Plaintiffs Central States, Southeast and Southwest Areas Pension Fund ("the Fund"), et al., sue Defendants Jeffrey Feldman, Sheldon Feldman and Benjamin Reiff ("the Individuals") and Mahoning National Bank of Ohio ("Mahoning") for alleged violations of the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended by the Multi-employer Pension Plan Amendments Act of 1980 ("MPPAA"), 29 U.S.C. §§ 1001, et seq. (1982). Specifically, the Fund alleges that the Defendants violated 29 U.S.C. § 1392(c), which prohibits employers from evading and avoiding liability to multi-employer pension funds. The Fund also alleges violations of several common law causes of action, including fraud upon creditors, civil conspiracy, constructive trust, improper corporate distributions, equitable subordination, and return of assets.
The Defendants filed three motions to dismiss: (1) Mahoning moved for dismissal under Fed. R. Civ. P. 12(b)(6), arguing, among other things, that the Fund's ERISA claim is time-barred; (2) Mahoning moved for dismissal under Fed. R. Civ. P. 12(b)(2), arguing that, if the ERISA claim is time-barred, we lack personal jurisdiction over Mahoning; and (3) the Individuals moved for dismissal under Fed. R. Civ. P. 12(b)(6), using arguments similar to Mahoning's, most notably echoing the ones about the time-bar and personal jurisdiction.
For the reasons discussed below, we grant the Defendants' motions to dismiss.
The Fund is a multi-employer pension plan. Feldman Brothers Produce Co., Inc. ("Produce"), made contributions to the Fund on behalf of certain of its employees. The Individuals owned Produce at the time it began making those contributions. In February 1984, however, the Individuals arranged to sell to Jacob Frydman Co. ("Frydman") their stock in Produce and another entity, Joseph Feldman, Inc. ("Feldman"). In March 1984, having received a loan from Mahoning, Frydman purchased the stock. Frydman used Produce's assets as collateral for the loan.
In January 1985, Produce and Feldman ceased operations. They also withdrew from the multi-employer pension plan and incurred $ 493,529.09 in withdrawal liability. Frydman liquidated the companies' assets and, with them, partially repaid Mahoning's loan. Apparently, Frydman paid the Fund nothing.
On March 14, 1987, the Fund sent to Frydman, Produce, and Feldman ("the Controlled Group") a Notice and Demand for Payment of the withdrawal liability. The Controlled Group failed to pay. In July 1988, the Fund sent a Past Due Notice. In March 1990, the Fund sued the Controlled Group, and in February 1993, it obtained a judgment for $ 1,076,612.77. On January 21, 1994, the Fund brought the current action against the Individuals and Mahoning, hoping they could discharge the Controlled Group's liability.
II. Standard of Review
In Bethlehem Steel Corp. v. Bush, 918 F.2d 1323 (7th Cir. 1990), the court reaffirmed the well-known standard of review for motions to dismiss under Fed. R. Civ. P. 12(b)(6):
A party fails to state a claim upon which relief can be granted only if that party "can prove no set of facts upon which relief may be granted." (citation omitted). We assume well-pleaded allegations are true and shall draw all reasonable inferences in the light most favorable to the plaintiff.