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Central States, Southeast and Southwest Areas Pension Fund v. ST. Louis Post-Dispatch

August 28, 2007

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND AND HOWARD MCDOUGALL, TRUSTEE, PLAINTIFFS,
v.
ST. LOUIS POST-DISPATCH, LLC, A DELAWARE LIMITED LIABILITY COMPANY, AND LEE ENTERPRISES, INC., A MISSOURI CORPORATION DEFENDANTS.



The opinion of the court was delivered by: Judge David H. Coar

MEMORANDUM OPINION AND ORDER

Before this Court is Defendants' motion to dismiss Plaintiffs' complaint under Rules 12(b)(1) and 12(b)(6) . For the reasons set forth below, Defendant's motion to dismiss is DENIED.

I. Facts

Central States, Southeast and Southwest Areas Pension Fund is a multi-employer pension fund, and Howard McDougall is a trustee of the Pension Fund ("Plaintiffs"). Post-Dispatch, under parent organization Lee Enterprises, Inc., is an employer covered by the Fund ("Defendants"). On July 1, 2006, Plaintiffs determined that Defendants' obligation to contribute to the fund had been terminated, triggering withdrawal liability under ERISA. On or about July 20, 2006, Defendants received a notice and demand for payment of withdrawal liability issued by Plaintiffs in the amount of $1,477,860.47.

Plaintiffs received a letter on behalf of the Lee Controlled Group dated August 25, 2006, requesting information under section 4221 of ERISA. The letter stated that the requested information was needed to determine whether to request review of the Withdrawal Liability. Plaintiffs did not respond to the request. Plaintiffs sent revised assessments to Defendants in September 2006 and November 2006, with the withdrawal liability amount ultimately reaching $1,725,097.20.

In February 2007, Defendants initiated an arbitration proceeding pursuant to the American Arbitration Association's ("AAA") Multi-employer Pension Plan Arbitration Rules for Withdrawal Liability. Plaintiffs objected to the AAA's jurisdiction based on Defendant's failure to request an internal review. AAA decided to proceed with the arbitration, and Plaintiffs filed the instant lawsuit.

II. Legal Standard

In reviewing a motion to dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1), the district court must accept all well-pleaded factual allegations as true and draw all reasonable inferences in favor of the plaintiff. See Transit Exp. Inc. v. Ettinger, 246 F.3d 1018, 1023 (7th Cir. 2001). On a motion to dismiss under Rule 12(b)(1), the plaintiff bears the burden of establishing that the jurisdictional requirements have been met. Kontos v. Dep't of Labor, 826 F.2d 573, 576 (7th Cir. 1987). When a party moves for dismissal under Rule 12(b)(1), the nonmoving party must provide competent proof of jurisdictional facts to support its allegations. Thomason v. Gaskill, 315 U.S. 442, 446, 62 S.Ct. 673, 86 L.Ed. 951 (1942); Kontos, 826 F.2d at 576.

On a motion to dismiss for failure to state a claim upon which relief can be granted, the Court again accepts all well-pleaded allegations in the plaintiff's complaint as true. Fed. R. Civ. P. 12(b)(6). The purpose of a 12(b)(6) motion is to decide the adequacy of the complaint, not to determine the merits of the case. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990) (citation omitted). A complaint should not be dismissed "unless it appears beyond all doubt that the Plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed. 2d 80 (1957).

III. Analysis

A. Subject Matter Jurisdiction

Defendants move for dismissal on the ground that this court lacks subject matter jurisdiction over the withdrawal liability dispute as it is subject to mandatory arbitration under Section 4221, 29 U.S.C. §1401. In general, federal courts do not have jurisdiction over withdrawal liability, which must first be subjected to arbitration. However, the Seventh Circuit has made clear that district courts do have jurisdiction over disputes on the timeliness of an arbitration request. Robbins v. Chipman Trucking, Inc., 866 F.2d 899 (7th Cir. 1988); Robbins v. B & B Lines, Inc., 830 F.2d 648 (7th Cir. 1987). In this case, Plaintiffs' complaint alleges solely that Defendants' request for arbitration was untimely. Because the issue is one of timeliness in the arbitration request, this court retains subject matter jurisdiction over the case.

B. Failure to State ...


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