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Central States, Southeast and Southwest Areas Pension Fund v. S & H Trucking

January 16, 2008

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND AND HOWARD MCDOUGALL, TRUSTEE, PLAINTIFFS,
v.
S & H TRUCKING, INC., AN INDIANA CORPORATION, DEFENDANT.



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

MEMORANDUM OPINION AND ORDER

Plaintiffs Central States, Southeast and Southwest Areas Pension Fund ("Central States Fund") and Howard McDougall, trustee ("McDougall") (collectively "Plaintiffs") brought this action against Defendant S & H Trucking, Inc. ("S&H" or "Defendant"), for employer contributions owed pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"). Now before this Court is Defendant's motion to dismiss based upon Plaintiffs' alleged failure to join indispensable parties (Docket No. 17). For the reasons stated below, Defendant's motion is DENIED.

1. FACTS*fn1

The Central States Fund is a multiemployer employee benefit plan under ERISA. It is primarily funded by contributions from participating employers pursuant to negotiated collective bargaining agreements ("CBAs") with local unions which are affiliated with the International Brotherhood of Teamsters. Pursuant to a pension plan, principal and income from contributions and investments to the Central States Fund is held and used to provide benefits to participants and related beneficiaries, and pay for necessary administrative expenses. Plaintiff McDougall is presently a trustee of the Central States Fund.

Defendant S&H agreed to be bound by a CBA entered into with Teamsters Joint Council No. 69 ("Joint Council 69") and a bargaining association known as Indiana Constructors, Inc. ("ICI") ("1994-2004 CBA"). The 1994-2004 CBA established initial effective dates of April 1, 1999 through March 31, 2004, with automatic yearly extensions absent termination or modification. This CBA required named employers to contribute to the Central States Fund on behalf of covered employees.

S&H agreed to be bound by another CBA entered into with the Joint Council and ICI, effective April 1, 2004 through March 31, 2009. ("2004-2009 CBA"). It also required employers to make contributions to Central States Fund on behalf of covered employees.

S&H agreed to be bound by the Central States Fund's Trust Agreement ("Central State Trust Agreement"), which required it to "make continuing and prompt payments to the [Pension] Fund as required by the applicable collective bargaining agreements." Compl. ¶ 10. However, S&H has not made any contributions to the Fund as required by the CBAs and the Trust Agreement.

Defendant S&H maintains that all contribution demands against S&H were superseded by Miscellaneous Addenda and related documents entered into with Local Union 135 of the International Brotherhood of Teamsters ("Teamsters Local 135") and the Indiana Teamsters Pension Fund ("Indiana Teamsters Fund"). According to Defendant, these documents shifted the S&H pension obligations now in contention from the Central States Fund to the Indiana Teamsters Fund. According to Defendant, it has made all necessary payments.

On October 4, 2007, Plaintiffs filed a complaint in this Court, alleging that S&H failed to contribute to the Central States Fund as required by the CBAs and the Trust Agreement, pursuant to 29 U.S.C. §§ 1145, 1132(g)(2).

2. STANDARD OF REVIEW FOR MOTION TO DISMISS

Defendant S&H has moved to dismiss this action via Federal Rules 12(b)(7) and 19. According to Federal Rule 19, determining whether dismissal is appropriate for failure to include a particular party requires a two-step analysis, where dismissal is only warranted if the allegedly missing party is both "necessary" under 19(a) and "indispensable" under 19(b). At the outset, it should be noted that the ultimate purpose of this rule is to "to permit joinder of all materially interested parties to a single lawsuit so as to protect interested parties and avoid waste of judicial resources." Davis Companies v. Emerald Casino, Inc., 268 F.3d 477, 481 (7th Cir. 2001).

A party can be deemed "necessary" only to the degree that it is "claim[ing] an interest relating to the subject of the action and is so situated that the disposition of the action in [its] absence may as a practical matter impair or impede [its] ability to protect that interest." Salton, Inc. v. Philips Domestic Appliances and Pers. Care B.V., 391 F.3d 871, 876-77 (7th Cir. 2004) (quoting Fed.R.Civ.P. 19(a)(2)(I)). Specifically, Rule 19(a) provides that a party be joined if:

(1) in the person's absence complete relief cannot be accorded among those already parties, or (2) the person claims an interest relating to the subject of the action and is so situated that the disposition of the action in the person's absence may (I) as a practical matter impair or impede the person's ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reasons of the claimed interest. Fed. R. Civ. P. 19(a).

If the individual or entity is deemed "necessary"*fn2 according to these criteria, the court must then determine whether "in equity and good conscience the action should not proceed among the parties before the court -- that is, should not proceed in the necessary party's absence -- but rather should be dismissed." Id. at 877 (quoting Fed. R. Civ. P. 19(b)). This question has been commonly referred to as a question of whether the necessary party is "indispensable." See Darush v. N. Trust Co., 1996 WL 99903, *1 (N.D. Ill. Feb. 29, 1996) (citing Pasco Int'l (London) Ltd. v. Stenograph Corp., 637 F.2d 496, 507 n. 13 (7th Cir.1980); Krueger v. Cartwright, 996 F.2d 928, 933 (7th Cir.1993)). Rule 19(b) sets forth four factors to consider in deciding whether an absent party is "indispensable": (1) the extent to which a judgment entered without the absent party might be prejudicial to him or those already parties; (2) the extent to which protective measures might be ...


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