When an ERISA Judgment Becomes Uncollectable: Fourth Circuit Holds That Voluntary Dismissal of Alleged Alter Ego Forecloses Later Suit to Pierce Corporate Veil

In Messer v. Garrison Investment Group, LP, — F.4th —-, 2026 WL 1465139 (4th Cir. May 26, 2026), the Fourth Circuit affirmed the dismissal of a class action in which Plaintiffs attempted to collect a federal judgment against a defunct employer by suing a private equity firm and fifteen related individuals and entities on alter ego and veil-piercing theories. Plaintiffs, former employees of Bristol Compressors International, LLC (“BCI”), originally sued BCI and Garrison Investment Group, LP (“Garrison”) in 2018, alleging that BCI failed to provide adequate notice of a plant closing under the Worker Adjustment and Retraining Notification Act of 1988 (“WARN Act”) and improperly terminated an ERISA-governed severance plan. Plaintiffs named Garrison as a jointly liable alter ego and successor of BCI under a single-employer theory. After Garrison moved for summary judgment, Plaintiffs voluntarily dismissed Garrison without prejudice under Federal Rule of Civil Procedure 41(a)(2), over Garrison’s opposition. The case proceeded against BCI alone, resulting in a judgment exceeding $4 million following remand from an earlier appeal. See Messer v. Bristol Compressors Int’l, LLC, No. 21-2363, 2023 WL 2759052 (4th Cir. Apr. 3, 2023).

When Plaintiffs were unable to collect the judgment from BCI due to its insolvency and dissolution, they filed a new action in 2024 against Garrison and fourteen additional individuals and entities never named in the original suit, seeking to hold them liable for the BCI judgment based on alter ego and veil-piercing theories. The complaint alleged that the suit was a “continuation” of the prior action “for the purpose of collecting judgments.” The district court dismissed for lack of subject matter jurisdiction, relying on the Supreme Court’s decision in Peacock v. Thomas, 516 U.S. 349 (1996).

The Fourth Circuit affirmed. The court considered two potential avenues of federal jurisdiction, 28 U.S.C. § 1331 federal question jurisdiction and federal common law ancillary jurisdiction, and concluded that neither supported the action. As to federal question jurisdiction, the court found Peacock controlling. In Peacock, the Supreme Court held that a plaintiff who obtained an ERISA judgment against an employer could not establish federal jurisdiction over a second suit against a corporate officer based on veil-piercing because “[p]iercing the corporate veil is not itself an independent ERISA cause of action,” and the second suit alleged no underlying violation of ERISA. The Fourth Circuit found the same reasoning dispositive here. Plaintiffs conceded that the new action did not allege any new ERISA violations beyond those litigated in the original suit, instead seeking only to enforce the existing judgment against new parties. ERISA therefore provided no independent basis for subject matter jurisdiction.

The court extended Peacock’s reasoning to Plaintiffs’ WARN Act claims, holding that the same principle applies. The WARN Act specifies that “the remedies provided for in this section shall be the exclusive remedies for any violation of this chapter.” 29 U.S.C. § 2104(b). The Department of Labor regulations promulgated under the WARN Act establish factors for determining when a related entity may be considered a single employer for purposes of WARN Act liability, including common ownership, common directors, de facto exercise of control, unity of personnel policies, and dependency of operations. 20 C.F.R. § 639.3(a)(2). Because the DOL regulations already provide a mechanism for imposing liability on related entities, the court reasoned, allowing a separate veil-piercing theory would be redundant and would impermissibly expand WARN Act liability beyond the scope established by Congress, the Supreme Court, and the DOL. The court cited decisions from the Third and Seventh Circuits reaching similar conclusions. See Pearson v. Component Tech. Corp., 247 F.3d 471 (3d Cir. 2001); In re Bluffton Casting Corp., 186 F.3d 857 (7th Cir. 1999).

The court rejected Plaintiffs’ argument that they were asserting independent ERISA and WARN Act claims against the new defendants, finding that the complaint’s own language characterized the action as a “continuation” of the prior suit “for the purpose of collecting judgments.” The relief sought, entry of judgment against the new defendants “for all amounts, due and owing” under the prior judgments, confirmed that the action was an attempt to pierce the corporate veil to establish liability for the original BCI judgment rather than to allege independent statutory violations.

Turning to ancillary jurisdiction, the court acknowledged that federal courts have ancillary jurisdiction to enforce their judgments through proceedings such as attachment, mandamus, garnishment, and prejudgment avoidance of fraudulent conveyances. However, the court emphasized that Peacock specifically held 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.” Because Plaintiffs voluntarily dismissed Garrison from the original suit and the judgment was entered against BCI only, the only entity already liable for the judgment was BCI. The court relied on the Second and Seventh Circuits, both of which have held that ancillary enforcement jurisdiction does not extend to subsequent suits seeking to hold new parties liable on new theories. See Peterson v. Bank Markazi, 121 F.4th 983 (2d Cir. 2024); Continental Indem. Co. v. BII, Inc., 104 F.4th 630 (7th Cir. 2024).

The Fourth Circuit concluded that because Plaintiffs’ suit was based exclusively on veil-piercing and alleged no new or additional ERISA or WARN Act violations, and because their voluntary dismissal of Garrison from the original suit resulted in a judgment against BCI only, the district court correctly held that it lacked federal subject matter jurisdiction. The court did not reach the alternative ground that the claims were time-barred. The court affirmed the judgment of the district court.