Source: http://de.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20190801_0000651.C03.htm/qx
Timestamp: 2020-08-15 09:04:55
Document Index: 215735482

Matched Legal Cases: ['§ 1001', '§ 1385', '§ 4205', '§ 1301', '§ 4001', '§ 4001', '§ 1381', '§ 1385', '§ 1385']

FindACase™ | Caesars Entertainment Corp. v. International Union of Operating Engineers Local 68 Pension Fund
INTERNATIONAL UNION OF OPERATING ENGINEERS LOCAL 68 PENSION FUND, Appellant
Argued on April 2, 2019
On Appeal from the United States District Court for the District of New Jersey (D.C. No. 2-17-cv-02450) District Judge: Honorable Kevin McNulty
Michael T. Scaraggi [Argued] Oransky Scaraggi Borg & Abbamonte Attorney for Appellant
James E. Tysse [Argued] Eric D. Field Lawrence D. Levien Pratik A. Shah Raymond P. Tolentino Akin Gump Strauss Hauer & Feld Brian T. Carney Stephanie L. Lindemuth Akin Gump Strauss Hauer & Feld One Bryant Park Attorneys for Appellee
Before: CHAGARES, HARDIMAN, and SILER, [*] Circuit Judges.
To safeguard private pensions, Congress enacted the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 829, as amended, 29 U.S.C. § 1001 et seq. Six years later, Congress tried to shore up multiemployer pension plans by passing the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA), Pub. L. No. 96-364, 94 Stat. 1208. The MPPAA imposes liability on employers who withdraw from covered plans by ceasing contributions in whole or in part. This appeal involves one type of partial withdrawal, "bargaining out," which occurs when an employer "permanently ceases to have an obligation to contribute under one or more but fewer than all collective bargaining agreements under which the employer has been obligated to contribute . . . but continues to perform work . . . of the type for which contributions were previously required." 29 U.S.C. § 1385(b)(2)(A)(i) (ERISA § 4205(b)(2)(A)(i)).
The relevant facts are undisputed. Appellee Caesars Entertainment Corporation (CEC) once operated four casinos in Atlantic City: Caesars, Bally's, Harrah's, and Showboat. These comprised a "controlled group" under ERISA, with CEC being the "single employer" of the group. 29 U.S.C. § 1301(b)(1) (ERISA § 4001(b)(1)); accord 29 C.F.R. § 4001.2. CEC bargained with the International Union of Operating Engineers, Local 68 (the Union), for engineering work at all four casinos. Under their collective bargaining agreements with the Union, each casino had to contribute to the Union's multiemployer pension fund (the Fund). The Fund had 259 contributing employers making some $14 million in annual payments. See Local 68 Engineers Union Pension Plan, Form 5500: FY 2013 Annual Return/Report of Employee Benefit Plan 2, 23 (2015).
In 2014, the Showboat casino closed, and CEC stopped contributing to the Fund for engineering work there. The other three casinos under CEC's control remain open, and CEC continues to pay the Fund for their Union work. Showboat's closure reduced CEC's total contributions to the Fund by 17%- well below the MPPAA's 70% threshold that would have automatically triggered liability for a partial withdrawal. See 29 U.S.C. §§ 1381, 1385(a)(1).
Although CEC was not automatically liable, the Fund claimed CEC was liable under the bargaining out provision of the MPPAA, which applies when an employer:
[1] permanently ceases to have an obligation to contribute under one or more but fewer than all collective bargaining agreements under which the employer has been obligated to contribute under the plan but [2] continues to perform work in the jurisdiction of the collective bargaining agreement of the type for which contributions were previously required or transfers such work to another location or to an entity or entities owned or controlled by the employer.
Id. § 1385(b)(2)(A)(i) (emphasis added); see id. § 1385(a)(2). CEC disagreed. So the parties went to arbitration, and CEC lost. The arbitrator held CEC had triggered both clauses [1] and [2] of the bargaining out provision. As relevant to this appeal, the arbitrator reasoned clause [2] applied because "[t]he type of work for which contributions were required at the closed Showboat is the same type of work currently being done at the remaining casinos." 2 App. 345.
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The District Court reversed the arbitrator&#39;s decision. Caesars Entm&#39;t Corp. v. IUOE Local 68 Pension Fund, 2018 WL 3000176, at *1 (D.N.J. June 15, 2018). The Court assumed without deciding that, under clause [1], the jurisdiction of the Showboat CBA included all engineering work in Atlantic City. But it held that, under clause [2], liability exists only when an employer replaces (a) work that contributes to the pension fund with (b) "work-of the same sort-that does not." Id. at *8. Such replacement hadn&#39;t occurred here because CEC&#39;s "constituent members [aside from the shuttered Showboat] continue to contribute to the Fund for all engineering work they perform throughout Atlantic City." Id. at *9. To ...