Genz-Ryan Plumbing & Heating Co. v. Sheet Metal Workers' Local 10

207 F. Supp. 3d 1038, 2016 U.S. Dist. LEXIS 127764, 2016 WL 5107074
CourtDistrict Court, D. Minnesota
DecidedSeptember 19, 2016
DocketCivil No. 16-280 (DWF/SER)
StatusPublished
Cited by1 cases

This text of 207 F. Supp. 3d 1038 (Genz-Ryan Plumbing & Heating Co. v. Sheet Metal Workers' Local 10) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Genz-Ryan Plumbing & Heating Co. v. Sheet Metal Workers' Local 10, 207 F. Supp. 3d 1038, 2016 U.S. Dist. LEXIS 127764, 2016 WL 5107074 (mnd 2016).

Opinion

MEMORANDUM OPINION AND ORDER

DONOVAN W. FRANK, United States District Judge

INTRODUCTION

This matter came before the Court on March 25, 2016, pursuant to a Motion to Dismiss filed by Genz-Ryan Plumbing So Heating Co.” (“Genz-Ryan”). (Doc. No. 10.) For the reasons set forth below, the Court denies the motion.

BACKGROUND

Sheet Metal Workers’ Local 10, Pension Fund (“Pension Fund”) is the respondent in an arbitration brought under the provisions of the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”), which amended the Employee Retirement Income Security Act of 1974 (“ERISA”). Genz-Ryan commenced arbitration after the Pension Fund assessed withdrawal liability against Genz-Ryan. (Doc. No. 3, at 5.) Genz-Ryan raised four issues: (1) the date of Genz-Ryan’s withdrawal from the fund (either 2008 or 2009); (2) whether an earlier settlement agreement between Genz-Ryan and the Pension Fund prevented a 2009 withdrawal finding; (3) whether the methods used by the Pension Fund’s actuary to calculate the withdrawal liability amount were flawed; and (4) whether the Pension Fund’s calculations included benefits that are not nonforfeitable under ERISA. (Doc. No. 4, ¶ 3, Ex. A, [1040]*1040at Ex. 1, at Ex. K.) The first issue was dispositive of all others; if Genz-Ryan’s withdrawal date occurred during 2008, Genz-Ryan’s withdrawal liability would be zero. (Id., ¶ 5, Ex. C., 11:13-11:20.)

On September 15, 2015, the arbitrator heard. testimony related to the date of Genz-Ryan’s date of withdrawal and determined (with the parties’ agreement) that the arbitration would be conducted in two phases—the first phase addressing the date of Genz-Ryan’s withdrawal (which would determine liability) and the second phase concerning the calculation of any amount owed by Genz-Ryan if the arbitrator found liability. (Id.) After the first phase, the arbitrator ruled in favor of Genz-Ryan and concluded that Genz-Ryan’s date of withdrawal was in 2008. (Id., ¶6, Ex. D.) Thus, the arbitrator determined that Genz-Ryan faced no liability. As the Pension Fund admits in its response to the present motion, “implicit in [the arbitrator’s] award, was that he need not hear further evidence on issues three and four related to damages, because those issues were necessarily rendered moot by his liability finding.” (Doc. No. 20, at 4.) While the arbitrator did not make a finding of zero damages in the event that Genz-Ryan was found liable, it is undisputed that the arbitrator concluded that Genz-Ryan faced no liability.

After the arbitration, the Pension Fund initiated this case by filing a Petition to Vacate the arbitration award. (Doc. No. 1.) The Pension Fund, self-styled as the “Respondent,” concurrently filed a Memorandum of Law in Support of its Petition to Vacate setting forth its argument for why the arbitration award should be vacated. (Doc. No. 3.) The Pension Fund also filed a Certificate of Service indicating that it served a copy of all of its initial papers via “first class mail, postage paid” to Michael G. Congiu, counsel for Genz-Ryan. (Doc. No. 5.)

In response, Genz-Ryan filed a Motion to Dismiss. (Doc. No. 10.) Genz-Ryan claims that by filing a Petition to Vacate instead of a traditional complaint, the Pension Fund failed to comply with the judicial-review provisions of the MPPAA, thereby warranting dismissal under Federal Rule of Civil Procedure 12(b)(1), (4), and (5). (Id.)

DISCUSSION

I. The MPPAA

In 1974, Congress enacted ERISA in part for the purpose of ensuring “that employees and their beneficiaries would not be deprived of anticipated retirement benefits by the termination of pension plans before sufficient funds have been accumulated in the plans.” Pension Ben. Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 720, 104 S.Ct. 2709, 81 L.Ed.2d 601 (1984). Congress sought to guarantee that “if a worker has been promised a defined pension benefit upon retirement—and if he has fulfilled whatever conditions are required to obtain a vested benefit—he actually will receive it.” Id. (citation omitted).

To accomplish this goal, ERISA created a plan termination insurance program administered by the Pension Benefit Guaranty Corporation (“PBGC”). 29 U.S.C. § 1302. The PBGC collects insurance premiums from covered pension funds and provides benefits to plan participants if their plans terminate with insufficient assets to support the promised benefits. 29 U.S.C. §§ 1322, 1361. The PBGC’s obligation regarding single employer pension plans took effect immediately upon passage of ERISA, while the PBGC’s obligations regarding multiemployer pension plans did not become mandatory until January 1, 1978. 29 U.S.C. § 1381.

As the date of mandatory PBGC coverage approached, Congress became con[1041]*1041cerned that a significant number of plans were experiencing financial hardship, and the assumption of new obligations by the PBGC could lead to the collapse of the plan termination insurance program. R.A. Gray, 467 U.S. at 721, 104 S.Ct. 2709. Congress passed the MPPAA to address this problem. The MPPAA provides that an employer withdrawing from a multiem-ployer pension plan pay a fixed and certain debt to the pension plan; this is known as withdrawal liability. Id. at 725, 104 S.Ct. 2709. The withdrawal liability represents the withdrawing employer’s share of the unfunded vested liability in proportion to the employer’s share of contributions to the plan during the years of its participation. Concrete Pipe & Prod. of California, Inc. v. Constr. Laborers Pension Trust for S. California, 508 U.S. 602, 610, 113 S.Ct. 2264, 124 L.Ed.2d 539 (1993).

If an employer objects to the determination of withdrawal liability, and the parties cannot resolve the dispute, the dispute is referred to arbitration. Id. at 611, 113 S.Ct. 2264; 29 U.S.C. § 1401(a)(1). Any arbitration proceeding under the MPPAA shall “be conducted in the same manner, subject to the same limitations, carried out with the same powers .,. and enforced in United States courts as an arbitration proceeding carried out under [the Federal Arbitration Act.]” 29 U.S.C. § 1401(b)(3). While disputes are referred first to arbitration, there are two ways for disputes under the MPPAA to arrive in federal court. First, if no arbitration is initiated by an employer challenging- a determination of withdrawal liability, then a plan sponsor may bring an action in a federal court of competent jurisdiction for collection. 29 U.S.C. § 1401(b)(1).

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207 F. Supp. 3d 1038, 2016 U.S. Dist. LEXIS 127764, 2016 WL 5107074, Counsel Stack Legal Research, https://law.counselstack.com/opinion/genz-ryan-plumbing-heating-co-v-sheet-metal-workers-local-10-mnd-2016.