Central States, Southeast & Southwest Areas Pension Fund v. Hunt Truck Lines, Inc.

204 F.3d 736
CourtCourt of Appeals for the Seventh Circuit
DecidedFebruary 28, 2000
DocketNos. 99-1273, 99-2385
StatusPublished
Cited by7 cases

This text of 204 F.3d 736 (Central States, Southeast & Southwest Areas Pension Fund v. Hunt Truck Lines, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Central States, Southeast & Southwest Areas Pension Fund v. Hunt Truck Lines, Inc., 204 F.3d 736 (7th Cir. 2000).

Opinion

TERENCE T. EVANS, Circuit Judge.

This appeal consolidates two cases arising out of Hunt Truck Lines’ refusal to make withdrawal liability payments to Central States under ERISA’s multiem-ployer pension plan provisions. In the first case, Judge John Nordberg found [739]*739that Central States’ admittedly premature fee assessment precluded the court from ordering Hunt to make interim payments on its withdrawal liability while the underlying fee assessment went through arbitration. In the second case, Judge Milton Shadur affirmed an arbitration award that assumed Hunt’s liability but failed to provide for an enforceable money judgment. Central States believes these rulings leave it in an odd and unjust position: despite widespread agreement that Hunt owes withdrawal liability, Central States cannot collect. It asks that we right this wrong and force Hunt to finally pay the money it owes.

Since both halves of this appeal concern the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA), 29 U.S.C. §§ 1381-1461, it makes sense to begin with a brief overview of the statute to put the facts that follow in context. The MPPAA arose out of Congress’ fear that any time an employer withdrew from a multiemployer pension plan (MPP) under ERISA it could set off a domino effect that, “much like a bank run,” could leave the MPP unable to pay its vested obligations. Artistic Carton Co. v. Paper Indus. Union-Management Pension Fund, 971 F.2d 1346, 1348 (7th Cir.1992); accord Milwaukee Brewery Workers’ Pension Plan v. Jos. Schlitz Brewing Co., 513 U.S. 414, 416-17, 115 S.Ct. 981, 130 L.Ed.2d 932 (1995). To correct this problem the statute provides that whenever a fund trustee determines that an employer has withdrawn, she can assess the employer “withdrawal liability” of an amount that roughly matches the employer’s proportionate share of the plan’s unfunded vested benefits. See Bay Area Laundry and Dry Cleaning Pension Trust Fund v. Ferbar Corp., 522 U.S. 192, 118 S.Ct. 542, 139 L.Ed.2d 553 (1997). The employer may contest the trustee’s assessment but, to ensure that this will not affect the fund’s ability to pay off its obligations, only an ■ arbitrator can decide the merits of the challenge, and the employer must pay “interim withdrawal liability payments” until the arbitrator reaches a final decision. See id. Under this “pay now, dispute later” scheme, if the employer wins it recovers its interim payments; if not, the fund collects the remainder of the withdrawal liability. Robbins v. Pepsi-Cola Metro. Bottling Co., 800 F.2d 641, 642-43 (7th Cir.1986). With this framework in place, we move on to the facts.

Central States is a multiemployer pension fund subject to ERISA. Hunt Truck Lines is a trucking firm that was obliged to contribute to the fund under a collective bargaining agreement.

In 1994 Hunt sold its assets to Wintz Parcel Drivers, Inc. and stopped making contributions to the fund. Ordinarily, this would require Hunt to pay a withdrawal fee. However, since the sale to Wintz satisfied the statutory requirements of 29 U.S.C. § 1384(a)(1)(C), Hunt avoided payment as long as Wintz made the required contributions. In other words, Hunt became secondarily liable — if Wintz withdrew and failed to pay a withdrawal fee, Hunt remained obligated to ante up for its own withdrawal liability.

On June 3, 1996, Hunt received a notice and demand from Central States requesting $303,372.75 in withdrawal liability. The fund claimed that Hunt’s liability was triggered because Wintz had “effected a complete withdrawal.” Hunt refused to pay and asked Central States to review its withdrawal liability assessment. Instead, the fund filed suit against Hunt demanding interim withdrawal liability payments. In response, Hunt commenced arbitration proceedings to contest the underlying fee assessment.

Cental States then filed a motion for summary judgment on its claim for the interim payments. The fund argued that because any dispute over the merits of a withdrawal assessment must be settled in arbitration, and 29 U.S.C. § 1401(d) mandates that a court order interim payments to an MPP pending the outcome of arbitration, it was entitled to collect. Hunt, in [740]*740turn, filed a cross-motion for summary judgment. It asserted that since Cental States’ “Statement of Material Facts to Which There Is No Material Issue” revealed that it sought withdrawal liability payments from Hunt before Wintz withdrew, and Hunt’s secondary liability for the withdrawal payments could only be triggered after a Wintz withdrawal, the fund had no right to demand withdrawal liability payments when it did.

Before addressing these arguments, Judge Nordberg laid out the relevant dates. He first noted that both sides conceded that Hunt received Central States’ demand on June 3, 1996. Deciding on the timing of Wintz’ final withdrawal proved slightly more difficult. In its memo in support of summary judgment, Central States attested to the fact that Wintz withdrew “on or about July 20, 1996.” But after Hunt seized upon this date to argue that it had been billed prematurely, the fund claimed that Wintz had actually withdrawn in May. Central States argued that this date was consistent with its prior filing because its “on or about” language was not sufficiently specific to tie the fund to the prior date. Judge Nordberg found this argument “unbelievable” and concluded that, based on their initial filings, both parties agreed to the basic time frame. He then settled on July 27, 1996, as the date for the Wintz withdrawal since the parties stipulated to that date in their arbitration proceedings.

With the dates set, Judge Nordberg turned to the question of whether Hunt was required to make interim withdrawal liability payments. Looking to the text of the MPPAA, the judge determined that the Act implicitly required that a plan sponsor could only issue notice of withdrawal liability after the event triggering liability occurred.1 He then found that, because this requirement was a statutory prerequisite to bringing a lawsuit to recover withdrawal liability and Cental States billed Hunt before its liability came due, the fund could not collect interim payments. Judge Nordberg underlined that his decision was not based on Hunt’s likelihood of success but, rather, on Central State’s failure to fulfill the MPPAA’s statutory requirements.

Meanwhile, back at the arbitration proceedings, arbitrator Ira Jaffe also concluded that Hunt had been billed prematurely. Nevertheless, he found that this did not require Central States to rescind its withdrawal liability assessment. Instead, he directed the fund to “revise the assessment to comport with Section 4204,2 not to void the assessment and ...

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Bluebook (online)
204 F.3d 736, Counsel Stack Legal Research, https://law.counselstack.com/opinion/central-states-southeast-southwest-areas-pension-fund-v-hunt-truck-ca7-2000.