In re Jamesway Corp.
| Decision Date | 21 June 1999 |
| Docket Number | 96/9039A.,Bankruptcy No. 95 B 44821(JLG). Adversary No. 96/8389A |
| Citation | 235 BR 329 |
| Parties | In re JAMESWAY CORPORATION, et al., Debtors. Kathleen Barnett, et al., on Behalf of Themselves and All Others Similarly Situated, Plaintiffs, v. Jamesway Corporation, Defendant. Local 560, an Affiliate of the International Brotherhood of Teamsters, Edwin Stier, Chairperson of the Board of Trustees of the Teamsters Industrial Employees Pension and Welfare Funds, and The Teamsters Industrial Employees Pension and Welfare Funds, Plaintiffs, v. Jamesway Corporation, Defendant. |
| Court | U.S. Bankruptcy Court — Southern District of New York |
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Kaye, Scholer, Fierman, Hays & Handler, LLP, New York City, for debtor.
John C. Lankenau & Associates, New York City, for Local 560, plaintiffs.
Schneider, Goldberger, Cohen, Finn, Solomon, Leder & Montalbano, P.C., Kenilworth, New Jersey, for Barnett, plaintiffs.
DECISION ON MOTIONS AND CROSS-MOTIONS FOR SUMMARY JUDGMENT
In these lawsuits, plaintiffs Kathleen Barnett, et al., (collectively, the "Barnett plaintiffs"), and Local 560, as an affiliate of the International Brotherhood of Teamsters, Edwin Stier, Chairperson of the Board of Trustees of the Teamsters Industrial Employees Pension and Welfare Funds, and the Teamsters Industrial Employees Pension and Welfare Funds, on behalf of members of Local 560 (collectively, the "Union plaintiffs", and together with the Barnett plaintiffs, the "plaintiffs") are suing Jamesway Corporation ("Jamesway") to recover damages occasioned by Jamesway's alleged violations of the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et seq. ("WARN" or the "Act"). The Barnett plaintiffs seek summary judgment on their complaint. Jamesway opposes that motion and cross-moves for summary judgment dismissing the complaint. Jamesway moves for summary judgment dismissing the Union plaintiffs' complaint. They oppose that motion and cross-move for summary judgment on the complaint. On the consent of the parties, we consolidated the motions because they involve many of the same legal and factual issues.
We grant the plaintiffs summary judgment on their complaints. We deny Jamesway's motions.
On or about February 1, 1995, Jamesway successfully reorganized under chapter 11 of the Bankruptcy Code. Nonetheless, on or about October 18, 1995, Jamesway and certain affiliates sought chapter 11 protection in this court. They remained in possession and control of their businesses and assets as debtors in possession until on or about June 6, 1997, when they confirmed their Amended Joint Liquidating Plan of Reorganization, dated April 15, 1997.
On October 12, 1995, Jamesway conducted business in approximately 90 store locations, and maintained its corporate headquarters in Secaucus, New Jersey, and a distribution center in Cranbury, New Jersey. As of that date, it employed more than 550 full-time employees between its corporate headquarters and distribution center.
During the period of October 12 through November 11, 1995, Jamesway fired a total of approximately 260 non-union employees of its corporate headquarters, 45 non-union employees of its distribution center, 240 union employees of its distribution center and four union employees of its corporate headquarters. The plaintiffs are among the employees that Jamesway fired during that period. In their respective complaints, they allege that Jamesway violated the Act when it fired them because it failed to give them advanced notice of their terminations. They maintain that Jamesway is liable to them in an amount equal to the sum of (a) unpaid wages, salary, commissions, bonuses, accrued holiday pay, accrued vacation pay and pension and 401(k) contributions for 60 calendar days, (b) the cost of health and medical insurance and other fringe benefits under ERISA for 60 calendar days, (c) any medical or other expenses incurred during the 60 calendar days since their respective terminations that would have been covered and paid under Jamesway's employee benefit plans had that coverage continued during that period, (d) interest on the above amounts and (e) reasonable attorneys' fees. Moreover, the Union plaintiffs contend that their claims are entitled to administrative priority status under the Bankruptcy Code.
In its answers to the complaints, Jamesway denies liability and asserts various affirmative defenses. For various reasons, certain of those defenses are irrelevant to the motions. We consider the relevant defenses in conjunction with these motions.
We base our subject matter jurisdiction of this adversary proceeding on 28 U.S.C. §§ 1334(b) and 157(a) and the July 10, 1984 Standing Order of Referral of Cases to Bankruptcy Judges of the United States District Court for the Southern District of New York (Ward, Acting C.J.). This is a core proceeding. See 28 U.S.C. § 157(b)(2)(A), (B) and (O); see also Oil, Chemical & Atomic Workers AFL-CIO-CLC v. Hanlin Group, Inc. (In re Hanlin Group, Inc.), 185 B.R. 703, 704-05 (Bankr. D.N.J.1995) ("In re Hanlin, II").
Fed.R.Bankr.P. 7056 makes Fed. R.Civ.P. 56 applicable herein. In relevant part, that rule states that summary judgment:
shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (quoting Fed. R.Civ.P. 56(c)); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (same). In assessing the merits of this motion, we view the record in the light most favorable to the non-moving party. See National Union Fire Ins. Co. v. Turtur, 892 F.2d 199, 203 (2d Cir.1989); Leberman v. John Blair & Co., 880 F.2d 1555, 1559 (2d Cir. 1989); Lund's Inc. v. Chemical Bank, 870 F.2d 840, 844 (2d Cir.1989). We must determine "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. at 251-52, 106 S.Ct. 2505. The movant initially must prove that there are no material facts in dispute. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Heyman v. Commerce & Industry Ins. Co., 524 F.2d 1317, 1319 (2d Cir.1975). Thereafter, the non-moving party must "set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby Inc., 477 U.S. at 250, 106 S.Ct. 2505 (quoting Fed.R.Civ.P. 56(e)). Ultimately, the non-moving party must demonstrate that some evidence exists which would create a genuine issue of material fact. See Delaware & Hudson Ry. v. Consolidated Rail Corp., 902 F.2d 174, 177-78 (2d Cir.1990). "Conclusory allegations will not suffice to create a genuine issue." Id. (quoting Anderson, 477 U.S. at 252, 106 S.Ct. 2505).
The fact that both sides have moved for summary judgment does not mean that we must grant judgment as a matter of law for one side or the other. Rather, we must evaluate each party\'s motion on its own merits, taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration
Schwabenbauer v. Board of Educ., 667 F.2d 305, 313-14 (2d Cir.1981); see also Heublein, Inc. v. United States, 996 F.2d 1455, 1460 (2d Cir.1993) (same). As we will discuss, the relevant and material facts are not in dispute. Accordingly, these matters are ripe for summary judgment.
29 U.S.C. § 2102(a)(1). The Department of Labor has prescribed regulations to implement the Act. See 29 U.S.C. § 2107(a). They have the force and effect of law. See Carpenters Dist. Council v. Dillard Dept. Stores, Inc., 778 F.Supp. 297, 307 n. 12 (E.D.La.1991), aff'd, 15 F.3d 1275 (5th Cir. 1994), cert. denied, 513 U.S. 1126, 115 S.Ct. 933, 130 L.Ed.2d 879 (1995); Finkler v. Elsinore Shore Assoc., 781 F.Supp. 1060, 1064 (D.N.J.1992). Among other things, they prescribe when an employer must give WARN notice, see 20 C.F.R. §§ 639.5, 639.9, who the employer must notify, see id. § 639.6, how the employer must give notice, see id. § 639.8, and what information the notice must contain. See id. § 639.7. The statute provides that an employer who fails to give WARN notice shall be liable to each aggrieved employee who suffers an employment loss as a result of such plant closing or mass layoff for, among other things, back pay for each day during the period of the violation. See 29 U.S.C. § 2104(a). It also states that the employer's liability "shall be calculated for the period of the violation, up to a maximum of 60 days, but in no event for more than one-half the number of days the employee was employed by the employer." Id.
The parties agree that for purposes of § 2102(a)(1) of the Act, Jamesway is an "employer," the plaintiffs are "affected employees," at all relevant times the Union plaintiffs had a "representative," and the Barnett plaintiffs did not, and on October 12, 1995, Jamesway ordered either a "plant closing" or "mass layoff" (although the parties dispute the proper...
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