                                In the

    United States Court of Appeals
                 For the Seventh Circuit
                     ____________________
Nos. 16-2079 & 16-2944
LABORERS’ PENSION FUND and
JAMES S. JORGENSEN,
                                                 Plaintiffs-Appellants/
                                                      Cross-Appellees,

                                  v.

W.R. WEIS COMPANY, INC.,
                                                  Defendant-Appellee/
                                                     Cross-Appellant.
                     ____________________

            Appeals from the United States District Court
        for the Northern District of Illinois, Eastern Division.
             No. 15 C 07867 — Edmond E. Chang, Judge.
                     ____________________

   ARGUED JANUARY 12, 2017 — DECIDED JANUARY 8, 2018
               ____________________

   Before BAUER, SYKES, and HAMILTON, Circuit Judges.
    SYKES, Circuit Judge. The Laborers’ Pension Fund adminis-
ters the pension fund for the Laborers’ International Union
of North America. W.R. Weis Company, a Chicago-area
stonework firm, was required by a collective-bargaining
2                                     Nos. 16-2079 & 16-2944

agreement to contribute to the Fund for each hour worked
by members of the Laborers’ Union. The company complied
with this obligation for many years. Over time, however, the
firm transitioned to using more highly skilled marble setters
and finishers on its jobs, so it gradually stopped hiring
members of the Laborers’ Union and ceased paying into the
Fund. In 2012 the Weis Company terminated its collective-
bargaining agreement with the Laborers’ Union.
    The Fund, a multiemployer pension plan governed by
ERISA and the Multiemployer Pension Plan Amendment Act
(“MPPAA”), served notice that the Weis Company owed
more than $600,000 in withdrawal liability for ceasing to
contribute to the Fund. The company paid the assessment
but challenged it via arbitration, invoking an exemption for
the building and construction industry. See 29 U.S.C.
§ 1383(b). The arbitrator agreed with the company, and a
district judge confirmed the award but denied the Weis
Company’s motion for attorney’s fees.
    Both sides appealed. The Fund seeks de novo review of
the arbitrator’s award, raising a legal argument about the
language and purpose of the § 1383(b) exemption. The Weis
Company responds that the deferential clear-error standard
applies because the parties treated their dispute as entirely
factual, as did the arbitrator. The Weis Company is right: the
Fund waived its statutory-interpretation argument by failing
to raise it in the arbitration. And because the Fund has not
meaningfully challenged the arbitrator’s factual determina-
tions, which easily survive clear-error review in any event,
we affirm the judgment. Finally, we reject the cross-appeal
because the judge did not abuse his discretion in denying the
Weis Company’s motion for attorney’s fees.
Nos. 16-2079 & 16-2944                                        3

                         I. Background
     The Weis Company does stone work in public, commer-
cial, and private buildings in the Chicago area and is in-
volved in all stages of the construction process. The
company is a union employer and has been since its found-
ing in 1991. As relevant here, it was party to two collective-
bargaining agreements, one with the International Union of
Bricklayers and Allied Craftsmen and one with the Laborers’
Union. By longstanding trade custom and practice, laborers
assist bricklayers at construction sites. They mix mortar,
unload the building material, erect scaffolding, work fork-
lifts, handle the stone before the bricklayers install it, and
clear debris. The Weis Company exclusively employed
bricklayers and laborers on a one-to-one basis for more than
a decade.
    In 2002 the bricklayers’ union merged with the marble
masons’ union, which meant that the Weis Company could
now hire marble masons, also known as setters, if it wished.
Just as laborers assist bricklayers, marble finishers assist
marble setters. The duties of a marble finisher overlap in
part with those of a laborer—both can unload trucks, shake
out stone, prepare marble pieces, and clear debris. But
finishers can also cut, polish, grout, caulk, drill holes, apply
epoxy, and patch stones. In other words, finishers are more
versatile and more highly skilled than laborers. And the
marble masons’ collective-bargaining agreement—binding
on the Weis Company after the unions merged—required
that an employer hire one finisher for each setter on a job.
    In 2003 the Weis Company won a contract to install an
intricate marble interior in a Chicago building. In accordance
with its practice at the time, the company employed brick-
4                                    Nos. 16-2079 & 16-2944

layers and laborers to do the job. The customer rejected the
work, however, and the Weis Company had to hire marble
setters and finishers to redo it. Thereafter the company
began hiring marble setters and finishers in addition to
bricklayers and laborers. In 2009 the company completely
stopped hiring bricklayers (and their attendant laborers) and
began relying solely on marble setters (and their attendant
finishers). In 2012 the Weis Company formally terminated its
collective-bargaining agreement with the Laborers’ Union.
    Under the terms of that agreement, the Weis Company
made pension contributions to the Fund of $8.57 per hour
“for each hour worked by all Employees covered by this
Agreement.” While the agreement was in effect, the Weis
Company consistently made these payments to the Fund for
the hours worked by laborers in its employ. The company
made similar payments to the bricklayers’ pension fund for
the hours worked by bricklayers, marble setters, and marble
finishers in accordance with the terms of its collective-
bargaining agreement with that union. When the company
stopped hiring laborers in 2009, however, it stopped making
payments to the Laborers’ Fund. The Fund continued to
send the Weis Company monthly contribution reminders,
but the company returned them without payment with an
explanatory “No Work” notation written across the face of
the document.
    During this period, the Fund twice audited the company
to confirm its compliance with any required contributions.
The Fund’s 2011 audit covered the years 2007–2011. The
company provided the auditor copies of all its contributions
to the Fund as well as its contributions to other union pen-
sion funds. The audit concluded that the company had
Nos. 16-2079 & 16-2944                                     5

“complied with its fringe benefit contribution require-
ments,” acknowledging that it hadn’t paid a penny to the
Fund since 2009 when it stopped hiring laborers and transi-
tioned to using setters and finishers exclusively. The Fund
later completed a second audit of the company for the years
2011–2012. Again the audit determined that the company
“complied with its obligations to the Union and its related
Funds,” even though the company hadn’t contributed
anything during the relevant period.
    The Weis Company formally terminated its collective-
bargaining agreement with the Laborers’ Union in 2012. In
December of that year, the Fund informed the company that
it owed additional contributions under ERISA and the
MPPAA for withdrawing from the multiemployer plan. The
Fund initially assessed an estimated withdrawal liability of
$488,780.33, calculated from the time the company terminat-
ed its collective-bargaining agreement with the Laborers’
Union. The Weis Company submitted a request for review
under ERISA, arguing that it was entitled to an exemption
from withdrawal liability under the MPPAA for employers
in the building and construction industry. The exemption
provides that for employers in these trades, withdrawal
liability occurs only if the employer “ceases to have an
obligation to contribute under the plan” but “continues to
perform work in the jurisdiction of the collective bargaining
agreement of the type for which contributions were previ-
ously required.” 29 U.S.C. § 1383(b)(2). In its request for
review, the Weis Company noted that it had not employed
members of the Laborers’ Union since late 2009. In response
the Fund sent a revised demand letter adjusting the compa-
ny’s withdrawal date from 2012 to October 2009 and increas-
ing the claimed liability to $619,209.
6                                            Nos. 16-2079 & 16-2944

    The Weis Company paid the assessment but challenged it
in arbitration. 1 See id. § 1401(a)(1) (“Any dispute between an
employer and the plan sponsor of a multiemployer plan
concerning a determination” of withdrawal liability “shall be
resolved through arbitration.”). The arbitrator found for the
company, ruling that it was exempt from withdrawal liabil-
ity under § 1383(b). As an alternative and independent
ground for her decision, the arbitrator also determined that
the company had proved the affirmative defense of estoppel.
The arbitrator ordered the Fund to refund the Weis Compa-
ny’s payment.
     The Fund sued to vacate the arbitration award, and the
Weis Company counterclaimed to confirm it. On cross-
motions for summary judgment, the district judge agreed
with the arbitrator that the nub of the dispute was whether
the company “continue[d] to perform work in the jurisdic-
tion of the collective bargaining agreement of the type for
which contributions were previously required.” Laborers’
Pension Fund v. W.R. Weis Co., 180 F. Supp. 3d 540, 550 (N.D.
Ill. 2016). The judge acknowledged, as had the arbitrator,


1  Under the “pay now, dispute later” rule for withdrawal liability, an
employer must pay the disputed amount even if it challenges liability.
29 U.S.C. § 1399(c)(2) (“Withdrawal liability shall be payable in accord-
ance with the schedule set forth by the plan sponsor … notwithstanding
any request for review or appeal of determinations of the amount of such
liability or of the schedule.”). The Weis Company made two installment
payments of $43,620.25 each before refusing to make additional pay-
ments in light of the scheduled arbitration. The Fund sued to collect the
full withdrawal liability, and the district court ordered the company to
make the payment. See Laborers’ Pension Fund v. W.R. Weis Co.,
180 F. Supp. 3d 540, 547 (N.D. Ill. 2016) (citing No. 13 C 6698, 2014 WL
5488387 (N.D. Ill. Oct. 30, 2014)). It did so. Id.
Nos. 16-2079 & 16-2944                                       7

that the company had continued to perform work within the
jurisdiction of the Laborers’ Union collective-bargaining
agreement. That is, the work performed by marble finishers
overlapped, at least in part, with the work performed by
laborers as described in the agreement. Id.
    But that was not enough, by itself, to trigger withdrawal
liability. The judge went on to consider whether “contribu-
tions were previously required for that work,” id., and agreed
with the arbitrator that the language in the parties’
collective-bargaining agreement was ambiguous. The Fund’s
trust instrument, which established the pension fund and is
incorporated by reference into the collective-bargaining
agreement, contains arguably broader language on this point
than the collective-bargaining agreement. Id. at 551. Accord-
ingly, the judge held that the arbitrator properly looked
“beyond the document itself … to the parties’ ‘practice,
usage and custom’” to resolve the ambiguity. Id. (quoting
Bhd. of Maint. of Way Emps. v. Atchison, Topeka & Santa Fe Ry.
Co., 138 F.3d 635, 640–41 (7th Cir. 1997)). Applying clear-
error review, the judge found no reason to displace the
arbitrator’s analysis of the parties’ “historical course of
dealing,” which revealed that the Fund “had not previously
required [the Weis Company] to make contributions for any
work performed by bricklayers, marble setters, or finishers.”
Id. at 552. The judge confirmed the arbitration award. Id.
   The Weis Company then moved for an award of attor-
ney’s fees, which are allowed under ERISA to the prevailing
party in the district court “unless the loser can show that its
position was substantially justified.” Cont’l Can Co. v. Chi.
Truck Drivers, Helpers & Warehouse Workers Union (Indep.)
Pension Fund, 921 F.2d 126, 127 (7th Cir. 1990) (internal
8                                        Nos. 16-2079 & 16-2944

quotation marks omitted). The judge declined to award fees,
holding that the Fund’s position was substantially justified
based on the ambiguity in the relevant contract provisions
and the fact-sensitive nature of the inquiry into the parties’
history, custom, and past practice. Both sides appealed.
                        II. Discussion
    We review a summary-judgment ruling de novo, apply-
ing “the same standards as the court below and viewing the
record and all reasonable inferences to be drawn from it in
the light most favorable to the nonmoving party.” Cent.
States, Se. & Sw. Areas Pension Fund v. Midwest Motor Exp.,
Inc., 181 F.3d 799, 804 (7th Cir. 1999). In this context, the de
novo standard means that we’re reviewing the arbitrator’s
decision. That inquiry, in turn, is governed by a split stand-
ard of review: The arbitrator’s findings of fact may be set
aside only if clearly erroneous; “[t]he same standard holds
for the arbitrator’s application of law to fact”; and “[t]he
arbitrator’s legal conclusions are subject to de novo review.”
Id. at 804–05 (citations omitted).
A. Withdrawal Liability
    The Fund’s sole argument on appeal is that the arbitrator
misinterpreted § 1383(b)(2)(B)(i) to contain a course-of-
dealing requirement. Recall that an employer in the building
and construction industry is subject to withdrawal liability
only if, after its contribution obligation ceases, it “continues
to perform work in the jurisdiction of the collective bargain-
ing agreement of the type for which contributions were
previously required.” § 1383(b)(2)(B)(i). The Fund argues
that the arbitrator misread the phrase “previously required”
to mean “previously collected by the plan,” which it says
Nos. 16-2079 & 16-2944                                       9

cannot be reconciled with either the language of the statute
or Congress’s purpose to disincentivize pension-fund with-
drawals and preserve the funding base of multiemployer
pension funds.
    The main problem with this argument is that the Fund
waived it by failing to raise it before the arbitrator. Both
sides acknowledged in the arbitration proceeding that
liability would turn on the arbitrator’s reading of the collec-
tive-bargaining agreement; there was no quarrel about the
meaning of the statute. The Fund’s primary argument was
that the collective-bargaining agreement required pension-
fund contributions for all “employees doing covered work,”
while the Weis Company argued that the agreement re-
quired contributions only for “hours worked by Laborers.”
Standing alone, the collective-bargaining agreement sup-
ported the company’s position, but the trust instrument—
incorporated by reference into the agreement—contained
somewhat broader language. The arbitrator accordingly
found that the agreement was ambiguous and turned to the
parties’ historical practice to resolve the ambiguity. At no
time was she presented with a legal dispute about the mean-
ing of the statute. Because the Fund never raised its
statutory-interpretation argument in the arbitration, the
issue is waived. Bowers v. Andrew Weir Shipping, Ltd., 27 F.3d
800, 808 (2d Cir. 1994) (“[W]hatever merit the [employer’s
omitted argument] may or may not have, it must first be
made to the arbitrator. Not having been so made, the argu-
ment was waived.”).
    Even if it hadn’t been waived, the Fund’s statutory-
interpretation argument suffers from another fundamental
flaw. The arbitrator did precisely what the Fund argues the
10                                     Nos. 16-2079 & 16-2944

statute requires, as noted at length in the district judge’s
decision:
       [T]he Fund argues that the [a]rbitrator erred in
       interpreting the withdrawal liability statute by
       concluding that “previously required” under
       28 U.S.C. § 1383(b)(2)(B)(i) meant “previously
       collected by the plan,” as opposed to “previ-
       ously required by the collective bargaining
       agreement.” But this is not so. As explained
       above, the award adopted the latter construc-
       tion[] and then looked to the [collective-
       bargaining agreement] to determine the em-
       ployers’ obligations. In making that determina-
       tion—that is, in interpreting the [collective-
       bargaining agreement]—what the Fund previ-
       ously collected appropriately informed the
       award’s decision.
W.R. Weis Co., 180 F. Supp. 3d at 552–53 (citations omitted).
    In other words, there is no daylight between the Fund’s
interpretation of the statute and the approach adopted by
the arbitrator. Everyone agreed that the collective-
bargaining agreement was paramount to the determination
of withdrawal liability. Again, the parties disagreed about
the meaning of the collective-bargaining agreement, not the
statute. And because the arbitrator determined that the
agreement was ambiguous, she turned to the parties’ histori-
cal collection practices to resolve the ambiguity; her factual
findings on that point are reviewed deferentially, for clear
error only. Aeroground, Inc. v. CenterPoint Props. Tr., 738 F.3d
810, 813 (7th Cir. 2013).
Nos. 16-2079 & 16-2944                                           11

    Remarkably, the Fund has not challenged the arbitrator’s
findings regarding the collective-bargaining agreement, so
our review can be brief. The agreement required the Weis
Company to “make a pension contribution of $8.57 per hour
for each hour worked by all Employees covered by this Agree-
ment in addition to the wages and welfare payments herein
stipulated.” (Emphasis added.) Under the same agreement,
the company also “agree[d] to be bound by the Agreements
and Declarations of Trust establishing the Laborers’ Pension
Fund, as well as any amendments thereto, and agree[d] to be
bound by all actions taken by the Trustees of that fund
pursuant to the Agreements and Declarations of Trust.”
    The declaration of trust, in turn, defines “Employee” (as
relevant here) as the following: (1) any person “covered by a
Collective Bargaining Agreement between an Employer and
the Union or any of its local affiliates who is engaged in
employment with respect to which the Employer is obligat-
ed by the Collective Bargaining Agreement to make contri-
butions to the Pension Fund”; or (2) any person “employed
by an Employer who performs work within the jurisdiction of the
Union as said jurisdiction is set forth in any applicable Collective
Bargaining Agreement or by any custom or practice in the
geographic area within which the Employer operates and his
Employees perform work.” (Emphasis added.)
   These two provisions are in some tension, creating an
ambiguity. As the district judge explained, the term “Em-
ployee” in the collective-bargaining agreement implies that
“Fund contributions are only required for employees who
are laborers[] because the agreement is between [the] em-
ployer[] and the General Laborer’s District Council of Chica-
go and Vicinity.” W.R. Weis Co., 180 F. Supp. 3d at 551. The
12                                     Nos. 16-2079 & 16-2944

declaration of trust, on the other hand, acknowledges that
“Employees” for whom pension-fund contributions are
made may well be workers covered by the agreement, but it
implies that an additional type of worker is covered—
anyone who performs work within the jurisdiction covered
by the agreement. Based on this apparent discrepancy, the
arbitrator looked to the parties’ historical practice to deter-
mine if contributions were “previously required.”
    The Fund’s opening brief in this court did not challenge
the arbitrator’s interpretation of the collective-bargaining
agreement or her factual findings about the parties’ course of
conduct. The Fund admitted as much in its reply brief, but
argued that it should be allowed to belatedly challenge those
findings because it would simply be “respond[ing] to argu-
ments raised by Weis in its [r]esponse [b]rief.” Our standard
is clear: Arguments raised for the first time in a reply brief
are waived. Dexia Crédit Local v. Rogan, 629 F.3d 612, 625 (7th
Cir. 2010).
    We are left then with the arbitrator’s unchallenged inter-
pretation of an ambiguous contract based on unchallenged
factual findings about the parties’ historical practice. The
arbitrator’s award rests primarily on evidence of the two
audits in which the Fund declared that the Weis Company
was in compliance with its payment obligations for the time
period in question. The arbitrator also relied on testimony
from Paul Connolly, the business manager and secretary-
treasurer for the Laborers’ Union. Connolly testified that the
Laborers’ Union doesn’t “go after a contractor based on his
contribution on an employee that may be on a different trade
that we may consider our work … . We don’t do it.” W.R.
Weis Co., 180 F. Supp. 3d at 552. In other words, the Fund
Nos. 16-2079 & 16-2944                                       13

does not collect contributions from an employer who has
already contributed to another union’s pension fund for the
same work. Or as Connolly more bluntly put it: “[T]he
policy of the Fund is that if contributions are made to anoth-
er fund, then we allow that. We don’t go back and try to
bang [the Employer] twice.” Id. The arbitrator credited this
evidence and concluded that contributions to the Fund were
not “previously required” by the parties’ collective-
bargaining agreement. That was not clear error.
B. Attorney’s Fees
    The Weis Company cross-appealed from the denial of its
motion for attorney’s fees under § 1451(e) of ERISA, which
allows the court to award “all or a portion of the costs and
expenses,” including “reasonable attorney’s fees, to the
prevailing party.” 29 U.S.C. § 1451(e). That decision is com-
mitted to the discretion of the district court and is reviewed
only for an abuse of that discretion. Cent. States, Se. & Sw.
Areas Pension Fund v. Sherwin-Williams Co., 71 F.3d 1338, 1343
(7th Cir. 1995). An award of fees is presumptively appropri-
ate “when the losing side in arbitration asks a judge to
disagree with the award.” Certco, Inc. v. Int’l Bhd. of Team-
sters, Local Union No. 695, 722 F.3d 1097, 1100 (7th Cir. 2013).
This is so because “the parties have agreed to resolve their
dispute in one forum, and the costs of moving the dispute to
a second forum should be borne by the person who initiates
the new round.” Id.
   Thus, under ERISA § 1451(e), the prevailing party is or-
dinarily entitled to an award of fees “unless the loser can
show that its position was ‘substantially justified.’” Cont’l
Can Co., 921 F.2d at 127. The “substantially justified” stand-
ard means “something more than non-frivolous, but some-
14                                          Nos. 16-2079 & 16-2944

thing less than meritorious.” Jackson Fin. Corp. v. Humana Ins.
Co., 641 F.3d 860, 866 (7th Cir. 2011) (quotation marks omit-
ted).
    The district judge held that the Fund’s position was sub-
stantially justified because the “text of the relevant con-
tracts” upon which the case turned “could have been
interpreted either in favor of the Fund or against the Fund,”
and the Fund had a “non-frivolous textual argument sup-
porting its position.” 2 The Weis Company points out that the
Fund’s summary-judgment motion did not develop a robust
argument about the proper interpretation of the collective-
bargaining agreement. True, it wasn’t the main thrust of the
Fund’s briefing in the district court. But the Fund did raise a
contract-based argument in both its opening brief and its
reply brief. The judge held that the dispositive issue in the
case was a question of contract construction and that both
sides offered legitimate interpretations. On that basis the
judge concluded that the Fund’s position was substantially
justified and declined to award fees. That was not an abuse
of discretion.
                                                           AFFIRMED.




2 The judge also determined that the Fund was substantially justified in
challenging the arbitrator’s equitable-estoppel holding, particularly
because “it is not yet clear whether equitable estoppel is an available
defense in an action involving a multiemployer pension plan.” We have
no need to review the merits of the arbitrator’s alternative equitable-
estoppel holding or the judge’s denial of fees on this ground.
