GCIU-Employer Ret. Fund v. Coleridge Fine Arts
| Decision Date | 09 December 2015 |
| Docket Number | Case No. 14-2303-EFM-GLR |
| Citation | 154 F.Supp.3d 1190 |
| Parties | GCIU-Employer Retirement Fund and Board of Trusteees of the GCUI-Employer Retirement Fund, Plaintiffs, v. Coleridge Fine Arts, et al., Defendants. |
| Court | U.S. District Court — District of Kansas |
Thomas J. Brady, Donaldson & Cornwell, Escondido, CA, Michael Amash, Blake & Uhlig, PA, Kansas City, KS, for Plaintiffs.
Jeffrey A. Deines, Lentz Clark Deines PA, Overland Park, KS, Jill M. Borgonzi, Robert J. Hingula, Kansas City, MO, for Defendants.
Plaintiffs GCIU-Employer Retirement Fund and its Board of Trustees bring this action against two Irish companies, Coleridge Fine Arts and Jelniki Limited. Plaintiffs seek to collect withdrawal liability payments under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq. and the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”). Defendants move for dismissal under Fed. R. Civ. P. 12(b)(2) asserting that the Court lacks personal jurisdiction. Because the Court finds that Defendants did not have sufficient minimum contacts with the forum and the exercise of personal jurisdiction would not comport with due process, the Court grants Defendants' Motion to Dismiss (Doc. 39).
Plaintiff GCUI-Employer Retirement Fund is a multiemployer pension plan. Plaintiff Board of Trustees is made up of the present trustees who are the named fiduciaries of the Fund. The Fund is primarily funded by contributions remitted by multiple participating employers as a result of negotiated collective bargaining agreements (“CBAs”).
Plaintiffs allege the following facts in the Amended Complaint relating to Defendants' corporate structure. Defendant Coleridge Fine Arts (“CFA”) is a corporation domiciled in the Republic of Ireland. CFA was established in Dublin, Ireland, on or about December 19, 1980, and it is in the business of providing lithograph printing services. Defendant Jelniki Limited (“Jelniki”) is a company domiciled in the Republic of Ireland. Jelniki's activities include owning lithographic printing businesses and printing for the computer industry in Europe and the United States. CFA is a wholly-owned subsidiary of Jelniki.
CFA owned Vile-Goller Fine Arts Printing and Lithographing Company (“Vile Goller”), a corporation organized in Missouri. In 1998, Vile Goller merged with Constable Hodgins Printing Company, Inc., a corporation organized in Kansas. The name of the surviving corporation became Greystone Graphics, Inc. (“Greystone”).
Greystone was a corporation organized under the law of Kansas and also provided lithograph printing services. At the time of the merger, CFA acquired a 50 percent ownership interest in Greystone and retained the right to increase its ownership interest. In 2002, CFA acquired the remaining 50 percent ownership in Greystone. Plaintiffs also allege that CFA owns 100 percent of JDV, Co. JDV, Co. is allegedly an umbrella company that holds three companies: Greystone, Greystone Investment Company, and Coleridge Design and Imaging, Inc.
A CBA bound Greystone to make contributions to the Fund. On or about February 2011, Greystone ceased doing business and is now a defunct corporation. On April 15, 2013, a default judgment was entered by the United States District Court in the Central District of California against Greystone, JDV, Co., Greystone Investment Company, and Coleridge Design and Imaging, Inc. in the amount of $4,454,092.02 in withdrawal liability.2
Plaintiffs filed suit in this Court on June 25, 2014, asserting that CFA was affiliated with Greystone and Coleridge Design and Imaging, Inc. and was liable for the withdrawal liability. Defendant CFA sought to quash allegedly defective service of process on it, but this Court denied Defendant's motion. Defendant CFA then filed a Motion to Dismiss asserting that the Court lacked personal jurisdiction over it. Plaintiffs then filed an Amended Complaint adding Jelniki as a Defendant and additional factual allegations. Defendant CFA withdrew its pending Motion to Dismiss.
Defendants CFA and Jelniki then filed a Motion to Dismiss (Doc. 39) for lack of personal jurisdiction based on the allegations in the Amended Complaint. In connection with this Motion to Dismiss, Defendants provide an affidavit. In this affidavit, Eugene Reynolds, a director and shareholder of CFA, states that CFA and Jelniki are separate Irish-registered companies that are not registered to conduct business and do not conduct business in Kansas. Reynolds avers that CFA and Jelniki never had direct control of the daily affairs of Greystone, did not have the authority to make business decisions related to Greystone, did not conduct business on behalf of Greystone, did not enter into contracts with Greystone, did not execute agreements in relation to the sale of Greystone, and did not acquire or purchase any of Greystone's property during the sale of Greystone's property. CFA and Jelniki had separate budgets, payroll, and business records from Greystone. CFA and Jelniki do not employ individuals in the United States, do not provide services to customers in the United States, do not have a designated agent for service of process in the United States, and have never litigated claims, either as a plaintiff or defendant, in the United States.
Reynolds avers that Greystone never conducted business on behalf of CFA or Jelniki. Reynolds states that Jelniki only had an investment interest in CFA, which only had an investment interest in JDV, Co. He also avers that CFA operated in a different sector of the printing market than Greystone, and Jelniki and CFA only operated in Ireland while Greystone only operated in the United States. Mr. Reynolds also states that although he was an officer and board member of Greystone, any action that he took on behalf of Greystone was not at the direction or interest of either CFA or Jelniki. In a subsequent affidavit, Reynolds avers that CFA's and Jelniki's respective corporate documents are located in Ireland, and the vast majority of relevant witnesses would likely be located in Ireland.3
In the original briefing of Defendants' Motion to Dismiss, Defendants briefed the personal jurisdiction issue by stating that the case was based on diversity. Because this case is actually premised on federal question, the Court ordered additional briefing by the parties to address relevant Tenth Circuit law. The additional briefing is complete, and the Court will now address Defendants' Motion to Dismiss on the basis of all the briefing.
A plaintiff opposing a motion to dismiss based on lack of personal jurisdiction bears the burden of showing that jurisdiction over the defendant is appropriate.4 In a pretrial motion to dismiss, when the matter is decided on the basis of affidavits and written materials, the plaintiff is only required to make a prima facie showing that personal jurisdiction is proper to avoid dismissal.5 Once the plaintiff makes a prima facie showing, the defendant must “present a compelling case demonstrating ‘that the presence of some other considerations would render jurisdiction unreasonable.’ ”6
7 “However, only the well pled facts of plaintiff's complaint, as distinguished from mere conclusory allegations, must be accepted as true.”8 “ ‘The plaintiff has the duty to support jurisdictional allegations in a complaint by competent proof of the supporting facts if the jurisdictional allegations are challenged by an appropriate pleading.’ ”9
Plaintiffs bring a claim for withdrawal liability under ERISA and the MPPAA. Under the MPPAA, an employer incurs withdrawal liability to a multiemployer plan if the employer partially or completely withdraws from the plan.10 Pursuant to 29 U.S.C. § 1383(a)(1), a complete withdrawal occurs if “an employer permanently ceases to have an obligation to contribute under the plan.” Businesses that are under “common control” are treated as a “single employer” and are jointly and severally liable for an affiliate business.11
As noted above, withdrawal liability in the amount of $4,454,092.02 was previously assessed against Greystone, JDV, Co., Greystone Investment Company, and Coleridge Design and Imaging, Inc. These companies are all apparently defunct. Plaintiffs seek to impose liability on Defendants CFA and Jelniki by arguing that Defendants are affiliated with Greystone. Plaintiffs allege that CFA owned 100 percent of Greystone and that CFA is a wholly-owned subsidiary of Jelniki. Thus, they assert that Defendants had control of Greystone such that Defendants should be treated as a single employer and are jointly and severally liable for Greystone's withdrawal liability. Defendants seek dismissal on the basis that they are not subject to personal jurisdiction because they had insufficient contacts with the forum and the exercise of personal jurisdiction would not comport with due process.
Plaintiff's federal MPPAA claim, brought under ERISA, is the only claim brought against Defendants. “Before a federal court can assert personal jurisdiction over a defendant in a federal question case, the court must determine (1) whether the applicable statute potentially confers jurisdiction by authorizing service of process on the defendant and (2) whether the exercise of jurisdiction comports with due process.”12 “[S]ervice of process and personal jurisdiction both must be satisfied before a suit can proceed.”13 Federal Rule of Civil Procedure 4 governs service of process. With regard to personal jurisdiction in federal...
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