the third case this morning and in electrical workers verses and web services please the court my name is rachel on behalf of pellets and we respectfully request that this court reversed decision of the district court which granted summary judgment in favor of me and well into night the plans motion for summary judgment this case presents the questions of whether success or liabilities continuity element was satisfied and whether the district court erred in weighing the equities in favor of the plan argues that both questions should be answered in the affirmative successor liabilities continuity element was lupul which unfairly advantages larger companies and third it feel to properly review the plans compelling evidence on eleven of fourteen factors that demonstrated that man were continued tiernan in hoover's business operations dispositive in deciding the case below which in itself is an error as we know from to simpkin no one factor is dispositive in the continuity analysis counsel i don't quite understand you're running away from resilient flooring given the circuit's focus in essence on the public presentation of the successor buyer i read that cases saying in essence that if you as a buyer present yourself to the public to customers etc as the successor in terms of the services you're providing the comparing through on the contracts that that's really the most important compelling way they're in obviously their details are a little bit different and that's where i understand you you don't like a few of the details but if we look beyond the individual trees of those factors the forest in resilient flooring is very supportive of your case right i understand your honor and as a matter of fact when the plan provided supplemental authority in between the prior appeal of this case and the distorts decision on the summary judgment motion below we did actually cite a resilient as a part of our position for exactly the reason you just mentioned we originally read brazilian just as you did citing to the fact that if you hold out the goodwill of the public representation and so forth exploiting customer contacts that that in fact waiting favor of however the district courts reading of resilience was very much different and in fact they used resilient to undercut the entire then your disagreement is with the district court's reading not with the ninth circuit well when we drill down into resilient we realized that it was relying on an incorrect rationale and we think that was carried through in the district court's opinion if i could continue i clues ok so as i was saying the ninth circuit and the district court is reserved requiring construction industry plans to demonstrate  success or its market capture of economically critical bulk of customers in order to establish continuity in the ninth circuit base is this not a requirement on aca application of the construction industry exemptions exemption that's a flawed rationale in in hoover's customers the ninth circuit and the district court have therefore conflated the rationale for the for the building construction industry exemption with the underlying purpose which are liability itself the underlying policy concern of w liability of the n p a is to ensure that remaining employers are not left holding the bag when other employers withdraw from the plan that's the analysis performed by this court in this case is prior appeal that's the analysis performed by the united states supreme court in the bay laundry case here we've already established that withdrawal twenty nine u s c thirteen eighty three which sets forth the building and construction industry exemption has already been met this case from its inception in the district court is just a collections case it is not to drop case under resilient the plan is effectively being asked to establish a withdrawal twice and in fact it's being asked to establish a withdrawal plus because of this heightened standard of showing an economically critical bo that's not quote the purpose of the n p a or successor liability in general because of this higher burden that's being imposed on building struction industry plaintiffs such as the plan it requires the elevated standard of economically critical requires demonstration of detail billing percentages and again ways that continuity of customers standard more heavily than any other factor other than the assignment of the existing we're completing certain whatever it was i that's correct your honor there were no unionized employees that ended up from going to chairman hoover to man however the test is actually whether or not there are shared employees now as we stated in our brief and he isn't even as resilient noted whether or not you're you nice employees make the jump is really more of an issue for and in l or a case here we're looking at pure successorship and again this is another issue where we believe the conflation of that building and construction industry exemption is somewhat tainted the district court's analysis of the importance of those unionized employees because she looked at the value of those pension contributions which in this case really has no no importance or significance in our analysis of continuity  correct we did have the same work we had same employees and again as we demonstrated in our chart at page forty five and forty six we had evidence on eleven of the fourteen factors a continuity and it when we're talking about withdrawal liability getting rid of all the unionized employees with the buyer with the seller in replacing them with new nonunion employees with the buyer doesn't actually weigh in the employer's favor i would think it's good in terms of policy that's the kind of thing we're trying that the congress is trying to prevent your honor we would argue that that was the point hold itself out as chairman hoover starting from day one after the asset purchase agreement but all all using the name preach right for everybody uses mr afridi's name direct ok and again i would point out again that the underlying purpose here for the m p p a is to protect those remaining employers they withdraw liabilities had already been established by the withdrawal of chairman hoover which is this was again established prior to this case ever being brought in the district court back in two thousand and ten so the success or liability analysis then is just looking for at these continuity elements i also want to discuss the loophole created by the district court the plant position is that the district court created a dangerously pulled that unfairly advantages a larger whether being employees or supervisors or what have you that resurface at the successor rather than the percentage of the successors total workforce or supervisory workforce under the test used by the district court the plant faced an automatic fail  district court ruling if a firm will invite other larger entity to absorb smaller entities without any fear of success or liability that contravenes the n p a in the doctrines underlying successor liability in general well it requires  maybe we have reason to say that's not the case they did continue with a lot of what was going on in order to get the continuity but it does seem that this was a pretty sharp diversion from what was originally did they hope to get  freed and whatever else it is but it seems that all melted once it went cold absorbed i don't know what went beyond that where the other workers were you say that's not relevant maybe it isn't maybe they did something completely different for the same union working on the same union in that successor bet successor who would have the obligation but we're looking at is withdrawing ability and what is it six hundred fifty thousand dollars six hundred  hears between delinquent contributions and withdrawal liability the withdrawal liability represents tiernan adverse share proportionate share of the unfunded vested benefits of the plan and it's not related to delinquent contributions for those particular employees again it goes with the policy underlying the m p p a the idea is not to allow an employer to withdraw from the plan and leave behind the vested benefits that have been promised to those pension participants again it's defined benefit plan whether or not  to whoever has left the plan or not the pension participants in the pension plan will receive those benefits so everybody was both both the buyer and the seller had the opportunity and incentive  may please the court for the district court's decision is correct because the holding that there was continuity of operations between tiernan and hoover and ma'am with requires finding the man with continued without interruption or substantial change  was business and that's just not the case here the record in the case fails to support the plans requests for reversal because it contains no evidence of significant work done by me and where after the closing on the asset purchase agreement and there's the facts necessary to prove continuity of operations when they finished the contracts that were pending you know there were assumed contracts within the the provisions of the asset purchase agreement now so why isn't that can continuity work well because   about the sale price well karen hoover didn't just receive back i'm sorry i wasn't part of the sale price of the assets it was rather as man with completed the assumed contract student who were compensated part of the overall asset purchase with rolling ability right and there's one additional step you're on of the profits from those business were from that business was required to go to pay down the line of credit right now the chairman who had as a debt and so it's important in this context though pointed out results matter you know the record contains no evidence beyond the twelve month period that the twelve months that that included turn and who was wind out of any additional work and i think it bears the looking at that in the proper context is important as well because what we have here is a purchase price of a little over two hundred fifty thousand dollars for the assets we have a liability at the the point assessment it was in excess of six hundred sixty thousand dollars and so we also have provisions in the agreement requiring charin and hoover to pay over the proceeds from the sale that's payoff it to release the lien from the assets right rob is in deep trouble and that's the point here so aside from it difficult to imagine an asset purchase agreement without some kind of an indemnity provision but for withdrawal i vill it well for a number of things very fraught for many things but when we're talking here about an important federal policy that protects workers in their unions and their benefits for the long term that where there's a great risk of underfunding in a kind of death the i'm not criticizing your your your clients for seeking the indemnification or obtaining it but it does mean that their eyes should have been wide open and if and they certainly had every right to insist on knowing from the sellers what the status of that process would be and an opportunity to participate if there was a reason to challenge the number and and that's right your honor and the state a lot that point didn't indicate that it was a possibility because you had you had to assume an eventuality that that wasn't frankly within the party's contemplation and that what that there might be found a kind of content continuation here you know you're out of the chair in who would fail to arbitrate the assessment and go to arbitration where they you guys didn't ask well if our guys didn't receive the notice it wasn't sent to us or they didn't ask of the sellers about what that what was going to happen with this lie a potential liability whether you're on the points looking at the the value or the worthy the meaning of the indemnity agreement and in this context it to say that man lab is in a position to look to it is now by virtue of the indemnity provision required to look to churn and hoover  indemnity on this on this obligation as elevating the provision for a well above the substance of the circumstances it's a standard poison in the contract white why is that elevating for the presumably that's a trucks and other things make sure most of those very soon that's what they purchased with an asset purchase i don't think you confused me about this thing from the start what was the benefit of the purchaser buying  this failing company who had some business the only thing attraction seemed to be that was a freebie free of three g is the name treat she had some kind of a transaction is a company called enterprise electrical mechanical it did purchase that they named the three g company and registered with the state of indiana as doing business as the pretty company member was also registered with the state of indiana is doing business as enterprise electrical  l man with did not use the name the freaky company at any point even up until today in october of two thousand and ten fourteen months after the transaction one portion of the name it became three g engineer solutions but that was fourteen months after the transaction and so as far as the continuation of the identity of the free t company what about i was going to put up what about the website the phone numbers from someone who or two to google a name the fiji company then enterprise electrical mechanicals website comes up and so on the point with that the reason that's important is that you know when you're going to a website if that website is what you are looking for that is no one i think it seriously contend that someone looking for the company's website who was sent to enterprise electromechanical is website would say oh this is the preachers let's this is the preacher company's website they're different similarly with answering it with the telephone the telephone numbers were forwarded as part of the asset purchase and those phones were answered after the transaction is enterprise electrical and mechanical and so the caller says i thought i was trying to fact and releases to customers at the time explaining a transaction in general terms not sophisticated terms but it was we have that was written do we have those in the record i believe they're in the record companies and so it was for a brief period of time yeah but it will i think it's important because it as far as representing i holding out the identity of the company there's clearly a difference between one logo versus two and for the fourteen months and even until today the pretty company name has not been used and so some of those concerns with respect to holding the company out as as a continuation of the freaky company fall away when you really look at the details you dig did the customers come to the physical locations the facilities there was one facility or are in that facility was and it's important here the continuity of operations analysis is a multi factor test no one factor is just positive to the customers come i suppose some did but there's no information on that in the record that i'm aware of it in the data same excuse me they did not maintain the same the the policy behind the building construction industry exemption is important here because the animating concern has to do with there has to be a link there has to be a link before we will transfer liability to another entity for the withdrawal and and that the purpose behind building a construction industry exemption is that it recognizes in the construction industry that employees may do covered work for dozens or even hundreds of employers throughout their careers and as long as those employees who leave a close company and go to the unions hiring hall and are picked up for additional covered work by an employer who is obligated to make contributions there's no harm to the plans funding base but let's look at the the that that assumes the company is going out of business right and it's not essentially going to continue doing the same kind of work but outside the the aegis of the union and its benefits right i'm going to the resilient flooring language pages ten ninety five and ninety six if instead an employer uses it in this would be the buyer uses its insider knowledge to draw a great many of the predecessors customers and so can pick up where the predecessor left off doing the same time of work as the predecessor yet neither contributes to the pension plan nor pays withdrawal liability the assumption that  webb resilient for that was a successor company or eight and alleged successor company that was started within a very very brief period of time of the demise of the predecessor sounds like you're about to meet the big buyer exception i know you know you are what i am going to tell you as a man was doing electrical work in the indianapolis area and in the midwest from two thousand and three for with really very like him the refrigeration engineering well no but the but the the work that we're talking about is important that that is to distinguish refrigeration or other plumbing from sheet metal from electrical work we're talking about a compromise an alleged compromise of the funding base of the plan because of non contributions for electrical work and  was doing electrical work in the jurisdiction for years and it it it didn't president was batted around on the opening remarks then with didn't get rid of the union electrician's men would employ dissident sufficient number of that assumed that they did work on the assumed contracts the electrical work that was required in the amounts are in the in the record it's a very small amount it's minuscule it's one point three percent of all the man lives electrical work for that twelve month period that's less than about that the plaintiffs math is wrong minded page eight twenty nine of their brief when they're percentages but the basic principle is correct that if if the big buyer comes in and we focus on what percentage  of the buyers revenues customers employees came from the seller then there's never going to be continuity right well i i don't think that quite captures it all your honor i think going to the other way and this is what i think resilient floor in this regard is persuasive the court in resilient floor was not persuaded that simple headcount is enough because man would doesn't number of services it does h p a see it does secur refrigeration and so to say that the number of customers that we shared in oh by the way man was doing business with some of these customers prior to the transaction we shared a number of customers and therefore man web as a sufficient length that men should be liable and that's equitable and that's just not the case we're talking about electrical work is it correct that you all are pursuing attorney fees in the district court that's correct where does that stand believe the district court has stated pending the outcome of this appeal and what is the basis for that the continuity of operations requirement requires that the order fall river time that a majority be made up of the predecessors employees but here in any case in any case you find about successor liability there must be bargaining unit employees or those or just like to address a few quick points as to the notice argument that man were brought up zero point out that mean what does not have a right to arbitrate in further the notice argument does not go to notice of the right to arbitrate that was negotiate the terms of your honor's question about what was the benefit of the sale i would say that you had hit that right on the head to us the benefit of the sale was man webb's intent to continue to monitor his operations there was no real estate there was no physical assets to be had the idea here was to continue the operations and that's exactly what me and what did you say no physical assets including excuse me estrada most of those were sold the real estate was there was no real estate no really  closed and that's why we feel that clearly man would did continue to know that hoover's operations we would ask that this court reversed the decision of the district court