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Benefit Funds Can’t Use Federal Courts to Collect From Successor

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A lawsuit seeking to hold a newly formed family plumbing company liable for a predecessor company’s $300,000 employee benefit judgment can’t proceed in federal court because there’s no federal jurisdiction over the dispute, the Seventh Circuit ruled Wednesday.

The lawsuit against Prather Plumbing & Heating Inc. asserted claims under the “federal common law doctrine of successor liability.” But that’s not enough to create jurisdiction; the benefit funds failed to identify a federal law authorizing them to sue in federal court, the U.S. Court of Appeals for the Seventh Circuit ruled.

The benefit funds cited two provisions of the Employee Retirement …