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September 4, 1985


The opinion of the court was delivered by: Shadur, District Judge.


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
  contribution history.
    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 ...

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