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National Shopmen Pension Fund v. DISA Industries

March 24, 2010


The opinion of the court was delivered by: Honorable Virginia M. Kendall


Plaintiff National Shopmen Pension Fund ("the Fund"), by its Trustees, John Kerr, Anthony Walencik, James R. King, and Ronald T. Bruce filed suit against Defendant DISA Industries, Inc. ("DISA") alleging that DISA has failed to pay its pension fund withdrawal liability in violation of the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended by the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), 29 U.S.C. §§ 1001 et seq. DISA moves to dismiss the Fund's Complaint as barred by the doctrine of res judicata and for failure to state a viable claim. For the reasons stated below, DISA's Motion to Dismiss is granted.


The following facts are taken from the Fund's Complaint and are assumed to be true for purposes of this Motion to Dismiss. See Murphy v. Walker, 51 F.3d 714, 717 (7th Cir. 1995). National Shopmen Pension Fund is a joint labor-management pension fund established pursuant to Section 302(c) of the Labor Management Relations Act, 29 U.S.C. § 186(c). The Fund provides pension, retirement and related benefits to eligible employees of employers who contribute to the Fund. The Fund is a multiemployer pension plan within the meaning of 29 U.S.C. §§ 1002(37) and 1301(a)(3). DISA is an employer affecting commerce under ERISA, see 29 U.S.C. § 1002(5), and the Labor Management Relations Act of 1947, 29 U.S.C. § 151 et seq. During 2000 and 2001, DISA contributed to the Fund's plan as an employer.

On or about December of 2001, DISA withdrew from the Fund pursuant to 29 U.S.C. § 1383 and was thus subject to withdrawal liability assessed by the Fund. Withdrawal liability is determined by assessing the portion of the Fund's unfunded vested benefits allocable to DISA under a statutory formula. See 29 U.S.C. §§ 1391(c)(4) & 1399(c). By a letter dated June 21, 2006, the Fund notified DISA of withdrawal liability totaling $372,472.00. The schedule provided in the letter stated that DISA was to pay $652.00 per month for 240 months, for a total payment of $127,761.00. From the date on which its first contribution was due-July 16, 2006-to the present, DISA has paid and continues to pay this amount to the Fund each month.

On September 19, 2006, DISA sent a notice of its intent to pursue arbitration regarding the withdrawal liability. In letters dated January 24, 2007 and February 15, 2007, the Fund notified DISA that it had erred in calculating the monthly payments and asked DISA to pay $978.00 per month and to pay $1,956.00 in prior underpaid amounts.*fn1 Subsequent to these requests, DISA requested arbitration concerning the withdrawal liability assessment. During the pendency of the arbitration, DISA continued to pay $652.00 per month.

On January 23, 2008, the Fund filed suit in the United States District Court for the District of Columbia, claiming that DISA was required to pay the $978.00 requested during the pendency of the arbitration. In a Memorandum Opinion on October 17, 2008, the district court dismissed the Fund's complaint because the statute only required DISA to pay the original amount requested by the Fund while the arbitration was pending. See Shopmen Pension Fund v. DISA Indus., Inc., 583 F. Supp. 2d 95 (D.D.C. 2008) ("Shopmen I").

On March 23, 2009, DISA withdrew its arbitration demand. The Fund then sent a letter dated April 8, 2009, telling DISA to pay $978.00 per month for future payments and to immediately pay the $326.00 difference for all the prior payments. The letter further stated that DISA's failure to pay these amounts within sixty days would constitute a default and that the full withdrawal liability would then become due and owing. DISA continued to pay the $652.00 monthly amount, and the Fund filed this suit.


When considering a motion to dismiss under Rule 12(b)(6), the Court accepts as true all facts alleged in the complaint and construe all reasonable inferences in favor of the plaintiff. See Murphy, 51 F.3d at 717. To state a claim upon which relief can be granted, a complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a)(2). "Detailed factual allegations" are not required, but the plaintiff must allege facts that, when "accepted as true... 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In analyzing whether a complaint has met this standard, the "reviewing court [must] draw on its judicial experience and common sense." Iqbal, 129 S.Ct. at 1950. When there are well-pleaded factual allegations, the Court assumes their veracity and then determines if they plausibly give rise to an entitlement to relief. Id. However, where a complaint is self-defeating in its allegations, a motion to dismiss for failure to state a claim is proper. See Wilkow v. Forbes, Inc., 241 F.3d 552, 555 (7th Cir. 2001).


I. DISA's Res Judicata Claim

DISA moves to dismiss the Fund's claim for withdrawal liability on the grounds that it is barred by res judicata. Under the doctrine of res judicata, a party is precluded from relitigating an issue that was or could have been raised in a prior action once a final judgment is entered regarding that action. Highway J Citizens Group v. U.S. Dep't of Transp., 456 F.3d 734, 741 (7th Cir. 2006). The three prerequisites for an application of res judicata are: (1) an identity of the parties or their privies; (2) an identity of the causes of actions; and (3) a final judgment on the merits. Cent. States, Se. & Sw. Areas Pension Fund v. Hunt Truck Lines, Inc., 296 F.3d 624, 628 (7th Cir. 2002). Simply put, when a final judgment is entered on the merits of a case, it is final as to that cause of action for every matter offered to sustain that claim and also any other matters which could have been offered. Nevada v. United States, 463 U.S. 110, 129-30 (1983).

In the present case, there is no dispute that the first element and third elements are satisfied. Rather, the parties dispute whether there is an identity in the cause of action. A cause of action has identity with a previously litigated matter if it emerges from the same nucleus of operative facts as that earlier action. Brzostowski v. Laidlaw Waste Sys., Inc., 49 F.3d 337, 339 (7th Cir. 1995). However, "a litigant's claims are not precluded if the court in an earlier action expressly reserves the litigant's right ...

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