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Joseph A. Ferrara, Sr., Frank H. Finkel, Marc Herbst, Thomas N. Piali v. Leticia

September 21, 2012

JOSEPH A. FERRARA, SR., FRANK H. FINKEL, MARC HERBST, THOMAS N. PIALI, DENISE RICHARDSON, ANTHONY D'AQUILA, THOMAS GESUALDI, LOUIS BISIGNANO, DOMINICK MARROCCO, AND ANTHONY PIROZZI, AS TRUSTEES AND FIDUCIARIES OF THE LOCAL 282 PENSION TRUST FUND, THE LOCAL 282 ANNUITY TRUST FUND, THE LOCAL 282 JOB TRAINING TRUST FUND, AND THE LOCAL 282 VACATION AND SICK LEAVE TRUST FUND, PLAINTIFFS,
v.
LETICIA, INC. AND YORK -- JERSEY HAULERS, INC., DEFENDANT.



The opinion of the court was delivered by: Roslynn R. Mauskopf, United States District Judge.

MEMORANDUM & ORDER

On July 15, 2009, plaintiff trustees and fiduciaries of employee benefit plans of Local 282 of the International Brotherhood of Teamsters (collectively, "plaintiffs" or "counterclaim defendants") filed this action to collect contributions allegedly owed by Leticia, Inc. ("defendant" or "counterclaim plaintiff") and its alleged alter ego, York-Jersey Haulers, Inc., pursuant to a collective bargaining agreement and Sections 502(a)(3) and 515 of the Employee Retirement Income Security Act of 1974, as amended ("ERISA), 29 U.S.C. §§ 1132(a)(3) and 1145. (Compl. (Doc. 1); Amended Compl. (Doc. 17).) On July 22, 2011, defendant filed a Second Amended Answer ("SAA"), alleging seven counterclaims, six of which sound in state tort law. (SAA (Doc. No. 67) ¶¶ 165--270.) On October 17, 2011, plaintiffs filed a motion to dismiss defendant's six state-law counterclaims. (Pls.' Mot. to Dismiss (Doc. No. 73).)

For the reasons set forth below, the motion is GRANTED in part and DENIED in part.

BACKGROUND

Defendant is a New Jersey corporation that provides trucking services for excavated materials from heavy construction sites. (SAA ¶ 8.) Plaintiffs are trustees and fiduciaries of various Local 282 Trust Funds ("the Funds"), which are multi-employer benefit plans. (Amended Compl. ¶¶ 3--4.) Local 282 and defendant are parties to a collective bargaining agreement ("CBA") allegedly requiring defendant to contribute to the Funds on behalf of covered employees. (Id. at ¶ 5.)

Plaintiffs allege that, beginning in 2005, defendant has underreported the hours worked by its employees in two ways: first, by paying workers through a separate entity that did not have a CBA with plaintiffs, and second, by failing to report all the hours worked. (Id. at ¶¶ 23, 26.) Defendant disputes these allegations and asserts counterclaims alleging that plaintiffs have engaged in a discriminatory effort to impede its business. (SAA at 16.) As part of this effort, defendant claims that plaintiffs "administered the Local 282 Funds arbitrarily, capriciously and in bad faith" (Id. at ¶ 102) "because [defendant] is owned and operated by an Hispanic woman" (Id. at ¶ 103). Defendant identifies the following conduct as the alleged arbitrary, capricious and bad faith administration of the Funds, purportedly constituting state-law torts:

(1) discriminatory enforcement of purported "key-to-key" pay requirements only against [defendant]; (2) refusal to provide . . . a letter of good standing . . . notwithstanding, upon information and belief, their willingness to do so for other employers who were blatantly and notoriously non-compliant . . .; (3) conducting audits . . . with greater frequency than . . . non-Hispanic employers; (4) purposely inflating the amount of contribution deficiencies . . . with full knowledge that the purported contractual basis for the asserted deficiencies was not supported . . . by the MTA CBA . . .; (5) arbitrarily and capriciously and in bad faith relying upon grossly inaccurate and deliberately manipulated On Site Steward Reports . . .; (6) arbitrarily and capriciously and in bad faith insisting upon and conducting audits of other legal entities owned by [defendant despite that plaintiffs knew] those other entities employed no truck drivers and were [not] liable under the MTA CBA . . .; and (7) by arbitrarily and capriciously and in bad faith seeking to impose liability upon [defendant] for the purported work of employees employed by . . . a separate and distinct entity . . . .

(Id. at ¶105.)

Defendant provides additional context for allegations related to the "key-to-key requirement." Allegedly, in mid-2007, union agents changed their interpretation of the CBA to measure covered work time to include not only the time "when the drivers were transporting excavated material," but also the "time when the drivers were traveling between the yard where the trucks were parked and their first and last assignments of the day," referred to as "down time" in the counterclaims. (Id. at ¶ 134.) This expanded measurement of the covered work time is known as the "key-to-key" rule. (Id. at ¶ 136.) Defendant alleges that this interpretation is "in direct conflict with the written terms of the MTA CBA," and is not being applied to other employers. (Id. at ¶¶ 135--38.) Defendant also claims that the alleged conduct-application of the key-to-key requirement, excessive audits, "bogus audit claims," false claims that individuals working for other businesses are instead working for defendant, and denial of a letter of good standing-was engaged in with malice and for the reason that the owner and operator is Hispanic. (Id. at ¶¶ 147--49, 156, 160.) Defendant further alleges that this conduct resulted in harm to the defendant in the form of higher wages and benefit contributions, excessive audit costs, resulting competitive disadvantage, and injury to business relationships that plaintiffs were aware of. (E.g., id. at ¶¶ 203--06.)

Before this Court is plaintiffs' motion to dismiss the state-law counterclaims, pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim, on grounds that they are preempted by Section 301 of the Labor Management Relations Act and Section 514 of the Employee Retirement Income Security Act. (Pls.' Mem. (Doc. No. 74) at 1--2.)

LEGAL STANDARD

I.Legal Standard on a Motion to Dismiss

A motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6) requires the Court to examine the legal, rather than factual, sufficiency of a pleading. Harris v. Mills, 572 F.3d 66, 71 (2d Cir. 2009). The standard for a motion to dismiss is the same with respect to claims and counterclaims. See, e.g., Onanuga v. Pfizer, Inc., No. 03 CIV. 5405(CM)(GAY), 2004 WL 601689, at *3 (S.D.N.Y. Mar. 16, 2004); O'Hearn v. Bodyonics, Ltd.,22 F. Supp. 2d 7, 10 (E.D.N.Y. 1998). As required by Rule 8(a)(2), a pleading must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." To withstand a motion to dismiss, a pleading "must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

A court considering a 12(b)(6) motion must "take[ ] factual allegations [in the pleading] to be true and draw[ ] all reasonable inferences" in the counterclaim plaintiff's favor. Harris, 572 F.3d at 71 (citation omitted). A pleading need not contain "detailed factual allegations," but it must contain "more than an unadorned, the-[counterclaim-]defendant-unlawfully-harmed-me accusation." Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). In other words, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. (citing Twombly, 550 U.S. at 555). Rather, the pleading must include "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. "A claim has facial plausibility when the [counterclaim-]plaintiff pleads factual content that allows the court to draw the reasonable inference that the [counterclaim-]defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). The determination of whether a pleading "states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679 (citing Iqbal v. Hasty, 490 F.3d 143, 157--58 (2d Cir. 2007)).

In considering a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), a district court must limit itself to the facts stated in the pleading, documents attached to the pleading as exhibits, and documents incorporated by reference in the ...


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