Adams v. Trustees of New Jersey Brewery Employees' Pension Trust Fund, 76-01931
| Citation | 29 F.3d 863 |
| Decision Date | 15 July 1994 |
| Docket Number | ANHEUSER-BUSC,No. 77-02543,No. 93-5480,No. 76-01931,INCORPORATED,76-01931,77-02543,93-5480 |
| Parties | , 18 Employee Benefits Cas. 1687 Gustav A. ADAMS; Andrew F. Dopkins; and Robert Malcolm, Deceased, By His Executrix Lillian Malcolm v. TRUSTEES OF THE NEW JERSEY BREWERY EMPLOYEES' PENSION TRUST FUND; Local Union 843, International Brotherhood of Teamsters; Falstaff Brewing Corporation; and Joseph M. Byrne Co., A Corporation of the State of New Jersey (Newark New Jersey District Civil) Bruno MICHOTA; Walter Lemke; Abraham Gellman; Lawrence Balback; Bolly Bonk; William Dunne; Bernard Kosciewicz; Siegfried Milchram; Howard Sears; Stephen Gardzinski; Harry Wolf; Bruno Dziedzic; William Riedel; Salvatore Guarneri; Samuel Monto; Fermin Loma; Vincent Sadowski; Stanley Kiesnowski; Anthony Bellina; Frank Pavolonis; William Roesch; Michael Duda; Edward Strittmatter; Frederick Hubner; Peter Rudy; Harold Wanthouse; Joseph Duffy; Joseph Coyle; Grace Green, Widow of Harold Green, Deceased v., (Budweiser); P. Ballantine & Sons; Pabst Brewing Company; Falstaff Brewing Corporation; Investors Funding Corporation; Rheingold Breweries, Inc.; The New Jersey Brewery Employees' Pension Trust Fund; Henry T. Hamilton; Herbert V. Johnson; Frank A. Jackiewicz; Frank Sullivan; Herbert Heilmann, Jr.; Henry Tchorzewski; Benno Merker; and Arthur Spinello, as Trustees of the New Jersey Brewery Employees' Pension Trust Fund (Newark New Jersey District Civil) Pension Benefit Guaranty Corporation ("PBGC"), Appellant. |
| Court | United States Courts of Appeals. United States Court of Appeals (3rd Circuit) |
Patricia A. Scott-Clayton (argued), Bernard P. Klein, Pension Ben. Guar. Corp., Washington, DC, Susan C. Cassell, Office of U.S. Atty., Newark, NJ, for appellant, Pension Ben. Guar. Corp.
Rosemary Alito (argued), Edward F. Ryan, Carpenter, Bennett & Morrissey, Newark, NJ, for appellee, Anheuser-Busch, Inc. (Budweiser).
John J. Rizzo (argued), Stryker, Tams & Dill, Newark, NJ, for appellee, Pabst Brewing Co.
Before: STAPLETON and SCIRICA, Circuit Judges and SMITH, District Judge. *
After a four and one-half year hiatus, the Pension Benefit Guaranty Corporation attempted to reopen its case against Pabst Brewing Co. and Anheuser-Busch, Inc. for unfunded benefits in a terminated pension fund. The district court dismissed the case for lack of prosecution under Federal Rule of Civil Procedure 41(b) and denied as untimely the PBGC's motion for reconsideration.
The PBGC appeals contending the district court abused its discretion in dismissing the case. The PBGC also claims its motion for reconsideration was timely, and that due process required notice and a hearing before dismissal.
We hold the district court correctly found the motion for reconsideration was untimely, and that the PBGC received adequate notice. Nonetheless, without considering the evidence the PBGC proffered with its motion for reconsideration, we find the district court should not have dismissed the case with prejudice. We agree that the PBGC's behavior was negligent and inexcusable, but think dismissal was too harsh a sanction. Therefore we will remand for reinstatement of the case and consideration of lesser sanctions.
In 1956, Pabst, Anheuser-Busch, and other breweries entered into an agreement with the New Jersey Brewers' Association, the Brewery Workers Joint Local Executive Board of New Jersey, and certain of its local unions to establish the "New Jersey Brewery Workers Trust Fund" (the Fund). Each brewery negotiated periodic collective bargaining agreements specifying the amount it would contribute to the Fund, which was to provide brewery workers' retirement pensions.
As employment in the brewing industry declined in the late 1960s, the Fund's unfunded liabilities mounted, exceeding $50 million by 1970. To protect its solvency and reduce the actuarial deficit, the Fund's trustees adopted a Partial Termination Clause, limiting benefits for participants whose employers had withdrawn from the fund.
In 1973, Pabst and Anheuser-Busch (collectively, the Breweries) withdrew from the Fund and set up separate funds for their employees. Other breweries also withdrew throughout the 1970's. In 1978 the Fund was terminated and the PBGC was appointed statutory trustee under Title IV of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. Sec. 1342(b) & (c) (1988).
Coinciding with the termination, 29 employees (the Employees) sued Pabst, Anheuser-Busch, other breweries, the Fund, its trustees, and the PBGC, for benefits under the Labor Management Relations Act of 1947, 29 U.S.C. Secs. 185 & 186 (1988 & Supp. IV 1992), and ERISA, 29 U.S.C. Secs. 1132, 1302, 1303 (1988 & Supp. IV 1992). In 1979, the PBGC was substituted for the Trustees, and the Employees added a fifth count solely against the PBGC, seeking a declaration that the PBGC was required to guarantee them certain nonforfeitable rights to pension benefits. A class was certified for this count.
The PBGC filed cross-claims against Pabst, Anheuser-Busch, and Rheingold (another brewery), seeking employer indemnification under 29 U.S.C. Sec. 1364 (1988 & Supp IV 1992) for benefits the PBGC might be required to pay employees under 29 U.S.C. Sec. 1322. 1 The PBGC filed a similar claim against Chock-Full O'Nuts Corp., parent company of Rheingold. 2 The Breweries filed cross-claims against the PBGC seeking to recover or offset their liability to the PBGC because of payments into both the Fund and the individual corporate plans.
All parties filed summary judgment motions. On September 22, 1980, the district court granted summary judgment to the Employees against the PBGC on the fifth count, holding that the Partial Termination Clause was invalid; and granted summary judgment against the Employees on all their other claims. Michota v. Anheuser-Busch, Inc., 526 F.Supp. 299 (D.N.J.1980). Thus, all causes of action by the Employees against the Breweries were disposed of, but the Employees' claims against the PBGC continued, as did the cross-claims between the PBGC and the Breweries.
On appeal, we reversed the district court only on the summary judgment for the Employees on the fifth count, holding the Partial Termination Clause was not void. We remanded, however, for determination of whether the Employees received proper notification of the clause. Adams v. New Jersey Brewery Employees' Pension Trust Fund, 670 F.2d 387 (3d Cir.1982).
After discovery on the notice issue, the PBGC and the Employees renewed their summary judgment motions, and the Breweries filed for summary judgment to dismiss the PBGC cross-claims for statutory employer indemnification. Because ERISA was not enacted until 1975, the Breweries claimed that statutory employer liability was not meant to apply to employers who had withdrawn from the Trust Fund in 1973, and in the alternative, that such liability would violate the Due Process Clause.
On October 7, 1983, after the case was transferred to another judge, the district court granted the Employees' summary judgment motion on the fifth count, holding they did not receive adequate notice of the Partial Termination Clause. The court denied Pabst and Anheuser-Busch's summary judgment motions, ruling that liability was appropriate under 29 U.S.C. Sec. 1364 and the Due Process Clause. The court certified the issues for interlocutory review.
On a second appeal, we reversed the grant of summary judgment for the Employees, holding they received adequate constructive notice of the Partial Termination Clause as a matter of law. Michota v. Anheuser-Busch, Inc., 755 F.2d 330, 332 (3d Cir.1985). We declined to address the certified questions, and remanded "for a final determination of the employers' liability on the PBGC's cross-claim for any remaining unfunded portions of the Brewery Pension Fund." Id. at 336.
On October 1, 1986, the district court granted the PBGC's motion to dismiss the Breweries' cross-claims against the PBGC for reduction of their statutory liability based on their payments to the Employees through their corporate pension plans. The court also denied the Breweries' motion for reconsideration of their due process objection to liability under 29 U.S.C. Sec. 1364.
In January, 1987, after the case was transferred to yet another judge, the Employees again raised their claims for guaranteed benefits from the PBGC. The court held we had ruled with finality that the Partial Termination Clause defeated those claims, and granted summary judgment to the PBGC against the Employees. Michota v. Anheuser-Busch, Inc., C.A. No. 77-2543 (D.N.J. March 17, 1988) (Memorandum Opinion and Order). We affirmed by judgment order, October 4, 1988. Adams v. Trustees of the New Jersey Brewery Employees' Pension Trust Fund, No. 88-5305 (3d Cir. Oct. 4, 1988) (judgment order).
Following our affirmance, the only claims remaining were the PBGC's cross-claims against the Breweries for employer indemnification. From October, 1988 to March, 1993 there was no contact among the parties and the court, although the PBGC engaged in limited, informal discovery with third parties on these claims. In December, 1992, the PBGC contacted the district court and was informed by the clerk that the case had been administratively closed. On March 19, 1993, the PBGC moved to reopen the case, seeking summary judgment against the Breweries. Without explaining the four and one-half year break in pursuing its claims, the PBGC contended the only remaining issue in the case was the amount of the Breweries' liability and described how that liability should be calculated. In response, Anheuser-Busch argued that the case should be dismissed under Federal Rule of Civil Procedure 41(b), noting that the court could do so sua sponte and discussing the relevant factors for dismissal. Pabst included in its letter response a form for an order denying the PBGC's motion to reopen and dismissing ...
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