good morning your honour's donna kerr chair on behalf of appellant resilient floor covering pension fund and its board of trustees that morning so the question in this appeal is both narrow and novel specifically in the construction industry what kind of notice if any does equity require in order to impose withdrawal liability on a successor employer who has made it is conscious decision to take over its predecessors customer base without pain for are you are you conceding that no this is required i believe i said and notice if any will are in that what is your position on that it was not clear to me from reading the briefs our position is that there are equity might support finding success or liability even if there was no notice however in this particular case what is that is that your is that your position i mean you say well might i want a judge q what your position is is that your position that liability millions of dollars of liability can be imposed on a successor because it is a fact issue about whether successor so let's assume that they are for the moment millions of dollars of liability can be imposed on a successor with no notice whatsoever our position is tied to the facts of this case and at a minimum and i'm going to just it's a yes or no question we because your briefs seem to say  we believe there are some circumstances if equity is otherwise satisfied because the notice requirement is a way one way of satisfying equity so for example in the contract so your position is just so unclear that under the facts of this case liability can be imposed on the successor even if the successor didn't even know that there was a pension fund and didn't even and didn't know it was underfunded is that your position  underfunded our position is that knowing that there is a pension fund that the predecessor was contributing to he was on at least inquiry notice to determine whether there's a potential for ok what case do you cite for that is there any case anywhere in the country yes for ever imposed liability when somebody didn't know that the that the fund was under funded yes the full circle case i don't have the full name i have the cite here it's  choice eight to six f third nine nine four in that case judge posner noted that even if the successor has no idea that well  the full circle case which i understand it was the son taking over the father's company right yes and he was represented by counsel who structured the yes and what i think judge posner was saying but tell me if i'm wrong  you can't possibly claim you didn't know there was an underfunded pension fund you took over the company from your father and you had a lawyer structure the deal i don't think he was saying that no notice ok he was saying under the facts of this case notice can be inferred right in that case and in that case there was also an actual purchase by the successor and sort out its purchase he purchased the company it was his father's company and a famil lurch structured to deal with judge posner said come on don't tell me you didn't know and one of the reasons i only had that in that case the buyer knew that with the union pension fund that i believe that the fact in that case they they did not know about withdrawal liability but they knew about the pension fund and in this case the magistrate judge found there is a reasonable inference that michael hassel the owner of michael's  knew that the that studious was contributing to a pension fund she did not find the record let's assume let's assume that the facts of this case give rise to reasonable inference that the successor knew that there was a pension fund i'm not sure they do but let's assume that your position is under those circumstances the successor need have no notice that the pension fund was under funded position is that he need not have any actual notice that the pension fund was under funded the prior decision didn't say notice of what and the prior decision specifically said that equity considerations  would we're dancing around each other here ok either you have a position or you don't is it your position that in the absence of actual notice of underfunding just simply because somebody knows that there's a pension fund that that successor is my boy for the underfunding we believe that equity is satisfied and that yes a court trial or a fact could find liability when balancing the equities not just of the successor who's getting a windfall of business that it hasn't paid for that has it has been able to use insider information before the success the predecessor closes and we go through and i'm not taken in we go back then tell me what case says you can post excess or liability in the absence of actual notice you cited the seventh circuit case but the seven circuit cases i read judge posner he was saying oh come on we can infer actual notice from this set of facts and that's the facts at issue there there are there is at least one context where regulation says no this is not required at all and that's under the family medical leave act which is not that which is not right what you're talking about here right and the supreme court and this court have repeatedly said that success or liability needs to be determined based on the policies underlying the federal statutes at issue and based on the facts where those cases deal with as i read them help me if i'm wrong whether or not someone is a successor and there's a fact issue here about whether or not these guys are successor but i'm trying to find a case that tells me that assuming there are success or they really don't have to know that there's a pension fund that's underfunded just because they're a success or that's enough there is no other case out there that is on all fours with this case in every respect and the distinction between full circle and this case full circle is the closest because but the distinction between there's no payment for the customer information and a good will there is nonetheless a transfer of the customer information and the good will in a manner that would not be allowed if studios was not closing down any reasonable employer would say to its longtime salesman don't don't you dare go solicit my customers for your business you're going to open in three months while you're still working for me but he did don't you know he the predecessor actively helped him get the phone numbers so that when they called they'd get the same guy there were steps taken and the first panel in its first footnote made a note that it was hampered in fully explaining its decision by the ceiling of documents those documents have all been unsealed at this point we had to file some under seal because the appellee wanted to maintain its confidentiality designations but then did not support those with the declaration so the court unsealed everything so the business plan that this is planned was specifically mentioned by the prior footnote number one and the business plan talks about there being a void that's going to come into the floor an industry that success of michael's new company is dependent on continuing  relationships how is that going to know this actual notice and isn't going to go you have to make here either if there's no truth required apparently you don't think it's actual know this despite what the panel said then resilient you think it's some kind of inquiry notice that should depend on what some factors that we should consider things one yes different factors depending on the facts what satisfice equity and all the facts about how this happened go to whether it's equitable to have imposed liability with less notice than you might otherwise require but resilient doesn't do that resilience says there's an issue about whether someone's a successor but they never take up the question of what kind of know to take it's required that is the issue here today is that and the reason the statements because your successor doesn't mean you therefore have notice right it's been separated out some of the other cases mingle it more but this the prior panel separated out notice was not at issue there because notice was not part of the district court's decision at the district court level where that so and although she could have because on the same factual record summary judgment was before her the first time she could have granted it on both grounds and it would have been before the first panel don't work would you do agree that the first panel requires the law of this case require some sort of notice i believe those dicta when they talk about notice they talk about a bonafide successor needing notice and i discuss that in  briefs and they're in the discussion of the prior nothing in the opinion that says bona fide the holding thing the long as the successor has notice of the liability not of the unions that said of the liability that the so long as there's two places then opinion it said it in one place it's quoting a prior supreme court case in a different context which the district court in it virtually i think attributed to this plant the panel in this case the first time it says it says they conclude it doesn't say we hold it says we conclude so long as and we do believe that's dicta so let's assume it's to and it seems victor and well i think what supports that what supports that is another part of the case where it says where a successor makes a conscious decision to take over the customer base of its predecessor equity equitable principles that are this source of success or liability to take yes for an answer i'm saying i it depends on what notice means no you can't have notice of an actual liability under the construction industry exception because on day one there is no can split exception doesn't allow withdrawal liability if you thin i think she was making a general statement of success or liability and not specifying what that notice is as to notice of the liability since there is no liability on day one it must mean notice that there could be liability so your keep asking you this and i keep i'm not sure i'm getting a single answer your position is that when somebody in the construction industry buys a company with some information that i unionized successor liability is automatically imposed not when they buy the company when they come in use insider information to set up essentially the same company they become mistakes are so they become a stick i soldier their success or there are an honest to god so they didn't pay anything for the customer information an honest to god success or all the things that make you a success or you're saying if your successor in the construction industry you're subject to liability for an under funded pension fund no matter what now we're saying when you get a windfall of business because you didn't pay for that all that in for a site or everything from ancient don't i gave you all that your successor that's why your success no there can be a successor to pay that went in and bought paid for the customer information you said that already they haven't paid for the queue and they haven't hit the floor then then they need no notice at all that there is an underfunded pension liability either no notice or at a minimum notice of the union or perhaps even that there's a union related pension  pay for a few reasons if they're paying for it there are procedures of due diligence and whatnot which are more likely to result in the parties looking at the issue in the construction industry the reason they don't do that is because the sellers are concerned about this the fact that there's a successor is going to mean there's going to be withdrawal liability and they may be subject to liability for some or all of that it will bring the issue out instead of hiding it and trying to step around it which if you look at the amicus brief that was filed in the prior appeal in this case you have construction industry employees saying we're not going be able to make any money if we can't pass on our assets and access to our customer lists without and without getting withdraw liability imposed on one on this one or the other there are many other employers trying to do this and in fact congress was saying you get this exception because you're not doing what all the employer has to do i mean i'm not worried about the employer or employer has to do is say to the successor here there's members of the court counsel they please the court my name is bob miller i represent the defendant michael floor covering inc i'd like to if i may just introduce that my client's mike and he has a lawyer in the back of the courtroom this morning i'd like to start with the point that the reason for notice is fairness we have to have some opportunity for the defendant understand or the putative successor to understand what liability he might face and that comes from not just one circuit jurisprudence but it starts with the united states supreme court in golden state bottling one nine hundred seventy three when this doctrine came into position the united states supreme court said the reason that we can do this the reason we can impose this equitable liability is because there is first notice notice gives an opportunity for the purchaser to negotiate for protections against this liability so we have judge posner's opinion in this in this seven unionized company and knowing that the company was unionized you almost certainly should have known that there was a it was required to a pension fund and that should have alerted you to the possibility of withdrawal liability w but that's statement that statement you knew you would you know you were in a construction industry you knew there was a union and there's at least some evidence in this case that your client knew there was a union why isn't that enough to impose liability under judge posner's because the son who took over the father's business also his company made contributions to the mechanics union fund and his company was bargaining with the mechanics union and he acknowledged that there was funding for a pension fund all of those facts are at page nine ninety five ninety six of the seven circuits opinion and if you look at the district court's unreported opinion that they feel was taken from you'll see the  built formed in one nine hundred fifty two in two thousand and seven and the son went out to start his own company to take over the father's company it was a family owned business for generations and as i say it was a big conglomerate that was a shipyard work it but i'm again reading the fact judge and he may be wrong judge posner has been wrong before but mark can i may have never heard of withdrawal liability or known that union pension fund was underfunded but knowing that he was dealing with the union pension fund he was on notice there was a pos ability of such liability is is that not in your view is that's wrong no i don't i don't view that is wrong but here's the difference you had the sun was a participating employer participating employer has certain information annually the deal well regulations twenty nine c f or twenty five twenty point one zero one requires the multi employer pension fund to send out notices of funding and that an notice that goes to every contributing employer which would have been the son tells about whether or not it's underfunded whether the multiple employer pension plan is under funded or not so the son in that case would have had access to a lot of information about the underfunding now withdraw liability attaches only if at the time the contributing employer ceases participation there are eligible under under fund unfunded liabilities in the multi employer pension fund that annual statement that every contributing employer would have received of which mark was a contributing employer on his own in his new company would have told about that underfunding that would have given rise to withdraw liability in this case and this is the interesting thing the fund has the access to that information that point in time that's important here is up through december thirty one two thousand and nine because mike started installations on january first two thousand and ten did he know at any time or before december thirty one two thousand and nine about the potential for contingent withdrawal liability that is unfunded liabilities the fund would have had the statements under twenty nine c f r twenty five twenty point one  one the annual statements that would have said under funded in two thousand and nine under funded in two thousand and eight so it's not as counsel said well we really don't know because it's not until after they withdraw you know going up to the end of your year if you are  year the all closes as of the first of year right no he never made a deal he never bought the company i understand but he he there are some agreements here too for example to what use the phone numbers no no what happened no what happened was the scott's tutor called the company and said i'm not going to be using the the phone after twelve thirty one two thousand and nine and so the company then released that number times like so there are some there are some interactions between us let's not make them contracts between your client and the company in the fall there's that one ok and then mike also bought scott sold his other things happened yes so what if the what if the union pension fund at that point in time had said oh you're michael you're dealing with students here's we have unfunded liabilities would you then would you then be liable for them if your successor if mike had notice from the trust fund notice from anyone that but i'm saying that they don't know you're dealing with students and so they run up with they say glad you're here i want to let you know if you buy this company is unfunded pension liability know if a competitor of mike's just walked up and said hey there's this without any in dishes of reliability hey there's this unfunded liability in order to scare mike off of going into business no but if he had noticed from the fund when that at least create a question of fact about whether you had notice if somebody who had no brothers or if it was this person and now this serious or not that a competitor told you that that this fund was underfunded he just told you that he was tired of contributing to his fund he didn't actually all he said was if the if the pension was funded i'd go united tomorrow but there's no but what if  i think you get yourself in some trouble here if a competitor came to you and said hey mike i want to i'm a nice guy if you're going to buy that company you know they have unfunded pension liabilities under that circumstance surely at least they'd be a question of fact for the district court to figure out whether you had notice why i'm going to understand why you're going there if somebody just if somebody out of the blue just says oh you could argue you could argue that the fact you could argue the weight of that point that your client had no notice the reason you are having difficulty is your statement that the notice has to come on the official letterhead of the fund or from studer notice can come from lots of places yes and the place where it's come up is usually unlike well where it's come up is in due diligence in a transaction again there wasn't a transaction here like like to court pointed out in full circle represented by lawyers making a transaction buying leases buying shipyard equipment from your argument that somebody reliable is going to tell you right you were posing a hypothetical i was trying to respond here there is no evidence none well you do have there is some evidence that your client knew this was  true and judge posner says when you know there's a unionized company and it's common knowledge that pension companies have pension funds and it's common knowledge that they're underfunded that's enough to create a fact issue i notice so not without distinguishing i'm not trying to distinguish the facts in that case tell me is that wrong i don't think that's an accurate statement what your exposure said he said surely the sun i just said it then i just well now we're back in hypothetical no is that enough to to post success or no liability no no and then there's another element of the notice here to remember that in this case there was no transaction there's never been successor liability imposed like this for a circumstance where there was no transaction and the law didn't even recognize in any circuit but certainly the ninth the law never said prior to january one thousand and ten when mike started operations that ape person could be deemed but you lost you lost that issue the first time up there's a fact issue about when you can own a team to success no i'm on the notice issue i'm on the notice issue and it's this nobody in two thousand and nine knew that somebody who didn't buy a company and where there was no event of withdrawal by the predecessor that that person in the absence of any transaction in the absence of already imposed liability could be liable for it in other words there was no source michael could have gone to and said disli ability exist what would happen and think of the havoc that something like this would raise because all that students did was go out of business it dissolved and more than five years has passed now so actually there's been no event to withdraw but think about it scooter simply just went out of business now there are three salesman including mike who are out there working for nonunion companies and they're they're having to do work that at some point was done by students they're doing it for one point does that have to do with the notice and what does have to do with the notice issue how would or any of those folks have any idea they could be subjected to withdraw liability and what about students had a student end up having withdraw liability when all they did was quit what they're asking to do here is turn everything upside down but i'll get back to the notice there is no notice there is no evidence the court decided it correctly and you should  demanded that he engage in collective bargaining they could have they could've predicted this and you seem to take the position that since he didn't otherwise have no that's assuming your argument that this is all the unions fault because they could have done it and they know no important distinction the union the union is not a party here the fellow who was the with the union who had that knowledge was also a trustee on the board of trustees and he knew at the time and all they had to do was walk up and say oh by the way here's the funding statement under twenty five transaction where there's some kind of reliable evidence don't start looking like well your position is there's no evidence there's no evidence here but i'm being asked to form a hypothetical  and i mean i could do that but you keep talking about a transaction but it seems to me that at that point you're fighting the successor issue you're saying this would mean no successfully there's no transaction and well the notice issues come up in the course of the courts have said look there was a transaction there was due diligence like the man web case where they went in they did due diligence they learned of the unfunded liabilities the same thing with full circle where they were contributing there was a transaction the judge said you've got to be kidding me this is a structure transaction with what you have to accept the idea that you can have that you can be a success without the kinds action i mean that's never that's never happened except for in the base case what's in this case judge person said you can become the successor is a fact issue about wh it for is this in every circumstance where it's happened the court the cases that we can look to the cases that would put a person on notice before they undertook this but this work and what was mike to do how was he to protect himself just not go to into him a successor yes but they were not at that issue so what i'm looking for is how do we answer the question in gold go and say bottling and that is just how could a put a person in michael's position knowing what he knew and not actually go in to not go into business actually i think mean the congress intended that congress wanted the funding base to stay with the union workers as to no one in two thousand and nine knew about withdraw liability yet that did not stop the court in full circle acknowledged was a trustee of this pension fund his tests and that's our oath thirteen of the district court order the testimony at our one thirty four to one thirty six shows the context of the conversation about whether michael should go union why shouldn't he go union for his company he's talking to a trustee of this pension fund and i would ask that the court remain and reverse and remain with instructions that the court find  liability or notice and full understanding of with my ability in other words to give her some guidance that the only notice required is that there were unit was union labor and a union related pension fund with contributions being made to it thank you your honors