Opinion ID: 495432
Heading Depth: 2
Heading Rank: 3

Heading: Relevant Decisional Law

Text: 29 Tiger relies primarily on this Court's decision in Barker & Williamson for the proposition that an alleged employer may bring a declaratory judgment action to have its status determined before such a corporate entity must engage in arbitration. We there suggested that, in addition to (1) trustee review and arbitration, or (2) complete inaction, 30 a third course ... available ... [to a] corporation [that] legitimately believes its status as a controlled group member is doubtful[ is to] bring a declaratory judgment action to have that question resolved by a federal court. In such a proceeding, the corporation could request that the court enjoin the running of the statutory period for seeking review and arbitration.... [T]he corporation [could also] ... request[ ] review by the fund and arbitration and mak[e] the interim payments to the fund contingent upon the outcome of the declaratory judgment action. 31 788 F.2d at 129. 32 The language of Barker & Williamson cannot be read so broadly as to change the clear meaning of MPPAA section 1401. In Barker & Williamson, this Court was required to interpret MPPAA section 1301 to determine whether Sentinel Electronics, Inc. (Sentinel), the putative controlled group member, had become such an employer at the time Barker & Williamson, Inc. (B & W), the contributing employer, completely withdrew from its multiemployer pension plan. 788 F.2d at 123. The central legal question in Barker & Williamson asked whether Sentinel's interest in certain B & W stock constituted an option that gave Sentinel constructive ownership over B & W as of that date. Id. When B & W defaulted on its payments, the fund's trustees alleged that Sentinel was a member of B & W's controlled group, that Sentinel and B & W were a single employer under MPPAA section 1301(b), and, therefore, that Sentinel was liable for the full amount of B & W's withdrawal liability. Sentinel did not challenge the trustees' assessment of withdrawal liability in any fashion; it simply d[id] nothing[,] ... gambl[ing] that it w[ould] not later be found to be a member of a controlled group with the withdrawn employer. Id. at 129. We affirmed the district court's legal determination that Sentinel was the constructive owner of B & W's stock on the date in question, id. at 122-26, and, accordingly, we held Sentinel liable for the full amount of B & W's withdrawal liability. Id. at 129-30. By do[ing] nothing, Sentinel los[t] the possibility of review and arbitration under MPPAA. Id. at 129. 33 The factual context of Barker & Williamson defines one relatively clear limit on the declaratory judgment course of action. Our reference there to this third course of action referred to disputes, such as Sentinel's unsuccessful stock option/controlled group argument, that arise under MPPAA provisions that fall outside of the section 1381 through 1399 range. The reference does not undermine section 1401's clear mandate that disputes within that range of sections be arbitrated. 34 We emphasize the legal dissimilarity of the two disputes. In Barker & Williamson, the issue was whether Sentinel had become a MPPAA employer in time to incur liability for B & W's withdrawal. Here, the issue is whether Tiger ceased to be a MPPAA employer in time to avoid liability for Hall's withdrawal. The latter unavoidably raises an evade or avoid issue under section 1392(c) that cannot be a part of the former. This dispute centers, in other words, upon the trustees' determination under section 1392(c) that a principal purpose of Tiger's sale of Hall's stock was to evade or avoid withdrawal liability; it is not simply a matter of whether Tiger was an employer as defined by the statute at the time of Hall's withdrawal. 14 35 While no provision of MPPAA specifically addresses who should resolve questions concerning the status of a one-time employer, the statutory scheme specifically provides that once an entity is an employer, it will be deemed to have withdrawn when it permanently ceases to have an obligation to contribute under the plan. 29 U.S.C. Sec. 1383(a) (1982). Any such employer will, under MPPAA section 1381, be assessed withdrawal liability unless that employer satisfies a statutory provision relieving it of liability. A district court in Banner Indus., Inc. v. Central States, Southeast & Southwest Areas Pension Fund, 657 F.Supp. 875, issues certified for appeal, 663 F.Supp. 1290, subsequent opinion, 663 F.Supp. 1292 (N.D.Ill.1987), recently concluded that 36 [w]hether the requirements of [a statutory] safe-haven have been satisfied necessarily turns on the facts of each case.... [T]he issue of whether one remains an employer on the date of withdrawal is not the same issue as whether one ever became an employer for the purposes of ERISA generally and MPPAA in particular. The latter is an issue for the court since its resolution determines the arbitrator's authority over the dispute. The former is an issue for the arbitrator since its resolution turns on the applicability of MPPAA provisions relating to employer withdrawals--provisions Congress specifically placed within the purview of the arbitrator. 37 657 F.Supp. at 882 (footnote omitted); accord id. at 883 ([W]e disagree with Banner that the factual disputes in this case bear on Banner's 'employer' status. Rather, they bear on Banner's continued employer status, an inherently different question.) (original emphasis); cf. Tri-State Rubber & Equip., Inc. v. Central States Southeast & Southwest Areas Pension Fund, 661 F.Supp. 46, 47 (E.D.Mich.1987) (No court has required interim payments from a company that claims it was never 'an employer.' ) (emphasis added). We find this distinction to be persuasive. 38 Courts that have resolved employer status questions prior to arbitration have been concerned with entities that never have been employers subject to MPPAA and that, therefore, legitimately question application of MPPAA's dispute resolution procedures to them. For example, in Central Transp., Inc. v. Central States, Southeast & Southwest Areas Pension Fund, 639 F.Supp. 788 (E.D.Tenn.1986), aff'd per curiam in an unpublished opinion, 816 F.2d 678 (6th Cir.) (table) (opinion available on LEXIS, Genfed library, USApp file), petition for cert. filed, 56 U.S.L.W. 3185 (U.S. Sept. 22, 1987), a corporation, Central Transport, entered into an agreement to purchase Mason & Dixon Lines, Inc., the parent of a subsidiary corporation called Tank Lines. This purchase agreement, however, was contingent upon Interstate Commerce Commission (ICC) approval. Before such approval was received, Tank Lines ceased contributing to its multiemployer pension plans. While the ICC subsequently did approve Central Transport's purchase agreement, the court held Central Transport was not liable for Tank Line's withdrawal because Central Transport had not exercised control over Tank Lines at the time the withdrawal occurred. The court held as a matter of law that, as of the withdrawal date, Central Transport had never been an employer. See 639 F.Supp. at 791; cf. United Paperworkers Int'l Union, Local No. 35 Pension Plan v. Arlington Sample Book Co., 5 Employee Benefits Cas. (BNA) 1948 (E.D.Pa.1984) (issue whether president and sole shareholder of a MPPAA corporate employer was himself an employer under MPPAA sections 1002(5) and 1002(9)); Refined Sugars, Inc., 580 F.Supp. 1457 (issue whether corporation was an employer); Baldwin v. Shopmen's Ironworkers Pension Trust of S. Calif., 3 Employee Benefits Cas. (BNA) 1713 (C.D.Cal.1982) (issue whether two sole shareholders were employers).