The opinion of the court was delivered by: ALAN N. BLOCH
Presently before the Court are defendants' motions to dismiss pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6). For the reasons herein stated, defendants' motions will be denied.
In ruling on a motion to dismiss, the applicable standard of review requires the Court to accept as true all allegations in the complaint and all reasonable inferences that can be drawn therefrom, and view them in the light most favorable to the non-moving party. Blaw Knox Retirement Income Plan v. White Consolidated Industries, Inc., 998 F.2d 1185, 1188 (3d Cir. 1993). The question before the Court is not whether the plaintiffs will ultimately prevail, but rather whether the plaintiffs can prove any set of facts in support of their claims that will entitle them to relief. Hishon v. King and Spalding, 467 U.S. 69, 73, 81 L. Ed. 2d 59, 104 S. Ct. 2229 (1984).
In their motions to dismiss, defendants make several arguments. First, they contend that plaintiffs have failed to state claims under the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. § 1001, et seq. (ERISA), based upon a "piercing the corporate veil" theory and that, as a result, this Court lacks subject matter jurisdiction. Defendants further argue that because this Court lacks federal question jurisdiction, the Court cannot assert supplemental jurisdiction under 28 U.S.C. § 1367 over the related claims under the Pennsylvania Wage Payment and Collection Law, 43 Pa.C.S.A. § 260.1, et seq. (WPCL). Finally, they assert that if plaintiffs have stated claims under ERISA, then plaintiffs' state law claims under the WPCL are preempted.
In response, plaintiffs argue that their complaints sufficiently state "pierce the corporate veil" claims under ERISA against the defendants. They further contend that their WPCL claims are not preempted because they are based upon non-ERISA obligations that do not relate to an employee benefit plan. Finally, they assert that this Court has federal question jurisdiction under ERISA §§ 502 and 515, as well as supplemental jurisdiction over the WPCL claims.
In Solomon v. Klein, 770 F.2d 352, 352-53 (3d Cir. 1985), the Court of Appeals for the Third Circuit held that the defendant, who held 50 percent of the corporation's stock, served as president and chief executive officer, and managed all of the corporation's business activities, was not personally liable under ERISA for unpaid contributions due to a retirement fund pursuant to a collective bargaining agreement between the corporation and the union. However, the Court of Appeals in Solomon expressly found that the case did not involve piercing the corporate veil or alter ego liability and noted that if the plaintiffs had proceeded "on an alter ego basis," its "inquiry would be different." Id. at 353.
See also Connors v. Peles, 724 F. Supp. 1538, 1558 n. 15 (W.D. Pa. 1989) (stating that plaintiffs' "'alter ego' theory of piercing the corporate veil" was the only factual issue presented). Where an individual is alleged to be the alter ego of the corporation or where the plaintiffs are seeking to pierce the corporate veil, the Court explained that the following factors are relevant:
(1) "failure to observe corporate formalities,"
(2) "nonpayment of dividends,"
(3) "insolvency of the debtor corporation,"
(5) "nonfunctioning of other officers or directors,"
(6) "absence of corporate records,"
(7) evidence that "the corporation is merely a facade for the operation of the ...