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TRUSTEES OF THE HEALTH & WELFARE v. SCHLESINGER BR

June 4, 1996

THE TRUSTEES OF THE HEALTH AND WELFARE AND THE PENSION FUNDS OF THE FOUR JOINT BOARDS AND ESTHER MAIESE, Plaintiffs, against SCHLESINGER BROTHERS, INC. AND THE INTERNATIONAL LEATHER GOODS, PLASTICS, NOVELTY AND SERVICE WORKERS UNION, Defendants.


The opinion of the court was delivered by: BAER

 Plaintiffs, Trustees of the Health and Welfare and Pension Funds of the Four Joint Boards and Esther Maiese, filed this action pursuant to ERISA § 404(a)(1), 29 U.S.C. § 1104(a)(1) and LMRA § 301. Defendant employer Schlesinger Brothers, Inc. ("Schlesinger") and defendant union International leather Goods, Plastics, Novelty and Service Workers Union (the "International") filed motions to dismiss. Schlesinger moves to dismiss the complaint in its entirety while the International moves only to dismiss the first cause of action in the complaint. Defendants' motions are granted; plaintiffs' complaint is dismissed in its entirety with regard to Schlesinger and the first cause of action in plaintiffs' complaint is dismissed with regard to the International. The remaining cause of action, i.e. the LMRA claim against the International, remains.

 Background

 Defendant Schlesinger Brothers, Inc. is a leather manufacturing company operating out of a single facility located in Berlin, New Jersey. According to affidavits provided by the defendant, Schlesinger Brothers, Inc. maintains only one place of business and does not have any employees working within New York. Defendant, International is the union that represents Schlesinger employees in the New Jersey facility. The union is headquartered in St. Louis, Missouri.

 Schlesinger Brothers and the International have negotiated several collective bargaining agreements. On January 23, 1992, the parties signed a Memorandum of Agreement which required Schlesinger to make monthly contributions to the Four Joint Boards Council ("FJBC") Health and Welfare and Pension Funds. The January 1992 Memorandum stated that Schlesinger's payments to the FJBC Funds were to continue until January 31, 1995. However, in October of 1994, three months prior to the termination of the collective bargaining agreement, the defendants negotiated a new Memorandum of Agreement, altering the January 1992 agreement.

 The October 1994 negotiations took place via phone and fax with Schlesinger located in New Jersey and the International in Missouri. Both parties intended that the negotiations be for the purpose of renegotiating the health, welfare and pension fund provisions of the January 1992 agreement. On October 31, 1994, Schlesinger and the International amended the January 1992 agreement in a Memorandum of Agreement (the "October Memo").

 Pursuant to the October Memo, the defendants agreed that Schlesinger would cease making contributions to the FJBC Health, Welfare and Pension Funds in favor of Schlesinger's participation in the International Health, Welfare and Pension Funds. This change took effect immediately. Schlesinger made contributions to the FJBC Health, Welfare and Pension Funds for the months of September and October, then, pursuant to the October Memo, Schlesinger began contributing to the International Health, Welfare and Pension Funds in November of 1994.

 Plaintiffs are the Trustees of the FJBC Health, Welfare and Pension Fund and Esther Maiese, is an individual Trustee and Schlesinger employee. Plaintiffs filed this action alleging that Schlesinger deprived the FJBC Funds of contributions to which they are entitled. Further, plaintiffs allege that the defendants violated their fiduciary obligations under ERISA by diverting monies from the FJBC Funds to the International Funds.

 Discussion

 The first cause of action in plaintiffs' amended complaint charges that defendants violated the "sole benefit rule" of ERISA, section 404(a)(1). The second cause of action makes a similar charge pursuant to LMRA § 301. Defendant Schlesinger moves to dismiss the complaint in its entirety. Defendant International moves only to dismiss the first claim, i.e. the ERISA claim. In assessing defendants' motions to dismiss, the Court must accept the well-pleaded contentions of the plaintiff as true. Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957). Additionally, the Court must draw all reasonable inferences arising from the facts in plaintiffs' favor. IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1052 (2d Cir. 1993), cert. denied, 130 L. Ed. 2d 38, 115 S. Ct. 86, U.S. , 115 S. Ct. 86 (1994).

 a. Defendant Schlesinger's Motion.

 Defendant Schlesinger moves to dismiss plaintiffs' complaint in its entirety pursuant to Fed. R. Civ. P. 12(b)(1), (2), (3) and (6). Defendant argues that plaintiffs lack standing to assert their claims under either ERISA or the LMRA and that this Court lacks in personam jurisdiction over defendant. For the reasons which follow, defendant's motion to dismiss the complaint is granted.

 1. The ERISA claim.

 Plaintiffs assert jurisdiction over defendant pursuant to ERISA § 502(3), 29 U.S.C. § ...


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