good morning ladies and gentlemen welcome to the th circuit we're pleased to be with you this morning we have a couple of matters that have either been submitted on the briefs or ordered removed from the calendar county of two larry with some more orders to minutes on the briefs a moral sources kimb been removed temporarily from the calendar that leaves us with three matters to be argued today will begin with automotive industries pension trust fund versus south city motors on this appeal i want to talk a little bit about the statute that we're talking about just to provide some context or is a very unusual statute this particular section of a risk of dealing with withdrawal liability disputes is also quite unusual u nlike almost anything any other kind of case that probably can be heard by this court provides that withdrawal liability often in the millions of dollars can be assessed by the plan with no judicial review no arbitration review an employer has to immediately start making those oftentimes very large payments and can only challenge the assessment at a later time through arbitration that is what happened in this case an excess of three million dollars was assessed against my clients as a group and they had to immediately make quarterly payments on amount of continue to make those payments and will as long as this challenge continues i provide that context because again this statute is quite unusual and the way that the issues are adjudicated are unusual so in this case the statute specifically says that an employer that's been assessed withdrawn liability must st go to the plan and challenge the assessment type of dispute there are obviously the p b g c regulations which require an arbitration and there are specific rules the aaa issues that govern this kind of dispute and as we get to a minute those are the particular panel conduct of discovery in the due course as we'll talk about a little bit later the plan is claiming that somehow the employer was acting improperly in serving discovery but i would maintain that at the outset of this case there was no guiding case law on the most any of the live issues in the case the free look issue that we're going to talk about a minute there's no case law directly on point the settlement agreement issue that we'll talk about in a minute there is the safeway case out there but as we pointed out in our briefs that safeway case is not directly on point because it dealt with different language in the settlement agreement it dealt with even a different type of withdraw which is treated very differently under the statute so without any guiding principles we were forced into a situation we had to make some decisions and instead of just challenging the assessment we also brought particular equitable claims in arbitration on behalf of the dealerships claiming  that equitable grounds withdraw liability could not be asserted again there was no case law going either way on that we thought it made the most sense just to proceed efficiently through one forum in this case arbitration and have all those issues heard so when we serve that discovery the plan objected after some meeting conferred discussions the issue that did go to the arbitrator the arbitrator alternately ruled that those particular equitable claims were not subject to arbitration under the statu so you know knowing that those were potentially viable claims the only other form we had at that point was to go and file those claims in in the district court i confess i'm not really sure what the point of all of this background is well as to how does it speak to the issues that are  denied my client's due process there are particular rules have been published here by aaa there are specific to these types of disputes and rule twenty four or section twenty four of those rules is quite explicit that a hearing the separate things out i mean i take it you don't mean due process in the usual sense or constitutional sense because summary judgment is pretty well established as being a part of court procedure without violating due process so i take it what you're complaining about is a violation of the contractual agreement entered into by the parties presumably the aaa rules and whatever documentation you're required to execute may well be right it doesn't appear that there's anything that speaks very explicitly to that but that still leaves me wondering well what exactly then is the objection to this procedure that is so well established and accepted in court what's wrong with that in the context of arbitration well your honor i would maybe go a little bit beyond the contractual obligation issue because in a lot of cases where aaa is involved that's that's the case you know the commercial rules it's by by contract are you going to to have it heard under those rules under the and did this particular case it goes beyond that though because the statute explicitly requires arbitration that the statute doesn't specifically say that arbitration has to include an evidentiary hearing you know but the rules that are hearing the say evidentiary hearing it's hearing if that's true but there was a hearing in this case a hearing oral argument on the summary judgment motion this court has dealt with lots of issues indeed we don't even require an oral hearing to satisfy when there is a due process requirement for hearing it can be satisfied by writing so if that's what you have to point to to say that the rules require an evidentiary hearing got to tell you it doesn't sound like it to me well your honor i would agree with you if the if the section ended right there but it continues it describes what kind of hearing we're talking about and it's very explicit it says the complaining party shall then present its claim and proofs and its witnesses who shall submit to questions or other examination what would you put in if you would had a have you shown that in your brief and certainly your honor you know we referenced the fact that there there's obviously a dispute about the free look provision at at issue here there were several documents of the plan itself published explicitly stating that this particular free look exemption was going to apply on an employer by employer are those that are those questions that would have required witnesses and would have been subject to questions of demeanor and and  agreed and we did make those arguments to the arbitrator but they were they were unfortunately rejected i think because we didn't have a full other i'm sure here let me give you another example your honor the fact that the settlement agreement at issue here that the arbitrator ruled that that that settlement agreement was was not ambiguous at all and he and obviously the two parties looking at it have come to different conclusions on it i think anyone looking at that language can say ok there's pretty a pretty broad release here that's going to apply to the full did you get a chance to argue that before the  arbitrator we argue that issue ok it was there somebody was there somebody else who knew about that settlement agreement that you would have called and put on the stand certainly you are you going to rely on extrinsic evidence in the interpretation of it of the of the of the agreement that's correct and what would that what would your witness have said  we would have called our witnesses who would have disclosed the fact that in the go shooting this settlement agreement and ford was the dealership that we're dealing with here they explicitly told the plan that they were part of a control group ford motor company  was a part of the release because the representative from ford motor company was involved in that in the negotiations with the attorney and so we certainly would if we were brought witnesses from both sides were those were those witnesses deposed they were not your honor that was not up that was not allow participated in it was disclosed that those was a common under common control yes your honor so you did get that evidence before that before the arbitrated it through declaration our preference would have been to call mr mark graf instead of putting that information right ration but if you if you put that if you put that into question then it seems to me that they that the arbitrator would have to accept that under the ordinary rules of summary judgment the arbitrator have to say well there's evidence here showing showing x and if the points if the points controverted then you have to go to you have to go to a hearing and that would just be art that would just be ordinary rules of summary judgment where you're secure we certainly made that argument your honor we would have preferred to call the and if you needed to us when we get those arguments all the time summary judgment was inappropriate genuine material fact and i went through your brief i really didn't see that argument i heard the procedural complaint about the technique of summary judgment but didn't see an argument that says if you're going to have s wasn't appropriate here have you made that argument to us we did your honor we specifically made that with respect to the settlement agreement issue where we said that at the very least this language was not clear on its face we needed to rely on  would have required calling witnesses in this rule twenty four it specifically says that you not only call witnesses but you could cross examine them that would have been crucial in this case for a number of issues for us to be able to call the plan's representatives the ones that made these calculations the ones that made these decisions the ones that issued the trust agreement which specifically defined employer in a different way than they are now maintaining there are all kinds of issues i would have loved to have cross examined some of these folks on here and we weren't allowed you know the arbitrator's decision on the antioch ford settlement agreement was that was that the with the agreement was limited to antioch ford and and the trust fund and that is there wasn't of that wasn't designed to affect other other dealerships that might have been under the common control of of ford now that that doesn't that doesn't seem to exclude any evidence that you've offered the district the arbitrator just said no the under i by reading this agreement i can tell that this is what this is what it means and i'm not going to allow this implicitly that i'm not going to allow this so what's the what's wrong what's wrong with that i mean that just that just doesn't seem to violate the summary judgment rule didn't have an authority but the argument was framed to us as one that you cannot at any time under any circumstances use the use the technique of summary judgment in an arbitration itself very different argument from saying that the and that that wasn't followed but we made the other argument as well i can point out our answer brief we need to we didn't spend a lot of time on it but we certainly pointed out that at the very least there was a question of fact here and it was inappropriate for the arbitrator decide as a matter of law that it was clear on the paper exactly what this settlement agreement provided and the problem with the problem with the arbitrator's ruling on this is that the the assessment against ford was essentially double double charge later on because that history that contribution base rate history was included in the calculation that we received later in two thousand and ten so it was a part of it and so the arbitrator blessed that by saying no that that that didn't apply and that the release didn't extend to described i may have missed it but i confess i didn't see it so thank  affords the parties full and equal opportunity to play their respective case or there are issues of fact that needed to be resolved in a hearing i would say they were not your honor because the arbitrator looked at that the main issue that was raised was the ne oxide on an agreement and the parties intent to that and the arbitrator looked at the agreement and said that there was no ambiguity in the agreement so therefore there was no dispute a fact ok appellants focus on the fact that rule twenty four  discusses the procedure for the opening of the hearing however while rule twenty four dollars explains the procedure for opening a hearing it does not say that a hearing must occur and all that is before the arbitrator nor does it disallow summary judgment nowhere do the rules disallow summary judgment appellants also focus on the fact that rule thirty three dollars discusses the procedure for a waiver of the oral hearing and cites back to a specific section of the p d g c rules we posit that this rule is describing a scenario most similar to a trial on the papers or tribal issues the fact do exist and the parties consent to try such issues without live testimony however again this action does not preclude they are the rules could be clearer because it doesn't to rule doesn't rule thirty three suggests that the parties have to agree yeah the parties made by written agreement to waive oral hearings to the parties agree to waive oral hearings they did not you are ok well i mean that you know the we may think of the summary judgment is is a is a terrific way of saving of saving time but the rules don't really say you can you can use summary judgment it does it does say if the parties agree to waive oral hearings then you can you can proceed to something else but that's not the case for rule thirty three just doesn't seem to be applicable to me i  understand your honor and what we posit is that the scenario described in rule thirty three like i said is more like a trial on the papers where there are issues of fact that are in dispute but the parties agree to waive oral hearings and that's similar to the other cases that we point in regard to handling this issue however they object to the cases cited by the plan which discussed nearly identical language and of the other aaa rules and court decisions affirming summer summary judgment we contend these cases must be regarded as persuasive in the absence of any other cases on point and given the broad authority given to the arbitrator by the knepper rules finally during the summary judgment proceeding appellants were permitted to present their purpose by way of declarations by way of briefs and by way of oral argument and they did a talented ample opportunity to present evidence the nd issue raised by appellants relates to the arbitrator's application of the free look before you leave the st issue i confess i back in my prejudge day i was involved in arbitration and i don't like of encountered a situation where a party said even if an arbitrator propose an alternative a party says look i really want to present a live witness and the arbitrator didn't entertain the lie witness now i don't was happening here but was ever an explanation offered as to why it was that the arbitrator declined to hear any witnesses i think what the arbitrator did was say i'm willing i'm not going to take the evidence you're hearing off the table but i'm willing to entertain a motion for summary judgment if anybody wants to the agreement is very clear there's no ambiguity so no live witness is required to interpret the agreement is it your position currently that there is no ambiguity in that agreement that's correct or there's only one interpretation that's possible yes and the admission of testimony by other people who presumably would have testified they had a different understanding of what that language map would not have had any impact i don't think it was  did the arbitrator give their notice to the sads it that it was considered summary judgment rather than having any kind of a hearing and i don't think i understand the question your honor ok well i just just wondered if i arbitrator said i don't think there's any factual problems here and that they enter summary judgment did the arbitrator do that al i'm not sure about that your honor but i know that the arbitrator did entertain the motion for summary judgment without taking that evidentiary hearing off it wasn't until pleasure just one hearing when hearing yes on here the nd issue raised by a palace relates to the arbitrator's application of the free look i'm not going to belabor what was single employer appellants reliance on the robin's case out of the northern district of illinois mis placed the exception in question and robinson was for a suspension of contributions due to a labor dispute in robbins the trust fund basically tried to argue that work control group is present the statutory exceptions to withdraw liability are in apple the illinois court rejected this argument saying that a control group employer must be treated like any other employer when applying the exceptions the major distinction here is in the wording of the exception the labor dispute exception applies when an employer suspends contributions during a labor dispute involving its employees employees of one control group member or employees of the entire single employer nothing in the wording of the state of the exception disqualified the pepsi group from utilizing the exception when applying the labor dispute exception on a control group basis but here with the free look at section it was adopted by the plan to allow a maximum five year free look for employees who st had to contribute after march st of two thousand and five the th control group clearly does not qualify under this criteria because group members were contributing before march st two thousand and five and contributed for more than five years moreover it cannot be ignored that five years later in hoosier dairy the same illinois court that decided robbins specifically stated that because one member of a control group change in corporate structure all members of the control group must qualify for the exception in penn central because the entire control group did not withdraw solely as the result of a stock sale of its last withdrawing member it was not eligible for the exception while not discussing the free look  was the only one circuit case on point and it directly supports the plan's position requiring that the entire control group qualify for the exception i had a question about the attorneys in this case the arbitrator granted attorney's  or gage didn't develop tory activities like the arbitrator did or is a criteria slightly different the criteria was slightly different your honor the great before the district where the action was extremely limited it was that the parties both both the plan and the balance filed to either confirm or set aside the arbitration award no discovery was conducted it went almost straight to summary judgment motions so there wasn't very much activity that occurred during the district court case for the judge to make a finding of fees only to the assessment in two thousand and five and the uk for a complete withdrawal and release of antioch and others is limited to that same dispute let me ask you about and i confess i may not it's possible i haven't really understood the argument being made did it is the argument as you understand it being made that the inclusion of antioch improperly from the perspective of defendants improperly shifted the time period or started the free to look time period and the clock should have been reset taking at ford off t completely as distinguished from and this is the one i'm struggling with did the calculation of the withdraw liability the the number was that affected by the inclusion of and forward could take your nd point st the what the plan did was they took that the contribution base units hours and they included them in the in the later assessment they included the any ah cowers then they deduct it as a straight deduction payment made by antioch so i came right off the top so they were credit wasn't double charging as was alleged by a palance now they was there any adverse effect to the dealership group as a result of the calculation that included the antioch forward hours i couldn't tell you if that dollar amount what the difference would have been or if there was a difference but  gave them the most favorable credit possible when including them in the control group my understanding of their argument why they believe that the any outside of an agreement held something different was that they believed it completely absolved antioch from any future withdraw liability claims whatsoever rather than relating to the two thousand and five assessment of antioch that the plant had done well the agreement does appear to have been aimed at attaining complete peace for ford which i understood was closing it doors and so if there is an adverse effect on the dealership group by including ours for a settlement that had been achieved and was presumably aimed at obtaining complete peace why isn't that inconsistent i don't think it is because the the any uk settlement agreement specifically referred to the dispute the dispute is that two thousand and five assessment and that they were complete forward we didn't know at the time th proceedings were going on that any op was part of a greater control group of four that didn't come out later until two thousand and nine and so looking back at it they were now included in the control group but they were given the most favorable treatment possible well you say it's the most favorable treatment possible but if in fact you can't tell me that they would have been better off of any forward disappeared better off in a calculation sense not the starting of the st free look period then i'm not sure it's the best possible result i should clarify my statement the best possible result when including them in the control group there was another way to pick them to calculate their inclusion and their their amortization of their payment which would have been less favorable to them the plan gave them the most reference to ford it did so how could it be unknown to anybody that there was a relationship such that they could have been later deemed part of the same control group otherwise that they were never of been a reference to forward with their i can't speak to that specific fact well i mean it's a if if in fact they got a settlement agreement but it worked out the numbers they were assessed later included some of those hours that had already been worked and had work history by two thousand and five or whatever the year it was why isn't there some merit to the argument that the assessment is reaching back to extract more money from the group that included and ford for things that it had already achieved a settlement agreement and should have gotten complete base and unite by arguments to the terms of the agreement which define that this viewed as that two thousand and five complete just to circle back on that argument that you may have missed in our in our papers and our opening brief we made that argument at page thirty five and then in our answering brief at page fourteen and again that was just the argument that even putting aside the specific rules that govern in this case summary judgment is inappropriate here because the language itself was not the language is was ambiguous and thus it should have been adjudicated as a matter of law or did you use the words interpretation was an issue of fact it was inappropriate for the arbitrator to grant summary judgment an error for the district court to confirm that decision well you can judge facts on papers that doesn't go to the question of demeanor of witnesses so the question of whether live testimony would have altered this and whether you had whether credibility determinations were at issue that doesn't that doesn't really go to that well your honor i think it does and we just saw counsel fail to be able to explain exactly what the language in the agreement said and so our position is that the language itself is is ambiguous it raises all these questions that were raised by the panel about if if wanted to by piece that how would it how is it i would do that and that's clearly what it meant to do it's hard to imagine broader language  you know i would challenge the plan to cite language that could have been cited in the settlement agreement to actually buy complete peace and not have that been counted against this control group five years later under a much higher withdraw liability amount because we have to keep that in mind i mean council referred this is to a favorable outcome but it certainly wasn't because what the plan did was a calculated the contribution base units for all the dealerships including and you know ford which thought it had bought piece back in two thousand and five but then calculated at the much higher withdraw liability rate in two thousand and ten and so that the difference in the underlying assessment is substantial you know a one million dollars it's it's a material issue and that's why  arbitration and one that deserves an evidentiary hearing we wanted to call these folks who negotiated this settlement agreement said what were you intending to do here why did you and why did you refer to the control group why did you so broadly define point of this exercise was for antioch ford to buy peace if it didn't if it didn't want to buy peace or didn't want to have a full release it could just pay the assessment under these consensus is a settlement agreement not necessary it's only if you want to do something in addition it released these other claims against the other four companies because they were all within the within common control or no you are no because that was a later assessment or later withdraw from those entities so that wouldn't have been a particular spew at the time the  issue that were we have with the the application of the exon agreement is the fact that antioch was not what's counted again later and lots of doesn't tell us the problem exactly ok which has a monetary effect so i indicated before i had understood the argument have more to do with when the st look period starts but i take it you're confirming what i was stumbling about with your colleague is there an adverse monetary effect on your clients as a result of including the anti forward hours and doing the arithmetic calculation that leads to the withdrawal liability absolutely your honor it says you know what that is how i don't know the exact number we did have an actuary calculate this on point i want to say it's a one million dollars to some like that almost half ing the the assessment itself by including that it's those that count and there but yeah it was substantial even if we thought there was a double counting problem what's that what's the remedy well there are i think that right i'm not sure if we if we mention them are brief they're certainly on the record jomar graf was the ford representative who negotiated the ford settlement back in two thousand and five so he had to go share it with that with the plans council so we were able to present him as a live witness and we presented a declaration for him but certainly he would have been our key witness at the evidence you're hearing thank you counsel thank you think of counsel for the argument the automobile industry pension fund for south city motors is submitted