Summary
The Sixth Circuit affirmed summary judgment limiting 888 Corporation's withdrawal liability under the Multiemployer Pension Plan Amendments Act of 1980, as amended by section 558 of the Deficit Reduction Act of 1984. The court held that contributions attributable to 888's Barry Steel Division could not be included because the company had a binding agreement to withdraw before the applicable effective date, while the remaining liability relating to the Intervale Steel Division could be determined through arbitration. The court reversed the award of attorney's fees because the pension fund had not acted culpably or in bad faith and had taken a colorable legal position.
Topics
Practice areas
Questions Presented
- Whether 888 was barred from contesting the Fund's withdrawal-liability assessment because it did not initiate arbitration within the statutory period.
- Whether section 558 of DEFRA and 29 U.S.C. § 1397 excluded Barry Steel's contribution history from the calculation of 888's MPPAA withdrawal liability.
- Whether the district court properly ordered the parties to arbitrate the amount of the remaining withdrawal liability attributable to Intervale Steel.
- Whether the district court properly awarded attorney's fees to 888 under 29 U.S.C. § 1451(e).
Holdings
- An employer is not barred from presenting a statutory defense in court when the defense did not exist during the period in which the employer could have initiated MPPAA arbitration.
- The MPPAA withdrawal-liability assessment against 888 was invalid to the extent it was calculated using the contribution history generated by the Barry Steel division.
- Because the parties agreed that 888 owed withdrawal liability for the Intervale Steel sale, the amount of that liability had to be calculated using the appropriate MPPAA provisions, and any dispute over the amount could proceed to arbitration under 29 U.S.C. § 1401.
- The attorney's-fee award to 888 could not stand because the relevant statutory factors did not support an award against the Fund.
Key quotations
“We decline to find that 888 is out of court because it failed to arbitrate a defense that it did not have.” (at 764)
“Accordingly, we hold that the withdrawal liability assessment made against 888 is invalid to the extent it was calculated using the contribution history generated by 888’s Barry Steel Division.” (at 767)
“While the Fund has ultimately been unsuccessful in this litigation, the Fund, along with 888, took a colorable legal position in this uncertain area of the law.” (at 768)
Factual background
888, formerly Barry Steel Corporation, operated separate Barry Steel and Intervale Steel divisions, each with its own facility and collective bargaining agreement requiring contributions to the Fund. In 1980, 888 entered into a binding agreement to sell the Barry Steel division and completed that sale in December 1980; in 1981 it sold the Intervale Steel division. The Fund assessed 888 $1,558,361.74 in withdrawal liability based on the contribution histories of both divisions, but 888 asserted that section 558 of DEFRA eliminated liability attributable to Barry Steel because the binding agreement to withdraw preceded September 26, 1980.
Procedural history
The Fund brought an action under the Multiemployer Pension Plan Amendments Act to collect an integrated withdrawal-liability assessment based on contributions attributable to 888's former Barry Steel and Intervale Steel divisions. The district court held that section 558 of the Deficit Reduction Act of 1984 invalidated the assessment to the extent it included Barry Steel contributions, granted summary judgment for 888, ordered arbitration concerning the remaining Intervale liability, and later awarded 888 attorney's fees. The Sixth Circuit affirmed the summary judgment ruling and arbitration-related disposition but reversed the attorney's-fee award.
Remand instructions
The remaining withdrawal-liability amount attributable to Intervale Steel should proceed to arbitration under 29 U.S.C. § 1401 if the parties cannot agree on the amount. The summary judgment ruling was affirmed, and the attorney's-fee award was reversed.