In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 01-2558

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS

PENSION FUND, and HOWARD MCDOUGALL, Trustee,

Plaintiffs-Appellees,

v.

HUNT TRUCK LINES, INC.,

Defendant-Appellant.

____________

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 00 C 1204—Ronald A. Guzman, Judge.

____________

ARGUED JANUARY 25, 2002—DECIDED JULY 23, 2002

____________

Before MANION, KANNE, and WILLIAMS, Circuit Judges.

KANNE, Circuit Judge. In 1994, Hunt Truck Lines, Inc.

withdrew from the Central States, Southeast and Southwest Areas Pension Fund (“Central States”). Usually, this

would give rise to withdrawal liability on Hunt’s part under

the Multiemployer Pension Plan Amendments Act of 1980,

29 U.S.C. §§ 1381-1461 (the “MPPAA”). However, because

Hunt sold its assets to another company, Wintz Parcel

Drivers, Inc., Hunt did not face withdrawal liability provided that Wintz continued to make payments to the fund.

In 1996, one of Wintz’s subsidiaries went bankrupt, triggering withdrawal liability on Wintz’s part. Initially, Central
2 No. 01-2558

States sent a notice to Wintz demanding that it begin making installment payments on the withdrawal liability, but

Wintz defaulted. That default permitted Central States to

pursue Hunt’s secondary liability for the withdrawal payments.

A. Proceedings before Judge Nordberg

On May 31, 1996, Central States sent Hunt a notice

demanding that it begin making interim payments on its

withdrawal liability. Hunt refused to pay, and Central

States brought suit seeking interim withdrawal payments,

and the case was assigned to Judge John A. Nordberg.

Although in most cases, a district court routinely grants

an order allowing a pension plan to obtain interim payments, Hunt I proved to be an exception to that rule. In

Hunt I, Judge Nordberg noted that Central States sent

the original notice to Hunt on May 31, 1996, but that Central States conceded in its motion for summary judgment

that Wintz did not withdraw from the plan until “on or

about July 20[, 1996].” Because Hunt could not have incurred withdrawal liability until Wintz actually withdrew

from the plan, it was clear that Central States had sent the

original demand at least one and one-half months before

Hunt incurred any liability. Judge Nordberg then held that

although the MPPAA provision regarding interim payments

was broad, it did not allow Central States to seek payments

until after Hunt incurred withdrawal liability. Therefore,

Judge Nordberg granted summary judgment in favor of

Hunt, finding that Central States failed to comply with the

statutory prerequisites of the MPPAA.

B. Arbitration Proceedings

On December 20, 1996, Hunt initiated arbitration of the

withdrawal liability assessment pursuant to 29 U.S.C.
No. 01-2558 3

§ 1401, and the arbitration was assigned to arbitrator Ira

F. Jaffe. On June 23, 1998, the arbitrator also concluded

that Hunt had been billed prematurely and issued an interim arbitration award containing the affirmative order

directing Central States to issue a revised demand, noting

that a revised demand was preferred to “starting the process anew.”

On July 1, 1998, pursuant to the arbitrator’s interim

award, Central States issued a revised Notice and Demand

for Withdrawal Liability against Hunt seeking payments

from Hunt from November 1, 1996 until May 1, 1999. On

October 14, 1998, the interim award was converted to a

final award by stipulation of the parties. The final arbitration award, however, did not specifically require Hunt

to actually make any withdrawal payments. Rather, it

solely ordered Central States to issue the revised demand.

C. Proceedings before Judge Shadur

On October 15, 1998, Central States filed suit seeking to

enforce the arbitration award, and the case was assigned to

Judge Milton Shadur. Central States’ complaint sought to

affirm and enforce the arbitrator’s final award and to enter

judgment against Hunt in accordance therewith. On April

8, 1999, Judge Shadur entered judgment enforcing the final

award. On April 26, 1999, Central States filed a Rule 59(e)

motion to amend judgment, seeking to amend the judgment

to provide for monetary relief because, as noted above, the

arbitration’s award did not provide for withdrawal payments. Judge Shadur denied the motion, noting that his

power was limited to determining whether the arbitrator’s

decision was correct. At no time, however, did Judge Shadur

rule on the ultimate issue of whether Hunt was liable for

the withdrawal under the MPPAA or on what would happen

if Hunt refused to make payments under the revised demand.
4 No. 01-2558

D. Our Prior Decision

On May 6, 1999, Hunt appealed Judge Shadur’s judgment

enforcing the final award. On June 30, 1999, Central States

moved to consolidate its appeal of Judge Nordberg’s decision with its appeal of Judge Shadur’s judgment and denial

of Central States’ motion to amend judgment, and we issued

an ordered consolidating the appeals.

On appeal, this court affirmed both lower courts. See

Cent. States, Southeast and Southwest Areas Pension Fund

v. Hunt Truck Lines, Inc., 204 F.3d 736, 743 (7th Cir. 2000)

(“Hunt I”). With regard to the appeal of Judge Nordberg’s

decision, we rejected Central States’ effort to argue that “on

or about July 20” could mean “as early as May 3” and held

that Central States was bound by its admission before the

district court and thus the date of withdrawal was not

legitimately in dispute. See id. at 742. We further concluded

that under the MPPAA, a pension fund was not permitted

to issue a notice and demand for withdrawal liability until after the employer incurred such liability. See id. Because Wintz had not withdrawn at the time Central States

issued the original demand to Hunt, we held that Central

States’ failure to comply with this procedural requirement

meant that Central States could not collect interim payments based on the May 31, 1996 notice. See id.

In affirming Judge Shadur’s rulings, we noted that

Arbitrator “Jaffe’s sole affirmative order was that Central

States issue the demand,” and that Judge Shadur was correct to deny Central States’ Rule 59(e) motion. Writing for

the court, Judge Evans concluded by stating that

[W]e wish to make absolutely clear that, while Central

States cannot recover on this appeal, our decision does

not preclude future recovery. In fact, it appears certain that Central States will (and should) receive the

full withdrawal fee to which it is entitled. As per

arbitrator Jaffe’s award, the fund has issued Hunt a
No. 01-2558 5

Œ Subsequently, Hunt sought attorney’s fees, which were awarded

by the district court. However, on appeal, we held that the district

court had abused its discretion in awarding attorney’s fees because there was no dispute that Hunt would ultimately face

withdrawal liability. See Cent. States, Southeast and Southwest

Areas Pension Fund v. Hunt Truck Lines, Inc., 272 F.3d 1000,

1006 (7th Cir. 2001) (“Hunt II”). In so holding, Judge Diane Wood,

writing for the court, again instructed Hunt to pay for the withdrawal liability and questioned Hunt’s failure to do so. See id.

at 1003.

renewed demand. Central States appears to be under

the impression that either Judge Nordberg’s or Judge

Shadur’s opinions preclude it from collecting on this

second demand. This is not the case. Since both judges’

rulings focused solely on the fund’s prior, premature

demand. (Indeed, it should already be complying.) If

Hunt fails to pay on this demand, Central States need

merely file suit under the MPPAA’s enforcement

scheme to ensure that it receives interim payments.

Id. at 743.Œ

E. The Present Suit

Following our dictate, Central States filed suit against

Hunt for collection of withdrawal liability for a complete

withdrawal by Hunt, and the case was assigned Judge

Ronald A. Guzman. Ignoring our statement that the prior

judgments would “not preclude” Central States from collecting under the renewed demand, Hunt argued that res

judicata precluded Central States’ action. Central States

responded that this suit was the first to determine Hunt’s

ultimate liability under the revised demand. Hunt moved

for summary judgment, contending that the present case

was res judicata or, in the alternative, that laches should

bar recovery. Central States moved for summary judgment
6 No. 01-2558

arguing, inter alia, that res judicata did not apply because

we had explicitly stated in Hunt I that a subsequent action

would not be precluded and because Hunt’s failure to make

payments under the revised demand constituted a new

wrong.

The district court rejected Hunt’s argument and granted

summary judgment in favor of Central States, while denying Hunt’s cross-motion. The district court initially noted

that the prior judgments involved the various procedural

issues and “not collection under the revised demand should

Hunt choose to disregard payments pursuant to the revised

demand.” The district court then held that the failure to

pay under the revised demand constituted a new wrong and

thus was not res judicata. Hunt appeals, resting solely on

its argument that this claim is res judicata.

I. Analysis

We review a grant of summary judgment de novo, viewing all of the facts and drawing all reasonable inferences

therefrom in favor of the nonmoving party. See Cent. States,

Southeast and Southwest Areas Pension Fund v. White, 258

F.3d 636, 639 (7th Cir. 2001). Because the prior litigation

was brought in federal court on a federal claim, the federal

rule of res judicata determines whether res judicata applies

to the present action. See In the Matter of Energy Co-op.,

Inc., 814 F.2d 1226, 1230 (7th Cir. 1987). The three requirements for res judicata under federal law are: (1) an identity

of the parties or their privies; (2) an identity of the causes

of actions; and (3) a final judgment on the merits. See id.

There is no dispute that the first element was satisfied.

Rather, the parties dispute whether the remaining two

elements have been satisfied.

The record shows that both the action before Judge

Nordberg and the action before Judge Shadur, as well as
No. 01-2558 7

our decision in Hunt I, concerned the procedural propriety

of Central States’ original demand and Arbitrator Jaffe’s

directive to revise the date of the demand notice. Thus, no

previous action has ever addressed Hunt’s ultimate liability

under the revised demand. Further, neither party disputes

that the subject of the arbitration was the May 31, 1996

original demand only and did not concern a scenario where

Hunt chose to disregard payment pursuant to the revised

demand. Therefore, we conclude that Hunt’s failure to make

payments under the revised demand is a new wrong and

thus the causes of action are not identical.

Moreover, a final judgment on the merits of Hunt’s ultimate liability under the revised demand is also absent. As

Judge Guzman succinctly noted, “[t]he thrust of the prior

decisions in the district court and the Seventh Circuit was

that Central States’ original demand for withdrawal liability was premature and whether the appropriate method

to cure this defect could in fact be a revised demand rather than recission. The procedural ramifications of Central

States’ premature notice is separate and distinct from the

substantive merits of the final withdrawal liability assessment.”

Furthermore, Hunt’s contention that the present suit

is res judicata also fails because “[u]nder a generally accepted exception to the res judicata doctrine, a litigant’s

claims are not precluded if the court in an earlier action

expressly reserves the litigant’s right to bring those claims

in a later action.” D & K Prop. Crystal Lake v. Mutual Life

Ins. Co. of New York, 112 F.3d 257, 260 (7th Cir. 1997)

(quoting Apparel Art Intern, Inc. v. Amertex Enter. Ltd., 48

F.3d 576, 586 (1st Cir. 1995)). The Second Restatement also

specifically addresses the issue at hand and provides that

“the general rule of § 24 does not apply to extinguish the

claim, and part or all of the claim subsists as a possible

basis for a second action by the plaintiff against the defendant [when] [t]he court in the first action has expressly
8 No. 01-2558

reserved the plaintiff’s right to maintain the second action . . . .” Restatement (Second) of Judgments § 26(b)(1)

(1982). Indeed, we have previously held that “[i]f a court

reserves for later resolution an issue that might otherwise have been adjudicated in the initial proceeding, res

judicata will not operate to bar the subsequent suit.” See

Energy Co-op, 814 F.2d at 1233.

In Hunt I, we specifically held that “[w]hile Central

States cannot recover on this appeal our decision does not

preclude future recovery,” and that if Hunt failed to pay on

the revised demand, Central States needed merely to file

suit under the MPPAA’s enforcement scheme to ensure that

it received the appropriate payments. 204 F.3d at 743 (emphasis added). Therefore, even if we were to assume that

the claims were identical and that a final judgment on the

merits had been entered, res judicata would not apply due

to our express language in Hunt I. See D & K Prop., 112

F.3d at 260; Energy Co-op, 814 F.2d at 1233.

II. Conclusion

For the foregoing reasons, we AFFIRM the judgment of the

district court.
No. 01-2558 9

MANION, Circuit Judge, concurring. The only reason

res judicata does not apply here is because of this court’s

(albeit a different panel) express language in Hunt I declaring that the decision would not preclude future recovery. When arbitrator Jaffe eventually issued his final

award that did not include a requirement that Hunt make

the withdrawal payments, Central States could and should

have brought a suit to modify the award rather than to

simply enforce it. Section 1401(b) of ERISA permits both

options. Under other circumstances, Central States’ failure to sue to modify would preclude its current suit to

collect the withdrawal liability under the doctrine of res

judicata. Hunt I’s declaration that Central States is not

precluded created the law for this case that would not be

applicable otherwise.

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-97-C-006—7-23-02