20-4012-cv Div. 1181 Amalgamated Transit Union-New York Emps. Pension Fund v. New York City Dep't of Educ., et al.
In the United States Court of Appeals for the Second Circuit
AUGUST TERM 2020
No. 20-4012-cv
DIVISION 1181 AMALGAMATED TRANSIT UNION-NEW YORK EMPLOYEES PENSION FUND, AND ITS BOARD OF TRUSTEES, Plaintiff-Appellant,
v.
NEW YORK CITY DEPARTMENT OF EDUCATION, JOFAZ TRANSPORTATION, INC., ALLIED TRANSIT CORP., PRIDE TRANSPORTATION SERVICES, INC., QUALITY TRANSPORTATION CORP., Defendants-Appellees.
On Appeal from the United States District Court for the Eastern District of New York
ARGUED: JUNE 24, 2021 DECIDED: AUGUST 13, 2021
Before: LEVAL, CABRANES, and PARK, Circuit Judges. This case principally presents one question: Whether Plaintiff- Appellant Division 1181 Amalgamated Transit Union-New York Employees Pension Fund and its Board of Trustees (the “Fund”) plausibly stated a claim for delinquent contributions under the Employee Retirement Income Security Act of 1974. In a comprehensive and well-reasoned opinion and order dated November 2, 2020, the United States District Court for the Eastern District of New York (Edward R. Korman, Judge) held that the Fund had failed to do so and dismissed the Amended Complaint with prejudice. We adopt in full the reasoning of the District Court, as set forth in its opinion, and we hold that the District Court did not err in dismissing the Amended Complaint pursuant to Rule 12(b)(6) with prejudice. Accordingly, we AFFIRM the judgment of the District Court.
JEFFREY S. SWYERS (Richard Scott Siegel, on the brief), Slevin & Hart, P.C., Washington, DC, for Plaintiff-Appellant.
MELISSA D. HILL (Michael Fleming and Hanna Martin, on the brief), Morgan, Lewis & Bockius LLP, New York, NY, for Defendant-Appellee New York City Department of Education.
RICHARD I. MILMAN (Netanel Newberger, on the brief), Milman Labuda Law Group, PLLC, Lake Success, NY, for Defendants-
2 Appellees Jofaz Transportation, Inc. and Allied Transit Corp.
MICHAEL A. KAPLAN (Robert J. Kipnees, on the brief), Lowenstein Sandler LLP, Roseland, NJ, for Defendants-Appellees Pride Transportation Services, Inc. and Quality Transportation Corp.
PER CURIAM:
This case principally presents one question: Whether Plaintiff-
Appellant Division 1181 Amalgamated Transit Union-New York
Employees Pension Fund and its Board of Trustees (the “Fund”)
plausibly stated a claim for delinquent contributions under the
Employee Retirement Income Security Act of 1974 1 (“ERISA”). In a
thorough and well-reasoned opinion and order dated November 2,
2020, the United States District Court for the Eastern District of New
York (Edward R. Korman, Judge) held that the Fund had failed to do
so and dismissed the Amended Complaint with prejudice. 2 We adopt
1 29 U.S.C. § 1001 et seq. 2 Div. 1181 Amalgamated Transit Union-New York Emps. Pension Fund v. New York City Dep't of Educ. et al., No. 14-cv-7405, ___ F. Supp. 3d ___, 2020 WL 6449268 (E.D.N.Y. Nov. 2, 2020).
3 in full the reasoning of the District Court, as set forth in its opinion and
order, and we hold that the District Court did not err in dismissing the
Amended Complaint pursuant to Rule 12(b)(6) with prejudice.
Accordingly, we AFFIRM the judgment of the District Court.
I. BACKGROUND
We include here only so much of the background of this matter
as is necessary to explain our decision to affirm; a comprehensive
discussion of the facts, statutes, and contractual terms at issue can be
found in the District Court’s excellent opinion. 3
The Fund is an ERISA-governed, multiemployer, defined
benefit pension plan, with participants that include employees of
companies that provide school bus transportation to schools in New
York City. The members of the Board of Trustees are fiduciaries of the
Fund.
Defendant-Appellee the New York City Department of
Education (the “DOE”) operates the public schools in New York City.
For decades, the DOE has contracted with private companies to
3See id.; see also In re Bankers Tr. Co., 450 F.3d 121, 123 (2d Cir. 2006) (on appeal, referring to, and relying on, the district court’s recitation of facts and survey of the pertinent law).
4 provide transportation services for students who attend school in New
York City. 4 Defendants-Appellees Jofaz Transportation, Inc., Allied
Transit Corp., Pride Transportation Services, Inc., and Quality
Transportation Corp. (together, the “Contractors,” and with the DOE,
“Defendants”) are companies that provide school bus services
pursuant to contracts with the DOE. These contracts contain a
provision called an Employee Protection Provision (the “EPP”), which
governs how the Contractors fill certain employee vacancies that arise.
Specifically, the EPP requires the Contractors to fill vacancies in
coordination with the DOE through what are called “Master Seniority
Lists,” and requires the Contractors to follow certain rules about
wages and benefits for employees who are hired to fill those
vacancies. 5 The Fund is not a party to the school bus services contracts
between the DOE and the Contractors.
4 See generally Div. 1181 A.T.U.-New York Emps. Pension Fund By Cordiello v. City of New York Dep't of Educ., 910 F.3d 608, 612 (2d Cir. 2018). 5 The Fund alleges the EPP states, inter alia, that, [t]he Contractor shall sign an agreement with Division 1181 A.T.U.—New York Employees Pension Fund and Plan to participate in such plan on behalf of all operators (drivers), mechanics, dispatchers and escorts (matrons-attendants), in the event the Contractor employs escorts, who appear
5 In 2014 the Fund filed this action against Defendants, bringing
numerous claims under ERISA as well as related state law contract
claims. In 2018 the Fund filed an Amended Complaint, which is the
operative pleading. The Fund alleged that the Contractors were
required to contribute to the Fund, based principally on provisions in
the school bus service contracts entered into by the DOE and the
Contractors, and that the Contractors failed to make the required
contributions. Defendants moved to dismiss the Amended Complaint
under Federal Rule of Civil Procedure 12(b)(6) for failure to state a
claim upon which relief can be granted. 6
In a comprehensive and well-reasoned opinion and order dated
November 2, 2020, the District Court principally held that the Fund
failed to plausibly allege that the Contractors had obligations to
contribute to the Fund under the terms of an ERISA pension plan. 7 The
District Court granted Defendants’ motions and dismissed the
on the Master Seniority Lists and who participated in the Fund and Plan. App’x 27-28 (Amended Complaint ¶ 44). 6The Contractors also moved to dismiss the Amended Complaint under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction, which was granted by the District Court but which is not the subject of this appeal. 7Div. 1181 Amalgamated Transit Union-New York Emps. Pension Fund, ___ F. Supp. 3d at ___, 2020 WL 6449268, at *5.
6 Amended Complaint with prejudice.
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20-4012-cv Div. 1181 Amalgamated Transit Union-New York Emps. Pension Fund v. New York City Dep't of Educ., et al.
In the United States Court of Appeals for the Second Circuit
AUGUST TERM 2020
No. 20-4012-cv
DIVISION 1181 AMALGAMATED TRANSIT UNION-NEW YORK EMPLOYEES PENSION FUND, AND ITS BOARD OF TRUSTEES, Plaintiff-Appellant,
v.
NEW YORK CITY DEPARTMENT OF EDUCATION, JOFAZ TRANSPORTATION, INC., ALLIED TRANSIT CORP., PRIDE TRANSPORTATION SERVICES, INC., QUALITY TRANSPORTATION CORP., Defendants-Appellees.
On Appeal from the United States District Court for the Eastern District of New York
ARGUED: JUNE 24, 2021 DECIDED: AUGUST 13, 2021
Before: LEVAL, CABRANES, and PARK, Circuit Judges. This case principally presents one question: Whether Plaintiff- Appellant Division 1181 Amalgamated Transit Union-New York Employees Pension Fund and its Board of Trustees (the “Fund”) plausibly stated a claim for delinquent contributions under the Employee Retirement Income Security Act of 1974. In a comprehensive and well-reasoned opinion and order dated November 2, 2020, the United States District Court for the Eastern District of New York (Edward R. Korman, Judge) held that the Fund had failed to do so and dismissed the Amended Complaint with prejudice. We adopt in full the reasoning of the District Court, as set forth in its opinion, and we hold that the District Court did not err in dismissing the Amended Complaint pursuant to Rule 12(b)(6) with prejudice. Accordingly, we AFFIRM the judgment of the District Court.
JEFFREY S. SWYERS (Richard Scott Siegel, on the brief), Slevin & Hart, P.C., Washington, DC, for Plaintiff-Appellant.
MELISSA D. HILL (Michael Fleming and Hanna Martin, on the brief), Morgan, Lewis & Bockius LLP, New York, NY, for Defendant-Appellee New York City Department of Education.
RICHARD I. MILMAN (Netanel Newberger, on the brief), Milman Labuda Law Group, PLLC, Lake Success, NY, for Defendants-
2 Appellees Jofaz Transportation, Inc. and Allied Transit Corp.
MICHAEL A. KAPLAN (Robert J. Kipnees, on the brief), Lowenstein Sandler LLP, Roseland, NJ, for Defendants-Appellees Pride Transportation Services, Inc. and Quality Transportation Corp.
PER CURIAM:
This case principally presents one question: Whether Plaintiff-
Appellant Division 1181 Amalgamated Transit Union-New York
Employees Pension Fund and its Board of Trustees (the “Fund”)
plausibly stated a claim for delinquent contributions under the
Employee Retirement Income Security Act of 1974 1 (“ERISA”). In a
thorough and well-reasoned opinion and order dated November 2,
2020, the United States District Court for the Eastern District of New
York (Edward R. Korman, Judge) held that the Fund had failed to do
so and dismissed the Amended Complaint with prejudice. 2 We adopt
1 29 U.S.C. § 1001 et seq. 2 Div. 1181 Amalgamated Transit Union-New York Emps. Pension Fund v. New York City Dep't of Educ. et al., No. 14-cv-7405, ___ F. Supp. 3d ___, 2020 WL 6449268 (E.D.N.Y. Nov. 2, 2020).
3 in full the reasoning of the District Court, as set forth in its opinion and
order, and we hold that the District Court did not err in dismissing the
Amended Complaint pursuant to Rule 12(b)(6) with prejudice.
Accordingly, we AFFIRM the judgment of the District Court.
I. BACKGROUND
We include here only so much of the background of this matter
as is necessary to explain our decision to affirm; a comprehensive
discussion of the facts, statutes, and contractual terms at issue can be
found in the District Court’s excellent opinion. 3
The Fund is an ERISA-governed, multiemployer, defined
benefit pension plan, with participants that include employees of
companies that provide school bus transportation to schools in New
York City. The members of the Board of Trustees are fiduciaries of the
Fund.
Defendant-Appellee the New York City Department of
Education (the “DOE”) operates the public schools in New York City.
For decades, the DOE has contracted with private companies to
3See id.; see also In re Bankers Tr. Co., 450 F.3d 121, 123 (2d Cir. 2006) (on appeal, referring to, and relying on, the district court’s recitation of facts and survey of the pertinent law).
4 provide transportation services for students who attend school in New
York City. 4 Defendants-Appellees Jofaz Transportation, Inc., Allied
Transit Corp., Pride Transportation Services, Inc., and Quality
Transportation Corp. (together, the “Contractors,” and with the DOE,
“Defendants”) are companies that provide school bus services
pursuant to contracts with the DOE. These contracts contain a
provision called an Employee Protection Provision (the “EPP”), which
governs how the Contractors fill certain employee vacancies that arise.
Specifically, the EPP requires the Contractors to fill vacancies in
coordination with the DOE through what are called “Master Seniority
Lists,” and requires the Contractors to follow certain rules about
wages and benefits for employees who are hired to fill those
vacancies. 5 The Fund is not a party to the school bus services contracts
between the DOE and the Contractors.
4 See generally Div. 1181 A.T.U.-New York Emps. Pension Fund By Cordiello v. City of New York Dep't of Educ., 910 F.3d 608, 612 (2d Cir. 2018). 5 The Fund alleges the EPP states, inter alia, that, [t]he Contractor shall sign an agreement with Division 1181 A.T.U.—New York Employees Pension Fund and Plan to participate in such plan on behalf of all operators (drivers), mechanics, dispatchers and escorts (matrons-attendants), in the event the Contractor employs escorts, who appear
5 In 2014 the Fund filed this action against Defendants, bringing
numerous claims under ERISA as well as related state law contract
claims. In 2018 the Fund filed an Amended Complaint, which is the
operative pleading. The Fund alleged that the Contractors were
required to contribute to the Fund, based principally on provisions in
the school bus service contracts entered into by the DOE and the
Contractors, and that the Contractors failed to make the required
contributions. Defendants moved to dismiss the Amended Complaint
under Federal Rule of Civil Procedure 12(b)(6) for failure to state a
claim upon which relief can be granted. 6
In a comprehensive and well-reasoned opinion and order dated
November 2, 2020, the District Court principally held that the Fund
failed to plausibly allege that the Contractors had obligations to
contribute to the Fund under the terms of an ERISA pension plan. 7 The
District Court granted Defendants’ motions and dismissed the
on the Master Seniority Lists and who participated in the Fund and Plan. App’x 27-28 (Amended Complaint ¶ 44). 6The Contractors also moved to dismiss the Amended Complaint under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction, which was granted by the District Court but which is not the subject of this appeal. 7Div. 1181 Amalgamated Transit Union-New York Emps. Pension Fund, ___ F. Supp. 3d at ___, 2020 WL 6449268, at *5.
6 Amended Complaint with prejudice. 8 Judgment in favor of
Defendants entered November 4, 2020, and the Fund timely appealed.
II. DISCUSSION
“[W]e review de novo a district court’s dismissal of a complaint
pursuant to Rule 12(b)(6).” 9 It is well established that “[t]o survive a
motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to state a claim to relief that is plausible on its face.” 10
When ruling on a motion to dismiss, “documents that are attached to
the complaint or incorporated in it by reference are deemed part of the
pleading and may be considered.” 11 In reviewing on appeal the
dismissal of a complaint pursuant to Rule 12(b)(6), we not only “accept
all factual allegations as true” but also “draw all reasonable inferences
in the plaintiff’s favor.” 12
An ERISA plan trustee, like the Fund, may bring a civil suit
against employers who are delinquent in making contributions. 13 To
8 Id. at *9. 9 Austin v. Town of Farmington, 826 F.3d 622, 626 (2d Cir. 2016). 10 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quotation marks omitted). 11 Beauvoir v. Israel, 794 F.3d 244, 248 n.4 (2d Cir. 2015). 12 Austin, 826 F.3d at 625. 13 29 U.S.C. § 1132.
7 be liable for delinquent contributions under Section 515 of ERISA, a
defendant must (1) have contribution obligations that arise from either
a “plan” or a “collectively bargained agreement” and (2) be an
“employer” within the meaning of ERISA. 14 A plan trustee may also
bring a claim under Section 409 of ERISA for a breach of fiduciary
duty 15 or pursue a claim under Section 406 of ERISA if a fiduciary
knowingly participates in a transaction prohibited by the statute. 16
The Fund advances several arguments as to why Defendants are
liable under ERISA. The Fund argues that the Contractors are liable for
delinquent contributions under ERISA, principally taking the position
that the Contractors were obliged to contribute to the Fund under the
terms of the school bus service contracts entered into by the DOE and
the Contractors. The Fund also argues that all Defendants are liable
under ERISA under a breach-of-fiduciary-duty theory of liability or, in
the alternative, a non-fiduciary theory of liability premised on
allegedly prohibited transactions.
14 Id. § 1145; see also Cement & Concrete Workers Dist. Council Welfare Fund, Pension Fund, Legal Servs. Fund & Annuity Fund v. Lollo, 35 F.3d 29, 36 (2d Cir. 1994) (“[Section] 1145 permits recovery only against those employers who are already obligated, in the absence of ERISA, to make ERISA contributions.”). 15 29 U.S.C. § 1109. 16 Id. § 1106.
8 After reviewing the record de novo, we reject the Fund’s
contentions. We adopt in full the reasoning of the District Court, as set
forth in its opinion dated November 2, 2020. Specifically, we hold that
the Fund failed to plausibly allege that the Contractors had obligations
to contribute to the Fund, as would be required for a delinquent
contribution claim under ERISA. Neither the contracts for school bus
services nor the Fund’s governing documents required the Contractors
to make the contributions demanded. Further, the EPP did not
constitute either an ERISA pension plan or a collectively bargained
agreement. Finally, we agree with the District Court that the Fund
failed to plausibly allege that Defendants are liable under ERISA as
fiduciaries or by participating in prohibited transactions. In sum, we
hold that the District Court did not err in dismissing the Amended
Complaint pursuant to Rule 12(b)(6) with prejudice.
III. CONCLUSION
We have considered all of the arguments raised by the Fund on
appeal and find them to be without merit. For the foregoing reasons,
we adopt the November 2, 2020 opinion and order of the District Court
as our own, and therefore we AFFIRM the November 4, 2020
judgment of the District Court.