Jaspan v. Certified Industries, Inc., IIJ Enterprises, Inc., IIJ Associates, and Split Rock Realty, Inc.

Summary

The United States District Court for the Eastern District of New York addressed withdrawal liability under the Multiemployer Pension Plan Amendments Act after Certified Industries, Inc. transferred its assets and ceased covered operations. The court denied the defendants' motion to stay pending arbitration, held that the employer waived arbitration by failing to timely seek review, and granted summary judgment against Certified for the assessed withdrawal liability with interest. The court also dismissed the employer's fiduciary-duty counterclaim for lack of standing and deferred claims against related defendants for further discovery.

Holdings

1. Certified waived its right to demand arbitration by failing to request review of the withdrawal-liability assessment within the 90-day period required by 29 U.S.C. § 1399(b)(2)(A); the motion to stay pending arbitration was therefore denied.
2. The assessed withdrawal-liability amounts were due and owing, and the trustees were entitled to summary judgment against Certified in the amount of $1,166,865, with interest at 11 percent from May 4, 1983.
3. Certified could not avoid withdrawal liability by belatedly posting the required bond and amending the sale agreement to impose secondary liability, because the statutory conditions had to be satisfied when the assets were sold and Certified had also waived arbitration of the § 1384 dispute.
4. The possibility, probability, or actuality of overpayment or double payment was not a defense to the withdrawal-liability assessment.
5. Certified lacked standing to sue under ERISA's fiduciary-duty enforcement provisions because it was an employer rather than a participant, beneficiary, or the Secretary of Labor.

Questions Presented

1. Whether the defendants were entitled to stay the action pending arbitration of Certified's challenge to the withdrawal-liability assessment.
2. Whether the trustees were entitled to summary judgment against Certified for the assessed withdrawal liability.
3. Whether Certified could cure after the asset sale the failure to satisfy the statutory conditions for avoiding withdrawal liability under 29 U.S.C. § 1384(a).
4. Whether the possibility of double payment or overpayment constituted a defense to the withdrawal-liability assessment.
5. Whether Certified, as an employer, had standing to assert an ERISA fiduciary-duty counterclaim against the trustees.

Disposition

other