Summary
The Ninth Circuit affirmed judgments imposing withdrawal liability under the Multiemployer Pension Plan Amendments Act on Allyn Transportation Company and commonly controlled Landy corporations. The court held that disputes concerning whether a complete withdrawal occurred before the Act’s effective date must be submitted to arbitration, and that failure to initiate arbitration made the demanded liability due and owing. The court also held that notice to the withdrawing employer constituted notice to other members of the controlled group.
Topics
Practice areas
Questions Presented
- Whether a dispute over whether Allyn had completely withdrawn from the pension plan before the effective date of the Multiemployer Pension Plan Amendments Act was subject to mandatory arbitration rather than initial judicial determination.
- Whether the statutory duty to arbitrate under the Multiemployer Pension Plan Amendments Act differs from a contractual duty to arbitrate such that the court, rather than the arbitrator, must decide whether the duty to arbitrate exists.
- Whether notice of withdrawal liability to the withdrawing employer constituted notice to all members of a controlled group, so that the Landy corporations were bound by their failure to initiate arbitration.
- Whether requiring arbitration of the withdrawal-liability dispute denied due process under the Fifth Amendment.
- Whether the Fund was entitled to attorney's fees and costs after prevailing in the collection action.
Holdings
- Questions of statutory interpretation, including whether an employer completely withdrew from a multiemployer pension plan before MPPAA's effective date, are not excepted from the mandatory arbitration requirement of 29 U.S.C. § 1401(a)(1).
- The court was not required to decide before arbitration whether Allyn's conduct constituted a complete withdrawal before MPPAA's effective date, because the duty to arbitrate arose from the statute rather than from a private agreement.
- Notice of withdrawal liability to the withdrawing employer constitutes notice to all members of a controlled group for purposes of 29 U.S.C. § 1399(b)(1), and controlled-group members that fail to timely initiate arbitration are jointly and severally liable for the withdrawal liability.
- The Fund was entitled to seek attorney's fees under 29 U.S.C. § 1132(g)(2), and the Fund was directed to file its bill of costs under Ninth Circuit Rule 39-1.
Key quotations
“We follow the holding of I.A.M. Nat’l Pension Fund v. Clinton Engines Corp., 825 F.2d 415 (D.C.Cir.1987), that questions of statutory interpretation are not excepted from arbitration under MPPAA.” (505)
“The matters to be resolved by arbitration are not to be determined by the parties’ intention, but by the intention of Congress.” (506)
“This purpose is best served by holding that notice to the withdrawing employer is notice to all members of the controlled group for the purposes of 29 U.S.C. § 1399(b)(1).” (507)
Factual background
Allyn Transportation Company participated in a multiemployer defined-benefit pension plan sponsored by the Teamsters Pension Trust Fund. Allyn laid off 122 of its 123 covered employees and restricted its covered operations, leading the Fund to determine that Allyn had incurred withdrawal liability under the Multiemployer Pension Plan Amendments Act of 1980. The Fund sent Allyn notice and a demand for payment, but Allyn did not initiate arbitration within the statutory period. The Landy corporations were under common control with Allyn and were sued as jointly and severally liable members of the controlled group.
Procedural history
Allyn received notice of withdrawal liability, requested reconsideration, and was advised that it had 60 days to initiate arbitration. Allyn did not initiate arbitration, and the district court held that the demanded amounts were due and owing under 29 U.S.C. § 1401(b)(1). The Fund gave direct notice only to Allyn; the district court nevertheless granted summary judgment against the Landy corporations on the ground that they were members of the same controlled group and were bound by Allyn's failure to arbitrate. The Ninth Circuit affirmed both judgments and directed the Fund to file its bill of costs.