Flying Tiger Line v. Teamsters Pension Trust Fund

830 F.2d 1241, 56 U.S.L.W. 2212, 8 Employee Benefits Cas. (BNA) 2505, 1987 U.S. App. LEXIS 12940
CourtCourt of Appeals for the Third Circuit
DecidedSeptember 30, 1987
DocketNos. 86-5817, 86-5931, 87-3063
StatusPublished
Cited by55 cases

This text of 830 F.2d 1241 (Flying Tiger Line v. Teamsters Pension Trust Fund) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Flying Tiger Line v. Teamsters Pension Trust Fund, 830 F.2d 1241, 56 U.S.L.W. 2212, 8 Employee Benefits Cas. (BNA) 2505, 1987 U.S. App. LEXIS 12940 (3d Cir. 1987).

Opinion

OPINION OF THE COURT

A. LEON HIGGINBOTHAM, Jr., Circuit Judge.

These appeals require us to determine whether a federal district court or an arbitrator should resolve the question whether a corporate entity is an employer subject to the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA” or “the Act”), 29 U.S.C. §§ 1381-1461 (1982 & Supp. I 1983 & Supp. II 1984 & Supp. III 1985). This employer status question arises in the context of a dispute concerning MPPAA section 1392(c), the so-called “evade or avoid” provision. The district court concluded that, pursuant to 29 U.S.C. § 1401 (1982), this question initially must be decided by an arbitrator. Appellants argue that their legal status — whether they are a MPPAA “employer” — is a predicate issue that must be resolved by a federal district court before an arbitrator can assert jurisdiction under MPPAA. Because we conclude that these appeals involve provisions of the Act that prescribe arbitration as the appropriate method of dispute resolution, we will affirm the district court’s order staying its proceedings pending arbitration.

I. OVERVIEW OF MPPAA

Under the Employee Retirement Income Security Act of 1974, Pub.L. No. 93-406, 88 Stat. 1020 (“ERISA”), as amended by MPPAA, employers may make contributions to one or more pension plans on behalf of all their employees who belong to a participating union. Congress enacted MPPAA in particular because it found that existing legislation “did not adequately protect plans from the adverse consequences that resulted when individual employers terminate[d] their participation in, or withdr[e]w from, multiemployer plans.”1 Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 722, 104 S.Ct. 2709, 2714, 81 L.Ed.2d 601 (1984) (“R.A. Gray”); accord IUE AFL-CIO Pension Fund v. Barker & Williamson, Inc., 788 F.2d 118, 127 (3d Cir.1986) (“The MPPAA was designed ‘(1) to protect the interests of participants and beneficiaries in financially distressed multiemployer plans, and (2) ... to ensure benefit security to plan participants.’”) (original ellipses) (quoting H.R. Rep. No. 869, 96th Cong., 2d Sess. 71 (1980), reprinted in 1980 U.S.Code Cong. & Admin.News 2918, 2939) (“Barker & Williamson”). The Act addressed this problem by assessing such employers with [1244]*1244withdrawal liability, defined in the statute as the employer’s adjusted “allocable amount of unfunded vested benefits.” 29 U.S.C. § 1381(b)(1) (1982).

We will briefly outline the MPPAA provisions that are relevant to this case. The Act requires that “all ... trades or businesses (whether or not incorporated) [that] are under common control”, as defined in regulations issued by amicus curiae the Pension Benefit Guaranty Corporation (“PBGC”), “shall be treated ... as a single employer.”2 29 U.S.C. § 1301(b)(1) (1982). Since a controlled group is to be treated as a single employer, each member of such a group is liable for the withdrawal of any other member of the group. See Barker & Williamson, 788 F.2d at 127-28. In determining whether a withdrawal has occurred, MPPAA explicitly provides that any transaction designed to “evade or avoid” withdrawal liability should be ignored: “[i]f a principal purpose of any transaction is to evade or avoid liability under this part, this part shall be applied (and liability shall be determined and collected) without regard to such transaction.” 29 U.S.C. 1392(c) (1982).

Provisions for the quick and informal resolution of withdrawal liability disputes are an integral part of MPPAA’s statutory scheme. The Act requires a plan’s trustees to determine initially whether a withdrawal has occurred. 29 U.S.C. §§ 1382(1), 1399(b)(l)(A)(i) (1982). When the trustees conclude that a withdrawal has taken place, they must then notify the employer of the amount of liability and demand payment in accordance with an amortization schedule. 29 U.S.C. §§ 1382(2), 1382(3), 1399(b)(1)(B) (1982). Thereafter, the employer may within 90 days ask the trustees to conduct a reasonable “review” of the computed liability. 29 U.S.C. § 1399(b)(2)(A)(i) (1982). If a dispute remains, either party may initiate arbitration proceedings. MPPAA provides that

[a]ny dispute between an employer and the plan sponsor of a multiemployer plan concerning a determination made under sections 1381 through 1399 of ... title [29] shall be resolved through arbitration. Either party may initiate the arbitration proceeding within [specified time periods].

29 U.S.C. § 1401(a)(1) (1982). Finally, “[u]pon completion of the arbitration proceedings in favor of one of the parties,” MPPAA permits “any party thereto” to bring an action “to enforce, vacate or modify the arbitrator’s award” in the appropriate federal district court. 29 U.S.C. § 1401(b)(2) (1982). Regardless of whether the employer requests review by a plan’s trustees or initiates arbitration, however, the employer must begin making interim payments of the withdrawal liability in accordance with the plan’s schedule within 60 days of notice of liability. See 29 U.S.C. §§ 1399(c)(2), 1401(d) (1982); see also Banner Indus., Inc. v. Central States, Southeast & Southwest Areas Pension Fund, 663 F.Supp. 1292, 1297-98 (N.D.Ill.1987) (“Congress has clearly established the balance it deems appropriate with respect to which party should have use of the money during the pendency of a dispute over withdrawal liability.”); Robbins v. Pepsi-Cola Metro. Bottling Co., 636 F.Supp. 641, 677 (N.D.Ill.) (“The MPPAA contemplates a ‘pay now, dispute later’ procedure.”), petition for supersedeas bond or entry of stay pending appeal denied, 800 F.2d 641 (7th Cir.1986).

II. BACKGROUND OF THIS DISPUTE

Appellant Tiger International, Inc. (“Tiger”), is a holding company engaged through its subsidiaries — which include appellants The Flying Tiger Line, Inc. and Warren Transport, Inc. — in the air cargo, transportation, and trucking businesses. On January 2,1980, Tiger acquired 100% of the stock of Hall’s Motor Transit Co. (“Hall’s”), a large interstate trucking company. Pursuant to collective bargaining agreements, Hall’s had contributed for many years until early 1986 to a number of multiemployer pension plans on behalf of [1245]*1245most of its approximately 3,500 employees.

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Bluebook (online)
830 F.2d 1241, 56 U.S.L.W. 2212, 8 Employee Benefits Cas. (BNA) 2505, 1987 U.S. App. LEXIS 12940, Counsel Stack Legal Research, https://law.counselstack.com/opinion/flying-tiger-line-v-teamsters-pension-trust-fund-ca3-1987.