Carl Colteryahn Dairy, Inc. v. Western Pennsylvania Teamsters & Employers Pension Fund

Summary

The United States Court of Appeals for the Third Circuit considered challenges to withdrawal liability assessed under the Multiemployer Pension Plan Amendments Act. It held that fraud, misrepresentation, and concealment claims were not subject to mandatory MPPAA arbitration and could proceed in federal court under 29 U.S.C. § 1451 and federal common law, while a claim challenging the calculation of withdrawal liability had to be arbitrated first. The court also remanded the state-law claims for consideration of ERISA preemption and directed that the calculation claim be stayed rather than dismissed.

Holdings

1. Claims alleging that a multiemployer pension fund fraudulently induced an employer to join and remain in the fund do not concern a technical withdrawal-liability determination made under 29 U.S.C. §§ 1381 through 1399 and therefore need not first be submitted to MPPAA arbitration.
2. Under the federal common law of pension plans, a defrauded employer may sue in federal court for return of withdrawal-liability sums assessed as a result of fraudulent inducement to join the pension fund.
3. A challenge to whether payments should be treated as contributions in calculating an employer's allocable share of unfunded vested benefits under 29 U.S.C. § 1391 is a dispute concerning a determination under §§ 1381 through 1399 and must first be submitted to arbitration under § 1401(a)(1).
4. The district court correctly required arbitration of the calculation claim but erred by dismissing it; the claim should be stayed pending completion of arbitration.
5. Because federal subject matter jurisdiction remained over the fraud and misrepresentation claims, the district court had to reconsider its dismissal of the state-law claims and determine whether those claims were preempted by ERISA.

Questions Presented

1. Whether claims that a multiemployer pension fund fraudulently induced an employer to join and remain in the fund must first be submitted to arbitration under 29 U.S.C. § 1401(a)(1).
2. Whether an employer has federal subject matter jurisdiction and a substantive federal cause of action to seek recovery of withdrawal liability allegedly assessed as a result of fraudulent inducement.
3. Whether a challenge to the inputs used to calculate withdrawal liability under 29 U.S.C. § 1391 must first be submitted to MPPAA arbitration even when framed as a pure statutory interpretation question.
4. Whether the district court should have dismissed the state-law claims for lack of pendent jurisdiction after dismissing the federal claims, or instead retained jurisdiction and determined whether ERISA preempted those claims.

Disposition

reversed_and_remanded