Teamsters Local 639 Emp'rs v. Hileman

• Decision Date: 23 October 2013
• Docket Number: Civil Action No. 13–833 (RMC)
• Citation: 988 F.Supp.2d 18
• Parties: Teamsters Local 639 Employers, Health Trust, et al., Plaintiffs, v. Robert Hileman, et al., Defendants.
• Court: U.S. District Court — District of Columbia

988 F.Supp.2d 18

Teamsters Local 639 Employers, Health Trust, et al., Plaintiffs,

v.Robert Hileman, et al., Defendants.

Civil Action No. 13–833 (RMC)

United States District Court, District of Columbia.

October 23, 2013

Lauren Brady Powell, Mooney, Green, Saindon, Murphy & Welch, P.C., Washington, DC, for Plaintiffs.

Eric Josh Pelletier, Russell B. Berger, Offit Kurman, P.A., Bethesda, MD, John J. Hathway, Whiteford, Taylor & Preston L.L.P., Washington, DC, for Defendants.

MEMORANDUM OPINION

ROSEMARY M. COLLYER, United States District Judge

In 2011, a now-defunct Maryland corporation failed to contribute to two employee benefit plans as required by certain collective bargaining agreements and trust declarations.The trustees of both plans have sued Gary and Robert Hileman, two residents of Maryland who served as directors of the corporation, for overdue contributions and related assessments. Messrs. Hileman move to dismiss for lack of personal jurisdiction and failure to state a claim. While personal jurisdiction appears to be lacking only over Gary Hileman, the Complaint fails to state a claim against either man because they can be sued only in the name of the corporation and not as individuals. Thus, the motion to dismiss will be granted and Messrs. Hileman will be dismissed from this suit in their individual capacities.

I. FACTS

Representing the unionized workers at United Crane Sales, Inc. (United Crane) prior to the corporation's demise, Teamsters Local 639 entered into a collective bargaining agreement with United Crane that required the company to make contributions on behalf of covered employees to two multi-employer benefit plans: Teamsters Local 639 Employers Pension Trust (Pension Plan) and Teamsters Local 639 Employers Health Trust (Health Plan). Both Funds are covered by the Employee Retirement Income Security Act (ERISA) of 1974, as amended, 29 U.S.C. §§ 1001 et seq., and are administered from Washington, D.C.

An audit in September 2011 revealed that United Crane was delinquent in its contributions to both Funds. As a result, the Health and Pension Funds jointly assessed United Crane $1,410.92 in audit fees and liquidated damages pursuant to section 6.5 of each Fund's Agreement and Declaration of Trust. Compl. [Dkt. 1], Ex. 2 (Pension Fund) [Dkt. 1–3]; Ex. 3 (Health Fund) [Dkt. 1–4]. Also in September 2011, United Crane transferred all, or a substantial portion, of its property and assets to UCR Acquisition, LLC (UCR). Within two months, United Crane had paid all outstanding amounts due to the Funds with the exception of the assessment for audit fees and liquidated damages. Compl. ¶¶ 24, 33.

The Complaint also asserts that by March 31, 2011, United Crane had withdrawn completely from the Pension Plan within the meaning of ERISA, see29 U.S.C. § 1383(a). The Pension Plan subsequently notified United Crane of this determination on October 2, 2012, and demanded payment of $30,828.00 in withdrawal liability. This sum has yet to be paid. Approximately six months later, United Crane filed Articles of Voluntary Dissolution with the Maryland Secretary of State.

On June 4, 2013, the Health and Pension Funds and their Trustees (collectively, Trustees) filed suit against Robert and Gary Hileman.¹ Trustees intentionally sue both Hilemans in their individual capacities because they are former directors of United Crane. Opp'n [Dkt. 13] at 5 (asserting that directors of dissolved corporations may be sued “in their own names as trustees of the corporation.”) Trustees state that “[u]pon information and belief,” Gary and Robert Hileman are residents of Maryland and were directors of United Crane. Compl. ¶¶ 9–11. Trustees demand that Messrs. Hileman be held jointly and severally liable for money due and owing to both Funds, in the amounts of $1,410.92 in audit fees and liquidated damages; $30,828.00 in withdrawal liability to the Pension Fund; at least $6,165.60 in liquidated damages on unpaid withdrawal liability to the Pension Fund; and interest, attorneys' fees, and costs as ERISA permits. Id. at 13–14. Trustees also seek injunctive relief. Messrs. Hileman move to dismiss under Federal Rules of Civil Procedure (FRCP) 12(b)(2) and (b)(6). See Mot. to Dismiss [Dkt. 12]. Plaintiffs oppose.

II. LEGAL STANDARDS

Gary and Robert Hileman challenge Trustees' suit on two grounds. They contend that the Complaint does not state sufficient facts to establish that they, as residents of the State of Maryland, are subject to this Court's jurisdiction, and that Trustees have failed to state a claim by suing them in their individual capacities.

A. Jurisdiction

The jurisdiction of federal courts is limited. SeeKokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). “The validity of an order of a federal court depends upon that court[ ] having jurisdiction over both the subject matter and the parties.” Ins. Corp. of Ir., Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982) (citing Stoll v. Gottlieb, 305 U.S. 165, 171–72, 59 S.Ct. 134, 83 L.Ed. 104 (1938); Thompson v. Whitman, 85 U.S. 457, 18 Wall. 457, 465, 21 L.Ed. 897 (1873)). Here, there is no dispute that the Court has subject matter jurisdiction over this matter, which arises under federal law. See28 U.S.C. § 1331. The parties do contest, however, in personam, or personal, jurisdiction.

On a motion to dismiss pursuant to FRCP 12(b)(2), the plaintiff bears the burden of establishing a factual basis for the court's exercise of personal jurisdiction over the defendant. Crane v. N.Y. Zoological Soc'y, 894 F.2d 454, 456 (D.C.Cir.1990). The plaintiff must allege specific acts connecting the defendant with the forum. Second Amendment Found. v. U.S. Conference of Mayors, 274 F.3d 521, 524 (D.C.Cir.2001). Bare allegations and conclusory statements are insufficient. See id.In determining whether a factual basis for personal jurisdiction exists, a court resolves factual discrepancies in the record in favor of the plaintiff, Crane, 894 F.2d at 456, with the caveat that the court 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). Instead, the court “may receive and weigh affidavits and any other relevant matter to assist it in determining the jurisdictional facts.” Jin v. Ministry of State Sec., 335 F.Supp.2d 72, 77 (D.D.C.2004) (internal quotations and citation omitted).

B. Failure to State a Claim

A motion to dismiss for failure to state a claim challenges the adequacy of a complaint on its face, testing whether a plaintiff has stated a claim properly. Fed.R.Civ.P. 12(b)(6); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (explaining that a complaint must be sufficient to “ ‘give [a] defendant fair notice of what the claim is and the grounds upon which it rests' ” (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is “plausible on its face.” Twombly, 550 U.S. at 570, 127 S.Ct. 1955. “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 556, 127 S.Ct. 1955).

In deciding a motion under FRCP 12(b)(6), a court must treat the complaint's factual allegations as true, “even if doubtful in fact.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955. Yet, it “may consider the facts alleged in the complaint, documents attached thereto or incorporated therein, and matters of which [the court] may take judicial notice.” Abhe & Svoboda, Inc. v. Chao, 508 F.3d 1052, 1059 (D.C.Cir.2007) (internal quotation marks and citation omitted). The court need not accept as true legal conclusions set forth in a complaint. Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (“Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”). “While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Id. at 679, 129 S.Ct. 1937.

III. ANALYSIS

A. Personal Jurisdiction

To establish personal jurisdiction over a non-resident of the forum, a federal court considers two separate issues. First, the court determines whether jurisdiction exists under the applicable long-arm statute and whether the plaintiff has served the defendant properly with a summons and a copy of the complaint. “Absent proper service of process, a [c]ourt may not exercise personal jurisdiction over the defendants named in the complaint.” Dominguez v. District of Columbia, 536 F.Supp.2d 18, 22 (D.D.C.2008); see alsoGorman v. Ameritrade Holding Corp., 293 F.3d 506, 514 (D.C.Cir.2002) (federal courts may not assert jurisdiction over defendants “unless the procedural requirements of effective service of process are satisfied”). Although proper service can be waived, actual notice of a lawsuit is insufficient to constitute waiver and establish personal jurisdiction. SeeRowe v. District of Columbia, 892 F.Supp.2d 174, 180 (D.D.C.2012) (citing Di Lella v. Univ. of the Dist. of Columbia David A. Clarke Sch. of Law, Civ. No. 07–0747, 2009 WL 3206709, at *1 (D.D.C. Sept. 30, 2009)).

Second, a federal court must find that exercising its jurisdiction over a non-resident satisfies constitutional principles of due process. This analysis evaluates the defendant's “minimum contacts' with the forum to ensure that “ ‘the maintenance of the suit does not offend traditional notions of fair play and substantial justice.’ ” GTE New Media...