Dominick's Finer Foods, LLC v. Ufcw Unions & Emp'rs Midwest Pension Fund
Dominick's Finer Foods, LLC v. Ufcw Unions & Emp'rs Midwest Pension Fund
Opinion of the Court
Dominick's Finer Foods, LLC, ("Dominick's") sues UFCW Unions and Employers Midwest Pension Fund (the "Fund") for allegedly failing to comply with the terms of a rehabilitation plan pursuant to Section 502(a)(10) of ERISA,
I.
For purposes of the Fund's motion, I accept all factual allegations in the complaint as true and draw all reasonable inferences in Dominick's favor. See Geinosky v. City of Chicago ,
Dominick's is a Delaware Limited Liability Company. Cmplt. ¶ 1. Dominick's sole member is Dominick's Supermarkets, LLC, another Delaware Limited Liability Company, which has a sole member, Safeway, Inc., a Delaware corporation with its principal place of business in Boise, Idaho.
Until 2014, Dominick's made contributions to the Fund pursuant to two collective bargaining agreements in effect from October of 2008 to October of 2012 (the "CBAs").
In September of 2010, the Fund's Board of Trustees passed two resolutions accepting and acknowledging the Voluntary Payments memorialized in the CBAs. Cmplt. at ¶ 9. By that point, the Fund had been certified by an actuary "to be in critical status under ERISA Section 305,
On December 1, 2011, Dominick's made the two Voluntary Payments provided in Section 22.4 of the CBAs, "[b]ased on the Fund's agreement to accept Voluntary Payments that would later offset payments Dominick's was required to make to the Fund."
In 2014, Dominick's withdrew from the Fund, was assessed withdrawal liability, and stopped being a contributing employer to the Fund.
II.
To survive the Fund's motion to dismiss, the complaint must state a plausible claim for relief. See Ashcroft v. Iqbal ,
Section 502(a)(10) of ERISA provides:
(a) PERSONS EMPOWERED TO BRING A CIVIL ACTION: A civil action may be brought-
...
(10) in the case of a multiemployer plan that has been certified by the actuary to be in endangered or critical status under section 1085 of this title, if the plan sponsor-
...
(B) fails to update or comply with the terms of the funding improvement or rehabilitation plan in accordance with the requirements of such section,
by an employer that has an obligation to contribute with respect to the multiemployer plan or an employee organization that represents active participants in the multiemployer plan, for an order compelling the plan sponsor to adopt a funding improvement or rehabilitation plan or to update or comply with the terms of the funding improvement or rehabilitation plan in accordance with the requirements of such section and the funding improvement or rehabilitation plan ...
Dominick's acknowledges that it has no current obligation to contribute to the Fund, but it argues that "standing" under Section 502(a)(10) of ERISA is not limited to employers with continuing contribution obligations. In Dominick's view, Section 502(a)(10) should not be construed as empowering only employers with ongoing contribution obligations to file suit to compel compliance with a rehabilitation plan. Such a narrow construction, Dominick's submits, would "produce nonsensical results" at odds with other aspects of ERISA's statutory scheme. Dkt. 24 at 4. I disagree.
The Seventh Circuit has held that "courts should take care to interpret ERISA strictly according to its plain language." Silvernail v. Ameritech Pension Plan ,
Dominick's urges against reading too much into Section 502(a)(10)'s present-tense formulation, noting that Section 515 likewise uses the present tense to describe an employer's contribution obligations, even though all agree that a plan fiduciary may sue to collect delinquent contributions against a withdrawn employer with no ongoing obligations. See
Nor am I persuaded by Dominick's argument that a narrow reading of 502(a)(10) would "perversely incentivize" plan sponsors to expel contributing employers for the purpose of avoiding liability for violating a rehabilitation plan. Dkt. 24 at 6. First, expelling a contributing employer against the plan's interest would be independently actionable as a breach of fiduciary duty under Section 502(a)(2). Second, none of Dominick's cited authorities suggests that Congress passed Section 502(a)(10) as a means of deterring plan sponsors from violating any duties the plan owes to contributing employers, much less does any authority support construing Section 502(a)(10) more expansively than its plain language provides in order to achieve that purpose.
*944In short, whatever the merits of Dominick's claims against the Fund, Section 502(a)(10) is not the vehicle for asserting them. As a withdrawn employer with no ongoing obligation to contribute to the Fund, Dominick's is outside the scope of parties authorized to bring suit under that section.
At all events, however, the Rehabilitation Plan does not establish the substantive obligations Dominick's seeks to enforce with respect to the Voluntary Payments. Indeed, the only portion of the Rehabilitation Plan to mention the Voluntary Payments states:
If an employer chooses, they [sic] can pay a reduced Supplemental Contribution Rate increase over a collective bargaining period provided they [sic] make a single voluntary payment such that the amount of the single voluntary payment, when combined with the reduced Supplemental Contribution Rate increases, is equivalent to the amount expected to be paid under the required Supplemental Contribution Rate increase as outlined in this section over the term of the CBA, with such amount to be determined by the Trustees.
Dkt. No. 1-5 at A-2. Dominick's acknowledges that the Rehabilitation Plan "does not, on its face, address what happens to the" Voluntary Payments in the event of Dominick's withdrawal. Contrary to Dominick's argument, however, the absence of such provisions does not render the Rehabilitation Plan "ambiguous." Instead, it merely confirms that Dominick's has no claim against the Fund under the Rehabilitation Plan to recover its excess Voluntary Payments. For this additional reason, dismissal of Dominick's Section 502(a)(10) claim is appropriate.
III.
Although district courts typically relinquish jurisdiction over pendent state claims if all federal are dismissed prior to trial, "[i]f the district court dismisses the federal claims on any basis other than for lack of jurisdiction, the court has discretion regarding whether to maintain supplemental jurisdiction over the state law claims." Walker v. Ingersoll Cutting Tool Company ,
The Fund seeks dismissal of Dominick's state claims on the grounds that each is preempted by Section 514 of ERISA,
Dominick's breach of contract claim alleges as follows:
The Fund agreed to accept Voluntary Payments from Dominick's pursuant to the terms and conditions set forth in the Collective Bargaining Agreements, and as reflected in the Resolutions and Rehabilitation Plan. Pursuant to that agreement, the Fund is obligated to offset future payments required to be made to the Fund by Dominick's, or otherwise reimburse Dominick's.
Cmplt. at ¶ 28. Dominick's goes on to allege that it made, and the Fund accepted, the Voluntary Payments, and that the *945Fund refused to offset or otherwise reimburse these payments.
In support of its unjust enrichment claim, Dominick's states:
Dominick's paid the Voluntary Payments pursuant to the Fund's Rehabilitation Plan when it was a contributing employer with the expectation that it would receive the benefit of the Voluntary Payments through offsets made against its future payments to the Fund, or some other mechanism to reimburse Dominick's.
The Fund's lead argument on preemption is that Dominick's state claims are preempted by Section 514 of ERISA. That section states that ERISA preempts "any and all State laws insofar as they may now or hereafter relate to any employee benefit plan" covered under ERISA.
Dominick's makes no effort to argue otherwise, but instead invokes the preemption analysis articulated in Aetna Health Inc. v. Davila ,
Dominick's professes bafflement that its claims may be at once preempted by ERISA and non-actionable under Section 502(a)(10). But as the Seventh Circuit explained in Pohl , "[o]ne of ERISA's purposes is to protect the financial integrity of the pension and welfare plans by confining benefits to the terms of the plans as written."
Although ERISA preemption mandates dismissal of Dominick's state law claims, I note that Dominick's breach of contract claim fails for the independent reason that it is not supported by the complaint's allegations or attached materials. The most salient flaw in the contracts claim is that Dominick's has not identified any contract containing either the rights it asserts or the obligations it seeks to enforce. As noted above, Dominick's alleges that the Fund
agreed to accept Voluntary Payments from Dominick's pursuant to the terms and conditions set forth in the Collective Bargaining Agreements, and as reflected in the Resolutions and Rehabilitation Plan. Pursuant to that agreement , the Fund is obligated to offset future payments required to be made to the Fund by Dominick's, or otherwise reimburse Dominick's.
Cmplt. at ¶ 28 (emphasis added). Dominick's theory, it appears, is that the CBAs, the Resolutions, and the Rehabilitation Plan collectively embody the parties' "agreement" that the Fund would credit or refund any portion of the Voluntary Payments that exceeded its contribution obligations. Yet, neither the Resolutions nor the Rehabilitation Plan contains the hallmarks of an "agreement" between the parties, and neither can reasonably be read as imposing on the Fund the obligations Dominick's seeks to enforce. Meanwhile, despite attaching, quoting from, and referencing the CBAs extensively in its complaint, in its response brief Dominick's disavows any reliance on the CBAs to support its claims. See Dkt. 24 at 12 ("Dominick's is not alleging a violation of the CBAs)" and n. 12 ("[t]he references to the [Voluntary Payments] in the CBAs are superfluous and put the parties in no different position than they would be in if the CBAs contained no such references.").
IV.
For the foregoing reasons, the Fund's motion to dismiss is granted.
Dominick's states in its opposition that the CBAs' provisions relating to the Voluntary Payments "are superfluous and put the parties in no different position than they would be in if the CBAs contained no such references." Dkt. 24 at 12, n. 12. I address this perplexing position in conjunction with my discussion of its state law claims.
Dominick's has no cause of action under Subsection A of Section 502(a)(10), which is relevant only when the plan sponsor has not adopted a rehabilitation plan.
The few cases that interpret Section 502(a)(10) do not address the issue here. See WestRock RKT Co. v. Pace Indus. Union-Mgmt. Pension Fund ,
Dominick's also cites McDonald v. Household Intern., Inc. ,
To be fair, the Fund also conflates the two doctrines. Although the captions of the Fund's preemption arguments state that Counts II and III are "pre-empted by ERISA § 514(a)," the substance of its argument raises both conflict preemption and complete preemption under Davila . Because Dominick's has forfeited any response to the Fund's meritorious Section 514 preemption argument, I need not reach the issue of complete preemption.
Reference
- Full Case Name
- DOMINICK'S FINER FOODS, LLC v. UFCW UNIONS & EMPLOYERS MIDWEST PENSION FUND
- Status
- Published