Pantry Pride, Inc. v. Retail Clerks Tri-State Pension Fund

• Citation: 747 F.2d 169
• Decision Date: 31 October 1984
• Docket Number: TRI-STATE,No. 83-1815,83-1815
• Parties: 5 Employee Benefits Ca 2494 PANTRY PRIDE, INC. and Pantry Pride Enterprises, Inc., Appellees, v. RETAIL CLERKSPENSION FUND, Norman L. Tyrie, Robert Carman, John C. Brennan, William Campbell, Angelo J. Lagano, Samuel Rocco, William Stebbins, Wendell W. Young, III, Roland Coleman, John Dailey, Edward Fagen, Joseph E. Lair, J. Fred Maurer, James Varian, Ronald Rosmini and John Bogan, Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Page 169

747 F.2d 169

5 Employee Benefits Ca 2494

PANTRY PRIDE, INC. and Pantry Pride Enterprises, Inc., Appellees, v. RETAIL CLERKS TRI-STATE PENSION FUND, Norman L. Tyrie Robert Carman, John C. Brennan, William Campbell, Angelo J Lagano, Samuel Rocco, William Stebbins, Wendell W. Young III, Roland Coleman, John Dailey, Edward Fagen, Joseph E Lair, J. Fred Maurer, James Varian, Ronald Rosmini and John Bogan, Appellants.

No. 83-1815.

United States Court of Appeals, Third Circuit.

Argued Aug. 7, 1984.

Decided Oct. 31, 1984.

Warren M. Laddon, Michael L. Banks, Morgan, Lewis & Bockius, Philadelphia, Pa., Barry S. Slevin, Roberta L. deAraujo, Seifman, Semo, Slevin & Marcus, P.C., Washington, D.C., for appellants.

Stuart H. Savett, Robert J. LaRocca, Kohn, Savett, Marion & Graf, P.C., Philadelphia, Pa., David A. Rosen, Stein, Simpson & Rosen, New York City, for appellees.

Before SEITZ, GIBBONS and HUNTER, Circuit Judges.

OPINION OF THE COURT

SEITZ, Circuit Judge.

I.

The Retail Clerks Tri-State Pension Fund and its trustees, defendants in this declaratory judgment action, appeal from an order of the district court denying, in part, their motion for interim employer's withdrawal liability payments demanded under the Multiemployer Pension Plan Amendments Act (the "MPPAA"), 29 U.S.C. Secs. 1399(c)(2), 1401(d) (1982). Jurisdiction of this appeal is asserted under 28 U.S.C. Sec. 1292(a)(1).

II. FACTS

Food Fair, Inc., the plaintiffs' predecessor, operated a chain of grocery stores in Pennsylvania, New Jersey, and Delaware. Beginning in 1959, Food Fair, pursuant to its collective bargaining agreements, began contributing to the Retail Clerks Tri-State Pension Fund (the "Fund"). In 1979, as part of a bankruptcy reorganization, the 101 stores in Pennsylvania and New Jersey were closed. This left, in the geographic area covered by the Fund, only the 5 Delaware stores. In 1981, those 5 stores were also closed.

Upon the closing of the Delaware stores, the Fund determined that Pantry Pride Enterprises, Inc. ("Pantry Pride"). Food Fair's successor in interest, had withdrawn from the pension plan and was liable to the Fund under the MPPAA for its share of the Fund's total unfunded vested benefits. 29 U.S.C. Sec. 1381 (1982). The Fund calculated Pantry Pride's share to be $20,935,000, payable in 79 monthly installments of $326,379.16 and a final payment of $107,972.06. Pursuant to 29 U.S.C. Sec. 1399(b)(1), the Fund demanded that Pantry Pride pay the withdrawal liability.

Pantry Pride brought this action in the district court for a declaratory judgment that the MPPAA was unconstitutional. Although the Act requires arbitration of disputes arising over withdrawal liability, the district court, upon motion by Pantry Pride, stayed arbitration pending the resolution of the constitutional challenge in accordance with this Court's decision in Republic Industries v. Central Pennsylvania Teamsters Pension Fund, 693 F.2d 290 (3d Cir.1982).

The Fund then filed a motion with the district court asking, inter alia, that Pantry Pride be required to pay the withdrawal liability to the Fund during the pendency of the litigation in accordance with the previously calculated schedule. The district court denied this motion in part, limiting the payments required to $15,000 per month. The Fund appeals from this order.

III. APPEALABILITY

Pantry Pride contends that the order of the district court was not appealable as either a final decision under 28 U.S.C. Sec. 1291, or as an interlocutory order under 28 U.S.C. Sec. 1292(a)(1). ¹

An interlocutory order "granting, continuing, modifying, refusing, or dissolving injunctions" is appealable under 28 U.S.C. Sec. 1292(a)(1). In determining whether an order is appealable as an order refusing an injunction, there are two requirements. First, the order must have the effect of refusing an injunction. Carson v. American Brands, Inc., 450 U.S. 79, 84, 101 S.Ct. 993, 996, 67 L.Ed.2d 59 (1981). Second, the appeal must "further the statutory purpose of 'permit[ting] litigants to effectively challenge interlocutory orders of serious, perhaps irreparable consequence.' " Id. (quoting Baltimore Contractors, Inc. v. Bodinger, 348 U.S. 176, 181, 75 S.Ct. 249, 252, 99 L.Ed. 233 (1955)).

The district court's order refused, in part, the Fund's motion for an injunction to compel the interim payment of withdrawal liability. Although the language of the Fund's motion did not use the word "injunction," this court must look to the substance of the request, rather than rely only on its language in determining whether an order is an appealable denial of an injunction. ² Cf. Ettelson v. Metropolitan Life Insurance Co., 317 U.S. 188, 192, 63 S.Ct. 163, 164, 87 L.Ed. 176 (1942) (interpreting a predecessor to 28 U.S.C. Sec. 1292(a)(1)). In this case, the Fund requested, inter alia, that the court compel Pantry Pride to make future payments according to the schedule in its prior demand which, construed liberally, is a request for an injunction.

Also, the denial of the claim to interim withdrawal benefits is a serious one. Congress believed that it was important to insure that the flow of employer withdrawal liability payments was not delayed by an employer disputing liability. See Senate Committee on Labor and Human Resources, Summary and Analysis of S. 1076, 96th Cong., 2d Sess. (1980), reprinted in Special Supp. 310, Pens.Rep. (BNA) 81, 84-85 (1980); H.R.Rep. No. 869, 96th Cong.2d Sess. 84, reprinted in 1980 U.S.Code & Cong. Ad.News 2918, 2952 (payments should continue despite litigation). Further, the loss of the important statutory right to interim payments cannot be effectively reviewed once a final order has been made. If no interlocutory review were possible, the Fund could effectively lose its statutory protection against interruptions in the pre-arbitration flow of contributions that Congress mandated through the interim liability provisions.

The order, insofar as it refuses, in part, the request for interim payments, ³ is reviewable as an interlocutory order under 28 U.S.C. Sec. 1292(a)(1) (1982). Because of our resolution of the appealability issue, we need not reach the contention that the order was appealable as a collateral final order under the doctrine of Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1948).

IV.

Although we are satisfied that the order denying the Fund's claim to equitable relief is properly appealable, we do not believe that the district court should have considered the Fund's motion for affirmative relief in its present procedural posture. The Fund has not filed any counterclaim, and, in these circumstances, is not entitled to seek affirmative relief until it has done so.

It is true that the federal courts have abandoned the strict pleading requirements of the common law, and the district court may, in certain cases, liberally construe a pleading, or in this case a motion, to state a complaint or counterclaim. Fed.R.Civ.P. 8(c), 8(f). See also, Cooper v. Anderson, 277 F.2d 449 (5th Cir.1960) (failure to plead a counterclaim is not fatal when evidence introduced reveals a counterclaim and the issue is tried without objection). However, the policy favoring liberal construction does not take precedence over potential prejudice to the opposing party.

Pantry Pride may have been under the erroneous assumption that the Fund made a motion for security under Rule 65(c). ⁴ The issue of security, however, is separate from, and independent of, the question of whether the Fund has a right to interim payments under the MPPAA. Because of its erroneous assumption, Pantry Pride did not have an opportunity to respond to the motion as a counterclaim and may not have raised all of its defenses, if any, to the Fund's motion.

Under the circumstances, we cannot say that Pantry Pride was not prejudiced. We believe that in this case the district court should have required that the Fund comply fully with the rules of procedure before affording any relief. Although requiring that a claim for interim payments be filed as a complaint or counterclaim may have the unfortunate effect of delaying payment to the Fund, the rights involved in this case are significant enough to require that a court have the requisite pleadings and record before adjudicating the merits of the claim to interim withdrawal payments.

V.

The order of the district court will be vacated, and the case will be remanded for further proceedings consistent with this opinion.

The mandate will issue forthwith.

JAMES HUNTER, III, Circuit Judge, dissenting:

1. The majority opinion finds that the Fund's request for interim payments of withdrawal liability was a prayer for injunctive relief, and therefore that the district court's order denying that relief was appealable, by looking "to the substance of the request, rather than rely[ing] only on its language ...." Yet the majority applies a rule of strict construction to find that the very same request was not a counterclaim, and therefore that the Fund is entitled to no affirmative relief. I find this disturbing, not only because it contravenes the cardinal principle that pleadings are to be "construed so as to do substantial justice," see Fed.R.Civ.P. 8(f), but particularly because in this case it facilitates the very evil that the interim payment provisions of the Multi-employer Pension Plan Amendments Act ("MPPAA") were designed to prevent.

2. A claim for relief in federal court need only contain "a short and plain statement of the claim showing that the pleader is entitled to relief, and a demand for judgment for the relief to which he deems himself entitled." Fed.R.Civ.P. 8(a). The Fund's motion for interim payments very clearly meets this standard, both requesting the payments and setting forth the statutory and factual bases for the claim. See II App. at 219-21. Pleadings are to be judged by their substance, not their form, and therefore,...