Central States v. Paramount Liquor Co.
| Decision Date | 07 February 2000 |
| Docket Number | PLAINTIFFS-APPELLANTS,DEFENDANT-APPELLEE,No. 99-1805,99-1805 |
| Parties | (7th Cir. 2000) CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND AND HOWARD MCDOUGALL, TRUSTEE,, v. PARAMOUNT LIQUOR CO., |
| Court | U.S. Court of Appeals — Seventh Circuit |
Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 98 C 7263--James H. Alesia, Judge.
Jon K. Stromsta, Des Plaines, IL, for plaintiff-appellant.
Patrick J. Whalen, Spencer, Fane, Britt, Glenn, D'Ancona & Pflaum, Chicago, IL, for defendant-appellee.
Before Coffey, Easterbrook, and Evans, Circuit Judges.
A multi-employer pension fund and an employer disagree about the employer's obligation, if any, for withdrawal liability. While the dispute was being arbitrated, see 29 U.S.C. sec.1401(a)(1), the employer paid some of the disputed sums. 29 U.S.C. sec.1399 (c)(2). Eventually the arbitrator determined that the employer (Paramount Liquor Co.) is not liable, and that the Fund must repay what it has received. Both sides sought judicial aid--Paramount by an action in the Eastern District of Missouri asking for enforcement of the award and the Fund by an action in the Northern District of Illinois asking for an order annulling the award. But the Northern District dismissed the Fund's action, ruling that it violated what the district judge called the "first filed doctrine." 34 F. Supp. 2d 1092, 1095 (N.D. Ill. 1999).
Both the Fund and the employer filed their actions on November 12, 1998. The district court in Illinois concluded that the employer's suit had been filed in the morning, while the Fund's had been filed in the afternoon, and applied a mechanical rule under which the second action automatically is dismissed. The Fund's appeal contends that its action should have been transferred to the Eastern District of Missouri, to avoid any possibility that passage of time would deprive the Fund of its entitlement to judicial review. Persons aggrieved by an arbitrator's decision have only 30 days to seek judicial review, see 29 U.S.C. sec.1401(b)(2), and the dismissal of the Illinois action enabled Paramount Liquor to dismiss the Missouri action after the 30 days expired and leave the Fund stranded, unable to obtain review in any forum. Although Paramount Liquor wanted the Missouri court to require the Fund to return payments already made, the stronger the Fund's position on the merits the more tempting it would have been for Paramount Liquor to dismiss its action, abandoning hope for a refund in order to avoid a risk that the court would set aside the arbitrator's decision and order it to resume paying. In the event, however, Paramount Liquor persisted, and the district court in Missouri enforced the arbitrator's decision. Paramount Liquor Co. v. Central States Pension Fund, No. 4:98CV1901-DJS (E.D. Mo. Sept. 20, 1999). Recognizing that the Illinois action no longer matters, the Fund has moved to dismiss its appeal under Fed. R. App. P. 42(b). But this is possible only if the parties agree on the allocation of costs, and they don't. Paramount Liquor contends that it is entitled to attorneys' fees under 29 U.S.C. sec.1451(e); the Fund disagrees. We must resolve the costs question before the appeal can finally be put to rest.
Continental Can Co. v. Chicago Truck Drivers Pension Fund, 921 F.2d 126 (7th Cir. 1990), holds that a party that is required to defend an arbitrator's award in court, and prevails, is presumptively entitled to attorneys' fees under sec.1451(e). But of course Paramount Liquor did not defend its award and prevail in the Illinois litigation. Whatever award of attorneys' fees may be appropriate in the Missouri case must be determined by that court. What happened in Illinois was that Paramount Liquor asserted a right not to be sued at all; it contended, and the district court held, that whoever wins a race to the courthouse secures its favored forum. To determine whether Paramount Liquor is entitled to reimbursement for the attorneys' fees it incurred, we must ask whether the Fund's position was substantially justified. See ...
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