Trs. of IAM Nat'l Pension Fund v. M & K Emp. Sols., LLC
| Decision Date | 20 April 2021 |
| Docket Number | Case No. 20-cv-433 (RCL) |
| Parties | TRUSTEES OF THE IAM NATIONAL PENSION FUND, Plaintiffs, v. M & K EMPLOYEE SOLUTIONS, LLC, et al., Defendants. |
| Court | U.S. District Court — District of Columbia |
Approximately one year ago, the Court preliminarily enjoined six defendants in this matter to pay two months' worth of defaulted withdrawal-liability payments to the IAM National Pension Fund ("the Fund"). ECF No. 22. At the time, the parties were arbitrating the amount of withdrawal liability assessed. See ECF No. 62-9 at 2. Today, arbitration is still pending, and not a dollar of withdrawal liability has been paid. See ECF No. 62-2 at ¶ 12.
Plaintiffs, the Trustees of the Fund ("the Trustees"), now move for a second preliminary injunction. ECF No. 62. This time, they seek payment of the full amount of withdrawal liability assessed from the original six defendants ("the M&K Employees Defendants"), plus a newly added seventh (Laborforce LLC). Id.; see ECF No. 56, Third Am. Compl. ¶¶ 25, 77-81. Rather than timely opposing the Trustees' preliminary-injunction motion, ECF No. 62, the M&K Employees Defendants separately moved for a scheduling conference or, alternatively, for an enlargement of the briefing schedule on the Trustees' motion. ECF No. 63; see LCvR 65.1(c). Laborforce LLC also did not oppose the Trustees' motion but instead moved to join the M&K Employees Defendants' motion for a scheduling conference. See ECF No. 68.
For the reasons set forth below, the Court will GRANT IN PART and DENY IN PART the Trustees' preliminary-injunction motion, ECF No. 62. Though the Court will preliminarily enjoin the M&K Employees Defendants and Laborforce LLC to pay the full amount of withdrawal liability assessed to M & K Employee Solutions, LLC-Alsip, it will not order the immediate payment of liquidated damages and interest on that amount. The Court will further GRANT Laborforce LLC's motion, ECF No. 68, to join the M&K Employees Defendants' motion for a scheduling conference or, alternatively, to enlarge the briefing dates, ECF No. 63, but will DENY the M&K Employees Defendants' motion, ECF No. 63. Finally, in light of its ruling today, the Court will VACATE the portion of its March 19, 2020 Order preliminarily enjoining the M&K Employees Defendants to pay "liquidated damages, interest, attorneys' fees, and costs, in an amount to be determined." ECF No. 22 at 2.
M&K Truck is a network of full-service commercial-vehicle dealerships and service centers that was founded in Michigan. Third Am. Compl. ¶¶ 28-29. In mid-2012, M&K Truck broke into the Illinois market by assuming the operations of three existing dealerships in the Chicagoland area. Id. at ¶ 29. M&K Truck structured those transactions so that one group of LLCs (collectively the "M&K Sales entities") purchased the Chicago dealers' assets, while another group of LLCs (collectively the "M&K Employees entities") re-hired the Chicago dealers' employees. Id. at ¶ 30. The M&K Employees entities would then lease those re-hired employees to the M&K Sales entities. Id. at ¶ 31.
Relevant to the present motions are the M&K Employees entities, which include M & K Employee Solutions, LLC ("M&K Employee Solutions"), and five other "Series" LLCs createdunder it: M & K Employee Solutions, LLC-Alsip ("M&K Employees Alsip"); M & K Employees Solutions, LLC-Illinois Leasing ("M&K Employees Illinois Leasing"), M & K Employee Solutions, LLC-Joliet ("M&K Employees Joliet"); M & K Employee Solutions, LLC-Northern Illinois ("M&K Employees Northern Illinois"); and M & K Employee Solutions, LLC-Summit ("M&K Employees Summit"). Id. at ¶¶ 15-20; see ECF No. 62-14 at 2-6. At the time they were established, each of these Series LLCs shared the same sole member and manager: Rainelle Jansma. See ECF No. 62-12 at 6; ECF No. 62-14 at 2-6.
Three of the M&K Employees entities—M&K Employees Alsip, M&K Employees Joliet, and M&K Employees Summit—subsequently entered into collective-bargaining agreements with Automobile Mechanics' Local 701, International Association of Machinists and Aerospace Workers, AFL-CIO ("the Union"). Third Am. Compl. at ¶ 33; see ECF No. 62-1 at 7. Under the terms of those agreements, M&K Employees Alsip, M&K Employees Joliet, and M&K Employees Summit were required to pay contributions to the IAM National Pension Fund ("the Fund"), which is a multiemployer pension plan managed from Washington, D.C. Third Am. Compl. ¶ 33; see 29 U.S.C. § 1002(37).
By December 31, 2018, M&K Employees Alsip, M&K Employees Joliet, and M&K Employees Summit ceased covered operations, thus effectuating a "complete withdrawal" from the Fund. Third Am. Compl. ¶ 40; see 29 U.S.C. § 1383. Doing so triggered an obligation to pay "withdrawal liability" pursuant to the Multiemployer Pension Plan Amendments Act ("MPPAA"). See 29 U.S.C. § 1381(a). Generally speaking, "withdrawal liability" is an employer's share of a multiemployer pension plan's unfunded, vested benefits. Id. § 1381(b)(1).
On June 14, 2019, pursuant to the procedures set forth in the MPPAA, the Fund notified M&K Employees Alsip that it had effectuated a complete withdrawal from the Fund and that itsallocated share of the unfunded, vested benefits (i.e., its "withdrawal liability") was $6,158,482. Third Am. Compl. ¶41; see 29 U.S.C. §§ 1382 & 1399(b)(1)(A)(i). The Fund also informed M&K Employees Alsip that this amount was due in twenty installments, with the first payment due by August 13, 2019. Third Am. Compl. ¶ 41; see 29 U.S.C. § 1399(b)(1)(A)-(B). But M&K Employees Alsip never made any of these payments. See ECF No. 62-2 ¶ 12. Instead, on November 20, 2019, it initiated arbitration to contest the amount of withdrawal liability assessed to it by the Fund. See id. at ¶ 10; ECF No. 62-9 at 2.
Several months later, in February 2020, the Trustees (in their capacities as fiduciaries for the Fund) sued M&K Employees Alsip to recover the withdrawal liability assessed to it. Compl. ¶¶ 16-26. They also sued M&K Employees Solutions, M&K Employees Illinois Leasing, M&K Employees Joliet, M&K Employees Northern Illinois, and M&K Employees Summit as "trade[s] or business[es] under common control" with M&K Employees Alsip at the time of M&K Employees Alsip's complete withdrawal from the Fund. Id. at ¶¶ 27-31.
When the Trustees filed their Complaint, they simultaneously moved for a preliminary injunction. ECF No. 2. Their motion asked for the immediate payment of $705,442, which represented the sum of the first two defaulted withdrawal-liability payments, plus "liquidated damages, interest, attorneys' fees, and costs, in an amount to be determined." ECF No. 2-1 at 8. The Trustees sought to preliminarily enjoin M&K Employees Alsip, as well as the five other M&K Employees entities (collectively the "M&K Employees Defendants"). See id. The M&K Employees Defendants did not oppose the motion and, on March 19, 2020, the Court granted it. See ECF No. 22.
Since the Court granted the Trustees' preliminary-injunction motion in March 2020, two developments relevant to the present motions have occurred. First, in September 2020, the Fundaccelerated the withdrawal liability assessed to M&K Employees Alsip pursuant to the MPPAA and demanded that it pay the full amount assessed. ECF No. 62-1 at 8-9; see 29 U.S.C. § 1399(c)(5).1 Second, in March 2021, the Trustees filed a Third Amended Complaint, which added a claim for recovery of withdrawal liability against Laborforce LLC, the M&K Employees Defendants' alleged successor. See Third Am. Compl. ¶¶ 77-81.2
In light of these developments, the Trustees now move for a second preliminary injunction. ECF No. 62.3 Their motion, filed April 1, 2021, asks the Court to preliminarily enjoin the M&K Employees Defendants and Laborforce LLC to immediately pay the full amount of withdrawal liability assessed by the Fund to M&K Employees Alsip, plus liquidated damages and interest on that amount. ECF No. 62-2. In support of this request, the Trustees argue that they have shown a likelihood of success on the merits of their claims seeking the payment of withdrawal liability fromthese parties while arbitration is pending, that the Fund is likely to suffer irreparable harm absent preliminary relief, that the harm to the Fund outweighs any harm to the defendants, and that the public interest favors a preliminary injunction. Id. at 11-20.
Neither the M&K Employees Defendants, nor Laborforce LLC,4 timely opposed the Trustees' request on the merits. See LCvR 65.1(c) (). Instead, on April 8, 2021, the M&K Employees Defendants moved for a scheduling conference or, in the alternative, to enlarge the briefing dates on the Trustees' motion. ECF No. 63. In support of this request, the M&K Employees Defendants represent that the Trustees recently appealed "two adverse arbitration awards to this Court," both of which "directly implicate issues in this case" and will require "motions to consolidate with or stay this action." Id. at 2. Accordingly, defendants say, a scheduling conference is necessary to "save the Court and the parties substantial time and resources." Id.
The Trustees opposed the M&K Employees Defendants' motion for a scheduling conference, ECF No. 64, and the M&K Employees Defendants replied, ECF No. 65. Laborforce LLC then moved to join the M&K Employees Defendants' motion for a scheduling conference. See ECF No. 68. It argues that a scheduling conference would be appropriate given the "procedural roller coaster" started by the Trustees. Id. at 2. And it notes that the Trustees do not consent to the relief requested. Id. at 3. All three motions are now ripe for consideration.
A preliminary injunction is an "extraordinary remedy that may only be awarded...
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