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Central States, Southeast and Southwest Areas Pension Fund v. Hunt Truck Lines

July 23, 2002

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, AND HOWARD MCDOUGALL, TRUSTEE, PLAINTIFFS-APPELLEES,
v.
HUNT TRUCK LINES, INC., DEFENDANT-APPELLANT.



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 00 C 1204-Ronald A. Guzman, Judge.

Before Manion, Kanne, and Williams, Circuit Judges.

The opinion of the court was delivered by: Kanne, Circuit Judge.

ARGUED JANUARY 25, 2002

In 1994, Hunt Truck Lines, Inc. withdrew from the Central States, Southeast and Southwest Areas Pension Fund ("Central States"). Usually, this would give rise to withdrawal liability on Hunt's part under the Multiemployer Pension Plan Amendments Act of 1980, 29 U.S.C. §§ 1381-1461 (the "MPPAA"). However, because Hunt sold its assets to another company, Wintz Parcel Drivers, Inc., Hunt did not face withdrawal liability provided that Wintz continued to make payments to the fund. In 1996, one of Wintz's subsidiaries went bankrupt, triggering withdrawal liability on Wintz's part. Initially, Central States sent a notice to Wintz demanding that it begin making installment payments on the withdrawal liability, but Wintz defaulted. That default permitted Central States to pursue Hunt's secondary liability for the withdrawal payments.

A. Proceedings before Judge Nordberg

On May 31, 1996, Central States sent Hunt a notice demanding that it begin making interim payments on its withdrawal liability. Hunt refused to pay, and Central States brought suit seeking interim withdrawal payments, and the case was assigned to Judge John A. Nordberg.

Although in most cases, a district court routinely grants an order allowing a pension plan to obtain interim payments, Hunt I proved to be an exception to that rule. In Hunt I, Judge Nordberg noted that Central States sent the original notice to Hunt on May 31, 1996, but that Central States conceded in its motion for summary judgment that Wintz did not withdraw from the plan until "on or about July 20[, 1996]." Because Hunt could not have incurred withdrawal liability until Wintz actually withdrew from the plan, it was clear that Central States had sent the original demand at least one and one-half months before Hunt incurred any liability. Judge Nordberg then held that although the MPPAA provision regarding interim payments was broad, it did not allow Central States to seek payments until after Hunt incurred withdrawal liability. Therefore, Judge Nordberg granted summary judgment in favor of Hunt, finding that Central States failed to comply with the statutory prerequisites of the MPPAA.

B. Arbitration Proceedings

On December 20, 1996, Hunt initiated arbitration of the withdrawal liability assessment pursuant to 29 U.S.C. § 1401, and the arbitration was assigned to arbitrator Ira F. Jaffe. On June 23, 1998, the arbitrator also concluded that Hunt had been billed prematurely and issued an interim arbitration award containing the affirmative order directing Central States to issue a revised demand, noting that a revised demand was preferred to "starting the process anew."

On July 1, 1998, pursuant to the arbitrator's interim award, Central States issued a revised Notice and Demand for Withdrawal Liability against Hunt seeking payments from Hunt from November 1, 1996 until May 1, 1999. On October 14, 1998, the interim award was converted to a final award by stipulation of the parties. The final arbitration award, however, did not specifically require Hunt to actually make any withdrawal payments. Rather, it solely ordered Central States to issue the revised demand.

C. Proceedings before Judge Shadur

On October 15, 1998, Central States filed suit seeking to enforce the arbitration award, and the case was assigned to Judge Milton Shadur. Central States' complaint sought to affirm and enforce the arbitrator's final award and to enter judgment against Hunt in accordance therewith. On April 8, 1999, Judge Shadur entered judgment enforcing the final award. On April 26, 1999, Central States filed a Rule 59(e) motion to amend judgment, seeking to amend the judgment to provide for monetary relief because, as noted above, the arbitration's award did not provide for withdrawal payments. Judge Shadur denied the motion, noting that his power was limited to determining whether the arbitrator's decision was correct. At no time, however, did Judge Shadur rule on the ultimate issue of whether Hunt was liable for the withdrawal under the MPPAA or on what would happen if Hunt refused to make payments under the revised demand.

D. Our Prior Decision

On May 6, 1999, Hunt appealed Judge Shadur's judgment enforcing the final award. On June 30, 1999, Central States moved to consolidate its appeal of Judge Nordberg's decision with its appeal of Judge Shadur's judgment and denial of Central States' motion to ...


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