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LLC v. UFCW Unions & Employers Midwest Pension Fund

United States District Court, N.D. Illinois, Eastern Division

June 6, 2019

DOMINICK'S FINER FOODS, LLC, Plaintiff,
v.
UFCW UNIONS & EMPLOYERS MIDWEST PENSION FUND, Defendant.

          MEMORANDUM OPINION AND ORDER

          Elaine E. Bucklo, United States District Judge.

         Dominick's Finer Foods, LLC, (“Dominick's”) sues UFCW Unions and Employers Midwest Pension Fund (the “Fund”) for allegedly failing to comply with the terms of a rehabilitation plan pursuant to Section 502(a)(10) of ERISA, 29 U.S.C. § 1132(a)(10), (Count I) and for breach of contract (Count II). Dominick's also alleges a claim of unjust enrichment in the alternative (Count III). The Fund moves to dismiss the complaint under Rule 12(b)(6). For the reasons that follow, I grant the motion.

         I.

         For purposes of the Fund's motion, I accept all factual allegations in the complaint as true and draw all reasonable inferences in Dominick's favor. See Geinosky v. City of Chicago, 675 F.3d 743, 746 (7th Cir. 2012). I may consider, in addition to Dominick's allegations, documents that are attached to the complaint and central to its claims. Id. at 745 n.1.

         Dominick's is a Delaware Limited Liability Company. Cmplt. ¶ 1. Dominick's sole member is Dominick's Supermarkets, LLC, another Delaware Limited Liability Company, which has a sole member, Safeway, Inc., a Delaware corporation with its principal place of business in Boise, Idaho. Id. The Fund “is a multiemployer plan within the meaning of Section 3(37) of ERISA, 29 U.S.C. § 1002(37), and is administered in Rosemont, Illinois.” Id. ¶ 2.

         Until 2014, Dominick's made contributions to the Fund pursuant to two collective bargaining agreements in effect from October of 2008 to October of 2012 (the “CBAs”). Id. ¶¶ 5, 17. Section 22.4 of each CBA provides that in addition to its normal hourly contributions to the Fund, Dominick's “has voluntarily agreed, ” subject to certain conditions, “to make an additional single sum payment (the ‘Voluntary Payment') to the fund on December 1, 2011.” Dkt. 1-1, 1-2 at ¶ 22.4. The conditions set forth in the CBAs include that the Voluntary Payments “shall be used and applied solely for the purpose of improving the funded status of the Fund, ” and that the Voluntary Payments “shall not be counted... (b) as an hourly or other contribution used in any way to determine the withdrawal liability payment schedule under ERISA Section 4219, or Article XVI of the Pension Plan documents; or (c) otherwise to increase the Employer's share of withdrawal liability or withdrawal liability payments to the Pension Plan in any way.” Id.[1]

         In September of 2010, the Fund's Board of Trustees passed two resolutions accepting and acknowledging the Voluntary Payments memorialized in the CBAs. Cmplt. at ¶ 9. By that point, the Fund had been certified by an actuary “to be in critical status under ERISA Section 305, 29 U.S.C. § 1085.” Id. at ¶ 12; see Dkt 1-5 at 1. On October 22, 2010, the Fund adopted a written rehabilitation plan (the “Rehabilitation Plan”), which provided, “[i]f an employer chooses, [it] can pay a reduced Supplemental Contribution Rate increase over a collective bargaining period” if it makes a Voluntary Payment. Cmplt. ¶ 13. On November 9, 2010, the Fund passed a consent resolution, stating, inter alia, that if Dominick's Voluntary Payments “exceed the amount Dominick's would have paid pursuant to the [Rehabilitation] Plan's rehabilitation schedules, the [Fund's] Trustees shall provide an equitable credit to Dominick's” in the form of a reduced rate for its contribution payments. Id.

         On December 1, 2011, Dominick's made the two Voluntary Payments provided in Section 22.4 of the CBAs, “[b]ased on the Fund's agreement to accept Voluntary Payments that would later offset payments Dominick's was required to make to the Fund.” Id. ¶ 14. The Fund accepted these two Voluntary Payments, which totaled roughly $12 million dollars, “pursuant to the terms, conditions and agreements contained in the [CBAs], the Resolutions and the Rehabilitation Plan.” Id. ¶ 15. Dominick's subsequently received some $3 million in offsets to its contributions to the Fund. Id. ¶ 17.

         In 2014, Dominick's withdrew from the Fund, was assessed withdrawal liability, and stopped being a contributing employer to the Fund. Id. ¶¶ 5, 16, 18. Dominick's then asked the Fund to offset its withdrawal liability by the approximately $9 million of the Voluntary Payments that had not been offset against Dominick's contributions to the Fund, since the Voluntary Payments could no longer be applied as offsets to contributions. Id. ¶ 18. On June 4, 2014, the Fund rejected this request. Id. ¶ 19. Nearly four years later, Dominick's filed this lawsuit to compel the Fund to credit or refund its excess payments.

         II.

         To survive the Fund's motion to dismiss, the complaint must state a plausible claim for relief. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). The Fund argues that Dominick's fails to state a claim under Section 502(a)(10) of ERISA for two reasons: First, Dominick's is not within the scope of “persons empowered to bring a civil action” under Section 502(a)(10); and second, even if Dominick's were empowered to bring such an action, its factual allegations are insufficient to support a claim under that section.

         Section 502(a)(10) of ERISA provides:

(a) PERSONS EMPOWERED TO BRING A CIVIL ACTION: A civil action may be brought-
(10) in the case of a multiemployer plan that has been certified by the actuary to be in endangered or critical status under section 1085 of this title, if the plan sponsor-
(B) fails to update or comply with the terms of the funding improvement or rehabilitation plan in accordance with the ...

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