DC TRANSP. SERVICES v. COCA-COLA BOTTLING CO.
| Decision Date | 16 May 1994 |
| Docket Number | No. 5:94 CV 305.,5:94 CV 305. |
| Citation | 853 F. Supp. 1002 |
| Parties | D.C. TRANSPORTATION SERVICES, INC., dba Commercial Drivers, Plaintiff, v. The COCA-COLA BOTTLING COMPANY OF NORTHERN OHIO, et al., Defendants. |
| Court | U.S. District Court — Northern District of Ohio |
Charles M. Rosenberg, Maynard A. Buck, III, Benesch, Friedlander, Coplan & Aronoff, Cleveland, OH, for plaintiff.
Hugh E. McKay, David Andrew Bell, Porter, Wright, Morris & Arthur, Stephen F. Gladstone, Thomas Jeffrey Piatak, Thompson, Hine & Flory, Cleveland, OH, for defendants.
Before the Court are two motions to dismiss, one filed by defendants The Coca-Cola Bottling Company of Northern Ohio, The Akron Coca-Cola Bottling Company, Johnston Great Lakes Canning, Inc., Great Lakes Canning, Inc. and Soft Drink Carriers, Inc. (collectively, "CCB")1 (Docket No. 11), and the other filed by the remaining defendant, ABARTA Transportation Services, Inc. ("ABARTA") (Docket No. 12). Both CCB and ABARTA seek dismissal of Count II for failure to state a claim and of Counts I and III for lack of subject matter jurisdiction.2
The Court is of the view that the parties' briefing of the issues presented and their submission of matters outside the pleadings has converted the motions to dismiss to motions for summary judgment under Fed. R.Civ.P. 56. The Court has treated the motions as such. See, Fed.R.Civ.P. 12(b).3
For the reasons discussed below, both motions are granted in part. Summary judgment is granted in favor of both CCB and ABARTA on Count II, the only federal claim. Summary judgment is denied on the state claims in Counts I and III, which counts are dismissed, pursuant to 28 U.S.C. § 1367(c)(3), without prejudice to plaintiff's right to assert those claims in the appropriate state court.
On February 15, 1994, plaintiff D.C. Transportation Services, dba Commercial Drivers ("Commercial Drivers") filed its complaint against the six defendants asserting jurisdiction under 28 U.S.C. § 1331 (federal question) and 29 U.S.C. § 1132 (Employment Retirement Income Security Act "ERISA").
Commercial Drivers is in the business of leasing truck drivers and related personnel to customers. The complaint alleges that Commercial Drivers entered into leasing contracts with CCB4 in February 1977 and December 1986 and with ABARTA in August 1991. Under the terms of each contract, Commercial Drivers ("the Lessor") essentially agreed to provide qualified truck drivers in return for reimbursement by CCB and ABARTA (each "the Lessee" under their respective contracts) of gross compensation, various payroll taxes and insurance costs related to the Lessor's employment of each driver.5
The leased drivers were members of Teamsters Local 293 ("the Union"). The terms and conditions of their employment were governed by collective bargaining agreements ("CBA"), which, among other things, required pension contributions to the Union's Pension Fund ("the FUND"). Commercial Drivers made the contributions and then, under the terms of the respective leasing agreements, was reimbursed by CCB and ABARTA.
In August of 1991, CCB terminated its leasing agreement. In August of 1992, ABARTA terminated its leasing agreement. As a result of the terminations, Commercial Drivers discontinued its payments into the FUND. This triggered a provision in the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), 29 U.S.C. §§ 1381-1453,6 under which an employer who partially or completely withdraws from a multiemployer pension plan must contribute to the plan a proportionate share of the unfunded, vested benefits.7
Pursuant to MPPAA, on October 20, 1992, the FUND assessed withdrawal liability against Commercial Drivers.8 The total liability assessed, including interest, was $348,528.00. Despite plaintiff's protestations that it was not the "employer" for MPPAA purposes, the Trustees of the FUND persisted in their view that plaintiff was liable for the withdrawal.9
Still maintaining that it was not really the "employer," Commercial Drivers, pursuant to the leasing agreement between it and CCB, initiated commercial arbitration10 of the question of its entitlement to contractual indemnification of the withdrawal liability.
The commercial arbitration with CCB eventually ended with an award in favor of Commercial Drivers on August 30, 1993.11 The arbitrator issued an indemnification award of $63,858.00 for amounts already paid and indicated that Commercial Drivers should send invoices for subsequent payments.12 The arbitrator further ordered as follows:
Claimant Commercial Drivers is ordered to cooperate fully with Respondents CCB in the assertion of any and all defenses which may be presented to oppose a finding of withdrawal liability ..., including the initiation of any arbitration proceedings pursuant to 29 U.S.C. § 1401 upon the written request of any Respondent to do so. If so requested, Claimant shall initiate such arbitration and shall request that Respondents be made parties to the arbitration. In the event the arbitrator of any such arbitration refuses to make Respondents parties to the arbitration, Claimant shall provide Respondents with full opportunity to be heard through the presentation of Claimant's defense against the Pension Plan claims of withdrawal liability.
Plaintiff filed in the Court of Common Pleas an application to reduce the arbitration award to judgment. Upon CCB's motion, the court vacated the award on December 10, 1993 and ordered a rehearing by the arbitrator "to be limited to the 1986 agreement."13 It does not appear that any ruling has yet been made upon remand.
Commercial Drivers and ABARTA arbitrated the same question in a separate proceeding with a different arbitrator. On August 30, 1993, that arbitrator issued an indemnification award in favor of Commercial Drivers.14 The arbitrator found that ABARTA was responsible for only that portion of the withdrawal liability attributable to services actually performed for ABARTA, not for the entire amount. The arbitrator noted that such amount "has not yet been determined" and that ABARTA had no duty to pay its portion until Commercial Drivers made a specific demand.
On September 10, 1993, Commercial Drivers availed itself of the MPPAA provision for resolution of disputes regarding withdrawal liability, See, 29 U.S.C. § 1401(a), by initiating arbitration proceedings with the FUND. In the course of the proceedings, CCB and Commercial Drivers jointly sought leave for CCB to join the arbitration.
The arbitrator directed the parties to brief the issue. Although CCB wanted to be part of the proceedings, apparently to have some say in the ultimate determination of the amount of liability,15 it strenuously objected to having the arbitrator decide the question of who among the parties was the "employer" for MPPAA purposes. CCB argued that this was not within the jurisdiction of the arbitrator but was a matter for a federal court. The arbitrator ultimately denied the motion to join CCB.16
On January 11, 1994, before the arbitration was complete, Commercial Drivers reached a favorable settlement with the FUND as to the amount of the withdrawal liability.17
Commercial Drivers immediately demanded of ABARTA payment of the entire withdrawal liability resulting from the settlement with the FUND, assertedly pursuant to the commercial arbitration award. ABARTA refused, insisting that its liability under the arbitration award was only for services performed for it under its leasing agreement with Commercial Drivers, not for the entire amount.18
On February 15, 1994, plaintiff filed its complaint, setting forth three counts. Count I, a state law breach of contract claim, alleges that CCB and ABARTA have breached their leasing contracts with Commercial Drivers by failing to indemnify Commercial Drivers for the withdrawal liability. Count II, asserted under ERISA, alleges that CCB and ABARTA, as the real "employers" under MPPAA, are entirely responsible for the withdrawal liability assessed against Commercial Drivers. Count III seeks to enforce the commercial arbitration award against ABARTA. Plaintiff, in its response to ABARTA's motion, asserts that jurisdiction over this count of the complaint is under the Federal Arbitration Act, 9 U.S.C. § 1, et seq. For the reasons discussed below, the Court finds that this count of the complaint is simply another variety of a state law breach of contract claim.
29 U.S.C. § 1381(a) (emphasis added).
The MPPAA itself contains no definition of "employer." Determination of who is an employer for purposes of MPPAA is one for the courts. Schaffer v. Eagle Industries, Inc., 726 F.Supp. 113, 114 (E.D.Pa.1989); Tri-State Rubber & Equipment, Inc. v. Central States Southeast & Southwest Areas Pension Fund, 661 F.Supp. 46, 48 (E.D.Mich.1987).19
An employer's withdrawal liability under MPPAA "is the amount determined under Section 1391 ... to be the allocable amount of unfunded vested benefits" adjusted by certain factors. 29 U.S.C. § 1381(b)(1). Section 1391 sets out methods for computing withdrawal liability.
The MPPAA also contains dispute resolution provisions because "the...
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