                                                                                                                           Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


7-12-2004

Bd Trustees Trucking v. Kero Leasing Corp
Precedential or Non-Precedential: Precedential

Docket No. 03-2176




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"Bd Trustees Trucking v. Kero Leasing Corp" (2004). 2004 Decisions. Paper 439.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/439


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                      PRECEDENTIAL

    UNITED STATES COURT                    BOARD OF TRUSTEES OF
     OF APPEALS FOR THE                   TRUCKING EMPLOYEES OF
        THIRD CIRCUIT                   NORTH JERSEY WELFARE FUND,
                                             INC-PENSION FUND

      Nos. 03-2176, 03-2344,                             v.
      03-3283 and 03-3448
                                        KERO LEASING CORPORATION,
                                             a New Jersey Corporation;
    BOARD OF TRUSTEES                   ROBERT C. HOLMES, a proprietor,
  OF TRUCKING EMPLOYEES                  individually, jointly and severally;
 OF NORTH JERSEY WELFARE                HOLMES LEASING COM PANY, a
  FUND, INC-PENSION FUND                           proprietorship
                                            (D.C. Civil No. 98-cv-1476)
                 v.
                                              ROBERT C. HOLMES
KERO LEASING CORPORATION,
     a New Jersey Corporation;                           v.
ROBERT C. HOLMES, a proprietor,
 individually, jointly and severally;      BOARD OF TRUSTEES OF
HOLMES LEASING COM PANY, a                TRUCKING EMPLOYEES OF
           proprietorship               NORTH JERSEY WELFARE FUND,
    (D.C. Civil No. 98-cv-1476)              INC.-PENSION FUND
                                           (D.C. Civil No. 02-cv-0059)
      ROBERT C. HOLMES
                                               ROBERT C. HOLMES,
                 v.                             Appellant Nos. 03-2344
                                                and 03-3448
   BOARD OF TRUSTEES OF
  TRUCKING EMPLOYEES OF
   NORTH JERSEY WELFARE                   Appeals from the United States
  FUND, INC.-PENSION FUND                     District Court for the
    (D.C. Civil No. 02-cv-0059)               District of New Jersey
                                           (D.C. Civil Nos. 98-cv-1476
   BOARD OF TRUSTEES OF                          and 02-cv-0059)
   TRUCKING EMPLOYEES                             District Judge:
 OF NORTH JERSEY, WELFARE               Honorable Joseph A. Greenaway, Jr.
  FUND, INC.-PENSION FUND,
      Appellant Nos. 03-2176
      and 03-3283                            Argued February 24, 2004
   Before: RENDELL, BARRY and                      pension fund against Holmes was
      ROSENN, Circuit Judges.                      untimely, as the complaint was filed seven
                                                   years after the cause of action accrued, one
       (Filed   July 12, 2004      )               year beyond the statute of limitations set
                                                   forth in the Multiemployer Pension Plan
                                                   Amendments Act of 1980 (“MPPAA”), 29
Elizabeth Roberto (ARGUED)                         U.S.C. §§ 1381-1461. For the reasons set
Roberto Law Offices                                forth below, we will affirm in part and
811 Fitzwater Street                               reverse in part.
Philadelphia, PA 19147
David W. New                                                                I.
Herbert New & David New
300 Broadacres Drive, 3rd Floor                             The appellant, Board of Trustees of
Bloomfield, NJ 07033                               Trucking Employees of North Jersey
 Counsel for Appellant/Cross Appellee              Welfare Fund, Inc. – Pension Fund (“the
                                                   Fund”), is the plan sponsor of a
Arthur G. Telegen (ARGUED)                         multiemployer fund established under the
Robert A. Fisher                                   Employee Retirement Income Security Act
Foley Hoag                                         of 1974 (“ERISA”).               29 U.S.C. §§
155 Seaport Boulevard                              1 0 0 2 (3 7 ) , 1 3 0 1 ( 3 ) .   E m p l o y e rs
Boston, MA 02210                                   participating in the Fund’s pension plan
 Counsel for Appellee/Cross Appellant              made contributions to the Fund based on
                                                   terms set forth in collective bargaining
                                                   agreements they negotiated with their
                                                   employees.
      OPINION OF THE COURT
                                                              Holmes was once the chief
                                                   executive officer of a trucking company
RENDELL, Circuit Judge.                            called Holmes Transportation Inc.
                                                   (“HTI”).       During the 1980s, Holmes
        In these appeals we are called upon        c r e a te d w h o l l y- o w n e d s u b s i d ia ry
to determine the relevant statute of               c ompa nies to su pp ly e mploy ee s,
limitations for an action brought by the           equipment, and land to HTI. One of these
trustees of a pension fund to recover              companies was Holmes Leasing Company
withdrawal liability. The appellee, Robert         (“Holmes Leasing”), a sole proprietorship
Holmes, is the former sole shareholder of          that owned and leased equipment to HTI.
a company that ceased making payments to           Another was Kero Leasing Corporation
the plan, and the former sole proprietor of        (“Kero”), a New Jersey corporation that
another related company. The District              provided employees to work at a certain
Court held that the action instituted by the       HTI terminal. Holmes was the sole

                                               2
proprietor of Holmes Leasing and the sole            assessment for withdrawal liability was
shareholder of Kero. Kero entered into a             mandatory under the provisions of the
collective bargaining agreement with the             MPPAA. See 29 U.S.C. § 1381. On
union representing its workers. 1 The                February 27, 1990, upon realizing that
agreement required Kero to make                      Kero had withdrawn from the plan, the
contributions on behalf of its employees to          Fund sent a notice of the statutory
the Fund’s pension plan.                             assessment of withdrawal liability to Kero.

       In March of 1987, Holmes agreed                       On March 7, 1991, after no
to sell HTI to Route Resources, a                    payments were made by Kero, the Fund
Canadian-owned holding company. The                  sent a letter to Route Resources regarding
sale was consummated in September of                 the default in payments, and the
1988, and Kero’s stock was included in the           withdrawal liability was demanded in full.
sale along with all interests in Holmes’s            When Kero continued to default on its
sole proprietorships. In December of                 withdrawal liability payments, the Fund
1988, after Route Resources had assumed              filed a complaint in the United States
ownership and control of his businesses,             District Court for the District of New
Holmes retired to Florida. According to              Jersey against Route Resources, alleging
the Fund’s complaint in this action, Kero            that it was under common control with
stopped making contributions to the Fund             Kero at the time of its withdrawal and was
in December of 1989, prior to the                    therefore responsible for the liability. No
expiration of its duties under the collective        answer was filed, and on December 13,
bargaining agreement.2 As a result, an               1995, a default judgment was entered
                                                     against Route Resources.
   1
    Holmes initially signed the agreement                   Notwithstanding its success in
himself, since the agreement was formed              obtaining the default judgment, the Fund
just prior to Kero’s incorporation. Once             continued to be unable to collect any of the
Kero was incorporated in October of 1985,            withdrawal liability. On January 8, 1998,
Holmes assigned the collective bargaining            counsel for the Fund sent a letter to
agreement, and the duty to contribute to             Holmes asking him to appear for a
the Fund, to the corporation.                        deposition, to provide information about
       2                                             Route Resources, Kero, and any other
     The District Court made no specific
finding with respect to this fact, noting that
it was disputed by the parties and that the
withdrawal occurred sometime during this             However, our analysis is not impacted by
sale or a subsequent sale of the businesses          the choice of a specific date, as Holmes
by Route Resources. We rely on the time              had indisputably severed his ties to his
of withdrawal asserted in the complaint for          companies at the time the relevant notices
purposes of describing the factual setting.          were sent and the complaints were filed.

                                                 3
related corporations that might be                   U.S.C. § 1399(c)(2); Bd. of Trs. of
responsible for the withdrawal liability.            Trucking Employees of N. Jersey Welfare
The letter also specified the amount that            Fund, Inc. – Pension Fund v. Centra, 983
Kero owed and noted that a default                   F.2d 495, 507 (3d Cir. 1992).
judgment had been entered against Route
Resources. However, the letter did not                       During arbitration, Holmes argued,
contain any indication that the Fund would           inter alia, that the Fund failed to provide
seek to impose liability on Holmes                   notice of its intention to seek the
personally.       Meanwhile, the Fund                withdrawal liability from Holmes
instituted the instant action by filing a            personally “as soon as practicable” after
complaint in the District of New Jersey on           Kero’s withdrawal, as required by 29
March 31, 1998, naming Kero, Holmes                  U.S.C. § 1399(b)(1), and should therefore
Leasing, and Holmes personally as                    be barred from assessing the withdrawal
defendants. After his deposition on July             penalty against him. In December of
22, 1998, Holmes received a copy of the              2001, the arbitrator issued an opinion
complaint in this matter from the Fund’s             agreeing with Holmes and dismissing the
counsel. According to Holmes, this was               Fund’s claim for withdrawal liability.3
his first notice that the Fund was seeking
to collect the withdrawal liability from
him.                                                    3
                                                          The dissent implies that the Fund and
                                                     its attorneys acted diligently from the time
                     II.
                                                     the withdrawal liability accrued, and that
                                                     they were constantly engaged in good faith
       The Fund’s complaint in the instant
                                                     attempts to track down “Kero’s phantom
case demands judgment against all three
                                                     owners.” Dissent at 8. However, the
named defendants, including Holmes
                                                     arbitrator’s findings, which were based on
personally, in the amount of the
                                                     information that came to light during
withdrawal liability, plus interest,
                                                     disc ove r y a s sociate d w ith th o s e
attorneys’ fees, and costs. Holmes was the
                                                     proceedings, indicate that the Fund knew
only defendant to answer the complaint,
                                                     or should have known of Holmes’s
and he is the only appellee to file a brief in
                                                     connection to Kero, its sale, and the
this appeal. Initially, both the Fund and
                                                     withdrawal liability in the early 1990s. In
Holmes filed motions for summary
                                                     other words, the six year limitations period
judgment on the merits. The District Court
                                                     created by Congress in the MPPAA did
denied both motions and referred the
                                                     provide enough time for the Fund to learn
matter to arbitration in accordance with the
                                                     of potential controlled group members.
MPPAA, 29 U.S.C. § 1401. The Court
                                                     The Fund had the option of pursuing
also ordered Holmes to make interim
                                                     Holmes personally several years earlier
withdrawal liability payments to the Fund
                                                     than it did, and well within the statute of
while the arbitration was pending. See 29
                                                     limitations, but it simply chose not to do

                                                 4
While the arbitration was proceeding, the         new statute of limitations starts to run with
Fund appealed the District Court’s order          each missed payment or when payment of
denying summary judgment and referring            the debt is accelerated). Strictly applying
the matter to arbitration. Holmes cross-          the six year statute of limitations in this
appealed and moved to reopen the record           case, the Court then concluded that the
to explore whether the six year statute of        limitations period expired in 1997, and that
limitations under the MPPAA had expired,          the action was brought approximately one
based on the fact that, during discovery          year too late.
related to the arbitration, he became aware
for the first time that the Fund had sent a               The Fund urged the Court to
letter in March of 1991 accelerating the          characterize the 1998 action as an
withdrawal liability. Accordingly, he             enforcement, as against Holmes, of the
urged that the action commenced in 1998           1995 default judgment that had been
should be dismissed as untimely.                  entered against Route Resources. The
                                                  Court rejected this theory, adopting
        Another panel of our court                reasoning similar to that employed in
considered these appeals and remanded the         Central States, Southeast & Southwest
matter in September of 2001, directing the        Areas Pension Fund v. Mississippi
District Court to determine whether the           Warehouse Corp., 853 F. Supp. 1053
statute of limitations had expired prior to       (N.D. Ill. 1994), and distinguishing
the filing of the 1998 action. The District       controlled group liability under the
Court reopened the record, and the parties        MPPAA from other alter-ego theories of
filed another round of motions for                liability. In doing so, the Court declined to
summary judgment. The Court ultimately            follow the lead of certain other New Jersey
granted summary judgment in favor of              district courts that had permitted actions
Holmes on April 22, 2003, and ordered the         brought after the six year limitations
Fund to reimburse him in an amount equal          period to proceed by characterizing them
to the interim payments, interest,                as enforcement actions against persons
attorneys’ fees and costs Holmes had              who were not previously named, but who
already paid to the Fund as required by the       were admittedly controlled group members
MPPAA, as well as interest on those               with the defendants that had been named.
payments. The Court first determined that         The Court emphasized that Holmes had
the cause of action accrued with the              sold his interests in the entities in 1988 –
sending of the March 1991 letter. See Bay         before the liability arose and before notice
Area Laundry & Dry Cleaning Pension               of it was given – and that he continued to
Trust Fund v. Ferber Corp. of Cal., Inc.,         dispute his status as a member of the
522 U.S. 192, 194 (1997) (holding that a          controlled group with Kero. Cf. Bd. of
                                                  Trs. of Trucking Employees of N. Jersey
                                                  Welfare Fund, Inc. v. Gotham Fuel Corp.,
                                                  860 F. Supp. 1044 (D.N.J. 1993) (applying
so.

                                              5
New Jersey’s twenty year statute of                 Fund appealed certain aspects of the
limitations for enforcing judgments to an           Judgment, and Holmes cross-appealed
action seeking to enforce a default                 once more. Before us now are both sets of
judgment, where defendants were not                 appeals and cross-appeals, which have
parties to the earlier action but did not           been consolidated for our review.
dispute their status as members of the
relevant controlled group); Bd. of Trs. of                              III.
Trucking Employees of N. Jersey Welfare
Fund, Inc. v. Able Truck Rental Corp., 822                  This action was brought under
F. Supp. 1091 (D.N.J. 1993) (same).                 ERISA and the M PPAA. The District
                                                    Court had jurisdiction over it pursuant to
        Ultimately, the District Court held         29 U.S.C. § 1451(c). We review the
that any action by the Fund seeking to hold         District Court’s final order granting
a potential controlled group member like            summary judgment in favor of Holmes
Holmes jointly and severally liable for the         based on 28 U.S.C. § 1291. Because the
withdrawal assessment had to be brought             issues involved are purely legal, we
within the MPPAA’s six year statute of              exercise plenary review of the District
limitations. Thus, the Fund’s action was            Court’s grant of summary judgment, its
dismissed with prejudice, and the Fund              interpretation of the MPPAA’s statute of
was ordered to return all payments made             limitations provision, and its award of
by Holmes, with interest. 4 The Fund                damages in light of ERISA’s anti-
appealed this order, and Holmes cross-              inurement provision.      IUE AFL-CIO
appealed. The District Court also issued a          Pension Fund v. Barker & Williamson,
Judgment ordering that the payments made            Inc., 788 F.2d 118, 122 (3d Cir. 1986).
by Holmes were to be reimbursed. The                However, where the relevant statutes are
                                                    silent or ambiguous, we will defer to any
                                                    reasonable regulations promulgated by the
    4                                               Department of Labor in connection with
     The District Court also vacated the
                                                    the statutory provisions at issue in this
arbitrator’s opinion without discussing the
                                                    case. See Chevron, U.S.A., Inc. v. Natural
merits of the determinations made by the
                                                    Res. Def. Council, Inc., 467 U.S. 837
arbitrator, as the statute of limitations
                                                    (1984).
mandated dismissal and rendered the
arbitration moot. Thus, the District Court
                                                                        IV.
did not discuss whether Holmes received
notice “as soon as practicable,” nor shall
                                                           In their various briefs, the parties
we. Such an inquiry would only become
                                                    raise numerous issues related to the proper
relevant after a finding that the action was
                                                    application of the statute of limitations to
filed within the six year limitations period,
                                                    this action, the merits of the District
and that further issues governed by the
                                                    Court’s first opinion ordering arbitration,
MPPAA could be explored.

                                                6
the enforcement of the arbitrator’s order,            The MPPAA extends responsibility for
and the amount of reimbursement included
in the District Court’s final judgment. We
will not reach many of these issues, as we
                                                      schedule. Id. at §§ 1382(2), 1382(3),
will affirm the District Co urt’s
                                                      1399(b)(1)(B). The employer then has
determination related to the MPPAA’s
                                                      ninety days to request that the trustees
statute of limitations. In light of our
                                                      conduct a reasonable review of the amount
conclusion that the action was untimely,
                                                      of liability. Id. at § 1399(b)(2)(A)(I). If
the only other issues that require our
                                                      the dispute is not resolved at that time,
attention are those related to the
                                                      either party may initiate arbitration within
calculation of the Fund’s reimbursement to
                                                      the relevant time period set forth in §
Holmes. We will discuss both of the
                                                      1401(a)(1). An employer will waive its
pertinent issues – the statute of limitations,
                                                      statutory rights to dispute aspects of the
and the judgment amount – in turn.
                                                      Fund’s liability determination where
                                                      arbitration is not demanded within the time
                      A.
                                                      period prescribed by the statute. Barker &
                                                      Williamson, 788 F.2d at 129. During
           We first consider what the
                                                      arbitration, determinations made by the
applicable statute of limitations is in the
                                                      Fund regarding withdrawal liability
context of the Fund’s action as it is stated
                                                      amounts or classification of an employer
in the 1998 complaint.              Under the
                                                      as a responsible party are entitled to a
MPPAA, when an employer prematurely
                                                      presumption of correctness, unless the
ceases making payments into a pension
                                                      employer shows by a preponderance of the
plan, the trustees of the plan can assess the
                                                      evidence that the determinations are
w i t h d r a w a l lia bi lity a g a inst th e
                                                      unreasonable or clearly erroneous. Id. at §
withdrawing employer in an amount
                                                      1401(a)(3)(A).
representing that employer’s pro rata share
of the payments remaining due to the
                                                              Regardless of requests for review or
pension fund. 5 29 U.S.C. § 1381(b)(1).
                                                      arbitration, an employer must begin
                                                      making interim payments of the
                                                      withdrawal liability, follow ing the
      5
      In disputes that arise under the                schedule set forth by the trustees, within
MPPAA, the following sequence of events               sixty days of receiving the initial notice of
normally occurs. First, the trustees of the           liability. Id. at §§ 1399(c)(2), 1401(d); see
plan determine that an employer has                   Galgay v. Beaverbrook Coal Co., 105 F.3d
withdrawn within the meaning of the                   137, 139 (3d Cir. 1997). When the
MPPAA.       29 U.S.C. §§ 1382(1),                    arbitration concludes, either party may
1399(b)(1)(A)(I). The trustees then notify            bring an action in federal district court “to
the employer of its liability, demand                 enforce, vacate or modify the arbitrator’s
payment, and offer an amortization                    award.” Id. at § 1401(b)(2).

                                                  7
payment of withdrawal liability beyond the         MPPAA each time an employer fails to
withdrawing employer to “all employees             make a payment as scheduled by the plan
of trades or businesses (whether or not            trustees, and the trustees have no
incorporated) which are under common               obligation to accelerate the debt when an
control.” 29 U.S.C. § 1301(b)(1). In this          employer defaults. Bay Area, 522 U.S. at
case, the Fund seeks to use this provision         194-95. However, in a case where the
in order to hold Holmes liable for Kero’s          trustees elect to accelerate the liability by
withdrawal liability, as he was once the           demanding payment in full following an
CEO of one business under common                   employer’s default, which is permissible
control with Kero, and sole proprietor of          under 29 U.S.C. § 1399(c)(5), the six year
another.                                           period begins to run when the liability is
                                                   accelerated. See id. at 209 n.5 (“The
         In setting forth the parameters for       statute of limitations on an accelerated
civil actions brought under the MPPAA,             debt runs from the date the creditor
Congress imposed a specific statute of             exercises its acceleration option . . . .”);
limitations that governs actions to recover        see also Bd. of Trs. of Dist. No. 15
withdrawal liability. According to §               Machinists’ Pension Fund v. Kahle Eng’g
1451(f)(1) of the statutory scheme, the            Corp., 43 F.3d 852, 857 (3d Cir. 1994)
Fund’s MPPAA action must have been                 (discussing the application of a statute of
brought within “6 years after the date on          limitations to a debt payable in
which the cause of action arose,” in order         installments).
for it to be considered timely. 6 According
to the Supreme Court, a cause of action for                The parties here apparently do not
withdrawal liability arises under the              dispute the fact that the letter sent to Kero
                                                   by the Fund in March of 1991 accelerated
                                                   the liability by demanding payment in full.
  6                                                Thus, the District Court correctly
   The statute provides an alternative time
                                                   identified the date of that letter as the
limitation, which allows an action to be
                                                   event that marked the starting point for the
brought within “3 years after the earliest
                                                   six year statute of limitations according to
date on which the plaintiff acquired or
                                                   the Supreme Court’s discussion in Bay
should have acquired actual knowledge of
                                                   Area. In light of that fact, the period for
the existence of such cause of action.” 29
                                                   bringing actions under the MPPAA to
U.S.C. § 1451(f)(2).       The provision
                                                   recover Kero’s withdrawal liability ended
indicates that the longer of the two
                                                   in March of 1997, one full year prior to the
limitation periods described should apply.
                                                   filing of the instant complaint. Without
Here, the Fund has never argued that the
                                                   looking any further, it appears as though a
alternative period should apply to save its
                                                   straightforward application of the six year
claims, so we will only consider the six
                                                   limitations period leads to the conclusion
year limitations period described in the
                                                   that the Fund’s action here was untimely.
first paragraph of subsection (f).

                                               8
However, the Fund seeks to avoid that              $3,670,093.70, but proceeds to demand a
conclusion by characterizing the instant           judgment against Holmes in a different
action as one to enforce the 1995 default          amount, listing payments that would be
judgment it obtained against Route                 sought in an original action under the
Resources, and not as an original action           MPPAA.
under the MPPAA to impose withdrawal
liability against Holmes. The MPPAA                        Only two paragraphs of the 1998
does not contain a separate provision for          complaint even mention the 1995 default
enforcement of judgments. Presumably,              judgment, and nothing related to that
therefore, the enforcement of the judgment         judgment is referenced, either explicitly or
would be a matter of state law, here               implicitly, in the Fund’s prayer for relief.
carrying a twenty year statute of                  Thus, the most obvious reading of the
limitations, so the Fund urges that the            complaint – and, we think, the only
action was timely.                                 plausible reading – leads us to conclude
                                                   that it states an original action brought
        However, the Fund’s 1998                   under the MPPAA, rather than one to
complaint very clearly states an original          enforce the 1995 judgment. 7
action to recover withdrawal liability
under the M PPAA, not one to enforce a                                  B.
judgment. Like the complaint filed in
1995 against Route Resources, the first                  Notwithstanding the manner in
paragraph of the 1998 complaint explicitly         which the complaint is framed, the Fund
describes the case as “an action for
collection of withdrawal liability under the
[MPPAA].” In fact, the complaint is                   7
                                                        Indeed, even if we were to adopt the
replete with statements indicating that the
                                                   dissent’s position and hold that a pension
action was brought to collect withdrawal
                                                   fund may only bring one original action
liability from Holmes directly under the
                                                   under the MPPAA to fix withdrawal
MPPAA. For example, paragraph 32
                                                   liability and must thereafter seek to
states that “Defendants have failed to
                                                   enforce the one judgment obtained in that
make any of the monthly payments of the
                                                   action, rather than to assert new original
withdrawal liability assessment; thus, it is
                                                   actions, we would conclude that the Fund
necessary to bring this action to enforce
                                                   has not done so here. In other words, if
payment.” Paragraphs 33 and 34 go on to
                                                   the correct course of action for the Fund to
describe original actions brought under the
                                                   take was to seek enforcement of the 1995
MPPAA, 29 U.S.C. § 1451(b), to “enforce
                                                   default judgment, we would remain
payment of a withdrawal liability
                                                   convinced that the Fund’s failure to
assessment.”      Further, the complaint
                                                   articulate such a cause of action in its 1998
indicates in paragraph 17 that the amount
                                                   complaint precludes it from prevailing on
of the 1995 default judgment was
                                                   this appeal.

                                               9
urges us to view the complaint differently          to enforce prior default judgments for
based on the following argument. The                withdrawal liability under the MPPAA.
Fund’s initial notice of the withdrawal             See Gotham Fuel, 860 F. Supp. at 1050
liability, sent in 1990, constituted                (holding that the state limitations period
constructive notice to all businesses or            for enforcement of judgments applies once
persons that were ever under common                 a fund establishes that the defendants were
control with Kero.          See Barker &            part of the relevant single employer
Williamson, 788 F.2d at 127 (holding that           group); Able Truck, 822 F. Supp. at 1095
actual notice to an employer serves as              (same).
constructive notice to all other members of
a controlled group). The Fund relies on                     We conclude that the Fund’s
this principle for the further proposition          position regarding the statute of limitations
that a judgment obtained against one                is flawed. Initially, we emphasize our
member of a controlled group is a                   conclusion, explained fully above, that the
judgment against all other members. In              complaint as written simply does not lend
other words, the Fund asserts that a timely         itself to such a reading. The second
filed suit to recover withdrawal liability          amended complaint in this matter, which
that results in default judgment against one        was nearly identical to the Fund’s earlier
entity determines the liability of all other        complaint that resulted in the 1995 default
controlled group members, whether or not            judgment, explicitly seeks to collect
they are named as parties to the action.            withdrawal liability from Holmes. Such
Thus, this principle would allow the Fund           an action is governed by the MPPAA’s six
to enforce the 1995 default judgment                year limitations period. We would find it
obtained against certain members of                 difficult to read the 1998 complaint as
Kero’s controlled group against any other           setting forth an action to enforce a prior
entity they deem to be an additional                judgment without disregarding the clear
member of that controlled group, including          language of the complaint and engaging in
Holmes.                                             illogical contortions.8 But even if we

        Because it characterizes this action
as one to enforce a prior judgment, the                  8
                                                           Additionally, adopting the Fund’s
Fund urges that it should be governed by
                                                    alternative description of this action as one
New Jersey’s twenty year statute of
                                                    to enforce the default judgment would
limitations for enforcement of judgments,
                                                    require us to ignore the character of the
N.J. Stat. Ann. § 2A:14-5, rather than by
                                                    proceedings as they were conducted during
the MPPAA’s six year limitations period.
                                                    the first three or four years of this
The Fund finds support for this view in
                                                    litigation. Prior to our remand instructing
two cases decided by New Jersey district
                                                    the District Court to examine the statute of
courts, both of which applied the twenty
                                                    limitations issue, the proceedings in the
year limitations period to actions seeking
                                                    District Court and before the arbitrator

                                               10
chose to reinterpret the complaint as the           which he was not a named party, and in
Fund suggests, we still think the action is         which no one actively represented his
barred, and that the application of a twenty        interests.
year statute for enforcement of judgments
is problematic here. This is so for several                 In attempting to accomplish this
basic reasons.                                      feat, the Fund relies heavily on our
                                                    discussion in Barker & Williamson.
       First, the Fund acknowledges the             There, we were asked to decide whether a
fact that it has not obtained a default             company, Sentinel Electronics, was in a
judgment against Holmes personally.                 controlled group with the withdrawing
Additionally, the District Court refused to         company, Barker & Williamson, and if so,
find that Holmes was notified of the                whether notice to Barker & Williamson
withdrawal liability prior to 1998. The             constituted constructive notice to Sentinel.
Fund, therefore, must engage in the                 788 F.2d at 121. We first determined that
difficult task of convincing us that Holmes         Sentinel and Barker & Williamson had
is somehow liable when he was not                   become members of the same controlled
notified of the claim in a timely manner;           group prior to the pension plan withdrawal
further, it must persuade us that Holmes is         that gave rise to the action. Id. at 122-26.
somehow bound by a judgment in an                   After deciding that the two companies
action of which he had no actual notice, in         were a “single employer” within the
                                                    meaning of the MPPAA, we held that
                                                    actual notice of the withdrawal liability to
                                                    Barker & W illiamson cons tituted
were structured as they would be in an
                                                    constructive notice to all other members of
original action brought under the MPPAA.
                                                    its controlled group, including Sentinel.
The arguments made by the Fund in its
                                                    Id. at 126-30. Thus, like other courts of
first motion for summary judgment and
                                                    appeals, we adopted a “notice to one is
before the arbitrator never indicated a
                                                    notice to all” rule to be applied in MPPAA
desire to simply enforce the 1995
                                                    cases. Id. at 127; see also, e.g., Cent.
judgment. For example, the Fund argued
                                                    States, Southeast & Southwest Areas
in its first summary judgment motion that
                                                    Pension Fund v. Slotky, 956 F.2d 1369,
Holmes could not dispute the amount of
                                                    1375 (7th Cir. 1992); I.A.M. Nat’l Pension
the withdrawal liability because he failed
                                                    Fund, Plan A, A Benefits v. Slyman
to request arbitration in a timely manner,
                                                    Indus., Inc., 901 F.2d 127, 129 (D.C. Cir.
and not because he was already bound by
                                                    1990); Teamsters Pension Trust Fund –
an existing judgment. The Fund’s conduct
                                                    Bd. of Trs. of W. Conference v. Allyn
throughout the early stages of this
                                                    Transp. Co., 832 F.2d 502, 506-07 (9th
litigation reaffirms our reading of the
                                                    Cir. 1987).
complaint as stating an original action
under the MPPAA, rather than an action to
enforce a prior judgment.

                                               11
        However, the principle of “notice to        incorporated by the MPPA A for
one is notice to all” announced in Barker           determining controlled group status. 788
& Williamson does not lead to the                   F.2d at 123; see 29 U.S.C. § 1301(b)(1).
conclusion suggested by the Fund                    Here, Holmes had divested himself of his
regarding enfo rcem ent of default                  interests in his former businesses and
judgments. In Barker & Williamson, there            retired to Florida in 1988, so it is far from
was no statute of limitations issue before          certain that such a “brother-sister”
us, because the pension fund had brought            relationship could be imputed to Holmes
timely actions under the MPPAA against              and Kero at the time of the withdrawal.9
both the employer and the potential                 Further, without first determining whether
members of the controlled group. The                Holmes was in fact a member of the
relevant parties were all joined in the             controlled group at the time of the
initial litigation, so the fund was not             withdrawal, as we did in Barker &
attempting to enforce any prior judgment,           Williamson, we would be hesitant to apply
and the limitations period for arbitrating          the “notice to one is notice to all” rule on
disputes under the MPPAA had not yet                the facts of this case, let alone expand the
run.    Also, the issue there involved              rule to support a finding that a default
whether the defendant company had                   judgment obtained in 1995 is enforceable
become a member of the controlled group             against Holmes. 10
prior to the employer’s withdrawal, rather
than whether the defendant had terminated             9
its membership in the controlled group                  We note that it would be even more of
prior to the withdrawal. Therefore, no              a stretch to find a “brother-sister”
question was presented that required                relationship between Holmes and Route
arbitration under the MPPAA; all issues             Resources, the company against whom the
could be decided by the court on its own.           1995 default judgment was entered. It
See Galgay v. Beaverbrook Coal Co., 105             appears as though Holmes passed his ties
F.3d 137, 141-42 (3d Cir. 1997); see also           to Kero along to Route Resources in the
Flying Tiger Line v. Teamsters Pension              sale of his companies, so any controlled
Trust Fund of Philadelphia, 830 F.2d 1241,          group connection between Holmes and
1249-50 (3d Cir. 1987) (distinguishing              Route Resources would be fairly
Barker & Williamson from a case in which            attenuated.
the issue involved termination of                     10
                                                        The Fund has not pointed us to a case,
controlled group status).
                                                    and we are not aware of any, in which we
                                                    have applied Barker & Williamson’s
       In Barker & Williamson, we
                                                    constructive notice concept to a situation
determined that, at the time of the
                                                    where an employer had severed all ties to
withdrawal, Barker & Williamson and
                                                    the controlled group entities before the
Sentinel were “brother-sister corporations”
                                                    trustees sent notice of the liability. Under
under the Internal Revenue Code standards
                                                    the cases we have examined, application of

                                               12
        In an effort to provide further             judgment against a newly-located member
support for its proposed rule, the Fund             of the controlled group within the state
directs our attention to two cases decided          statute of limitations for enforcement of
by district courts in New Jersey. In those          judgments.11 Gotham Fuel, 860 F. Supp.
cases, the lower courts extended our                at 1050; Able Truck, 822 F. Supp. at 1095.
reasoning in Barker & Williamson to                  However, several factors counsel against
create a “judgment against one is judgment          reliance on the New Jersey district court
against all” rule that they applied to              cases cited by the Fund. Obviously, we
MPPAA controlled group situations where             are not bound by the manner in which the
a pension fund sought to enforce a prior            New Jersey district courts have interpreted
                                                    the MPPAA and our relevant precedent.
                                                    Furthermore, whereas the courts in Able
                                                    Truck and Gotham Fuel indicated that the
the “notice to one is notice to all” concept
                                                    actions before them were characterized as
is only proper after there has been a
                                                    actions to enforce prior default judgments,
determination regarding membership in the
controlled group.         See Barker &
Williamson, 788 F.2d at 126-27
                                                         11
(developing the rule regarding notice after                 Other district courts facing facts
first concluding that the relevant parties          similar to those presented here have
were controlled group members); see also            refused to apply a statute of limitations
Bd. of Trs. of Teamsters Local 863                  other than the one described in the
Pension Fund v. Foodtown, Inc., 296 F.3d            MPPAA. See Mississippi Warehouse, 853
164, 175 (3d Cir. 2002) (applying the               F. Supp. at 1059 (“[E]ach action brought
notice rule after establishing alter ego            against an alleged controlled group
status and likening the situation presented         member on the basis of joint and several
to a controlled group ); Trs. of                    liability must be brought within the ERISA
Amalgamated Ins. Fund v. Sheldon Hall               limitations period . . . . [A fund] may not
Clothing, Inc., 862 F.2d 1020, 1024 (3d             invoke ERISA withdrawal provisions
Cir. 1988) (applying the notice rule after          while simultaneously appealing to a state
noting that the district court finding              statute of limitations for the collection of a
regarding controlled group status was not           judgment.”); see also Langone v. Esernia,
appealed); Trs. of Chicago Truck Drivers,           847 F. Supp. 214, 218-19 (D. Mass. 1994)
Helpers & Warehouse Workers Union                   (considering a complaint seeking to bring
(Indep.) Pension Fund v. Rentar Indus.,             an original MPPAA action and to enforce
Inc., 1989 WL 153559, at *4 (N.D. Ill.              a prior judgment, and granting summary
Nov. 8, 1989) (“[O]wners who sell a                 judgment in favor of defendant sole
business cannot be expected to know of              proprietor based on statute of limitations
withdrawal liability assessments which are          and failure to show why the court should
served on their successors after control has        pierce the corporate veil and hold
been transferred.”).                                proprietor responsible for liability).

                                               13
applying such a view in this case would                time of the withdrawal, leaving us faced
require us to substantially recharacterize             with a dispute that would require
the action originally set forth in the Fund’s          arbitration as dictated by the MPPAA,
complaint, as we explained above. We are               including its statute of limitations
simply unwilling to do so.             Finally,        provision.12 Thus, we think that the
a key distinction separates the facts before           ultimate problem with the Fund’s position
us from those at issue in Able Truck and               is the fact that there has been no finding
Gotham Fuel and convinces us that the                  here by any court or arbitrator that Holmes
Fund is time-barred from proceeding with               was an employer or a member of the
this action. The defendants in both of the             controlled group within the meaning of the
New Jersey district court cases conceded               MPPAA at the time Kero withdrew from
membership in the relevant controlled                  the Fund. We conclude that such a finding
groups, leaving no unresolved issues that              would be a necessary predicate to our even
would require arbitration pursuant to the              considering the application of the Barker
MPPAA. Thus, those courts were able to                 & Williamson rule, and to any proposed
apply the state enforcement statutes of
limitations without implicating other
MPPAA provisions that would require                       12
                                                             Because the facts of the New Jersey
resolution through arbitration. Indeed,
                                                       district court cases are distinguishable on
those district courts emphasized this fact
                                                       this basis, we need not decide whether the
as they reached their conclusions
                                                       “judgment against one is judgment against
extending the liability determined in prior
                                                       all” concept adopted by the New Jersey
judgments to the new parties before them.
                                                       courts is more generally proper under the
See Gotham Fuel, 860 F. Supp. at 1048
                                                       MPPAA, or whether the MPPAA allows
(“It is conceded that defendants . . . were,
                                                       for “enforcement” actions to be brought in
as of the date of the withdrawal, members
                                                       federal court at all. Cf. Peacock v.
of a controlled group with the contributing
                                                       Thomas, 516 U.S. 349 (1996) (concluding
employer . . . .”); Able Truck, 822 F. Supp.
                                                       that district courts lack jurisdiction over an
at 1093-94 (“Defendants do not deny that
                                                       action seeking to enforce, as against a
[they] were members of a controlled group
                                                       corporation’s officer, a judgment obtained
with [the withdrawing company at the
                                                       in a previous ERISA suit involving the
relevant time]. Thus, the only contested
                                                       corporation). While a statutory basis for
issue is whether plaintiff’s action is
                                                       importing state statutes of limitations
timely.”).
                                                       governing enforcement of judgment
                                                       actions does not seem apparent to us as we
        Here, Holmes cites the sale of his
                                                       read the relevant provisions of the
interests in all of his businesses and his
                                                       MPPAA, we will not engage in a lengthy
retirement to Florida, and vigorously
                                                       examination and resolution of that issue
objects to any claim that he should be
                                                       here. The issue before us is narrower than
deemed a controlled group member at the
                                                       that.

                                                  14
extension thereof. See supra note 10.                  thereby responsible for the withdrawal
                                                       liability, and allow the Fund to enforce the
                      C.                               1995 default judgment against Holmes.

        Hoping to avoid the need to obtain                     It is true that, in an arbitration
such a finding, the Fund seeks to have the             proceeding, a pension fund’s finding that
1995 judgment enforced against Holmes                  a defendant engaged in a transaction
by asserting a challenge to the sale of                described in the “evade or avoid”
Holmes’s companies, saying that the                    provision of the MPPAA is accorded a
purpose of that transaction was to evade               presumption of correctness, which must be
withdrawal liability.       So, under the              overcome by proof to the contrary offered
MPPAA, since any transaction undertaken                by the defendant. See 29 U.S.C. §
for the “principal purpose” of evading or              1401(a)(3)(A). And the Fund is correct
avoiding withdrawal liability must be                  that a court may not evaluate whether a
disregarded, Holmes’s sale should be                   company, which has already been deemed
ignored. 29 U.S.C. § 1392(c). In other                 to have been a member of the controlled
words, an employer might still be                      group at one time prior to the withdrawal,
responsible for withdrawal liability, even             has engaged in a transaction to evade
after he sells his businesses, if the purpose          liability. 13 See Flying Tiger, 830 F.2d at
of the sale is deemed to bring the
transaction within the scope of § 1392(c).
Here, the Fund urges that Holmes’s sale of                13
                                                             We have interpreted the MPPAA to
Kero and his other businesses to Route
                                                       require that “where the party against which
Resources, which occurred prior to Kero’s
                                                       withdrawal liability is being asserted was
withdrawal from the plan, should not
                                                       certainly part of the controlled group of an
shield him from liability.           We are
                                                       employer subject to the MPPAA at some
unconvinced by this theory as well.
                                                       point in time, and where the issues in
                                                       dispute fall within the purview of MPPAA
        According to the Fund, we must
                                                       provisions that are explicitly designated
accept its assertion, stated for the first time
                                                       for arbitration,” the parties must comply
in its 1998 complaint, that Holmes’s sale
                                                       with the MPPAA arbitration provisions in
of his companies to Route Resources was
                                                       resolving their dispute. Flying Tiger, 830
undertaken so that he could avoid
                                                       F.2d at 1247. In other words, a federal
withdrawal liability under the MPPAA.
                                                       district court may not, for example, make
Based on that assertion and its theory that
                                                       a determination as to whether a particular
“judgment against one is judgment against
                                                       transaction was undertaken in order to
all” under the MPPAA’s controlled group
                                                       evade or avoid withdrawal liability; rather,
provision, the Fund contends that we must
                                                       that issue is one that is explicitly reserved
disregard Holmes’s sale, find that he was
                                                       for resolution through arbitration. Id.; see
in the controlled group with Kero and is
                                                       also Galgay, 105 F.3d at 141. However, a

                                                  15
1247. However, this does not mean that               allow collection of a judgment against
we must allow a pension fund to bring a              those clearly liable, as the New Jersey
claim against a defendant, alleging for the          district courts have done, but quite another
first time that he engaged in a transaction          to sanction an attempt to bypass the
with a purpose of evasion and is thus                MPPAA’s limitations provision and
liable, after the six year limitations period        litigate issues related to withdrawal
under the MPPAA has expired. Neither                 liability in such a belated action. We hold
does it imply that we must entertain such            that an “evade or avoid” determination
an action when a pension fund asserts it             must be asserted, allowing for the
under the guise of enforcing a judgment,             necessary arbitration proceedings that
conclusive as to liability.                          would be governed entirely by provisions
                                                     of the MPPAA, within the six year statute
         We are not persuaded that the               of limitations that governs proceedings
MPPAA allows a pension fund, once it has             involving the MPPAA. Thus, applying the
obtained a default judgment within the six           plain language of the statutory provisions,
year period, to initiate a string of suits           the Fund is time-barred from raising and
against purported members of a controlled            litigating the issue of whether Holmes’s
group anytime in the following twenty year           sale of his companies to Route Resources
period. This strikes us as especially                in 1988 was undertaken in order to evade
troublesome in view of the fact that, if             or avoid Kero’s withdrawal liability.
permitted to avoid the MPPAA’s statute of
limitations here and force Holmes to                        The dissent asserts that our ruling
litigate this matter beyond the statutory            will vitiate the remedial purpose of the
period, the Fund would have managed to
do so by merely adding a simple paragraph
to its complaint alleging that Holmes’s sale
                                                     a member of the controlled group until he
of his businesses “was to evade or avoid
                                                     refutes the Fund’s “determination” in
withdrawal liability.” 14 It is one thing to
                                                     arbitration, we would still conclude that
                                                     the Fund’s action was untimely. As we
district court may preliminarily determine           have indicated above, the complaint that
whether the MPPAA applies at all to a                first announces the Fund’s “determination”
given entity, and it may resolve other               was filed beyond the six year statute of
issues where arbitration would cause                 limitations. Further, the only method for
irreparable harm to the employer, or where           challenging that “determination” is
the question is one of statutory                     arbitration, as described by the MPPAA.
interpretation. Flying Tiger, 830 F.2d at            Under these circumstances, we find no
1251-54; see also Galgay, 105 F.3d at 142            basis in either the statutory scheme or the
                                                     case law interpreting it to apply a statute of
  14
    Even if we would be required to accept           limitations other than the one clearly
the Fund’s assertion and consider Holmes             delineated in the M PPAA itself.

                                                16
MPPAA and do an injustice to pension                  claims to languish over a twenty year
funds seeking to enforce judgments related            limitations period.1 5       Accordingly,
to delinquent withdraw al liability                   Congress has given funds sufficient time
payments. But we do not view our opinion              to discover the owners of closely held
as doing either of those things. It is true,          corporations and trace the paths of
as we have previously observed, that the              complicated sales transactions, while at the
MPPAA sets up a single-employer, or                   same time encouraging funds to act in a
controlled group, scheme because a fund               manner that serves the best interests of the
“has no way of knowing the ownership of               plan participants.
a closely held corporation.” Barker &
Williamson, 788 F.2d at 128. But we                                         V.
made that observation in the context of a
case involving notice of withdrawal                          Because we agree with the District
liability, which, under the MPPAA, must               Court that this matter should have been
be given “as soon as practicable.” 29                 dismissed as untimely, Holmes is entitled
U.S.C. § 1399(b)(1). Thereafter, a pension            to a reimbursement of the interim
fund has six full years to investigate and            payments he made while the action was
prepare to bring a cause of action to                 pending. See 29 C.F.R. § 4219.31(d)
recover the withdrawal liability in a district        (requiring a plan sponsor to refund
court. 29 U.S.C. § 1451(f). Congress                  overpayments of withdrawal liability).
elected to create a relatively long                   The Fund does not dispute the fact that,
limitations period to govern actions                  given our conclusion regarding the statute
brought under the MPPAA, giving pension               of limitations, it is required to return some
funds adequate time to locate corporations            portion of Holmes’s payments. However,
and persons who are pote ntially                      the Fund does assert that the return of
responsible for withdrawal liability. See             certain amounts described in the District
Central States, Southeast & Southwest
Areas Pension Fund v. Navco, 3 F.3d 167,
171 (7th Cir. 1993), abrogated on other                 15
                                                          We see it fit to emphasize here that we
grounds by Bay Area, 522 U.S. at 194.
                                                      are to construe this remedial scheme in
                                                      favor of the plan participants. This does
        On the other hand, the M PPAA is a
                                                      not always equate to construing the
remedial statutory scheme which is to be
                                                      scheme in a way that grants wide latitude
“liberally construed in favor of protecting
                                                      to the pension funds. Here, it is in the best
the participants in employee benefit
                                                      interests of the plan participants to allow
plans.” Id. at 127. The discrete six year
                                                      sufficient time for a fund to engage in the
limitations period furthers this goal,
                                                      necessary inves tigation related to
requiring a fund to act expeditiously in
                                                      identifying potentially liable entities, but to
pursuing payment from members of a
                                                      also motivate the fund to do so in an
controlled group, rather than allowing such
                                                      expeditious manner.

                                                 17
Court’s judgment would violate ERISA’s               making the overdue payments, the Court
anti-inurement provision. See 29 U.S.C. §            entered judgment for the delinquent
1103(c) (preventing plan assets from                 payments and ordered Holmes to pay any
inuring to the benefit of an employer).              attorneys’ fees and costs associated with
Specifically, the Fund asserts that it should        the Fund’s efforts to secure payment
only be required to return the interim               pursuant to the original order.
payments made by Holmes – the return of
which is explicitly provided for in an                       In its final order related to this
exception to the anti-inurement provision            matter, after dismissing the Fund’s action
of ERISA, see 29 U.S.C. § 1103(c)(3) –               based on the statute of limitations, the
without having to return his payments of             District Court included these attorneys’
attorneys’ fees and costs, and without               fees and costs paid by Holmes in the total
having to pay interest on the total amount.          amount the Fund was ordered to return to
                                                     him.     The Fund offers two reasons
                     A.                              explaining why it thinks the District Court
                                                     erred, and why it should not have to return
       We agree with the Fund that it                that portion of the total amount: first, the
should be permitted to retain the payments           Fund notes that the payment arose from
of attorneys’ fees and costs. A few more             Holmes’s failure to comply with a court
facts are necessary here in order to                 order; and second, the Fund urges that the
understand the context in which these                payments are now plan assets, which
payments were made, as well as our                   cannot be returned absent a specific
decision to allow the Fund to keep them.             statutory exception to the anti-inurement
In the District Court’s first order referring        provisions of ERISA. We agree that, for
this matter to arbitration, the Court ordered        the first reason offered by the Fund,
Holmes to begin making interim                       Holmes is not entitled to reimbursement of
withdrawal liability payments to the Fund            these costs and fees.
in accordance with 29 U.S.C. § 1399(c)(2).
Following this decision, Holmes refused to                   Regardless of the ultimate
make the interim payments that had come              disposition of the case, Holmes had an
due between the date that he received the            obligation to comply with the District
complaint and the date that the Court                Court’s orders that preceded its final
ordered him to make the payments. The                judgment. By refusing to obey the initial
Fund filed a Motion for Entry of                     order regarding interim payments, Holmes
Judgment, seeking the overdue payments,              forced the Fund to engage in further
and Holmes filed a Motion for                        litigation in order to secure enforcement of
Clarification, asking whether the Court’s            what was at the time a valid order of the
order mandated the backpayments. After               District Co urt.          The subsequent
determining that its order had been clear            determination regarding the untimeliness
and that Holmes was responsible for                  of the Fund’s action does not serve to

                                                18
negate the costs incurred due to Holmes’s                  overpayments).17 In Huber, we examined
wrongful failure to make the interim                       a regulation promulgated by the
payments ordered by the Court. Thus, we                    Department of Labor allowing for the
will reverse the District Court’s judgment                 payment of interest on overpayments under
insofar as it orders the Fund to reimburse                 the MPPAA, and we deferred to the
Holmes for the payments of these                           agency’s reasonable construction of the
attorneys’ fees and costs.16                               MPPAA and the anti-inurement provision
                                                           of ERISA.18 See 29 C.F.R. § 4219.31(d)
                        B.
                                                                  17
        The second issue related to the                          We note that Huber was partially
reimbursement amount involves the                          abrogated, with respect to a separate
District Court’s award of interest and its                 holding not relevant here, by the Supreme
use of the interest rate set forth in the                  Court’s decision in Milwaukee Brewery
Fund’s plan agreement as the interest rate                 Workers’ Pension Plan v. Jos. Schlitz
applicable to delinquent contributions and                 Brewing Co., 513 U.S. 414, 421 (1995).
payments. The Fund contends that it                          18
                                                                The Fund urges that Huber’s analysis
should not be required to pay interest on
                                                           on this point has been undermined by
the amount of the reimbursement, and, in
                                                           intervening developments in this area of
the alternative, that the interest rate should
                                                           the law. Specifically, the Fund asserts that
be based on prevailing market rates. We
                                                           our discussion in Huber rested upon our
reject both of these arguments. As to the
                                                           holding in an earlier case that was
Fund’s obligation to pay interest, we are
                                                           subsequently abrogated by a decision of
bound by a prior decision of our court.
                                                           the Supreme Court. See United Retail &
See Huber v. Casablanca Indus., Inc., 916
                                                           Wholesale Employees Teamsters Union
F.2d 85, 103 (3d Cir. 1990) (holding that
                                                           Local No. 115 Pension Plan v. Yahn &
an ERISA fund may be required to pay
                                                           McDonnell, Inc., 787 F.2d 128 (3d Cir.
interest on refunds of withdrawal liability
                                                           1986), abrogated in part by, Concrete Pipe
                                                           & Prods. of Cal, Inc. v. Constr. Laborers
                                                           Pension Trust for S. Cal., 508 U.S. 602
                                                           (1993) (involving the constitutionality of
                                                           the MPPAA’s presumptions favoring
     16
        Because we are persuaded by the                    liability determinations made by
Fund’s first point, we need not determine                  multiemployer plans).        We are not
w h e t h e r E R IS A ’s a n t i- i n u re m e n t        persuaded that our conclusion in Huber
provision, viewed in light of other                        regarding payment of interest was dealt a
provisions of the MPPAA related to                         fatal blow by the Supreme Court’s
withdrawal liability refunds, would bar the                decision in Concrete Pipe, as it is far from
return of previously paid attorneys’ fees                  clear that our holding on this point was
and costs here.                                            dictated solely by our mention of United

                                                      19
(“The plan sponsor shall credit interest on         judgment order. We see no basis for
the overpayment from the date of the                questioning that determination. While the
overpayment to the date on which the                rate set by the Fund might be slightly
overpayment is refunded . . . .”); see also         higher than the current prevailing market
Chevron, 467 U.S. at 844. In light of this          rate, the average rates over time have been
binding precedent, the District Court was           recorded both above and below ten
correct to include an award of interest in          percent. Further, we note that it seems
its judgment order outlining the amount of          somewhat problematic for the Fund to be
Holmes’s reimbursement.                             challenging its own rate as being
                                                    unreasonable, while it presumably
        Regarding the interest rate to be           continues to apply that rate against
applied when a fund reimburses an                   e m ployers with delinq uent p la n
employer for overpayments of withdrawal             contributions and overdue withdrawal
liability, we again look to the Department          liability payments. In any event, we
of Labor’s regulation for guidance.                 conclude that the District Court’s award of
According to 29 C.F.R. § 4219.31(d), the            interest at a rate of ten percent was proper.
Fund must credit interest on the
overpayment “at the same rate as the rate                               VI.
f o r o v e r due w ithdrawal liability
payments.” In determining what rate                        Accordingly, we will AFFIRM the
should apply, the Fund may choose                   order of the District Court granting
between the rate specified in 29 C.F.R. §           summary judgment in favor of Holmes and
4219.32, which sets out a rate that is              dismissing the Fund’s action as untimely.
essentially equivalent to the prevailing            We will also AFFIRM the judgment of the
market rate for short-term commercial               District Court to the extent that it orders
loans, or the rate specified by the plan            the Fund to reimburse Holmes in the
itself pursuant to 29 C.F.R. § 4219.33,             amount of his interim payments, the
which allows ERISA funds to adopt                   interest he paid, and interest on that
reasonable rules setting out interests rates        amount to be computed at a rate of ten
that will apply to overdue or overpaid              percent. However, we will REVERSE the
withdrawal liability. Here, the Fund’s plan         judgment of the District Court to the extent
agreement sets the interest rate for overdue        that it orders the Fund to return the
withdrawal liability at ten percent, and the        attorneys’ fees and costs paid by Holmes.
Court applied that rate in constructing its

                                                    ROSENN, Circuit Judge, dissenting.
Retail. Thus, absent a clear statement to
                                                           The majority has fashioned a
the contrary by the Supreme Court or our
                                                    principle that eviscerates the intent of the
own court sitting en banc, we remain
                                                    Multiemployer Pension Plan Amendments
bound by Huber.

                                               20
Act of 1980 (“MPPAA” or “the Act”) and                 precedent in this circuit.     Therefore, I
vitally undermines a pension fund’s ability            respectfully dissent.
to enforce its judgment against a
defaulting employer.            Although the                                I.
MPPAA provides for a six-year statute of
limitations within which to initiate suits                     When drafting the MPPAA,
for the determination of the underlying                Congress endowed the legislation with
pension liability, it is silent with respect to        several key provisions designed to assist
enforcement of judgments, leaving that                 pension funds in collecting withdrawal
aspect to existing state and federal laws.             liability from delinquent or evasive
The enforcement of judgments often                     employers in situations such as the case at
requires prolonged investigations in an                bar. The statutory scheme provides: (1) all
effort to identify and find related entities           trades or businesses in a “control group”
and their resources. The majority expands              will be treated as a “single employer,” 29
the Act’s six-year statute of limitations not          U.S.C. § 1301(b)(1); (2) if a pension fund
only to govern an underlying claim for                 makes a factual determination that an
withdrawal liability against an employer,              employer has conducted a transaction for
but also to deny the pension fund an                   the primary purpose of “evading or
opportunity to make factual determinations             avoiding” pension liability, the pension
regarding the liability of related entities.           fund may disregard the transaction, 29
                                                       U.S.C. § 1392(c); (3) if an employer
        The evidence in this case shows                disputes a factual determination made by a
that the employer shifted its liability                pension fund, that dispute must be
among a tangled web of domestic and                    resolved through arbitration before a civil
foreign corporate entities, frustrating the            suit may proceed, 29 U.S.C. § 1401(a)(1);
Trucking Employees of North Jersey                     and (4) suits against an employer to collect
Welfare Fund’s (the “Fund”) continuous                 withdrawal liability must be brought
efforts to collect pension liability under the         within six years of the accrual of the
mechanisms prescribed by ERISA and the                 action, 29 U.S.C. § 1451(f).
MPPAA . The majority, by treating the
judgment against the employer, Route                           In the seminal case of IUE AFL-
Resources, as a nullity with respect to                CIO Pension Fund v. Barker &
members of the “control group,” thus                   Williamson, Inc., 788 F.2d 118 (3d Cir.
enables the latter to evade statutory                  1986), this court recognized that a liberal
liability under the Act. I believe that the            construction of the MPPAA’s provisions
majority’s expansive and unrealistic                   in favor of pension funds is consistent with
interpretation of the MPPAA’s statute of               the statute’s legislative intent. 788 F.2d at
limitations and its narrow view of the                 127 (citing H.R.Rep. No. 869, 96 th Cong.,
control group is contrary to the letter and            2d Sess. 71, reprinted in 1980 U.S. Code
purpose of the MPPAA, as well as the                   Cong. & Ad. News 2918, 2939).

                                                  21
Furthermore, “[c]ourts have indicated that           group constitutes constructive notice to all
because ERISA (and the M PPAA) are                   entities in the control group. 788 F.2d at
remedial statutes, they should be liberally          127. We noted the practical necessity for
construed in favor of protecting the                 this principle, acknowledging that pension
participants in employee benefit plans.”             funds have no way of knowing ownership
Id. (citing Smith v. CMAT-IAM Pension                arrangem ents among closely held
Trust, 746 F.2d 587, 589 (9 th Cir. 1984);           corporations. Id. at 128. The court
Rettig v. PBGC, 744 F.2d 133, 155 (D.C.              reasoned that:
Cir. 1984)). In this case, the majority has                  [h]olding the fund responsible for
disregarded these guideposts, and instead                    providing notice to all other
engages in a rigid construction of the                       poss ible entities that m ight
MPPAA that is inconsistent with the                          subsequently be deemed to be in a
statute, departs from the prior holdings of                  controlled group with the employer
this court, and defies the MPPAA’s                           corporation would place the fund in
legislative intent acknowledged by this and                  an untenable position. In contrast,
other courts.                                                the stockholders and officers of
                                                             corporations . . . certainly are aware
        There are two significant provisions                 of their holdings. If they choose to
in the MPPAA that underlie the analysis in                   ignore . . . potential liability as a
this case. First, the MPPAA stipulates that                  member of a controlled group
pension funds may treat all trades and                       under the MPPAA, then they
businesses under “common control” as a                       should suffer the consequences if
“sing le employer.” 29 U.S .C. §                             t h a t i s sue is subseque ntl y
1301(b)(1).19       This “single employer”                   determined adversely to them.
principle allows pension funds to deal               Id.
exclusively with the defaulting employer
known to the fund, while at the same time                    Second, Congress acknowledged
assuring themselves that legal remedies              that employers owing significant pension
can be maintained against all related                liability may attempt to avoid their
entities in the control group. In Barker &           obligations through evasive transactions.
Williamson, we derived from the                      See Flying Tiger Line v. Teamsters
MPPAA’s “single employer” principle the              Pension Trust Fund of Philadelphia, 830
logical corollary that notice of pension             F.2d 1241, 1248 (3d Cir. 1987). For
liability provided to one entity in a control        example, a corporate entity with pension
                                                     liability may be sold to a separate,
                                                     undercapitalized corporate entity that then
  19                                                 declares bankruptcy, thereby frustrating a
    The MPPAA utilizes the definition of
                                                     pension fund’s efforts to collect from the
“control group” as prescribed in the
                                                     employer.     To remedy this evasive
Internal Revenue Code. 29 U.S.C. §
                                                     practice, the MPPAA states that if the
1301(b)(1).

                                                22
primary purpose of a transaction is to                matter, the Fund asserts that Holmes
“evade or avoid” pension liability, a                 participated in a transaction intended to
pension fund may disregard the                        “evade or avoid” pension liability. Thus,
transaction, and “liability shall be                  as Congress provided in the MPPAA, the
determined and collected . . . without                Fund may disregard the transaction and
regard to such transaction.” 29 U.S.C. §              treat Holmes as a continuing member of
1392(c). Notably, if an employer disputes             the control group. 29 U.S.C. § 1392(c).
a pension fund’s determination that a                 Second, as a matter of law, the Fund
transaction was primarily conducted to                argues that because it brought a claim
“evade or avoid” pension liability, the               against a member of the employer control
employer must seek arbitration to resolve             group in 1995, it has satisfied the MPPAA
this factual dispute before the court                 statute of limitations, leaving the Fund free
proceeding may continue. 29 U.S.C. §                  bring the present suit against Holmes as an
1401(a)(1); Flying Tiger Line, 830 F.2d at            action to enforce the 1995 judgment.
1248. Once in arbitration, Congress
further tipped the scales in favor of                                      A.
pension funds by granting a presumption
that any factual determination by the fund                    Through a combination of stock and
is correct, unless the employer shows by a            trust, Holmes was the owner of Holmes
preponderance of the evidence that the                Transportation, Inc., (“HTI”), Kero
fund’s finding was “unreasonable or                   Leasing Corp. (“Kero”) and other related
clearly erroneous.” 29 U .S.C . §                     personal proprietorships.20      In 1988,
1401(a)(3)(A). The Supreme Court has                  Holmes transferred his interest in these
interpreted this language to place the                related companies to Route Resources, a
burden of persuasion on the employer                  Canadian-owned holding company. The
during arbitration to “disprove a                     Fund points to significant evidence in the
challenged factual determination by a                 record indicating that Holmes’ transaction
preponderance.”       Concrete Pipes and              was intended to evade pension liability.
Prod ucts of C alifornia, In c. v .                   For example, Holmes originally signed a
Construction Laborers Pension Trust of                collective bargaining agreement with the
Southern California, 508 U.S. 602, 629                Teamsters Local Union No. 560 in May of
(1993).                                               1985, constituting his initial personal
                                                      promise to make payments to the Fund.
                     II.

      The Fund’s position in this case                   20
                                                           The Fund is able to bring an action
may be boiled down to two arguments that
                                                      against Holmes personally because he
support its claim to collect pension liability
                                                      operated proprietorships under common
from the Defendant/Appellee Robert
                                                      control with Kero in his personal capacity
Holmes (“Holmes”). First, as a factual
                                                      without corporate protection.

                                                 23
Then, several months later in October of             during the negotiation of the alleged sale
1985, Holmes incorporated Kero and                   or soon after the transaction closed, Kero
assigned the ag reem ent (an d the                   and/or Route Resources stopped making
corresponding pension liability) to it. At           payments to the Fund. In July of 1989,
that point, Kero had no apparent assets              shortly after the execution of the purchase
except the bare collective bargaining                agreement, Route Resources conveyed the
agreement. In what may have been a                   capital stock of HTI to Anthony
further attempt to isolate assets from               Matarozzo, the owner of Arrow Carrier,
liabilities, the record indicates that Holmes        Inc. Six months later, HTI filed a petition
transferred a large piece of real estate in          in bankruptcy.
Framingham, Mass., worth over $10
million, from HTI to himself personally in                   Almost immediately after Kero
December 1987, prior to conducting the               stopped making pension payments, the
sale to Route Resources. Next, Holmes                Fund did its best to follow this elusive
transferred HTI’s remaining assets into              chain of ownership and serve notice of
two shell corporations to facilitate the sale        withdrawal liability on the appropriate
to Route Resources. Kero’s stock, which              parties as required under the MPPAA.
may be better characterized as the large             The Fund’s efforts included several notice
pension liability, was then transferred to           letters sent to Matarozzo from 1990
Route Resources separately from the                  through 1992, as well as letters sent to
corporations now containing the assets.              Route Resources and Kero Leasing at their
                                                     last known addresses. The Fund received
        Despite the sale, Holmes displayed           no response until 1992, when Matarozzo
an initial intent to remain involved with            finally informed the Fund that his purchase
the companies through a fifteen year                 of HTI from Route Resources did not
management consulting contract worth                 include Kero or Kero’s pension liability.
$4,725,000, which was included as part of            Thus, the Fund’s pursuit of Matarozzo
the sale agreement. Yet, the parties                 over a three year period was a red herring.
walked away from the agreement after                 Interestingly, the District Court in this case
only a single payment of $78,750 covering            noted that when Anthony Matarozzo
three months of services. Not surprisingly,          eventually responded to the Fund, he was
a bankruptcy trustee appointed for the HTI           in prison serving a sentence for theft from
estate opined that the Route Resources               a separate pension fund. Bd. of Trustees
transaction “was made upon insufficient              of Trucking Employees of N. Jersey
consideration.” Trucking Employees of                Welfare Fund, Inc. - Pension Fund v. Kero
North Jersey Welfare Fund, Inc. v. Route             Leasing Corp., et al., No. 98-1476, slip op.
USA Real Estate, Inc., No. 90-4489, slip             at 4 (D.N.J. Oct. 26, 1999).
op. at 2 (D.N.J. May 23, 1991).
                                                           While the actual determination of
       At some point in 1988, either                 whether this transaction was intended to

                                                24
“evade or avoid” pension liability is a               under the MPPAA, should be construed as
matter for arbitration, the claims presented          enforcement actions against the different
by the Fund and reinforced by the District            entities comprising the “single employer.”
Cou rt facially support a factual
determination of evasive intent. This                         The Fund believed that by bringing
determination should not be undermined                an initial suit against one member of the
by Holmes’ dubious effort to invoke the               control group, it would satisfy the MPPAA
statute of limitations.                               statute of limitations and provide further
                                                      time to investigate the complicated history
                     B.                               of private transactions to find other
                                                      resources to satisfy its judgment. The
        After years of frustration from               Fund was justified in this belief because
chasing Kero’s phantom owners, the Fund               courts in this circuit have consistently held
decided to switch tactics, retain new                 that this approach is permissible under the
counsel, and address the matter in court.             MPPAA. Specifically, this same pension
The Fund’s new counsel brought an action              fund was the plaintiff in two prior cases
in the U.S. District Court for the District of        before the New Jersey district court,
New Jersey in April of 1995 against Route             raising almost identical claims. In Bd. of
Resources and its related companies to                Trustees of Trucking Employees of N.
collect the withdrawal liability, again               Jersey Welfare Fund, Inc. v. Gotham Fuel
following the MPPAA procedures. Route                 Corp., 860 F.Supp. 1044, 1051 (D.N.J.
Resources did not respond to the                      1993) and Bd. of Trustees of Trucking
complaint, and the District Court awarded             Employees of N. Jersey Welfare Fund, Inc.
the Fund a default judgment.                          v. Able Truck Rental Corp., 822
                                                      F.Supp.1091, 1095 (D.N.J. 1993), Judges
        The Fund argues that because the              Ackerman and Lifland, respectively, held
1995 suit was brought within the six-year             that under the MPPAA, members of a
statute of limitations period under the               control group are “statutory alter egos.” 21
MPPAA, it satisfied the statute of                    Thus, as courts have held in other “alter
limitations as to all other entities in the           ego” cases, Judges Ackerman and Lifland
same control group, due to the “single                determined that the Fund’s claims should
employer” principle. The Fund claims that             be “construed as actions to enforce
because the MPPAA allows the Fund to                  judgment” and will be considered timely
treat all entities in a control group as a
single entity, there can be only one
judgment against that single entity. In                 21
                                                          This argument should not be confused
short, “judgment against one is judgment
                                                      with an alter ego claim brought under state
against all.” Therefore, all future litigation
                                                      common law. The MPPAA’s “single
against other entities in the same control
                                                      employer” provision makes members of a
group, even if postured as new claims
                                                      control group “statutory” alter egos.

                                                 25
“if the underlying action against the                       exist against members of a
corporation was timely and the subsequent                   controlled group. Thus, it follows
action to pierce the corporate veil to                      that all subsequent actions against
enforce the judgment was brought within                     different members of a controlled
the limitations period for enforcement of                   group are actions to enforce the
judgments.” Able Truck, 822 F.Supp. at                      judgment previously entered . . . .”
1095 (emphasis added) (citing Wm.
Passalacqua Builders v. Resnik Developers
                                                     Able Truck, 822 F.Supp. at 1095. The
South, Inc., 933 F.2d 131 (2 nd Cir. 1991)).
                                                     District Court opinion in the present case,
The use of the word “construed” is
                                                     as affirmed by the majority here,
noteworthy, as it shows a willingness
                                                     eviscerates the concepts set forth in Barker
among the courts to read complaints
                                                     & Williamson, and imposes a highly
liberally when a plaintiff is seeking to
                                                     technical pleading requirement that
enforce a prior judgment under an “alter
                                                     frustrates the letter and the intent of the
ego” theory, or the statutorily analogous
                                                     MPPAA.
“single employer” theory.
                                                             The majority here would prohibit
        Although the complaints filed in             the Fund from collecting its debt partly
Able Truck and Gotham Fuel are not a part            because it failed to adequately express the
of the record in this case, counsel for the          magic words “enforcement of judgment”
Fund certified at oral argument before us            in its complaint. However, even if this
that she was involved in those prior cases           court would impose a strict pleading rule,
on behalf of the Fund. She stated that in            requiring an explicit statement that an
those cases she filed substantially the same         action seeks to enforce a prior judgment
complaint that she filed in the present case.        under ERISA, the complaint filed here by
Based on counsel’s explanation, which is             the Fund arguably would meet that
further supported by the language of the             requirement. The claim for relief pled all
district courts in Gotham Fuel and Able              of the factual predicates required for
Truck “construing” the complaints as                 enforcement of judgment, including
actions to enforce judgment, it appears that         acknowledgment of the 1995 judgment
the complaints in all of these cases filed by        against Route Resources (paragraph 17), a
the Fund used the same terminology.                  factual determination that Holmes
However, in the previous cases, the courts           remained part of the control group due to
were                                                 his evasive transaction (paragraph 24), and
                                                     a statutory basis for joint and several
       persuaded that pursuant to the                liability for the judgment among all control
       single employer concept adopted by            group members as required under the
       the Third Circuit in Barker &
       Williamson, supra, only one
       withdrawal liability judgment can

                                                26
MPPAA (paragraph 31).22                              Therefore, under the applicable New
                                                     Jersey law, the twenty year statute of
        The majority’s narrow view of the
                                                     limitations for enforcement of judgment
pleading, coupled with an impractical
                                                     applies to the present suit to enforce the
extension of the MPPAA statute of
                                                     1995 judgment. N.J. Stat. Ann. § 2A:14-5.
limitations requiring that actions to enforce
an underlying judgment must also be
brought within a six-year period, severely
                                                                        III.
limits the purpose of the Act. I believe, in
agreement with the district courts in                       The majority attempts to distinguish
Gotham Fuel and Able Truck, that the                 Able Truck and Gotham Fuel on the facts
Fund satisfied the MPPAA statute of                  by noting that in those cases, membership
limitations when it brought the original             in the control group was conceded by the
suit against Route Resources in 1995.                defendants, while in the present case,
                                                     Holmes contests his control group status.
                                                     The majority further holds that because six
   22
      In an attempt to justify its position          years expired prior to filing this suit
that this complaint cannot be read as an             against Holmes, the Fund is now
enforcement action, the majority discusses           prohibited from asserting that Holmes
at length the legal steps taken by the Fund          remained a control group member because
that can be interpreted to show an intent to         his sale to Route Resources was intended
pursue Holmes through a new action under             to evade or avoid liability, effectively
the MPPAA. I believe that the actions                blocking the Fund from reaching Holmes’
referenced by the majority do not prohibit           assets. Both of these arguments miss the
the Fund from asserting that its current             mark.
action is intended to enforce the 1995
judgment. Rather, the multiple allegations
put forth by the Fund to describe its claim                              A.
against Holmes are better interpreted as
                                                            First, by distinguishing Able Truck
alternate legal theories that the Fund
                                                     and Gotham Fuel based on Holmes’
pursued. Given the silence in the MPPAA
                                                     dispute of his control group status, the
regarding enforcement of judgments that
                                                     majority states in a footnote that it need
we now attempt to resolve, and this
                                                     not decide the crucial issue of whether the
particular Fund’s past experience in
                                                     “single employer” theory requires that
Gotham Fuel and Able Truck, it is not
                                                     “judgment against one is judgment against
surprising that the Fund pursued multiple
                                                     all.”   Yet, in my view, we cannot
theories of liability. The Fund should not
                                                     effectively resolve this appeal without
now be penalized for its comprehensive
                                                     deciding this crucial legal question.
approach to this litigation, much of which
was initiated in response to the District                   The   importance     of   resolving
Court’s early rulings in the case.

                                                27
whether “judgment against one is                     limitations bars a suit cannot be affected,
judgment against all” is highlighted by a            as the majority allows, by whether the
disagreement among several district courts           defendant concedes or denies liability in
across the country. For example, both the            the underlying suit. The operation of the
District Court opinion and the majority in           statute of limitations is a legal concept,
this case draw support from a case decided           completely separate from the defendant’s
in the Northern District of Illinois, Central        underlying defenses, or lack thereof. The
States, Southeast and Southwest Areas                majority’s willingness to uphold a narrow
Pension Fund v. Mississippi Warehouse                interpretation of the MPPAA statute of
Corp., 853 F.Supp. 1053 (N.D. Ill. 1994).            limitations against those who concede
Although the majority attempts to                    liability, and yet apply a broader
distinguish Mississippi Warehouse from               interpretation when the underlying liability
Able Truck and Gotham Fuel on the facts,             is disputed, confuses the issue and fails to
even a cursory reading of Mississippi                address the operative legal principle at bar.
Warehouse shows a fundamental legal                  The majority position essentially means
difference between these cases. The                  that if a defendant challenges his
district court in Mississippi Warehouse              underlying liability in an action to enforce
plainly stated its disagreement with the             an MPPAA judgment, he can obtain the
New Jersey cases and refused to adopt the            benefit of an abbreviated statute of
rule construing secondary suits as                   limitations. Such a legal concept has no
enforcement claims under the “single                 basis in the law, nor should it.
employer” theory, regardless of whether
the defendant conceded or contested
control group status.23 853 F.Supp. at                                    B.
1058.
                                                            Second, the majority acknowledges
        Furthermore, the majority’s effort           that the MPPAA requires disputes
to distinguish the New Jersey district court         involving the “evade or avoid” provision
cases from Mississippi Warehouse and the             to be resolved through arbitration. 29
present case based on the defendants’                U.S.C. §§ 1392(c), 1401(a)(1). However,
dispute of their control group status                the majority adopts the non sequitur that
produces an untenable legal anomaly. The             because the process for resolving the
determination of whether a statute of                “evade or avoid” issue is prescribed under
                                                     the MPPAA statutory framework, the six-
                                                     year statute of limitations also applies as a
   23
     The court in Mississippi Warehouse              bar to resolving this issue. There is
only recognized the factual distinction              absolutely no support in the MPPAA or
from the New Jersey cases in a footnote,             the prior case law for this proposition, and
while discussing its disagreement on the             the majority cites to none.
law extensively in the body of the opinion.
                                                            The statute of limitations in the
853 F.Supp. at 1058, n.2.

                                                28
MPPAA clearly refers to “action[s]                     acknowledged duty to interpret ERISA and
brought under this section.” 29 U.S.C. §               the MPPAA liberally as remedial statutes.
1451(f) (emphasis added). On the other                 Barker & Williamson, 788 F.2d at 127.
hand, the MPPAA’s arbitration provision
                                                               I believe that the majority
requires that “disputes between an
                                                       ultimately errs in its interpretation of the
e m p l o y er and the plan sponsor
                                                       MPPAA by treating the question of
. . . concerning a determination made
                                                       whether Holmes can be considered a
under sections 1381 through 1399 of this
                                                       member of the control group as the
title shall b e resolved through
                                                       threshold issue. The majority holds that
arbitration.” 24 29 U.S.C. § 1401(a)(1)
                                                       regardless of whether the statute of
(emphases added). Section 1401(a)(1)
                                                       limitations will be satisfied by a prior,
r e f e r s t o “ d is p u t e s” co ncern in g
                                                       timely claim against a member of the
“determinations” because the items in
                                                       control group, this particular suit may not
sections 1381 through 1399 are all factual
                                                       proceed because the statute of limitations
determinations that the MPPAA entrusts to
                                                       bars the Fund from asserting that Holmes
the discretion of the Fund. These factual
                                                       is still a member of the control group
determinations, such as w hether a
                                                       against whom the prior judgment may be
transaction was intended to “evade or
                                                       enforced. I believe that this approach is ill
avoid” liability, are not causes of action in
                                                       advised, given the ability of employers in
and of themselves subject to the MPPAA
                                                       close corporations to hide their evasive
statute of limitations. Rather, as the
                                                       intent behind a thicket of private
Supreme Court acknowledged in Concrete
                                                       transactions that may take several years to
Pipes, they are “factual determinations” to
                                                       untangle, as occurred in this case.
be resolved through arbitration before a
civil suit may proceed. 508 U.S. at 629.                       Our review should be limited to the
The majority’s expansive application of                legal question of whether the “single
the statute of limitations covering not only           employer” principle requires that a timely
an original claim, but also the Fund’s                 claim against one control group member
ability to make factual determinations                 satisfies the MPPAA statute of limitations,
regarding an evasive transaction as part of            leaving future actions against other control
an effort to enforce judgment, is contrary             group members to be governed by the
to a reasonable construction of the statute.           applicable state law statute of limitations
Also, it is contrary to this court’s                   for enforcement of judgment. If, as I
                                                       suggest, the answer is affirmative, then the
                                                       current action should be allowed to
   24                                                  proceed as an enforcement suit. The
     The “evade or avoid” provision, 29
                                                       MPPAA would then require recognition of
U.S.C. 1392(c), falls within the applicable
                                                       the Fund’s factual determination that
range of sections 1381 through 1399,
                                                       Holmes should be treated as a member of
thereby designating it as a determination
                                                       the control group because his sale was
subject to arbitration.

                                                  29
primarily intended to “evade or avoid”             F.2d 495, 501 (3d Cir. 1992). This court
liability. If Holmes wishes to dispute that        should limit its inquiry to the legal
factual finding, he may do so in                   question of whether the MPPAA statute of
arbitration, as required under the MPPAA,          limitations bars this suit. To that end, the
before the claim proceeds in the District          majority has fashioned a six-year time
Court. Flying Tiger Lines, 830 F.2d at             limit that applies to a pension fund’s
1248.                                              original suit on the underlying claim, as
                                                   well as all efforts to enforce a judgment
                                                   against entities later determined to be
                   IV.                             members of the control group. Such a rule
                                                   encourages employers to impede the
        The majority contends that allowing
                                                   collection of monies lawfully due pension
this suit to proceed against Holmes in such
                                                   funds and negates the arbitration
a “belated” manner would be somehow
                                                   provisions of the MPPAA for the factual
unfair to Holmes, given that he sold his
                                                   determinations of whether members of the
companies in 1988 and retired to Florida.
                                                   control group engaged in evasive and
This approach punishes the Fund for its
                                                   fraudulent schemes. The MPPAA never
investigation and delayed legal action,
                                                   intended such a result. Furthermore, the
despite evidence that Holmes and Route
                                                   majority’s rule is based, in part, on the
Resources may have engineered a scheme
                                                   unsupportable ground that it applies only
designed to conceal assets from the Fund
                                                   to situations where a defendant disputes
and obstruct detection of the culpable
                                                   control group status that has not yet been
entities. Our court has held on several
                                                   conclusively determined by a court or
occasions that factual determinations
                                                   arbitrator. As a result, the majority
regarding evasive transactions are left for
                                                   establishes an illusory dichotomy that
pension funds and arbitrators to decide.
                                                   avoids the operative legal issue.
The Fund’s factual determination should
not be disregarded by granting summary                     I would affirm this circuit’s line of
judgment on the basis of an affirmative            MPPAA cases by following the precedent
defense. Such a decision denies the Fund           set in Barker & Williamson. I would hold
the opportunity set forth in the Act to            that judgment against one control group
challenge evasive and fraudulent                   member shall be deemed judgment against
transactions and transfers. We need only           all, construe the Fund’s claim as an action
verify that Holmes was a member of the             to enforce the 1995 judgment, vacate the
control group at some time prior to                summary judgment against the Fund in this
withdrawal from the Fund, and leave the            proceeding, and remand the case to the
resolution of this factual dispute to              District Court for further proceedings
arbitration.     See Bd. of Trustees of
Trucking Employees of N. Jersey Welfare
Fund, Inc. – Pension Fund v. Centra, 983


                                              30
consistent with this opinion.25




    25
       Because my analysis of this case
would vacate the District Court judgment,
I do not reach the issue of whether Holmes
is entitled to interest payments and
attorneys’ fees

                                             31
