The opinion of the court was delivered by: McGARR, Chief Judge.
This is an action for a preliminary injunction in which the
plaintiff The Terson Company ("Terson") seeks to enjoin the
defendants, the Trustees of Local 734 of the International
Brotherhood of Teamsters (the "Trustees") from collecting,
declaring a default or commencing arbitration on any dispute with
the plaintiff concerning payment of "withdrawal liability"
demanded from Terson by the Trustees as authorized by the
Employee Retirement Income Security Act of 1974 ("ERISA"),
29 U.S.C. § 1001-1380, as amended by the Multiemployer Pension Plan
Amendments Act of 1980 ("MPPAA") 29 U.S.C. § 1381-1461 (Supp.
Terson is engaged in the baking and food processing business.
In December, 1980, it sold its Chicago bakery operations
("Buttermaid Bakeries") to Interstate Brands Corporation ("IBC")
for $1,500,000. IBC hired all of Terson's employees and assumed
Terson's obligations to contribute to the two pension funds at
issue. In May, 1981, the Trustee requested that Terson pay
approximately $3,500,000 in withdrawal liability pursuant to the
According to the complaint, IBC is currently making
contributions to the pension fund. Neither of the pension funds
are in danger of insolvency; one plan is fully funded to provide
presently vested benefits and the other fund is adequately
funded. Until Buttermaid Bakeries was sold, that division made
all the pension fund contributions that were required under the
collective bargaining agreements. See Plaintiff's Memorandum in
Support of its Motion for Preliminary Injunction ("Pl's. Mem.")
at 5-7. The plaintiff asserts further that payment of the
withdrawal liability will result in a windfall gain and unjust
enrichment to the pension fund, remaining contributing employers
and beneficiaries of the funds.
According to the MPPAA, an employer who effects a "complete
withdrawal" from a multiemployer pension fund is subject to
withdrawal liability, 29 U.S.C. § 1383 which is an allocable
share of the unfunded vested benefits liability of the fund. Id.
§ 1381(a). Generally, a complete withdrawal occurs when an
employer permanently ceases to have an obligation to contribute
to the fund because it has discontinued business.
If the employer disputes the fact or amount of the withdrawal
liability, the statute requires that the dispute be submitted to
compulsory arbitration. Id. at § 1401. In the arbitration
proceeding, any determination made by the Trustees is presumed
correct unless the party contesting the determination
establishes, by a preponderance of the evidence, that the
determination was unreasonable or clearly erroneous. Id. §
1401(a)(3). The "presumably correct" determinations include
whether a complete withdrawal has occurred, id. at § 1383, and
whether the Trustee's determination of the amount of liability
due was correct. Id. § 1391. If there is no arbitration, these
determinations are given conclusive effect by statute, the amount
claimed is converted into a debt, and the Trustees may bring a
collection action in which the defaulting employer is subject to
penalties, costs and attorneys' fees. Id. §§ 1132(g)(2), 1145,
1451(b) and 1451(e).
The Trustees have a certain amount of leeway in computing the
fund's own unfunded vested benefits and allocating the employer's
share. The guidelines are relatively vague. The computations may
be based on actuarial assumptions and methods as long as they are
not "in the aggregate, unreasonable." Id. § 1401(a)(3)(B).
Moreover, the Trustees may determine whether "a principal purpose
of any transaction is to evade or avoid liability," and whether
there has been a bona fide sale of all or substantially all of
the employer's assets in an arm's length transaction. Id. §
1392(c) and 1405(a)(1).
The MPPAA provides further that an action may be brought in a
district court "to enforce, vacate or modify the arbitrator's
award." Id. § 1401(b)(2). However, in such a proceeding, there
shall be a presumption, rebuttable only by a clear preponderance
of the evidence, that the findings of fact made by the arbitrator
were correct. Id. § 1401(c).
A preliminary injunction is an extraordinary remedy. It is
unavailable unless the plaintiff can meet all the prerequisites.
Fox Valley Harvestore, Inc. v. A.O. Smith Harvestore Prods.,
Inc., 545 F.2d 1096 (7th Cir. 1976). The elements of a
preliminary injunction are as follows: 1) The plaintiff has no
adequate remedy at law and will be irreparably harmed if the
injunction does not issue; 2) The threatened injury to the
plaintiff outweighs the threatened harm the injunction may
inflict on the defendant; 3) the plaintiff has at least a
reasonable likelihood of success on the merits; and 4) The
granting of a preliminary injunction will not disserve the public
interest. Id. at 1087; In re Uranium Antitrust Litigation,
617 F.2d 1248, 1261 (7th Cir. 1980).
Terson offers several reasons to support its claim that it
lacks an adequate remedy at law and that it will suffer
irreparable injury if the preliminary injunction does not issue.
It contends that if Terson failed to make periodic payments of
its withdrawal liability, the Trustees could declare a default
and require immediate payment of the entire amount plus interest.
29 U.S.C. § 1451. It maintains further that the Trustees would be
entitled to the delinquent amount, interest on that amount,
liquidated damages, attorneys' fees and costs. Id. § 1132.
Terson asserts that its only alternative is to commence
arbitration over the amount and basis for the withdrawal
liability. Terson objects to pursuing that course of action on
several grounds. In that situation there would be a presumptive
conclusion that the determinations of the Trustees were correct.
Id. §§ 1401(a) and (c). Thus, Terson contends, it could only
obtain a limited review of these actions in the district court.
It also maintains that during the pendency of the arbitration and
subsequent appeal, it still would be required to make withdrawal
The court concurs in this interpretation. Since the PBGC was
statutorily created to administer the MPPAA, private parties are
protected should they rely on PBGC's interpretation of the
statute. Cf. United States v. National Ass'n. of Securities
Dealers, 422 U.S. 694, 717-18, 95 S.Ct. 2427, 2441-42, 45 L.Ed.2d
486 (1975). Moreover, inasmuch as neither the Trustees nor Terson
have initiated arbitration proceedings within the time specified,
the fact that Terson did bring this suit in order to prevent a
default should toll the limitation's period. See Memorandum of
Defendant Trustees in Opposition to the Plaintiff's Motion for a
Preliminary Injunction at 2.
Next, the PBGC contends that even if Terson does not seek
arbitration, it has an adequate remedy at law for any harm it may
suffer as a consequence of making monthly payments. The PBGC
maintains that Terson can always seek a court order ...