Robbins v. McNicholas Transp. Co.

• Decision Date: 21 April 1987
• Docket Number: Nos. 85-2184,85-2330,s. 85-2184
• Parties: , 8 Employee Benefits Ca 2191 Loran W. ROBBINS, et al., Plaintiffs-Appellees, Cross-Appellants, v. McNICHOLAS TRANSPORTATION COMPANY, Defendant-Appellant, Cross-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 682

819 F.2d 682

55 USLW 2610, 8 Employee Benefits Ca 2191

Loran W. ROBBINS, et al., Plaintiffs-Appellees, Cross-Appellants, v. McNICHOLAS TRANSPORTATION COMPANY, Defendant-Appellant Cross-Appellee.

Nos. 85-2184, 85-2330.

United States Court of Appeals, Seventh Circuit.

Argued April 15, 1986.

Decided April 21, 1987.

Terende C. Craig, Central States Law Dept., Chicago, Ill., for plaintiff-appellee, cross-appellant.

Robert H. Cowan, Gracey, Maddin, Cowan & Bird, Nashville, Tenn., for defendant-appellant, cross-appellee.

Before WOOD and POSNER, Circuit Judges, and FAIRCHILD, Senior Circuit Judge.

FAIRCHILD, Senior Circuit Judge.

Trustees of the Central States, Southeast and Southwest Areas Pension Fund (Trustees) filed a complaint on August 8, 1984 against McNicholas Transportation Company (McNicholas) seeking an order compelling McNicholas to make withdrawal liability payments pursuant to the Multiemployer Pension Plan Amendment Act of 1980 (MPPAA), ¹ 29 U.S.C. Sec. 1381 et seq. McNicholas, an Ohio corporation, is a motor carrier, and was a contributor to the Central States Fund.

On May 31 and June 6, 1985, the district court ordered McNicholas "to pay 55.73 monthly interim installments of $71,221.83 to the Trustees beginning July 1, 1985." McNicholas appealed from the order compelling payments and the Trustees appealed from the denial of its request that McNicholas be compelled immediately to pay past due installments, with interest. On June 6, 1986, after oral argument, this court stayed the June 6, 1985 order during the pendency of this appeal.

The Trustees' side of the matter is as follows: McNicholas stopped making contributions to the Fund in September 1982. The Trustees determined in late 1982 that McNicholas had permanently ceased its obligation to make contributions and thus had completely withdrawn. 29 U.S.C. Sec. 1383. The Trustees determined McNicholas' withdrawal liability, 29 U.S.C. Sec. 1382, at $3,287,614.68 in total, or $71,270.83 in monthly installments, beginning March 1, 1984. On December 22, 1983, they gave notice pursuant to 29 U.S.C. Sec. 1399(b)(1). Although McNicholas disputes the claim that it has withdrawn, and that it is liable, and has sought arbitration under 29 U.S.C. Sec. 1401(a), Sec. 1401(d) requires McNicholas to make the monthly payments while the arbitration remains pending, and the Trustees are entitled to bring this action to compel the payments. 29 U.S.C. Sec. 1451.

McNicholas' side is as follows: McNicholas' operations in the Pittsburgh area were shut down by a strike September 7, 1982, and its entire operation was shut down as a result on September 28, 1982. (Apparently the workers who struck were not beneficiaries of the Fund, although other McNicholas employees are.) The Company desires to reopen its operations, but cannot do so until it reaches agreement with the striking union. Negotiations have continued, but have not been successful. The Trustees' determination that McNicholas had withdrawn was erroneous because 29 U.S.C. Sec. 1398 provides

Notwithstanding any other provision of this part, an employer shall not be considered to have withdrawn from a plan solely because--

* * *

* * *

(2) an employer suspends contributions under the plan during a labor dispute involving its employees....

McNicholas timely sought review by the Trustees (29 U.S.C. Sec. 1399(b)(2)(A)) and then initiated arbitration under Sec. 1401(a).

The Trustees brought this action for an order compelling McNicholas to make its 56 withdrawal liability monthly payments.

29 U.S.C. Sec. 1451(a)(1) authorizes fiduciaries, employers, and others adversely affected to bring an action for legal or equitable relief, and Sec. 1451(c) confers jurisdiction. (See also Sec. 1132(a) and (e).) 29 U.S.C. Sec. 1401(a)(1) provides that "Any dispute between an employer and the plan sponsor of a multi-employer plan concerning a determination made under sections 1381 through 1399 of this title shall be resolved through arbitration."

Notwithstanding the mandatory language prescribing arbitration for a dispute like the present one, employers, faced with a demand for interim payments to which they claim a defense, have brought actions, or interposed counterclaims in actions brought to compel payments, seeking to enjoin fiduciaries from asserting or collecting withdrawal liability.

Many courts have viewed the arbitration provision as an administrative remedy and have acknowledged the rule that the administrative remedy must be exhausted before judicial relief can be sought. They usually have cited Myers v. Bethlehem Corp., 303 U.S. 41, 58 S.Ct. 459, 82 L.Ed. 638 (1938). Courts have often found, however, an exception permitting them to resolve some or all the issues on the merits. Republic Industries v. Central Pa. Teamsters, Etc., 534 F.Supp. 1340 (E.D.Pa.1982), reversed, 693 F.2d 290 (3rd Cir.1982) (exhaustion excused in order to decide facial constitutional challenge, p. 296); T.I.M.E.-D.C., Inc. v. Truck Emp. of N.J. Wel. Fund, 560 F.Supp. 294 (E.D.N.Y.1983) (exhaustion excused in order to decide statutory interpretation, p. 303); T.I.M.E.-D.C. v. N.Y. St. Teamsters Conf. Pen. & Ret., 580 F.Supp. 621 (N.D.N.Y.1984), aff'd 735 F.2d 60 (2d Cir.1984) (exhaustion excused in order to decide statutory interpretation and because employer established irreparable injury, p. 633); T.I.M.E.-D.C. v. Management-Labor W & P Funds, Etc., 756 F.2d 939 (2d Cir.1985) (exhaustion excused in order to decide statutory interpretation, p. 945); I.A.M. Nat. Pen. Fund v. Schulze Tool & Die, 564 F.Supp. 1285 (N.D.Cal.1983) (exhaustion excused in order to decide statutory interpretation, p. 1294); Central States, etc., Pension Fund v. T.I.M.E.-D.C., 639 F.Supp. 1468 (N.D.Tex.1986), appeal pending, (exhaustion excused in order to avoid irreparable injury, p. 1478); I.A.M. Nat. Pension Fund Ben. v. Stockton Tri. Ind., 727 F.2d 1204 (D.C.Cir.1984) (exhaustion excused because issue was statutory interpretation and exhaustion would not produce judicial economy, p. 1210); Robbins v. Pepsi Cola Metropolitan Bottling Co., 636 F.Supp. 641 (N.D.Ill.1986) (exhaustion implicitly excused as to constitutional and statutory issues, but not as to fact issues, p. 679 n. 53, p. 683); stay pending appeal denied, 800 F.2d 641 (7th Cir.1986).

Although McNicholas in part of its brief does challenge the constitutionality of the MPPAA, this court has upheld the statute in general. Peick v. Pension Ben. Guar. Corp., 724 F.2d 1247, 1276 (7th Cir.1983). ²

In the case before us, McNicholas promptly resorted to the arbitration remedy, and the ultimate decision on the merits will be produced through that process. Thus we have not been concerned with the rule requiring exhaustion or its exceptions. 29 U.S.C. Sec. 1401(d) imposes a duty to make the scheduled payments in the interim. The Trustees sought the aid of the court to enforce that duty, and they seem to contend that the court has no discretion as to enforcement.

Although the order appealed from specifies that McNicholas must make all 56 payments, it also refers to the payments as "interim installments," and must, we think, be subject to the arbitrator's ultimate decision as to the liability for and amount of the payments. If the arbitrator determines that there is no liability, or liability for a smaller amount, the order appealed from would have to be modified. If the arbitrator sustains the Trustees' determination of liability, a final order compelling the remaining payments (no longer "interim") will be appropriate. Because the court's June 6 order is subject to these contingencies, we consider it interlocutory and not final. We have jurisdiction of an appeal from an interlocutory order if it grants or refuses an injunction. 28 U.S.C. Sec. 1292(a)(1).

On its face the order appears to grant an injunction compelling payments on and after July 1, 1985, and refuses an injunction as to payments scheduled before that date. This court has noted the question whether an order compelling payment of interim liability is an injunction appealable under Secs. 1292(a)(1). Robbins, 800 F.2d at 642, n. 2. It had been held that an order compelling a past due payment "is appealable only if it 'might have a "serious, perhaps irreparable, consequence," and [if] the order can be "effectually challenged" only by immediate appeal.' " I.A.M. Nat. Pension Fund v. Cooper Industries, Inc., 789 F.2d 21, 24 (D.C.Cir.1986). See also Korea Shipping Corporation v. New York Shipping Association, 811 F.2d 124, 126 (2nd Cir.1987). We conclude, however, that we have jurisdiction of both appeals, McNicholas' as well as the Trustees'. As will be seen, we are of the opinion that a district court has a measure of discretion whether or not to use injunctive power to compel interim payments in these situations. Because the decision to compel payments beginning July 1, 1985, as well as to refuse to compel immediate payment of installments previously due, had a "serious, perhaps irreparable, consequence," subject to effectual challenge only by immediate appeal, the order at least has consequences similar to an injunction and is appealable, by each party, respectively, as an interlocutory grant, in part, and refusal, in part, of an injunction. Carson v. American Brands, Inc., 450 U.S. 79, 84, 101 S.Ct. 993, 996, 67 L.Ed.2d 59 (1981); Donovan v. Robbins, 752 F.2d 1170, 1174 (7th Cir.1985).

We recognize the Congressional purpose behind a collection procedure which has been characterized as "pay now, dispute later." Robbins, 636 F.Supp. at 677 and 680, 800 F.2d at 642. We also recognize that compelled payment of money, recoverable with interest upon later determination of error, is not, in itself, irreparable harm. I.A.M....