The opinion of the court was delivered by: KAPLAN
LEWIS A. KAPLAN, District Judge.
This case presents the question whether an assignee for the benefit of creditors may be sued under the Employee Retirement Income Security Act ("ERISA")
for contributions to employee funds which the assignor failed to make as required. In view of the novel character of the issue, the Court has invited and received the views of the United States Department of Labor, which is charged with enforcement and administration of the statute.
Defendant Logic Construction Corporation ("Logic") is a New York corporation formerly engaged in the construction business. It is a party to collective bargaining agreements ("CBAs") pursuant to which it was obliged to make monetary contributions and/or reports to the plaintiff employee benefit plans (the "Funds") and remit dues checkoffs and New York Laborers' Political Action Committee ("NYLPAC") contributions deducted from the wages of employees who authorize such deductions to the plaintiff union. The complaint alleges that a total of more than $ 250,000 became due and payable, and remains unpaid, in respect of the period January 3, 1995 through June 30, 1997.
On January 23, 1997, Logic made a general assignment for the benefit of creditors to defendant Robert M. Fisher, who is sued solely in his capacity as assignee for the benefit of Logic's creditors. Fisher accepted and then filed the assignment with the Clerk of the Supreme Court of the State of New York, New York County, on January 27, 1997 in conformity with New York statute.
The state court promptly entered an order requiring the assignee to advertise for creditors to present claims.
On or about October 8, 1997, the plaintiffs commenced this action against Logic, its principal Matthew Shelton, Sr., and Fisher. Default judgments have been entered against Logic and Shelton. The plaintiffs thus have reduced their claims for unpaid benefit plan contributions, dues checkoffs and NYLPAC contributions to judgment. Nevertheless, there remain pending in this Court plaintiffs' claims against the assignee, in his capacity as such, for breach of contract by failure to make contributions to benefit plans (count 3), to permit access to books and records (count 9), and to remit dues checkoffs (count 12) and NYLPAC contributions (count 15); violation of Section 515 of ERISA
by failure to make benefit plan contributions (count 6); and for prospective injunctive relief on contract and ERISA theories (counts 16 and 17). Fisher now moves to dismiss the claims against him for lack of subject matter jurisdiction, lack of personal jurisdiction, failure to join indispensable parties, failure to state a claim upon which relief may be granted and on other grounds.
The Secretary of Labor, as amicus curiae, has taken the position, in relevant part, that the assignee is not an "employer" within the meaning of ERISA, that ERISA does not preempt the New York assignment for benefit of creditors statute, and that the assignee may be sued to compel submission to an audit to the extent he is in possession of Logic's books and records. The Court is in substantial agreement.
The purposes of ERISA include protection of employee benefit plan participants and beneficiaries by requiring disclosure and reporting of pertinent information, establishment of standards of conduct for plan fiduciaries, and provision of appropriate federal remedies.
In order to achieve national uniformity, it adopted a sweeping preemption clause which, so far as it is relevant here, provides that ERISA "shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan."
ERISA preemption, indeed, is so broad that the Supreme Court has made clear both that (1) federal court suit under Section 502(a) of ERISA is "the exclusive remedy for rights guaranteed under ERISA,"
and (2) the assertion of a state law claim that "relates to" an ERISA plan is sufficient to confer federal subject matter jurisdiction notwithstanding the failure of the complaint to rely on federal law as a rule of decision.
It is against this background that this dispute must be considered.
The ERISA claim for unpaid plan contributions presents an overriding issue: is an assignee for the benefit of creditors subject to suit under ERISA for unpaid benefit plan contributions owed by its assignor? This appears to be a question of first ...