN. LAW §50-e.
On May 17, 2017, R and C filed the third-party complaint against the NYCDOE. The
complaint does not specify any causes of action, but the final “wherefore” clause of the complaint
states that “judgment is demanded by way of indemnification, contribution, and/or alter ego
status . . . .” (Third-Party Compl. at 6). Paragraph 20 of the complaint states that the alter ego
theory is that which is “applicable in ERISA cases.” (Third-Party Compl. ¶20). The Court
liberally construes the third party complaint to state claims for indemnification, contribution, and
for liability based on alter ego status.
On July 31, 2017, the NYCDOE filed the instant motion to dismiss pursuant to Rule
12(b)(6). R and C never filed a memorandum in opposition, but instead filed a declaration in
opposition signed by the President of R and C.
A. The Legal Standard
In reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept the
factual allegations set forth in the third party complaint as true and draw all reasonable inferences
in favor of the third party Plaintiff. See Walker v. Schult, 717 F.3d 119, 124 (2d Cir.
2013); Cleveland v. Caplaw Enters., 448 F.3d 518, 521 (2d Cir. 2006); Bold Elec., Inc. v. City of
N.Y., 53 F.3d 465, 469 (2d Cir. 1995); Reed v. Garden City Union Free School Dist., 987
F. Supp. 2d 260, 263 (E.D.N.Y. 2013).
Under the now well-established Twombly standard, a complaint should be dismissed only
if it does not contain enough allegations of fact to state a claim for relief that is “plausible on its
face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 1974, 167 L. Ed. 2d 929
(2007). The Second Circuit has explained that, after Twombly, the Court’s inquiry under Rule
12(b)(6) is guided by two principles:
First, although a court must accept as true all of the allegations contained in a
complaint, that tenet is inapplicable to legal conclusions, and [t]hreadbare recitals
of the elements of a cause of action, supported by mere conclusory statements, do
not suffice. Second, only a complaint that states a plausible claim for relief survives
a motion to dismiss and [d]etermining whether a complaint states a plausible claim
for relief will . . . be a context-specific task that requires the reviewing court to draw
on its judicial experience and common sense.
Harris v. Mills, 572 F.3d 66, 72 (2d Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 664, 129
S. Ct. 1937, 1940, 173 L. Ed. 2d 868 (2009)).
Thus, “[w]hen there are well-pleaded factual allegations, a court should assume their
veracity and . . . determine whether they plausibly give rise to an entitlement of relief.” Iqbal, 556
U.S. at 679.
B. As to the Form of R and C’s Opposition to the NYCDOE’s Motion to Dismiss
As stated above, R and C did not file a memorandum in opposition to the NYCDOE’s
motion to dismiss, but instead filed a declaration signed by the President of R and C. The affidavit
mostly repeats the facts contained in the complaint. It is devoid of argument, except for one
sentence, which states that “[t]he Second Circuit has stated that while the alter ego doctrine was
well developed in the context of the National Labor Relations Act, it ‘has relevance in the ERISA
context as well.’” (Decl. of Rene Sainvil ¶ 17 (ECF No. 37) (quoting Ret. Plan of the Unite Here
Nat’l Ret. Fund v. Kombassan Holdings A.S., 629 F.3d 282 (2d Cir. 2010)).
In its reply brief, the NYCDOE asks the Court to grant its motion to dismiss based on R
and C’s failure to comply with Local Rule 7.1. While the Court would be justified in granting the
NYCDOE’s motion based solely on R and C’s failure to submit a memorandum of law, the Court
exercises its discretion and will decide the case on the merits. However, the Court finds that R
and C has abandoned its claims for indemnification and contribution.
Local Rule 7.1 states, in pertinent part, that:
Except for letter-motions as permitted by Local Rule 7.1(d) or as otherwise
permitted by the Court, all motions shall include . . . [a] memorandum of law,
setting forth the cases and other authorities relied upon in support of the motion,
and divided, under appropriate headings, into as many parts as there are issues to
be determined . . . .
E.D.N.Y. LOCAL CIV. R. 7.1(a)(2). It further states that “all oppositions and replies with respect
to motions shall comply with Local Civil Rule 7.1(a)(2) . . . .” Id. at 7.1(b).
“It is well-established that ‘[a]n affirmation alone will not satisfy the requirements of Rule
7.1.’” Employers Ins. Co. of Wausau v. Skinner, 2008 WL 4283346, at *4 (E.D.N.Y. Sept. 17,
2008) (quoting Microsoft Corp. v. K & E Computer Inc., No. 00 Civ. 7550, 2001 WL 332962, at
*1 (S.D.N.Y. Apr. 4, 2001)); see also Wenzhou Wanli Food Co. v. Hop Chong Trading Co., No.
98 Civ. 5045, 2000 WL 964944, at *3 (S.D.N.Y. July 11, 2000) (“Submitting an affidavit rather
than a memorandum of law is insufficient under Local Rule 7.1.”). “Failure to file a memorandum
of law in opposition to the opposing party’s motion is, by itself, a sufficient basis to grant the
motion.” Kamara v. United States, No. 04 Civ. 626, 2005 WL 2298176, at *1 (S.D.N.Y. Sept. 20,
2005) (citing Loew v. Kolb, No. 03 Civ. 5064, 2003 WL 22271221, at *2 (S.D.N.Y. Sept. 30,
2003)); see also E. 65 St. Realty Corp. v. Rinzler, No. 98 CIV. 6555 (RCC), 2000 WL 303279, at
*3 (S.D.N.Y. Mar. 22, 2000) (granting the defendant’s motion to dismiss where the plaintiff
submitted an affidavit rather than a memorandum of law, and “fail[ed] to cite any statute or case
law defending its claims against [the] motion and [did] not set forth points and authorities relied
upon in opposition to [d]efendant’s motion”).
Nevertheless, this Court has “broad discretion to determine whether to overlook a party’s
failure to comply with local court rules.” Milner v. City of New York, No. 10 Civ. 9384(JGK)
(GWG), 2012 WL 3138110, at *9 (S.D.N.Y. Aug. 2, 2012) (quoting Holtz v. Rockefeller & Co.,
258 F.3d 62, 73 (2d Cir. 2001)). The Court therefore overlooks the format of the filing, and
considers the substance.
Here, the affidavit submitted by R and C cites to one Second Circuit case regarding alter
ego doctrine in the ERISA context. (Decl. of Rene Sainvil ¶ 17 (ECF No. 37) (quoting Ret. Plan
of the Unite Here Nat’l Ret. Fund, 629 F.3d 282). Therefore, the Court will consider R and C’s
ERISA alter ego claim.
However, the affidavit does not address, in any way, the NYCDOE’s arguments regarding
R and C’s contribution and indemnification claims. Therefore, the Court finds that R and C has
abandoned those claims. See Robinson v. Fischer, No. 09 CIV. 8882 LAKAJP, 2010 WL
5376204, at *10 (S.D.N.Y. Dec. 29, 2010) (“Federal courts have the discretion to deem a claim
abandoned when a defendant moves to dismiss that claim and the plaintiff fails to address in their
opposition papers defendants’ arguments for dismissing such a claim.” (citing Lipton v. Cnty. of
Orange, 315 F. Supp. 2d 434, 446 (S.D.N.Y. 2004) (“This Court may, and generally will, deem a
claim abandoned when a plaintiff fails to respond to a defendant's arguments that the claim should
be dismissed.”))); see also Bonilla v. Smithfield Assoc. LLC, 09 Civ. 1549, 2009 WL 4457304 at
*4 (S.D.N.Y. Dec.4, 2009) (dismissing certain claims where the plaintiff failed to respond to the
defendant’s arguments); Thomas v. Atl. Express Corp., 07 Civ.1978, 2009 WL 856993 at *2
(S.D.N.Y. Mar. 31, 2009) (same) (citing Hanig v. Yorktown Cent. Sch. Dist., 384 F. Supp. 2d 710,
722–23 (S.D.N.Y. 2005)); Burchette v. Abercrombie & Fitch Stores, Inc., 08 Civ. 8786, 2009 WL
856682 at *9 (S.D.N.Y. Mar.30, 2009) (dismissing plaintiff’s constructive discharge claim because
plaintiff abandoned it by failing to address it in her opposition motion to defendant's motion to
dismiss all claims); Hanig, 384 F. Supp. 2d at 723 (“[B]ecause plaintiff did not address defendant's
motion to dismiss with regard to this claim, it is deemed abandoned and is hereby dismissed.”);
Martinez v. Sanders, 02 Civ. 5624, 2004 WL 1234041 at *3 (S.D.N.Y. June 3, 2004) (“Because
Plaintiff did not address Defendant's motion to dismiss with regard to these claims, they are
deemed abandoned.”); Anti–Monopoly, Inc. v. Hasbro, Inc., 958 F. Supp. 895, 907 n.11 (S.D.N.Y.)
(“[T]he failure to provide argument on a point at issue constitutes abandonment of the
issue . . . which provides an independent basis for dismissal.”), aff’d, 130 F.3d 1101 (2d Cir. 1997).
Accordingly, the NYCDOE’s motion to dismiss R and C’s indemnification and
contribution claims pursuant to Rule 12(b)(6) is granted.
C. As to R and C’s Alter Ego Claim
The NYCDOE argues, inter alia, that R and C does not have standing to bring an ERISA
claim because it is not a participant, beneficiary, or a fiduciary of the Fund. As stated above, R
and C does not respond to this argument, but states broadly that alter ego theory has “relevance in
the ERISA context . . . .” (Decl. of Rene Sainvil ¶ 17 (ECF No. 37) (quoting Ret. Plan of the Unite
Here Nat’l Ret. Fund, 629 F.3d 282). The Court finds that R and C, as an employer, does not have
standing to bring an ERISA claim.
At the outset, the Court notes that R and C’s failure to clearly identify its claims in its
complaint, as well its failure to file a memorandum of law, significantly impair this Court’s ability
to analyze its claims. The Court is left to speculate that R and C seeks to bring an ERISA claim
based on alter ego theory. (See Compl. ¶ 20 (“The DOE is liable to the Plaintiff Fund for any
withdrawal liability of [R and C] as the DOE is the alter ego of [R and C] under the federal common
law alter ego standard applicable in ERISA cases.”); Decl. of Rene Sainvil ¶ 17).
Section 502 of ERISA authorizes participants, beneficiaries, and fiduciaries to bring civil
actions to obtain appropriate equitable relief. 29 U.S.C. § 1132(a)(3). R and C is not a participant,
beneficiary, or a fiduciary. It is an employer. While employers may bring civil actions to enjoin
or redress violations of 29 U.S.C. § 1021, see 29 U.S.C. 1132(a)(8) (“A civil action may be
brought . . . by an employer . . . to enjoin any act or practice which violates [29 U.S.C. § 1021(f)]
or to obtain appropriate equitable relief to redress such violation or to enforce such
subsection . . . .”), R and C does not seek such a redress, as that section deals with required notices
As an employer, R and C does not have standing to bring suit under ERISA. See Tuvia
Convalescent Ctr., Inc. v. Nat’l Union of Hosp. & Health Care Employees, a Div. of RWDSU,
AFL-CIO, 717 F.2d 726, 730 (2d Cir. 1983) (“[W]e hold that Tuvia, as an employer, did not have
standing to bring an action under section 1132 of ERISA.”); Sterling Indus., Inc. v. Sheet Metal
Workers' Nat. Pension Fund, No. 14-CV-5956 SJF SIL, 2015 WL 3407927, at *4 (E.D.N.Y. May
27, 2015) (holding that defendants could not recover attorneys’ fees, because ERISA did not
provide for jurisdiction where the plaintiff was an employer (citing Tuvia, Convalescent Ctr., 717
F.2d at 729–30)); Danecker v. Bd. of Trustees of Serv. Employees 32BJ N. Pension Fund, 882 F.
Supp. 2d 606, 614–15 (S.D.N.Y. 2012) (“The Second Circuit Court of Appeals has repeatedly
interpreted 29 U.S.C. § 1132(a) to prohibit employers from bringing ERISA claims.” (quoting
King v. Audax Const. Corp., No. 02–cv–582, 2007 WL 2582103, at *10 (E.D.N.Y. Sept. 5, 2007)).
The fact that R and C pleads an alter ego claim does not give it standing. The purpose of
the alter ego doctrine is to permit employees, beneficiaries, and fiduciaries to pierce the veil of a
corporate entity where its alter ego has sought to avoid union obligations. See Ret. Plan of UNITE
HERE Nat. Ret. Fund, 629 F.3d at 288 (stating that the purpose of the alter ego doctrine in the
ERIAS context is to protect employee benefits, and “ERISA was enacted to promote the interests
of employees and their beneficiaries in employee benefit plans and to protect contractually defined
benefits”). The Court has been unable to find, and R and C certainly did not provide, any cases
where a court permitted an employer to bring an alter ego claim under ERISA.
Therefore, R and C’s ERISA alter-ego claim is dismissed, because it does not have standing
to bring claims under ERISA. Accordingly, the NYCDOE’s motion to dismiss that claim pursuant
to Rule 12(b)(6) is granted.
For the above stated reasons, the NYCDOE’s motion to dismiss the third party complaint
is granted in its entirety. The Clerk of the Court is respectfully directed to terminate the third party
action, and to amend the official caption to reflect the following:
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
DIVISION 1181 AMALGAMATED TRANSIT
UNION - NEW YORK EMPLOYEES PENSION
FUND, AND ITS TRUSTEES,
-againstR AND C TRANSIT, INC.,
Dated: Central Islip, New York
____/s/ Arthur D. Spatt______
February 7, 2018
ARTHUR D. SPATT
United States District Judge
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