Opinion
No. 98 C 773
December 5, 2000
MEMORANDUM ORDER
In conjunction with what is hoped to be the final act in this long-playing drama — quantifying the joint and several recovery by plaintiff Funds against co-defendants Hills Funeral Home, Ltd. ("Hills") and George Pepper ("Pepper") — Hills has raised a question as to its liability for one component of Pepper's unpaid contributions to the Funds: those due by reason of a breach of contract under the livery collective bargaining agreements ("CBAs"). That claim by Funds is premised on Labor Management Relations Act ("LMRA") § 301 ( 29 U.S.C. § 185), rather than on ERISA.
When Hills raised that question, this Court promptly directed counsel for both Funds and Hills to provide the citations of authorities that they relied on for their respective positions. It might have been thought that with a serious matter of money thus at issue (though this Court is uninformed as yet regarding just how many dollars are involved), both counsel would have taken that directive with appropriate seriousness. But think again — instead, Hills' counsel has essentially advanced nothing to support his position other than his own ipse dixit.
That may not be true in the literal sense, for the memorandum from Hills' counsel has cited to the general proposition that a corporate purchaser of assets does not assume the seller's liabilities, referring toUpholsterers' Int'l Union Pension Fund v. Artistic Furniture of Pontiac, 920 F.2d 1323, 1325 (7th Cir. 1990) — a case that this Court had itself cited in its March 21, 2000 memorandum opinion and order granting summary judgment against Hills ( 93 F. Supp.2d 910, 915 (N.D. Ill. 2000)). But that citation is worse than useless to Hills, because Upholsterers', 920 F.2d at 1326 immediately went on to say:
However, "[t]he perimeters of the labor-law doctrine of successorship have not been so narrowly confined." Golden State Bottling Co. v. NLRB, 414 U.S. 168, 182 n. 5, 94 S.Ct. 414, 424 n. 5, 38 L.Ed.2d 388 (1973). Rather, the Supreme Court and this Circuit have imposed liability upon successors beyond the bounds of the common law rule in a number of different employment related contexts in order to vindicate important federal statutory policies.
As Funds' thoughtful response has pointed out, the expansion of such successorship liability in the ERISA context is a direct outgrowth of the comparable earlier impositions of liability on asset purchasers in the LMRA and employment discrimination contexts. After discussing those related authorities, Upholsterers', id. at 1327 went on to summarize:
We have found the imposition of successor liability to be appropriate in those cases where the vindication of an important federal statutory policy has necessitated the creation of an exception to the common law rule, where the successor has had prior notice of the liability in question, and where there has existed sufficient evidence of continuity of operations between the predecessor and successor.
That being said, we do not see any reason why successor liability should not in principle apply to actions seeking recovery of delinquent multiemployer pension fund contributions.
This is a totally apt occasion for the application of a parity of reasoning approach. Funds are right and Hills is wrong. Hills' liability does extend to the breach of contract claim against Pepper under the livery CBAs, as well as under the other CBAs giving rise to Funds' ERISA claim. This Court therefore expects to get a proposed form of final judgment order against both Pepper and Hills as swiftly as possible.