Court Opinion

ID: 8979863
Source: CourtListenerOpinion
Date Created: 2022-11-27 11:14:53.581084+00
Date Added: 2024-06-11T17:10:38.192981
License: Public Domain

PIERCE, Senior Circuit Judge,
concurring:
I concur in the result reached by the majority. I write separately to note my disagreement with the majority’s assertion that, having ignored the MPPAA’s dispute resolution procedures, TMM is entitled to a judicial determination of whether it is an “employer” within the meaning of the MPPAA.
The MPPAA’s requirement that “[a]ny dispute between an employer and the plan sponsor ... concerning a determination [of withdrawal liability] shall be resolved through arbitration,” 29 U.S.C. § 1401(a) (emphasis added), is an exhaustion of remedies requirement. T.I.M.E.-DC, Inc. v. Management-Labor Welfare & Pension Funds, of Local 1730, 756 F.2d 939, 945 (2d Cir.1985). While the majority notes cases in which we have excused a failure to exhaust the arbitration remedy, these cases do not establish a per se rule that a corporation challenging its alleged status as an “employer” may ignore its obligation to pursue arbitration. Rather, the cases hold that, unless prudential considerations are paramount, disputes such as the present one should be arbitrated.
Thus, in Park South Hotel Corp. v. New York Hotel Trades Council, 851 F.2d 578 (2d Cir.), cert. denied, — U.S. -, 109 S.Ct. 493, 102 L.Ed.2d 530 (1988), we excused the parties’ failure to arbitrate because:
(1) this case presents no factual issues but only legal questions of statutory interpretation, (2) the parties agreed that arbitration was not required, (3) the suit was filed before the time for invoking arbitration had expired, and (4) judicial economy would not be served by remanding [after a district court ruling on the merits] for arbitration, which almost certainly would be followed by further judicial proceedings.
Id. at 582; see also T.I.M.E-DC, 756 F.2d at 945 (excusing failure to arbitrate where (1) case presents no questions of fact or issues of contract interpretation; (2) it is probable that parties would seek judicial review of arbitrator’s decision; and (3) issue raised is one which it appears Congress did not contemplate would be resolved in arbitration). By resolving this case without examining such prudential considerations, the majority weakens the MPPAA’s arbitration requirement, contrary to established case law.
Thus, in ILGWU National Retirement Fund v. Levy Bros. Frocks, Inc., 846 F.2d *266879 (2d Cir.1988), the plaintiff had asserted withdrawal liability and, after the defendant defaulted, brought an action seeking immediate payment of the total due together with interest, liquidated damages, costs and attorneys’ fees. In defending this action, the employer asserted, inter alia, that it was not “a party to the Fund’s multiem-ployer plan or otherwise obligated to contribute to the Fund and thus it was not obligated under the MPPAA to pay withdrawal liability.” Id. at 883. In reversing the district court’s decision which reached the merits, we held that, under the MPPAA, a defendant must arbitrate its defense that it was not obligated to contribute to the Fund, “in order to preserve that defense for ultimate judicial review.” Id. at 880.
In Levy Bros. Frocks, we noted that while the arbitration requirement “does not always prevent a party from seeking declaratory and/or injunctive relief against the imposition of withdrawal liability, the instances in which such relief is appropriate are likely to be rare.” Id. at 886. While recognizing that arbitration is not required in certain cases, the court, in Levy Bros. Frocks, noted that the question of whether an employer was “obligated to contribute” to a Fund — -the very issue which TMM raises herein — is essentially factual and does not implicate T.I.M.E.DC’s rationale for excusing the exhaustion requirement. Id. Moreover, Levy Bros. Frocks explains that:
Congress intended that disputes over withdrawal liability would be resolved quickly, and established a procedural bar for employers who fail to arbitrate disputes over withdrawal liability in a timely manner. If a party wishes to seek judicial resolution of its dispute without first submitting to arbitration it should seek declaratory and/or injunctive relief against the imposition of withdrawal liability before the time period to initiate arbitration expires. The failure to seek such relief on a timely basis may, in some instances, lead to a harsh result, but the harshness of the default is largely “a self-inflicted wound.”
Id. at 887 (citations omitted) (quoting IUE AFL-CIO Pension Fund v. Barker & Williamson, Inc., 788 F.2d 118, 129 (3d Cir.1986)).
Finally, while Levy Bros. Frocks recognizes that an employer’s relationship with a multiemployer plan could be so attenuated as to warrant a finding that it was not an “employer” and thus not obligated to arbitrate pursuant to § 1401, as the majority explains, in this ease, TMM cannot justifiably claim that it is “a complete stranger to the Fund.” Id. at 885-86.
While TMM herein did not bring an action for declaratory or injunctive relief, if, in fact, TMM was not aware that the Fund was asserting withdrawal liability until it was served with the summons and complaint, there would be some basis for excusing its failure to arbitrate. However, the Fund seeks to have liability imposed on the basis of the notice given in the complaint which was served upon TMM and, since I agree with the majority that TMM is no longer entitled to pursue arbitration, I do not see the need to remand for a resolution of this factual question.