                                     PUBLISHED

                      UNITED STATES COURT OF APPEALS
                          FOR THE FOURTH CIRCUIT


                                      No. 17-1369


BAKERY & CONFECTIONARY UNION & INDUSTRY INTERNATIONAL
PENSION FUND; TRUSTEES OF THE BAKERY AND CONFECTIONARY
UNION AND INDUSTRY INTERNATIONAL PENSION FUND,

                    Plaintiffs – Appellees,

             v.

JUST BORN II, INCORPORATED, d/b/a Goldenberg Candy Company,

                    Defendant – Appellant.


Appeal from the United States District Court for the District of Maryland, at Greenbelt.
Deborah K. Chasanow, Senior District Judge. (8:16-cv-00793-DKC)


Argued: January 24, 2018                                       Decided: April 26, 2018


Before AGEE, WYNN, and THACKER, Circuit Judges.


Affirmed by published opinion. Judge Agee wrote the opinion, in which Judge Wynn and
Judge Thacker concur.


ARGUED: David Boris Rivkin, BAKER & HOSTETLER, LLP, Washington, D.C., for
Appellant. Julia Penny Clark, BREDHOFF & KAISER, P.L.L.C., Washington, D.C., for
Appellees. ON BRIEF: Jay P. Krupin, Mark W. DeLaquil, Elizabeth A. Scully, Richard
B. Raile, BAKER & HOSTETLER LLP, Washington, D.C., for Appellant. Andrew D.
Roth, BREDHOFF & KAISER, P.L.L.C., Washington, D.C., for Appellees.
AGEE, Circuit Judge:

       Just Born II, Inc. (“Just Born”), a candy manufacturer, appeals the district court’s

judgment requiring it to pay delinquent contributions into the Bakery and Confectionary

Union and Industry International Pension Fund (the “Pension Fund”), as well as interest,

statutory damages, and attorneys’ fees. It contends, first, that the district court misapplied

the federal statute governing multiemployer pension funds in critical status and, second,

that the court erred in holding that it had failed to plead adequately its affirmative

defenses. For the reasons set out below, we affirm the judgment of the district court.



                                               I.

       Just Born and the Bakery, Confectionary and Tobacco Workers International

Union, Local Union 6 (the “Union”) were parties to a collective bargaining agreement

(the “CBA”) governing employment at Just Born’s Philadelphia, Pennsylvania,

confectionary plant from March 1, 2012, to February 28, 2015. The CBA required Just

Born to contribute to the Pension Fund, which is an employee benefit plan and

multiemployer pension fund governed by the Employee Retirement Income Security Act

of 1974 (“ERISA”), 29 U.S.C. §§ 1001–1461. 1 These contributions were to be “paid

from the first day the employee begins working in a job classification covered by” the

CBA. J.A. 27.
       1
         In a multiemployer pension plan, “multiple employers pool contributions into a single
fund that pays benefits to covered retirees who spent a certain amount of time working for one or
more of the contributing employers.” Trustees of the Local 138 Pension Trust Fund v. F.W.
Honerkamp Co., 692 F.3d 127, 129 (2d Cir. 2012).



                                               2
       While the CBA was still in effect, the Pension Fund’s actuaries certified it to be in

critical status, a designation based on statutory guidelines indicating the potential that the

Pension Fund’s assets and expected contributions would be insufficient to meet its

projected future obligations. See 29 U.S.C. § 1085(b)(2). A critical-status designation

triggers statutory safeguards, including the requirement that the plan sponsor “adopt and

implement a rehabilitation plan” designed to return the plan to financial stability and

bring it out of critical status. § 1085(a)(2)(A). 2 To accomplish this objective, the

rehabilitation plan must adopt revised schedules of reduced benefits and increased

contributions. See § 1085(e).

       As the plan sponsor, the Pension Fund’s Board of Trustees developed a

rehabilitation plan as required for multiemployer plans that are in critical status. In late

2012, Just Born and the Union selected a revised contribution schedule that, like the

CBA, required Just Born to “contribute for every hour or portion of an hour, beginning

on the first day of employment, that a person . . . works in a job classification that is

covered by the” CBA. J.A. 60. In addition, the revised schedule required Just Born to

increase its contributions to the Pension Fund by 5% each year. As a practical matter,

because the CBA required Just Born to participate in the Pension Fund, the Fund’s

critical-status designation altered the nature of Just Born’s obligations not only under its

agreement with the Pension Fund, but also under its CBA with the Union.

       2
          The plan sponsor of a multiemployer pension plan is the plan’s joint board of trustees,
or if there is not one, its administrator. 29 U.S.C. §§ 1002(16)(B)(iii), 1301(a)(10). The Pension
Fund has a Board of Trustees, and it therefore is the plan sponsor here.



                                                3
      Just Born contributed to the Pension Fund under the revised schedule without

incident until negotiations for a new CBA with the Union fell through. As part of the

negotiations for a new agreement, Just Born demanded the new CBA not require it to

contribute to the Pension Fund for newly hired employees. Citing concerns about the

Pension Fund’s solvency and management, Just Born proposed to contribute to a separate

401(k) plan for such new employees, but to continue contributing to the Pension Fund—

which was still operating under the rehabilitation plan schedules—for existing

employees.

      The Union would not agree to those terms, and, as a result, Just Born declared a

good-faith impasse. Relying on the principle from federal labor law that permits an

employer to act upon a good-faith impasse, Just Born unilaterally implemented the terms

of its last, best offer to the Union. See AMF Bowling Co. v. NLRB, 63 F.3d 1293, 1299

(4th Cir. 1995) (“When the parties are thus without a collective bargaining agreement,

having made good faith efforts to reach one, the employer may impose its own terms and

conditions of employment unilaterally.”). Thus, while it continued to contribute to the

Pension Fund under the rehabilitation plan for existing employees, Just Born contributed

nothing to the Fund for newly hired employees. Instead, Just Born contributed to a

separate 401(k) plan for any employee who began working after November 2, 2015.




                                           4
       The Pension Fund 3 filed a complaint in the United States District Court for the

District of Maryland seeking to compel Just Born to contribute to it under the

rehabilitation plan for all employees, including any new hires. It alleged that 29 U.S.C. §

1085(e)(3)(C)(ii) (governing subsequent contributions schedules for plans in critical

status) (the “Provision”), coupled with the terms of the expired CBA and the agreed-to

rehabilitation plan’s revised schedules, required Just Born to continue making

contributions for all employees, including those individuals hired after it declared an

impasse.

       In its amended answer, Just Born denied the applicability of the Provision and

raised several affirmative defenses. Relevant to this appeal, Just Born contended that,

once the CBA expired and the impasse occurred, it was not a “bargaining party” as

defined by 29 U.S.C. § 1085(j)(1) and, thus, that the Provision did not apply to it.

Further, Just Born asserted a series of affirmative defenses: fraudulent and fraudulently

induced     material    misrepresentation;       fraudulent   and    intentional    material

misrepresentation; unjust enrichment; unclean hands; and an unspecified defense of

“legally defective and unlawfully imposed” critical-status determination, rehabilitation

plan, and revised schedule. These defenses all centered on the theory that the Pension




       3
         References to the Pension Fund as a party in this case refer to both plaintiffs: the
Pension Fund and its trustees.



                                             5
Fund defrauded and deceived Just Born into accepting the critical-status designation and

its consequences. 4

       The Pension Fund moved for judgment on the pleadings on the issue of liability,

and Just Born filed a cross-motion for judgment on the pleadings as to the entire case.

       The district court held in favor of the Pension Fund, concluding that Just Born was

liable for contributions to the Pension Fund for its newly hired employees. See generally

Bakery & Confectionary Union & Indus. Int’l Pension Fund v. Just Born II, Inc., Civil

Action No. DKC 16-0793, 2017 WL 511911 (D. Md. Feb. 8, 2017). Relying on a plain

reading of the Provision, the district court concluded it requires bargaining parties to an

expired collective bargaining agreement to continue making payments consistent with the

previously adopted rehabilitation plan and schedule. The court rejected Just Born’s

contention that the term “bargaining part[y]” did not apply to it because the company was

no longer a party to an operative collective bargaining agreement. Under the district

court’s reading of the Provision, because Just Born “still was a bargaining party with

respect to the expired” CBA, the statute applied to Just Born. Id. at *4. Consequently, the

court concluded that unless Just Born could prove an affirmative defense, it would be

liable to the Pension Fund for the delinquent contributions and associated costs.


       4
         Although Just Born asserted four additional defenses, the district court characterized
them as “speak[ing] to the merits” of the Pension Fund’s claims and rejected them as part of the
merits determination. Just Born does not raise a separate issue on appeal concerning those
defenses, which are therefore not before us. Bakery & Confectionary Union & Indus. Int’l
Pension Fund v. Just Born II, Inc., Civil Action No. DKC 16-0793, 2017 WL 511911, at *8 (D.
Md. Feb. 8, 2017). We do not consider them as part of our review of the court’s treatment of
Just Born’s affirmative defenses.



                                               6
       Turning to the affirmative defenses, the district court held that Just Born had failed

to plead any of them with the particularity required for fraud-based allegations under

Federal Rule of Civil Procedure 9(b). 5 First, the court observed that each defense was

“dependent on [the Pension Fund] having fraudulently or intentionally misrepresented the

Fund being in critical status as required or authorized by ERISA.” Id. at *9 (internal

alteration and quotation marks omitted). Second, it concluded that Just Born did not plead

“the time, place, and contents of the false representations, as well as the identity of the

person making the misrepresentation and what he obtained thereby.” Id. at *10. And,

although Just Born generally alleged that the Pension Fund’s actuary “departed from

‘sound actuarial principles’ in evaluating the financial health of the Fund,” id., the district

court noted that it was

       unclear whether [Just Born was] accusing the actuary of fraud by way of its
       certification or accusing the Trustees on the theory that they fraudulently
       induced [Just Born] to agree to a contribution schedule under the
       rehabilitation plan when they knew that the critical status was not based on
       reasonable actuarial assumptions.

Id. The court noted that Just Born referred alternately to “actions taken by the actuary, the

Fund, or the Trustees.” Id. In sum, these deficiencies made it impossible for the court to



       5
          The district court alternatively held that Just Born’s claims were inadequate under the
Twombly/Iqbal pleading standard. As a threshold to that determination, it concluded it was
appropriate to hold Just Born to that standard for its affirmative defenses because that was the
majority view, it had been adopted in the District of Maryland, and Just Born had filed a cross
motion for judgment on the pleadings. See generally Ashcroft v. Iqbal, 556 U.S. 662 (2009); Bell
Atl. Corp. v. Twombly, 550 U.S. 544 (2007). Although applicability of this standard to
affirmative defenses continues to divide courts, we need not address it in this case because we
resolve the issue under Rule 9(b).



                                               7
determine what false representations Just Born relied upon or who made them, a fatal

deficiency under Rule 9(b).

       The district court therefore denied Just Born’s motion, granted in part and denied

in part the Pension Fund’s motion, and gave Just Born approximately one month to file

an amended answer. Just Born elected not to amend its answer and, instead, filed a joint

motion with the Pension Fund to stipulate to judgment at a set monetary amount,

reserving its right to appeal the district court’s judgment as to liability.

       The district court entered a final judgment awarding the Pension Fund

$255,264.16 consisting of the agreed-to amount for delinquent contributions, plus

interest, statutory damages, and fees. Just Born noted a timely appeal, and the Court has

jurisdiction under 28 U.S.C. § 1291.



                                               II.

       We review de novo the district court’s grant or denial of a motion for judgment on

the pleadings. Priority Auto Grp., Inc. v. Ford Motor Co., 757 F.3d 137, 139 (4th Cir.

2014). The same standard applies to questions of statutory interpretation. Stone v.

Instrumentation Lab. Co., 591 F.3d 239, 242–43 (4th Cir. 2009).

                       A. The Pension Fund’s Statutory Party Claim

       Just Born first argues that the district court erred in concluding that the Provision

required it to contribute to the Pension Fund for employees hired after the expiration of

the CBA. In essence, Just Born contends that the Provision does not apply to it because

the company is not a “bargaining party” with respect to newly hired employees in the

                                               8
absence of an operative CBA. The Pension Fund responds that Just Born falls squarely

within the Provision because it was a bargaining party to the expired CBA. We hold that

the district court properly interpreted the statute and, accordingly, did not err in

concluding that Just Born remained a “bargaining party” required to contribute to the

Pension Fund under the rehabilitation plan schedule in effect, even after the CBA

expired.

          Congress enacted the Provision as part of the Pension Protection Act of 2006

(“PPA”), which amended ERISA to “help severely underfunded multiemployer pension

plans recover.” Lehman v. Nelson, 862 F.3d 1203, 1207 (9th Cir. 2017). The Provision

states:

          If—

          (I) a collective bargaining agreement providing for contributions under a
          multiemployer plan in accordance with a schedule provided by the plan
          sponsor pursuant to a rehabilitation plan . . . expires while the plan is still in
          critical status, and

          (II) after receiving one or more updated schedules from the plan
          sponsor . . . , the bargaining parties with respect to such agreement fail to
          adopt a contribution schedule with terms consistent with the updated
          rehabilitation plan and a schedule from the plan sponsor,

          then the contribution schedule applicable under the expired collective
          bargaining agreement, as updated and in effect on the date the collective
          bargaining agreement expires, shall be implemented by the plan sponsor
          beginning [180 days after the collective bargaining agreement expires].

§ 1085(e)(3)(C)(ii).

          Under a plain reading of the Provision, the CBA’s expiration does not alter Just

Born’s status as a bargaining party to that CBA. If Just Born was a bargaining party to the


                                                  9
CBA, it remains a bargaining party “with respect to” that CBA even after the CBA’s

provisions lapsed. Indeed, the Provision only applies after a collective bargaining

agreement expires. That precondition is expressly set out in the first paragraph of

subsection I: “If a collective bargaining agreement . . . expires.” § 1085(e)(3)(C)(ii)(I).

What follows are additional limiting criteria that are all framed within the context of an

expired collective bargaining agreement. For example, the second paragraph refers to

“the bargaining parties with respect to such agreement” § 1085(e)(3)(C)(ii)(II) (emphasis

added). These “bargaining parties” can only be the bargaining parties to the expired

collective bargaining agreement because that is the “such agreement” referred to in the

statutory text. No other interpretation makes sense of all the words in the Provision.

       Because the CBA’s expiration cannot change Just Born’s status as a bargaining

party under the Provision, the only question is whether Just Born was ever such a party. It

was, as Just Born acknowledges. And the remaining conditions of § 1085(e)(3)(C)(ii) are

also satisfied, another fact Just Born does not challenge. That is, the CBA expired while

the Pension Fund was in critical status and operating under a rehabilitation plan schedule,

and Just Born and the Union—the bargaining parties to the expired CBA—“fail[ed] to

adopt a contribution schedule” with terms consistent with an updated rehabilitation plan.

With these preconditions met, the Provision requires the Pension Fund to implement the

contribution schedule “as updated and in effect on the date the [CBA] expire[d].” See

§ 1085(e)(3)(C)(ii)(II). Thus, the plain language of the Provision requires Just Born to

continue to contribute according to the revised schedule that applied at the time the CBA



                                             10
expired, and that schedule, in turn, requires contribution for all employees: existing and

new hires.

       Contrary to Just Born’s contention, this interpretation of the Provision does not

render the word “bargaining” in “bargaining parties” superfluous. “Bargaining parties” is

a statutorily defined term, and that definition determines an entity’s status. See

§ 1085(j)(1)(A)(i) (stating, with certain exceptions not relevant here, that a “bargaining

party” is “an employer who has an obligation to contribute under the plan”). It is Just

Born’s interpretation that would read “bargaining” out of the statutory language. As the

district court aptly explained, Just Born’s argument

       ignores the temporal element inherent in the reference. [Just Born] does not
       and could not suggest that it was never a bargaining party. Rather, it
       contends that it ceased to be a bargaining party when its obligation to
       contribute expired with the CBA. Even if that is true and [Just Born] is no
       longer a bargaining party, however, it still was a bargaining party with
       respect to the expired CBA. Hence, it is actually [Just Born]’s reading that
       would read words out of the Provision, applying it only to “bargaining
       parties” that remain “bargaining parties” without regard for the fact that the
       phrase “with respect to such agreement” necessarily includes former
       bargaining parties whose obligation to contribute has expired. Those former
       “bargaining parties with respect to” the expired CBA are indeed a subset of
       all “bargaining parties,” and they are the subset identified in the Provision.
       Therefore, [Just Born] is a bargaining party in this context.

Just Born, 2017 WL 511911, at *4.

       Just Born also contends that this interpretation of the Provision creates a Hotel

California 6 scenario in which employers must contribute to a critical-status plan into

perpetuity once a governing collective bargaining agreement has expired. In support of its
       6
          The band Eagles tells us that at the Hotel California, “You can check out any time you
like / But you can never leave!” Eagles, Hotel California (Asylum 1976).



                                              11
argument, Just Born points to the Second Circuit’s decision in Trustees of the Local 138

Pension Trust Fund v. F.W. Honerkamp Co., 692 F.3d 127 (2d Cir. 2012). Just Born

posits that Honerkamp stands for the principle that employers must be allowed to leave a

critical-status plan by invoking the statutory right to withdraw from a multiemployer

plan, and that upon withdrawing, that employer no longer has a duty under the PPA to

continue contributing to the plan. Just Born contends that the district court’s

interpretation of the Provision—and thus our interpretation of it—conflicts with

Honerkamp and creates an irreconcilable conflict between the Provision and ERISA’s

withdrawal provisions because it would treat employers who have withdrawn to still be

“bargaining parties” to an expired collective bargaining agreement and thus obligated to

continue making contributions. We disagree.

       Honerkamp involved a different issue: whether the PPA prohibited an employer

from withdrawing from a multiemployer pension fund while the fund was in critical

status. 7 There, the Second Circuit observed that “in enacting the PPA, Congress did not

intend to prevent employers from withdrawing from multiemployer pension plans in

critical status.” 692 F.3d at 135. In doing so, the Second Circuit recognized that

Congress’ objective in enacting the PPA’s provisions requiring participating employers

to continue contributing to a critical-status plan is compatible with Congress’ recognition



       7
         The employer was obligated to contribute to a pension fund that was placed in critical
status. Honerkamp, 692 F.3d at 132. When the employer reached an impasse with its union in
negotiating a new collective bargaining agreement, the employer implemented its last best offer,
“withdrawing from the [pension fund] in favor of [a] 401(k) plan.” Id. at 133.



                                              12
that withdrawing employers must pay a withdrawal liability because both requirements

seek to ensure properly funded plans. Id. at 135–36.

       Our interpretation of the Provision in no way limits the application of other

ERISA provisions governing when and how an employer may withdraw partially or

completely from an ERISA-qualified plan. See Borden, Inc. v. Bakery & Confectionary

Union & Indus. Int’l Pension, 974 F.2d 528, 530 (4th Cir. 1992); see also 29 U.S.C.

§ 1381. Instead, our decision centers on what is required of employers who have not

sought to withdraw, and who instead remain participants in the plan by virtue of an

expired collective bargaining agreement. Here, Just Born has never sought to withdraw

from the Pension Fund and our interpretation of the Provision does not limit its ability to

do so. We simply recognize that the Provision applies to entities like Just Born that meet

its requirements and have not exercised their option to withdraw. Just Born is attempting

a de facto partial withdrawal from the Pension Fund by not covering new employees,

which could lead to a complete withdrawal eventually over time through the attrition of

its older employees. In so doing, Just Born is seeking to circumvent both the critical-

status contributions for an expired collective bargaining agreement under the Provision

and the withdrawal penalty under § 1381.

       As the district court observed, Just Born

       seems to be trying to walk the line between [ERISA provisions], avoiding
       the contributions required under [the Pension Fund’s] rehabilitation plan
       schedules while simultaneously avoiding [statutory] withdrawal liability by
       removing itself from the Fund by attrition, making each new hire an
       effective withdrawal without acknowledging withdrawal in a way that
       would trigger the withdrawal penalty.


                                            13
Just Born, 2017 WL 511911, at *6. ERISA does not allow Just Born this course. Just

Born can either withdraw and pay the penalty for doing so, or remain and make the

required payments under the Provision; it cannot avoid both obligations.

       Just Born also maintains that this interpretation of the Provision undermines its

right under federal labor law to enforce the last, best proposal when CBA negotiations

reach an impasse. This argument derives from the National Labor Review Board’s view

that although an employer has a duty to negotiate in good faith, it does not have “an

obligation to agree[, so w]hen the parties are . . . without a collective bargaining

agreement, having made good faith efforts to reach one, the employer may impose its

own terms and conditions of employment unilaterally.” AMF Bowling, 63 F.3d at 1299.

But this principle describes Just Born’s obligations and rights only when negotiating with

the Union. Just Born’s obligations to the Pension Fund arise from a different authority:

ERISA, including the PPA. The Provision, as part of the PPA, is a separate and

independent statutory requirement under ERISA, distinct from the collective bargaining

process between an employer and union. Our interpretation leaves unaffected Just Born’s

ability under labor law to implement its last, best offer so long as it does not contravene

its statutory duties under the PPA. 8

       Under a plain-language application of the Provision to the facts of this case, Just

Born is liable to the Pension Fund for continued contributions for all employees hired

       8
         Because no other potentially conflicting duty is at issue in this case, we take no view on
whether or when other legal principles may affect an employer’s ability to invoke its last-and-
best offer outside the specific context of ERISA.



                                                14
after the declaration of an impasse, pending the execution of a new CBA in compliance

with § 1085, the invocation of the withdrawal provisions, or some other statutorily

required act. Accordingly, the Pension Fund was entitled to judgment on the pleadings so

long as Just Born did not present a cognizable affirmative defense, the topic to which we

now turn.

                                 B. Affirmative Defenses

       Just Born contends the district court erred in requiring it to plead its affirmative

defenses with the level of particularity required for pleading fraud under Rule 9(b). It

argues that only two of its affirmative defenses were related to fraud and that those

defenses were pleaded in the alternative as misrepresentation-based defenses.

Accordingly, Just Born maintains the court held it to the wrong standard and, further, that

its pleadings were sufficient under 9(b) to allege that the Pension Fund fraudulently

claimed that the fund was in critical status for ERISA purposes because that

determination was unwarranted.

       We agree with the district court’s reasoning that the Rule 9(b) standard applies to

Just Born’s affirmative defenses and that Just Born’s allegations did not satisfy this

standard. As an initial matter, we hold that defendants must satisfy Rule 9(b) when they

plead affirmative defenses sounding in fraud. This conclusion arises from the plain

language of Rule 9(b), which states, “In alleging fraud or mistake, a party must state with

particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge,

and other conditions of a person’s mind may be alleged generally.” Fed. R. Civ. P. 9(b)

(emphasis added); see also Bose Corp. v. Ejaz, 732 F.3d 17, 22 (1st Cir. 2013) (“Fraud is

                                            15
an affirmative defense that must be pleaded with particularity.”); Massey-Ferguson, Inc.

v. Bent Equip. Co., 283 F.2d 12, 14–15 (5th Cir. 1960) (observing that allegations of

fraud as a defense must be pleaded with particularity under Rule 9(b)); 5A Charles Alan

Wright & Arthur R. Miller, Federal Practice and Procedure §§ 1274 & 1297 (3d ed.

1998) (reiterating that affirmative defenses dealing with fraud are subject to the

heightened pleading requirements of Rule 9(b)).

       Just Born’s affirmative defenses all sounded in fraud and thus had to be pleaded

with the particularity required by Rule 9(b). In making this assessment, we look beyond

each defense’s label to its substance in order to ascertain if it actually sounds in fraud.

Cozzarelli v. Inspire Pharms. Inc., 549 F.3d 618, 629 (4th Cir. 2008) (“Rule 9(b) refers to

‘alleging fraud,’ not to causes of action or elements of fraud. When a [party] makes an

allegation that has the substance of fraud, therefore, he cannot escape the requirements of

Rule 9(b) by adding a superficial label[.]”). As noted, Just Born’s asserted defenses were

“fraudulent[] and/or intentional[] induce[ment]”; “fraudulent and/or intentional material

misrepresentations”; unjust enrichment; unclean hands; and “legally defective and

unlawfully imposed” placement into critical status, creation of the rehabilitation plan, and

implementation of the schedule. J.A. 82. As the district court correctly summarized, the

theory Just Born pleaded to support each of these defenses sounded in fraud:

       [These] defenses pertain to the validity of the Fund’s certified critical
       status. [Just Born] contends that . . . the Fund’s actuary “falsely and
       fraudulently” revised its actuarial assumptions in order to certify the Fund
       as being in critical status, thereby allowing the Fund to reduce benefits as
       part of a rehabilitation plan. The crux of its argument is that the Fund’s
       critical status should never have been certified.


                                            16
                                             ***

              Each of these defenses is dependent on [the Pension Fund] having
       fraudulently or intentionally misrepresented the Fund being in critical status
       as “required []or authorized by ERISA.”

Just Born, 2017 WL 511911, at *9. 9

       Just Born’s amended answer failed to plead its allegations of fraud to support its

defenses with sufficient particularity. The Rule 9(b) standard requires a party to, “at a

minimum, describe ‘the time, place, and contents of the false representations, as well as

the identity of the person making the misrepresentation and what he obtained thereby.’

These facts are often ‘referred to as the who, what, when, where, and how of the alleged

fraud.’” U.S. ex rel. Wilson v. Kellogg Brown & Root, Inc., 525 F.3d 370, 379 (4th Cir.

2008). Instead of alleging these necessary particular facts, Just Born broadly accused the

“plaintiffs” of “manipulat[ing] actuarial assumptions, departing from past practice in

analyzing the Pension Funds health,” for the purpose of “obtain[ing] certification of

‘critical status.’” J.A. 77.

       However, Just Born did not specify who it was accusing of which specific

misrepresentations. Just Born’s allegations “variously refer[] to the actions taken by the

actuary, the Fund, [and] the Trustees” without detailing “who allegedly knew what” or

when. Just Born, 2017 WL 511911, at *10. This ambiguity makes it difficult to follow


       9
         Just Born claims that its inducement and misrepresentation claims should survive
because it labeled them as “fraudulent and/or intentional” behavior. That position ignores that
fraudulent conduct can be either intentional or reckless conduct, so that an allegation of
fraudulent conduct encompasses intentional conduct as well. See, e.g., JKC Holding Co. v. Wash.
Sports Ventures, Inc., 264 F.3d 459, 469 (4th Cir. 2001).



                                              17
the precise nature of the alleged fraud, and thus falls short of the applicable pleading

standard.

       In addition, Just Born’s allegations do not explain why the complained-of changes

were false or misleading. Put another way, Just Born failed to allege particularized facts

demonstrating the requisite misrepresentations and deception to support its defenses. The

mere fact of a change in actuarial assumptions or the motive for moving the Pension

Fund into critical status does not suffice; instead, Just Born had to allege specific facts

demonstrating that the alleged conduct causing the change was unreasonable. 10 The

critical-status determination involves judgment calls about future fund health, and courts

accord such judgment a “wide range of ‘reasonableness.’” Artistic Carton Co. v. Paper

Indus. Union-Mgmt. Pension Fund, 971 F.2d 1346, 1348 (7th Cir. 1992) (discussing

different ERISA provisions that require similar approximations of future fund health). Put

another way, the law recognizes that “[r]easonableness is a zone, not a point,” id. at 1351,

and projections of a pension fund’s future health necessarily involves decisions others

may have made differently. See, e.g., Combs v. Classic Coal Corp., 931 F.2d 96, 99–100

(D.C. Cir. 1991) (discussing different ERISA provisions that also rely on reasonable

       10
           Although § 1085 identifies the criteria for when a multiemployer plan is in critical
status, it defers to the actuary’s judgment as to when some of those benchmarks are met. For
example, a critical-status determination is based in part on both the present value of “reasonably
anticipated employer contributions for the current plan year and each of the 6 succeeding plan
years” as well as the present value of “all nonforfeitable benefits projected to be payable under
the plan during the current plan year and each of the 6 succeeding plan years.” 29 U.S.C.
§ 1085(b)(2)(A)(ii) (emphases added). In making those determinations, the PPA requires only
that an actuary’s assumptions be “based on reasonable actuarial estimates, assumptions, and
methods,” not that they avoid triggering a critical-status determination if at all feasible.
§ 1085(b)(3)(B)(i).



                                               18
actuarial assessments and observing that “[g]reat differences of opinion exist as to

actuarial methods” and that Congress’ focus on reasonableness “permits the actuary wide

latitude” in undertaking its duties).

       Recognizing that there is an acceptable range of calculation, ERISA only requires

that an actuary’s projections relating to the fund’s health “be based on reasonable

actuarial estimates, assumptions, and methods that . . . offer the actuary’s best estimate of

anticipated experience under the plan.” 29 U.S.C. § 1085(b)(3)(B)(i). As the district court

observed, “[f]or [Just Born] to show that the need for a rehabilitation plan was fraudulent

and ‘neither required nor authorized by ERISA’, it must attack the reasonableness of the

actuary’s assumptions, not the alteration of the assumptions or the motivations behind the

alterations.” Just Born, 2017 WL 511911, at *9 (citation omitted). Just Born’s amended

answer does not provide the sort of specific allegations aimed at this question that would

allow its affirmative defenses to withstand the Pension Fund’s motion for judgment on

the pleadings. 11




       11
           On appeal, Just Born points to two allegations as containing the requisite specificity:
that using two different interest rates was “in contravention of the usual assumption that
administrative expenses and employer contributions are uniformly distributed during a given
year,” and that the Pension Fund “evidently did not factor in the withdrawal liability that
employers would owe in the event that they ceased participation in the Pension Fund” when they
forecasted future contributions. Opening Br. 49. These allegations suffer from the same
misperception already described: something different from the “usual” is not a foundation for
fraud in this context any more than the mere failure to take something into account when
undertaking one’s duties is. Just Born never specified how these changes amounted to fraud and,
therefore, they do not satisfy Just Born’s burden under Rule 9(b).



                                               19
      For these reasons, the district court did not err in concluding Just Born did not

plead its affirmative defenses with sufficient particularity to withstand the Pension

Fund’s motion for judgment on the pleadings.



                                           III.

      For the reasons set out above, we affirm the district court’s judgment.

                                                                                AFFIRMED




                                           20
