United States District Court, D. Oregon
BOARD OF TRUSTEES OF THE EMPLOYERS-SHOPMEN'S LOCAL 516 PENSION TRUST, through their designated fiduciaries Zanley Galton, III and Phil Casciato, Plaintiff,
COLUMBIA WIRE & IRON WORKS, INC., an Oregon corporation; COLUMBIA STEEL SERVICES, INC., an Oregon corporation; COLUMBIA STEEL SERVICES, INC. dba COLUMBIA WIRE & IRON WORKS, an Oregon corporation; COLUMBIA STEEL SOLUTIONS, INC., an Oregon corporation; ROBERT G. PARK, an individual; ANDREW V. PARK, an individual; and SHAWNA C. PARK, an individual, Defendants.
Mechanic and Whitney Stark, Mechanic Law Firm, Of Attorneys
B. Miller and Candice R. Broock, Kilmer, Voorhees &
Laurick, P.C. Of Attorneys for Defendants.
OPINION AND ORDER
MICHAEL H. SIMON, DISTRICT JUDGE.
Board of Trustees of the Employers-Shopmen's Local 516
Pension Trust (the “Fund”) brings claims under
Oregon common law and the Employee Retirement Income Security
Act of 1974 (“ERISA”), 29 U.S.C. § 1001
et seq., against Defendants Columbia Wire & Iron
Works, Inc. (“CWIW”); Columbia Steel Services,
Inc. (“CSSI”); Columbia Steel Services, Inc. dba
Columbia Wire & Iron Works (“CSSI dba CWIW”);
Columbia Steel Solutions, Inc. (“Solutions”); and
Robert and Andrew Park (collectively, the
“Defendants”). The Fund alleges that CWIW incurred
more than $2 million in withdrawal liability when it withdrew
from the Fund and seeks to recover CWIW's withdrawal
liability from CWIW, CWIW's former owners (the Parks),
and from other corporations owned by the Parks. Before the
Court is Defendants' motion to dismiss the First Amended
Complaint. For the reasons that follow, the motion to dismiss
is granted in part and denied in part.
motion to dismiss for failure to state a claim may be granted
only when there is no cognizable legal theory to support the
claim or when the complaint lacks sufficient factual
allegations to state a facially plausible claim for relief.
Shroyer v. New Cingular Wireless Servs., Inc., 622
F.3d 1035, 1041 (9th Cir. 2010). In evaluating the
sufficiency of a complaint's factual allegations, the
court must accept as true all well-pleaded material facts
alleged in the complaint and construe them in the light most
favorable to the non-moving party. Wilson v.
Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir.
2012); Daniels-Hall v. Nat'l Educ. Ass'n,
629 F.3d 992, 998 (9th Cir. 2010). To be entitled to a
presumption of truth, allegations in a complaint “may
not simply recite the elements of a cause of action, but must
contain sufficient allegations of underlying facts to give
fair notice and to enable the opposing party to defend itself
effectively.” Starr v. Baca, 652 F.3d 1202,
1216 (9th Cir. 2011). All reasonable inferences from the
factual allegations must be drawn in favor of the plaintiff.
Newcal Indus. v. Ikon Office Solution, 513 F.3d
1038, 1043 n.2 (9th Cir. 2008). The court need not, however,
credit the plaintiff's legal conclusions that are couched
as factual allegations. Ashcroft v. Iqbal, 556 U.S.
662, 678-79 (2009).
complaint must contain sufficient factual allegations to
“plausibly suggest an entitlement to relief, such that
it is not unfair to require the opposing party to be
subjected to the expense of discovery and continued
litigation.” Starr, 652 F.3d at 1216. “A
claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Iqbal, 556 U.S. at 678 (citing
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556
it ceased operations in 2012, CWIW was a corporation owned by
the Parks and others. CWIW had collective bargaining agreements
(collectively, the “CBA”) with the
Ironworkers-Shopmen's Local 516, International
Association of Bridge, Structural, Ornamental and Reinforcing
Iron Workers. The CBA allegedly covered all of CWIW's
production and maintenance employees engaged in the
fabrication of iron, steel, metal, and other products. The
CBA also required CWIW to contribute regularly to a pension
fund (the Fund) on behalf of CWIW's employees. CWIW
withdrew from the Fund in 2012 when it ceased all business
operations. As a result of its withdrawal, CWIW allegedly
incurred more than $2 million in withdrawal liability to the
suit, the Fund seeks to recover the alleged withdrawal
liability from Defendants, and primarily CWIW. Because CWIW,
however, is no longer in business and may be unable to pay
the withdrawal liability, the Fund also seeks to recover
CWIW's withdrawal liability from the Parks and other
corporations owned by the Parks, Defendants CSSI, CSSI dba
CWIW, and Solutions. The Fund alleges that despite CWIW's
cessation of business operations in 2012, the Parks have
continued CWIW's steel fabrication business as a
non-union operation through CSSI, CSSI dba CWIW, and
Solutions. The Fund further alleges that Defendants
fraudulently concealed from the Fund the fact that they were
continuing their steel fabrication business in order to avoid
payment of CWIW's withdrawal liability.
Fund brings five claims under ERISA and the common law.
First, the Fund claims that CWIW has failed to pay withdrawal
liability. 29 U.S.C. §§ 1145, 1451(b). Second, the
Fund claims that CSSI, CSSI dba CWIW, and Solutions are
liable for CWIW's withdrawal liability because they are
in the same controlled group as CWIW. 29 U.S.C. §
1401(f)(3)(B). In the third and fourth claims, the Fund
claims that CSSI, CSSI dba CWIW, and Solutions are liable for
the withdrawal liability under the common law alter ego and
successor liability doctrines, respectively. Fifth, the Fund
seeks to hold Robert and Andrew Park liable under the
doctrine of “piercing the corporate veil.”
move to dismiss Claim Two against Solutions and Claims Three,
Four, and Five against all Defendants. The Fund has
agreed voluntarily to dismiss Claim Two against Solutions.
Accordingly, remaining before the Court is Defendants'
motion to dismiss Claims Three through Five.
Claim Three: Alter Ego Liability
argue that Claim Three should be dismissed against CSSI and
Solutions for three reasons. First, Defendants argue in their
reply that the alter ego doctrine does not apply to suits
attempting to collect withdrawal liability after the
enactment of the Multiemployer Pension Plan Amendments Act of
1980 (MPPAA), 29 U.S.C. § 1381 et seq. In 2010,
the Ninth Circuit declined to decide “whether [29
U.S.C.] § 1392(c) is intended to be the sole route of
redress for evading or avoiding withdrawal liability”
or whether the alter ego doctrine is still available despite
enactment of the MPPAA. Resilient Floor Covering Pension
Fund v. M&M Installation, Inc., 630 F.3d 848, 852
(9th Cir. 2010). The Ninth Circuit instructed the district
court on remand to decide the issue. Id. In a
thoroughly reasoned opinion, which this Court finds
persuasive, the district court held that the alter ego
doctrine was still available. See Resilient Floor
Covering Pension Fund v. M&M Installation, Inc.,
2012 WL 669765, at *4-5 (N.D. Cal. Feb. 29, 2012).
the Ninth Circuit does not appear to have expressly
considered the issue, other circuits have applied the alter
ego doctrine to suits to collect withdrawal liability after
the enactment of the MPPAA. See, e.g., N.Y.
State Teamsters Conference Pension & Ret. Fund v. Express
Servs., Inc., 426 F.3d 640, 649-50 (2d Cir. 2005);
Bd. of Trs. of Teamsters Local 863 Pension Fund
v. Foodtown, Inc., 296 F.3d 164, 171-73 (3d Cir. 2002);
Cent. States, Se. & Sw. Areas Pension Fund v. Cent.
Transp., Inc., 85 F.3d 1282, 1288-89 (7th Cir. 1996).
Moreover, the Ninth Circuit has applied the alter ego
doctrine in suits to collect delinquent contributions, which
are “treated in the same manner” as actions to
compel an employer to pay withdrawal liability. 29 U.S.C.
§ 1451(b); Trs. of the Screen Actors Guild-Producers
Pension & Health Plans v. NYCA, Inc., 572 F.3d 771,
776-77 (9th Cir. 2009); cf. Resilient Floor Covering
Pension Tr. Fund Bd. of Trs. v. Michael's Floor Covering,
Inc., 801 F.3d 1079, 1093 (9th Cir. 2015) (“We see
no reason why the successorship doctrine should not apply to
MPPAA withdrawal liability just as it does to the obligation
to make delinquent ERISA contributions.”) Accordingly,
the Court holds that the alter ego doctrine still applies to
actions to compel employers to pay withdrawal liability after
the enactment of the MPAA.
Defendants argue that the Fund has not adequately alleged
unity of interest or fraud or injustice under Ranza v.
Nike, Inc., 793 F.3d 1059, 1073-75 (9th Cir. 2015),
cert. denied, 136 S.Ct. 915 (2016). The Fund
correctly responds that the Ranza test does not
apply to the alter ego claim in this case. When a union
company is accused of creating a non-union alter ego for the
purpose of avoiding collective bargaining obligations, a
court must determine: (1) “whether the two firms are a
single employer by measuring the degree of common ownership,
management, operations, and labor relations”; and (2)
whether the non-union firm is “being used ‘in a
sham effort to avoid collective bargaining obligations,
rather than for the pursuit of legitimate business
objectives.'” UA Local 343 v. Nor-Cal Plumbing,
Inc., 48 F.3d 1465, 1470 (9th Cir. 1994) (citation
omitted) (quoting Brick Masons Pension Tr. v. Indus.
Fence & Supply, Inc., 839 F.2d 1333, 1336 (9th Cir.
1988)); see also M&M Installation, 630 F.3d at
854 (“[T]he rationale of our alter ego cases shows that
the Nor-Cal standard, adapted to the circumstances
of withdrawal liability, remains applicable.”).
the first Nor-Cal factor, the Fund points to
allegations that Robert, Andrew, and Shawna Park collectively
own all of the shares of CWIW, CSSI, and Solutions, ECF 28
¶ 9-11; Robert Park is CWIW's and CSSI's Chief
Executive Officer and Solutions' President and
Secretary-Treasurer, ECF 28 ¶ 9; Andrew Park is
CWIW's and CSSI's President, ECF 28 ¶ 10; CSSI
is a successor to CWIW's steel fabrication business, ECF
28 ¶ 13, 21-25; and “Defendants continued to do
business with the same customers and vendors, and to use
employees formerly employed by [CWIW], ECF 28 ¶ 20.
Taking these allegations as true, the Fund has adequately
alleged common ownership, management, operations, and labor
relations between CWIW, on the one hand, and CSSI and
Solutions, on the other.
the second Nor-Cal factor, the Fund points to
allegations that CSSI and Solutions fraudulently concealed
that they were continuing their “steel
fabrication” business and “are being used in a
sham effort to evade and avoid their withdrawal liability
obligations to” the Fund. ECF 28 ¶¶ 13, 18,
20-21, 23, 25, 35. Defendants reply that the Fund has not
alleged that CSSI and Solutions continue to engage in work
covered by the CBA. The Court notes the CBA allegedly covers
“all production and maintenance employees . . . engaged
in the fabrication of iron, steel, metal and other products,
” which the First Amended Complaint refers to as
“steel fabrication.” ECF 28 ¶ 12.
Accordingly, the Fund has adequately alleged that CSSI and
Solutions continue to engage in covered work. Defendants
further reply that the CBA only covered shop fabrication, not
steel design or construction, and that Defendants ceased shop
fabrication work after CWIW withdrew from the Fund.
Defendants argue that because the evidence does not support
the Fund's allegations that Defendants continued
CWIW's fabrication business, the Fund does not have a
valid alter ego claim. The Court notes that Defendants have
not filed a copy of the CBA and have not requested that it be
incorporated by reference into the First ...