Local 2-1971 of Pace International Union v. Cooper

• Decision Date: 24 March 2005
• Docket Number: No. CIV.1:02 CV 224.,CIV.1:02 CV 224.
• Citation: 364 F.Supp.2d 546
• Court: U.S. District Court — Western District of North Carolina
• Parties: LOCAL 2-1971 OF PACE INTERNATIONAL UNION; Paper Allied-Industrial, Chemical & Energy Workers International Union, on behalf of members and former member participants in pension plans sponsored by the Defendants; Joy M. O'Dell; Raymon C. Galloway; James F. Sumner; W. Harrison Whitlock; Huey W. Harris; and Gurlie R. Owen, on behalf of themselves and others similarly situated, Plaintiffs, v. Langdon M. COOPER, Trustee in Bankruptcy for RFS Ecusta, Inc., and RFS U.S., Inc.; RFS Ecusta, Inc., as Administrator of the RFS Ecusta, Inc. Hourly Employees' Retirement Plan, and in its own capacity; Directors of RFS Ecusta, Inc.; Purico (IOM) Limited; RF & Son, Inc.; RFS U.S., Inc.; Nathu Puri; Steven H. Smith; Trustee of the RFS Ecusta, Inc. Hourly Employees' Retirement Plan; Wachovia Bank, N.A.; and Transamerica Business Capital Corporation, Defendants.

364 F.Supp.2d 546

LOCAL 2-1971 OF PACE INTERNATIONAL UNION; Paper Allied-Industrial, Chemical & Energy Workers International Union, on behalf of members and former member participants in pension plans sponsored by the Defendants; Joy M. O'Dell; Raymon C. Galloway; James F. Sumner; W. Harrison Whitlock; Huey W. Harris; and Gurlie R. Owen, on behalf of themselves and others similarly situated, Plaintiffs, v. Langdon M. COOPER, Trustee in Bankruptcy for RFS Ecusta, Inc., and RFS U.S., Inc.; RFS Ecusta, Inc., as Administrator of the RFS Ecusta, Inc. Hourly Employees' Retirement Plan, and in its own capacity; Directors of RFS Ecusta, Inc.; Purico (IOM) Limited; RF & Son, Inc.; RFS U.S., Inc.; Nathu Puri; Steven H. Smith; Trustee of the RFS Ecusta, Inc. Hourly Employees' Retirement Plan; Wachovia Bank, N.A.; and Transamerica Business Capital Corporation, Defendants.

No. CIV.1:02 CV 224.

United States District Court, W.D. North Carolina, Asheville Division.

March 24, 2005.

COPYRIGHT MATERIAL OMITTED

Richard M. Mitchell, Mitchell, Rallings & Tissue, Joyce M. Brooks, Brooks Law Offices, Charlotte, NC, Christian L. Raisner, John Plotz, Van Bourg, Weinberg, Roger & Rosenfeld, Roberta Perkins, Weinberg, Roger & Rosenfeld, Oakland, CA, for Plaintiffs.

Kimberly W. Daniel, Mays & Valentine, D. Eugene Webb, Jr., Vivieon E. Kelley, Troutman Sanders, Richmond, VA, Troutman Sanders, Atlanta, GA, Wyatt S. Stevens, Roberts & Stevens, P.A., Asheville, NC, Thomas G. Collins, Jayson R. Wolfgang, Buchanan Ingersoll Professional Corporation, Harrisburg, PA, Craig D. Mills, Buchanan Ingersoll Professional Corporation, Philadelphia, PA, Kiran H. Mehta, Sara W. Higgins, Kennedy, Covington, Lobdell & Hickman, Pamela Pearson, Charlotte, NC, for Defendants.

MEMORANDUM AND ORDER

THORNBURG, District Judge.

THIS MATTER is before the Court on the following matters:

1. the Second Renewed Motion for Summary Judgment of Defendant Transamerica Business Capital Corporation (Transamerica), filed July 30, 2004;

2. the Motion for Summary Judgment of Defendants Purico (IOM) Limited, RF & Son, Inc., and Nathu Puri (collectively "Purico") as to Plaintiffs' WARN Act¹ Claims, filed July 30, 2004 3. the Plaintiffs' Motion for Partial Summary Judgment and Adjudication as to WARN Act Claims, filed July 30, 2004;

4. the Motion for Summary Judgment of the Purico Defendants and Defendant Steven Smith as to Plaintiffs' ERISA² Claims, filed July 30, 2004;

5. Plaintiffs' Motion for Stay of Pension Litigation Pending Merger of Pension Plans and for Vacating of Trial Date as [to] the ERISA Case Only, filed August 13, 2004;

6. the Stipulation and Agreement for Dismissal with Prejudice of Transamerica, filed August 31, 2004;

7. the Plaintiffs' Request for Judicial Notice of a Newly Filed Pleading relevant to Pending Cross Motions for Summary Judgment (WARN Act), filed November 4, 2004;

8. the Motion for Order Striking Answer and Prohibiting Plaintiff[s] from Obtaining Judgment or Alternatively Denying Plaintiff[s'] Motion for Summary Judgment and Adjourning Trial, filed January 21, 2005, by Langdon M. Cooper as Chapter 7 Trustee (Trustee) for the estates of Defendants RFS Ecusta, Inc. and RFS U.S., Inc. (collectively "Ecusta"); and

9. the Motion to Disqualify Troutman Sanders, L.L.P., filed by the Trustee on January 21, 2005.

The Court first notes that, without permission, the parties filed separate motions for summary judgment as to each claim. This is contrary to the custom in this Court and counsel are hereby placed on notice that, in the future, should they appear in this Court, all claims as to which summary judgment is sought are to be pled in one motion subject to the 25 page limit.

I. PROCEDURAL HISTORY

On September 27, 2002, the Plaintiffs Paper Allied-Industrial, Chemical & Energy Workers International Union (PACE or Plaintiffs), Joy O'Dell, Raymon Galloway, James Sumner, Harrison Whitlock, Huey Harris and Gurlie Owen (Plaintiffs) initiated an action in this Court alleging two violations of ERISA by the Defendants. Complaint, Case No. 1:02cv224, filed September 27, 2002. In response to the motion to dismiss of two of those Defendants, P.H. Glatfelter Company and Mollanvick, Inc., the Plaintiffs moved for leave to amend the complaint, clarifying that the first claim of the complaint against those two Defendants would be dropped, thus mooting the motion to dismiss. Motion with Memorandum in Support, filed December 18, 2002. In the motion to amend, the Plaintiffs also clarified that the action was brought by the Union and named Plaintiffs only for the benefit of the RFS Ecusta, Inc. Hourly and Salaried Employees' Retirement Plans (Plans) and not individually. This eliminated any issue regarding class action status. Plaintiffs further sought leave to add Wachovia Bank, N.A., the Plans' trustee, as a Defendant. That motion was granted by the undersigned on December 30, 2002. Order, filed December 30, 2002. On February 10, 2003, the amended complaint was filed, alleging a single cause of action pursuant to ERISA for breach of fiduciary duty. First Amended Complaint for Declaratory and Injunctive Relief to Rescind Prohibited Transaction and for Breach of Fiduciary Duties Respecting Pension Plan and for Appointment of Independent Fiduciary, filed February 10, 2003.

Meanwhile, on October 4, 2002, Plaintiffs Local 2-971 of Pace International Union and Paper Allied-Industrial, Chemical & Energy Workers International Union AFL-CIO (PACE) initiated a separate action in this Court on behalf of their union members who were employees of RFS Ecusta, Inc., alleging WARN Act violations. Complaint for Damages (WARN Act), in Case No. 1:02cv230, filed October 4, 2002. On July 31, 2003, the undersigned consolidated these cases. Order, filed July 31, 2003.

On November 14, 2002, the Court was advised that the Ecusta Defendants had filed Chapter 11 bankruptcy petitions in the United States Bankruptcy Court for the District of Delaware.³ Notice, filed November 14, 2002. The Plaintiffs thereafter notified the Court they intended to seek relief from the stay in Bankruptcy Court. Notice Concerning Motion for Relief from Stay, filed April 21, 2003. On July 31, 2003, the Plaintiffs advised that on June 24, 2003, U.S. Bankruptcy Court Judge George Hodges had lifted the stay as to the bankrupt Ecusta Defendants. Status Report, filed July 31, 2003. On August 18, 2003, the undersigned was advised that the Ecusta Defendants' bankruptcy case had been converted to a Chapter 7 liquidation and a Trustee had been appointed. Notice, filed August 18, 2003.

On November 20, 2003, the undersigned entered an Order which allowed for the administration of the Plans while this action was pending. No-Contest Order for Interim Administration of Benefit Plans, filed November 20, 2003. That Order continues in effect and thus, the Plans' beneficiaries and participants have been served by the terms and provisions of the Plans despite the bankruptcy of the Ecusta Defendants because the Plans themselves are not bankrupt.

The case proceeded through discovery with a deadline for dispositive motions of July 30, 2004. As a result, the parties filed cross-motions for summary judgment on that date. However, since the filing of those motions, the parties have also filed miscellaneous motions which the Court will address before reaching the merits of the dispositive motions.

II. MISCELLANEOUS MOTIONS

A. Plaintiffs' Motion to Stay

On August 13, 2004, while the motions for summary judgment were pending, Plaintiffs moved to stay the ERISA portion of the litigation for six months because negotiations were underway for the merger of the Plans into a larger PACE Industry Union-Management Pension Fund (PIUMPF). Plaintiffs' Motion for Stay of Pension Litigation pending Merger of Pension Plans and for Vacating of Trial Date as [to] the ERISA Case Only, filed August 13, 2004. It was noted that the merger would

satisfy most of the injunctive relief requested, or make it unnecessary. Specifically, there would be no further need for an independent fiduciary to be appointed; the plan assets will be securely under the control of PIUMPF fiduciaries; and benefits will be guaranteed under established administration of the larger plan. The Court therefore need not decide the merits presented in this case, as it appears that the prayer for relief under ERISA will be largely moot as a result of the merger.

Plaintiffs' Brief in Support of Motion for Stay of Pension Litigation pending Merger of Pension Plans and for Vacating of Trial Date as to the ERISA Case Only, filed August 13, 2004, at 2. The Purico Defendants and Defendant Smith opposed this motion, noting that the Plaintiffs had been attempting this merger since 2001 and the prosecution of this action had not and would not impact those negotiations. Brief of Purico (IOM) Limited, RF & Son, Inc., Nathu Puri, and Steven H. Smith in Opposition to Plaintiffs' Motion for Stay of Pension Litigation, filed August 26, 2004, at 2. Since the filing of the motion, six months have elapsed and the Court has not received any information from the Plaintiffs suggesting that the merger has been accomplished. As a result, the motion is denied as moot.

B. The Stipulation to Dismiss

On August 31, 2004, a "Stipulation and Agreement for Dismissal with Prejudice of Transamerica Business Capital Corporation; Order Thereon" was received by the Clerk of Court. The Stipulation has been signed by counsel for the Plaintiffs and Transamerica, but has not been signed by counsel for the other parties. Fed.R.Civ.P. 41(a)(1) (action may be dismissed "by filing a stipulation of dismissal signed by all parties who have appeared in the action"). While the Stipulation contains an ordering paragraph for the signature of the undersigned, it does not appear it was served on the other parties since no certificate of service has been provided. Fed.R.Civ.P. 41(a)(2) ("Except as provided in paragraph ...