Combs v. Adkins & Adkins Coal Co., Inc.

• Decision Date: 19 October 1984
• Docket Number: Civ. A. No. 84-781.
• Citation: 597 F. Supp. 122
• Court: U.S. District Court — District of Columbia
• Parties: Harrison COMBS, et al., Plaintiffs, v. ADKINS & ADKINS COAL CO., INC., et al., Defendants.

597 F. Supp. 122

Harrison COMBS, et al., Plaintiffs, v. ADKINS & ADKINS COAL CO., INC., et al., Defendants.

Civ. A. No. 84-781.

United States District Court, District of Columbia.

October 19, 1984.

COPYRIGHT MATERIAL OMITTED

Rodney F. Page, R. Steven Holt, Arent, Fox, Kintner, Plotkin & Kahn, Washington, D.C., for plaintiffs.

Dennis Dean Kirk, Washington, D.C., for defendants.

MEMORANDUM OPINION

BARRINGTON D. PARKER, District Judge:

This matter comes before the Court on the motion to dismiss, or in the alternative, to transfer, filed by the defendants, and the plaintiffs' motion for summary judgment asserting the defendants' liability to the plaintiffs for contributions due under the Employee Retirement Income Security Act of 1974 ("ERISA").

The plaintiffs, trustees of the United Mine Workers of America's ("UMWA") 1950 and 1974 Pension Plans ("Plans" or "Fund") have brought suit under ERISA, as amended by the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), 29 U.S.C. § 1001 et seq. As sponsors of the Plans, the plaintiffs seek a declaratory judgment that the defendants have ceased to make contributions to the Plans, 29 U.S.C. § 1383(a), and request payment of contributions equaling approximately $50,000, together with the liquidated damages and interest which are authorized by statute.

Defendants Phillip and Earl Adkins operate a coal mining business in Kentucky. When the Adkins' business operated as the Adkins & Adkins Coal Company, Inc. ("Adkins & Adkins"), the company was a signatory to the National Coal Mine Construction Agreements of 1978 and 1981, which required it to contribute to the Plans. Subsequently, the business operated by the Adkins brothers has also been known as the A & A Coal Company and the P & E Coal Company, Inc. For purposes of this Memorandum Opinion, the above entities are collectively referred to as the defendants.

The two pending motions present three issues for the Court's consideration: first, whether venue lies in the District of Columbia; second, whether this Court has personal jurisdiction over the defendants; and third, whether the defendants have withdrawn from a multiemployer pension plan within the meaning of 29 U.S.C. § 1398. For the reasons set forth below, the Court denies the defendants' motion to dismiss or transfer, and grants summary judgment in favor of the plaintiffs.

A. Venue and Personal Jurisdiction

The Trustees are authorized to bring this action pursuant to 29 U.S.C. §§ 1132(a)(3) and 1451(a)(1). In actions "to compel an employer to pay withdrawal liability" or "to collect withdrawal liability," 29 U.S.C. § 1451(b), (c), venue and service of process are governed by 29 U.S.C. § 1451(d). That section provides that:

an action ... may be brought in the district where the plan is administered or where the defendant resides or does business, and process may be served in any district where a defendant resides, does business, or may be found.

Similar venue and service of process provisions are provided in 29 U.S.C. § 1132(e)(2), which permits actions by plan fiduciaries to enforce ERISA liability. See Combs v. Pelbro Fuel, Inc., 4 E.B.C. 2610, 2611 (D.D.C.1983). Since the 1950 and 1974 pension plans are administered in the District of Columbia, venue lies in this District within the plain meaning of sections 1451(d) and 1132(e)(2).

Moreover, this Court possesses personal jurisdiction over the defendants, who reside in Kentucky. Where Congress has authorized nationwide service of process, a federal court may exercise personal jurisdiction over any United States resident, without regard to whether its sister state court could assert jurisdiction under minimum contacts principles. Briggs v. Goodwin, 569 F.2d 1, 8-10 (D.C.Cir.1977) (interpreting similar provisions of 28 U.S.C. § 1391(e)), rev'd on other grounds sub nom. Stafford v. Briggs, 444 U.S. 527, 100 S.Ct. 774, 63 L.Ed.2d 1 (1980); Combs v. Pelbro Fuel, Inc., 4 E.B.C. at 2611 (District Court for the District of Columbia asserted jurisdiction over defendant Pennsylvania corporation in ERISA case). Here, the defendants' status as United States residents is not disputed, and this Court may assert personal jurisdiction over them.

This finding also disposes of the defendants' contentions with respect to service of process. The validity of service in this case depends on the defendants' "contacts with the district of service," I.A.M. National Pension Fund, Benefit Plan A v. Wakefield Industries, Inc., 699 F.2d 1254, 1258 (D.C.Cir.1983), and not, as the defendants contend, on their contacts with the District of Columbia. The Congress may constitutionally authorize extraterritorial service of process, see Briggs v. Goodwin, 569 F.2d at 8, as done here. The defendants do not dispute that they have sufficient contacts with Kentucky, the district of service. Accordingly, the defendants' motion to dismiss must be denied.

This Court also declines to disturb the plaintiffs' choice of forum by transferring this action to Kentucky under the doctrine of forum non conveniens or pursuant to its discretion under 28 U.S.C. § 1404(a).¹ Numerous decisions of this Court have denied similar motions filed by nonresident defendants in other ERISA cases. See, e.g., Combs v. Pelbro Fuel, 4 E.B.C. 2612-13; Combs v. Rawhide Coal Co., No. 83-2045 (D.D.C. Nov. 16, 1983); Combs v. Garin Trucking Co., No. 83-3651 (D.D.C. May 21, 1984), appeal docketed, No. 84-5343 (D.C.Cir. May 31, 1984). The defendants were given ample notice that litigation could ensue in the District of Columbia, and in any event, it makes good sense to hear this case where the Plans are administered.

The defendants also argue that litigation currently pending in the Eastern District of Kentucky supports transfer to that district. This argument must be rejected because the Kentucky litigation concerns the defendants' dispute with the union, not the pension fund. See District 30, United Mineworkers of America v. Adkins & Adkins Coal Co., Inc. ("Kentucky litigation"), No. 82-310 (E.D. Kentucky, amended complaint filed Feb. 25, 1983). The amended complaint is attached as Exhibit 6 to the Memorandum in Opposition to Defendants' Motion to Dismiss, or, in the Alternative, to Transfer, and in Support of Plaintiffs' Motion for Summary Judgment ("Plaintiffs' Memorandum"), filed Aug. 21, 1984.

B. Subject Matter Jurisdiction: Exemption From Withdrawal Liability Under 29 U.S.C. § 1398

The defendants oppose the plaintiffs' motion for summary judgment on the grounds that they are engaged in a labor dispute with their employees within the meaning of 29 U.S.C. § 1398,² and are therefore exempt from any obligation to make contributions to the Plans. The dispute between the defendants and their employees in this case is summarized in the Amended Complaint in the Kentucky litigation, which alleges that Adkins & Adkins Coal failed to withhold membership dues and union fees and remit those sums to the UMWA in accordance with a 1981 Wage Agreement. Plaintiffs' Memorandum, Ex. 6, ¶¶ 9, 12. In addition, the defendants allege certain work stoppages and union confrontations since February of 1982.

Although the defendants and their employees are apparently involved in a labor dispute, this finding does not automatically insulate the defendants from all liability in connection with payment of contributions. The purpose of the labor dispute exception is to protect an employer from the threat of withdrawal liability for time period during which its contributions have been temporarily interrupted by labor problems. I.A.M. National Pension Fund, Benefit Plan C v. Schulze Tool and Die Co., Inc., 564 F.Supp. 1285, 1295 (N.D. Cal.1983). This exception, however, does not give an employer the unrestricted ability to permanently cease contributions to a pension plan merely because the "cessation ... was precipitated by a labor dispute." 126 Cong.Rec. 23,038.

The facts and circumstances in this case strongly suggest that the defendants have permanently withdrawn from the Plans. They have admitted that the entity known as Adkins & Adkins Coal Company, Inc. ceased operations in February of 1982, and was reconstituted as the P & E Coal Company, Inc., a non-union shop. Affidavit of Phillip Adkins at ¶ 9, attached as Ex. 1 to Defendants' Reply to Plaintiffs' Memorandum in Opposition and Memorandum in Opposition to Plaintiffs' Motion for Summary Judgment and Statement of Facts, filed Aug. 31, 1984. Despite the issuance of withdrawal liability notices by the Fund, the defendants have not made any contributions since February of 1982. Affidavit of Deborah L. Gilleland, Assistant Comptroller of the Withdrawal Liability Section of the UMWA Health and Retirement Funds, at ¶ 4, filed Aug. 21, 1984. Based on this information, the trustees of the Fund reasonably determined that the defendants' failure to make payments constituted a permanent withdrawal from the Plans.

More importantly, the defendants have forfeited their opportunity to contest the existence or the amount of their withdrawal liability because they blatantly ignored the clear statutory requirements for resolution of disputed withdrawal liability determinations. Within 90 days of receipt of notice and demand for payment, an employer is required to request the plan sponsor to review any dispute concerning the withdrawal liability determination. 29 U.S.C. § 1399(b)(2)(A). If the employer disagrees with the sponsor's decision, it may initiate arbitration. This arbitration must be initiated within 60 days of the date the sponsor notified the employer of the decision on review or within 120 days of the date the employer requested review, whichever is earlier. 29 U.S.C. § 1401(a)(1)(A).³ If arbitration is not initiated within the statutory time frame, "the amounts demanded by the plan sponsor ... shall be due and owing." 29 U.S.C. § 1401(b)(1).

In June of 1983, the trustees notified Adkins & Adkins that it owed $36,171.82 and...