Trustees of Chicago Truck Drivers, Helpers and Warehouse Workers Union (Independent) Pension Fund v. Leaseway Transp. Corp.

• Decision Date: 08 February 1996
• Docket Number: No. 95-1999,95-1999
• Citation: 76 F.3d 824
• Parties: Pens. Plan Guide P 23917F TRUSTEES OF THE CHICAGO TRUCK DRIVERS, HELPERS AND WAREHOUSE WORKERS UNION (INDEPENDENT) PENSION FUND, et al., Plaintiffs-Appellants, v. LEASEWAY TRANSPORTATION CORPORATION and Leaseway Trucking, Incorporated, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 824

76 F.3d 824

Pens. Plan Guide P 23917F

TRUSTEES OF THE CHICAGO TRUCK DRIVERS, HELPERS AND WAREHOUSE WORKERS UNION (INDEPENDENT) PENSION FUND, et al Plaintiffs-Appellants, v. LEASEWAY TRANSPORTATION CORPORATION and Leaseway Trucking Incorporated, Defendants-Appellees.

No. 95-1999.

United States Court of Appeals Seventh Circuit.

Argued Nov. 8, 1995.

Decided Feb. 8, 1996.

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 92 C 1831--James B. Zagel, Judge.

Stephen B. Horwitz, David S. Allen (argued), Jacobs, Burns, Sugarman, Orlove & Stanton, Chicago, IL, for Plaintiffs-Appellants.

Eugene J. Kelley, Jr., Leslie W. Loftus, David L. Strauss, Thomas M. Leinenweber, Arnstein & Lehr, Chicago, IL, Karen E. Katz (argued), Robert M. Grass, Yoon Hi Greene, Kaye, Scholer, Fierman, Hays & Handler, New York City, Jeffrey D. Wohl, Orrick, Herrington & Sutcliffe, San Francisco, CA, for Defendants-Appellees.

Before WOOD, Jr., FLAUM, and MANION, Circuit Judges.

FLAUM, Circuit Judge.

The plaintiffs, Trustees of the Chicago Truck Drivers, Helpers and Warehouse Workers Union (Independent) Pension Fund ("the Fund"), appeal the district court's grant of summary judgment in favor of the defendants, Leaseway Transportation Corp. ("Leaseway") and Leaseway Trucking, Inc. ("Leaseway Trucking"). The Fund filed this action, pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended by the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), in order to vacate an arbitrator's determination that Leaseway had not incurred partial withdrawal liability within the meaning of 29 U.S.C. § 1385. Leaseway counterclaimed, seeking to recover the amount it had previously paid to satisfy the Fund's withdrawal liability assessment, pending the outcome of the arbitration. The district court upheld the arbitrator's decision and granted summary judgment for Leaseway on its counterclaim. We now affirm the district court's decision.

I.

Leaseway Trucking, a subsidiary of Leaseway, was under contract to perform delivery services for Carson Pirie Scott & Co. ("Carson") from February 1976 until May 1986. Leaseway Trucking dedicated an entire division ("Leaseway/Carson") to fulfill its contractual obligations. On April 1, 1985, Leaseway/Carson entered into a collective bargaining agreement with the Chicago Truck Drivers, Helpers and Warehouse Workers Union (Independent) ("the CDTU") that required Leaseway/Carson to make contributions to the Fund on behalf of its employees. On April 2, 1986, Carson notified Leaseway Trucking that it intended to cancel their contract, effective May 3, 1986. When Carson terminated the contract on May 3, Leaseway/Carson discontinued its operations entirely, terminated all employees covered by the collective bargaining agreement for such operations, and was no longer obligated to contribute to the Fund. Although Leaseway/Carson ceased contributing to the Fund, other members of Leaseway's controlled group ¹ continued to contribute to the Fund under their own collective bargaining agreements with the CDTU. Leaseway Trucking never performed delivery services for Carson again.

Instead, Carson contracted with Black Horse Carriers, Inc. ("Black Horse"), a subsidiary of Niedert Terminals, Inc. ("Niedert"), to replace Leaseway Trucking's delivery operations. On May 4, 1986, one day after Carson terminated its contract with Leaseway Trucking, Carson's contract with Black Horse became effective. Black Horse was not a party to any collective bargaining agreement with the CDTU and was not obligated to contribute to the Fund. Thus, as of May 4, 1986, Leaseway/Carson was not obligated to contribute to the Fund, and no member of the Leaseway controlled group was performing delivery services for Carson.

On July 3, 1986, Leaseway entered into a share purchase agreement with Niedert's shareholders to acquire Niedert and its subsidiaries, including Black Horse. ² The proposed purchase was approved by the Interstate Commerce Commission on August 28, 1986. On September 30, 1986, nearly five months after Carson terminated its contract with Leaseway Trucking, the agreement closed and Leaseway acquired Niedert and its subsidiaries. Therefore, on September 30, 1986, Black Horse became a member of the Leaseway controlled group. At that time, Black Horse was still providing delivery services to Carson under their contract and had no obligation to contribute to the Fund. Thus, during the Fund's plan year, which ran between April 1, 1986 and March 31, 1987, two dates are important to note: (1) on May 3, 1986, Leaseway ceased to have an obligation to contribute to the Fund under Leaseway/Carson's collective bargaining agreement with the CDTU, and (2) beginning on September 30, 1986, Leaseway (through Black Horse) began performing the identical work for which it previously had been required to contribute.

On November 3, 1986, the Fund assessed partial withdrawal liability against Leaseway based on Leaseway's loss and subsequent reacquisition of the work performed by Leaseway/Carson. The Fund ultimately calculated Leaseway's withdrawal liability as $5,055,002. Leaseway disputed the Fund's assessment, arguing that it had not "continued" to perform delivery services for Carson and thus was not liable for partial withdrawal under 29 U.S.C. § 1385(b)(2)(A)(i). Leaseway initiated arbitration under ERISA's dispute resolution mechanism, and the parties selected a neutral arbitrator. As required by ERISA, Leaseway paid $4,948,589 to the Fund in satisfaction of the Fund's assessment, pending the arbitrator's decision. On February 28, 1992, the arbitrator held that Leaseway had not incurred partial withdrawal liability, due to the five month gap between Leaseway's loss of the Carson account and its acquisition of Black Horse. The district court dismissed the Fund's suit to vacate the arbitrator's decision, granted Leaseway's motion for summary judgment on its counterclaim to recover the liability assessment, and entered a final judgment in favor of Leaseway for $7,260,061. ³

II.

The MPPAA imposes liability on employers who withdraw from multiemployer pension plans in an amount equal to their proportionate share of "unfunded vested benefits." 29 U.S.C. §§ 1381, 1391. Without this withdrawal liability, a withdrawing employer could shift the financial burden of its employees' vested pension benefits to the plan's other employers and, indirectly, to the Pension Benefit Guaranty Corporation ("PBGC"), which insures these benefits. Central States, Southeast and Southwest Areas Pension Fund v. Slotky, 956 F.2d 1369, 1371 (7th Cir.1992). A partial withdrawal occurs "on the last day of a plan year if for such plan year--(1) there is a 70-percent contribution decline, or (2) there is a partial cessation of the employer's contribution obligation." 29 U.S.C. § 1385(a). Section 1385(b)(2)(A) then provides:

[t]here is a partial cessation of the employer's contribution obligation for the plan year if, during such year--

(i) the employer permanently ceases to have an obligation to contribute under one or more but fewer than all collective bargaining agreements under which the employer has been obligated to contribute under the plan but continues to perform work in the jurisdiction of the collective bargaining agreement of the type for which contributions were previously required ... or

(ii) an employer permanently ceases to have an obligation to contribute under the plan with respect to work performed at one or more but fewer than all of its facilities, but continues to perform work at the facility of the type for which the obligation to contribute ceased.

29 U.S.C. § 1385(b)(2)(A) (emphasis added).

On appeal, the parties do not dispute the facts but rather present us with a pure issue of statutory construction. Leaseway argues, as both the arbitrator and the district court held, that "continues" in § 1385(b)(2)(A)(i) means to continue without interruption. Thus, under Leaseway's view, a partial cessation only occurs when an employer performs work contemporaneously with the cessation of its obligation to contribute to the Fund for that work. Leaseway concludes that the five month period when it did not perform delivery services for Carson precludes imposition of partial withdrawal liability. The Fund counters that the "work continuity" language encompasses situations where an employer continues performing the work after an interruption. Under the Fund's interpretation, the date of withdrawal (the last day of the plan year for a partial withdrawal) is the reference point from which to determine whether an employer has "continued to perform work" within the plan year. Because Leaseway "continued" to perform delivery services for Carson by the end of the plan year, the Fund concludes that Leaseway underwent partial withdrawal. We review de novo the interpretation of § 1385 by the arbitrator and the district court. Central States, Southeast and Southwest Areas Pension Fund v. Robinson Cartage Co., 55 F.3d 1318, 1322 (7th Cir.1995). The dispute regarding the meaning of the "work continuity" language in § 1385 is an issue of first impression.

We begin our interpretive task by examining the language of the statute. United States v. Ron Pair Enter., Inc., 489 U.S. 235, 241, 109 S.Ct. 1026, 1030, 103 L.Ed.2d 290 (1989). When a statute is unambiguous, "we must enforce the plain meaning of the language enacted by Congress." Family and Children's Center, Inc. v. School City of Mishawaka, 13 F.3d 1052, 1060 (7th Cir.1994), cert. denied, --- U.S. ----, 115 S.Ct. 420, 130 L.Ed.2d 335 (1994). Absent specific statutory definitions, words in a statute are presumed to have their ordinary or natural meaning. Smith v. United States, 508 U.S. 223, 228-30, 113 S.Ct. 2050, 2054, 124 L.Ed.2d 138 (1993). Without a limiting context, the word "continues" in § 1385(b)(2)(A)(i) appears to be...