Court Opinion

ID: 196507
Source: CourtListenerOpinion
Date Created: 2011-02-07 03:07:36+00
Date Added: 2024-06-11T09:43:05.674474
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UNITED STATES COURT OF APPEALS
                            UNITED STATES COURT OF APPEALS
                    FOR THE FIRST CIRCUIT
                                FOR THE FIRST CIRCUIT

                                         

No. 95-1032

              GIROUX BROS. TRANSPORTATION, INC.,

                    Plaintiff, Appellant,

                              v.

   NEW ENGLAND TEAMSTERS & TRUCKING INDUSTRY PENSION FUND,

                     Defendant, Appellee.

                                         

         APPEAL FROM THE UNITED STATES DISTRICT COURT

              FOR THE DISTRICT OF MASSACHUSETTS

       [Hon. Douglas P. Woodlock, U.S. District Judge]
                                                                 

                                         

                            Before

                    Boudin, Circuit Judge,
                                                     

          Aldrich and Coffin, Senior Circuit Judges.
                                                               

                                         

John  D. O'Reilly,  III with whom  O'Reilly & Grosso  was on brief
                                                                
for appellant.
Christopher N.  Souris with  whom Feinberg,  Charnas &  Birmingham
                                                                              
was on brief for appellee.

                                         

                       January 4, 1996
                                         

          ALDRICH,   Senior  Circuit  Judge.    Giroux  Bros.
                                                       

Transportation,  Inc.  (Giroux)  appeals  from  the grant  of

summary judgment in favor of New England Teamsters & Trucking

Industry  Pension  Fund (the  Fund),  the plan  sponsor  of a

multi-employer   employee  benefit   plan  in   which  Giroux

participated.   Giroux sought a declaration  of non-liability

for the  Fund's assessment of withdrawal  liability under the

Employee Retirement Income  Security Act (ERISA), as  amended

by  the Multiemployer  Pension  Plan Amendments  Act of  1980

(MPPAA),  29 U.S.C.   1381 et seq, claiming the Fund's demand
                                             

was barred by  the statute of limitations, and  that hardship

should excuse it from the obligation to make interim payments

of the Fund's demand pending resolution of this dispute.  The

Fund  counterclaimed to  the contrary.   The  court concluded

that  the Fund's demand was not barred, that Giroux failed to

allege facts sufficient  to show irreparable harm in order to

avoid  its  obligation to  make  interim  payments, and  that

resolution of its  withdrawal liability dispute  is committed

in the first instance to arbitration.  We affirm.

          The parties agreeing to the material facts, we take

a moment to trace  the genesis and procedural history  of the

controversy.  Giroux had been making pension contributions to

the Fund  on behalf of  its employees for  a number  of years

pursuant to  a standard, industry-wide  collective bargaining

agreement to which it  periodically renewed its allegiance by

                             -2-

executing "supplements"  with a Teamsters local.   It decided

to  stop with the last executed agreement upon its expiration

in 1981  or 1982, but neglected  to notify the local,  or the

Fund.  In light of a  common industry tolerance  for delay in

executing renewals,1 failure to execute a new agreement would

not necessarily give rise to an inference that an employer no

longer intended  to be  bound, and Giroux  continued, without

interruption, to make  employee contributions  to the  Fund's

pension plan until early  1994.  When these payments  ceased,

the Fund  responded by sending Giroux  a standard delinquency

notice,  to which  Giroux responded  that it  had "not  had a

collective bargaining agreement with  the Teamsters for  some

15-20  years,"  and  thus   had  no  obligation  to  continue

contributions.  The Fund then  verified that Giroux had never

executed any successors to the agreement that expired in 1981

or  1982,  and  conceded   Giroux  thus  had  no  contractual

obligation to contribute after that point.  The parties agree

that  Giroux therefore  "withdrew" from  the Fund  within the

meaning of the  MPPAA,   1383(a)(1),  upon expiration of  its

last  collective bargaining  agreement, sometime  in 1981  or

1982.   The Fund therefore  assessed and demanded  payment of

withdrawal liability from Giroux as of September 30, 1981, as

                    
                                

1.  The  district  court noted  that  gaps  of several  years
between  expiration and  renewal are  not uncommon  among the
thousands  of   employers  that  adhere  to   the  collective
bargaining  agreement  through  executing   supplements  with
Teamsters locals.

                             -3-

provided.  29 U.S.C   1381 et seq.
                                              

          In  October,  1994,  Giroux  initiated  arbitration

according to the MPPAA's mandatory arbitration provision, id.
                                                                         

at     1401,  claiming   the  Fund's  demand  for  withdrawal

liability  payment   some  12   years  after  its   effective

withdrawal was untimely, and, even if timely, it was entitled

to   credit  for   post-withdrawal  contributions.     Giroux

simultaneously  instigated  this action  in  the  District of

Massachusetts for declaratory judgment that the Fund's demand

was statutorily  barred by the six  year limitation contained

in   1451(f),  and for injunctive relief from  its obligation

under    1399(c)(2) to  make interim  payments of  the Fund's

withdrawal  liability  assessment pending  resolution  of its

claims.    The  Fund  counterclaimed to  the  contrary.    It

stressed  that  the timeliness  of  its  demand was  governed

exclusively  by    1399(b),  which  in  turn  is  statutorily

committed  to resolution  through  arbitration, 29  U.S.C.   

1401(a)(1), and sought declaratory relief.

          In December,  1994, the  district court ruled  that

the  Fund's demand was not barred by   1451(f), that Giroux's

allegations  of   financial  hardship   did  not   amount  to

"irreparable  harm"  sufficient to  exempt it  from statutory

obligation to  make interim payments, and  that any remaining

dispute  with respect to the Fund's demand had to be resolved

through   arbitration.     Giroux's  appeal  was   argued  in

                             -4-

September, 1995.

          In October, 1995, the arbitrator ruled, inter alia,
                                                                        

that  Giroux was  estopped  from contending  that the  Fund's

demand was  untimely by  its own "equivocal"  and "deceitful"

actions,  and that  the Fund's  demand was  made "as  soon as

practicable" under   1399(b)(1) in any event; it  declined to

rule on  Giroux's offset  claim.   Both parties briefed  this

court on the implications of  the arbitration award for  this

appeal.

                    I.  Withdrawal Liability
                                                        

          The  MPPAA  was enacted  in  response  to a  crisis

facing multi-employer  pension plans from which employers had

withdrawn in  increasing numbers,  leaving the  plans without

adequate funds to pay vested  employee benefits.  See Pension
                                                                         

Benefit Guaranty Corp. v. R.A. Gray & Co., 467 U.S. 717, 722-
                                                     

25 (1984).  The act makes an employer withdrawing from such a

plan  liable  for  its  proportionate  share  of  the  plan's

unfunded vested benefits.   Id.  at 725; 29  U.S.C.     1381,
                                           

1391.     Withdrawal  generally   occurs  when  an   employer

permanently ceases to have  an obligation to contribute under

the  plan,  or  ceases  all   covered  operations.    Id.  at
                                                                     

  1383(a).  The plan sponsor must assess, schedule and demand

withdrawal liability payment "[a]s soon as  practicable after

an  employer's  complete  or  partial  withdrawal,"  id.   at
                                                                    

  1399(b)(1),  and  an employer  must  pay  according to  the

                             -5-

Fund's schedule notwithstanding any  pending dispute.  Id. at
                                                                      

  1399(c)(2).

                             -6-

                 II.  Statute of Limitations
                                                        

          Giroux  seeks  to  avoid  the  Fund's   demand  for

withdrawal  liability  payment  by invoking  the  limitations

provision of the MPPAA, which states, in relevant part,  that

a plan fiduciary

          who is  adversely affected by the  act or
          omission of any party under this subtitle
          with    respect   to    a   multiemployer
          plan, . . .  may  bring  an   action  for
          appropriate legal or equitable relief, or
          both,

29 U.S.C.   1451(a)(1), but no later than

          (1) 6  years after the date  on which the
          cause of action arose, or

          (2) 3  years after  the earliest date  on
          which  the  plaintiff acquired  or should
          have  acquired  actual  knowledge of  the
          existence of such cause of action; except
          that in the case of fraud or concealment,
          such action may be brought not later than
          6 years after  the date  of discovery  of
          the existence of such cause of action.

Id. at    1451(f).  Giroux  claims that because the  Fund did
               

not demand  withdrawal liability payment until  some 12 years

after Giroux's  withdrawal from the Fund's  pension plan, its

demand is barred by this provision.

          The Fund contends on appeal that its demand in this

case is not governed by   1451(f) because this provision is a

limitation only on litigation, and since it did not instigate
                                                       

this  lawsuit but  merely demanded  payment according  to its

statutory rights, it has not commenced an "action" within the

meaning of   1451.  Thus, according to  the Fund, the statute

                             -7-

of limitations cannot have  begun to run with respect  to any

action it could bring to enforce these rights.
                                            

          We cannot  agree that an action  for declaration of

non-liability  asserting a  statute  of  limitations  defense

renders the statute inapplicable simply by virtue of the fact

that  the  party  claiming  liability did  not  commence  the

action,  especially  where  (but   not  because)  that  party

counterclaimed for declaration and enforcement of its rights.

However,  the principal question  raised by  Giroux's action,

whether  the  Fund  timely  made its  demand,  is  explicitly

governed by   1399, which provides:

          As   soon   as   practicable   after   an
          employer's     complete    or     partial
          withdrawal, the plan sponsor shall--

          (A)  notify the employer of--

               (i) the amount of the liability, and

               (ii) the schedule for liability payments,
               and

          (B) demand payment in accordance with the
          schedule.

29 U.S.C.   1399(b)(1).   The MPPAA further provides  that if

the Fund's  demand for withdrawal liability  payment was made

"as  soon  as  practicable,"  then   it  is  due  and  owing,

notwithstanding  a pending dispute, id. at   1399(c)(1)(A)(i)
                                                   

and  (2),  and  the  Fund  can  bring  an  action  to  compel

"immediate  payment"  of  any  outstanding  amounts,  id.  at
                                                                     

   1399(c)(5)  and  1451(a), subject  to  the statutory  time

                             -8-

limitation.    Id.  at   1451(f).    We  find this  statutory
                              

framework  governing a plan  sponsor's demand  for withdrawal

liability payment  sufficiently clear  so that to  the extent

the general 6 year  limitation on actions conflicts, Congress

did  not intend  it  to override.    We therefore  hold  that

questions  concerning  the  timeliness of  a  plan  sponsor's

demand  are  governed  exclusively  by    1399(b)(1).    Thus

resolution  of Giroux's  claim  turns solely  on whether  the

Fund's  demand  was  made  "as  soon  as  practicable"  after

Giroux's withdrawal.2

          However,  any dispute  regarding the  timeliness of

the Fund's demand under   1399(b)(1) is statutorily committed

to   arbitration  in   the   first  instance.     29   U.S.C.

  1401(a)(1).3   This  is  no less  so  because it  may  also

involve  a measure  of statutory  interpretation.   Vaughn v.
                                                                      

Sexton,  975 F.2d 498, 502 (8th Cir. 1992), cert. denied,    
                                                                    

U.S.    , 113  S. Ct.  1268, 122 L.Ed.2d  664 (1993)  (citing

cases  of 2d,  3d,  4th, 6th  and  D.C. circuits);  Teamsters
                                                                         

                    
                                

2.  We  express  no  views  on the  significance  of  section
1451(f) to a  determination of whether the Fund's  demand was
made  "as  soon as  practicable"  within  the  meaning  of   
1399(b)(1), as this question is not before us.  See post.
                                                                    

3.        Any dispute between  an employer and  the
                         
          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.   1401(a)(1) (emphasis added).  

                             -9-

Pension  Trust Fund v. Allyn Transp. Corp., 832 F.2d 502, 504
                                                      

(9th Cir. 1987); Trustees of Colorado Pipe Ind. Pension Trust
                                                                         

v. Howard Electrical & Mech., Inc., 909 F.2d 1379, 1386 (10th
                                              

Cir. 1990), cert. denied, 498 U.S. 1085 (1991).
                                    

          Although the arbitration provision is an exhaustion

of  administrative   remedies  requirement,  rather   than  a

jurisdictional  bar, see,  e.g., Colorado  Pipe, 909  F.2d at
                                                           

1385 (citing cases),  there can  be no question  that it  was

aptly applied here, when arbitration was already underway.

              III.  Relationship of this Appeal 
                                                            

             to Parallel Arbitration Proceedings
                                                            

          It  now  seems to  be  Giroux's  position that  the

arbitrator's determination that the  Fund's demand was timely

under   1399(b)(1) is before this  court for review, or, that

this  issue, never raised before the  district court, is open

for our consideration.   Although it might conserve resources

in  this instance to  concur, we disagree.   Rather, Giroux's

only recourse is to pursue judicial review of the arbitration

award:

          Upon   completion   of  the   arbitration
          proceedings   in  favor  of  one  of  the
          parties,any  party  thereto may  bring an
          action, no later  than 30 days  after the
          issuance  of an arbitrator's award, in an
          appropriate United  States district court
          in  accordance with section  1451 of this
          title to enforce,  vacate, or modify  the
          arbitrator's award.

29  U.S.C.   1401(b)(2).  This simultaneously pending action,

                             -10-

brought separately  to assert a claim  under a non-arbitrable

provision of the MPPAA,  does not qualify as a  proper appeal

of  the arbitrator's ruling.   We see no  reason to undertake

review of the arbitrator's analysis when it is beyond serious

dispute that issues  arising under   1399  cannot normally be

litigated in  federal court  independent of  arbitration, and

the process for appealing an arbitration award is clear.

          We are well  aware that  enforcing the  statutorily

mandated procedure in this case could land it again before us

in substantially the same posture after additional expense on

both  sides, and  that the  legislative  aim in  enacting the

MPPAA included  lessening the  costs and delay  of withdrawal

liability dispute resolution.  See, e.g., I.A.M. Nat. Pension
                                                                         

Fund v.  Clinton Engines Corp., 825 F.2d 415 at 426 and n. 20
                                          

(D.C. Cir. 1987) (citing legislative history).  Yet,  to hold

otherwise would create a loophole for employers to bypass the

statutory  scheme  by  disguising  arbitrable   disputes  for

presentation directly  in federal court, as  Giroux did here,

then  invoking legislative  purpose  in order  to get  prompt

appellate consideration.  Because this is not a proper appeal

of the  arbitrator's award,  and we decline  to independently

reach Giroux's  arbitrable claims,  we do not  review whether

the Fund's demand was  made "as soon as practicable,"  or any

other arbitrable issues.

          IV.  Interim Payment of the Fund's Demand
                                                               

                             -11-

          The  district  court held  that Giroux's  claims of

hardship were  insufficient  to avoid  meeting its  statutory

obligation  to make  interim  payments of  the Fund's  demand

pending  ultimate  resolution  of  its  withdrawal  liability

dispute.    29  U.S.C.     1399(c)(2).4    See  Debreceni  v.
                                                                     

Merchants  Terminal Corp.,  889  F.2d 1,  4 (1st  Cir. 1989);
                                     

Trustees  of the  Plumbers and  Pipefitters National  Pension
                                                                         

Fund  v. Mar-Len,  Inc., 30  F.3d 621,  624 (5th  Cir. 1994).
                                   

Giroux contended  that the Fund's claim  would most certainly

be found barred by   1451(f), and that meeting these payments

would  require  a  partial  liquidation  of  its  assets  and

employee  layoffs,  hence  the  court  therefore  abused  its

discretion in failing  to suspend payment.   We have  already

disposed of Giroux's first contention; we turn to the second.

          The MPPAA indisputably creates a  "pay now, dispute

later"  mechanism, deeming  the protection  of multi-employer

pension plans and their beneficiaries paramount.   See id. at
                                                                      

624  (citing cases); Debreceni, 889  F.2d at 5.   This scheme
                                          

                    
                                

4.  This section states, in relevant part:

          Withdrawal liability shall be  payable in
                                                
          accordance with the schedule set forth by
          the plan sponsor under  subsection (b)(1)
          of this section  beginning no later  than
                                                               
          60  days  after the  date  of  the demand
          notwithstanding any request for review or
                                     
          appeal of determinations of the amount of
          such liability or of the schedule.

29 U.S.C.   1399(c)(2) (emphasis added).

                             -12-

puts payment ahead of decision even though the employer might

prevail in  the  end.5   Trustees  of Chicago  Truck  Drivers
                                                                         

Pension Fund v. Central Transp., Inc., 935 F.2d 114, 118 (7th
                                                 

Cir. 1991).   Although we have therefore  held that "assessed

interim liability payment must be  paid . . . notwithstanding

a  pending arbitrable dispute," Debreceni, 889  F.2d at 4, we
                                                     

have never  squarely decided  whether an  equitable exception

exists.6    Id.  at 7.    However,  in  light  of  the  clear
                           

congressional intent to  protect multi-employer pension plans

in  withdrawal liability  disputes,  we have  indicated  that

should an equitable exception exist it would "require no less

than the threat of imminent insolvency."   Id. at 7 and n. 6.
                                                          

Giroux's allegations,  even if accepted, do  not suggest such

harm.

          Affirmed.
                              

                    
                                

5.  The  MPPAA requires  "actual  payment  shall commence  in
accordance  with   [the  schedule  set  forth   by  the  plan
sponsor],"  29 U.S.C.     1399(c)(1)(A)(i) and  (2), note  4,
supra;  Debreceni, 889  F.2d at  6; the  plan has a  right to
                             
"immediate payment" of any outstanding amount, plus interest,
"from the due date of the first  payment which was not timely
made," 29 U.S.C.   1399(c)(5); a plan may enforce this right,
id.  at   1451(a)(1);  employers are entitled  to recovery of
               
any overpayment, with interest, 29 C.F.R.   2644.2(d).

6.  Other circuits  have held  an employer may  avoid interim
payment  only if the pension plan's claim is frivolous or not
colorable.   Mar-Len,  30  F.3d at  626; Trustees  of Chicago
                                                                         
Truck Drivers v.  Central Transport, Inc., 935 F.2d  114, 119
                                                     
(7th Cir. 1991).

                             -13-