FREIGHT DRIVERS AND HELPERS LOCAL UNION NO. 557 PENSION FUND, By its Trustee, William Alexander Plaintiff,
PENSKE LOGISTICS LLC, et al., Defendants.
ELLEN LIPTON HOLLANDER, District Judge.
This is an action under the Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq., and the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), 29 U.S.C. § 1381-1453. Suit was "brought on behalf of the Freight Drivers and Helpers Local Union No. 557 Pension Fund" (the "Fund"), a multiemployer pension plan, "by its Trustee, William Alexander" (collectively, "plaintiff"). See Complaint, Caption & ¶ 1 (ECF 1). Seeking to vacate and/or modify an arbitration award, pursuant to 29 U.S.C. § 1401(b)(2), plaintiff challenges the arbitrator's dismissal of the Fund's claim for "withdrawal liability, " lodged against two contributing employers, Penske Logistics, LLC ("Penske Logistics") and Penske Truck Leasing Co., LP ("Penske Leasing") (collectively, "Penske"), defendants. Compl. ¶ 1.
Defendants moved to dismiss for lack of jurisdiction ("Motion, " ECF 5), pursuant to Fed.R.Civ.P. 12(b)(1), and filed a supporting memorandum ("Memo, ECF 5-1), asserting that plaintiff lacks statutory standing under ERISA and the MPPAA. Specifically, defendants argue that an action under 29 U.S.C. § 1401(b)(2) to "enforce, vacate or modify" an arbitration award may only be brought by the "plan sponsor" or the employer that were parties to the arbitration. Because the MPPAA defines "plan sponsor" as, in pertinent part, a plan's "joint board of trustees, " 29 U.S.C. § 1300(a)(10)(A), and the joint board of trustees did not file suit on behalf of the Fund, Penske claims that plaintiff lacks statutory standing.
The Motion has been fully briefed,  and no hearing is necessary to resolve it. See Local Rule 105.6. For the reasons that follow, I will grant the Motion, without prejudice to plaintiff's right to amend.
I. Statutory Background
ERISA provides a "comprehensive and reticulated" statutory framework for the administration and regulation of employee pension plans. Massachusetts v. Morash, 490 U.S. 107, 113 (1989). Its regulatory scheme is guided by a specific purpose:
"[T]o ensure that employees and their beneficiaries would not be deprived of anticipated retirement benefits by the termination of pension plans before sufficient funds have been accumulated in [them].... Congress wanted to guarantee that if a worker has been promised a defined pension benefit upon retirement-and if he has fulfilled whatever conditions are required to obtain a vested benefit-he will actually receive it."
Concrete Pipe & Prods. of Cal., Inc. v. Constr. Laborers Pension Trust for S. Cal., 508 U.S. 602, 607 (1993) (quoting Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211, 214 (1986)) (alterations in Concrete Pipe ). Among those pension plans subject to ERISA are "multiemployer plans, " like the Fund, "to which more than one employer contributes, " which are "maintained to fulfill the terms of collective-bargaining agreements." Concrete Pipe, 508 U.S. at 606; see 29 U.S.C. § 1301(a)(3) (defining "multiemployer plan").
As originally enacted, ERISA generated a peculiar incentive for employers that contributed to multiemployer plans. Specifically, the withdrawal of one employer from a multiemployer plan reduced a plan's "contribution base." Bd. of Trs., Sheet Metal Workers' Nat'l Pension Fund v. BES Servs., Inc., 469 F.3d 369, 374 (4th Cir. 2006). To compensate for the loss, the remaining employers were required to increase their "contribution rate." Id. Thus, "[a]s employers withdrew, the rising costs of continued participation in multiemployer plans increased the incentives for further withdrawals." Id. This, in turn, jeopardized the financial health of multiemployer plans. See Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 722 (1984).
To reduce the risk of employer withdrawals, Congress amended ERISA through the Multiemployer Pension Plan Amendments Act of 1980, 29 U.S.C. § 1381, et seq. Under the MPPAA, an employer that withdraws from a multiemployer plan "incurs withdrawal liability' in the form of a fixed and certain debt to the pension plan.'" Concrete Pipe, 508 U.S. at 609 (quoting R.A. Gray, 467 U.S. at 725). The amount is calculated according to various statutory provisions which are not at issue here. See generally Milwaukee Brewery Workers' Pension Plan v. Joseph Schlitz Brewing Co., 513 U.S. 414, 417-19 (1995) (explaining MPPAA's rules for calculating withdrawal liability). Generally speaking, "[a]n employer's withdrawal liability is its proportionate share of the plan's unfunded vested benefits.'" Concrete Pipe, 508 U.S. at 609 (citing 29 U.S.C §§ 1381, 1391); accord BES Servs., 469 F.3d at 374.
The "plan sponsor" of a multiemployer plan is charged with determining, providing notification of, and collecting an employer's withdrawal liability. See 29 U.S.C. §§ 1382, 1399(b); see also Concrete Pipe, 508 U.S. at 610. With respect to a multiemployer plan, the "plan sponsor" is defined as the "joint board of trustees" or, "if the plan has no joint board of trustees, the plan administrator." 29 U.S.C. § 1301(10); see, e.g., Bay Area Laundry & Dry Cleaning Pension Trust Fund v. Berbar of Cal., Inc., 522 U.S. 192, 197 (1997) (explaining that ERISA "places the calculation burden on the plan's trustees, " and that "[t]he trustees must set an installment schedule and demand payment").
An employer may challenge a plan sponsor's determination of withdrawal liability. See 29 U.S.C. § 1399(b)(2). Notably, "[a]ny dispute between an employer and the plan sponsor of a multiemployer plan" concerning withdrawal liability must be "resolved through arbitration." 29 U.S.C. § 1401(a)(1); see Concrete Pipe, 508 U.S. at 611; BES Servs., 469 F.3d at 375. In such an arbitration, any determination made by the plan sponsor as to withdrawal liability is "presumed correct unless the party contesting the determination shows by a preponderance of the evidence that the determination was unreasonable or clearly erroneous." 29 U.S.C. § 1401(a)(3)(A).
Judicial review of the arbitrator's decision is available to "any party thereto." 29 U.S.C. § 1401(b)(2). Specifically, 29 U.S.C. § 1401(b)(2), titled, in pertinent part, "civil action subsequent to arbitration award, " provides (emphasis added):
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.
According to regulations promulgated by the Pension Benefit Guaranty Corporation ("PBGC") to implement ERISA's provisions on arbitration of disputes concerning withdrawal liability, "[p]arty or parties means the employer and the plan sponsor involved in a withdrawal liability dispute." 29 C.F.R. § 4221.2; see 29 U.S.C. § 1302(b)(3) (granting regulatory authority to PBGC); 29 C.F.R. § 4221.1(a) ("The purpose of this part is to establish procedures for the arbitration, pursuant to section 4221 of ERISA [29 U.S.C. § 1401], of withdrawal liability disputes....").
As indicated, an action under 29 U.S.C. § 1401(b)(2) must be brought "in accordance with" 29 U.S.C. § 1451, titled "Civil actions." Subsection (a) is titled "Persons entitled to maintain actions." Pertinent here, 29 U.S.C. § 1451(a)(1) provides:
A plan fiduciary, employer, plan participant, or beneficiary, who is adversely affected by the act or omission of any party under this subtitle with respect to a multiemployer plan, or an employee organization which represents such a plan participant or beneficiary for purposes of collective bargaining, may bring an action for appropriate legal or equitable relief, or both.
Additionally, 29 U.S.C. § 1451 includes several provisions relevant to filing a lawsuit, such as a jurisdictional provision, id. § 1451(c); provisions governing venue and service of process, id. § 1451(d), (g); and a statute of limitations, id. § 1451(d). It also addresses an employer's failure "to make any withdrawal liability payment within the time prescribed, " id. § 1451(b), and provides for an award of costs and expenses to the prevailing party, id. § 1451(e).
II. Factual Background
The Fund is an "employee pension benefit plan, " as defined in 29 U.S.C. § 1002(2), and a "multiemployer plan, " as defined in 29 U.S.C. §§ 1002(37) and 1301(a)(3). Compl. ¶ 4. It is also a "trucking industry fund, " pursuant to 29 U.S.C. § 1383, meaning that "substantially all of the contributions required under the plan are made by employers primarily engaged in the long and short haul trucking industry." See Compl. ¶ 4.
Penske, a contributing employer, operates "trucking services" and "own[s] subsidiary businesses." Id. ¶ 6. On March 19, 1996, Penske acquired Leaseway Motorcar Transport Co. ("Leaseway") as a "wholly owned subsidiary." Id. ¶ 7. According to plaintiff, Leaseway was "obligated to contribute to the Fund pursuant to a collective bargaining agreement." Id. Thereafter, at an unspecified date, Penske sold Leaseway to Performance Transportation Services, "a wholly owned subsidiary" of Performance Logistics Group. Id. ¶ 8.
According to the Complaint, Leaseway experienced two "partial withdrawals" from the Fund, in December 2004 and December 2005, respectively, and a "complete withdrawal" in December 2006. Id. ¶¶ 9-11. "[T]here is a partial withdrawal by an employer from a plan on the last day of a plan year if for such plan year (1) there is a 70-percent contribution decline, or (2) there is a partial cessation of the employer's contribution obligation." 29 U.S.C. § 1385. Complete withdrawal occurs when an employer "(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.
The Fund and Penske disputed whether Penske was liable for Leaseway's withdrawals, and the parties initiated arbitration pursuant to 29 U.S.C. § 1401. Compl. ¶¶ 13-14. The arbitrations for all three withdrawals were consolidated into a single proceeding. Id. ¶ 17. The arbitrator requested briefing from the parties on a "trucking industry exemption" to the assessment of complete withdrawal liability. Id. ¶ 18. On July 13, 2012, the arbitrator found the trucking ...