Opinion ID: 506205
Heading Depth: 1
Heading Rank: 4

Heading: arbitrability of count 2 (payments to reduce the dairy

Text: FUND'S LIABILITIES) 32 Count 2 of Colteryahn's complaint, as we understand it, seeks a determination whether certain payments made at the time of the merger should be counted as contributions for the purpose of apportioning the Fund's unfunded vested liabilities among its member employers. Section 1391 requires such apportionment to assess a withdrawal liability sum. The district court held that, under 29 U.S.C. Sec. 1401, Colteryahn must first exhaust the administrative remedy of arbitration before proceeding on this claim to district court. We agree. 33 Section 1401(a)(1) states: Any dispute between an employer and the plan sponsor of a multiemployer plan concerning a determination made under sections 1381 through 1399 of this title shall be resolved through arbitration. 29 U.S.C. Sec. 1401(a)(1) (emphasis added). In Republic Industries v. Central Pennsylvania Teamsters Pension Fund, 693 F.2d 290 (3d Cir.1982), we explained that 34 Congress, in enacting MPPAA, expressed a clear preference for self-regulation through arbitration, 29 U.S.C. Sec. 1401(a)(1); ... Thus, in accordance with the exhaustion doctrine's policy of deference to Congress, the legislature's decision that arbitration, and not the courts, is the proper forum for the initial resolution of disputes should be respected. Id. at 294-95. 14 35 Colteryahn contends, however, that this is a pure legal issue, the resolution of which requires only the interpretation of a statute, and no factual development. Moreover, Colteryahn claims that, at this early stage in the litigation, the Fund has not yet identified any disputed issues of material fact. Without such a factual dispute, Colteryahn contends, arbitration is unnecessary. Colteryahn's contentions, however, are entirely undercut by our recent decision in Flying Tiger Line v. Teamsters Pension Trust Fund, 830 F.2d 1241 (3d Cir.1987). 15 36 In Flying Tiger we noted that Sec. 1401 does not differentiate between legal and factual questions; it simply dictates that '[a]ny dispute between an employer and the plan sponsor ... shall be resolved through arbitration.' 29 U.S.C. Sec. 1401 (1982). 830 F.2d at 1255 (emphasis and ellipsis supplied by Flying Tiger court). We therefore held that  'it should be beyond cavil that the existence of an issue of statutory interpretation, standing alone, does not justify bypassing arbitration.'  Id. (quoting I.A.M. Nat'l Pension Fund, Plan A, A Benefits v. Clinton Engines Corp., 825 F.2d 415, 418 (D.C.Cir.1987)); 16 see also Teamsters Pension Trust Fund--Bd. of Trustees of W. Conference v. Allyn Transp. Co., 832 F.2d 502, 504 (9th Cir.1987) (questions of statutory interpretation are not excepted from arbitration under MPPAA (footnote omitted)). Thus, where the issue of statutory interpretation involves only a MPPAA section that Congress explicitly reserved for arbitration, arbitration is the appropriate route for resolution of the dispute. Flying Tiger, 830 F.2d at 1254. 37 As noted above, Colteryahn seeks a determination whether payments made to reduce the unfunded liabilities of the Dairy Fund at the time of the merger constitute contributions within the meaning of Sec. 1391 for the purpose of calculating Colteryahn's withdrawal liability. We believe that such a question constitutes the type of calculation issue for which MPPAA arbitration is most appropriately designed, because it is directly related to the actual determination of the size of the assessment. Unlike the fraudulent inducement claims, which concern events external to the actual calculation of the assessments (e.g., representations made by the Fund to Colteryahn and the extent of Colteryahn's reliance on these representations), Count 2 challenges the calculation itself, contending that the wrong inputs were plugged into the equation when doing the actual computation. In sum, Colteryahn's challenge concern[s] a determination made under sections 1381 through 1399 and therefore, by the very terms of the statutory mandate, shall be resolved through arbitration. 29 U.S.C. Sec. 1401(a)(1). 17 38 We therefore will affirm the district court's holding that Colteryahn must first submit Count 2 to arbitration. However we will reverse the court's order insofar as it dismissed Count 2 outright. The logical course would have been to stay proceedings on Count 2 until arbitration is completed, see, e.g., Flying Tiger, 830 F.2d at 1256, and we will so order.