Borntrager v. Central States, S.E. and S.W. Areas

• Decision Date: 10 October 2005
• Docket Number: No. 04-1720.,04-1720.
• Citation: 425 F.3d 1087
• Parties: Lee BORNTRAGER, et al., Plaintiffs—Appellees, v. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, Defendant—Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1087

425 F.3d 1087

Lee BORNTRAGER, et al., Plaintiffs—Appellees, v. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, Defendant—Appellant.

No. 04-1720.

United States Court of Appeals, Eighth Circuit.

Submitted: February 17, 2005.

Filed: October 10, 2005.

John J. Franczyk, Jr., argued, Rosemont, IL, for appellant.

Herve H. Aitken, argued, Alexandria, VA (Kevin M. Williams and Robert E. Konchar, on the brief), for appellee.

Before LOKEN, Chief Judge, RILEY and SMITH, Circuit Judges.

LOKEN, Chief Judge.

Central States, Southeast and Southwest Areas Pension Fund ("Central States") is a multi-employer pension fund subject to the federal labor laws and the Employee Retirement Income Security Act ("ERISA"). See 29 U.S.C. §§ 186(c)(5), 1301(a)(3), 1322a, 1341a, 1381. CRST Flatbed, Inc., and CRST Van Expedited, Inc. (collectively, "CRST"), are interstate trucking companies that entered into collective bargaining agreements with local unions which require CRST to make defined benefit contributions to Central States on behalf of their employees. Central States expelled CRST for violating Central States's "adverse selection" policy. CRST and affected union member employees including Lee Borntrager commenced this action, seeking an order declaring that CRST was wrongfully expelled and other relief.

Central States moved to dismiss the complaint, arguing that the district court lacked jurisdiction over the wrongful expulsion claim. After denying that motion, the court remanded the matter to the Central States Trustees "for further development of the record" and ordered the Trustees "to allow the plaintiffs discovery" on the adverse selection issue. Central States appeals the remand and discovery order. CRST moved to dismiss the appeal on the ground that the order is not a final decision under either 28 U.S.C. § 1291 or the collateral order doctrine. We deferred consideration of the motion to dismiss until the appeal was briefed and argued. For the following reasons, we now grant the motion and dismiss the appeal for lack of appellate jurisdiction.

I. Background.

To place this rather unusual jurisdiction issue in proper context, we briefly review the factual and legal setting, the claims asserted in the lawsuit, and the relevant rulings of the district court.

A. The Expulsion. In their collective bargaining agreements, CRST and the local unions agreed to be bound by the Trust Agreement that created Central States. Article III, § 1 of the Trust Agreement authorizes the Central States Trustees to —

reject any collective bargaining agreement of an Employer (and all contributions from the Employer) whenever they determine. . . that the Employer is engaged in one or more practices or arrangements that threaten to cause economic harm to, and/or impairment of the actuarial soundness of, the Fund.

Applying this provision, Central States adopted Special Bulletin 90-7 declaring that "the Trustees will terminate" participation by an employer that engages in the actuarially unsound practice of "adverse selection," which the Bulletin generally describes as an arrangement that "restricts pension coverage to only those employees likely to receive a benefit and excludes those employees less likely to receive a benefit." This prohibition is based on the "universal actuarial assumption" for benefit plans such as Central States that "the contributions of new members who replace retiring members will be used in part to pay the benefits due retired members." Cent. Hardware Co. v. Cent. States, SE & SW Areas Pension Fund, 770 F.2d 106, 110 (8th Cir.1985), cert. denied, 475 U.S. 1108, 106 S.Ct. 1515, 89 L.Ed.2d 914 (1986).

After an audit, Central States concluded that CRST was violating this adverse selection policy by replacing departing employees with independent contractors, thereby depriving Central States of new member contributions to help pay benefits due to CRST's remaining employees as they retire. Though this subcontracting was apparently not a violation of CRST's collective bargaining agreements, the Central States Trustees terminated CRST and its bargaining unit employees from participation in the fund on the ground that CRST's practices threaten to cause economic harm and to impair the actuarial soundness of the pension fund.

B. The MPPAA. In 1980, Congress amended ERISA by enacting the Multi-Employer Pension Plan Amendments Act ("MPPAA"), codified in Subtitle E of ERISA, 29 U.S.C. §§ 1381-1453. To counter the threat that voluntary employer withdrawals pose to the viability of underfunded multi-employer pension funds, especially in declining industries, the MPPAA imposed a withdrawal liability equal to the withdrawing employer's proportionate share of the fund's "unfunded vested benefits." 29 U.S.C. §§ 1381, 1391; see Pension Ben. Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 720-25, 104 S.Ct. 2709, 81 L.Ed.2d 601 (1984).

Under the MPPAA, withdrawal liability is triggered by an employer's "complete withdrawal" from the plan, that is, "when the employer `permanently ceases to have an obligation to contribute under the plan' or `permanently ceases all covered operations under the plan.'" Bay Area Laundry & Dry Cleaning Pension Trust Fund v. Ferbar Corp., 522 U.S. 192, 196, 118 S.Ct. 542, 139 L.Ed.2d 553 (1997), quoting 29 U.S.C. § 1383(a). The MPPAA also provides that an employer or plan beneficiary "adversely affected by the act or omission of any party under [Subtitle E] with respect to a multiemployer plan . . . may bring an action for appropriate legal or equitable relief, or both." 29 U.S.C. § 1451(a)(1). However, a dispute over the amount of withdrawal liability must first be arbitrated. See 29 U.S.C. § 1401(a)(1); Trustees of Colorado Pipe Ind. Pension Trust v. Howard Elec. & Mech., Inc., 909 F.2d 1379, 1385-86 (10th Cir.1990), cert. denied, 498 U.S. 1085, 111 S.Ct. 958, 112 L.Ed.2d 1046 (1991). In this case, CRST paid the amount of withdrawal liability assessed by Central States after the expulsion ($358,534).

C. The Claims at Issue. In their amended complaint, CRST and the employees assert that CRST was wrongfully expelled from the pension fund, that the expulsion breached and tortiously interfered with CRST's collective bargaining agreements, that Central States thereby violated the employees' rights under ERISA to qualify for pension benefits, and that Central States is guilty of "disparate treatment" because it has not enforced the adverse selection policy against its largest contributor, UPS. For relief, the complaint seeks an order declaring the expulsion invalid, reinstating CRST to the fund, granting the employees retroactive pension service credits, and reimbursing CRST "for the full amount of withdrawal liability already paid."

Central States moved to dismiss for lack of jurisdiction, arguing that neither the MPPAA nor any ERISA provision regulates employer expulsions, that CRST's other claims are preempted by ERISA, and that the individual employees fail to state a claim under ERISA. Plaintiffs responded that the court has jurisdiction under 29 U.S.C. § 1451 because the expulsion "is forcing CRST's complete withdrawal from the fund" within the meaning of the MPPAA, and that the dispute is not subject to arbitration under the MPPAA because CRST is not contesting the amount of withdrawal liability.

D. The District Court's Rulings. The district court denied Central States's motion to dismiss the wrongful expulsion claim, concluding that it has jurisdiction because the language of 29 U.S.C. § 1451(a)(1) "is broad enough to encompass an action such as this one challenging an expulsion from a pension plan." The court subsequently denied CRST's motion to expand the Central States administrative record with discovery addressing the pension fund's treatment of UPS. CRST then moved to remand the proceedings to the Central States Trustees for further consideration of whether Central States has consistently applied the adverse selection policy to CRST and UPS, on the ground that consistency of plan interpretation is a factor we consider in determining whether an ERISA plan administrator abused its discretion in denying plan benefits. See Finley v. Special Agents Mut. Ben. Ass'n, Inc., 957 F.2d 617, 621 (8th Cir.1992). The district court granted this motion, remanding the matter to the Central States Trustees "for consideration of all relevant documents relating to UPS' alleged violation of defendant's adverse selection policy and to allow the plaintiffs discovery on this issue." Order of Feb. 24, 2004, at p. 4. Central States appeals the remand and discovery order and argues that the district court lacks jurisdiction under § 1451.

II. Appellate Jurisdiction.

The circuit courts have jurisdiction over "final decisions of the district courts." 28 U.S.C. § 1291. In general, an interlocutory order may not be appealed unless it includes the grant or denial of an injunction, § 1292(a)(1); or the district court has certified a controlling issue of law under § 1292(b); or the court has directed entry of a partial final judgment pursuant to Rule 54(b) of the Federal Rules of Civil Procedure; or the order is appealable as a final order under the judicially created collateral order doctrine. See Great Rivers Co-op. of S.E. Ia. v. Farmland Indus., Inc., 198 F.3d 685, 688-89 (8th Cir.1999).

A number of our sister circuits have held that an order remanding to an ERISA plan administrator for further proceedings is interlocutory in nature and therefore not immediately appealable, particularly when the district court retained jurisdiction or otherwise deferred considering the merits of the administrator's decision being reviewed. See Bowers v. Sheet Metal Workers' Nat'l Pension Fund, 365 F.3d 535, 537 & 537 n. 1 (6th Cir.2004); Rekstad v. First Bank Sys., Inc., 238 F.3d 1259, 1262 (10th Cir.2001); Williamson v. Unum Life Ins. Co. of Am., 160 F.3d 1247, 1250-52 (9th Cir.1998); Petralia v. AT & T Global Info....