Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 94 C 811 Suzanne B. Conlon, Judge.
Before BAUER, FLAUM, and RIPPLE, Circuit Judges.
Successful litigation strategy requires crafting a viable theory of liability against a reasonably affluent defendant. The plaintiff-appellant in this case, Central States, Southeast and Southwest Areas Pension Fund ("Central States"), accomplished the former when it filed suit against D&S Leasing, Genessee Cartage Co., and Michiana Trucking, Inc. (collectively the "Rogers Group") for pension withdrawal liability. See 29 U.S.C. sec. 1381. In June 1990, Central States obtained a judgment against the Rogers Group jointly and severally for $957,246.37. Two years later, Central States obtained a judgment against George Rogers, the proprietor who owned the Rogers Group companies at the time they withdrew from the pension fund. By this time, the liability, including interest, exceeded $1.2 million. However, with the exception of $33,554.84 that George Rogers has paid personally, these judgments remain unsatisfied.
In their efforts to find a collectible defendant, Central States brought this action against Central Transport, Inc. ("Transport") and Central Cartage Co. ("Cartage"), claiming that these two companies were the "alter-egos" of the Rogers Group companies, and that they too should be liable for the unpaid pension contributions. Following a bench trial, the district court entered judgment in favor of Transport and Cartage. We affirm.
This case turns on the control of various current and former subsidiaries of CenTra, Inc., a Michigan corporation engaged in the cartage and over-the-road trucking industries. We begin with a review of the relevant cast of corporate characters:
CenTra, Inc.: A holding company and corporate parent of the defendants, Transport and Cartage. CenTra's annual gross income exceeds $300,000,000.
GLS Leaseco, Inc.: A wholly owned subsidiary of CenTra, Inc., GLS Leaseco is a Michigan corporation engaged in the employee leasing business. GLS Leaseco also was the corporate parent of Genessee Cartage ("Genessee") and Michiana Trucking ("Michiana"), two subsidiaries which Transport and Cartage organized to haul steel on behalf of General Motors. In May 1980, GLS Leaseco sold Genessee Cartage to Florence Vorce. In January 1981, it sold Michiana Trucking to Edward Dowgiert. Both Vorce and Dowgiert had previous affiliations with Transport and Cartage.
D&S Leasing: Incorporated in Michigan in July 1981, D&S Leasing provided dock workers and other employees for one of Cartage and Transport's facilities in Cleveland, Ohio. This arrangement lasted from 1982 until May 1986.
"Rogers Group Companies": A collective reference to Genessee, Michiana, and D&S Leasing. By the end of August 1984, George W. Rogers, a former employee of a Transport and Cartage affiliate, owned and controlled all three corporations. Rogers was the original owner of D&S Leasing. He acquired Genessee from Vorce, and Michiana from Dowgiert in August 1984.
As early as December 1973, Genessee Cartage and Michiana Trucking leased union truck drivers to Transport to haul steel for General Motors in the Flint, Michigan area. Since its incorporation in 1981, D&S Leasing has provided a similar service, leasing dock workers and other employees to one of Transport's facilities in Cleveland, Ohio. Under each of these arrangements, the Rogers Group paid the union employees at rates determined under "white paper" agreements that each company negotiated with the local unions of the International Brotherhood of Teamsters. The wage rates were lower than those provided in the Teamsters National Master Freight Agreement, but Central States reviewed, approved, and accepted the terms and conditions of all of the white paper agreements.
Throughout the terms of the leases, Transport and Cartage employees played central roles in the preparation and maintenance of payroll records, and in the recruitment, hiring, supervising, disciplining, and firing of Rogers Group employees. This involvement notwithstanding, George Rogers established a separate office for the three Rogers Group companies, and he hired and supervised his own office staff. The Rogers ...