The opinion of the court was delivered by: Shadur, District Judge.
MEMORANDUM OPINION AND ORDER
Richland Industries, Ltd. ("Richland II") sues the Trustees
("Trustees") of the Central States, Southeast and Southwest Areas
Pension Fund (the "Fund") to recover withdrawal liability
payments made under Section 4062 of the Employee Retirement
Income Security Act of 1974 ("ERISA"), as amended by the
Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"
or simply the "Act"), 29 U.S.C. § 1362.*fn1 Richland II argues
Trustees erroneously calculated the amount of withdrawal
liability Richland II owed to the Fund by including the
contribution history of Richland Industries, Inc. ("Richland I"),
the corporation whose assets Richland II purchased.
Richland II and Trustees have filed cross-motions for summary
judgment under Fed.R.Civ.P. ("Rule") 56. For the reasons stated
in this memorandum opinion and order, Richland II's motion is
granted and Trustees' is denied.
From February 1, 1975 through July 11, 1979 Richland I
submitted contributions to the Fund pursuant to a series of
collective bargaining agreements ("CBAs") with Teamsters Local
695 ("Local 695"). Richland I was a wholly-owned subsidiary of
TSC Industries, Inc. ("TSC"), which was in turn owned and
controlled by Fuqua Industries, Inc.
On July 12, 1979 — before the Act became effective — Dallman
Investments, Inc. (the same corporation that later, by name
change, became Richland II) purchased the operating assets (both
tangible and intangible, including good will) of Richland I in a
going-concern transaction. Before that time Richland II and
Richland I had been entirely separate, independent corporate
entities (no officers, directors or stockholders of Richland II
had been employees, officers or directors of Richland I). Nor did
either acquire any stock of the other as a result of the asset
transaction. After the sale Richland I ceased its business
activities, stopped contributing to the Fund and changed its name
to R.I. Liquidating, Inc. In 1981 it merged into TSC.
As part of its asset purchase, Richland II acquired the right
to use the trade name "Richland Industries." It changed its
corporate name to Richland Industries, Ltd. and continued
production of the same products as Richland I, in the same
facility and with the same employees. Under the purchase
agreement, Richland II assumed all Richland I's future
obligations under its CBA with Local 695. It immediately began
contributing to the Fund as required by the CBA.
On November 30, 1981 the CBA Richland II had inherited expired.
When the parties failed to negotiate a new agreement, on February
6, 1982 Local 695 went out on strike. On December 10, 1982 the
NLRB decertified Local 695. That decertification permanently
terminated Richland II's obligation to contribute to the Fund, a
cessation that constituted a "complete withdrawal" within the
meaning of Act § 1383.
In late December 1982 Richland II received from Trustees a
request to file a "Statement of Business Affairs." Though the
request was addressed to Richland I rather than Richland II, the
latter timely filed the statement. It did so however on behalf of
Richland I, at the same time advising Trustees Richland II was an
employer different from Richland I.
In December 1983 Trustees sent Richland II a notice and "Demand
For Payment of Withdrawal Liability." Again the notice was
addressed to Richland I not Richland II. Trustees' "Demand"
claimed a withdrawal liability in the amount of $35,378.69, based
on the contribution history of Richland I dating back to 1975.
Trustees later recalculated the liability to $37,717.97.
Richland II objected to the inclusion of Richland I's
contribution history in the calculation of Richland II's
withdrawal liability and filed a Request for Review. Trustees
denied the request on the grounds that (Stip. Ex. G):
For all of the reasons stated above, the Board of
Trustees rejects the employer's position and
reaffirms the policy with respect to pre-MPPAA assets
sales involving on-going businesses.
Richland II paid the Fund (under protest) over $17,000 on the
disputed liability. Trustees have denied Richland II's demands
for a refund of those payments.
If Richland I's contribution history were not attributed to
Richland II, the latter would face no withdrawal liability at all
(any liability attributable solely to Richland II falls below the
de minimis threshold established by the Act). And Richland II has
not challenged Trustees' calculations except insofar as they
include Richland I's contribution history. Thus the cross-motions
pose a sole — an all-or-nothing — issue: whether Richland II may
be held liable under the Act for unfunded vested liabilities that
accrued during Richland I's regime.
Relevance of NLRA Successorship Doctrines
Trustees' contention is that:
1. Nothing in the Act speaks to a pre-Act asset
purchaser's liability under the Act for the seller's
2. That silence justifies decision of the issue by
reference to successorship doctrines developed under
the National Labor Relations Act ("NLRA").
But the NLRA cases and doctrines cited by Trustees really do not
bear on the question here at all. Indeed, one of the cases
Trustees themselves cite (Mem. 5), Howard Johnson Co. v. Detroit
Local Joint Executive Board, 417 U.S. 249, 262-63 n. 9, 94 S.Ct.
2236, 2243-44 n. 9, 41 L.Ed.2d 46 (1974) (citations omitted and
adapted to this case) emphasizes that Gertrude Stein's "A rose is
a rose is a rose" analysis does not apply here:
The question whether [Richland II] is a "successor"
is simply not meaningful in the abstract. [Richland
II] is of course a successor employer in the sense
that it succeeded to operation of a [business]
formerly operated by [Richland I]. But the real
question in each of these "successorship" cases is,
on the particular facts, what are the legal
obligations of the new employer to the employees of
the former owner or their representative? The answer
to this inquiry requires analysis of the interests of
the new employer and the employees and of the
policies of the labor laws in light of the facts of
each case and the particular legal obligation which
is at issue, whether it be the duty to recognize and
bargain with the union, the duty to remedy unfair
labor practices, the duty to arbitrate, etc. There
is, and can be, no single definition of "successor"
which is applicable in every legal context. A new
employer, in other words, may be a successor for some
purposes and not for others.
Trustees first cite a host of NLRA cases for the
noncontroversial proposition that when a successor employer
voluntarily assumes the predecessor's labor agreement, the
successor is "fully responsible for the whole obligation" or
"fully bound to every aspect of that agreement" (Trustees Mem.
7). That truism leads nowhere, for Richland II has concededly
performed its only relevant obligation under the CBA: paying
contributions into the Fund at a specified rate (Stip. Ex. A,
Art. XXIV). No provision of the CBA even arguably deals with
withdrawal liability payments.*fn3 As such cases
as Debrecini v. Healthco-D.G. Stoughton Co., 579 F. Supp. 296,
297-98 (D.Mass. 1984) and T.I.M.E.-DC, Inc. v. Trucking Employees
of North Jersey Welfare Fund, Inc., 560 F. Supp. 294, 297
(E.D.N.Y. 1983) have recognized, withdrawal liability arises from
the statute, not the CBA.
Trustees attempt to avoid the force of the
Debrecini-T.I.M.E.-DC line of cases by arguing NLRA also renders
a successor liable for its predecessor's statutory obligations,
citing cases in which successors have been required to implement
remedies imposed on their predecessors for the latters' unfair
labor practices. Richland II argues forcefully the NLRA policies
motivating those decisions are inapplicable here. But there is an
even more fundamental problem with Trustees' approach: Richland
I had no statutory ...