Central States, Southeast & Southwest Areas Pension Fund v. Skyland Leasing Co.

Summary

The court granted summary judgment to the pension and health funds in an action seeking ERISA/MPPAA withdrawal liability. It held that a partnership formed and controlled by the same individuals who controlled the withdrawing trucking company was an employer within a commonly controlled group, and that the partners were jointly and severally liable. The court further held that defendants’ failure to timely invoke review and arbitration procedures foreclosed factual challenges to the amount and calculation of liability, while preserving consideration of certain statutory-interpretation and constitutional issues.

Holdings

1. A partnership with no employees of its own may nevertheless qualify as an employer under 29 U.S.C. § 1301(b)(1) when it is a trade or business under common control with the withdrawing employer. Skyland Leasing was an employer subject to liability for Skyland's withdrawal liability.
2. Keller and Van Dyke were jointly and severally liable for Leasing's withdrawal-liability obligations because they were its partners; their liability was based on partnership status, not on their status as corporate officers or shareholders.
3. Notice and demand to one member of a controlled group may constitute notice and demand to all members, and the defendants' actual receipt of notice independently satisfied the applicable notice and due-process requirements.
4. Defendants' failure to timely invoke the MPPAA's review and arbitration procedures conclusively established the withdrawal-liability assessment and barred later factual challenges to liability, the amount assessed, and the calculation method.
5. Defendants could not seek reduction of withdrawal liability under 29 U.S.C. § 1405(b) or (d) after failing to timely arbitrate the amount or calculation of liability.
6. The MPPAA's controlled-group liability, partnership liability, arbitration procedures, presumption of correctness, and related withdrawal-liability provisions did not violate the Fifth or Seventh Amendments as applied here.

Questions Presented

1. Whether Skyland Leasing was an employer subject to MPPAA withdrawal liability because it was a trade or business under common control with Skyland.
2. Whether Kenneth Keller and Stephen Van Dyke were personally and jointly and severally liable for Leasing's withdrawal liability as its partners.
3. Whether notice to Skyland and actual notice received by defendants satisfied the MPPAA's notice and due-process requirements.
4. Whether defendants waived or forfeited factual challenges to the amount and calculation of withdrawal liability by failing to timely seek review and arbitration.
5. Whether defendants could invoke the insolvency-related mitigation provisions of 29 U.S.C. § 1405 after failing to arbitrate.
6. Whether the MPPAA's controlled-group liability, arbitration, presumption-of-correctness, and withdrawal-liability provisions violated the Fifth or Seventh Amendments.

Disposition

other