Central States, etc., Pension Fund v. TIME-DC, INC.

• Decision Date: 25 July 1986
• Docket Number: Civ. A. No. CA3-86-1033-D.
• Parties: CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND; Central States, Southeast and Southwest Areas Health & Welfare Fund and Howard McDougall, Trustee, Plaintiffs/Counterdefendants, v. T.I.M.E.-DC, INC., Defendant/Counterplaintiff.
• Court: U.S. District Court — Northern District of Texas

639 F. Supp. 1468

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND; Central States, Southeast and Southwest Areas Health & Welfare Fund and Howard McDougall, Trustee, Plaintiffs/Counterdefendants, v. T.I.M.E.-DC, INC., Defendant/Counterplaintiff.

Civ. A. No. CA3-86-1033-D.

United States District Court, N.D. Texas, Dallas Division.

July 25, 1986.

Charles P. O'Connor, Margery Sinder Friedman, Robert D. Manfred, Jr., of Morgan, Lewis & Bockius, Washington, D.C.; William Baab, of Mullinax, Wells, Baab & Cloutman, P.C., Dallas, Tex.; and Karen I. Ward, Associate General Counsel, Central States, Southeast and Southwest Areas Pension Fund, Chicago, Ill., for plaintiffs/counterdefendants.

Carl L. Taylor, Jeffrey S. Davidson, Michael E. Baumann, of Kirkland & Ellis, Washington, D.C.; and George W. Bramblett, Haynes & Boone, Dallas, Tex., for defendant/counterplaintiff.

MEMORANDUM OPINION

FITZWATER, District Judge.

This is at least the sixth¹ installment in the saga of the efforts of T.I.M.E.-DC, Inc. ("TIME-DC") to enjoin a multiemployer pension fund, in this case the Central States, Southeast and Southwest Areas Pension Fund ("CSF"), from assessing withdrawal liability² against it pursuant to the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"). On TIME-DC's motion for preliminary injunction, presented by the parties on Fed.R.Civ.P. 43(e) affidavits, the court must decide whether TIME-DC has satisfied the Canal Authority³ requirements for obtaining a preliminary injunction. In particular, the court must determine whether TIME-DC is likely to succeed on the merits of its claim that, at the time CSF assessed withdrawal liability, there was an ongoing labor dispute between TIME-DC and the International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America ("IBT") that exempted TIME-DC from withdrawal liability. The court must also decide whether TIME-DC's claim must be dismissed for failure to exhaust the arbitration procedure of MPPAA. For the reasons that follow, the court concludes that Canal Authority has been satisfied, that TIME-DC's claim should not be dismissed, and that a preliminary injunction should issue.⁴

I. PROCEDURAL HISTORY AND STATUTORY FRAMEWORK

Procedural History

On April 15, 1986, CSF, together with another IBT fund and a trustee of both funds,⁵ filed a complaint in this court to collect from TIME-DC unpaid contributions, interest, statutory penalties, and attorney's fees which they contend TIME-DC is obligated to pay pursuant to the terms of a collective bargaining agreement, a trust plan and trust agreement, and federal labor law. CSF contends TIME-DC failed to make timely payments to the trust funds for the time periods for which contributions were due under the collective bargaining agreement.

Thereafter, TIME-DC filed its answer and counterclaim and its answer and first amended counterclaim ("counterclaim"). By its counterclaim TIME-DC seeks a declaratory judgment and injunctive relief against CSF against the threat of prosecution, enforcement, or collection of a claim made against TIME-DC for $18,432,748.94 in withdrawal liability under MPPAA. (See TIME-DC May 27, 1986 Memo. Ex. I). TIME-DC urges that it is exempted from liability under MPPAA's labor dispute exemption. Alternatively, TIME-DC seeks to offset against such liability certain sums of money that TIME-DC contends CSF has lost due to alleged breaches of fiduciary duty, waste, mismanagement and other improper actions taken by CSF's trustees, former trustees, and other fiduciaries. TIME-DC contends these acts have caused an underfunding of CSF, absent which little or no withdrawal liability would be due. TIME-DC alternatively seeks a declaration that MPPAA, as applied, is unconstitutional, that TIME-DC has been injured within the meaning of the Racketeer Influenced and Corrupt Organizations Act if TIME-DC is required to pay withdrawal liability attributable to the unlawful acts of CSF, and that MPPAA is unconstitutional in that it denies TIME-DC due process of law if TIME-DC is required to raise its labor dispute defense in an arbitration forum. (Counterclaim at 8-9).

On May 27, 1986, TIME-DC applied for a temporary restraining order to preclude CSF from assessing withdrawal liability. After considering briefs and conducting a hearing by teleconference, the court on May 30, 1986 issued a temporary restraining order. On July 10, 1986, the court extended the restraining order until July 25, 1986 to afford the court ample time to consider the substantial briefs and supporting evidence submitted in support of and in opposition to TIME-DC's motion for preliminary injunction.

TIME-DC's motion is premised on considerably narrower grounds than is its counterclaim. TIME-DC contends CSF's assessment of withdrawal liability violates MPPAA's labor dispute exemption, arguing that: (1) the labor dispute between TIME-DC and IBT continues because there has been no good faith and unequivocal disclaimer of representation of TIME-DC's employees by all IBT locals within the CSF geographical area; (2) CSF and IBT's Teamsters National Freight Industry Negotiating Committee ("TNFINC") colluded to precipitate an end to the labor dispute, which voids any inference that the locals have disclaimed; (3) the deadlock in TIME-DC and IBT negotiations is no basis for the assertion of withdrawal liability; (4) there is a stipulated labor dispute through at least April 1986; and (5) TIME-DC is ready and able to recommence operations within CSF's territorial jurisdiction if TIME-DC gets a contract or a no-strike pledge.

CSF contends: (1) the CSF trustees reasonably concluded that TIME-DC had permanently ceased contributions to CSF because the facts underlying the trustee's determination were accurate and because the facts presented to the trustees supported a determination that the labor dispute had ended; (2) TIME-DC's assertions of collusion are unsupported; (3) the disclaimers by IBT locals were effective, clear, and unequivocal and include all the locals within CSF jurisdiction; (4) even if the disclaimers are deficient, TIME-DC cannot avoid withdrawal liability because the facts otherwise indicated that TIME-DC had permanently ceased contributions to the Fund, there had been a lack of bargaining for over 32 months, and TIME-DC failed to resume operations within CSF jurisdiction; (5) TIME-DC is unable to recommence operations in the CSF geographic area; and (6) CSF has correctly calculated TIME-DC's withdrawal liability.

Statutory Framework

In 1980, Congress enacted MPPAA, 29 U.S.C. §§ 1381 et seq., to ensure further the fiscal soundness of multiemployer pension plans⁶ adopted pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001 et seq. The staggering size of the unfunded vested liabilities of multiemployer pension plans such as CSF⁷ influenced Congress to rewrite ERISA's pension plan termination insurance program as it applied to multiemployer plans. Pension Benefit Guaranty Corp. v. R.A. Gray & Co., 467 U.S. 717, 722-25, 104 S.Ct. 2709, 2714-16, 81 L.Ed.2d 601 (1984). To alleviate the burdens on plans and on employers that remained when an employer/contributor withdrew from a plan, Congress provided for the imposition of withdrawal liability on employers that ceased their contribution obligations. Id. at 724-25, 104 S.Ct. at 2715-16. This burden arises because, as noted, such funds usually have unfunded but vested benefit liabilities. For example, at the end of 1985, CSF had net assets of approximately $6.4 billion (CSF Ex. 1 at 2) but had unfunded vested liabilities of $3.021 billion. CSF Ex. 1 at 24. CSF's trustees are obligated to collect withdrawal liability to ensure that the plan receives all funds to which it is entitled so that those funds can be used on behalf of participants and beneficiaries. Central States, Southeast and Southwest Areas Pension Fund v. Central Transport, Inc., ___ U.S. ___, 105 S.Ct. 2833, 2841, 86 L.Ed.2d 447 (1985).

MPPAA requires fund trustees to demand payment of withdrawal liability "as soon as practicable after an employer's complete or partial withdrawal." 29 U.S.C. § 1399(b)(1)(B). After receiving the trustees' demand, the employer has the right to ask the trustees to review their determination, 29 U.S.C. § 1399(b)(2)(A), and the trustees must then afford "a reasonable review of any matter raised." 29 U.S.C. § 1399(b)(2)(B). In connection with the review process the employer has the right to submit any information that is relevant to the trustees' determination.

MPPAA also establishes exemptions from the obligation to pay withdrawal liability. The exemption at issue in the instant case is the labor dispute exemption, which provides that an "employer shall not be considered to have withdrawn from the plan solely because —... (2) an employer suspends contributions under the plan during a labor dispute involving its employees." 29 U.S.C. § 1398.

As discussed below, in order to determine whether the TIME-DC-IBT labor dispute had ended on April 23, 1986, when CSF assessed withdrawal liability against TIME-DC, the court must first decide what is a "labor dispute" within the meaning of the exemption. Section 1398 does not define the term. The term is, however, defined in other labor laws such as the National Labor Relations Act ("NLRA"), 29 U.S.C. § 152(9), the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 142(3), and the Norris-LaGuardia Act ("NLA"), 29 U.S.C. § 113(c).⁸ Use of the same language in various enactments dealing with the same general subject matter is a strong indication that the statutes should be interpreted to mean the same thing. See, e.g., Northcross v. Board of Education of Memphis City Schools, 412 U.S. 427, 428, 93 S.Ct. 2201, 2202, 37 L.Ed.2d 48 (1973); Riddell v. National Democratic Party, 624 F.2d 539, 543 (5th Cir.1980).

The NLRA defines the term "labor dispute" to include:

Any controversy concerning

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