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Cork v. Central States Southeast and Southwest Areas Pension Fund

argued: May 31, 1989.

CROWN CORK & SEAL COMPANY, INC.
v.
CENTRAL STATES SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, A FEDERAL MULTIEMPLOYER EMPLOYEE PENSION BENEFIT PLAN, ROBBINS, LORAN W., WINSTEAD, MARION M., SANSONE, ROBERT C., BAKER, ROBERT J., MCDOUGALL, HOWARD, BUNTIE, ARTHUR H., COOK, R. JERRY, AND PULLIAM, R.V., ITS PRESENT TRUSTEES IN THEIR FIDUCIARY CAPACITY(IES); CENTRAL STATES SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, AND ITS TRUSTEES, LORAN W. ROBBINS, MARION M. WINSTEAD, ROBERT C. SANSONE, ROBERT J. BAKER, HOWARD J. MCDOUGALL, ARTHUR H. BUNTE, R. JERRY COOK AND R.V. PULLIAM, APPELLANTS



On Appeal from the United States District Court for the Eastern District of Pennsylvania, D.C. Civil No. 84-5737.

Higginbotham, Greenberg and Hutchinson, Circuit Judges.

Author: Greenberg

Opinion OF THE COURT

GREENBERG, Circuit Judge

This appeal requires the court again to address the scope of the arbitration requirement of the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), 29 U.S.C. §§ 1381 et seq. Central States, Southeast and Southwest Areas Pension Fund and its Trustees (collectively "Fund") appeal from an order of the district court of December 30, 1988, entered on cross-motions for summary judgment. The accompanying memorandum decision held that Crown Cork & Seal Co., Inc. ("Crown Cork") could bypass arbitration of its withdrawal liability dispute with the Fund, and was entitled to a declaratory judgment on the merits of the dispute. We will reverse the order of December 30, 1988, to the extent that it granted Crown Cork's motion for summary judgment but will affirm the order insofar as it denied the Fund's cross-motion and will remand this case with instructions to the district court to defer the dispute to arbitration.

I.

As this court recently summarized, MPPAA was "Congress' response to the growing problem of financial insolvencies of multiemployer pension plans" caused by the withdrawal of contributors, and was aimed at protecting the financial integrity of these plans by requiring that withdrawing employers pay a withdrawal liability sum. Colteryahn Dairy v. Teamsters & Employers Pension Fund, 847 F.2d 113, 116 (3d Cir. 1988), cert. denied, 488 U.S. 1041, 109 S. Ct. 865, 102 L. Ed. 2d 989 (1989). An employer is deemed to have "completely withdrawn" from a plan when it either "(1) permanently ceases to have an obligation to contribute under the plan, or (2) permanently ceases all covered operations under the plan." 29 U.S.C. § 1383(a).*fn1 The withdrawing employer is liable to the plan for its allocable share of the plan's unfunded vested benefits. 29 U.S.C. §§ 1381; 1391.

"Provisions for the quick and informal resolution of withdrawal liability disputes are an integral part of MPPAA's statutory scheme." Flying Tiger Line v. Teamsters Pension Trust Fund, 830 F.2d 1241, 1244 (3d Cir. 1987). Thus, the statute provides that "[as] soon as practicable after an employer's complete or partial withdrawal," the plan is required to determine the amount of withdrawal liability, notify the employer of its assessment, and demand payment. 29 U.S.C. § 1399(b)(1). The employer has 90 days within which to request review of the plan's determination, section 1399(b)(2)(A),*fn2 and the plan must notify the employer of the result of such review. Section 1399(b)(2)(B).

If the employer remains dissatisfied with the plan's determination, MPPAA provides for resolution of the dispute through arbitration. Specifically, section 1401(a)(1) provides that "[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." Arbitration must be initiated within a 60-day period after the earlier of the plan's response to the employer's request for review, or 120 days after the date of the request itself. 29 U.S.C. § 1401(a)(1). If arbitration is not initiated within the specified time period, the amount demanded by the plan "shall be due and owing." 29 U.S.C. § 1401(b)(1). However, if arbitration is pursued, an action may be brought in a district court "to enforce, vacate, or modify the arbitrator's award." 29 U.S.C. § 1401(b)(2).

Although MPPAA became law on September 26, 1980, it imposed withdrawal liability on employers who either partially or completely withdrew from a plan after April 29, 1980. 29 U.S.C. § 1461(e) (1982) (amended 1984). "MPPAA was made retroactively effective in order to prevent employers from withdrawing from multiemployer plans during congressional debate of MPPAA." Central States Southeast and Southwest Areas Pension Fund v. 888 Corp., 813 F.2d 760, 765 (6th Cir. 1987) (citation omitted).*fn3 However, on July 18, 1984, Congress, by enacting section 558 of the Deficit Reduction Act of 1984 (DEFRA), amended MPPAA to eliminate its retroactive reach, and to provide for the refund of any amount paid because of such retroactive application. Pub.L. No. 98-369, 98 Stat. 494, 899, reprinted in Historical Note accompanying 29 U.S.C.A. § 1381. Section 558 not only voids any liability incurred as a result of a complete or partial withdrawal prior to September 26, 1980, but further provides that if an employer had a "binding agreement to withdraw" on September 26, 1980, liability for withdrawals before December 31, 1980 is extinguished.*fn4

II.

This case involves the Fund's assessment of approximately $1.3 million in withdrawal liability based upon Crown Cork's complete withdrawal from the Fund as a consequence of the closing of its St. Louis plant, where it had manufactured and assembled three-part cans. Crown Cork had made contributions to the Fund pursuant to its collective bargaining agreement with Teamsters Local 688, which represented its production and maintenance employees as well as some of its clerical employees.

Crown Cork began to consider closing the plant in early 1980 and on July 28, 1980, it formally notified the local of its intention to shut down. The local did not object to the closing but requested negotiations on the effects of the closing.*fn5

On September 16, 1980, Crown Cork's Director of Production Control sent an internal mailgram to various management personnel stating that the plant would cease operations at the end of business on September 26, 1980, and that all orders should be switched to another facility. On September 23, 1980, Crown Cork signed a listing agreement with Turley Martin Company, a real estate broker, for sale of the plant. Crown Cork maintains that its signature constituted an acceptance of Turley Martin's offer to act as ...


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