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Robbins v. Lady Baltimore Foods Inc.

decided: February 14, 1989.

LORAN W. ROBBINS, ET AL., PLAINTIFFS-APPELLEES,
v.
LADY BALTIMORE FOODS, INC., DEFENDANT-APPELLANT



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division, No. 85-C-09262, Bernard M. Decker, Judge.

Wood, Jr. and Kanne, Circuit Judges, and Eschbach, Senior Circuit Judge.

Author: Kanne

KANNE, Circuit Judge.

The defendant, Lady Baltimore Foods, Inc. ("Lady Baltimore"), 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 ("Pension Fund"). Specifically, Lady Baltimore challenges the district court's decision that 29 U.S.C. § 1461(h)(1) was unconstitutional. This statute purported to exempt Lady Baltimore from withdrawal liability under the Multiemployer Pension Plan Adjustment Act of 1980 ("MPPAA"), 29 U.S.C. §§ 1381-1461.*fn1 Lady Baltimore also challenges the district court's award of interim withdrawal liability payments to the Pension Fund. For the reasons set out below, we affirm the district court's award of interim withdrawal liability payments, but we reverse the grant of summary judgment against Lady Baltimore as to the constitutionality of 29 U.S.C. § 1461(h)(1), vacate the district court's decision that this statute was unconstitutional, and remand the entire matter for arbitration.

I. Background

A. Lady Baltimore's Withdrawal from the Pension Fund

Lady Baltimore Foods, Inc. was a contributing employer to the Pension Fund under the terms of a collective bargaining agreement with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America ("the Union"). On January 12, 1979, Lady Baltimore and the Union executed a new collective bargaining agreement which remained in effect through May 15, 1982. This agreement included the following pension provision:

ARTICLE XVIII -- PENSION

Section 7. Effective January 12, 1982 all contributions to the Central States Southeast and Southwest Areas Pension Fund shall cease, Sections 1, 2, 3, 4, 5 and 6 of this Article shall be null and void and of no further force and effect and all obligations of the Company to said Fund or under any trust agreement shall be terminated. From that date forward regular employees shall be eligible to enter into the Company's pension plan pursuant to the terms and provisions of that plan.

The Pension Fund initially refused to approve Lady Baltimore's continued participation in the plan on these terms. By letter of December 24, 1980, however, it reversed its position and agreed to permit Lady Baltimore to continue to participate in the Pension Fund. In April of 1982, after a dispute over the amount of the last payment, Lady Baltimore made its final contribution to the fund.*fn2

In December, 1983, the Pension Fund advised Lady Baltimore that it determined that Lady Baltimore owed it withdrawal liability under the MPPAA in the amount of $216,488.80. It also notified Lady Baltimore that it was required to discharge this liability in monthly payments of somewhat less than $5,000.00. The Pension Fund subsequently reduced the assessment of Lady Baltimore's withdrawal liability to $212,797.92 and increased the monthly payment to $5,001.06. Lady Baltimore thereafter requested arbitration of its withdrawal liability.*fn3

B. Procedural Posture

On November 1, 1985, the Pension Fund filed suit in the Northern District of Illinois to compel Lady Baltimore to make interim liability payments pursuant to 29 U.S.C. §§ 1399(c)(2), 1401(d). On December 11, 1985, Lady Baltimore filed its answer denying liability. On June 5, 1986, the Pension Fund filed a motion for summary judgment, requesting continuing and past due interim withdrawal liability payments. On August 26, 1986, the district court entered orders directing Lady Baltimore to pay interim withdrawal liability payments as they became due in the future. It said nothing, however, about past due payments of withdrawal liability.

On October 22, 1986, the Tax Reform Act of 1986 became law. Included in this Act was a statutory provision referred to by appellees as the "Lady Baltimore Amendment." The so-called Lady Baltimore Amendment, Pub. L. No. 99-514, § 1852(i), 100 Stat. ...


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