Opinion ID: 524085
Heading Depth: 2
Heading Rank: 1

Heading: Whether Banner was an employer.

Text: 38 After the district court's decision, the Third Circuit affirmed a District of Delaware decision discussed by the district court here on pages 880-81 of its opinion. We consider the Third Circuit's opinion in Flying Tiger Line v. Teamsters Pension Trust Fund, 830 F.2d 1241 (3d Cir.1987), to be persuasive authority on the issues raised by these parties. See also ILGWU Nat. Retirement Fund v. Levy Bros. Frocks, 846 F.2d 879, 886 (2d Cir.1988), which observed that several circuits have agreed that an employer can be subject to the arbitration provisions of MPPAA even if it arguably was not obligated to contribute to a multiemployer plan during the relevant period for determining withdrawal liability. 39 Flying Tiger Line, like Banner Industries, also required determining whether a federal district court or an arbitrator should resolve whether an entity is an employer subject to the MPPAA, an issue arising in the evade or avoid context of Sec. 1392(c). Flying Tiger Line, 830 F.2d at 1243. In perspective of an excellent and complete overview of the MPPAA, id. at 1243-44, that Third Circuit opinion explained that the District of Delaware had certified the following question for appeal: 40 May a corporation that legitimately believes its status as a MPPAA employer is doubtful have that issue resolved by a federal court in a timely declaratory action, wherein the federal district court will determine the legal and factual issues necessary for a determination that the corporation is subject to MPPAA liability and procedures, or must the issue of MPPAA applicability and liability instead be determined by a MPPAA arbitrator? 41 Id. at 1247, quoting The Flying Tiger Line, Inc. v. Central States, Southwest & Southeast Areas Pension Fund, No. 86-304, mem. order p 1 (D.Del. Dec. 4, 1986). The Third Circuit concluded that where the party against which withdrawal liability is asserted surely had been a part of the controlled group of an employer subject to the MPPAA at some juncture, and where the disputed questions fall within the scope of MPPAA provisions which are explicitly designated for arbitration, the statute's dispute resolution machinery must be invoked. Flying Tiger Line, 830 F.2d at 1247. 42 In Flying Tiger Line, Tiger International, Inc. (Tiger) contended that the issue was whether Tiger was an employer at the time of a bankrupt's withdrawal from the bankrupt's multiemployer pension plans. Id. at 1247. But the primary dispute between Tiger and the funds was whether a crucial sale by Tiger must be ignored under the MPPAA evade or avoid provision. Id. This being the case, the Third Circuit was guided by clear Sec. 1401(a)(1) language: disputes between an employer and the plan sponsor of a multiemployer plan concerning determinations made under Secs. 1381-1399 of that Title should be resolved via arbitration. Id. at 1247-48. Flying Tiger Line, like this case, is an evade or avoid case, not an employer case. Id. at 1248. 4 43 Tiger proposed that an alleged employer may bring a declaratory judgment action to have its status determined before such a corporate entity need arbitrate. Id. at 1249. Although no provision of MPPAA specifically defines who resolves issues of the status of a one-time employer, the statutory framework expressly provides that once an entity is an employer it will be deemed to have withdrawn when permanently ceasing to have an obligation to contribute under the plan. 29 U.S.C. Sec. 1383(a). Under Sec. 1381 such an employer is assessed withdrawal liability, unless satisfying the statutory provision relieving it of such liability. Id. at 1250. 44 The Third Circuit approvingly drew upon the excellent legal discussion by the district court in this case to satisfy itself that the question of whether one remains an employer on the date of withdrawal is not identical to the question of whether one ever became an MPPAA employer. The focus of the Flying Tiger Line/Banner Industries controversy is on continued employer status, an inherently different problem from mere employer status. Id. at 1250-51. Courts that have resolved employer status questions before arbitration have confronted entities which, unlike those of Flying Tiger Line/Banner Industries, never had been employers subject to the MPPAA, and which therefore legitimately challenged application of the MPPAA dispute resolution process to them. Id. at 1251. 45 Tiger claimed that because its complaint challenged the applicability of the entire MPPAA administrative scheme to its dispute, Tiger could not be compelled to arbitrate the question of arbitral jurisdiction. Id. But the Flying Tiger Line district court had not compelled Tiger to arbitrate a legal question of the arbitrator's jurisdiction, but had considered the statutory issue and decided that the dispute was arbitrable under Sec. 1401. Id. at 1251-52. Here, likewise, the district court considered the statutory issue and decided the dispute must be arbitrated under the MPPAA. The Third Circuit affirmed the district court order staying the first count of Tiger's complaint pending MPPAA arbitration. For the reasons articulated by the Third Circuit in Flying Tiger Line, we affirm the district court here. 46