Court Opinion

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Opinions of the United
1997 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

1-29-1997

Galgay v. Beaverbrook Coal Co
Precedential or Non-Precedential:

Docket 95-7532

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               THE UNITED STATES COURT OF APPEALS
                     FOR THE THIRD CIRCUIT

                           __________

                          No. 95-7532
                           __________

      FRANK J. GALGAY; FRANCIS P. BONNER, TRUSTEES OF THE
 ANTHRACITE HEALTH AND WELFARE FUND (PENSION TRUST); ANTHRACITE
            HEALTH AND WELFARE FUND (PENSION TRUST),

                                         Appellants

                               v.

           BEAVERBROOK COAL COMPANY; GEORGE HUSS JR.;
              WILLIAM HUSS; HUSS INDUSTRIES, INC.

                                         Appellees

                           __________

         ON APPEAL FROM THE UNITED STATES DISTRICT COURT
             FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
                 (D.C. Civ. Action No. 95-00433)
                            __________

                      Argued June 28, 1996
                           __________

        BEFORE: BECKER, NYGAARD AND LEWIS, Circuit Judges

                (Opinion Filed January 29, 1997)

                           __________

                                    A. Richard Caputo (Argued)
                                    Thomas J. Mosca
                                    Shea, Shea and Caputo
                                    387 Wyoming Avenue
                                    P.O. Box 2059
                                    Kingston, Pa. 18704-2059

                                    Counsel for the Appellants

                                    Michael Beltrami (Argued)
                                    1110 South Church Street
                                    Hazleton, Pa. 18201

                                    Counsel for the Appellees

Nygaard, Circuit Judge.

                               1
     This appeal stems from appellants' action to compel

Beaverbrook Coal Company, George Huss, Jr., William Huss and Huss

Industries, Inc. to make interim withdrawal liability payments

while the parties arbitrate liability.    The district court denied

appellants' motion for injunctive relief and their motion for

reconsideration.    We will reverse and remand.

                                 I.

     Appellants are trustees of the Anthracite Health and Welfare

Fund and the fund itself (collectively, the "Fund"), a

multiemployer pension plan under the Multiemployer Pension Plan

Amendments Act of 1980 ("MPPAA"), 29 U.S.C. § 1381 et seq.    The

Beaverbrook Coal Company, a signatory to the Anthracite Wage

Agreement, is a general partnership consisting of George Huss,

Jr. and William Huss.    Huss Industries, Inc. is a Pennsylvania

corporation.    Beaverbrook, George and William Huss, and Huss

Industries are all appellees.

     For over ten years, Beaverbrook made payments to the

Anthracite Health and Welfare Fund Pension Plan.    In August of

1994, the Fund notified Beaverbrook that it had effectively

withdrawn from the Fund on June 15, 1993.    The Fund subsequently

assessed Beaverbrook withdrawal liability in the amount of

$146,242.00, to be paid in monthly installments of $1,966.17.

Beaverbrook initiated arbitration proceedings to contest the

Fund's claim.    Because Beaverbrook refused to make withdrawal

liability payments in the interim, the Fund sued under 29 U.S.C.

§ 1132(g)(2) to recover the delinquent payments, liquidated

                                 2
damages, attorney's fees and costs.   The Fund also sought an

order directing appellees to make monthly payments and to provide

a bond in the total amount of the withdrawal liability.    One

month later the Fund requested the same relief by a motion for a

mandatory preliminary injunction.

     The district court denied both the Fund's motion for a

preliminary injunction and its motion for reconsideration.

Noting the employer's "compelling obligation to make interim

payments" under MPPAA, the court nonetheless held that the Fund

had failed to demonstrate that it would suffer irreparable harm

if temporary relief were not granted.   The district court further

indicated that Beaverbrook might not be obligated to make interim

payments when the merits of the Fund's claim were considered if

Beaverbrook showed that it would suffer irreparable harm as a

result.   Finally, the court declined to rule on whether all of

the defendants were employers for purposes of MPPAA and,

consequently, obligated to satisfy Beaverbrook's withdrawal

liability, holding that Flying Tiger Line v. Teamsters Pension

Trust Fund of Philadelphia, 830 F.2d 1241 (3d Cir. 1987) mandated

that the issue be addressed first in arbitration.

     On appeal, the Fund argues that it need not satisfy the

traditional requirements for a preliminary injunction because,

under MPPAA, employers are required to make interim payments, so

the Fund need show only that payments were not made when

demanded.   The Fund also disputes the district court's suggestion

that Beaverbrook may avoid making interim payments if it can

demonstrate that it would be irreparably harmed as a result.      In

                                3
addition, the Fund contends that under Flying Tiger the court

must decide whether all of the appellees are considered employers

for purposes of MPPAA, since the answer to that question

determines the arbitrator's jurisdiction.    The issues appellant

raises are legal questions over which we exercise plenary review;

we will consider each in turn.

                                 II.

     An employer withdraws from a multiemployer pension plan when

the employer either permanently ceases to have an obligation to

contribute under the plan or permanently ceases all covered

operations under the plan.    29 U.S.C. § 1383(a).   The employer is

liable for its share of the plan's unfunded vested benefits as

calculated at the time of withdrawal.    29 U.S.C. §§ 1381, 1383,

1391; Concrete Pipe & Products v. Construction Laborers Pension

Trust, 508 U.S. 602, 609, 113 S. Ct. 2264, 2272 (1993).     The plan

sponsor has the responsibility of determining this withdrawal

liability, notifying the employer and collecting payment.     29

U.S.C. § 1382.   If the employer disputes the amount set, it may

ask the plan sponsor to conduct a reasonable review of the

computed liability.    29 U.S.C. § 1399(b)(2)(A).    In the event the

dispute is unresolved, either party may request arbitration.       29

U.S.C. § 1401(a)(1).    The arbitrator's award, in turn, may be

challenged in federal court.    29 U.S.C. § 1401(b)(2).

     Congress enacted MPPAA out of concern that multiemployer

pension plans would collapse as employers withdrew if the

remaining contributors became too few in number to pay the

unfunded vested benefits.    See H.R. Rep. No. 869, Pt. II, 96th

                                 4
Cong., 2d Sess. 10-11 (1980), reprinted in 1980 U.S.C.C.A.N.

2918, 3000-01.    Congress foresaw that the purpose of MPPAA would

be undermined if employers could postpone paying their debts to

pension funds by engaging in protracted litigation over

withdrawal liability.     Pantry Pride, Inc. v. Retail Clerks Tri-

State Pension Fund, 747 F.2d 169, 171 (3d Cir. 1984) (citing

Senate Comm. on Labor and Human Resources, Summary and Analysis

of S. 1076, 96th Cong., 1st Sess. (1980), reprinted in Special

Supp. 310, Pens.Rep. (BNA) 81, 84-85 (1980); H.R. Rep. No. 869,

reprinted in 1980 U.S.C.C.A.N. at 2952).    Therefore, the statute

directs employers to begin payments upon notification of

withdrawal liability, whether or not they choose to dispute the

determination.

     Section 4219(c)(2) of MPPAA states:
Withdrawal liability shall be payable in accordance with the
     schedule set forth by the plan sponsor . . . 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).    Similarly, § 4221(d) of MPPAA, 29 U.S.C.

§ 1401(d), specifies that payments are to be made during

arbitration.     Should the arbitrator decide that the plan sponsor

erred in assessing withdrawal liability, the employer is

reimbursed for any overpayment.       Id.
       When an employer fails to make a withdrawal liability

payment within the prescribed time, an action may be brought in

federal or state court to compel payment.     29 U.S.C. § 1451(b) &

(c).    The plan sponsor need show only that it made a demand for

                                  5
interim payments under 29 U.S.C. § 1382 and that the payments

were not made.

     Here, Beaverbrook does not dispute that withdrawal liability

payment was demanded, or that it has refused to comply with the

demand.   Instead, it argues that a motion for preliminary

injunction is not a proper procedure for either compelling

payment or determining whether the appellees are all considered

employers for purposes of MPPAA.    We reject its argument.      The

denomination of the procedural vehicle is not important.      It is

true that we often consider demands for interim withdrawal

liability payments after summary judgment.      E.g., Board of

Trustees of Trucking Employees Pension Fund v. Centra, 983 F.2d
495 (3d Cir. 1992); United Retail & Wholesale Employees Teamsters

Union Local No. 115 Pension Plan v. Yahn & McDonnell, Inc., 787
F.2d 128 (3d Cir. 1986), aff'd, 481 U.S. 735 (1987).

Nonetheless, we have never foreclosed using preliminary

injunctive relief to ensure the payments mandated by Congress are

made.

     For instance, in Pantry Pride, we heard an appeal from a

district court order denying a motion to compel withdrawal

liability payments, which we construed as an order denying a

preliminary injunction. 747 F.2d at 170-71.    Although we held

that the district court should not have considered the motion

because the moving party in that action had not first made a

claim for interim payments, we indicated that the district court

would be free to consider a request for affirmative relief once

the claim had been made, since the court could then be certain

                                6
the employer had been afforded an opportunity to respond to the

motion and raise all defenses.   Id. at 171-72.   In this case, the

Fund acted as we directed in Pantry Pride, first filing a

complaint with a claim for interim payments, then making its

motion for a preliminary injunction.

     The district court held that for the Fund to obtain

preliminary injunctive relief it must first meet the traditional

requirements we reiterated in Acierno v. New Castle County:      1) a

reasonable probability of eventual success in the litigation; and

2) irreparable injury if relief is not granted, while taking into

account when relevant; 3) the possibility of harm to other

interested persons from the grant or denial of the injunction

and; 4) the public interest.   40 F.3d 645, 653 (3d Cir. 1994)

(citing Delaware River Port Authority v. Transamerican Trailer

Transport, Inc., 501 F.2d 917, 919-20 (3d Cir. 1974)).    The

district court found that any loss to the Fund could be measured

by economic terms; hence, the Fund would suffer no irreparable

injury.   In so finding, the district court erred.

     The traditional four-prong test for garden-variety

preliminary injunctions is not applicable in this context.      In

enacting the interim withdrawal liability provisions of MPPAA, 29

U.S.C. §§ 1399(c)(2), 1401(d), and the judicial mechanism for

their enforcement, 29 U.S.C. § 1451(b) & (c), Congress has

effectively determined that pension funds will be irreparably
harmed unless employers are enjoined to make interim payments

while litigation proceeds.   By enacting the withdrawal liability

provisions, Congress has concluded that the uninterrupted flow of

                                 7
payments is important in itself, Pantry Pride, 747 F.2d at 171,

and that the ultimate recovery of payments will not suffice to

make the Fund whole.   Congress has likewise determined that

neither party's probability of success in litigation is relevant:

 interim payments must be made regardless.

     Employers may be financially pressed to make sizeable

monthly payments to pension funds, and some courts when deciding

generally whether to order interim payment under 29 U.S.C. §

1381, have created an equitable exception to the requirement in

instances where the employer can show that it would suffer severe

financial hardship, and that the pension fund's claim is

frivolous or not colorable.     See Trustees of Plumbers and

Pipefitters National Pension Fund v. Mar-Len, Inc., 30 F.3d 621,

626 (5th Cir. 1994); Trustees of the Chicago Truck Drivers

Pension Fund v. Rentar Industries, Inc., 951 F.2d 152, 155 (7th

Cir. 1991); see also Giroux Brothers Transportation, Inc. v. New

England Teamsters & Trucking Industry Pension Fund, 73 F.3d 1, 5

(1st Cir. 1996) (dictum).     Similarly, the district court

indicated that, when considering the merits of the Fund's claim

for interim withdrawal liability payments, it might have the

equitable authority to refuse to order payments if Beaverbrook

showed that irreparable injury would result.

     We have never held that there are any equitable exceptions

to the statutory provisions on interim payments, see Centra, 983
F.2d at 507-08,1 and we decline to do so now.    Congress has
     1
      In Flying Tiger, 830 F.3d at 1253, we suggested in dictum
that a court could deny a pension fund's request upon an
employer's demonstration of irreparable injury. However, we went

                                  8
clearly indicated its intent in this matter.    The plain language

of the statute declares, "Withdrawal liability shall be payable

in accordance with the schedule set forth by the plan sponsor . .

. ."    29 U.S.C. § 1399(c)(2) (emphasis added).   No exceptions are

provided.    Our jurisdiction is limited to ordering the employer

to make interim payments once the pension fund has demonstrated

that it complied with the statutory requirements for calculating

liability and notifying the employer.    29 U.S.C. § 1382.

       Notably, the two circuits which adopted an irreparable-

injury exception have later held that courts only have discretion

to exercise it once the employer has made an affirmative showing

that the pension fund lacks a colorable or non-frivolous claim.

Mar-Len, 30 F.3d at 626 (5th Cir.); Rentar Industries, 951 F.2d

at 155 (7th Cir.).    These circuits have adopted the equitable

exception solely to ensure that the courts are not used by an

unscrupulous pension fund lacking a legitimate withdrawal

liability claim to squeeze money from an employer and propel it

into bankruptcy.     Mar-Len, 30 F.3d at 626 (citing Trustees of

Chicago Truck Drivers Pension Fund v. Central Transport, Inc.,

935 F.2d 114, 119 (7th Cir. 1991)).

       We do not now have occasion to consider adopting a similar

equitable exception.    At no point in the argument of this case

has Beaverbrook contended that the Fund's claim is frivolous or

non-colorable, although supplemental briefs were submitted on the

on to say that any such potential defenses were irrelevant to the
issue in Flying Tiger, namely, whether the dispute in that case
had to be arbitrated.

                                  9
very issue of possible equitable defenses to interim payment

liability.   See Rentar Industries, 951 F.2d at 155 (holding that

the employer must make an affirmative showing that the pension

fund lacks a colorable claim).    Nor did Beaverbrook submit any

evidence to support its claim of irreparable harm.   See id.

(declaring the district court was not obligated to hold a hearing

so the employer could demonstrate irreparable harm when employer

offered no evidence to support its assertion).

     We agree with the reasoning employed by the Fifth and

Seventh circuits in concluding that a showing of irreparable harm

to the employer is alone insufficient to warrant equitable relief

from interim payment liability.    In both instances, these courts

of appeals have recognized that withdrawing employers are often

financially troubled companies.    Mar-Len, 30 F.3d at 626; Central

Transport, 935 F.2d at 118-19.    If such companies are allowed to

defer paying their debt to the pension funds, and go out of

business while liability is being litigated, the pension funds

will be saddled with full liability for the unfunded pension

benefits.    The interim payment provisions are designed to

diminish this risk.   Mar-Len 30 F.3d at 626; Central Transport
935 F.2d at 118.

     We believe that it would contort the law if we were to allow

the undercapitalized or financially precarious companies that

pose the very risk to pension funds that MPPAA was designed to

correct to defer payment because they pose that risk.    It is

inappropriate to refuse a preliminary injunction ordering interim

withdrawal liability payments on the grounds that the payments

                                  10
might pose a financial risk to the employer.

     Congress has effectively answered all the questions a court

generally asks when considering a motion for a preliminary

injunction.   We will not substitute our own views on the wisdom

of ordering interim withdrawal liability payments.     The Fund had

sustained its burden of showing that withdrawal liability was

assessed, Beaverbrook was notified and payments were not made.

That is all the statute requires.      Therefore, the district court

erred by refusing to grant the Fund's request for a preliminary

injunction.

                                III.

     The district court also did not decide whether all of the

appellees are employers for purposes of MPPAA, finding that our

decision in Flying Tiger directed that the issue first be

resolved in arbitration.   Here too it erred, because resolving

this issue determines the arbitrator's authority over the

withdrawal liability dispute.

     In both Flying Tiger and our recent decision in Doherty v.

Teamsters Pension Trust Fund of Philadelphia, we have

distinguished between disputes over whether an entity has ceased

to be an employer within the meaning of MPPAA, which must be

resolved in arbitration, and disputes over whether an entity has

ever become an employer, which must be resolved in the courts.

Doherty, 16 F.3d 1386, 1390-91 (3d Cir. 1994); Flying Tiger, 830
F.2d at 1250-51.   In the first instance, Congress has directed

that an arbitrator shall initially determine if an entity that

was once an employer took steps to evade or avoid liability as

                                11
defined under 29 U.S.C. § 1392(c).    29 U.S.C. § 1401(a)(1) ("Any

dispute between an employer and the plan sponsor of a

multiemployer plan concerning a determination made under sections

1381 through 1399 of this title shall be resolved through

arbitration."); Flying Tiger, 830 F.2d at 1250.

     By contrast, an entity which has never been an employer

within the meaning of MPPAA is not subject to the arbitrator's

jurisdiction, since 29 U.S.C. § 1401(a)(1) only mandates

arbitration for disputes between "an employer and the plan

sponsor."   Doherty, 16 F.3d at 1390 (quoting 29 U.S.C. §

1401(a)(1)).   Therefore, entity's employer status is a legal

question to be resolved by the court.    In particular, we held in

Doherty that the issue of whether persons or entities are "alter

egos" or members of the same controlled group is properly

resolved in the courts.   Id. at 1390-91.

     Here, some of the appellees have disputed the Fund's

assertion that they are liable as employers under an "alter-ego"

or controlled-group theory.   This is a question of law upon which

courts are indeed empowered to act.     The district court erred by

holding that the issue should be resolved in arbitration.    We

will remand this issue for further proceedings.

                               IV.

     For these reasons, we will reverse and remand to the

district court to determine whether the appellees are employers

under MPPAA, and for it to enter an order requiring Beaverbrook

to make interim payments as scheduled by the Fund.

                          ________________________

                                12
Circuit JudgeFRANK J. GALGAY; FRANCIS P. BONNER, TRUSTEES OF THE

ANTHRACITE HEALTH AND WELFARE FUND (PENSION TRUST); ANTHRACITE

HEALTH AND WELFARE FUND (PENSION TRUST), Appellants v.

BEAVERBROOK COAL COMPANY; GEORGE HUSS JR.; WILLIAM HUSS; HUSS

INDUSTRIES, INC.

Appellees, No. 95-7532

BECKER, J., Dissenting.

     The majority's decision is driven by its conclusion that

when the Congress provided that withdrawal liability "shall be

payable . . . no later than 60 days after the date of the demand

notwithstanding any request for review," 29 U.S.C. § 1399(c)(2)

(emphasis added), Congress provided for a mandatory injunction.

Under this approach, a district court must impose such an

injunction even if:    (1) the trustees' demand for payment is

frivolous (in terms of either liability or amount demanded); and

(2) the payment would bankrupt or financially cripple the

withdrawing employer and eliminate the possibility of future

payments.   I disagree.

                                 I.

     First, I doubt that Congress's words here are susceptible to

that construction.    It uses the phrase "shall be payable," which
seems much more open-ended than "shall be paid."   Thus, the

statute is at least ambiguous.    Looking to Congressional intent,

I do not believe that Congress here intended a result so

inflexible and therefore so problematic.

     Like the majority, I read Congress to be concerned that an

                                 13
employer could stymie a pension fund's collection attempts by

pursuing litigation over withdrawal liability.    However, by

disallowing consideration of the employer's inability to pay in

the face of a frivolous withdrawal liability claim, the majority

actually undermines Congress's goals.    If an employer becomes

financially insolvent as a result of its withdrawal payment

obligations, the pension fund will not only be unable to receive

"an uninterrupted flow of payments,"    but also will be the but

for cause of its own inability to secure "ultimate recovery."

Furthermore, the proposal that I will advance -- giving courts

the discretion to deny a preliminary injunction only when the

pension's claim is not colorable and when requiring interim

payments would push a financially distressed employer over the

cliffs -- preserves Congress's "pay now, dispute later" scheme.

                               II.

     There is an even more fundamental problem with the

majority's analysis, one which does not depend on finding an

ambiguity in the Congressional language.    The majority

uncritically assumes that the Congressional locution "shall be

payable" translates into a proscription against a federal court's

using its historic equity powers to withhold or condition relief.

 It is incorrect.

                                A.

     As I see it, the seminal cases in this area are Hecht Co. v.
Bowles, 321 U.S. 321 (1944), and Porter v. Warner Holding Co.,

328 U.S. 395 (1946).   These cases arose under the World War II

Emergency Price Control Act and Regulations, and involved actions

                                14
by the Price Administrator to enforce compliance therewith.

Section 205(a) of the Act provided that
[w]henever in the judgment of the Administrator any person has
     engaged or is about to engage in any acts or practices which
     constitute or will constitute a violation of any provision
     of section 4 of this Act, *** he may make application to the
     appropriate court for an order enjoining such acts or
     practices, or for an order enforcing compliance with such
     provisions, and upon a showing by the Administrator that
     such person has engaged or is about to engage in any such
     acts or practices a permanent or temporary injunction,
     restraining order, or other order shall be granted without
     bond.

Emergency Price Control Act of 1942, 50 U.S.C. App. Supp. II

§§ 901 et seq., 925.   (emphasis added).

     The question presented in Hecht was whether the

Administrator, having established that a defendant has engaged in

acts or practices violative of § 4 of the Act, is entitled as of

right to an injunction restraining the defendant from engaging in

such acts or practices, or whether the court has some discretion

to grant or withhold such relief.    Although the Court determined

that the mandatory character of § 205(a) is clear from its

language, history and purpose (in our case the language is less

clear), it held that the phrase "shall be granted" does not

require issuance of an injunction against violation of a price

regulation merely because the Administrator asks for it.

Instead, the district court may, in accordance with equity

practice, exercise discretion in determining what order shall be

made. Hecht, 321 U.S. at 328-29. The court explained that
[a] grant of jurisdiction to issue compliance orders hardly
     suggests an absolute duty to do so under any and all
     circumstances. We cannot but think that if Congress had
     intended to make such a drastic departure from the
     traditions of equity practice, an unequivocal statement of
     its purpose would have been made.

                                15
Id. at 329.

     In Porter, the Court dealt with the power of a federal

court, in an enforcement proceeding under § 205(a), to order

restitution of rents collected by a landlord in excess of the

permissible maximums.   In rejecting the position of the Price

Administrator that there was no jurisdiction under the statute to

give the equitable remedy of restitution, the Court, following

Hecht, held that
 the comprehensiveness of this equitable jurisdiction is not to
     be denied or limited in the absence of a clear and valid
     legislative command. Unless a statute in so many words, or
     by a necessary and inescapable inference, restricts the
     court's jurisdiction in equity, the full scope of that
     jurisdiction is to be recognized and applied. 'The great
     principles of equity, securing complete justice, should not
     be yielded to light inferences, or doubtful construction.'
     Brown v. Swann, 10 Pet. 497, 503. See also Hecht Co. v.
     Bowles, supra.

Porter, 328 U.S. at 398.

     Another helpful case is Weinberger v. Romero-Barcelo, 456
U.S. 305 (1982).   In Weinberger, the Court faced the question

whether the mandatory language of the Federal Water Pollution

Control Act requires a district court to enjoin immediately all

discharges of pollutants that do not comply with the Act's permit

requirements, or whether the district court retains discretion to

order other relief to achieve compliance.   Reviewing the

structure of the statutory scheme and the legislative history,

the Court held that the statute contemplated the exercise of

discretion.   Importantly, however, the Court also relied on Hecht
Co. v. Bowles, supra, pointing out that, while Congress may

intervene and guide or control the exercise of the courts'

                                16
historic equity discretion, which reflects a "practice with a

background of several hundred years of history," Hecht, 321 U.S.

at 329, we "should not lightly assume that Congress has intended

to depart from established principles."   Weinberger, 456 U.S. at

313 (emphasis added).    Nor should we.

                                 B.

       Nothing cited to us suggests that Congress has been so

direct and explicit in the MPPAA that we can conclude, much less

“lightly assume,” that all equitable discretion has been removed.

 I, therefore, would follow the lead of the Fifth Circuit in

Trustees of Plumbers and Pipefitters N.H. Pension Fund v. Mar-

Len, Inc., 30 F.3d 621, 626 (5th Cir. 1994), and the Seventh

Circuit in Robbins v. McNicholas Transport Co., 819 F.2d 682,

685-86 (7th Cir. 1987).    As the majority acknowledges, these

courts have adopted an “equitable exception” to the MPPAA’s “pay

now, dispute later” scheme.    The equitable exception was first

articulated by the Seventh Circuit, which observed in McNicholas:
where the trustees bring an action to compel payments, pending
     arbitration, the court should consider the probability of
     the employer's success in defeating liability before the
     arbitrator and the impact of the demanded interim payments
     on the employer and his business.

McNicholas Transport Co., 819 F.2d at 685.     The McNicholas

standard has evolved into a test whereby “a reviewing court

merely determines whether the pension plan’s claim [for

withdrawal liability] is nonfrivolous and colorable.”    If the

claim is colorable, then the employer “must make interim payments

while it contests the underlying liability.”    Mar-Len, 30 F.3d at
626.    If the claim is frivolous or not colorable, the district

                                 17
court has a narrow measure of discretion to excuse interim

payments which to do otherwise would cause irreparable economic

injury to the employer.    Id.; Trustees of Chicago Truck Drivers

Union Pension Fund v. Central Transport, Inc. 935 F.2d 114, 119

(7th Cir. 1991).

     In suggesting that we follow the Fifth and Seventh Circuit

test, I underscore that the "equitable exception" would take hold

only in the rare case.    The district court can exercise

discretion solely to ensure that the courts are not used by an

unscrupulous pension fund lacking a legitimate withdrawal

liability claim to squeeze money from an employer and propel it

into bankruptcy.   See Central Transport, 935 F.2d at 119.     It

also bears emphasizing that federal judicial involvement need not

be extensive nor burdensome -- federal judges are comfortable

with making threshold colorability assessments, which is what I

would require as to the viability of the withdrawal liability

claim.   The same is true for the inquiry as to whether the

withdrawal liability will be so burdensome as to permanently

cripple the employer (and deprive the Fund of future payouts).      I

also stress that, contrary to the majority's intimation, our

decision in Board of Trustees of Trucking Employees Pension Fund
v. Centra, 983 F.2d 495 (3rd Cir. 1992), did not decide the

question before us here.    Indeed, after noting the Seventh

Circuit position, the Centra panel was careful to explain that

the equitable exception could not possibly apply in the case

before it because the withdrawing employer was "well heeled."

                                 C.

                                 18
     It is not clear from the present record whether the

Trustees' withdrawal liability claim here is in fact colorable or

whether the financial impact of withdrawal liability payouts on

Beaverbrook will in fact be devastating.   I note that Beaverbrook

has represented that it will experience serious financial

difficulty if required to make interim withdrawal payments prior

to the resolution of its challenge to the assessment of

liability.   And while it did not make a formal proffer on the

point, Beaverbrook’s litigation position suggests its belief that

the withdrawal liability claim is wholly without merit.    I would

remand for consideration of such matters under the Seventh

Circuit test, which I read to be conjunctive:   if the district

court finds that the claim for withdrawal liability is not

colorable, and if payment of withdrawal liability would push

Beaverbrook over the cliff, as it were, it can utilize its

equitable discretion to fashion a decree that might relieve

Beaverbrook of the obligation to make interim payments (or some

portion thereof).

     A good argument can be made that this test should be made in

the disjunctive, so as to protect every employer from frivolous

claims and from bankruptcy.   But I would be reluctant to extend

our equitable discretion in the absence of more persuasive

authority and a more compelling factual scenario.

     For the foregoing reasons, I respectfully dissent.

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