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Robbins v. Admiral Merchants Motor Freight Inc.

decided: May 4, 1988.

LORAN W. ROBBINS, ET AL., PLAINTIFFS-APPELLEES,
v.
ADMIRAL MERCHANTS MOTOR FREIGHT, INC., DEFENDANT-APPELLANT



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division, No. 85-C-8670--Charles R. Norgle, Judge.

Cummings, Cudahy and Kanne, Circuit Judges.

Author: Kanne

KAANN, Circuit Judge.

The defendant, Admiral Merchants Motor Freight, Inc. ("Admiral") appeals the district court's grant of summary judgment in favor of the plaintiffs, the trustees of the Central States, Southeast and Southwest Areas Pension Fund ("Fund"). The Fund, a multiemployer pension fund as described in 29 U.S.C. § 1002 (37)(A), brought this suit, pursuant to the Multiemployer Pension Plan Adjustment Act of 1980 ("MPPAA"), 29 U.S.C. §§ 1381-1461, to collect withdrawal liability payments.*fn1 On appeal, Admiral contends that 29 U.S.C. § 1381(a)(1), which absolves employers of MPPAA liability if they ceased plan contributions before September 26, 1980, divested the district court of jurisdiction. Admiral claims that it withdrew from the plan before September 26, 1980. The Fund, however, places Admiral's withdrawal date on or about January 30, 1982.

We affirm the district court since Congress clearly intended all withdrawal liability disputes, including withdrawal date disputes, to be arbitrated. The consequence for failure to initiate arbitration is the immediate obligation to pay the sum demanded by the plan sponsor.

I.

A brief overview of the MPPAA's mechanics is necessary. Congress enacted the MPPAA to cure a recurring problem that arose when an employer ceased making payments to a pension plan fund. Specifically, when an employer ceased making payments, the plan would be left with vested pension obligations which were only partially funded. See, Pension Benefit Guaranty Corp. v. R. A. Gray & Co., 467 U.S. 717, 104 S. Ct. 2709, 81 L. Ed. 2d 601 (1984); Flying Tiger Line v. Teamsters Pension Trust, 830 F.2d 1241 (3rd Cir. 1987); I.A.M. Nat'l Pension Fund v. Clinton Engines Corp., 263 U.S. App. D.C. 278, 825 F.2d 415, 416 (D.C. Cir. 1987); Warner-Lambert Co. v. United Retail & Wholesale Employee's, 791 F.2d 283, 284 (3rd Cir. 1986).

The MPPAA provides that an employer who withdraws from a pension plan covered by its provisions becomes liable for a fixed amount designed to cover the employees' share of the vested, but unfunded, benefits.

Robbins v. B and B Lines, 830 F.2d 648, 649 (7th Cir. 1987).

29 U.S.C. § 1401(a)(1) mandates the procedure to be employed when resolving disputes arising under the MPPAA. In pertinent part, it reads:

Any dispute between an employer and the plan sponsor of a multiemployer plan concerning a determination made under sections 4201 through 4219 [29 U.S.C. §§ 1381-1399] shall be resolved through arbitration.

Failure to initiate arbitration has a simple result--the amount demanded by the pension plan sponsor becomes due and owing. 29 U.S.C. § 1401(b)(1) provides:

If no arbitration proceeding has been initiated pursuant to subsection (a), the amounts demanded by the plan sponsor under section 4219(b)(1) [29 U.S.C. § 1399(b)(1)] shall be due and owing on the schedule set forth by the plan sponsor. The plan sponsor may bring an action in a State or Federal court of competent jurisdiction for collection.

Courts interpreting § 1401(a)(1) have been consistent in their conclusions. "Any dispute over withdrawal liability as determined under the enumerated statutory provisions shall be arbitrated." Clinton Engines, 825 F.2d at 417; Teamsters Pension Trust Fund v. Allyn Transportation Co., 832 F.2d 502, 504 (9th Cir. 1987); Robbins v. B and B Lines, 830 F.2d 648, 649 (7th Cir. 1987). The arbitration requirement is not viewed as a jurisdictional prerequisite but rather as an administrative remedy exhaustion requirement. Clinton Engines, 825 F.2d at 417; I.A.M. v. Stockton TRI Industries, 234 U.S. App. D.C. 105, 727 F.2d 1204, 1207 (D.C. Cir. 1984). "'Arbitrate first' is indeed a rule Congress ...


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