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International Painters and Allied Trades Industry Pension Fund v. Painting Co.

August 5, 2008

INTERNATIONAL PAINTERS AND ALLIED TRADES INDUSTRY PENSION FUND ET AL., PLAINTIFFS,
v.
THE PAINTING COMPANY, DEFENDANT.



The opinion of the court was delivered by: Ricardo M. Urbina United States District Judge

Document Nos. 7, 8

MEMORANDUM OPINION DENYING THE DEFENDANT'S MOTION TO DISMISS; DENYING THE DEFENDANT'S MOTION TO TRANSFER; GRANTING THE DEFENDANT'S MOTION TO STAY PROCEEDINGS

I.INTRODUCTION

This case comes before the court on the defendant's motion to dismiss or, in the alternative, to transfer or stay the proceedings. International Painters and Allied Trades Industry Pension Fund ("the Fund") and Gary J. Meyers, Administrator of the Fund, (collectively "the plaintiffs") bring suit against the defendant, The Painting Company, under the Employment Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1132 and 1145, alleging that the defendant failed to make contributions to the Fund pursuant to independent trade agreements between the defendant and three local unions affiliated with the Fund. The defendant moves to dismiss based on the first-to-file rule because it filed a suit for declaratory judgment in the United States District Court for the Southern District of Ohio prior to the institution of this action. Because the equitable considerations do not justify dismissal under the first-to-file rule, the court denies the defendant's motion. Furthermore, because the defendant fails to overcome the extra deference given to the plaintiffs' choice of forum in ERISA suits, the court denies the defendant's motion to transfer. Finally, because allowing the District Court for the Southern District of Ohio to discern the defendant's contractual obligations before this court proceeds conserves judicial resources, the court stays these proceedings.

II. FACTUAL & PROCEDURAL BACKGROUND

The facts of this case are undisputed. Beginning in August 2005, the defendant entered into contracts with three local unions -- one in New York (IUPAT District Council No. 9), one in New Jersey (IUPAT District Council No. 711) and one in Nevada (IUPAT District Council No. 15) -- to complete painting work at three flagship Abercrombie & Fitch stores in each of the respective states. Def.'s Mot. at 2-4; Pls.' Opp'n at 2. For each store, the defendant signed standard independent form agreements with each union. Def.'s Mot. at 2-4. As part of these agreements, the defendant contributed to the local union employees' pension funds. Id. at 4. Sometime before May 2007, the defendant concluded its work at the three stores and with the three local unions. Id.

On May 30, 2007, following an audit conducted by the Fund, the plaintiffs' letter notified the defendant that it was in arrears $527,587.35. Id. at 6. The plaintiffs also requested $142,044.47 "for liquidated damages, interest, attorney's fees, and audit costs." Id. In the notification letter, the plaintiffs informed the defendant that it had ten days to either pay the amount or challenge the plaintiffs' findings, or the plaintiffs would file a collection action in the District Court for the District of Columbia. Pls.' Opp'n at 4.

Nine days after receipt of the letter, on June 8, 2007, the defendant instituted a declaratory judgment action in the Southern District of Ohio. Def.'s Mot. at 7. The suit, naming the Fund, the local unions and "four funds for which the Fund claims to be the collection agent" as defendants, id., seeks a declaration of the rights and obligations of all the parties, specifically regarding responsibilities under the independent form agreements, id. at 8. Six days later, on June 14, 2007, the plaintiffs filed this action to recover the delinquent contributions. Id. at 8. This suit, naming the defendant as the only other party, is strictly an ERISA collection action. Since these filings, both parties have filed amended complaints in their respective actions. Id. at 7, 9. Additionally, both parties have brought motions to dismiss or to transfer in response to the other's action. Pls.' Opp'n at 4. The court now turns to the defendant's motions.

III. ANALYSIS

A. The Defendant's Motion to Dismiss

1. Legal Standard for the First-to-File Rule

"For more than [five] decades the rule in this circuit has been that '(w)here two cases between the same parties on the same cause of action are commenced in two different Federal courts, the one which is commenced first is to be allowed to proceed to its conclusion first.'" Wash. Metro. Area Transit Auth. v. Ragonese, 617 F.2d 828, 830 (D.C. Cir. 1980) (second alteration in original) (citing Speed Prod. Co. v. Tinnerman, 171 F.2d 727, 729 (D.C. Cir. 1948)). But, the first-to-file rule "should be ignored under some circumstances," Columbia Plaza Corp. v. Sec. Nat'l Bank, 525 F.2d 620, 627 (D.C. Cir. 1975); Lewis v. Nat'l Football League, 813 F. Supp. 1, 4 (D.D.C. 1992) (opposing a mechanical application of the first-to-file rule) (citing Columbia Plaza Corp., 525 F.2d at 627), and a court should be guided by the equities of a particular case in making its decision, Fed'n Internationale de Football Ass'n v. Nike, Inc., 285 F. Supp. 2d 64, 67-68 (D.D.C. 2003) (noting that courts should analyze various equitable factors when considering an exception to the first-to-file rule). One equitable consideration is whether "the first-filing plaintiff has launched a 'preemptive strike' declaratory judgment action in the face of an impending . . . suit." Nike, 285 F. Supp. 2d at 67; accord Thayer/Patricof Educ. Funding, L.L.C. v. Pryor Res., Inc., 196 F. Supp. 2d 21, 30 (D.D.C. 2002). Additional considerations may include whether "the first action was filed in the midst of good faith settlement discussions[; whether] the two suits were filed closely together in time[; whether the cases have] progressed very far," Nike, 285 F. Supp. 2d at 67-68; and whether "full, fair, and complete adjudication of all issues may be had before [the present] court," Lewis, 813 F. Supp. at 5.

2. The Court Denies the Defendant's Motion to Dismiss

The defendant requests that the court dismiss this action under the ...


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