Central States, Southeast & Southwest Areas Pension Fund v. US Foods, Inc. ( 2014 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No.  13-­‐‑1566
CENTRAL   STATES,   SOUTHEAST  AND   SOUTHWEST   AREAS   PENSION
FUND  and  ARTHUR  H.  BUNTE,  JR.,  Trustee,
Plaintiffs-­‐‑Appellees,
v.
US  FOODS,  INC.,
Defendant-­‐‑Appellant.
____________________
Appeal  from  the  United  States  District  Court  for  the
Northern  District  of  Illinois,  Eastern  Division.
No.  12  C  5513  —  Elaine  E.  Bucklo,  Judge.
____________________
ARGUED  MAY  27,  2014  —  DECIDED  JULY  30,  2014
____________________
Before   POSNER,   EASTERBROOK,   and   HAMILTON,   Circuit
Judges.
EASTERBROOK,  Circuit  Judge.  Employers  that  withdraw,  in
whole   or   part,   from   underfunded   multiemployer   pension
plans  must  pay  their  share  of  the  shortfall.  They  can  dispute
the   plans’   assessments   by   seeking   recalculation   within   90
days,   29   U.S.C.   §1399(b)(2)(A),   and   they   have   a   further   60
days   to   invoke   a   process   that   the   statute   calls   arbitration,
2   No.  13-­‐‑1566
though  unlike  normal  arbitration  it  is  neither  contractual  nor
consensual.   29   U.S.C.   §1401(a).   (A   joint   request   for   arbitra-­‐‑
tion   may   be   made   within   180   days,   and   there   are   other   de-­‐‑
tails   that   we   need   not   relate.)   The   Central   States   Pension
Fund  concluded  that  US  Foods  has  withdrawn  in  part;  it  as-­‐‑
sessed   some   liability   in   2008   and   some   in   2009.   US   Foods
made  a  timely  request  for  arbitration  of  the  2009  assessment.
That  process  is  under  way.  But  it  did  not  ask  for  arbitration
of  the  2008  assessment  within  the  statutory  limit.
In  response  to  the  Fund’s  suit  seeking  to  collect  the  2008
assessment  and  prevent  the  arbitrator  from  considering  how
much  US  Foods  owes  for  that  year,  US  Foods  asked  the  dis-­‐‑
trict  court  to  order  the  arbitrator  to  calculate  the  amount  due
for  2008  and  2009  jointly.  The  court  ruled  that  US  Foods  had
missed   the   deadline   for   arbitral   resolution   of   the   2008   as-­‐‑
sessment.   US   Foods   appealed,   relying   on   9   U.S.C.
§16(a)(1)(B),   which   authorizes   an   interlocutory   appeal   from
an   order   “denying   a   petition   under   section   4   of   this   title   to
order  arbitration  to  proceed”.  This  poses  the  question  how  a
request   for   “arbitration”   under   a   section   in   Title   29   of   the
United  States  Code  could  come  within  §16(a)(1)(B),  which  is
part  of  Title  9,  the  Federal  Arbitration  Act  (FAA  or  Arbitra-­‐‑
tion   Act)   and   is   limited   to   requests   to   arbitrate   under   §4   of
that  title  (9  U.S.C.  §4).
Section   4   says   that   “[a]   party   aggrieved   by   the   alleged
failure,   neglect,   or   refusal   of   another   to   arbitrate   under   a
written   agreement   for   arbitration   may   petition   any   United
States  district  court  …  for  an  order  directing  that  such  arbi-­‐‑
tration   proceed   in   the   manner   provided   for   in   such   agree-­‐‑
ment.”   US   Foods   and   the   Fund   do   not   have   a   “written
agreement  for  arbitration”,  and  it  would  be  impossible  for  a
No.  13-­‐‑1566   3
court   to   order   “that   such   arbitration   proceed   in   the   manner
provided   for   in   such   agreement.”   US   Foods   insists   that   this
is   irrelevant   because   the   Multiemployer   Pension   Plan
Amendments   Act   of   1980   (MPPAA   or   Multiemployer   Act)
provides   that   the   procedure   it   establishes   “shall,   to   the   ex-­‐‑
tent   consistent   with   this   subchapter,   be   conducted   in   the
same   manner,   subject   to   the   same   limitations,   carried   out
with   the   same   powers   (including   subpena   power),   and   en-­‐‑
forced   in   United   States   courts   as   an   arbitration   proceeding
carried   out   under   title   9.”   29   U.S.C.   §1401(b)(3).   This   refer-­‐‑
ence  to  the  “manner”  and  “powers”  of  arbitration  under  the
Arbitration  Act  does  not  supply  what  §4  demands:  a  “writ-­‐‑
ten  agreement”.
One   could   argue   to   the   contrary   that,   unless   the   court
overlooks   the   difference   between   statutory   arbitration   (the
Multiemployer  Act)  and  contractual  arbitration  (the  Arbitra-­‐‑
tion   Act),   there   would   be   no   authority   to   mandate   arbitra-­‐‑
tion   at   all—for   although   §4   supplies   a   judicial   power   to
compel   arbitration,   the   Multiemployer   Act   lacks   a   parallel
provision.  Perhaps  §1401(b)(3)  is  best  understood  as  requir-­‐‑
ing   litigants   and   the   judiciary   to   proceed   as   if   the   extra-­‐‑
judicial  proceedings  contemplated  by  the  Multiemployer  Act
are  contractual  for  the  purpose  of  the  Arbitration  Act.  Then
§16(a)(1)(B)  would  authorize  an  interlocutory  appeal.  As  far
as  we  can  tell,  no  court  of  appeals  has  addressed  this  possi-­‐‑
bility   or   otherwise   decided   whether   §16   of   the   Arbitration
Act   authorizes   an   interlocutory   appeal   in   a   proceeding   un-­‐‑
der   the   Multiemployer   Act.   We   need   not   be   the   first,   for
there  is  another  problem  with  appellate  jurisdiction.
Arbitration   of   the   2009   assessment   is   under   way.   US
Foods   did   not   ask   the   district   court   to   compel   the   Fund   to
4   No.  13-­‐‑1566
engage   in   a   second,   independent   arbitration.   Instead,   it
maintains   that   the   2008   and   2009   assessments   are   inversely
related,  so  that  to  change  one  compels  a  change  to  the  other.
US  Foods  therefore  wants  the  2008  assessment  added  to  the
agenda  of  the  arbitrator  who  is  already  serving.  Yet  the  arbi-­‐‑
trator  can  decide  for  himself,  in  the  first  instance,  what  dis-­‐‑
putes   require   resolution.   Whether   or   not   the   arbitrator   con-­‐‑
siders  the  interaction  of  the  2008  and  2009  figures,  his  deci-­‐‑
sion  could  be  reviewed  (to  the  extent  the  Multiemployer  Act
allows)  on  petition  to  enforce  or  set  aside  the  final  order.
A  judge  who  adds  or  subtracts  issues  in  a  pending  arbi-­‐‑
tration   has   neither   compelled   nor   forbidden   arbitration;   the
judge  has  instead  resolved  an  issue  in  the  arbitration.  That’s
why  we  held  in  Blue  Cross  Blue  Shield  of  Massachusetts,  Inc.  v.
BCS   Insurance   Co.,   671   F.3d   635   (7th   Cir.   2011),   that   a   pro-­‐‑
posal  to  tell  an  arbitrator  what  to  do  is  not  a  request  for  “an
order   directing   …   arbitration”   within   the   meaning   of   §4   of
the  Arbitration  Act,  and  a  judge’s  order  declining  to  interfere
in   the   conduct   of   an   arbitration   is   not   an   order   “denying   a
petition   under   section   4   of   this   title   to   order   arbitration   to
proceed”  for  the  purpose  of  §16(a)(1)(B).
We  explained  in  Blue  Cross  that  a  party’s  request  to  tell  an
arbitrator   how   to   act   in   a   pending   proceeding   is   not   a   re-­‐‑
quest  to  compel  arbitration,  no  matter  what  caption  the  liti-­‐‑
gant   puts   on   its   motion.   And   we   added   that   “judges   must
not   intervene   in   pending   arbitration   to   direct   arbitrators   to
resolve  an  issue  one  way  rather  than  another.  Trustmark  In-­‐‑
surance   Co.   v.   John   Hancock   Life   Insurance   Co.,   631   F.3d   869(7th   Cir.   2011).   Review   comes   at   the   beginning   or   the   end,
but  not  in  the  middle.”  671  F.3d  at  638.  Once  the  arbitration
is   over,   the   losing   side   can   seek   judicial   review.   29   U.S.C.
No.  13-­‐‑1566   5
§§  1401(b)(2),  1451.  Until  then  matters  are  in  the  hands  of  the
arbitrator.
The  appeal  is  dismissed  for  want  of  jurisdiction.