Trustees of the Plumbers & Pipefitters National Pension Fund v. Plumbing Services, Inc.

791 F.3d 436, 60 Employee Benefits Cas. (BNA) 1733, 2015 U.S. App. LEXIS 11073, 2015 WL 3940851
CourtCourt of Appeals for the Fourth Circuit
DecidedJune 29, 2015
Docket13-2403
StatusPublished
Cited by458 cases

This text of 791 F.3d 436 (Trustees of the Plumbers & Pipefitters National Pension Fund v. Plumbing Services, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Trustees of the Plumbers & Pipefitters National Pension Fund v. Plumbing Services, Inc., 791 F.3d 436, 60 Employee Benefits Cas. (BNA) 1733, 2015 U.S. App. LEXIS 11073, 2015 WL 3940851 (4th Cir. 2015).

Opinion

Affirmed by published opinion. Judge DIAZ wrote the opinion, in which Judge MOTZ and Senior Judge DAVIS joined.

*440 DIAZ, Circuit Judge:

For nearly thirteen years, Plumbing Services, Inc. (“PSI”) made contributions to the Plumbers and Pipefitters National Pension Fund (the “Fund”), a multiem-ployer pension benefit plan governed by the Employment Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq. (2012). On March 10, 2011, however, PSI stopped contributing to the Fund. The Fund, in turn, informed PSI that it (and its successor entity, PSI Mechanical, Inc., collectively “Defendants”) owed “withdrawal liability” pursuant to 29 U.S.C. § 1381. When Defendants failed to pay the sum owed, the Fund filed suit.

Defendants moved to dismiss the action on the ground' that the district court did not have personal jurisdiction over them. In the alternative, they sought a change in venue. The district court denied both motions. On the merits, Defendants claimed that PSI never agreed to be bound by an existing collective bargaining agreement requiring participating employers to make contributions to the Fund. The district court disagreed, and granted the Fund’s motion for summary judgment. Because we find that (1) the district court had personal and subject matter jurisdiction, (2) venue was proper in Virginia, and (3) PSI bound itself to make contributions to the Fund, we affirm.

I.

A.

We begin by briefly setting out the relevant statutory framework. Congress enacted ERISA to promote the “soundness and stability of [employee benefit] plans” in private industry. 29 U.S.C. § 1001(a). Specifically, ERISA protects “the interests of employees and their beneficiaries” by establishing “minimum standards ... assuring the equitable character of such plans and their financial soundness.” Id. To further that end, Congress in 1980 passed the Multiemployer Pension Plan Amendments Act (the “MPPAA”). In part, the MPPAA

requires that an employer withdrawing from a multiemployer pension plan pay a fixed and certain debt to the pension plan. This withdrawal liability is the employer’s proportionate share of the plan’s “unfunded vested benefits,” calculated as the difference between the present value of vested benefits and the current value of the plan’s assets.

Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 725, 104 S.Ct. 2709, 81 L.Ed.2d 601 (1984) (citing 29 U.S.C. §§ 1381, 1391). The purpose of assessing withdrawal liability is “to assign to the withdrawing employer a portion of the plan’s unfunded obligations in rough proportion to that employer’s relative participation in the plan over the last 5 to 10 years.” Borden, Inc. v. Bakery & Confectionery Union & Indus. Int’l Pension, 974 F.2d 528, 530 (4th Cir.1992).

An employer owes withdrawal liability when it makes a complete or partial withdrawal from a pension plan. 29 U.S.C. § 1381(a). In the building and construction industry, a complete withdrawal occurs when: (1) “an employer ceases to have an obligation to contribute under the plan, and” (2) the employer “continues to perform work in the jurisdiction of the collective bargaining agreement of the type for which contributions were previously required.” 29 U.S.C. § 1383(b)(2). ERISA treats all trades or businesses that are under common control as a single employer. 29 U.S.C. § 1301(b)(1). 1

*441 An employer who disputes an assessment of withdrawal liability may file an objection with the plan sponsor. 29 U.S.C. § 1899(b)(2)(A). “After a reasonable review of any matter raised,” the plan sponsor must notify the employer of (1) its decision, (2) the basis for its decision, and (3) “the reason for any change in the determination of the employer’s liability or schedule of liability payments.” Id. § 1399(b)(2)(B).

An employer dissatisfied with the plan sponsor’s response must demand arbitration within a 60-day period after the earlier of the date of the plan sponsor’s notification that it has rejected the employer’s request for review, or 120 days after the employer’s request for review. 29 U.S.C. § 1401(a). “[Ujnlijce the Federal Arbitration Act, the MPPAA treats an award issuing from such a § 1401 arbitration like an agency determination-the arbitrator decides the issues in the first instance but then the decision is subject to judicial review.” Bd. of Trs., Sheet Metal Workers’ Nat’l Pension Fund v. BES Servs., Inc., 469 F.3d 369, 375 (4th Cir.2006).

If, however, the employer does not pursue arbitration, the amount assessed by the plan sponsor as withdrawal liability “shall be due and owing on the schedule set forth by the plan sponsor,” which may then “bring an action in a State or Federal court of competent jurisdiction for collection.” 29 U.S.C. § 1401(b)(1). In such a circumstance, an employer is deemed to have waived review of all issues concerning the determination of withdrawal liability. BES Servs., 469 F.3d at 375.

B.

The Fund is a multiemployer pension benefit plan maintained pursuant to a collective bargaining agreement between the Associated Plumbing, Heating and Cooling Contractors of Jefferson County, Alabama (the “Multiemployer Association”) and affiliated local unions of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada (the “Union”). Defendants are Alabama corporations engaged as plumbing and pipefitting contractors.

On April 8, 1998, Kenneth Julian-PSI’s sole shareholder-agreed in writing (on behalf of PSI) “to be bound by provisions of the current labor Agreement executed and presently existing between” the Multiem-ployer Association and the Union. J.A. 448. 2 PSI further agreed to “make contributions to the ... Plumbers and Pipefit-ters National Pension Fund .... as provided for by the [labor] Agreements now existing and as hereafter.” Id.

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791 F.3d 436, 60 Employee Benefits Cas. (BNA) 1733, 2015 U.S. App. LEXIS 11073, 2015 WL 3940851, Counsel Stack Legal Research, https://law.counselstack.com/opinion/trustees-of-the-plumbers-pipefitters-national-pension-fund-v-plumbing-ca4-2015.