Peacock Applied to WARN Act and ERISA: No Federal Jurisdiction for Post‑Judgment Veil‑Piercing Against a Non‑Liable Third Party

I. Introduction

Tony Messer v. Garrison Investment Group, LP is a post-judgment collection case arising out of a prior class action, Messer, et al. v. Bristol Compressors International, LLC, No. 1:18-CV-00040 (W.D. Va.) (“Messer I”). In Messer I, former employees of Bristol Compressors International, LLC (“BCI”) litigated claims under the Worker Adjustment and Retraining Notification Act of 1988 (“the Warn Act”) and ERISA. Although the employees originally sued both BCI and Garrison (asserting Garrison was an alter ego/successor and a “single employer”), they voluntarily dismissed Garrison under Rule 41(a)(2). They then obtained a substantial money judgment against BCI alone.

When BCI proved insolvent and dissolved, the employees filed a new federal action seeking to collect the Messer I judgment from Garrison and additional non-parties using alter-ego and veil-piercing theories. The central issue on appeal was jurisdictional: whether the district court could exercise federal question jurisdiction under ERISA/WARN or ancillary enforcement jurisdiction to impose liability for a federal judgment on parties not liable on that judgment.

II. Summary of the Opinion

The Fourth Circuit affirmed dismissal for lack of subject matter jurisdiction. Relying principally on Peacock v. Thomas, the court held that federal courts lack jurisdiction over a new action where a federal judgment creditor seeks to impose liability for an existing federal money judgment on a person who was never found liable for the underlying statutory violations, absent an independent jurisdictional basis.

The court rejected both asserted jurisdictional routes: (1) 28 U.S.C. § 1331 (no new ERISA/WARN violation alleged; veil-piercing is not itself a federal cause of action); and (2) ancillary jurisdiction (enforcement jurisdiction does not extend to a new lawsuit that seeks to make a new party pay the old judgment). Because jurisdiction was lacking, the panel did not reach the district court’s alternative limitations ruling.

III. Analysis

A. Precedents Cited (and How They Drove the Result)

  • Peacock v. Thomas, 516 U.S. 349 (1996)

    This is the decision’s fulcrum. In Peacock, an ERISA plaintiff won a judgment against the employer (not the officer/shareholder), then filed a second suit to pierce the corporate veil to collect from the officer. The Supreme Court held there was no subject matter jurisdiction over that second suit because: (i) ERISA did not authorize imposing liability for an “extant ERISA judgment” on a third party; and (ii) ancillary enforcement jurisdiction does not permit a new action to impose new liability on a non-judgment debtor.

    The Fourth Circuit treated Peacock as controlling not only for the ERISA portion of the complaint but also as a broader jurisdictional rule: post-judgment veil-piercing against a non-liable party requires an independent jurisdictional hook.

  • Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994)

    Cited for the foundational principle that federal courts are of limited jurisdiction and jurisdiction cannot be expanded by judicial decree, framing the court’s unwillingness to “bootstrap” jurisdiction from the earlier federal case to the later collection suit.

  • Flying Pigs, LLC v. RRAJ Franchising, LLC, 757 F.3d 177 (4th Cir. 2014)

    Used to restate the canonical “arising under” test: federal question jurisdiction exists most commonly when federal law creates the cause of action. The panel then contrasted that with plaintiffs’ actual theory—veil piercing—an external doctrine not created by ERISA or the WARN Act.

  • Marino v. Pioneer Edsel Sales, Inc., 349 F.3d 746 (4th Cir. 2003)

    Recognizes that federal courts may exercise ancillary jurisdiction to enforce their judgments, setting up the boundary question addressed (and limited) by Peacock.

  • Robb Evans & Assocs., LLC v. Holibaugh, 609 F.3d 359 (4th Cir. 2010)

    Supplies the taxonomy of ancillary jurisdiction: (i) statutory supplemental jurisdiction (codified in part at § 1367), and (ii) federal common law “ancillary enforcement” jurisdiction for related proceedings separate from the initial case. The court used this framework to explain why this suit—an entirely new action—falls on the wrong side of Peacock.

  • Evans v. United States, 105 F.4th 606 (4th Cir. 2024); Durden v. United States, 736 F.3d 296 (4th Cir. 2013); Evans v. B.F. Perkins Co., 166 F.3d 642 (4th Cir. 1999)

    These cases supply standards of review and burden allocation for jurisdictional challenges: de novo review and the plaintiff’s burden to establish jurisdiction.

  • Pennington v. Fluor Corp., 19 F.4th 589 (4th Cir. 2021)

    Cited to demonstrate the Fourth Circuit’s regular application of the Department of Labor’s WARN “single employer” factors, reinforcing that WARN Act related-entity liability is addressed through 20 C.F.R. § 639.3(a)(2) rather than free-form veil piercing.

  • Fleming v. Bayou Steel BD Holdings II LLC., 83 F.4th 278 (5th Cir. 2023)

    Supports the proposition that, although the WARN Act itself does not define related-entity liability, the DOL has done so by regulation, and courts treat those regulations as the governing framework.

  • Vitol, S.A. v. Primerose Shipping Co., 708 F.3d 527 (4th Cir. 2013)

    Quoted for a general description of veil piercing as disregarding the corporate entity to treat parent and subsidiary as a single entity, which the panel then viewed as functionally overlapping with WARN’s single-employer regulatory test.

  • Pearson v. Component Technology Corp., 247 F.3d 471 (3d Cir. 2001); In re Bluffton Casting Corp., 186 F.3d 857 (7th Cir. 1999), overruled on other grounds by In Re Bentz Metal Prods. Co., 253 F.3d 283 (7th Cir. 2001)

    These cases are invoked to show that other circuits have declined to expand WARN liability through alternative tests when the DOL regulation supplies an explicit standard, and to emphasize WARN’s “exclusive remedies” structure.

  • Continental Indemnity Company v. BII, Inc., 104 F.4th 630 (7th Cir. 2024); Peterson v. Bank Markazi, 121 F.4th 983 (2d Cir. 2024)

    Both reinforce Peacock’s modern application: ancillary enforcement jurisdiction is unavailable where the plaintiff seeks to hold a new party liable on a new theory, even if the goal is to satisfy a prior federal judgment.

  • Alexandria Resident Council, Inc. v. Alexandria Redev. & Hous. Auth., 218 F.3d 307 (4th Cir. 2000); Flame S.A. v. Freight Bulk Pte. Ltd., 807 F.3d 572 (4th Cir. 2015); U.S. ex rel. Bunk v. Gov't Logistics N.V., 842 F.3d 261 (4th Cir. 2016)

    Cited collectively as additional Fourth Circuit authority limiting jurisdiction in post-judgment and enforcement-adjacent contexts consistent with Peacock’s constraints.

  • Messer v. Bristol Compressors Int'l, LLC, No. 21-2363, 2023 WL 2759052 (4th Cir. Apr. 3, 2023)

    Provides procedural context (vacatur and remand on ERISA severance-plan termination and WARN issues) and highlights that the merits of WARN/ERISA violations were adjudicated against BCI in Messer I—yet no liability finding was ever entered against Garrison, because Garrison had been dismissed.

B. Legal Reasoning

1. Federal-question jurisdiction failed because plaintiffs alleged no new statutory violation

The complaint invoked ERISA (29 U.S.C. § 1132(a)(3)(B)) and the WARN Act (29 U.S.C. § 2104), but the Fourth Circuit looked past labels to the substance: the suit was “a continuation” of Messer I “for the purpose of collecting” the existing judgment, and the demanded relief was entry of judgment against Garrison and others for “all amounts” owed under the earlier judgment.

Under Peacock v. Thomas, that framing is jurisdictionally fatal: a post-judgment veil-piercing theory is not itself an independent ERISA claim, and federal question jurisdiction requires an independently pleaded violation of federal law by the new defendant(s). Because plaintiffs alleged no new ERISA or WARN Act violation, § 1331 did not apply.

2. WARN Act claims could not be used to expand liability beyond the regulatory “single employer” framework

The court added a WARN-specific overlay: the WARN Act provides that its remedies are “exclusive,” and the DOL regulation, 20 C.F.R. § 639.3(a)(2), supplies the governing test for related-entity (“single employer”) liability. In the panel’s view, allowing plaintiffs to proceed via veil piercing would be an end-run that effectively broadens WARN liability beyond that established framework—particularly in a new action whose practical goal is to make a previously dismissed party pay the old judgment.

3. Ancillary enforcement jurisdiction did not extend to imposing new liability on new parties

While federal courts can use ancillary jurisdiction to execute judgments through mechanisms like garnishment or attachment, Peacock draws a clear boundary: ancillary jurisdiction does not support a new lawsuit seeking to impose liability on “a person not otherwise liable for the judgment.”

That boundary applied with special force here because plaintiffs themselves chose to dismiss Garrison from Messer I. The judgment was entered against BCI only; therefore, only BCI was a judgment debtor. Attempting to convert non-parties (and a dismissed party) into new judgment debtors required an independent basis of subject matter jurisdiction, which was absent.

C. Impact

  • Strategic dismissal consequences: The opinion underscores a practical procedural rule: voluntarily dismissing a potentially liable related entity (even without prejudice) can leave plaintiffs with a judgment that is difficult to collect and can foreclose later federal-court efforts to impose liability via veil piercing absent an independent jurisdictional basis.
  • Peacock’s reach confirmed beyond ERISA: Although Peacock arose in ERISA, the Fourth Circuit confirms its core jurisdictional principle applies to other federal statutes (here, the WARN Act) when the second suit is a collection-driven attempt to shift an existing federal judgment to a non-liable party.
  • WARN Act related-entity liability channeled through regulation: The court’s emphasis on 20 C.F.R. § 639.3(a)(2) suggests future WARN litigants in the Fourth Circuit should expect courts to treat the DOL “single employer” factors as the primary vehicle for reaching parents/owners/creditors—especially when attempting to extend liability beyond the immediate employer.
  • Enforcement vs. liability creation: The case sharpens the line between permissible federal enforcement tools (collecting from the judgment debtor’s assets) and impermissible federal efforts to create a new debtor via veil piercing in a new action.

IV. Complex Concepts Simplified

  • Subject matter jurisdiction: The court’s power to hear a case at all. If it’s missing, the case must be dismissed regardless of merits.
  • Federal question jurisdiction (28 U.S.C. § 1331): Jurisdiction when a plaintiff sues to enforce rights created by federal law. Merely referencing a federal statute is not enough if the claim is really a state-law or common-law theory dressed in federal terms.
  • Ancillary (enforcement) jurisdiction: A limited power to handle certain proceedings that help enforce an existing federal judgment (e.g., garnishment). It does not allow a new lawsuit that tries to make a new person pay the judgment.
  • Veil piercing / alter ego: Doctrines that treat a corporation and its owners/affiliates as the same entity in order to impose liability. The key point here: veil piercing can be a liability theory, but it is not itself a federal cause of action and cannot supply jurisdiction.
  • WARN Act “single employer” doctrine (20 C.F.R. § 639.3(a)(2)): A regulatory test (common ownership, shared directors/officers, de facto control, unified personnel policies, operational dependency) used to determine whether a related entity shares WARN liability.
  • “Exclusive remedies” under WARN (29 U.S.C. § 2104(b)): The statute states that the remedies in § 2104 are the exclusive remedies “for any violation” of WARN—supporting the court’s reluctance to expand WARN recovery via alternative liability frameworks in a new suit.

V. Conclusion

The Fourth Circuit’s decision establishes (and strongly reinforces) a clear jurisdictional rule in post-judgment litigation: a federal court cannot entertain a new action seeking to impose liability for an existing federal money judgment on a party not liable on that judgment unless the plaintiff pleads an independent basis for federal jurisdiction. By applying Peacock v. Thomas in a combined ERISA/WARN collection context—and by emphasizing WARN’s regulatory single-employer framework— the court signals that federal jurisdiction cannot be used as a vehicle to convert a hard-to-collect judgment against an insolvent employer into a new judgment against previously dismissed or never-sued affiliates through veil piercing alone.