Flynn v. R.D. Masonry, Inc.

• Decision Date: 07 September 2010
• Docket Number: Civil Action No.: 09-1855 (RMU)
• Citation: 736 F.Supp.2d 54
• Court: U.S. District Court — District of Columbia
• Parties: John FLYNN et al., Plaintiffs, v. R.D. MASONRY, INC. et al., Defendants.

736 F.Supp.2d 54

John FLYNN et al., Plaintiffs,

v.R.D. MASONRY, INC. et al., Defendants.

Civil Action No.: 09-1855 (RMU).

United States District Court,

District of Columbia.

Sept. 7, 2010.

Ira R. Mitzner, Dickstein Shapiro LLP, Washington, DC, for Plaintiffs.

Timothy Edward Heffernan, Watt, Tieder, Hoffar & Fitzgerald, L.L.P., McLean, VA, Brian N. Krulick, Michael R. Freed, Brennan Manna & Diamond, P.L., Jacksonville, FL, for Defendants.

MEMORANDUM OPINION

Denying the Defendants' Motion to Dismiss

RICARDO M. URBINA, Judge.

I. INTRODUCTION

This matter comes before the court on the motion filed by two of the defendants, R.D. Masonry Inc. ("RDMI") and R.D. Masonry LLC ("RDM LLC"), (collectively, "the RDM defendants") to dismiss the plaintiffs' complaint for lack of personal jurisdiction and for failure to state a claim for which relief can be granted. The plaintiffs in this case seek to recover delinquent contributions under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001 et seq. Because the court concludes that it has personal jurisdiction over the RDM defendants based on § 502(e) of ERISA, and because the plaintiffs have set forth a plausible entitlement to relief, the court denies the RDM defendants' motion to dismiss.

II. FACTUAL & PROCEDURAL BACKGROUND

The plaintiffs are trustees of the Bricklayers and Trowel Trades International Pension Fund ("IPF") and the International Masonry Institute ("IMI"), multi-employer benefit plans that are "administered" in the District of Columbia. Compl. ¶¶ 1-5. The plaintiffs allege that they are authorized to effect collections on behalf of the IPF on IMI. Id. ¶ 4. The defendants-RDMI, RDM LLC and Bucher Masonry, LLC ("Bucher")-are Florida companies that allegedly maintain offices and conduct business in the state of Florida and employ members of the International Union of Bricklayers and Allied Craftworkers and its affiliated local unions (collectively, "the Union"). Id. ¶¶ 6-9.

The plaintiffs assert that defendants RDMI and Bucher executed collective bargaining agreements with the Union ("the agreements") that obligated these employers to make certain payments to the IPF and IMI on behalf of their covered employees and submit to audits in order to determine the accuracy of such payments.Id. ¶¶ 10, 12, Exs. A-E. The agreements each contained an "evergreen clause" which, the plaintiffs purport automatically renewed the contract from one term to the next, binding RDMI and Bucher past the expressed expiration date. Pls.' Opp'n at 4, n. 2. Although RDMI and Bucher allegedly submitted a portion of their required contributions, Compl. ¶ 13, the plaintiffs claim that the "[d]efendants have failed to submit required reports and [other] contributions," id. ¶ 14. The plaintiffs contend that all three defendants are "alter ego companies" ¹ because RDM LLC and RDMI share an identical street address and all three defendants have "common ownership or management, and/or the same or similar employees, customers, and type of work." Id. ¶ 11. Accordingly, the plaintiffs seek to hold the defendants "jointly and severally liable for each others['] debts," and more specifically, for their alleged failure "to properly submit required reports and contributions for covered work they have performed," id. ¶¶ 11, 14.

On September 29, 2009, the plaintiffs filed their complaint pursuant to §§ 502(a)(3), 502(g)(2) and 515 of ERISA.² See generally Compl. The plaintiffs seek an order requiring the defendants to "submit all required reports and to make all contributions due and owing to the IPF and IMI, and to pay the costs and disbursements of this action." Id. ¶ 5. More specifically, the plaintiffs ask that RDMI "turn over its books and records from January 2005 through the date that the company ceased operations, or through December 2007, whichever date is later." Id. ¶ 2. Similar disclosure is sought from RDM LLC for the period from December 2007 through the present and from Bucher from January 2008 through the present. Id.

The RDM defendants have filed a motion to dismiss under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction and under Rule 12(b)(6) for failure to state a claim. See generally RDM Defs.' Mot. With this motion now ripe for adjudication, the court turns to the applicable legal standards and the parties' arguments.

III. ANALYSIS

A. The Court Denies the RDM Defendants' Motion to Dismiss for Lack of Personal Jurisdiction

1. Legal Standard for a Motion to Dismiss for Lack of Personal Jurisdiction Under Rule 12(b)(2)

On a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2), the plaintiff has the burden of establishing a prima facie case that personal jurisdiction exists. See e.g., Second Amendment Found. v. U.S. Conference of Mayors, 274 F.3d 521, 524 (D.C.Cir.2001). To establish a prima facie case, the plaintiff must present evidence sufficient to defeat a motion for judgment as a matter of law. See Cable/Home Commc'n Corp. v. Network Prods., Inc., 902 F.2d 829, 855 (11th Cir.1990); cf. Carter v. Duncan-Huggins, Ltd., 727 F.2d 1225, 1227 (D.C.Cir.1984) (indicating, under a differently labeled but similar standard, that such motions should be denied unless "the evidence, together with all inferences that can reasonably be drawn therefrom is so one-sided that reasonable men could not disagree on the verdict").

In determining whether a basis for personal jurisdiction exists, the court resolves factual discrepancies in the complaint and affidavits in favor of the plaintiff. Crane v. N.Y. Zoological Soc'y, 894 F.2d 454, 456 (D.C.Cir.1990). The court, however, need not treat all of the plaintiff's allegations as true. United States v. Philip Morris Inc., 116 F.Supp.2d 116, 120 n. 4 (D.D.C.2000); see also GTE New Media Servs. v. BellSouth Corp., 199 F.3d 1343, 1349 (D.C.Cir.2000) (stating that courts should not accept bare allegations and conclusory statements). Moreover, the court "may receive and weigh affidavits and any other relevant matter to assist it in determining the jurisdictional facts." Arista Records, Inc. v. Sakfield Holding Co., 314 F.Supp.2d 27, 30 (D.D.C.2004) (internal quotations omitted). ³

2. The Court Has Personal Jurisdiction Over the RDM Defendants

The RDM defendants maintain that the court lacks personal jurisdiction over them because, unlike Bucher, the RDM defendants are neither "parties to a binding agreement governed by ERISA" nor alter egos of Bucher. RDM Defs.' Mot. at 5-7. They argue that "[t]o allow [the] [p]laintiffs' [sic] the ability to haul these two companies into a jurisdiction where they have not actively conducted business and who are not parties to a binding agreement governed by ERISA would render a severe harm," particularly as "there has been no determination that Bucher LLC owes any contributions to the Union." Id. at 7. The RDM defendants, however, do not contest and, indeed, implicitly concede that as a general matter, an employee submits itself to the court's jurisdiction by entering into a valid agreement governed by ERISA. See id. at 5 (stating that "only Bucher LLC has submitted itself to the jurisdiction of the Court by entering into a valid agreement with the Union").

The plaintiffs respond that regardless of whether the RDM defendants are determined to be alter ego companies, the court has personal jurisdiction over those defendants pursuant § 502(e)(2), ERISA's nationwide service of process provision. Pls.' Opp'n at 2-3. In addition, the plaintiffs maintain that the RDM defendants were signatories to a binding ERISA-governed agreement between the RDM defendants and the Union. Id. at 4-5. More specifically, the plaintiffs point out that two of the five agreements at issue were signed by "RD Masonry," which could be either of the RDM defendants.⁴Id. at 5. The plaintiffs explain that as a signatory, "RD Masonry" would have been bound to these agreements during the periods of time for which the plaintiffs are seeking relief due to the "evergreen clauses" controlling the expiration of the contract. Id. at 4-5; Compl., Exs. A, E. The plaintiffs also notethat the RDM defendants do not provide any affidavits in support of their contention that RDM LLC did not sign any collective bargaining agreement. Pls.'s Opp'n at 5. Finally, the plaintiffs argue that under ERISA, RDMI is additionally and independently subject to the personal jurisdiction of the court based upon its previous "payment of fringe benefit contributions" to the IPF and IMI, both of which are "administered in the District of Columbia." Id. at 6.

Under Federal Rule of Civil Procedure 4(k)(1)(C), service of a summons establishes personal jurisdiction over a defendant when such service is authorized by a federal statute. Fed.R.Civ.P. 4(k)(1)(C). Section 502(e)(2) of ERISA authorizes nationwide service of process on defendants in an ERISA action. 29 U.S.C. § 1132(e)(2) (providing that "[w]here an action under [ERISA] is brought in a district court of the United States, it may be brought in the district where the plan is administered, where the breach took place, or where a defendant resides or may be found, and process may be served in any other district where a defendant resides or may be found"). Thus, the court has personal jurisdiction over the RDM defendants irrespective of whether those defendants have conducted business in the District of Columbia, see Flynn v. Ohio Bldg. Restoration, Inc., 260 F.Supp.2d 156, 170 (D.D.C.2003) (concluding that an alleged lack of contacts with the District of Columbia did not preclude the court from asserting personal jurisdiction over an out of state defendant in an ERISA claim), unless exercising such jurisdiction would violate due process, Price v. Socialist People's Libyan Arab Jamahiriya, 294 F.3d 82, 95 (D.C.Cir.2002) (noting that "it is well-settled that 'a statute cannot grant personal jurisdiction where the Constitution forbids it' " (quoting Gilson v. Republic of Ireland, 682 F.2d...