Trustees of the New York City District Council of Carpenters Pension Fund v…

Background

The Funds sued Mensch Millwork Corp. under the Employee Retirement Income Security Act and the Labor Management Relations Act. They alleged that Mensch was bound by a collective bargaining agreement requiring employer contributions to the Funds. According to the complaint, an audit found a deficiency of about $1.1 million, and the Funds sought the unpaid contributions, interest, attorneys’ fees, and audit fees.

Mensch answered the complaint and denied liability. Before discovery began, the Funds served Mensch with a notice assessing withdrawal liability under the Multiemployer Pension Plan Amendments Act. The Funds concluded that pursuing withdrawal liability was inconsistent with the claims in this case and moved to dismiss the action under Federal Rule of Civil Procedure 41(a)(2), which allows a court to dismiss an action at a plaintiff’s request after the defendant has filed a response.

The parties’ positions

The Funds agreed that the dismissal should be with prejudice, meaning the claims dismissed in this case could not be brought again. Mensch consented to that dismissal if the Court required the Funds to pay $20,958.47 in attorneys’ fees and costs or preserved Mensch’s ability to seek those fees later. The Funds opposed the request.

Court’s analysis

Judge Rochon considered whether dismissal would substantially prejudice Mensch. The Court found that the Funds moved promptly, about two months after filing the complaint and soon after receiving information through Mensch’s answer. The Court found no evidence of improper motive or harassment. Discovery had not begun, and dismissal with prejudice would prevent the claims from being relitigated. The Funds also adequately explained that they had chosen to pursue withdrawal liability instead.

The Court separately considered fees and costs. It concluded that a fee award was not warranted because the Funds agreed to dismissal with prejudice, the relevant dismissal factors favored the Funds, and there was no independent statutory basis for awarding fees. The Court also stated that the case was at an early stage, the Funds moved promptly, and the action did not appear frivolous. It further noted that the full fee request was unreasonable because nearly one-quarter of the claimed fees had been incurred before the complaint was filed.

Ruling and disposition

Judge Rochon granted the Funds’ motion to voluntarily dismiss the action with prejudice under Rule 41(a)(2), without fees or costs to Mensch. The dismissed claims were the claim for unpaid contributions under 29 U.S.C. § 1145 and the claim under 29 U.S.C. § 185 based on violation of the collective bargaining agreement. The Court stated that dismissal of those claims did not prevent the Funds from later pursuing a withdrawal-liability assessment against Mensch because that potential claim was not brought in this case. The Clerk was directed to terminate all pending motions and close the case.