Court Opinion

ID: 4413895
Source: CourtListenerOpinion
Date Created: 2019-07-03 19:00:21.267735+00
Date Added: 2024-06-11T14:50:46.402393
License: Public Domain

PUBLISHED

                             UNITED STATES COURT OF APPEALS
                                 FOR THE FOURTH CIRCUIT

                                        No. 17-2295

BOARD OF TRUSTEES, SHEET METAL WORKERS’ NATIONAL PENSION
FUND,

               Plaintiff – Appellant,

and

BOARD OF TRUSTEES, INTERNATIONAL TRAINING INSTITUTE FOR THE
SHEET METAL AND AIR CONDITIONING INDUSTRY; BOARD OF
TRUSTEES,   NATIONAL    ENERGY    MANAGEMENT      INSTITUTE
COMMITTEE; BOARD OF TRUSTEES, SHEET METAL OCCUPATIONAL
HEALTH INSTITUTE TRUST FUND; BOARD OF TRUSTEES, SHEET
METAL WORKERS’ INTERNATIONAL ASSOCIATION SCHOLARSHIP
FUND; BOARD OF TRUSTEES, NATIONAL STABILIZATION AGREEMENT
FOR THE SHEET METAL INDUSTRY TRUST FUND,

               Plaintiffs,

v.

FOUR-C-AIRE, INC.,

               Defendant – Appellee.

------------------------------

BAKERY    AND   CONFECTIONERY                   UNION    AND      INDUSTRY
INTERNATIONAL PENSION FUND,

               Amicus Supporting Appellant.

Appeal from the United States District Court for the Eastern District of Virginia, at
Alexandria. Liam O’Grady, District Judge. (1:16-cv-01613-LO-IDD)
Argued: January 30, 2019                                        Decided: July 3, 2019

Before NIEMEYER, AGEE, and DIAZ, Circuit Judges.

Reversed, vacated, and remanded by published opinion. Judge Agee wrote the opinion, in
which Judge Niemeyer and Judge Diaz joined.

ARGUED: Lauren Powell McDermott, MOONEY, GREEN, SAINDON, MURPHY &
WELCH, PC, Washington, D.C., for Appellant. Joseph Ray Pope, WILLIAMS MULLEN,
Richmond, Virginia, for Appellee. ON BRIEF: John R. Mooney, Diana M. Bardes,
MOONEY, GREEN, SAINDON, MURPHY & WELCH, PC, Washington, D.C., for
Appellant. Michael E. Avakian, WIMBERLY, LAWSON & AVAKIAN, Washington,
D.C., for Appellee. Julia Penny Clark, Richard F. Griffin, Jr., BREDHOFF & KAISER,
PLLC, Washington, D.C., for Amicus Curiae.

                                          2
AGEE, Circuit Judge:

       The Board of Trustees of the Sheet Metal Workers’ National Pension Fund (the

“Fund”), a multiemployer pension plan, filed this suit claiming a delinquent exit

contribution from Four-C-Aire, Inc., a former participating employer, pursuant to § 515 of

the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1145.

After the district court granted Four-C-Aire’s motion to dismiss, the Fund appealed.

Because the Fund’s governing agreements (the “Trust Documents”) and Four-C-Aire’s

collective bargaining agreement (the “CBA”) require participating employers to pay an

exit contribution when they no longer have a duty to contribute to the Fund due to the

expiration of the underlying CBA, the complaint alleges a viable claim. We therefore

reverse the district court’s order granting the motion to dismiss, vacate the judgment as to

the exit contribution claim, and remand for further proceedings consistent with this

opinion.

                                             I.

       Before turning to the specific facts of this case, we review how multiemployer

pension plans like the Fund operate and the law that governs them. As the name suggests,

“[i]n a multiemployer pension plan, multiple employers [from within an industry] pool

contributions into a single [trust] fund that pays benefits to covered retirees who spent a

certain amount of time working for one or more of the contributing employers.” Bakery &

Confectionary Union & Indus. Int’l Pension Fund v. Just Born II, Inc., 888 F.3d 696, 698

n.1 (4th Cir. 2018) (internal quotation marks omitted). When an employer executes a CBA

                                             3
with a local union governing the terms of employment, the CBA will often require the

employer to contribute to such a plan. Thus, in addition to signing on to a CBA with the

union, an employer will also sign on to the terms and conditions of the plan’s separate

governing documents. But, as discussed further below, the plan is not a party to the CBA

between the employer and union.

      Plan participation provides multiple advantages to both employees and employers.

Among them, employees receive benefits that follow them throughout jobs within a

particular industry, and employers are able to offer those benefits while taking advantage

of cost- and risk-sharing mechanisms. See Concrete Pipe & Prods. of Cal., Inc. v. Constr.

Laborers Pension Trust Fund for S. Cal., 508 U.S. 602, 606 (1993).

       But participation by an employer in a multiemployer pension plan is not without its

risks and obligations. For example, if one participating employer fails to make a

contribution to the plan—whether because their CBA has expired, they have gone out of

business, or otherwise—the remaining employers must then make larger contributions or

employees must receive reduced benefits to cover the shortfall. These “rising costs may

encourage—or force—further withdrawals, thereby increasing the inherited liabilities to

be funded by an ever-decreasing contribution base.” Pension Benefit Guar. Corp. v. R.A.

Gray & Co., 467 U.S. 717, 722 n.2 (1984) (internal quotation marks omitted). “This vicious

downward spiral may continue until it is no longer reasonable or possible for the pension

plan to continue.” Id.; see also Cent. States, Se. & Sw. Areas Pension Fund v. Gerber Truck

Serv., Inc., 870 F.2d 1148, 1151 (7th Cir. 1989) (en banc) (“Multi-employer plans are

defined-contribution in, defined-benefit out. Once they promise a level of benefits to

                                            4
employees, they must pay even if the contributions they expected to receive do not

materialize[.]”).

       To address these risks, Congress amended ERISA by enacting the Multiemployer

Pension Plan Amendments Act of 1980 (the “MPPAA”) with the goal of stabilizing plans

that had suffered financial setbacks when participating employers ceased contributing to

the plan. H.R. Rep. No. 96-869(I), at 71 (1980), as reprinted in 1980 U.S.C.C.A.N. 2918,

2939 (reporting that the MPPAA was designed to “protect the interests of participants and

beneficiaries in financially distressed multiemployer plans” and ensure benefit security to

plan participants). Relevant here, the MPPAA provides a separate federal cause of action

permitting multiemployer plans to collect contributions from employers so long as the plan

is able to establish an obligation to contribute under the terms of the plan’s governing

documents or the CBA: “Every employer who is obligated to make contributions to a

multiemployer plan under the terms of the plan or under the terms of a [CBA] shall, to the

extent not inconsistent with law, make such contributions in accordance with the terms and

conditions of such plan or such agreement.” ERISA § 515, 29 U.S.C. § 1145; see also

Laborers Health & Welfare Trust Fund for N. Cal. v. Advanced Lightweight Concrete Co.,

484 U.S. 539, 547 (1988) (“The liability created by § 515 may be enforced by the trustees

of a plan by bringing an action in federal court pursuant to § 502.”); Bakery &

Confectionery Union & Indus. Int’l Pension Fund v. Ralph’s Grocery Co., 118 F.3d 1018,

1021 (4th Cir. 1997) (stating that § 515 “creates a federal right of action independent of

the contract on which the duty to contribute is based” (internal quotation marks omitted)).

                                            5
       With the enactment of the MPPAA, Congress placed multiemployer plans in a

stronger position to collect outstanding contributions “than they [would] otherwise occupy

under common law contract principles.” Ralph’s Grocery, 118 F.3d at 1021. Ordinarily,

any suit brought by a plan for contributions would be subject to common law defenses—

such as the parties’ intent, fraud in the inducement, or mistake of fact—that the employer

could assert against the local union. Id. (noting that although third party beneficiaries to a

contract—which multiemployer pension plans are similarly situated to in the context of a

CBA—can enforce contract terms that inure to their benefit, they are also “subject to

defenses that the promisor could assert against the original party to the contract”). But

under § 515,

       a multiemployer plan can enforce, as written, the contribution requirements
       found in the controlling documents . . . . Consequently, an employer is not
       permitted to raise defenses that attempt to show that the union and the
       employer agreed to terms different from those set forth in the agreement. Nor
       is an employer permitted to raise defenses that relate to claims the employer
       may have against the union[.]

Id. (emphasis added) (internal citations omitted).

       As Ralph’s Grocery explained, this favored status arises from the interaction

between § 515 and longstanding interpretative principles that federal courts apply to CBAs.

Generally, we employ federal labor law to construe the terms of a CBA. See Textile

Workers Union of Am. v. Lincoln Mills of Ala., 353 U.S. 448, 456 (1957). Thus, we will

apply “traditional rules of contract construction” to CBAs and plan documents “only when

they do not conflict with federal labor law.” Ralph’s Grocery, 118 F.3d at 1025; see also

M & G Polymers USA, LLC v. Tackett, 135 S. Ct. 926, 933 (2015) (“We interpret [CBAs],

                                              6
including those establishing ERISA plans, according to ordinary principles of contract law,

at least when those principles are not inconsistent with federal labor policy.”).

Consequently, § 515—as a statement of federal labor policy—bestows favored status on

multiemployer plans, allowing them to collect contributions from employers by enforcing

the contribution requirements “in accordance with the terms and conditions” of the plan or

CBA. 29 U.S.C. § 1145. Section 515 thus “strengthens the position of multiemployer plans

by holding employers and unions to the literal terms of their written commitments. [This

means that] the actual intent of the contracting parties (i.e., the employer and the local

union) is immaterial when the meaning of [the] language is clear.” 1 Ralph’s Grocery, 118
F.3d at 1021. In sum, even if an employer could assert a valid common law defense, it must

give way to the plain language of the CBA or governing plan documents. 2

       1
          Of course, the intentions of the parties and the contractual language will often
align. For example, the Supreme Court has held that in the context of labor negotiations,
“contractual obligations will cease, in the ordinary course, upon termination of the
bargaining agreement,” but a CBA may provide “in explicit terms that certain benefits
continue after the agreement’s expiration.” M & G Polymers, 135 S. Ct. at 937 (internal
quotation marks omitted). Because the parties’ written agreement is “clear and
unambiguous” on that point, that language governs as an expression of the parties’ intent.
Id. at 933 (internal quotation marks omitted). After all, language providing that a particular
obligation or benefit survives the CBA’s expiration fairly demonstrates the parties’ intent
on that point.
        2
          That said, most circuit courts—including this one—have recognized that some
contract defenses can be raised in a collection action for delinquent contributions. One such
defense is that a plan fiduciary cannot “enforce a nonexistent contractual obligation.”
Ralph’s Grocery, 118 F.3d at 1022 (internal quotation marks omitted); see also Gerber
Truck Serv., 870 F.2d at 1153 (observing that § 515 was designed to preclude only
“complex litigation concerning claims and defenses unrelated to the employer’s promise
and the plans’ entitlement to the contributions” (emphasis added) (internal quotation marks
omitted)).
                                              7
       This strengthened position gives effect to the protections the MPPAA was designed

to provide to plans and beneficiaries. Prior to the enactment of § 515, “collection actions

by multiemployer plans often were complicated by issues that had arisen between the

employer and the local union but were unrelated to the employer’s obligation to the plan.”

Id. “Injecting these tangential issues into collection actions consumed plan resources by

increasing the cost and delay involved in litigation” and, should an employer’s defense be

successful, resulted in decreased plan contributions. Id.

       Permitting a plan to bring an action against an individual employer in accordance

with the plain language of the plan documents or CBA addresses these issues in three

crucial ways. First, it streamlines the collections process and ensures plans remain funded

pursuant to the plan’s clear terms. Id. at 1021–22. Second, it permits plans to apply the

written terms of plan participation uniformly, despite the existence of numerous individual

CBAs—all with their own unique provisions—through which employers agreed to

contribute to the plan. Cf. Sinai Hosp. of Balt., Inc. v. Nat’l Benefit Fund for Hosp. &

Health Care Emps., 697 F.2d 562, 568 (4th Cir. 1982) (binding a multiemployer pension

plan to all the terms of an individual CBA would “completely dissipate the law of trusts,

leaving employee benefit funds vulnerable to the recurring whims of employer/union

bargainers”). Third, it leaves for separate litigation any matters between the employer and

the union arising from their individual CBA, to which the plan was not a party. This last

point is particularly important given that plans necessarily do not have the same duties and

interests as local labor unions or employers. See Cent. States, Se. & Sw. Areas Pension

Fund v. Cent. Transport, Inc., 472 U.S. 559, 576 (1985) (noting that where a plan’s “duty

                                             8
extends to all [national] participants and beneficiaries of [the] multiemployer plan,” “a

local union’s duty is confined to current employees employed in the bargaining unit in

which it has representational rights”).

       This Court has underscored the need for plans to be able to enforce their trust

agreements uniformly. In Ralph’s Grocery, we concluded that where two CBA provisions

conflict, the provision imposing “uniform [plan] participation requirements” governs. 118
F.3d at 1025. There, an employer had entered into a CBA requiring it to contribute to a

multiemployer pension plan. One of the specific CBA provisions plainly provided that the

employer would not be required to make any plan contributions based on severance pay.

However, the applicable plan (a multiemployer plan) also required as a condition of

participation that the CBA include a separate clause—known as a “standard clause”—

providing that the employer would agree to make plan contributions based on rates

established by the plan trust, and that the standard clause encompassed “the sole and total

agreement between the [e]mployer and [u]nion with respect to pensions or retirement.” Id.

at 1022. In turn, the plan later enacted a provision requiring employers to make

contributions based on severance pay. But when the employer began reducing its workforce

and disbursing severance pay, it did not make plan contributions in accord with the standard

clause. Instead, relying on the other CBA provision relieving it from a severance payment

obligation, the employer declined to make a contribution. The fund filed suit, demanding

delinquent contributions based on the severance pay.

       In resolving the conflict between these provisions, the Court recognized as an initial

matter that the purpose of § 515 was to “permit multiemployer funds to rely on the

                                             9
representations made to it” by employers, including agreement to any uniform participation

requirements. Id. at 1025. The Court then interpreted the competing provisions in

accordance with that purpose and held that the standard clause controlled. Accordingly,

the employer was required to make the contributions in accordance with the terms set by

the trust—and thereby based on severance pay. First, the Court recognized that “by virtue

of section 515,” the fund was entitled to rely on the “literal meaning of the [c]ompany’s

representation” in the standard clause—that is, that the “the standard clause was the parties’

complete agreement on pensions,” rendering the other clause’s exclusion of contributions

based on severance pay “ineffective against the [plan].” Id. at 1023–24. Otherwise, the plan

would be “required to comb through the other parts of the [CBA] searching for additional

terms related to pensions,” which would require plan counsel to inspect all individual CBA

provisions and exacerbate the “risk of losing contributions due to overlooked or

misinterpreted provisions that appear outside the standard clause and purport to alter the

uniform standard of participation.” Id. at 1024. Second, because the plan’s “acceptance of

an employer [was] based on the terms of the prescribed instruments,” “the terms of the

standard clause [necessarily] form[ed] the basis for the [employer’s] relationship with the

[plan].” Id. And third, allowing the plan to rely on the standard clause was “consistent with

the congressional policies embodied in section 515,” particularly the need to “reduce the

cost of administering funds” and “achieve a uniform standard of participation for all

participating employers.” Id. Thus, where two provisions concerning plan contribution

conflict, that which gives effect to the purposes of § 515 prevails. See id. at 1025.

                                             10
                                            II. 3

       Having established these background principles, we turn to the facts at hand. Four-

C-Aire is a New York-based corporation that employs members of the Sheet Metal

Workers International Association Local Union No. 58. Throughout labor negotiations

with Local Union No. 58, Four-C-Aire utilized a national trade association to represent it.

At the conclusion of negotiations, Four-C-Aire signed onto an existing CBA 4 that

incorporated other documents, none of which the corporation had played a part in drafting.

Specifically, the negotiations resulted in Four-C-Aire becoming a signatory to a CBA that

was to remain in effect, per a durational clause 5 in the CBA, until April 30, 2016. In turn,

       3
          The facts are principally drawn from the complaint’s allegations—along with any
reasonable inferences from them—which must be viewed as true at this stage of the
proceedings. See Nemet Chevrolet, Ltd. v. Consummeraffairs.com, Inc., 591 F.3d 250, 253
(4th Cir. 2009). Because the complaint quoted and incorporated by reference other
documents on which the claim is grounded, we can consider them also. See Matrix Capital
Mgmt. Fund, LP v. BearingPoint, Inc., 576 F.3d 172, 197 (4th Cir. 2009).
        4
           In so doing, Four-C-Aire entered into a “me-too agreement,” which is a contract
where an employer agrees to be bound by the terms of a CBA negotiated by a
multiemployer association and local union. Carpenters Health v. Mgmt. Res. Sys. Inc., 837
F.3d 378, 382–83 (3d Cir. 2016). Such agreements permit employers to benefit from the
terms of an association’s CBA without having to participate in the collective bargaining
process. Id.; see also Ariz. Laborers, Teamsters & Cement Masons Local 395 Health &
Welfare Trust Fund v. Conquer Cartage Co., 753 F.2d 1512, 1518 (9th Cir. 1985) (noting
that me-too agreements permit independent employers “to obtain all the benefits of the
master [CBA] that is negotiated by the principal employers in the industry”—including
“whatever protections or advantages the industry [CBA] provides other employers”—
“without having to participate in the industry negotiations, or to engage in separate
negotiations, every few years”).
        5
          See M & G Polymers, 135 S. Ct. at 934 (noting a durational clause indicates the
“set time” at which a contract or provision will expire).

                                             11
the CBA required Four-C-Aire to contribute to the Fund 6 and “incorporated by reference”

the Fund’s Trust Documents. 7 The CBA also bound Four-C-Aire to abide by the terms and

conditions of the Trust Documents, “including any amendments thereto and policies and

procedures adopted by the [Fund’s] Board[] of Trustees.” 8 J.A. 10, 112–13. Specifically,

the text of the CBA provided:

       The parties agree to [be] bound by . . . the separate agreements and
       declarations of trusts of all other local or national programs to which it has
       been agreed that contributions will be made. In addition, the parties agree to
       be bound by any amendments to said trust agreements as may be made from
       time to time[.]

Bd. of Trustees, Sheet Metal Workers Nat’l Pension Fund v. Four-C-Aire, Inc., No. 1:16-

cv-1613, 2017 WL 1479425, at *10 n.8. (E.D. Va. Apr. 21, 2017).

       In turn, under Article V, Section 6(a) of the Trust Documents, Four-C-Aire was

required to pay an exit contribution to the Fund when three criteria were met: (1) it ceased

to have an obligation to contribute to the Fund, and (2) as a result of the cessation of its

obligation to contribute, it had an event of withdrawal under Title IV of ERISA, but (3) did

       6
          The Fund operates a multiemployer pension plan as defined under ERISA, as
amended by the MPPAA, and created and maintained under § 302(c) of the Labor
Management Relations Act of 1947.
        7
          Neither the CBA nor the Trust Document are in the record on appeal. Thus, we
rely on the description and quotation of these documents set forth in the complaint and
district court opinion, which the parties do not contest. See Feminist Majority Found. v.
Hurley, 911 F.3d 674, 697 (4th Cir. 2018); Matrix Capital Mgmt. Fund, 576 F.3d at 197.
        8
          The Fund is administered by a plan sponsor, its Board of Trustees. See 29 U.S.C.
§§ 1002(16)(B)(iii), 1301(a)(10) (providing that a multiemployer pension plan’s sponsor
is either the joint board of trustees or an administrator). As a fiduciary of the Fund, the
Board is permitted to bring a § 515 action on the Fund’s behalf. See 29 U.S.C.
§§ 1132(a)(3), 1132(g)(2). Our references to the “Fund” include the Board in this capacity.

                                            12
not have to pay a statutorily-mandated withdrawal liability. 9 While the CBA was in effect,

the Trust Documents were amended to state:

       [B]y agreeing to contribute, continuing to contribute, or continuing to be
       obligated to contribute, to the Fund, each Employer agrees to pay an Exit

       9
         Under the MPPAA, an employer owes “a fixed and certain debt to the pension
plan”—known as withdrawal liability—when it makes a complete or partial withdrawal
from the plan. Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 725 (1984)
(citing 29 U.S.C. §§ 1381, 1391). “The purpose of assessing withdrawal liability is to
assign to the withdrawing employer a portion of the plan’s unfunded obligations in rough
proportion to that employer’s relative participation in the plan” such that the plan may
remain solvent even upon an employer’s withdrawal. Trs. of the Plumbers & Pipefitters
Nat’l Pension Fund v. Plumbing Servs., Inc., 791 F.3d 436, 440 (4th Cir. 2015) (internal
quotation marks omitted); see also Concrete Pipe, 508 U.S. at 610. The amount of an
employer’s withdrawal liability depends on its share of the “plan’s unfunded vested
benefits,” which is “calculated as the difference between the present value of vested
benefits and the current value of the plan’s assets.” Pension Ben. Guar. Corp., 467 U.S. at
725 (internal quotation marks omitted); see 29 U.S.C. §§ 1381, 1391.
       As relevant to Four-C-Aire, a complete withdrawal occurs when: (1) “an employer
ceases to have an obligation to contribute under the plan,” such as through the expiration
of the CBA, and (2) the employer “continues to perform work in the jurisdiction of the
[CBA] of the type for which contributions were previously required.” 29 U.S.C.
§ 1383(b)(2). When, on May 1, 2016, Four-C-Aire continued to operate in the jurisdiction
covered by the CBA and yet no longer had an obligation to contribute to the Fund because
of the expiration of the CBA—events discussed further below—it ordinarily would have
had to pay the statutorily-mandated withdrawal liability.
       But Four-C-Aire “was not required to pay statutory withdrawal liability under
ERISA’s de minimis rule,” which is intended to eliminate or reduce the withdrawal liability
certain employers—generally smaller companies—would owe, to the extent that their
calculated withdrawal liability is less than $150,000. Opening Br. 7 (citing 29 U.S.C.
§§ 1381(b)(1)(A), 1389).
       Rather, the Trust Documents provided that the Fund would instead assess a specific
exit contribution based upon its own formula in the plan. Specifically, the Documents
provided that the amount an employer would owe as an exit contribution upon an event of
withdrawal would be equal “to the amount of the employer’s contributions due for the 36-
month period preceding the month in which the employer ceased to have an obligation to
contribute.” J.A. 15 ¶ 41; see also 29 U.S.C. § 1391(c)(1) (providing a plan may determine,
with certain restrictions, its own method of assessing a contribution upon withdrawal). At
this point in the proceedings, the exact amount of the corporation’s exit contribution is not
an issue before us.

                                             13
       Contribution in accordance with this [provision]. The Employer’s obligation
       to pay an Exit Contribution under this [provision] is independent of the
       Employer’s [CBA] and continues to apply after the termination of the [CBA]
       (notwithstanding any language to the contrary in the [CBA]).

J.A. 16 (emphasis in original) (the “Amendment”).

       Four-C-Aire’s obligation to contribute to the Fund in the ordinary course ended on

or around April 30, 2016, when the terms of the CBA expired and Four-C-Aire had not

entered into a new CBA or other agreement requiring it to contribute to the Fund. 10 Several

months later, in August 2016, the Fund notified Four-C-Aire that the corporation had “an

event of withdrawal under Title IV of ERISA” on or around May 1, 2016 when the CBA

expired without Four-C-Aire having entered into a new agreement requiring contributions

to the Fund yet it continued to operate in the jurisdiction covered by the CBA. J.A. 17. The

Fund demanded an exit contribution of $97,601.01, which it claimed to be the amount

required by the Trust Documents based on Four-C-Aire’s contribution history. J.A. 17.

Four-C-Aire refused.

       The Fund then filed a complaint, subsequently amended, in the United States

District Court for the Eastern District of Virginia, alleging that the corporation owed an

exit contribution to the Fund as a delinquent contribution under §§ 502 and 515 of ERISA

       10
          As discussed further below, the CBA also contained an “evergreen clause.” Such
clauses extend the CBA’s terms or particular portions for successive periods even after the
specified expiration date until certain conditions are met. Here, the evergreen clause noted
that the CBA would remain in full force and effect until April 30, 2016 and “from year to
year thereafter unless written notice of reopening” was given “not less than ninety (90)
days prior to the expiration date.” J.A. 113 (internal quotation marks omitted). Four-C-Aire
provided such notice and thus ceased having an obligation to contribute in the ordinary
course upon the CBA’s expiration.

                                            14
(codified at 29 U.S.C. §§ 1132 and 1145). Four-C-Aire moved to dismiss the Fund’s claim,

arguing that its obligations under the CBA—including any duty to pay an exit contribution

as required under the Trust Documents, regardless of the Amendment—had ceased when

the CBA expired. 11

       The district court granted Four-C-Aire’s motion to dismiss the Fund’s claim, relying

on three independent grounds: first, it determined the duty to pay an exit contribution did

not survive the CBA’s expiration because the CBA did not specifically state that obligation

would survive. The court therefore concluded that the corporation was not bound after the

expiration of the CBA by any requirements in the Trust Documents, including the

requirement to pay an exit contribution. Second, the district court relied on an alternative

ground—not advanced by Four-C-Aire’s motion to dismiss—that the complaint’s

allegations were insufficient to demonstrate that the Amendment had been properly

incorporated into the Trust Documents. Specifically, it determined that without allegations

(1) that Four-C-Aire knew and consented to the Amendment, and (2) that described the

amendment process and that the process had been followed, the Amendment could not be

applied against the corporation. Third—and as another alternative ground that Four-C-Aire

had not advanced—the district court held that the CBA’s grant of “unilateral” modification

power to the Fund was illusory and therefore unenforceable under ordinary principles of

contract law. Four-C-Aire, 2017 WL 1479425, at *10.

       11
          The Fund and additional plaintiffs also asserted a claim for delinquent
contributions for a specific period when the CBA was still in effect. That separate claim
and the additional plaintiffs are not part of this appeal.

                                            15
       The Fund noted a timely appeal and the Court has jurisdiction under 28 U.S.C.

§ 1291. 12

                                             III.

       The Court reviews de novo the district court’s decision to grant a motion to dismiss

under Rule 12(b)(6). Owens v. Balt. City State’s Attorneys Office, 767 F.3d 379, 388 (4th

Cir. 2014). To survive a motion to dismiss the Fund’s claim that Four-C-Aire owed an exit

contribution, the complaint was required to “state a claim to relief that is plausible on its

face,” meaning that it had to “plead[] factual content that allows the court to draw the

reasonable inference that [Four-C-Aire] is liable” to pay such a contribution under the

terms of its agreement. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation

marks omitted). When assessing the complaint’s plausibility, the Court must “assume as

true all its well-pleaded facts and draw all reasonable inferences in favor of the plaintiff.”

Nanni v. Aberdeen Marketplace, Inc., 878 F.3d 447, 452 (4th Cir. 2017).

       The Fund contends that none of the district court’s grounds for dismissing its claim

for an exit contribution withstand review. Pointing to principles of ERISA that govern

multiemployer pension plans as well as general contract principles, the Fund asserts that

the district court misinterpreted the plain language of the CBA and Trust Documents. In

       12
         During the appeal, the Court identified a possible jurisdictional defect related to
a settlement agreement and ordered supplemental briefing. Based on the parties’ written
and oral submissions to the Court clarifying the nature of the settlement agreement and
related actions, we are satisfied that we have jurisdiction based on the entry of a final,
appealable order.
                                             16
addition, it argues the complaint’s allegation that the Trust Documents “were amended”

requires the inference that those documents were properly amended and that any challenge

to the amendment process should be raised as a defense to liability later in the proceedings.

Lastly, the Fund argues the district court misunderstood how multiemployer pension plans

work when it held that Four-C-Aire’s liability was premised on an illusory promise and

was unenforceable. For the reasons set forth below, we agree with the Fund on each of

these points and conclude it has adequately alleged a claim for an exit contribution against

Four-C-Aire.

                                             A.

       The district court’s first ground for dismissing the Fund’s claim was its conclusion

that the language in the CBA incorporating the Trust Documents did not survive the CBA’s

expiration, so any of Four-C-Aire’s duties under the Trust Documents likewise did not

survive. In order to fully understand the district court’s errors in reaching this conclusion,

we first provide a lengthier explanation of its reasoning.

       At the outset, the district court held “that exit contribution requirements imposed by

an incorporated trust document do not survive the termination of the CBA unless explicitly

noted in the CBA.” Four-C-Aire, 2017 WL 1479425, at *10 (emphasis added). The court’s

analysis on this point was truncated because it relied on its own prior holding to this effect

in a case involving a different former participating employer but a similarly worded CBA

and the same multiemployer pension plan (the Fund). See id.; Bd. of Trs., Sheet Metal

Workers’ Nat’l Pension Fund v. Caddo Sheet Metal, LLC, No. 1:14–cv–858, 2015 WL
4032037 (E.D. Va. June 30, 2015). In Caddo Sheet Metal, the district court held that when

                                             17
a CBA contained an evergreen clause specifically stating which provisions survive the

expiration of the CBA, and the provision incorporating the Trust Documents was not listed

in that clause, the incorporation provision—and therefore any duties contained only in the

Trust Documents—did not survive the CBA’s expiration. 2015 WL 4032037, at *3. That

reasoning led the district court in Caddo Sheet Metal to hold that the Fund was not entitled

to seek an exit obligation from a former participating employer after its CBA expired. Id.

at *6. 13

        In dismissing the Fund’s claim against Four-C-Aire, the district court adopted its

reasoning in Caddo Sheet Metal as the basis for concluding the Fund had not stated a claim

for an exit contribution based on the pre-Amendment Trust Documents. In short, like the

CBA at issue in Caddo Sheet Metal, the CBA in the case at bar had (1) a durational clause

specifically stating when the CBA ended and Four-C-Aire’s obligation to contribute to the

Fund ceased (April 30, 2016) and (2) an evergreen clause stating that certain parts of the

CBA would remain in force after that time under certain conditions—but the CBA’s

provision incorporating the Trust Documents was not listed as a provision that survived

the CBA’s expiration. 14 Therefore, the district court concluded, as in Caddo Sheet Metal,

        13
           The district court’s decision in Caddo Sheet Metal was not appealed, so it is not
directly before us. Nonetheless, we reject the reasoning of that decision to the extent the
district court relied on it to decide the Fund’s claim against Four-C-Aire.
        14
           The district court quoted the evergreen clause as providing:

        This Agreement and Addenda Numbers one (1) through thirty-two (32)
        attached hereto shall become effective on the 1st day of May, 2011 and
        remain in full force and effect until the 30th day of April 2016 and shall
        continue in force from year to year thereafter unless written notice of

                                            18
that any obligations set out in the Trust Documents—including the duty to pay the exit

contribution—did not survive the CBA’s expiration.

       The district court then observed that the Amendment was the only changed

circumstance from Caddo Sheet Metal, but concluded that the Amendment did not lead to

a different result. It noted that both Caddo Sheet Metal and M & G Polymers had focused

“on the bargaining agreement and not on the secondary documents,” i.e., the Trust

Documents, when analyzing the extent of the employer’s obligations. Four-C-Aire, 2017
WL 1479425, at *11. Consequently, the court concluded that any changes to the Trust

Documents did not alter the barrier it had identified in Caddo Sheet Metal, which was that

the CBA did not specifically provide that the incorporation clause (and therefore any duties

set out in the Trust Documents) would survive the CBA’s expiration. Relying on Caddo

Sheet Metal, the district court held that Four-C-Aire’s agreement to pay an exit contribution

did not survive the CBA’s expiration. However, in the course of its reasoning, the district

court never considered the impact of § 515.

       The district court’s reasoning thus runs counter in at least two respects to Four-C-

Aire’s alleged contractual obligations. First, under § 515, the CBA and Trust Documents

       reopening is given not less than ninety (90) days prior to the expiration date.
       In the event such notice of reopening is served, this Agreement shall continue
       in force and effect until conferences relating thereto have been terminated by
       either party by written notice, provided, however, that, if this Agreement
       contains [an arbitration provision], it shall continue in full force and effect
       until modified by order of the National Joint Adjustment Board or until the
       procedures under [the arbitration provision] have otherwise been completed.

Four-C-Aire, 2017 WL 1479425, at *7 (emphasis omitted).
                                              19
must be interpreted so that Four-C-Aire is held to the requirements set forth by the plain

language of those Documents—and as adequately alleged in the complaint, these

requirements included payment of an exit contribution after the expiration of the CBA.

Second, even if § 515 did not produce such a result, ordinary contract principles regarding

the incorporation of documents would similarly compel the finding that the Fund has

adequately alleged that Four-C-Aire was liable for an exit contribution. We address each

in turn.

                                            B.

                                             1.

       “According to section 515, the scope of [an employer’s] obligation to [a plan] is

controlled by the plan documents and the representations that appear in the [CBA].”

Ralph’s Grocery, 118 F.3d at 1023. Thus, under § 515, “a multiemployer plan can enforce,

as written, the contribution requirements found in the controlling documents,” even if an

employer might have an otherwise valid common law defense against contribution. Id. at

1021. Such controlling documents must be interpreted “in accordance with the principles

embodied in section 515.” Id. at 1023. And here, the plain language of the contribution

requirements as set forth in those documents provided that Four-C-Aire was obligated to

pay an exit contribution 15 even after the expiration of the CBA. In sum, because (1) Four-

       15
          The district court noted that the parties disputed whether an exit contribution in
this case even qualified as a “contribution” under ERISA §§ 502 and 515. The district court
determined that because the Amendment “is unenforceable against Four-C-Aire,” it did not
need to reach that question. Four-C-Aire, 2017 WL 1479425, at *8 n.4.

                                            20
C-Aire signed the CBA and thereby agreed to be bound by the Trust Documents, (2) the

Trust Documents provided that a participating employer would be obligated to pay an exit

contribution under certain circumstances, (3) the Amendment additionally stated that the

obligation would survive the expiration of the CBA, and (4) the complaint alleged that

Four-C-Aire failed to pay the exit contribution despite the occurrence of events requiring

such a contribution, the Fund has set forth a viable claim for an exit contribution from Four-

C-Aire.

       First, the controlling documents determining the extent of Four-C-Aire’s obligations

to the Fund included both (1) the CBA and (2) the Trust Documents (as well as any

amendments to the Trust Documents). Specifically, the complaint alleged that when Four-

C-Aire signed onto the CBA, it agreed to “abide by the terms and conditions of” the Trust

Documents and “expressly incorporated” the Trust Documents. J.A. 10 ¶ 11. Furthermore,

as set forth in the complaint, the text of the CBA stated: “The parties agree to [be] bound

by . . . the separate agreements and declarations of trusts of all other local or national

programs to which it has been agreed that contributions will be made.” Four-C-Aire, 2017

        We conclude that the exit contribution in this case constituted a “contribution” under
§ 515 of ERISA. We have previously held that “[a]n action to compel an employer to pay
overdue withdrawal liability is treated the same as an action to collect delinquent
contributions.” Plumbing Servs., 791 F.3d at 445 (finding that the district court had
jurisdiction under ERISA § 515 to hear a claim compelling an employer to pay withdrawal
liability because “an employer that is contractually obligated to make contributions to a
retirement fund must do so in accordance with the operative [CBA]” (citing 29 U.S.C.
§ 1145)). Given our prior explanation that exit contributions operate as a subset of
withdrawal liability payments, see supra n. 9, it follows that exit contributions also
constitute a contribution under ERISA § 515. Furthermore, the Trust Documents provided
that an employer’s failure to pay an exit contribution would be treated as a delinquent
contribution.
                                             21
WL 1479425, at *10 n.8. “In addition,” the CBA continued, “the parties agree to be bound

by any amendments to said trust agreements as may be made from time to time[.]” Id. Thus,

Four-C-Aire clearly agreed by signing the CBA to abide by the contribution requirements

set forth in the Trust Documents and any amendments to those Documents. Accordingly,

in examining the controlling documents at issue in this § 515 action, we may look to both

the CBA and the Trust Documents to determine the extent of Four-C-Aire’s obligations.

This conclusion is bolstered by the text of § 515, which provides that employers may be

obligated to make plan contributions “under the terms of the plan or under the terms of the

[CBA].” 29 U.S.C. § 1145 (emphasis added); see also Ralph’s Grocery, 118 F.3d at 1023

(“According to section 515, the scope of [an employer’s] obligation to [a plan] is controlled

by the plan documents and the representations that appear in the [CBA].” (emphasis

added)).

       Second, Article V, Section 6(a) of the Trust Documents required that Four-C-Aire

pay an exit contribution if three criteria were met: (1) it ceased to have an obligation to

contribute to the Fund, and (2) as a result of the cessation of its obligation to contribute, it

had an event of withdrawal under Title IV of ERISA, but (3) did not have to pay a

statutorily-mandated withdrawal liability. Put another way, the pre-Amendment Trust

Documents provided that Four-C-Aire would pay an exit contribution to the Fund “after

the expiration of its [CBA] if it ceased to have an obligation to contribute to the Fund as a

result of such expiration, and it did not enter into a successor [CBA] requiring contributions

to the Fund.” J.A. 15 ¶ 40. Thus, according to the well-pleaded allegations in the complaint,

the plain terms of the Trust Documents required Four-C-Aire to pay an exit contribution

                                              22
upon the expiration of the CBA (if no successor CBA had been reached), even prior to the

Amendment.

       The complaint further alleged that all the events triggering an exit contribution

occurred as to Four-C-Aire: that is, the corporation ceased having an obligation to

contribute to the Fund because of the CBA’s expiration; this cessation resulted in an event

of withdrawal; but Four-C-Aire did not have to pay the statutory withdrawal liability

because of ERISA’s de minimis rule. Altogether, this is sufficient to allege that Four-C-

Aire’s duty to pay an exit contribution survived the CBA’s expiration, even if the triggering

event was the CBA’s expiration. 16

       Third, regardless of whether the original Trust Documents created a duty to pay that

survived the CBA’s expiration (they did), the Trust Documents were also explicitly

amended to provide that the exit contribution requirement would survive the CBA’s

expiration. 17 Contrary to the district court’s analysis, the complaint’s allegations

concerning the Amendment further support the Fund’s claim against Four-C-Aire. In

       16
           This conclusion is bolstered by the connection between the exit contribution and
withdrawal liability obligation. The complaint provides that when an exit contribution
arises (upon an event of withdrawal under Title IV of ERISA), that exit contribution is
required only if an employer is not statutorily mandated to pay a withdrawal liability. See
J.A. 15 ¶ 39. It is clear that the exit contribution is meant to bridge—via contract—a gap
in payments to the Fund created when a participating employer would be obligated by
statute to pay withdrawal liability, but is relieved of that withdrawal obligation by ERISA’s
de minimis rule.
        17
           We note this analysis even though we conclude that the terms of the CBA and
pre-Amendment Trust Documents—at least as alleged and apparent from the record before
us—would be sufficient to survive dismissal, and that the complaint’s allegations regarding
the Amendment may not be necessary to show that Four-C-Aire’s obligation to pay an exit
contribution survived the expiration of the CBA.
                                             23
particular, the complaint alleges that the CBA’s language incorporating the Trust

Documents specifically indicated that Four-C-Aire would be bound by not only the

provisions of the Trust Documents in effect at the time it became a participating employer,

but also “any amendments thereto and policies and procedures adopted by the” Trustees,

which were also “expressly incorporated” into the CBA. J.A. 10 ¶ 11. The complaint

further alleges that the Trust Documents were amended to include the following language:

“[a participating employer’s] obligation to pay an Exit Contribution under this Section 6 is

independent of the Employer’s [CBA] and continues to apply after the termination of the

[CBA] (notwithstanding any language to the contrary in the [CBA]).” J.A. 16 ¶ 44

(emphasis omitted). These terms plainly establish that regardless of any language in the

CBA or the expiration of the CBA, a contributing employer’s obligation to pay an exit

contribution would survive its expiration. Thus, when the events triggering an exit

contribution payment were fulfilled, Four-C-Aire was required to pay an exit contribution

regardless of the underlying CBA’s status.

       Consequently, the only remaining question for purposes of the motion to dismiss is

whether the complaint sufficiently alleged a violation of the obligation to pay an exit

contribution. In short, it did. Specifically, the complaint alleged Four-C-Aire did not pay

an exit contribution despite the Trust Documents’ conditions being satisfied as a result of

the CBA’s expiration. These allegations are sufficient to state a claim for relief under § 515

of ERISA. See 29 U.S.C. §§ 1145, 1132(g)(2).

       Contrary to the district court’s reasoning, this is the case even though the survival

of the incorporation provision—and thereby the exit contribution obligation—was not

                                             24
specified in the evergreen clause. A CBA can explicitly provide that certain obligations

contained within it may extend beyond the CBA’s expiration—as the district court

correctly recognized in Caddo. 2017 WL 4032037, at *2. And that is exactly what occurred

here: the Trust Documents, which were expressly incorporated into the CBA,

unambiguously provided that an employer’s obligation to pay the exit contribution

survived the expiration of the CBA. 18

       Furthermore, in attempting to distinguish between the terms of the CBA and the

terms in the “secondary documents,” the district court ignored ERISA § 515, which

explicitly provides that a plan may bring an action against any employer “obligated to make

contributions to a multiemployer plan under the terms of the plan or under the terms of a

[CBA].” 29 U.S.C. § 1145 (emphasis added). Section 515 does not distinguish between

primary and secondary documents in the enforcement of delinquent contributions, instead

providing that “such contributions [shall be made] in accordance with terms and conditions

of such plan or such agreement.” Id.; see also Ralph’s Grocery, 118 F.3d at 1023

(“According to section 515, the scope of [an employer’s] obligation to [a plan] is controlled

       18
          To the extent that Four-C-Aire argues that M & G Polymers mandates the opposite
result, that case is inapposite. There, the Supreme Court considered the written contractual
terms against arguments about what inferences could be drawn from that language,
ultimately holding that the written language controlled. 135 S. Ct. at 933. It did not
involve—like the case here—a conflict between language in primary and incorporated
documents, nor did it address how to reconcile such language. In this sense, M & G
Polymers shows the error of the district court in failing to give due weight to all the written
contractual commitments of Four-C-Aire as found in the CBA and incorporated Trust
Documents.
        Finally, to the extent M & G Polymers is applicable, the Supreme Court there
recognized that the parties to a CBA could explicitly agree to extend specific obligations
beyond the CBA’s expiration. Id. at 937.
                                              25
by the plan documents and the representations that appear in the [CBA].” (emphasis

added)). And here, where the contribution requirements found in the controlling documents

plainly provided that Four-C-Aire was obligated to pay an exit contribution, the failure to

specify the survival of the exit contribution obligation in the evergreen clause does not

require the Court to eschew the plain language of the controlling documents.

       In sum, as alleged in the complaint, Four-C-Aire agreed to be bound by both the

CBA and the Trust Documents. Thus, the terms of the Trust Documents had to be

considered to determine whether any specific obligations survived the CBA’s expiration.

Because the district court’s analysis failed to look to the plain language of the Trust

Documents and instead centered exclusively on whether the CBA called for the

incorporation provision to survive the CBA’s expiration, the court’s analysis was in error. 19

       19
          But even if § 515 had not required that Four-C-Aire pay the exit contribution, the
district court’s reasoning runs counter to common law principles governing contract
interpretation. First, as set forth in the complaint, the CBA incorporated the Trust
Documents and stated that Four-C-Aire agreed to be bound by both instruments. This
means that both documents were relevant to determining what contractual duties survived
the expiration of the CBA. World Fuel Servs. Trading, DMCC v. Hebei Prince Shipping
Co., 783 F.3d 507, 519 n.6 (4th Cir. 2015) (“[W]here a contract expressly refers to and
incorporates another instrument in specific terms which show a clear intent to incorporate
that instrument into the contract, both instruments are to be construed together.” (internal
quotation marks omitted)). Second, the plain language of the pre-Amendment Trust
Documents provided that Four-C-Aire would owe an exit contribution when it ceased to
have an obligation to contribute to the Fund even if the event that triggered that requirement
was the CBA’s expiration. Third, the Amendment—which must also be considered in
determining the corporation’s contractual duties—only strengthens the conclusion that the
obligation to pay an exit contribution survived the CBA’s expiration. And fourth, the
complaint sufficiently alleged a violation of this contractual duty to pay an exit contribution
to survive a motion to dismiss. An analysis of the provisions at issue under contract
principles only highlights the errors in the district court’s reasoning. See M & G Polymers,
135 S. Ct. at 933 (“[T]he rule that contractual provisions ordinarily should be enforced as

                                              26
                                              2.

       Ralph’s Grocery—which the district court entirely ignored in its analysis—further

underscores the error in the district court’s reasoning. As discussed above, this Court has

emphasized the need to provide for uniform enforcement of trust agreements by holding

that where various trust and CBA terms conflict, § 515—as a statement of federal labor

policy—mandates that the terms of the provision permitting for uniform enforcement of

the trust documents govern.

       In contrast to Ralph’s Grocery, the provisions at issue in this case were not in

conflict: had the Fund searched for a potentially conflicting clause undermining the

mandate of the Trust Documents and the Amendment, it would have found none. The terms

of the CBA clearly incorporated all Trust Documents, and the Trust Documents plainly

provided that an exit contribution was required under certain circumstances—an obligation

which survived the expiration of the CBA. The only potential conflict, as asserted by Four-

C-Aire, was the evergreen clause’s failure to include the incorporation provision. But for

all of the reasons discussed above, the Fund was entitled to rely on and enforce the plain

terms of the Trust Documents, including the Amendment.

       Furthermore, even if the evergreen clause or another provision in the CBA plainly

conflicted with the exit contribution requirement, the latter would prevail. First, “by virtue

of section 515,” the Fund was entitled to “rely on and enforce the literal meaning of [Four-

C-Aire’s] representation” that it would agree to abide by the terms of the Trust Documents

written is especially appropriate when enforcing an ERISA [welfare benefits] plan.”
(second alteration in original) (internal quotation marks omitted)).
                                             27
and any amendments thereto. Ralph’s Grocery, 118 F.3d at 1023–24. Second, the Trust

Documents and Amendment controlled because Four-C-Aire’s acceptance of the terms set

forth in those documents, as provided in the CBA, “form[ed] the basis for [its] relationship

with the Fund.” Id. at 1024. And finally, as discussed below, congressional policy provides

that multiemployer pension plans like the Fund are entitled to enforce the terms of their

plans uniformly.

                                             3.

       We conclude by noting that the district court’s analysis would also undermine the

statutory protections Congress set in place for multiemployer pension plans. In providing

a cause of action permitting plans to enforce contribution requirements according to the

plain terms of the controlling documents, Congress created a statutory scheme that would

allow plans to enforce their contribution obligations uniformly and thereby avoid

discrepancies in the enforcement of such obligations. But that is precisely what the district

court’s holding permits: if the unique evergreen clause in Four-C-Aire’s individual CBA

indeed dictated the extent of its obligations to the Fund, the Fund would be prevented from

uniformly enforcing exit contribution requirements because other withdrawing employers

would be able to point to similar individual CBA terms to limit their particular obligations

to the Fund. Instead, by enforcing the terms of the Trust Documents and Amendment

according to their plain language, the Fund is able to ensure uniform application of the exit

contribution requirements.

       This also streamlines the collections process and ensures the Fund remains solvent

based on the application of that plain language. Because the Fund provides mechanisms

                                             28
that spread the risks and costs of running a benefits plan amongst multiple employers, the

cost of Four-C-Aire’s withdrawal without the guarantee of exit contributions or withdrawal

liability would be shouldered to a far greater extent by the remaining employers (as well

as the employees)—a result § 515 was designed to avoid.

       Finally, if the Fund were not able to bring such a suit under § 515, it would have

instead been forced to rely on litigation between the employer and union to enforce the

contribution requirement—which, as discussed above, would have more likely than not

resulted in delayed or reduced contributions. Furthermore, the Fund’s interest in avoiding

such litigation is particularly important given that it does not have the same duties and

interests as Local Union No. 58. Id. at 1021–22. For all of these reasons, the district court’s

analysis erroneously ignored the statutorily mandated protections afforded to

multiemployer pension plans.

                                           ****

       The district court thus erred in concluding the incorporation of the Trust Documents

did not survive the termination of the CBA as a basis to grant Four-C-Aire’s motion to

dismiss. And for the reasons discussed above, the allegations of the complaint are sufficient

to state a claim for relief under § 515 of ERISA. 29 U.S.C. § 1145.

                                             IV.

       The district court also articulated two alternative grounds for dismissing the Fund’s

claim for an exit contribution, which were based solely on its holding that the Fund could

not bring its claim under the language of the Amendment. The first ground was that the

                                              29
complaint contained insufficient allegations to demonstrate that the Amendment had been

“properly incorporated into the CBA.” Four-C-Aire, 2017 WL 1479425, at *11. The

second was that the CBA’s language purporting to give the Fund unfettered unilateral

modification power over the Trust Documents was “illusory” and therefore unenforceable,

making the Amendment also unenforceable. Id. at *11‒*12. The district court was wrong

on both grounds.

       The district court erred in dismissing the Fund’s claim based on perceived flaws in

the Trust Documents’ amendment process. Specifically, the court held that applying an

amendment that had been added without Four-C-Aire’s “knowledge, awareness, or

consent[] would result in surprise and hardship.” Id. at *11. It then noted that because the

complaint lacked any allegations that Four-C-Aire had the opportunity “to acknowledge

and assent to” the Amendment “or was even aware of this Amendment,” the corporation

could not be bound by the Amendment. Id. Further, the district court observed that the

Complaint did not allege “who amended the document or how it was amended,” or whether

the Fund “had any specific process for amending” the Trust Documents. Id.

       At the motion to dismiss stage, the court should not have considered the viability of

a potential defense against enforcement of the Amendment due to an invalidity in its

adoption; such a consideration requires factual development that is not before the court

when considering a motion to dismiss. When considering the sufficiency of a complaint’s

allegations under a Rule 12(b)(6) motion, courts must construe the complaint “liberally so

as to do substantial justice.” Hall v. DIRECTV, LLC, 846 F.3d 757, 765 (4th Cir. 2017)

(internal quotation marks omitted). In turn, the complaint need only “give the defendant

                                            30
fair notice of what the claim is and the grounds on which it rests” by “stat[ing] a claim to

relief that is plausible on its face.” Id. (internal quotation marks omitted). Plaintiffs are not

ordinarily required to plead allegations relevant to potential affirmative defenses to an

asserted claim. See Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007) (en banc)

(noting that “[i]n the relatively rare circumstances where facts sufficient to rule on an

affirmative defense are alleged in the complaint, the defense may be reached by a motion

to dismiss,” but that this principle only applies “if all facts necessary to the affirmative

defense clearly appear[] on the face of the complaint” (second alteration in original)

(emphasis and internal quotation marks omitted)). But by considering the viability of

potential defenses, the district court here failed to view the complaint’s allegations—

including all reasonable inferences—in the Fund’s favor as the non-moving party.

       The Fund’s complaint states that the Trust Documents were “amended,” J.A. 16

¶ 44, to add certain language that further supported its claim that Four-C-Aire owed an exit

contribution. Under the above-stated principles, these allegations are sufficient to

withstand dismissal: they give Four-C-Aire fair notice that the Fund will be relying on the

Amendment to support the claim that it owes an exit contribution. Of course, after further

factual development, Four-C-Aire is not barred from challenging the validity of the

amendment process. However, at the motion to dismiss stage, it is premature and

speculative to conclude that unknowns about the amendment process render the

Amendment unenforceable against Four-C-Aire as a matter of law. See Goldfarb v. Mayor

& City Council of Balt., 791 F.3d 500, 513 (4th Cir. 2015) (holding that the district court

erred in granting a motion to dismiss where the complaint “provide[d] sufficient detail

                                               31
about [the] claim to show that [the plaintiff] has a more-than-conceivable chance of success

on the merits” (second and third alterations in original) (internal quotation marks omitted)).

       In addition, the district court erred in determining that the CBA provision

incorporating any future amendments to the Trust Documents bestowed a “complete lack

of procedural or substantive limits on [the Fund’s] unilateral modification power (as pled),”

“mean[ing] that the clause itself is illusory.” Four-C-Aire, 2017 WL 1479425, at *11.

Under the principles governing a motion to dismiss set out above, the Fund wasn’t required

to allege such limits in order to allege facts plausibly stating a claim for relief. Again, the

district court prematurely assumed certain flaws in the amendment process rather than

recognizing that any defenses based on those points are beyond the proper scope of review

on a motion to dismiss. The complaint alleged that the Amendment is binding on Four-C-

Aire and that its language, coupled with the pre-Amendment language in the Trust

Documents, shows Four-C-Aire’s obligation to pay an exit contribution. Those allegations

suffice to state a claim for relief and dismissal based on the assumed errors in the

amendment process was therefore in error.

                                              V.

       For the reasons set forth above, we reverse the district court’s order granting Four-

C-Aire’s motion to dismiss, vacate the judgment as to the exit contribution claim, and

remand for further proceedings consistent with this opinion.

                                                                    REVERSED, VACATED,
                                                                        AND REMANDED

                                              32