Trustees of the Iam National Pension Fund v. M & K Employee Solutions, LLC

CourtDistrict Court, District of Columbia
DecidedSeptember 30, 2024
DocketCivil Action No. 2020-0433
StatusPublished

This text of Trustees of the Iam National Pension Fund v. M & K Employee Solutions, LLC (Trustees of the Iam National Pension Fund v. M & K Employee Solutions, LLC) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Trustees of the Iam National Pension Fund v. M & K Employee Solutions, LLC, (D.D.C. 2024).

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

TRUSTEES of the IAM NATIONAL PENSION FUND,

Plaintiff,

v. Case No. 1:20-CV-433-RCL

M&K EMPLOYEE SOLUTIONS, LLC, et al.,

Defendants.

MEMORANDUM OPINION

I. INTRODUCTION

The Trustees of the IAM National Pension Fund (“IAM”), plaintiffs in this long-running

ERISA dispute, and their counsel Proskauer Rose LLP (“Proskauer”) have been engaged in a

multi-year long battle to extract overdue withdrawal liability, delinquent contributions, and other

damages from the defendants, entities and natural persons associated with a network of truck

dealerships and service stations (collectively, “M&K”). All throughout, M&K has tried to hide

behind a Potemkin corporate structure in a credulity-straining campaign to convince the court that

it is judgment-proof. M&K has also failed on multiple occasions to comply with discovery

obligations and express orders of this Court, incurring sanctions as a result.

Over the course of nearly five years, IAM’s counsel undertook a herculean effort to

overcome M&K’s obduracy and unwind its web of legal defenses, eventually culminating in a

grant of summary judgment for their clients. They garnered a tremendous recovery of more than

$15 million for IAM, and racked up a considerable quantity of billable hours and out-of-pocket

costs in the process. Those fees and costs are the subject of this opinion.

1 Before the Court today is IAM’s Motion for Attorneys’ Fees and Costs, which M&K

vehemently opposes as excessive. M&K’s objections are almost entirely unpersuasive. For the

reasons contained herein, the Court will GRANT IN PART AND DENY IN PART IAM’s

motion, and will reduce their proposed fee award by approximately 1%.

II. FACTUAL AND PROCEDURAL BACKGROUND

This Court has recounted the factual, procedural, and statutory circumstances underlying

this dispute in several previous opinions. See Trs. of IAM Nat’l Pension Fund v. M&K Emp. Sols.,

LLC (“IAM IV”), 694 F. Supp. 3d 54 (D.D.C. 2023); Trs. of IAM Nat’l Pension Fund v. M&K Emp.

Sols., LLC (“IAM III”), No. 21-cv-2152-RCL, 2022 WL 4534998 (D.D.C. Sept. 28, 2022); Trs. of

IAM Nat’l Pension Fund v. M&K Emp. Sols., LLC (“IAM II”), No. 20-cv-433-RCL, 2022 WL

594539 (D.D.C. Feb. 28, 2022); Trs. of IAM Nat’l Pension Fund v. M&K Emp. Sols., LLC (“IAM

I”), No. 20-cv-433-RCL, 2021 WL 1546947 (D.D.C. Apr. 20, 2021). The Court will therefore

presume some familiarity with the facts, and restate only the most relevant information.

“To ensure that employees who were promised a pension would actually receive it,

Congress enacted the Employee Retirement Income Security Act of 1974 (“ERISA”).” United

Mine Workers of Am. 1974 Pension Plan v. Energy W. Mining Co., 39 F.4th 730, 734 (D.C. Cir.

2022). Shortly after ERISA’s passage, it became clear that the statute provided inadequate

protections for a particular type of pension plan: the multiemployer pension plan (“MPP”), which

is “maintained pursuant to a collective bargaining agreement between multiple employers and a

union.” Id.; 29 U.S.C. § 1002(37)(A). MPPs are particularly important in “industries where there

are hundreds or thousands of small employers going in and out of business and where the nexus

of the employment relationship is the union that represents employees who typically work for

many of those employers over the course of their career.” United Mine Workers, 39 F.4th at 734

n.1. Under ERISA, employers were generally able to withdraw from MPPs without any financial

2 obligation to continue supporting the plan, even though their employees retained the benefits that

they had accrued, putting immense financial pressure on the pension funds. Id. at 734–35 & n.2.

In 1980, Congress enacted the Multiemployer Pension Plan Amendments Act (“MPPAA”),

codified at 29 U.S.C. §§ 1381–1461, to “protect the financial solvency of multiemployer pension

plans.” Bay Area Laundry and Dry Cleaning Pension Tr. Fund v. Ferbar Corp. of Cal., Inc., 522

U.S. 192, 196 (1997). It does so by “requir[ing] most employers who withdraw from underfunded

multiemployer pension plans to pay ‘withdrawal liability.’” Id. (quoting 29 U.S.C. § 1381(a)).

Withdrawal liability is assessed as “the employer’s proportionate share of the plan’s ‘unfunded

vested benefits,’ calculated as the difference between the present value of vested benefits and the

current value of the plan’s assets.” Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717,

725 (1984) (citing 29 U.S.C. §§ 1381, 1391). The MPP’s trustees are responsible for calculating

an employer’s withdrawal liability and setting a payment schedule for the employer to follow,

which is meant to “approximate[] the periodic contributions the employer had made before

withdrawing from the plan.” Bay Area Laundry, 522 U.S. at 196–97 (citing 29

U.S.C. §§ 1399(b)(1), (c)(1)(C)).

An employer may dispute an assessment of withdrawal liability by first requesting

reconsideration by the fund, then submitting the dispute to arbitration. Id. at 197 (citing 29

U.S.C. §§ 1399(b)(2), 1401(a)(1)). However, even if it disputes the amount due, the employer

must abide by the payment schedule, a protocol commonly referred to as the “‘pay now, dispute

later’ collection procedure.” Id. (citing Robbins v. Pepsi-Cola Metro. Bottling Co., 800 F.2d 641,

642 (7th Cir. 1986)). The pay now, dispute later procedure ensures that employers cannot litigate

abusively to delay payment of their withdrawal liability until, say, the MPP or the employer

becomes insolvent. IAM II, 2022 WL 594539, at *2 (collecting cases). The MPPAA contains

3 built-in enforcement mechanisms to enforce compliance with the pay now, dispute later procedure:

if an employer fails to comply, the MPP may accelerate the unpaid withdrawal liability (i.e.,

abandon the payment schedule and demand payment all at once instead), seek judicial intervention,

and force the employer to pay attorneys’ fees, liquidated damages, and other costs associated with

litigation. Bay Area Laundry, 522 U.S. at 197; see 29 U.S.C. §§ 1399(c)(5), 1451(a)(1), 1451(b),

1451(e). The liquidated damages are owed whether or not the employer’s challenge to the plan’s

withdrawal liability assessment is meritorious: they are a “penalty for refusing to follow” the pay

now, dispute later procedure, “separate from the underlying withdrawal liability itself.” IAM II,

2022 WL 594539, at *2 (quoting Cent. States, Se. & Sw. Areas Pension Fund v. Lady Balt. Foods,

Inc., 960 F.2d 1339, 1347 (7th Cir. 1992)).

The IAM National Pension Fund is an MPP associated with the International Association

of Machinists and Aerospace Workers, AFL-CIO union. Compl. ¶ 17, ECF No. 1. The defendants

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