Court Opinion

ID: 2963810
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:15:28.145311+00
Date Added: 2024-06-11T11:42:46.427216
License: Public Domain

USCA1 Opinion

	

                            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-