SUSAN E. COX, Magistrate Judge.
Plaintiffs Central States, Southeast and Southwest Areas Pension Fund and Arthur H. Bunte, Jr., as Trustee, (collectively, the "Pension Fund") sued Gary Rinker Trucking, Inc., for withdrawal liability pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended by the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), 29 U.S.C. 1001, et seq. This matter comes before the Court on the Pension Fund's motion for summary judgment. For the reasons stated below, the Court grants the Pension Fund's motion and enters judgment for plaintiffs and against defendant.
The Pension Fund is a multiemployer pension plan under ERISA, administered by its trustee. Gary Rinker Trucking, Inc. ("Defendant"), an Illinois corporation, was a party to a collective bargaining agreement with a certain local union affiliated with the International Brotherhood of Teamsters ("IBI"), pursuant to which Defendant was required to contribute to that Pension Fund on behalf of certain of its employees. On August 11, 2012, the Pension Fund determined that Defendant permanently ceased to have an obligation to contribute to the Pension Fund and/or permanently ceased all covered operations, thereby effecting a "complete withdrawal" as defined in 29 U.S.C. § 1383. As a result, the Pension Fund determined that Defendant incurred withdrawal liability to the Pension Fund in the principal amount of $803,965.86. On September 19, 2013, Defendant received a Notice and Demand for payment of the withdrawal liability that the Pension Fund issued in accordance with 29 U.S.C. §1401. In this Notice and Demand, the Pension Fund informed Defendant of its withdrawal liability and further stated that Defendant was required to discharge that liability either in a lump sum payment, or in monthly payments of $5,758.91, beginning on October 1, 2013.
On October 18, 2013, Defendant received a notice from the Pension Fund that its withdrawal liability payments were past due. It is undisputed that Defendant has not paid any of the assessed withdrawal liability. However, in October 2013, Defendant attempted to make a payment to the Pension Fund which Defendant claimed was a contribution for covered work that an employee allegedly performed in 2013, not withdrawal liability. The Pension Fund rejected that payment because it had already determined that defendant had withdrawn from the Pension Fund.
In June 2014, after the Pension Fund refused to alter its determination that Defendant had withdrawn from the Pension Fund, Defendant initiated arbitration proceedings seeking to challenge the merits of the withdrawal liability in accordance with 29 U.S.C. § 1401.
On September 16, 2014, the Pension Fund filed a complaint in federal court to collect the past-due interim withdrawal liability payments. It now seeks summary judgment in its favor on its complaint. In response, Defendant has asserted an affirmative defense, maintaining that it should not be forced to pay withdrawal liability while the arbitration is pending. That defense, which will be discussed further below, requires Defendant to show that the Pension Fund's claim for withdrawal liability is not colorable and that making the interim payments will irreparably damage it.
Summary judgment is proper where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56 (c). In determining whether there is a genuine issue of fact, the Court "must construe the facts and draw all reasonable inferences in the light most favorable to the nonmoving party." Foley v. City of Lafayette Indiana, 359 F.3d 925, 928 (7
The purpose of ERISA is to make sure that employees and beneficiaries are not deprived of retirement benefits even though pension plans may terminate prior to the accumulation of sufficient funds to pay the anticipated benefits. Concrete Pipe & Prods. of Cal. Inc. v. Constr. Laborers Pension Trust for S. Cal., 508 U.S. 602, 607 (1993). To address the debilitating impact of employers withdrawing from multi-employer plans on assets, Congress enacted the MPPAA, 29 U.S.C. §§ 1381-1461. The MPPAA provides that when an employer withdraws from a pension fund, the plan must determine the amount owed by the employer, notify the employer of the amount of withdrawal liability in the schedule of payments, and demand payment from the employer. 29 U.S.C. §§ 1382, 1399(b)(1). The employer may request that the plan review its liability determination. 29 U.S.C. § 1399(b)(2)(B). The statute provides that the plan must respond to the employer's request and provide the basis for its decision. 29 U.S.C. § 1399(b)(2)(B).
The Seventh Circuit has established an extremely limited exception to the statutory directive that interim withdrawal payment must be made by an employer while the employer challenges the liability in arbitration. Payments may be excused if the employer shows that the plan's claim to payment is frivolous and the payments would cause irreparable harm to the employer. Central States, Southeast and Southwest Areas Pension Fund v. Bonar National, Inc., 253 F.3d 1011, 1016 (7
A claim is deemed frivolous if it has "no arguable basis in law or in fact." Talley v. Lane, 13 F.3d 1031, 1033 (7
In this case, Defendant argues that the Pension Fund's claim is frivolous because it has submitted evidence that, although it ceased operations covered by the Pension Fund in 2012, it did not permanently cease covered work. Defendant claims that ten months later (in June 2013), one of its employees resumed work covered by the Pension Fund. Therefore, according to Defendant, the Pension Fund's claim for withdrawal liability is not colorable and it should not be compelled to pay withdrawal liability now.
This argument is unpersuasive. Section 1383 of the statute does not define the term "permanently," but, as the Pension Fund points out, the legislative history makes it clear that the plan sponsor does not need to be omniscient about whether an employer which ceases covered operations for a protracted period of time will resume such operations in the future. S.Rep. No. 96-1076 at 12-13 (1980) ("A plan sponsor need only make a reasonable determination based on the evidence available that the cessation of covered operations. . . .is not merely temporary"). In this case, Defendant does not dispute that it was not performing covered work at the time that the Pension Fund assessed withdrawal liability. Nor is it disputed that Defendant did not make any contributions to the Pension Fund on behalf of any employee for a period of more than a year. In fact, Defendant did not even attempt to make a payment for the employee who allegedly resumed covered work in June 2013 until October 2013, after it received a Notice and Demand from the Pension Fund demanding payment of the withdrawal liability on September 18, 2013.
The arbitrator may decide that the cessation of covered work was not sufficiently permanent under the statute to warrant withdrawal liability, but we certainly cannot find under these facts that the Pension Fund's claim is frivolous. In fact, a plausible construction of the evidence before this Court points to the opposite conclusion: that Defendant had indeed permanently ceased all covered operations and only claimed covered work for one employee after it was assessed for withdrawal liability. But that is a matter to be sorted out by the arbitrator. Defendant has failed to demonstrate that there is a triable issue of fact on the question of whether the Pension Fund's claim is frivolous. Because we do not find that Defendant has shown that the Pension Fund's claim for withdrawal liability is frivolous, we do not need to reach the question of whether Defendant has proven that paying the assesses liability would render it insolvent.
In addition to the principal amount of its withdrawal liability assessment, the Pension Fund is entitled to recover interest on the missed interim withdrawal liability payment, liquidated damages, and attorneys' fees and costs pursuant to Section 502 (g)(2) of ERISA, 29 U.S.C. § 1132(g)(2). In collection actions, delinquent withdrawal liability payments are treated as delinquent employer contributions and are enforced under Title I of ERISA, 29 U.S.C. § 1451(b). The damages awarded under 29 U.S.C. § 1132(g)(2), made applicable to cases involving withdrawal liability pursuant to 29 U.S.C. 1451(b), are mandatory. Central States, Southeast and Southwest Areas Pension Fund v. Slotky, 956 F.2d 1369, 1377 (7
For the foregoing reasons, the Court grants the Pension Fund's motion for summary judgment. The Pension Fund should submit a Judgment Order within seven days of this Order.