Civil Procedure – No jurisdiction over collection action

Where employees previously obtained a judgment against their former employer, who was now out of business, and they then filed this action to enforce the judgment against the defunct company’s alleged successor, who they previously dismissed from the first lawsuit, the court lacked jurisdiction over this collection action.

Background

Former employees of Bristol Compressors International LLC, or BCI, obtained a class action money judgment against BCI for violations of the Worker Adjustment and Retraining Notification Act of 1988, or Warn Act, and the Employee Retirement Income Security Act, or ERISA. When efforts to collect the judgment from BCI failed, the former employees pivoted and filed this action seeking to enforce the BCI judgment against Garrison Investment Group LP, a party they voluntarily dismissed from the suit against BCI.

The district court concluded that it lacked subject matter jurisdiction because the complaint sought to enforce the previous judgment against a party that was never found liable for the WARN Act and ERISA violations, and the complaint lacked an independent jurisdictional basis.

Federal question jurisdiction

Appellants assert that the district court had subject matter jurisdiction pursuant to 28 U.S.C. § 1331 because their claims arose under 29 U.S.C. § 1132(a)(3)(B) (ERISA) and 29 U.S.C. § 2104 (the WARN Act). This avenue of conferring jurisdiction is often referred to as the “federal question doctrine.”

However, in this case, appellants do not allege any new or additional violations of the federal statutes at issue beyond those cited in Messer I. Rather, the present action is solely an effort to collect on the BCI judgment from Messer I because BCI is unable to pay. But the Supreme Court determined, in Peacock v. Thomas, 516 U.S. 349 (1996), that this is an improper means by which to establish § 1331 subject matter jurisdiction.

Although Peacock was decided within the context of an ERISA action rather than the WARN Act, the underlying proposition still squarely applies here — without any new or additional violations of the federal statute at issue, there is no independent basis for federal question jurisdiction. Were there any doubt about this conclusion, the WARN Act regulations promulgated by the Department of Labor foreclose the applicability of duplicative theories of recovery such as piercing the corporate veil.

Appellants nevertheless contend they are in fact asserting independent ERISA and WARN Act claims against appellees. But, this argument does not withstand a review of the record. For example, in their complaint, appellants argue, “[b]ecause the alter ego and instrumentality doctrines for piercing the corporate veil and federal common law allow derivative liability to be placed upon a corporation’s individuals, [appellees] are responsible for the[] judgments [in Messer I].” Appellants further assert, “[t]his suit is a continuation of the prior class action [Messer I] for the purpose of collecting judgments for [appellants].”

And in their demand for relief, appellants sought entry of “judgment against [appellees] for all amounts, due and owing [appellants] under this Court’s judgments.” These excerpts clearly highlight that the present action is not an attempt to separately allege new ERISA or WARN Act violations against appellees but is instead an attempt to pierce the corporate veil in order to establish appellees’ liability for the original judgment against BCI.

Ancillary jurisdiction

“It is well-settled that a federal court may exercise ancillary jurisdiction to enforce its judgments.” Although federal courts have the authority to exercise this power, the Supreme Court has nonetheless outlined certain types of enforcement proceedings that do not fall within the ambit of ancillary jurisdiction — one of which is the circumstance in this case.

The Supreme Court has specifically recognized that ancillary jurisdiction does not extend to “new actions in which a federal judgment creditor seeks to impose liability for a money judgment on a person not otherwise liable for the judgment.” This is so, the court concluded, because “[i]n a subsequent lawsuit [against a third party] involving claims with no independent basis for jurisdiction, a federal court lacks the threshold jurisdictional power that exists when ancillary claims are asserted in the same proceeding as the claims conferring federal jurisdiction.”

Affirmed.

Messer v. Garrison Investment Group, LP, Case No. 25-1657, May 26, 2026. 4th Cir. (Thacker), from WDVA at Abingdon (Jones). Mary Lynn Tate for Appellants. Mark Hunter Churchill for Appellees. VLW 026-2-187. 21 pp.

Full-Text Opinion
VLW 026-2-187