
USCA1 Opinion

	




                            UNITED STATES COURT OF APPEALS                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                FOR THE FIRST CIRCUIT                                 ____________________        No. 95-1032                          GIROUX BROS. TRANSPORTATION, INC.,                                Plaintiff, Appellant,                                          v.               NEW ENGLAND TEAMSTERS & TRUCKING INDUSTRY PENSION FUND,                                 Defendant, Appellee.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                   [Hon. Douglas P. Woodlock, U.S. District Judge]                                              ___________________                                 ____________________                                        Before                                Boudin, Circuit Judge,                                        _____________                      Aldrich and Coffin, Senior Circuit Judges.                                          _____________________                                 ____________________            John  D. O'Reilly,  III with whom  O'Reilly & Grosso  was on brief            _______________________            _________________        for appellant.            Christopher N.  Souris with  whom Feinberg,  Charnas &  Birmingham            ______________________            ________________________________        was on brief for appellee.                                 ____________________                                   January 4, 1996                                 ____________________                      ALDRICH,   Senior  Circuit  Judge.    Giroux  Bros.                                 ______________________            Transportation,  Inc.  (Giroux)  appeals  from  the grant  of            summary judgment in favor of New England Teamsters & Trucking            Industry  Pension  Fund (the  Fund),  the plan  sponsor  of a            multi-employer   employee  benefit   plan  in   which  Giroux            participated.   Giroux sought a declaration  of non-liability            for the  Fund's assessment of withdrawal  liability under the            Employee Retirement Income  Security Act (ERISA), as  amended            by  the Multiemployer  Pension  Plan Amendments  Act of  1980            (MPPAA),  29 U.S.C.   1381 et seq, claiming the Fund's demand                                       ______            was barred by  the statute of limitations, and  that hardship            should excuse it from the obligation to make interim payments            of the Fund's demand pending resolution of this dispute.  The            Fund  counterclaimed to  the contrary.   The  court concluded            that  the Fund's demand was not barred, that Giroux failed to            allege facts sufficient  to show irreparable harm in order to            avoid  its  obligation to  make  interim  payments, and  that            resolution of its  withdrawal liability dispute  is committed            in the first instance to arbitration.  We affirm.                      The parties agreeing to the material facts, we take            a moment to trace  the genesis and procedural history  of the            controversy.  Giroux had been making pension contributions to            the Fund  on behalf of  its employees for  a number  of years            pursuant to  a standard, industry-wide  collective bargaining            agreement to which it  periodically renewed its allegiance by                                         -2-            executing "supplements"  with a Teamsters local.   It decided            to  stop with the last executed agreement upon its expiration            in 1981  or 1982, but neglected  to notify the local,  or the            Fund.  In light of a  common industry tolerance  for delay in            executing renewals,1 failure to execute a new agreement would            not necessarily give rise to an inference that an employer no            longer intended  to be  bound, and Giroux  continued, without            interruption, to make  employee contributions  to the  Fund's            pension plan until early  1994.  When these payments  ceased,            the Fund  responded by sending Giroux  a standard delinquency            notice,  to which  Giroux responded  that it  had "not  had a            collective bargaining agreement with  the Teamsters for  some            15-20  years,"  and  thus   had  no  obligation  to  continue            contributions.  The Fund then  verified that Giroux had never            executed any successors to the agreement that expired in 1981            or  1982,  and  conceded   Giroux  thus  had  no  contractual            obligation to contribute after that point.  The parties agree            that  Giroux therefore  "withdrew" from  the Fund  within the            meaning of the  MPPAA,   1383(a)(1),  upon expiration of  its            last  collective bargaining  agreement, sometime  in 1981  or            1982.   The Fund therefore  assessed and demanded  payment of            withdrawal liability from Giroux as of September 30, 1981, as                                            ____________________            1.  The  district  court noted  that  gaps  of several  years            between  expiration and  renewal are  not uncommon  among the            thousands  of   employers  that  adhere  to   the  collective            bargaining  agreement  through  executing   supplements  with            Teamsters locals.                                         -3-            provided.  29 U.S.C   1381 et seq.                                       _______                      In  October,  1994,  Giroux  initiated  arbitration            according to the MPPAA's mandatory arbitration provision, id.                                                                      ___            at     1401,  claiming   the  Fund's  demand  for  withdrawal            liability  payment   some  12   years  after  its   effective            withdrawal was untimely, and, even if timely, it was entitled            to   credit  for   post-withdrawal  contributions.     Giroux            simultaneously  instigated  this action  in  the  District of            Massachusetts for declaratory judgment that the Fund's demand            was statutorily  barred by the six  year limitation contained            in   1451(f),  and for injunctive relief from  its obligation            under    1399(c)(2) to  make interim  payments of  the Fund's            withdrawal  liability  assessment pending  resolution  of its            claims.    The  Fund  counterclaimed to  the  contrary.    It            stressed  that  the timeliness  of  its  demand was  governed            exclusively  by    1399(b),  which  in  turn  is  statutorily            committed  to resolution  through  arbitration, 29  U.S.C.               1401(a)(1), and sought declaratory relief.                      In December,  1994, the  district court ruled  that            the  Fund's demand was not barred by   1451(f), that Giroux's            allegations  of   financial  hardship   did  not   amount  to            "irreparable  harm"  sufficient to  exempt it  from statutory            obligation to  make interim payments, and  that any remaining            dispute  with respect to the Fund's demand had to be resolved            through   arbitration.     Giroux's  appeal  was   argued  in                                         -4-            September, 1995.                      In October, 1995, the arbitrator ruled, inter alia,                                                              __________            that  Giroux was  estopped  from contending  that the  Fund's            demand was  untimely by  its own "equivocal"  and "deceitful"            actions,  and that  the Fund's  demand was  made "as  soon as            practicable" under   1399(b)(1) in any event; it  declined to            rule on  Giroux's offset  claim.   Both parties briefed  this            court on the implications of  the arbitration award for  this            appeal.                                I.  Withdrawal Liability                                ________________________                      The  MPPAA  was enacted  in  response  to a  crisis            facing multi-employer  pension plans from which employers had            withdrawn in  increasing numbers,  leaving the  plans without            adequate funds to pay vested  employee benefits.  See Pension                                                              ___ _______            Benefit Guaranty Corp. v. R.A. Gray & Co., 467 U.S. 717, 722-            ______________________    _______________            25 (1984).  The act makes an employer withdrawing from such a            plan  liable  for  its  proportionate  share  of  the  plan's            unfunded vested benefits.   Id.  at 725; 29  U.S.C.     1381,                                        ___            1391.     Withdrawal  generally   occurs  when  an   employer            permanently ceases to have  an obligation to contribute under            the  plan,  or  ceases  all   covered  operations.    Id.  at                                                                  ___              1383(a).  The plan sponsor must assess, schedule and demand            withdrawal liability payment "[a]s soon as  practicable after            an  employer's  complete  or  partial  withdrawal,"  id.   at                                                                 ___              1399(b)(1),  and  an employer  must  pay  according to  the                                         -5-            Fund's schedule notwithstanding any  pending dispute.  Id. at                                                                   ___              1399(c)(2).                                         -6-                             II.  Statute of Limitations                             ___________________________                      Giroux  seeks  to  avoid  the  Fund's   demand  for            withdrawal  liability  payment  by invoking  the  limitations            provision of the MPPAA, which states, in relevant part,  that            a plan fiduciary                      who is  adversely affected by the  act or                      omission of any party under this subtitle                      with    respect   to    a   multiemployer                      plan, . . .  may  bring  an   action  for                      appropriate legal or equitable relief, or                      both,            29 U.S.C.   1451(a)(1), but no later than                      (1) 6  years after the date  on which the                      cause of action arose, or                      (2) 3  years after  the earliest date  on                      which  the  plaintiff acquired  or should                      have  acquired  actual  knowledge of  the                      existence of such cause of action; except                      that in the case of fraud or concealment,                      such action may be brought not later than                      6 years after  the date  of discovery  of                      the existence of such cause of action.            Id. at    1451(f).  Giroux  claims that because the  Fund did            ___            not demand  withdrawal liability payment until  some 12 years            after Giroux's  withdrawal from the Fund's  pension plan, its            demand is barred by this provision.                      The Fund contends on appeal that its demand in this            case is not governed by   1451(f) because this provision is a            limitation only on litigation, and since it did not instigate                                                     __            this  lawsuit but  merely demanded  payment according  to its            statutory rights, it has not commenced an "action" within the            meaning of   1451.  Thus, according to  the Fund, the statute                                         -7-            of limitations cannot have  begun to run with respect  to any            action it could bring to enforce these rights.                   __                _______                      We cannot  agree that an action  for declaration of            non-liability  asserting a  statute  of  limitations  defense            renders the statute inapplicable simply by virtue of the fact            that  the  party  claiming  liability did  not  commence  the            action,  especially  where  (but   not  because)  that  party            counterclaimed for declaration and enforcement of its rights.            However,  the principal question  raised by  Giroux's action,            whether  the  Fund  timely  made its  demand,  is  explicitly            governed by   1399, which provides:                      As   soon   as   practicable   after   an                      employer's     complete    or     partial                      withdrawal, the plan sponsor shall--                      (A)  notify the employer of--                           (i) the amount of the liability, and                           (ii) the schedule for liability payments,                           and                      (B) demand payment in accordance with the                      schedule.            29 U.S.C.   1399(b)(1).   The MPPAA further provides  that if            the Fund's  demand for withdrawal liability  payment was made            "as  soon  as  practicable,"  then   it  is  due  and  owing,            notwithstanding  a pending dispute, id. at   1399(c)(1)(A)(i)                                                ___            and  (2),  and  the  Fund  can  bring  an  action  to  compel            "immediate  payment"  of  any  outstanding  amounts,  id.  at                                                                  ___               1399(c)(5)  and  1451(a), subject  to  the statutory  time                                         -8-            limitation.    Id.  at   1451(f).    We  find this  statutory                           ___            framework  governing a plan  sponsor's demand  for withdrawal            liability payment  sufficiently clear  so that to  the extent            the general 6 year  limitation on actions conflicts, Congress            did  not intend  it  to override.    We therefore  hold  that            questions  concerning  the  timeliness of  a  plan  sponsor's            demand  are  governed  exclusively  by    1399(b)(1).    Thus            resolution  of Giroux's  claim  turns solely  on whether  the            Fund's  demand  was  made  "as  soon  as  practicable"  after            Giroux's withdrawal.2                      However,  any dispute  regarding the  timeliness of            the Fund's demand under   1399(b)(1) is statutorily committed            to   arbitration  in   the   first  instance.     29   U.S.C.              1401(a)(1).3   This  is  no less  so  because it  may  also            involve  a measure  of statutory  interpretation.   Vaughn v.                                                                ______            Sexton,  975 F.2d 498, 502 (8th Cir. 1992), cert. denied, ___            ______                                      ____________            U.S. ___, 113  S. Ct.  1268, 122 L.Ed.2d  664 (1993)  (citing            cases  of 2d,  3d,  4th, 6th  and  D.C. circuits);  Teamsters                                                                _________                                            ____________________            2.  We  express  no  views  on the  significance  of  section            1451(f) to a  determination of whether the Fund's  demand was            made  "as  soon as  practicable"  within  the  meaning  of               1399(b)(1), as this question is not before us.  See post.                                                            ___ ____            3.        Any dispute between  an employer and  the                      ___                      sponsor    of   a    multiemployer   plan                      concerning  a  determination  made  under                      sections  1381 through 1399 of this title                      shall be resolved through arbitration.                      _____            29 U.S.C.   1401(a)(1) (emphasis added).                                           -9-            Pension  Trust Fund v. Allyn Transp. Corp., 832 F.2d 502, 504            ___________________    ___________________            (9th Cir. 1987); Trustees of Colorado Pipe Ind. Pension Trust                             ____________________________________________            v. Howard Electrical & Mech., Inc., 909 F.2d 1379, 1386 (10th               _______________________________            Cir. 1990), cert. denied, 498 U.S. 1085 (1991).                        ____________                      Although the arbitration provision is an exhaustion            of  administrative   remedies  requirement,  rather   than  a            jurisdictional  bar, see,  e.g., Colorado  Pipe, 909  F.2d at                                 ___   ____  ______________            1385 (citing cases),  there can  be no question  that it  was            aptly applied here, when arbitration was already underway.                          III.  Relationship of this Appeal                           __________________________________                         to Parallel Arbitration Proceedings                         ___________________________________                      It  now  seems to  be  Giroux's  position that  the            arbitrator's determination that the  Fund's demand was timely            under   1399(b)(1) is before this  court for review, or, that            this  issue, never raised before the  district court, is open            for our consideration.   Although it might conserve resources            in  this instance to  concur, we disagree.   Rather, Giroux's            only recourse is to pursue judicial review of the arbitration            award:                      Upon   completion   of  the   arbitration                      proceedings   in  favor  of  one  of  the                      parties,any  party  thereto may  bring an                      action, no later  than 30 days  after the                      issuance  of an arbitrator's award, in an                      appropriate United  States district court                      in  accordance with section  1451 of this                      title to enforce,  vacate, or modify  the                      arbitrator's award.            29  U.S.C.   1401(b)(2).  This simultaneously pending action,                                         -10-            brought separately  to assert a claim  under a non-arbitrable            provision of the MPPAA,  does not qualify as a  proper appeal            of  the arbitrator's ruling.   We see no  reason to undertake            review of the arbitrator's analysis when it is beyond serious            dispute that issues  arising under   1399  cannot normally be            litigated in  federal court  independent of  arbitration, and            the process for appealing an arbitration award is clear.                      We are well  aware that  enforcing the  statutorily            mandated procedure in this case could land it again before us            in substantially the same posture after additional expense on            both  sides, and  that the  legislative  aim in  enacting the            MPPAA included  lessening the  costs and delay  of withdrawal            liability dispute resolution.  See, e.g., I.A.M. Nat. Pension                                           ___  ____  ___________________            Fund v.  Clinton Engines Corp., 825 F.2d 415 at 426 and n. 20            ____     _____________________            (D.C. Cir. 1987) (citing legislative history).  Yet,  to hold            otherwise would create a loophole for employers to bypass the            statutory  scheme  by  disguising  arbitrable   disputes  for            presentation directly  in federal court, as  Giroux did here,            then  invoking legislative  purpose  in order  to get  prompt            appellate consideration.  Because this is not a proper appeal            of the  arbitrator's award,  and we decline  to independently            reach Giroux's  arbitrable claims,  we do not  review whether            the Fund's demand was  made "as soon as practicable,"  or any            other arbitrable issues.                      IV.  Interim Payment of the Fund's Demand                      _________________________________________                                         -11-                      The  district  court held  that Giroux's  claims of            hardship were  insufficient  to avoid  meeting its  statutory            obligation  to make  interim  payments of  the Fund's  demand            pending  ultimate  resolution  of  its  withdrawal  liability            dispute.    29  U.S.C.     1399(c)(2).4    See  Debreceni  v.                                                       ___  _________            Merchants  Terminal Corp.,  889  F.2d 1,  4 (1st  Cir. 1989);            _________________________            Trustees  of the  Plumbers and  Pipefitters National  Pension            _____________________________________________________________            Fund  v. Mar-Len,  Inc., 30  F.3d 621,  624 (5th  Cir. 1994).            ____     ______________            Giroux contended  that the Fund's claim  would most certainly            be found barred by   1451(f), and that meeting these payments            would  require  a  partial  liquidation  of  its  assets  and            employee  layoffs,  hence  the  court  therefore  abused  its            discretion in failing  to suspend payment.   We have  already            disposed of Giroux's first contention; we turn to the second.                      The MPPAA indisputably creates a  "pay now, dispute            later"  mechanism, deeming  the protection  of multi-employer            pension plans and their beneficiaries paramount.   See id. at                                                               ___ ___            624  (citing cases); Debreceni, 889  F.2d at 5.   This scheme                                 _________                                            ____________________            4.  This section states, in relevant part:                      Withdrawal liability shall be  payable in                                           _____                      accordance with the schedule set forth by                      the plan sponsor under  subsection (b)(1)                      of this section  beginning no later  than                                                 ______________                      60  days  after the  date  of  the demand                      notwithstanding any request for review or                      _______________                      appeal of determinations of the amount of                      such liability or of the schedule.            29 U.S.C.   1399(c)(2) (emphasis added).                                         -12-            puts payment ahead of decision even though the employer might            prevail in  the  end.5   Trustees  of Chicago  Truck  Drivers                                     ____________________________________            Pension Fund v. Central Transp., Inc., 935 F.2d 114, 118 (7th            ____________    _____________________            Cir. 1991).   Although we have therefore  held that "assessed            interim liability payment must be  paid . . . notwithstanding            a  pending arbitrable dispute," Debreceni, 889  F.2d at 4, we                                            _________            have never  squarely decided  whether an  equitable exception            exists.6    Id.  at 7.    However,  in  light  of  the  clear                        ___            congressional intent to  protect multi-employer pension plans            in  withdrawal liability  disputes,  we have  indicated  that            should an equitable exception exist it would "require no less            than the threat of imminent insolvency."   Id. at 7 and n. 6.                               ___________________     ___            Giroux's allegations,  even if accepted, do  not suggest such            harm.                      Affirmed.                      ________                                            ____________________            5.  The  MPPAA requires  "actual  payment  shall commence  in            accordance  with   [the  schedule  set  forth   by  the  plan            sponsor],"  29 U.S.C.     1399(c)(1)(A)(i) and  (2), note  4,            supra;  Debreceni, 889  F.2d at  6; the  plan has a  right to            _____   _________            "immediate payment" of any outstanding amount, plus interest,            "from the due date of the first  payment which was not timely            made," 29 U.S.C.   1399(c)(5); a plan may enforce this right,            id.  at   1451(a)(1);  employers are entitled  to recovery of            ___            any overpayment, with interest, 29 C.F.R.   2644.2(d).            6.  Other circuits  have held  an employer may  avoid interim            payment  only if the pension plan's claim is frivolous or not            colorable.   Mar-Len,  30  F.3d at  626; Trustees  of Chicago                         _______                     ____________________            Truck Drivers v.  Central Transport, Inc., 935 F.2d  114, 119            _____________     _______________________            (7th Cir. 1991).                                         -13-
