Central States Southeast and Southwest Areas Pension Fund v. T.I.M.E.-DC, Inc., No. 86-1628

CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)
Writing for the CourtBefore RANDALL, GARWOOD and DAVIS; RANDALL; GARWOOD
Citation826 F.2d 320
Parties8 Employee Benefits Ca 2397 CENTRAL STATES SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, Plaintiff-Appellant. v. T.I.M.E.-DC, INC., Defendant-Appellee.
Decision Date24 August 1987
Docket NumberNo. 86-1628

Page 320

826 F.2d 320
8 Employee Benefits Ca 2397
CENTRAL STATES SOUTHEAST AND SOUTHWEST AREAS PENSION FUND,
Plaintiff-Appellant.
v.
T.I.M.E.-DC, INC., Defendant-Appellee.
No. 86-1628.
United States Court of Appeals,
Fifth Circuit.
Aug. 24, 1987.

Robert D. Manfred, Charles O'Connor, Washington, D.C., for plaintiff-appellant.

Peter H. Gould, J. Stephen Caflish, Sp. Counsel, Pension Benefit Guar. Corp., David F. Power, Washington, D.C., Mullinax, Wells, Baab & Cloutman, Roger Albright, Dallas, Tex., for amicus Pension Benefit Guar. Corp.

Carl L. Taylor, Jeffrey S. Davidson, Michael E. Baumann, Kirkland & Ellis, Washington, D.C., for T.I.M.E.-DC, Inc.

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

Before RANDALL, GARWOOD and DAVIS, Circuit Judges.

RANDALL, Circuit Judge:

The Central States, Southeast and Southwest Areas Pension Fund ("CSF") appeals the district court's issuance of a preliminary injunction against CSF's assessment of withdrawal liability against T.I.M.E.-DC, Inc. ("TIME-DC"), 639 F.Supp. 1468. Finding that TIME-DC did not make a showing of irreparable injury sufficient to excuse its failure to exhaust administrative remedies, we reverse.

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I.

The central issue in this appeal is the importance of arbitration as the congressionally mandated first recourse in litigation concerning the assessment of withdrawal liability pursuant to the Employee Retirement Income Security Act of 1974, 29 U.S.C. Sec. 1001, et seq. ("ERISA"), as amended by the Multiemployer Pension Plan Amendments Act of 1980, 29 U.S.C. Sec. 1381, et seq. ("MPPAA"). In order to fully develop the factual and procedural posture in which this appeal is presented, we will first engage in a brief overview of ERISA as amended by the MPPAA, then examine the labor dispute engendering the instant litigation, and, finally, review the proceedings below.

A. An Overview of the Statute

Congress enacted ERISA in 1974 to comprehensively regulate private pension plans. Congress's intention "was to ensure that employees and their beneficiaries would not be deprived of anticipated retirement benefits by the termination of pension plans before sufficient funds have been accumulated in the plans. Congress wanted to guarantee that 'if a worker has been promised a defined pension benefit upon retirement--and if he has fulfilled whatever conditions are required to obtain a vested benefit--he actually will receive it.' " Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 720, 104 S.Ct. 2709, 2713, 81 L.Ed.2d 601 (1984) (citations omitted) (quoting Nachman Corp. v. Pension Benefit Guar. Corp., 446 U.S. 359, 375, 100 S.Ct. 1723, 1733, 64 L.Ed.2d 354 (1980)).

In the late 1970s, "Congress became concerned that a significant number of [multiemployer] plans were experiencing extreme financial hardship," id. at 721, 104 S.Ct. at 2713, and that the imminent application of ERISA to multiemployer plans "might induce several large plans to terminate, thus subjecting [ERISA's pension] insurance system to liability beyond its means." Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211, 215, 106 S.Ct. 1018, 1021, 89 L.Ed.2d 166 (1986). Congress perceived that "existing law, and particularly the provisions [of ERISA] governing plan termination insurance, do nothing to strengthen financially weak plans, and in some cases may actually cause further deterioration of a plan's financial condition and create incentives to terminate a plan in financial difficulty." H.R.Rep. No. 869, 96th Cong., 2d Sess. 51, reprinted in 1980 U.S. Code Cong. & Admin. News 2918, 2919. Congress's eventual response was the MPPAA, which sought to reduce the burden of employer withdrawals upon a plan and remaining employers by requiring "that an employer withdrawing from a multiemployer pension plan pay a fixed and certain debt to the pension plan. This withdrawal liability is the employer's proportionate share of the plan's 'unfunded vested benefits,' calculated as the difference between the present value of the vested benefits and the current value of the plan's assets." Gray, 467 U.S. at 725, 104 S.Ct. at 2715.

The MPPAA places the responsibility on plan sponsors of determining when withdrawal has taken place, assessing the amount of withdrawal liability, notifying the employer, and collecting the amount due. See 29 U.S.C. Secs. 1382, 1399(b)(1). "On timely request, the plan sponsor is obliged to review and explain any aspect of the withdrawal liability determination questioned by the employer." Grand Union Co. v. Food Employers Labor Relations Ass'n, 808 F.2d 66, 68 (D.C.Cir.1987) (citing 29 U.S.C. Sec. 1399(b)(2)). "If informal review does not resolve the differences between plan sponsor and employer, the statute commands arbitration: 'Any dispute between an employer and the plan sponsor of a multiemployer plan concerning a determination made under sections 1381 through 1399 of this title, [i.e., the prescriptions on establishment, calculation, and collection of withdrawal liability] shall be resolved through arbitration.' " Id. (quoting 29 U.S.C. Sec. 1401(a)(1)). The plan sponsor's withdrawal liability determination is presumed correct under the statute, a presumption that the employer may rebut upon a showing "by a preponderance of the evidence that the determination was unreasonable

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or clearly erroneous." 29 U.S.C. Sec. 1401(a)(3)(A). A party to the arbitration may seek judicial review of the arbitral award, but, in court, the arbitrator's findings of fact are presumed correct unless rebutted by a clear preponderance of the evidence. 29 U.S.C. Sec. 1401(b)(2), (c).

B. The Labor Dispute and CSF's Withdrawal Assessment

In 1981, TIME-DC's longstanding, nation-wide trucking operation felt the pinch of the recent deregulation of the trucking industry. Stating that it could no longer effectively compete with new, non-unionized trucking companies, TIME-DC notified the Teamsters National Freight Industry Negotiating Committee ("TNFINC") that it wished to negotiate a contract tailored to TIME-DC's particular needs, preferably by individual negotiations with each local International Brotherhood of Teamsters ("Teamsters") union. Through the period of deregulation, labor arrangements in the trucking industry were governed by a series of collective bargaining agreements negotiated on one side by TNFINC, acting as the exclusive agent for Teamsters locals, and on the other side by a multiemployer bargaining group representing a wide array of freight companies. Pursuant to such agreements, TIME-DC was obligated to make payments to pension funds such as CSF. Thus, in 1981, TIME-DC broke away from the multiemployer group in the hope of cutting labor costs by negotiating bilaterally with TNFINC, or through a series of negotiations with the local unions.

TNFINC was hardly receptive to this challenge to its national bargaining authority. Negotiations between TIME-DC and TNFINC quickly broke down, and a strike called by TNFINC against TIME-DC in April of 1982 immobilized TIME-DC's general commodities operation. Within weeks, TIME-DC shut down 80 or 85 of the approximately 100 terminals that it operated, removed office furniture and operating equipment, and, by May 1982, released its entire sales staff. In August of that year, the Teamsters made an unconditional offer to return to work. Nonetheless, TIME-DC recommenced only a fraction of its former operations, opening a limited, special commodities operation on the West Coast. TNFINC informed TIME-DC in December, 1982, that it desired to resume negotiations. The two parties negotiated face-to-face twice in 1983, and exchanged letters in 1984, but neither side was willing, it seems, to concede to the essential demands of the other.

Beginning in 1983, a number of multiemployer plan sponsors, for one reason or another, took TIME-DC's substantial reduction or cessation of contributions to the pension plans as a withdrawal from their plans, and assessed withdrawal liability against TIME-DC. Because many of these funds had not followed the proper procedures in assessing liability 1 or had operated in a biased manner, 2 and all had failed to give adequate consideration to the MPPAA's "labor dispute exception," 3 TIME-DC was able to obtain district court injunctions against the withdrawal liability assessments without first arbitrating the disputes.

Sometime in 1985, TNFINC seemed to lose hope in negotiations with TIME-DC, and commenced the process of ending the labor dispute with TIME-DC in order to clear the way for the proper assessment of withdrawal liability by the funds. In October, 1985, TNFINC polled its TIME-DC locals to determine whether they were willing to disclaim further interest in representing TIME-DC employees. The parties before this court agree that, according to

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the applicable labor laws, a union may unilaterally end a labor dispute by disclaiming all interest in representing the workers in question.

At an October 22-23, 1985, meeting, the CSF trustees received a report on the status of the TIME-DC situation which concluded that the TIME-DC/Teamsters labor dispute was "over or will continue forever" and, based on the prior TIME-DC cases, suggested that CSF "formally request additional documentation from both sides of the labor dispute before a final determination is made." CSF made such a request and received a reply from TIME-DC, which CSF forwarded to TNFINC for comment. CSF did not forward a copy of TNFINC's response to TIME-DC.

As 1986 began, TNFINC's polling of its locals proceeded. By a letter dated March 4, 1986, the Teamsters sent TIME-DC a list of 61 local unions that had disclaimed interest in representing TIME-DC employees. CSF received a copy of the letter and checked this list against a master list of TIME-DC locals on whose behalf TIME-DC had contributed to CSF. Finding a number of contributing locals that did not appear on the list, CSF...

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33 practice notes
  • In re BFW Liquidation, LLC, No. 09–00634–BGC–11.
    • United States
    • United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Northern District of Alabama
    • 28 September 2011
    ...prescribed administrative remedy has been exhausted.’ ” Central States Southeast and Southwest Areas Pension Fund v. T.I.M.E.–DC, Inc., 826 F.2d 320, 328 (5th Cir.1987)(quoting Myers v. Bethlehem Corp., 303 U.S. 41, 50–51, 58 S.Ct. 459, 82 L.Ed. 638 (1938)). “Thus, if a party commences an a......
  • Coles Exp. v. NE TEAMSTERS & TRACKING INDUS., Civ. No. 86-0313-B.
    • United States
    • United States District Courts. 1st Circuit. United States District Court (Maine)
    • 19 December 1988
    ...Motor Freight, 846 F.2d 1054, 1056 (7th Cir.1988); Central States, Southeast and Southwest Areas Pension Fund v. T.I.M.E.-D.C., Inc., 826 F.2d 320, 325-28 (5th Cir.1987) (Central States); I.A.M. National Pension Fund Plan A. v. Clinton Engines Corp., 825 F.2d 415, 417 702 F. Supp. 361 (D.C.......
  • Flying Tiger Line v. Cent. States Pension Fund, Civ. A. No. 86-304-CMW.
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Delaware)
    • 6 February 1989
    ...Co., 819 F.2d 682, 685 (7th Cir.1987); accord Central States, Southeast and Southwest Areas Pension Fund v. T.I.M.E. — DC, Inc., 826 F.2d 320, 330 (5th Cir.1987); contra Joyce v. Ace Construction Co., No. 87-2136, slip op. at 3-4 (D.D.C. Sept. 20, 1988) 1988 WL Admittedly, "there can be unf......
  • McDonald v. Centra, Civ. No. S 89-1734.
    • United States
    • United States District Courts. 1st Circuit. United States District Court (Maine)
    • 28 August 1990
    ...(D.C.Cir.1987), and that its utilization is "compulsory," Central States, Southeast and Southwest Areas Pension Fund v. T.I.M.E.-DC, Inc., 826 F.2d 320, 327 (5th Cir.1987), the provisions of § 1401 uniformly have been analogized to statutory provisions requiring a party to utilize administr......
  • Request a trial to view additional results
33 cases
  • In re BFW Liquidation, LLC, No. 09–00634–BGC–11.
    • United States
    • United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Northern District of Alabama
    • 28 September 2011
    ...prescribed administrative remedy has been exhausted.’ ” Central States Southeast and Southwest Areas Pension Fund v. T.I.M.E.–DC, Inc., 826 F.2d 320, 328 (5th Cir.1987)(quoting Myers v. Bethlehem Corp., 303 U.S. 41, 50–51, 58 S.Ct. 459, 82 L.Ed. 638 (1938)). “Thus, if a party commences an a......
  • Coles Exp. v. NE TEAMSTERS & TRACKING INDUS., Civ. No. 86-0313-B.
    • United States
    • United States District Courts. 1st Circuit. United States District Court (Maine)
    • 19 December 1988
    ...Motor Freight, 846 F.2d 1054, 1056 (7th Cir.1988); Central States, Southeast and Southwest Areas Pension Fund v. T.I.M.E.-D.C., Inc., 826 F.2d 320, 325-28 (5th Cir.1987) (Central States); I.A.M. National Pension Fund Plan A. v. Clinton Engines Corp., 825 F.2d 415, 417 702 F. Supp. 361 (D.C.......
  • Flying Tiger Line v. Cent. States Pension Fund, Civ. A. No. 86-304-CMW.
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Delaware)
    • 6 February 1989
    ...Co., 819 F.2d 682, 685 (7th Cir.1987); accord Central States, Southeast and Southwest Areas Pension Fund v. T.I.M.E. — DC, Inc., 826 F.2d 320, 330 (5th Cir.1987); contra Joyce v. Ace Construction Co., No. 87-2136, slip op. at 3-4 (D.D.C. Sept. 20, 1988) 1988 WL Admittedly, "there can be unf......
  • McDonald v. Centra, Civ. No. S 89-1734.
    • United States
    • United States District Courts. 1st Circuit. United States District Court (Maine)
    • 28 August 1990
    ...(D.C.Cir.1987), and that its utilization is "compulsory," Central States, Southeast and Southwest Areas Pension Fund v. T.I.M.E.-DC, Inc., 826 F.2d 320, 327 (5th Cir.1987), the provisions of § 1401 uniformly have been analogized to statutory provisions requiring a party to utilize administr......
  • Request a trial to view additional results

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