Employment – ERISA — successor liability

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United States Court of Appeals For the Seventh Circuit

Civil

Employment – ERISA — successor liability

Successor liability under ERISA was properly imposed on businesses that took on every aspect and former customer of a defunct business.

“RWI contends that it does not conduct the same business as Alpine. It argues that Alpine ‘serviced and installed’ irrigation systems, while RWI services and consults for irrigation systems. This distinction is wholly artificial, highlighted by the fact that almost every one of RWI’s customers is a former customer of Alpine and receives similar services. The district court did not err in finding that both Alpine and RWI are in the same or a substantially similar business.”

“JV characterizes the equipment transfer from Alpine to JV as a piecemeal sale of assets, which under Tweed v. Thomas & Betts Power Solutions, LLC, is insufficient to establish continuity. 711 F.3d 763, 768 (7th Cir. 2013). In a similar vein, RWI contends that it is not a successor because it acquired no assets or equipment from Alpine. Viewed in isolation, these assertions as to the unrelated nature of these entities might be persuasive. However, these are artificial distinctions, which do not mask the substantial interrelatedness of RWI, JV and Alpine. The factual basis for substantial continuity is quite clear in this case. In fact, the Appellants do not contest the district court’s finding that ‘Jeffery Zeh structured his companies such that JV would buy Alpine’s assets and lease them back to RWI in servicing Alpine’s former clients.’”

Affirmed.

13-1308 Sullivan v. Running Waters Irrigation, Inc.

Appeal from the United States District Court for the Northern District of Illinois, Bucklo, J., Cudahy, J.