Trustees of the Suburban Teamsters of Northern Illinois Pension Fund v. Nagel Trucking & Materials, Inc.
| Decision Date | 22 December 2011 |
| Docket Number | 11 C 2775 |
| Parties | TRUSTEES OF THE SUBURBAN TEAMSTERS OF NORTHERN ILLINOIS PENSION FUND Plaintiffs, v. NAGEL TRUCKING & MATERIALS, INC. Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
Hon. Charles R. Norgle
Before the Court is Plaintiff Trustees of the Suburban Teamsters of Northern Illinois Pension Fund's ("Fund") motion to strike Defendant Nagel Trucking & Materials, Inc.'s ("Nagel") affirmative defenses and for judgment on the pleadings compelling interim withdrawal liability payments. For the following reasons, the Fund's motion is granted and judgment is entered pursuant to Federal Rule of Civil Procedure 12(c).
The Fund sues Nagel under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq., as amended by the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), 29 U.S.C. §§ 1301-1461, seeking withdrawal liability payments. The following facts are undisputed.
Nagel is an Illinois corporation engaged in an industry affecting commerce. Nagel and the International Brotherhood of Teamsters ("Union") were parties to multiple collective bargaining agreements ("CBA"), the most recent of which covered the periodMay 1, 2003, through April 30, 2006 ("2006 CBA"). The CBA required Nagel to submit monthly welfare and pension contributions to the Fund.
Upon expiration of the 2006 CBA, Nagel and the Fund commenced negotiations for a successor agreement. Those negotiations proved difficult and ultimately led the Fund to sue for unpaid contributions under ERISA. See Trs. of the Suburban Teamsters of N. Ill Welfare & Pension Funds v. Nagel Trucking & Materials. Inc., No. 09 C 4411 (N.D. 111. Sept. 20, 2011) (Gettleman, J.) [hereinafter Nagel I], A central dispute in Nagel I was whether the parties entered into a CBA for the period May 1, 2006, through April 30, 2010. On September 20, 2011, after over two years of litigation, Judge Gettleman found that Nagel and the Fund did not enter into a CBA for that period. Id. The 2006 CBA, therefore, is the last CBA between the parties.
Nagel continued to pay welfare and pension contributions to the Fund into 2010. Nagel's final payment to the Fund, for December 31, 2009, was made in March 2010. On November 14, 2010, Nagel received from the Fund a notice and demand for payment of $381,177 in withdrawal liability ("Notice"). The Notice advised Nagel that it was required to discharge its liability in twenty quarterly payments, beginning with a $22,477 payment on November 20, 2010. Nagel admits that it has not made any quarterly payments to the Fund. Answer ¶¶ 18-20. Seeking to challenge the merits of the alleged withdrawal liability in accordance with 29 U.S.C. § 1401(a)(1)(A), Nagel "timely requested arbitration" on or about March 28, 2011. Compl. ¶ 25.
The parties dispute the date upon which Nagel completely withdrew from the Fund. According to the Fund, Nagel completely withdrew during the plan year ending December 31, 2010. Nagel's first affirmative defense, by contrast, alleges that thecorrect date of its withdrawal is during the plan year ending December 31, 2006, the expiration year of the 2006 CBA.
The Fund filed this lawsuit to collect past due withdrawal liability payments on April 26, 2011, approximately one month after Nagel requested arbitration. The Fund filed the instant motion on July 29, 2011. On September 20, 2011, six days after this motion was fully briefed, Judge Gettleman found that Nagel and the Fund did not enter into a CBA for the period May 1, 2006, through April 30, 2010. Nagel Trucking & Materials, Inc., No. 09 C 4411 (N.D. 111. Sept. 20, 2011). On November 8, 2011, the Court granted each party the opportunity to file an additional brief addressing the significance of Nagel I on this case. The parties filed their additional briefs on November 21, 2011.
Rule 12(c) permits judgment based on the pleadings alone, which includes the complaint, the answer, and any written instruments attached as exhibits. Moss v. Martin, 473 F.3d 694, 698 (7th Cir. 2007). The Court reviews Rule 12(c) motions "by employing the same standard that applies when reviewing a motion to dismiss for failure to state a claim under Rule 12(b)(6)." Buchanan-Moore v. City of Milwaukee, 570 F.3d 824, 827 (7th Cir. 2009) (citation omitted). "Where the plaintiff moves for judgment on the pleadings, the motion should not be granted unless it appears beyond doubt that the non-moving party cannot prove facts sufficient to support his position." Hous. Auth. Risk Retention Grp., Inc. v. Chi. Hous. Auth.. 378 F.3d 596, 600 (7th Cir. 2004) (citations and quotation omitted). "The Court may take judicial notice of documents that are part of the public record, including pleadings, orders, and transcripts from the prior proceedings."Hernandez ex rel. Gonzalez v. Tapia. No. 10-CV-4124, 2010 WL 5232942, at *3 (N.D. 111. Dec. 15, 2010) (citing Gen. Elec. Capital Corp. v. Lease Res. Corp.. 128 F.3d 1074, 1081-82 (7th Cir. 1997)); see also Baker v. Potter. 175 F. App'x 759, 762 (7th Cir. 2006) (). The Court takes judicial notice of Judge Gettleman's opinions and orders in Nagel I.
To Nagel, Judge Gettleman's ruling that the parties did not enter into a CBA for the period May 1, 2006, though April 30, 2010, means that Nagel had no "contractual legal obligation" to contribute to the Fund during that period. Nagel argues that a complete withdrawal occurred as of May 1, 2006, and that as of that date any alleged withdrawal liability attached. For this reason, Nagel argues that the Fund's claim is "fictitious." In response, the Fund argues that Nagel's "obligation to contribute" extends well beyond the expiration of the 2006 CBA and, in any event, the date of withdrawal is a question for the arbitrator, not this Court. Under the "pay now, fight later" regime of the MPPAA, the Fund argues that, at minimum, all past due interim withdrawal payments must be paid immediately. The Fund is correct.
When an employer withdraws from a multi-employer plan, it incurs withdrawal liability under the MPPAA. See 29 U.S.C. §§ 1381, 1391. Nat'l Shopmen Pension Fund v. Pisa Indus..Inc.. 653 F.3d 573, 575 (7th Cir. 2011) (citation omitted). The MPPAA protects the solvency of the plan by making the withdrawing employer '"liable for an amount of money designed to cover the employees' share of the vested, but unfunded, benefits.'" IdL (quoting Robbins v. Lady Baltimore Foods. Inc.. 868 F.2d 258, 261 (7th Cir. 1989)); see also 29 U.S.C. §§ 1381,1391.
To collect withdrawal liability, a plan must first determine the amount owed by a withdrawing employer, 29 U.S.C. § 1382, and then send the employer a notice and demand for payment, id. § 1399(b)(1). The employer may ask the plan to review its assessment, id. § 1399(b)(2), and may contest the plan's assessment of its liability through arbitration, id. § 1401 (a)(1).
When an employer requests arbitration, as Nagel has done here, the MPPAA establishes a "pay now, fight later regime" in which "an employer is almost always required to make payments while it. . . pursues arbitration." Nat'l Shopmen. 653 F.3d at 576; see also 29 U.S.C. § 1399(c)(2) (). "Congress intentionally drafted the interim payment provisions of the MPPAA to give funds very broad power to demand interim payments." Cent. States. Se. & Sw. Areas Pension Fund v. Hunt Truck Lines. Inc.. 272 F.3d 1000, 1006 (7th Cir. 2001). "This is to ensure that the pension plan remains solvent while the parties resolve their dispute - a process that can take many years." Nat'l Shopmen, 653 F.3d at 576. "If [the employer] wins the arbitration he will get back whatever he has paid but the rule is pay first,arbitrate after." Cent. States, Se. & Sw. Areas Pension Fund v. Lady Baltimore Foods, Inc.. 960 F.2d 1339, 1341 (7th Cir. 1992).
If the employer defaults by failing to make the appropriate payments, matters progress in one of two ways. If the employer fails to make payments while arbitration is pending (known as interim withdrawal liability payments), the plan may file suit to collect on the interim payments, but not the entire amount. Nat'l Shopmen, 653 F.3d at 576. If the employer fails to make demanded payments and also fails to seek arbitration, the plan may sue for accelerated payments. Id. (citing 29 U.S.C. §§ 1399(c)(5), 1401(b)(1)).
Finally, attorneys' fees, costs, liquidated damages, and interest are '"mandatory addons in (successful) suits to enforce' a delinquent employer's duty to contribute [interim withdrawal liability payments]." Cent. States, Se. & Sw. Areas Pension Fund v. Murphy Bros.. Inc., 772 F. Supp. 2d 918, 923 (N.D. 111. 2011) ; see also 29 U.S.C. §§ 1132(g), 1451(b).
Disputes arising under the MPPAA must be resolved through arbitration. Section 1401 of the MPPAA provides:
Any dispute between an employer and the plan sponsor of a multiemployer plan concerning a determination made under sections 1381 through 1399 of this title shall be resolved through arbitration.
29 U.S.C. § 1401(a); see also Robbins v. Admiral...
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