Boland v. Wasco, Inc.
| Decision Date | 13 June 2014 |
| Docket Number | Civil Action No.: 13-0739 (RC),Re Document No.: 7 |
| Parties | JAMES BOLAND, et al., Plaintiffs/Counterclaim-Defendants, v. WASCO, INC., et al., Defendants/Counterclaim-Plaintiffs. |
| Court | U.S. District Court — District of Columbia |
The plaintiffs in this action are James Boland and several other Trustees ("Trustees") of the Bricklayers & Trowel Trades International Pension Fund ("IPF"). The IPF is an employee benefit plan and a multiemployer plan as defined under the Employee Retirement Income Security Act of 1974 ("ERISA"). See Compl. ¶¶ 1, 3, ECF No. 1. Defendants Wasco Inc. and Lovell's Masonry (hereinafter collectively referred to as "WASCO") are building and construction industry employers who conduct business in Tennessee, and employ members of the Bricklayers & Trowel Trades International Union. See id. ¶¶ 4-6. The Trustees brought this action against WASCO pursuant to ERISA, seeking interim payments and enforcement of the terms of certain collective bargaining agreements between the parties. WASCO, meanwhile, counterclaimed, alleging violations of ERISA, the Labor-Management Relations Act ("LMRA"), and the Racketeer Influenced and Corrupt Organizations Act ("RICO"). See Countercl. ¶¶ 39-50, ECF No. 5. Pending before the Court is the Trustees' motion to dismiss WASCO's counterclaims. See ECF No. 7. For the reasons that follow, the Court will grant that motion.
Employer withdrawal liability was established by Congress in the Multiemployer Pension Plan Amendments Act ("MPPAA"), which made various amendments to ERISA. "ERISA, as amended by the MPPAA, provides an elaborate system to ensure the financial integrity of multiemployer pension funds." Joyce v. Clyde Sandoz Masonry, 871 F.2d 1119, 1120 (D.C. Cir. 1989). "Congress passed the MPPAA in part because employers' withdrawals from multiemployer pension plans threatened those plans' solvency, and thus their ability to ensure that beneficiaries would ultimately receive benefits that were their due." Id.
Under the MPPAA, a building and construction industry employer "withdraws" from a multiemployer pension plan if (a) "an employer ceases to have an obligation to contribute under the plan," and (b) "the employer continues to perform work in the jurisdiction of the collective bargaining agreement of the type for which contributions were previously required, or resumes such work within 5 years after the date on which the obligation to contribute under the plan ceases." 29 U.S.C. § 1383(b)(2). "When an employer withdraws from a multiemployer plan," the plan sponsor is to "(1) determine the amount of the employer's withdrawal liability, (2) notify the employer of the amount of the withdrawal liability, and (3) collect the amount of the withdrawal liability from the employer." 29 U.S.C. § 1382.
On December 19, 2011, the IPF determined that Wasco Inc. and Lovell's Masonry had withdrawn from the IPF within the meaning of 29 U.S.C. § 1383(b) of ERISA, and therefore sent Wasco Inc. and Lovell's Masonry letters notifying them of their liability under 29 U.S.C. §§ 1381, 1383(b), and 1399. See Compl. ¶ 9. Under the notices sent to Wasco Inc. andLovell's Masonry, Wasco Inc. was obligated to pay the IPF $36,082.71 per month for 240 months beginning in February 2012, and Lovell's Masonry was obligated to pay $11,430.63 to the IPF for 153 months beginning in February 2012. See Compl. ¶¶ 10-11. WASCO made the first 12 payments, but failed to make any other payments under the payment schedules. As a result, the Trustees sent WASCO warning letters, seeking immediate payment of all outstanding withdrawal liability payments. See id. ¶ 13. When WASCO did not initiate any other payments, the Trustees filed the instant action, demanding the interim payment amounts, interest, liquidated damages, attorney's fees, and costs. See Compl. at 5-6.
WASCO, in turn, counterclaimed, alleging that the Trustees have conducted two audits of it since the late 1970s and that the "audit results were in each instance improperly inflated by demands for payment for work done by supervisors and other ineligible individuals." See Countercl. ¶¶ 33-35. WASCO asserted the following three counterclaims: (1) violation of ERISA, "by causing WASCO1 to pay more in pension contributions to the Fund than were actually owed and by increasing the amount of its withdrawal liability assessment"; (2) violation of LMRA, for demanding "payments by an employer to an employee representative the detailed basis for which was not set forth in a written agreement with the employer"; and (3) violation of the RICO Act. See Countercl. ¶¶ 39-50. The Trustees have moved to dismiss these counterclaims, arguing that (1) all counterclaims must be dismissed because WASCO was required to exhaust the arbitration process mandated by the MPPAA, (2) the LMRA claim must be dismissed because any LMRA violation is belied by WASCO's own pleading, and in any event, damages are not recoverable under 29 U.S.C. § 186, and (3) the RICO count must bedismissed because WASCO has not alleged a pattern of racketeering activity. See generally Pls.' Mem. Supp. Mot. to Dismiss Countercl. The Court analyzes each argument in turn.
"Under Federal Rule of Civil Procedure 12(b)(6), a counter-defendant may file a motion to dismiss to test 'the sufficiency of the allegations within the four corners of the complaint after taking those allegations as true.'" Embassy of Fed. Republic of Nigeria v. Ugwuonye, 901 F. Supp. 2d 136, 139 (D.D.C. 2012); see also Armenian Assembly of Am., Inc. v. Cafesjian, 597 F. Supp. 2d 128, 134 (D.D.C. 2009) ().
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) "tests the legal sufficiency of a complaint," Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002), or in this case, a counterclaim. The motion does not test a plaintiff's ultimate likelihood of success on the merits, but only forces the court to determine whether a plaintiff has properly stated a claim. ACLU Found. of S. Cal. v. Barr, 952 F.2d 457, 467 (D.C. Cir. 1991).
"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 562 (2007). A claim is facially plausible when the pleaded factual content "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (citing Twombly, 550 U.S. at 556).
The court need not accept as true inferences unsupported by facts set out in the complaint or legal conclusions cast as factual allegations. See Warren v. District of Columbia, 353 F.3d 36, 39-40 (D.C. Cir. 2004); Browning, 292 F.3d at 242. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 555).
The Trustees' first argument is that WASCO's counterclaims must be dismissed because WASCO failed to raise those counterclaims in arbitration as mandated by the MPPAA before it brought them in federal court. See Pls.' Mem. Supp. Mot. to Dismiss Countercl. 4-10. They argue that the D.C. Circuit's decision in Grand Union Co. v. Food Employers Labor Relations Ass'n, 808 F.2d 66 (D.C. Cir. 1987), controls this case, and that neither exception to the mandatory arbitration rule recognized in that case applies. They also argue that the LMRA and RICO claims must be submitted to arbitration before being brought in federal court because "[t]he issue of whether the withdrawal liability assessment was correct is . . . crucial to" all three of WASCO's counterclaims. See Pls.' Mem. Supp. Mot. to Dismiss Countercl. 9. WASCO, in turn, argues (1) that its claims do not concern withdrawal liability, but rather fall outside the scope of the MPPAA arbitration mandate, (2) that it is entitled to have its claims of illegality heard by this Court, and (3) that arbitration of its claims would be futile. See Defs.' Resp. Mot. to Dismiss Countercl. 3-7. The Court agrees with the Trustees that all of WASCO's counterclaims must first be submitted to arbitration and that regardless, there is no illegality or futility requiring the Court to hear WASCO's claims before an arbitrator does.
The MPPAA establishes both informal and formal dispute resolution procedures with respect to withdrawal liability owed by the employer. First, the MPPAA provides that anemployer "may ask the plan sponsor to review any specific matter relating to the determination of the employer's liability and the schedule of payments," and "may identify any inaccuracy in the determination of the amount of the unfunded vested benefits allocable to the employer." 29 U.S.C. § 1399(b)(2)(A). In the event informal channels do not end the dispute, the MPPAA mandates that "[a]ny dispute between an employer and the plan sponsor of a multiemployer plan concerning a determination made under sections 1381 through 1399 of this title shall be resolved through arbitration." 29 U.S.C. § 1401(a)(1) (emphasis added). After the arbitration process has been completed, "any party . . . may bring an action . . . in an appropriate United States district court . . . to enforce, vacate, or modify the arbitrator's award." Id. § 1401(b)(2).
The...
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