31 F.3d 776 (9th Cir. 1994), 92-15649, Carpenters Pension Trust Fund for Northern California v. Underground Const. Co., Inc.

Docket Nº:92-15649.
Citation:31 F.3d 776
Party Name:CARPENTERS PENSION TRUST FUND FOR NORTHERN CALIFORNIA, Plaintiff-Appellant, v. UNDERGROUND CONSTRUCTION COMPANY, INC., Defendant-Appellee.
Case Date:July 22, 1994
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
FREE EXCERPT

Page 776

31 F.3d 776 (9th Cir. 1994)

CARPENTERS PENSION TRUST FUND FOR NORTHERN CALIFORNIA,

Plaintiff-Appellant,

v.

UNDERGROUND CONSTRUCTION COMPANY, INC., Defendant-Appellee.

No. 92-15649.

United States Court of Appeals, Ninth Circuit

July 22, 1994

Argued and Submitted Oct. 6, 1993.

Page 777

Robert M. Hirsch, Van Bourg, Weinberg, Roger & Rosenfeld, San Francisco, CA, for plaintiff-appellant.

John T. Hayden and Gregory R. Meyer, Littler, Mendelson, Fastiff & Tichy, San Francisco, CA, for defendant-appellee.

Appeal from the United States District Court for the Northern District of California.

Before: HUG, FARRIS, and BRUNETTI, Circuit Judges.

BRUNETTI, Circuit Judge:

Appellant Carpenters Pension Trust Fund for Northern California ("the Fund") is a multiemployer pension plan for the carpenters who are represented by Carpenters 46 Northern California Counties Conference Board of the United Brotherhood of Carpenters and Joiners of America (AFL-CIO). The trustees of the Fund administer the plan pursuant to a Trust Agreement. Appellee Underground Construction Co., Inc. ("Underground") was for many years a signatory to the Trust Agreement and the relevant collective bargaining agreement, the Carpenters Master Agreement ("the CBA").

During that period, Underground participated in two joint ventures ("JV"s), each formed to build a specific project. In each case, Underground had one JV partner; Underground owned 60 percent of the first JV and 55 percent of the second. The business operations of the JVs were entirely separate from those of Underground and its JV partners. Moreover, each JV was itself a signatory to the CBA, and each contributed to the Fund under its own account number and kept its own financial records.

In June 1986, Underground withdrew from the CBA and thereby terminated its obligation to make continued contributions to the Fund, while the firm continued to work in the area covered by the CBA. The present dispute concerns the amount of Underground's resulting "withdrawal liability" to the Fund for its proportionate share of the Fund's unfunded vested liabilities. The Fund included the JVs' contribution history in its calculation of Underground's liability. Underground, supported by the rulings of an

Page 778

arbitrator as well as the district court, contends that it was not liable for the additional contribution history.

For the reasons stated below, we hold that the district court did not err in ruling that including the JVs' history in the calculation of Underground's withdrawal liability requires an arbitrary interpretation of the Trust Agreement. The Fund concedes here that federal law provides no independent source of liability. As the parties had stipulated to the principal facts, there remained no disputed issues. We thus affirm the district court's grant of summary judgment for Underground.

The Statutory Scheme

As a general matter, pension plans are federally regulated pursuant to the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. Secs. 1001 et seq. (1988). The Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), 29 U.S.C. Secs. 1381-1453 (1988), amended ERISA to allow plans to impose proportional liability on withdrawing employers for the unfunded vested benefit obligations of multiemployer plans. For a summary of the legislative history, see Pension Benefit Guarantee Corp. v. R.A. Gray & Co., 467 U.S. 717, 720-25, 104 S.Ct. 2709, 2713-16, 81 L.Ed.2d 601 (1984). To the extent that past contributions did not suffice to fund obligations that had vested at the time of withdrawal, the MPPAA sought to make withdrawing employers pay their proportionate share of the deficit such that remaining employers would not be unfairly saddled with increased payments.

Ordinarily, "withdrawal" triggering this liability occurs when an employer permanently terminates its obligation to contribute or ceases all operations covered by the plan. 29 U.S.C. Sec. 1383(a). However, in enacting the MPPAA Congress recognized the...

To continue reading

FREE SIGN UP