CENTRAL STATES, SOUTHEAST, ETC. v. Alco Exp. Co., Civ. No. 77-70031.

CourtUnited States District Courts. 6th Circuit. United States District Court (Western District Michigan)
Writing for the CourtCOHN
Citation522 F. Supp. 919
Docket NumberCiv. No. 77-70031.
Decision Date26 August 1981
PartiesCENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, Plaintiff, v. ALCO EXPRESS COMPANY, Defendant.

522 F. Supp. 919

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, Plaintiff,
v.
ALCO EXPRESS COMPANY, Defendant.

Civ. No. 77-70031.

United States District Court, E. D. Michigan, S. D.

August 26, 1981.


522 F. Supp. 920

Russell N. Luplow, P. C., Russell N. Luplow, and Diana L. S. Peters, Bloomfield Hills, Mich., for plaintiff; Charles J. Taunt, Bloomfield Hills, Mich., and Robert J. Lenihan, II, Birmingham, Mich., of counsel.

Joseph J. Fabrizio, Fabrizio & Miller, P. C., Bloomfield Hills, Mich., for defendant; Richard M. Lustig, Lustig & Friedman, P. C., Southfield, Mich., of counsel.

OPINION

COHN, District Judge.

I.

Before the Court is a petition by plaintiff Central States, Southeast and Southwest Areas Pension Fund (Central States) for attorney fees and double interest as "mandated" by Section 306 of the Multiemployer Pension Plan Amendments Act of 1980, Pub.L. 96-364, 94 Stat. 1208, signed into law by President Carter and effective September 26, 1980 (1980 amendments).

1.

On January 20, 1981 the Court ordered a summary judgment1 in favor of Central States declaring defendant Alco Express Company (Alco) contractually obligated to make pension plan contributions on behalf of its employees to Central States for the

522 F. Supp. 921
period April 1, 1976 to March 31, 1978. A judgment in the amount of $126,672.32 was entered on April 6, 1981. An order denying a motion to clarify or amend the judgment was entered May 6, 1981 and a stay of enforcement of the judgment was denied on May 5, 1981

In its complaint, filed January 5, 1977, Central States alleged that since October 1975 Alco had "failed, neglected, omitted and/or refused to tender its required contributions in a timely fashion and through November, 1976, and owes ... the sum of Twenty-Three Thousand Four Hundred Fourteen and 74/100 ($23,414.74) Dollars in delinquent contributions and interest." Thereafter Central States' claims were extended to include delinquent contributions through January 31, 1981. With the exception of the period from April 1, 1976 to March 31, 1978 there was no real dispute as to the amounts owed by Alco to Central States or that Alco was delinquent in making payment.

The order of January 20, 1981 resolved a dispute over whether the contractual obligation of Alco to make pension plan contributions on behalf of its employees to Central States terminated on March 31, 1976 or continued to March 31, 1978. The Court held that neither notice of a desire to modify the collective bargaining agreement between the parties nor a strike terminated the agreement or affected the obligation of Alco to make payments. There was nothing in the presentations to the Court to suggest that either party to the dispute was in bad faith in the position it maintained.

The judgment of April 6, 1981 represented amounts due for the periods April 1, 1975 to March 31, 1978 ($56,348.62) and April 1, 1978 to January 31, 1981 ($70,323.70) inclusive of interest. The amounts due for the period April 1, 1976 to March 31, 1978 were not separately stated.

2.

The 1980 amendments became effective during the pendency of this case. Central States takes the position the Court is obligated to award attorney fees and double interest2 as liquidated damages as provided in Section 306; Alco takes the position that Section 306 is prospective only and therefore the Court has discretion in awarding attorney fees and there is no right to double interest. Alco also challenges the amount of attorney fees claimed by Central States.

Applying the general principle that a court is to apply the law in effect at the time it renders its decision unless doing so would result in manifest injustice or there is a statutory direction or legislative history to the contrary, Bradley v. School Board of the City of Richmond, 416 U.S. 696, 711, 94 S.Ct. 2006, 2016, 40 L.Ed.2d 476 (1974), the Court finds it is obligated to award attorney fees and statutory liquidated damages in an amount equal to the amount of interest accrued on the delinquent contributions. Also, following the principles of Northcross v. Board of Education of the Memphis City Schools, 611 F.2d 624, 636-43 (6th Cir. 1979), cert. denied, 447 U.S. 911, 100 S.Ct. 2999, 64 L.Ed.2d 862 (1980), it determines the reasonable attorney fees due Central States to be $20,625.00.

II.

The Employee Retirement Income Security Act of 1974, Pub.L. 93-406, 88 Stat. 829 (codified at 29 U.S.C. § 1001 et seq.) (ERISA), which become effective on September 2, 1974, imposed a comprehensive regulatory scheme on employee benefit plans. One of its important goals was the protection of the interests of participants in such plans by providing "... appropriate remedies, sanctions, and ready access to the Federal courts". 29 U.S.C. § 1001(b).

In particular, Section 502 of ERISA,3 29 U.S.C. § 1132, provided in part:

522 F. Supp. 922
"Sec. 502(a) A civil action may be brought —
. . . . .
(3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this title or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this title or the terms of the plan;
. . . . .
(g) In any action under this title by a participant, beneficiary, or fiduciary, the court in its discretion may allow a reasonable attorney's fee and costs of action to either party."

The 1980 amendments were prompted by a number of Congressional concerns, including the need "to alleviate certain problems which tend to discourage the maintenance ...." of such plans. 29 U.S.C. § 1001a(c).

To that end, Section 3064 of the 1980 amendments provides in part:

"(a) Part 5 of subtitle B of title I is amended by adding after section 514 the following new section:
`DELINQUENT CONTRIBUTIONS
`Sec. 515. Every employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or under the terms of the collectively bargained agreement shall, to the extent not inconsistent with law, make such contributions in accordance with the terms and conditions of such plan or such agreement.'
(b) Section 502 is amended by —
(2) redesignating subsection (g) as paragraph (1) of such subsection and inserting `(other than an action described in paragraph (2))' between `title' and `by' in such redesignated paragraph (1), and adding at the end thereof the following new paragraph: `(2) In any action under this title by a fiduciary for or on behalf of a plan to enforce section 515 in which a judgment in favor of the plan is awarded, the court shall award the plan —
`(A) the unpaid contributions,
`(B) interest on the unpaid contributions,
`(C) an amount equal to the greater of —
`(i) interest on the unpaid contributions, or
`(ii) liquidated damages provided for under the plan in an amount not in excess of 20 percent (or such higher percentage as may be permitted under Federal or State law) of the amount determined by the court under subparagraph (A),
`(D) reasonable attorney's fees and costs of the action, to be paid by the defendant, and
`(E) such other legal or equitable relief as the court deems appropriate.
For purposes of this paragraph, interest on unpaid contributions shall be determined by using the rate provided under the plan, the rate prescribed under section 6621 of the Internal Revenue Code of 1954."

Under ERISA delinquent contributions were enforced by an action founded either on state law, the collective bargaining agreement between the parties or the trust agreement forming the foundation for the employee benefit plan. By adding Section 515 to ERISA the 1980 amendments created a statutory cause of action.

Under ERISA the award of attorney fees was discretionary with the Court and an award of interest as liquidated damages was dependent on the terms of the collective bargaining or trust agreement. See Central States Southeast and Southwest Areas Pension Fund v. Hitchings Trucking, Inc., 492 F.Supp. 906 (E.D.Mich.1980). While the Court's discretion to award attorney fees in other kinds of actions continues, under the 1980 amendment to Section 502

522 F. Supp. 923
of ERISA a judgment in favor of a plan for delinquent contributions must include (i) interest on the unpaid contributions, (ii) an amount equal to the greater of interest on the unpaid contributions or the liquidated damages provided for under the plan subject to certain limitations, and (iii) attorney fees

The effect of the 1980 amendments is to substantially increase the cost of failing to make required contributions.

III.

Central States' claim that Section 306 applies to cases pending at the time it became effective is based on the proposition that in enacting the 1980 amendments Congress sought to remedy problems of great national concern; that Section 306 is remedial in nature and a remedial law is to be applied to pending litigation; and that Section 306 neither deprives Alco of a vested right nor imposes an unanticipated burden. In short, Central States argues that in view of the findings, policies and purposes of the 1980 amendments, the parties to this dispute and the nature of the right and obligations involved, application of Section 306 will not cause "manifest injustice" as that term has been defined by the Supreme Court.

Alco argues that Section 306 should not be applied to this action because to do so would impose an unanticipated substantive obligation on it, particularly since the only matter pending "at or about" September 26, 1980 "was the Court's decision".5 Alco further argues that this case is a simple collection suit between two parties and the relief now requested goes beyond the terms of the parties' agreement, making it "manifestly unjust" to award Central States additional interest as liquidated damages.

IV.

1.

The Court starts with the proposition that there is nothing in the United States Constitution prohibiting a...

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44 practice notes
  • N.L.R.B. v. Viola Industries-Elevator Div., Inc., INDUSTRIES-ELEVATOR
    • United States
    • U.S. Court of Appeals — Tenth Circuit
    • November 2, 1992
    ...to be a penalty but rather a form of liquidated damages. Central States, Southeast and Southwest Areas Pension Fund v. Alco Express Co., 522 F.Supp. 919, 929 n. 12 (E.D.Mich.1981); see also Painters District Council No. 3 Pension Fund v. Johnson, 566 F.Supp. 592, 599 (W.D.Mo.1983); but see ......
  • Sasso v. Vachris
    • United States
    • New York Court of Appeals
    • October 22, 1985
    ...agreement between the parties or the trust agreement" (Central States, Southeast & Southwest Areas Pension Fund v. Alco Express Co., 522 F.Supp. 919, 922 [E.D.Mich.] [emphasis added]; see, Central States, Southeast & Southwest Areas Pension Fund v. Kraftco, Inc., 589 F.Supp. 1061, 1072 [M.D......
  • Peick v. Pension Ben. Guaranty Corp., No. 81 C 1911.
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • May 14, 1982
    ...The Supreme Court, 1977 Term, 92 Harv.L.Rev. 57, 97 (1978). 37 Similar reasoning appears in Central States v. Alco Express Company, 522 F.Supp. 919 (E.D.Mich.1981). At issue there was a provision of MPPAA which affords prevailing trustees an absolute right to attorneys fees in suits brought......
  • Plumbers & Pipefitters Local 625 v. Nitro Constr. Servs., Inc., 20-2080
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • February 23, 2022
    ...of Rep. Frank Thompson Jr. and Sen. Harrison Williams Jr.); see also Cent. States Se. & Sw. Areas Pension Fund v. Alco Express Co. , 522 F. Supp. 919, 928 (E.D. Mich. 1981) (noting this legislative history); Trs. of Glaziers Loc. 963 Pension, Welfare & Apprentice Funds v. Walker & Laberge C......
  • Request a trial to view additional results
44 cases
  • N.L.R.B. v. Viola Industries-Elevator Div., Inc., INDUSTRIES-ELEVATOR
    • United States
    • U.S. Court of Appeals — Tenth Circuit
    • November 2, 1992
    ...to be a penalty but rather a form of liquidated damages. Central States, Southeast and Southwest Areas Pension Fund v. Alco Express Co., 522 F.Supp. 919, 929 n. 12 (E.D.Mich.1981); see also Painters District Council No. 3 Pension Fund v. Johnson, 566 F.Supp. 592, 599 (W.D.Mo.1983); but see ......
  • Sasso v. Vachris
    • United States
    • New York Court of Appeals
    • October 22, 1985
    ...agreement between the parties or the trust agreement" (Central States, Southeast & Southwest Areas Pension Fund v. Alco Express Co., 522 F.Supp. 919, 922 [E.D.Mich.] [emphasis added]; see, Central States, Southeast & Southwest Areas Pension Fund v. Kraftco, Inc., 589 F.Supp. 1061, 1072 [M.D......
  • Peick v. Pension Ben. Guaranty Corp., No. 81 C 1911.
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • May 14, 1982
    ...The Supreme Court, 1977 Term, 92 Harv.L.Rev. 57, 97 (1978). 37 Similar reasoning appears in Central States v. Alco Express Company, 522 F.Supp. 919 (E.D.Mich.1981). At issue there was a provision of MPPAA which affords prevailing trustees an absolute right to attorneys fees in suits brought......
  • Plumbers & Pipefitters Local 625 v. Nitro Constr. Servs., Inc., 20-2080
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • February 23, 2022
    ...of Rep. Frank Thompson Jr. and Sen. Harrison Williams Jr.); see also Cent. States Se. & Sw. Areas Pension Fund v. Alco Express Co. , 522 F. Supp. 919, 928 (E.D. Mich. 1981) (noting this legislative history); Trs. of Glaziers Loc. 963 Pension, Welfare & Apprentice Funds v. Walker & Laberge C......
  • Request a trial to view additional results

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