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Freight Drivers and Helpers Local Union No. 557 Pension Fund v. Penske Logistics LLC

United States District Court, D. Maryland

June 15, 2016

FREIGHT DRIVERS AND HELPERS LOCAL UNION NO. 557 PENSION FUND, by its Plan Sponsor, The Joint Board of Trustees,
v.
PENSKE LOGISTICS LLC, et al.

          MEMORANDUM

          J. Frederick Motz, United States District Judge.

         This action arises under the Employment Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., as amended by the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”), 29 U.S.C. § 1381 et seq. Plaintiff Freight Drivers and Helpers Local Union No. 557 Pension Fund (the “Fund”) seeks to vacate an arbitration order dismissing its claim for the imposition of withdrawal liability against defendants Penske Logistics LLC and Penske Truck Leasing Co., L.P. (collectively, “Penske”). Now pending are the Fund’s motion for summary judgment (ECF No. 44), and Penske’s cross-motion for summary judgment. (ECF No. 45). The motions are fully briefed, and no oral argument is necessary. See Local R. 105.6. For the reasons set forth below, the Fund’s motion is denied, and Penske’s cross-motion is granted.

         BACKGROUND

         The Fund, a multiemployer pension plan, is a “trucking industry fund” under 29 U.S.C. § 1383(d), 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.” Penske Logistics LLC and Penske Truck Leasing Co., L.P. are out-of-state businesses whose operations include trucking services and owning subsidiary businesses.

         For some time, Leaseway Motorcar Transport Company (“Leaseway”)-not a party to this case-was obligated by a collective bargaining agreement to contribute to the Fund, and it did so. In 1996, Leaseway became a wholly owned subsidiary of Penske Truck Leasing, but in 2004, Penske Truck Leasing transferred ownership of Leaseway to a third party, Performance Transportation Company (“PLG”). Two years later, Leaseway, PLG, and various affiliates filed for relief under Chapter 11 of the United States Bankruptcy Code. (ECF No. 1, Ex. 1, p. 4). Leaseway subsequently ceased making contributions to the Fund. See 29 U.S.C. § 1383(a). The Fund responded by assessing complete withdrawal liability against Penske. (Id., p. 24). Penske disputed that it was responsible for Leaseway’s withdrawal liability, and the parties submitted the dispute to arbitration pursuant to the MPPAA.

         In its July 13, 2012 order, the arbitrator dismissed the Fund’s demand against Penske. The arbitrator reasoned that the trucking industry exemption to the assessment of complete withdrawal liability applied, and so Penske was not liable for the withdrawal. (Id., p. 36-42). The Fund then filed a civil action in this court on August 9, 2012, seeking review of the arbitrator’s ruling. (ECF No. 1). After the Fund was permitted to file an amended complaint, Penske filed a motion to dismiss on the basis that filing a complaint was not the proper method to obtain review of an MPPAA arbitration order. The court agreed that the Fund’s amended complaint was procedurally improper and dismissed the case. (ECF Nos. 19, 20). The court denied the Fund’s motion for reconsideration, and the Fund appealed to the Fourth Circuit. The Fourth Circuit reversed, holding that the Fund’s amended complaint was procedurally proper, and remanded the case for further proceedings. See ECF No. 30; Freight Drivers & Helpers Local Union No. 557 Pension Fund v. Penske Logistics LLC, 784 F.3d 210, 211 (4th Cir. 2015).

         Now before this court are the parties’ respective motions for summary judgment. (ECF Nos. 44, 45). They dispute whether the arbitrator correctly determined that Penske met the requirements of the trucking industry exemption, and thus whether Penske can be held responsible for Leaseway’s cessation of contributions to the Fund.

         STANDARD OF REVIEW

         In reviewing a case brought under the MPPAA, the district court must accept as correct the arbitrator’s findings of fact, which may be rebutted only by a clear preponderance of the evidence. Republic Indus., Inc. v. Teamsters Joint Council No. 83 of Virginia Pension Fund, 718 F.2d 628, 641 (4th Cir. 1983); see also 29 U.S.C. § 1401(c) (creating a presumption of correctness of the arbitrator’s findings of fact). The arbitrator’s conclusions of law, however, are reviewed de novo. Trustees of the Cent. Pension Fund of the Int’l Union of Operating Eng’rs and Participating Emp’rs v. Wolf Crane Serv., Inc., 374 F.3d 1035, 1038 (11th Cir. 2004).

         Federal Rule of Civil Procedure 56, which governs summary judgment motions, provides that summary judgment should be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “A dispute is genuine if a reasonable jury could return a verdict for the nonmoving party.” Libertarian Party of Va. v. Judd, 718 F.3d 308, 313 (4th Cir. 2013) (internal quotation marks and citation omitted). “A fact is material if it ‘might affect the outcome of the suit under the governing law.’” Id. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). Accordingly, “the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment.” Anderson, 477 U.S. at 247-48. When considering a motion for summary judgment, the court must view the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in that party’s favor, Dennis v. Columbia Colleton Med. Ctr., Inc., 290 F.3d 639, 645 (4th Cir. 2002), but the court must also “prevent factually unsupported claims and defenses from proceeding to trial.” Bouchat v. Balt. Ravens Football Club, Inc., 346 F.3d 514, 526 (4th Cir. 2003) (internal quotation marks and citation omitted).

         ANALYSIS

         The issue before the court is whether the arbitrator correctly determined that the trucking industry exception applies in this case. Although the Fund offers several reasons the arbitrator erred in so concluding, none are persuasive.

         Congress enacted the MPPAA to protect multiemployer pension plans: the statute discourages employers from withdrawing from such plans, and thus leaving them with unfunded liabilities. Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 720-22 (1984). Accordingly, when a contributing employer withdraws from a multiemployer pension plan, the MPPAA provides that the employer owes withdrawal liability in the amount of its share of the plan’s vested but unfunded benefits. See 29 U.S.C. §§ 1381, 1383(a); Concrete Pipe & Prods. of Cal., Inc. v. Constr. Laborers Pension Trust for S. Cal., 508 U.S. 602, 609 (1993). There are a number of exceptions to this rule, however, including one for withdrawals from plans that receive contributions primarily from employers in the trucking industry. See Id. § 1383(d). For this so-called “trucking industry” exception to apply, the employer must have “an obligation to contribute” to a trucking industry plan, but does not “continue to perform work within the jurisdiction of the plan.” Id. § 1383(d)(1).

         When these preliminary requirements are met, a withdrawal occurs-and withdrawal ...


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