Malden Mills v. ILGWU Nat. Retirement Fund

• Decision Date: 01 July 1991
• Docket Number: 91-10290-C.,Civ. A. No. 88-0681-C
• Citation: 766 F. Supp. 1202
• Parties: MALDEN MILLS INDUSTRIES, INC., Plaintiff, v. ILGWU NATIONAL RETIREMENT FUND, et al., Defendants.
• Court: U.S. District Court — District of Massachusetts

766 F. Supp. 1202

MALDEN MILLS INDUSTRIES, INC., Plaintiff, v. ILGWU NATIONAL RETIREMENT FUND, et al., Defendants.

Civ. A. Nos. 88-0681-C, 91-10290-C.

United States District Court, D. Massachusetts.

July 1, 1991.

COPYRIGHT MATERIAL OMITTED

Marc L. Goodheart, E. Randolph Tucker, Hill & Barlow, Boston, Mass., for plaintiff Malden Mills Ind., Inc.

John Francis McMahon, Angoff, Goldman, Manning, Pyle, Wagner & Hiatt, Boston, Mass., Philip W. Horton, Arnold & Porter, Washington, D.C., for defendant ILGWU Nat. Retirement Fund.

MEMORANDUM

CAFFREY, Senior District Judge.

This case is before the Court on the defendants', ILGWU National Retirement Fund and certain of its trustees (collectively the "Pension Fund" or "Fund"), motions for summary judgment, and the plaintiff's, Malden Mills Industries, Inc. ("Malden" or "Employer"), motion for summary judgment pursuant to Fed.R.Civ.P. 56(c). Plaintiff brought this action against the Pension Fund for declaratory relief seeking a determination of the date it withdrew from the Fund for purposes of assessing withdrawal liability under the provisions of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C.A. § 1001 et seq. (1978), as amended by the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA").¹ Malden contends it withdrew from the pension plan in 1986, and the Fund argues that Malden withdrew in 1987. The Fund counterclaimed to collect unpaid pension contributions and withdrawal liability which the Fund claims Malden owes to it under the MPPAA. In August 1988, by Order of this Court, the issue of withdrawal liability was submitted to arbitration, and on December 31, 1990, the arbitrator issued a final award in favor of the Fund. The Fund now asks this Court to confirm the arbitrator's final award and seeks summary judgment with respect to Malden's delinquent contribution claims. Malden seeks modification of the arbitrator's award. Jurisdiction of this Court is founded under ERISA, 29 U.S.C.A. §§ 1132 and 1451. For the reasons stated below, the defendants' motions for summary judgment should be granted, and the plaintiff's motion for summary judgment should be denied.

I.

For the purpose of these motions, the relevant undisputed facts are as follows.² The defendant, ILGWU Retirement Fund, is a pension fund maintained pursuant to collective bargaining agreements ("CBA's") between the Union and Malden.³ The Fund is a multiemployer plan as defined by ERISA under 29 U.S.C.A. §§ 1002(37)(A) and 1301(a)(3) (1980). A number of employers in the garment industry, including Malden, contribute to the Fund on behalf of their present employees, and benefits are currently being paid to retired and disabled workers, as well as survivors of deceased workers.

Malden engages in fabric manufacturing and, as a signatory of the CBA's with the Union, made contributions to the ILGWU Fund from 1954-1986. On November 30, 1986, the parties' then existing three-year CBA expired and negotiations commenced for a new one. Meanwhile, Malden and the Union agreed on an interim basis to extend the old CBA, including the obligation to contribute to the Fund, on a day-to-day basis. This "Extension Agreement," which was dated November 26, 1986 and made effective December 1, 1986, indicated that negotiated changes in the retirement plan "shall not be retroactive unless the parties otherwise agree."⁴ The interim agreement remained in effect for five and one-half months (the "hiatus period"). During this hiatus period, Malden made no contributions to the Fund.

Then on May 15, 1987, Malden and the Union executed a new three-year CBA covering the period from December 1, 1986 through November 30, 1989.⁵ The pension/retirement provisions of the new CBA, retroactive to December 1, 1986, did not require Malden to make contributions to the ILGWU Fund for the five and one-half month hiatus period. The new CBA also did not require Malden to make any further contributions to the ILGWU Fund during the balance of the three-year period, but rather required Malden to contribute to a new single-employer retirement plan.

Malden and the Union also executed an "Amendment of the 1983-86 Collective Bargaining Agreement" which purported to amend Malden's obligations to contribute to the Fund under the expired 1983-86 CBA. This amendment provides that Malden's "obligation to contribute to the ILGWU National Retirement fund shall cease for all periods from and after January 1, 1986."⁶

After the Fund was notified that the new CBA was finalized and ratified by the Union membership, the Fund issued an estimated withdrawal liability assessment in the amount of $5,131,025 based on a withdrawal date of May 15, 1987, the date the new CBA was executed. On November 3, 1987, when updated figures became available, the Fund revised this withdrawal liability assessment to $5,217,126. In addition, the Fund by letter dated September 3, 1987, demanded payment of unpaid pension contributions for the hiatus period from December 1, 1986 to May 15, 1987, in the amount of $643,129.80. Thereafter, a dispute arose between Malden and the Fund as to the date of Malden's withdrawal from the retirement plan. The Fund maintained that Malden withdrew on May 15, 1987. Malden, on the other hand, argued that it withdrew on January 1, 1986 or December 1, 1986.

After the Fund rejected Malden's alleged date of withdrawal, on March 21, 1988, Malden gave notice that it was initiating withdrawal liability arbitration, then filed suit in this Court (C.A. No. 88-0681-C) seeking a declaratory judgment that it had withdrawn from the Fund in 1986, that it was entitled to a credit for the eleven months of contributions made to the Fund, and that it was not liable for any delinquent contributions during the five and one-half month hiatus period from December 1, 1986 through May 15, 1987. By Order dated August 5, 1988, the Court stayed the 1988 action pending arbitration of "all claims regarding the determination of Malden's withdrawal liability, including but not limited to the determination of when Malden withdrew from the ILGWU National Retirement Fund and whether Malden failed to make a timely request for arbitration."⁷

In an interim award dated September 15, 1989, the arbitrator concluded that Malden had initiated arbitration in a timely manner as required under 29 U.S.C.A. § 1401(a) (1980).⁸ On December 31, 1990, after a two-day hearing, the arbitrator issued a final order stating as follows:

The Fund was correct when it determined that Malden withdrew from the Fund during May, 1987. Therefore, the Fund's calculation of withdrawal liability in the amount of $5,225,563 shall be sustained.

The scope of the arbitrator's decision was limited to the issue of withdrawal liability and did not address the issues of delinquent contributions or overpayments in current contribution obligations raised by the parties in their pending cross-motions for summary judgment.

On January 29, 1991, pursuant to 29 U.S. C.A. § 1401(b)(2), Malden filed a separate civil action to modify the arbitrator's final award (C.A. No. 91-10290-C). On January 30, 1991, the Fund filed three motions in the original lawsuit (C.A. No. 88-0681-C): (1) a motion to confirm the arbitrator's final award; (2) a motion for summary judgment with respect to its pension contribution claims; and (3) a motion to amend and supplement counterclaims. In response, on March 29, 1991, Malden filed a motion for summary judgment seeking modification of the arbitrator's final award.

This Court will now address the following five issues raised by the parties: (a) the date of Malden's withdrawal from the Fund for purposes of assessing withdrawal liability; (b) Malden's liability for the allegedly delinquent plan contributions for the five and one-half month hiatus period from December 1, 1986 to May 15, 1987; (c) whether Malden is entitled to a credit or refund of its contributions made to the plan during the eleven-month period from January 1, 1986 until the expiration of the 1983-86 CBA; (d) whether Malden is entitled to a continuance under Fed.R.Civ.P. 56(f); and (e) whether the Fund is statutorily entitled to recover interest, liquidated damages, attorneys' fees and costs, insofar as they relate to the Fund's claims seeking recovery of delinquent contributions provided under ERISA 502(g), 29 U.S.C.A. § 1132(g) (1980).

II.

The plaintiff has moved for summary judgment seeking modification of the arbitrator's final award, pursuant to Fed.R. Civ.P. 56(c). The defendants have also moved to confirm the arbitrator's award and for summary judgment with respect to their pension contribution counterclaims. Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The party moving for summary judgment bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986); Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970). The moving party may satisfy this burden by showing that there is an absence of evidence to support the non-moving party's case. Celotex, 477 U.S. at 325, 106 S.Ct. at 2553. Only after the moving party has met its burden of coming forward with proof of the absence of any genuine issue of material fact does the party opposing the motion bear the burden of responding. Id. at 321, 106 S.Ct. at 2551; Adickes, 398 U.S. at 159-60, 90 S.Ct. at 1609-10. The opposing party may not rest upon the mere allegations or denials in its pleading, but must respond with affidavits or otherwise to show the existence of a genuine issue for trial. Fed.R.Civ.P. 56(e); Adickes, 398 U.S. at 159-60, 90 S.Ct. at 1609-10. A...