DiGeronimo Aggregates, LLC v. Zemla

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DiGeronimo and other employers contributed to the Teamsters Local Union No. 293 Pension Plan, which is governed by the Employee Retirement Income Security Act, 29 U.S.C. 1001–1461. Defendants are trustees of the Plan and managed the Plan, including negotiating and ratifying contribution rates and overseeing the Plan’s investments and expenses. Defendants terminated the Plan in December 2009 because substantially all of the Plan’s contributing employers withdrew from paying contributions. Defendants assessed $1,755,733 in “withdrawal liability” to DiGeronimo, which represents its share of the $49,000,000 in unfunded, vested benefits that the contributing employers owed the Plan. DiGeronimo sued defendants under 29 U.S.C. 1451(a), alleging that defendants negligently managed the Plan’s assets, causing increased withdrawal liability. The district court dismissed holding, that there was no substantive basis for the negligence claim in any section of ERISA or under the federal common law. The Sixth Circuit affirmed: a contributing employer to a multiemployer pension plan has no cause of action against plan trustees for negligent management under the federal common law of ERISA pension plans. View "DiGeronimo Aggregates, LLC v. Zemla" on Justia Law