Freight Drivers & Helpers Local Union No. 557 Pension Fund v. Penske Logistics LLC
| Decision Date | 07 February 2014 |
| Docket Number | Civil Action No. ELH-12-2376 |
| Parties | FREIGHT DRIVERS AND HELPERS LOCAL UNION NO. 557 PENSION FUND, By its Plan Sponsor, the Joint Board of Trustees Plaintiff, v. PENSKE LOGISTICS LLC, et al., Defendants. |
| Court | U.S. District Court — District of Maryland |
This is an action under the Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq., and the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), 29 U.S.C. § 1381-1453. Suit was initially "brought on behalf of the Freight Drivers and Helpers Local Union No. 557 Pension Fund" (the "Fund"), a multiemployer pension plan, "by its Trustee, William Alexander." See Complaint, Caption & ¶ 1 (ECF 1). However, after the Court ruled that the Trustee lacked statutory standing to bring an action under 29 U.S.C. § 1401(b)(2), see Memorandum Opinion (ECF 13), an "Amended Complaint" was filed on August 7, 2013, ECF 15, also on behalf of the Fund, but this time by "its Plan Sponsor, the Joint Board of Trustees." See Am. Compl., Caption & ¶ 1.
Pursuant to 29 U.S.C. § 1401(b)(2), plaintiff seeks to vacate and/or modify an arbitrator's dismissal of the its claim for "withdrawal liability," which it had lodged against two contributing employers, Penske Logistics, LLC ("Penske Logistics") and Penske Truck Leasing Co., LP ("Penske Leasing") (collectively, "Penske"), defendants. Am. Compl. ¶ 1.
Defendants filed a "Motion to Dismiss, or, in the Alternative, Opposition to 'Amended Complaint' Pursuant to Local Rule 105" ("Penske Filing," ECF 16), supported by a memorandum of law ("Memo," ECF 16-1). Penske argues that plaintiff's "Amended Complaint" is procedurally improper because ERISA and MPPAA require plaintiff to submit his filing in the form of a motion to vacate rather than as a complaint. Accordingly, Penske seeks dismissal of the Amended Complaint. Penske also argues that, even if the Amended Complaint is construed as a motion to vacate, it should be denied because it is untimely, unsupported, and without merit.
The Penske Filing was fully briefed,1 and no hearing is necessary to resolve it. See Local Rule 105.6. For the reasons that follow, I will construe the "Amended Complaint" as a motion to vacate, and I will deny it.
ERISA provides a "comprehensive and reticulated" statutory framework for the administration and regulation of employee pension plans. Massachusetts v. Morash, 490 U.S. 107, 113 (1989). Its regulatory scheme is guided by a specific purpose:
Concrete Pipe & Prods. of Cal., Inc. v. Constr. Laborers Pension Trust for S. Cal., 508 U.S. 602, 607 (1993) (quoting Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211, 214 (1986)) (alterations in Concrete Pipe). Among those pension plans subject to ERISA are "multiemployerplans," like the Fund, "to which more than one employer contributes," which are "maintained to fulfill the terms of collective-bargaining agreements." Concrete Pipe, 508 U.S. at 606; see 29 U.S.C. § 1301(a)(3) (defining "multiemployer plan").
As originally enacted, ERISA generated a peculiar incentive for employers that contributed to multiemployer plans. Specifically, the withdrawal of one employer from a multiemployer plan reduced a plan's "contribution base." Bd. of Trs., Sheet Metal Workers' Nat'l Pension Fund v. BES Servs., Inc., 469 F.3d 369, 374 (4th Cir. 2006). To compensate for the loss, the remaining employers were required to increase their "contribution rate." Id. Thus, "[a]s employers withdrew, the rising costs of continued participation in multiemployer plans increased the incentives for further withdrawals." Id. This, in turn, jeopardized the financial health of multiemployer plans. See Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 722 (1984).
To reduce the risk of employer withdrawals, Congress amended ERISA through the Multiemployer Pension Plan Amendments Act of 1980, 29 U.S.C. § 1381, et seq. Under the MPPAA, an employer that withdraws from a multiemployer plan "incurs 'withdrawal liability' in the form of 'a fixed and certain debt to the pension plan.'" Concrete Pipe, 508 U.S. at 609 (quoting R.A. Gray, 467 U.S. at 725). The amount is calculated according to various statutory provisions which are not at issue here. See generally Milwaukee Brewery Workers' Pension Plan v. Joseph Schlitz Brewing Co., 513 U.S. 414, 417-19 (1995) (). Generally speaking, "[a]n employer's withdrawal liability is its 'proportionate share of the plan's unfunded vested benefits.'" Concrete Pipe, 508 U.S. at 609 (citing 29 U.S.C §§ 1381, 1391); accord BES Servs., 469 F.3d at 374.
The "plan sponsor" of a multiemployer plan is charged with determining, providing notification of, and collecting an employer's withdrawal liability. See 29 U.S.C. §§ 1382, 1399(b); see also Concrete Pipe, 508 U.S. at 610. With respect to a multiemployer plan, the "plan sponsor" is defined as the "joint board of trustees" or, "if the plan has no joint board of trustees, the plan administrator." 29 U.S.C. § 1301(10); see, e.g., Bay Area Laundry & Dry Cleaning Pension Trust Fund v. Berbar of Cal., Inc., 522 U.S. 192, 197 (1997) ().
An employer may challenge a plan sponsor's determination of withdrawal liability. See 29 U.S.C. § 1399(b)(2). Notably, "[a]ny dispute between an employer and the plan sponsor of a multiemployer plan" concerning withdrawal liability must be "resolved through arbitration." 29 U.S.C. § 1401(a)(1); see Concrete Pipe, 508 U.S. at 611; BES Servs., 469 F.3d at 375. In such an arbitration, any determination made by the plan sponsor as to withdrawal liability is "presumed correct unless the party contesting the determination shows by a preponderance of the evidence that the determination was unreasonable or clearly erroneous." 29 U.S.C. § 1401(a)(3)(A).
Pursuant to 29 U.S.C. § 1401(b)(3), "[a]ny arbitration proceedings under this section shall, to the extent consistent with this subchapter, be conducted in the same manner, subject to the same limitations, carried out with the same powers (including subpoena power), and enforced in United States courts as an arbitration proceeding carried out under Title 9." Title 9 of the United States Code contains the provisions of the Federal Arbitration Act ("FAA").
Judicial review of the arbitrator's decision is available to "any party thereto." 29 U.S.C. § 1401(b)(2). Specifically, 29 U.S.C. § 1401(b)(2), titled, in pertinent part, "civil action subsequent to arbitration award," provides:
Upon completion of the arbitration proceedings in favor of one of the parties, any party thereto may bring an action, no later than 30 days after the issuance of an arbitrator's award, in an appropriate United States district court in accordance with section 1451 of this title to enforce, vacate, or modify the arbitrator's award.
As indicated, an action under 29 U.S.C. § 1401(b)(2) must be brought "in accordance with" 29 U.S.C. § 1451, which is titled "Civil actions." Section 1451 includes several provisions relevant to filing a lawsuit, such as a jurisdictional provision, id. § 1451(c); provisions governing venue and service of process, id. § 1451(d), (g); and a statute of limitations, id. § 1451(d). It also addresses an employer's failure "to make any withdrawal liability payment within the time prescribed," id. § 1451(b), and provides for an award of costs and expenses to the prevailing party. Id. § 1451(e).
The Fund is an "employee pension benefit plan," as defined in 29 U.S.C. § 1002(2), and a "multiemployer plan," as defined in 29 U.S.C. §§ 1002(37) and 1301(a)(3). Am. Compl. ¶ 4. It is also a "trucking industry fund," pursuant to 29 U.S.C. § 1383, meaning that "substantially all of the contributions required under the plan are made by employers primarily engaged in the long and short haul trucking industry." See Am. Compl. ¶ 4.
Penske, a contributing employer, operates "trucking services" and "own[s] subsidiary businesses." Id. ¶ 6. On March 19, 1996, Penske acquired Leaseway Motorcar Transport Co. ("Leaseway") as a "wholly owned subsidiary." Id. ¶ 7. According to plaintiff, Leaseway was "obligated to contribute to the Fund pursuant to a collective bargaining agreement." Id.Thereafter, on an unspecified date, Penske sold Leaseway to Performance Transportation Services, "a wholly owned subsidiary" of Performance Logistics Group. Id. ¶ 8.
According to the Amended Complaint, Leaseway experienced two "partial withdrawals" from the Fund, in December 2004 and December 2005, respectively, and a "complete withdrawal" in December 2006. Id. ¶¶ 9-11. "[T]here is a partial withdrawal by an employer from a plan on the last day of a plan year if for such plan year (1) there is a 70-percent contribution decline, or (2) there is a partial cessation of the employer's contribution obligation." 29 U.S.C. § 1385. Complete withdrawal occurs when an employer "(1) permanently ceases to have an obligation to contribute under the plan, or (2) permanently ceases all covered operations under the plan." 29 U.S.C. § 1383.
The Fund and Penske disputed whether Penske was liable for Leaseway's withdrawals, and the parties initiated arbitration pursuant to 29 U.S.C. § 1401. Am. Compl. ¶¶ 13-14. The arbitrations for all three withdrawals were consolidated into a single proceeding. Id. ¶ 17. The arbitrator...
To continue reading
Request your trial