Technical Metallurgical Services, Inc. v. Plumbers & Pipefitters National Pension Fund

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS January 5, 2007
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
)))))))))))))))))))))))))) Clerk
No. 06-40321
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TECHNICAL METALLURGICAL SERVICES, INC.,
Plaintiff-Counter Defendant-Appellant,
versus
PLUMBERS AND PIPEFITTERS NATIONAL PENSION FUND,
Defendant-Counter Claimant-Appellee.
Appeal from the United States District Court
for the Eastern District of Texas
No. 5:04-CV-230
Before SMITH, BENAVIDES, and PRADO, Circuit Judges.
PER CURIAM:*
This lawsuit arises under the Employee Retirement Income
Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., as amended
by the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”),
29 U.S.C. § 1381 et seq. Plaintiff-Appellant Technical
Metallurgical Services, Inc. (“TMSI”), contends that Defendant-
Appellee Plumbers and Pipefitters National Fund (“the Fund”)
*
Pursuant to 5TH CIRCUIT RULE 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5TH CIRCUIT RULE
47.5.4.
improperly assessed withdrawal liability in the amount of $125,336
against it.1 The only issue before the court is the date of TMSI’s
complete withdrawal from the Fund. If TMSI completely withdrew from
the Fund on June 30, 2002, then it owes no withdrawal liability.
However, if TMSI completely withdrew on July 1, 2002, as the Fund
contends, then it owes the Fund $125,336. We AFFIRM the order of
the district court because we hold that TMSI completely withdrew
from the Fund on July 1, 2002.
I. FACTUAL AND PROCEDURAL HISTORY
TMSI is a mechanical contractor incorporated in Arkansas and
registered to do business in Texas. The Fund is a multi-employer
fund as defined by ERISA. See 29 U.S.C. § 1002(3) and (37).
On or about July 1, 2000, TMSI entered into a collective
bargaining agreement (“CBA”) with Local 237 of the United
Association of Plumbers and Pipefitters (“Local 237”). In relevant
1
Under the MPPAA, withdrawal liability is an employer’s:
proportionate share of the plan’s unfunded
vested benefits, that is, the difference
between the present value of vested benefits
(benefits that are currently being paid to
retirees and that will be paid in the future
to covered employees who have already
completed some specified period of service, 29
U.S.C. § 1053) and the current value of the
plan’s assets.
Concrete Pipe & Prods. of Cal., Inc. v. Constr. Laborers Pension
Trust for S. Cal., 508 U.S. 602, 609 (1993) (citations omitted)
(interpreting 29 U.S.C. §§ 1381, 1391). For the plan year at issue
in this case, the Fund had unfunded vested benefits in the amount
of $542,797,204.
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part, the CBA stated that it would be “in full force and effect
between [Local 237] and the Contractors from July 1, 2000, through
June 30, 2002 and it shall continue in full force and effect from
year to year thereafter between the Union and the
Contractors . . . .” (Emphasis added). Additionally, the CBA
stipulated that “[t]he expiration date of the present Collective
Bargaining Agreement between the undersigned parties is June 30,
2002.”
In the spring of 2002, Local 237 and TMSI began negotiations
for an extension of the CBA, but the parties failed to reach an
agreement. Friday, June 28, 2002, was the last day that TMSI
employed workers under the CBA. On or about August 14, 2003, the
Fund sent a letter to TMSI advising that TMSI was subject to
withdrawal liability. On or about September 2, 2003, TMSI responded
and disputed that it owed any withdrawal liability.
As required by 29 U.S.C. § 1401(a)(1), TMSI initiated
arbitration challenging the Fund’s assessment of withdrawal
liability. The arbitrator decided that TMSI withdrew from the Fund
on July 1, 2002, and thereby owed withdrawal liability.
TMSI then challenged the arbitrator’s decision in district
court. See 29 U.S.C. § 1401(b)(2) (allowing any party to challenge
an arbitrator’s decision in federal district court). The parties
filed cross-motions for summary judgment, which were referred to a
magistrate judge for report and recommendation. The district court
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adopted the magistrate’s report and recommendation finding that TMSI
owed withdrawal liability because it completely withdrew from the
Fund on July 1, 2002. TMSI appeals this decision.
II. STANDARD OF REVIEW
This court reviews the district court’s summary judgment order
de novo, using the same standards applied by the district court.
Dallas County Hosp. Dist. v. Assocs. Health & Welfare Plan, 293 F.3d
282, 285 (5th Cir. 2002) (reciting the familiar summary judgment
standards).
The determination of the date of complete withdrawal is a mixed
question of law and fact. Concrete Pipe, 508 U.S. at 630. Here,
the parties stipulated to the facts before the arbitrator, so there
remains only a question of law. All circuits that have considered
the issue have decided that an arbitrator’s conclusions of law under
the MPPAA are reviewed de novo. See e.g., Trs. of the Cent. Pension
Fund of the Int’l Union of Operating Eng’rs v. Wolf Crane Serv.,
Inc., 374 F.3d 1035, 1038 (11th Cir. 2004).
III. DISCUSSION
The MPPAA defines when an employer experiences a “complete
withdrawal” that gives rise to withdrawal liability. Under the
MPPAA, 29 U.S.C. § 1383(a), “a complete withdrawal from a
multiemployer plan occurs when an employer –- (1) permanently ceases
4
to have an obligation to contribute to the plan . . . .”2 The
statute defines “obligation to contribute” as an “obligation to
contribute arising . . . under one or more collective bargaining (or
related) agreements.” 29 U.S.C. § 1392(a). Finally, the MPPAA
defines the date of complete withdrawal, in pertinent part, as “the
date of the cessation of the obligation to contribute.” Id.§ 1983(e). The parties dispute when TMSI’s obligations to
contribute to the Fund ceased under the CBA.
TMSI argues that it completely withdrew from the Fund on June
30, 2002, because the CBA states that “[t]he expiration date” of the
CBA “is June 30, 2002.” (Emphasis added). TMSI urges that its
interpretation of the CBA gives effect to all of the CBA’s
provisions. Accordingly, TMSI contends that its reading of
“expiration date” does not render the “through June 30, 2002"
language meaningless because legal documents are effective “through”
their expiration date.
The Fund focuses on language in the CBA which states that the
Agreement “shall be in full force and effect . . . from July 1, 2000
through June 30, 2002.” (Emphasis added). TMSI, according to the
Fund, still had an obligation to contribute to the Fund on June 30,
2002, until that day ended. Therefore, TMSI did not completely
withdraw from the Fund until July 1, 2002, the first day on which
2
There are additional requirements for a complete withdrawal
for an employer in the building and construction industry--TMSI is
such an employer--but those requirements are not at issue in this
case. See 29 U.S.C. § 1383(b) (listing additional requirements).
5
TMSI did not have an obligation to contribute to the Fund. The Fund
contends that the expiration date is not dispositive of complete
withdrawal. The Fund maintains that TMSI’s reading of “expiration
date” would impermissibly negate the CBA’s “through June 30, 2002”
language.
Application of the MPPAA to the facts of this case requires
this court to conclude that TMSI completely withdrew from the Fund
on July 1, 2002. The CBA states that TMSI had an obligation to
contribute “through June 30, 2002.” TMSI could not have ceased to
have an obligation to contribute on June 30, 2002, because the plain
meaning of “through” is that TMSI had an obligation to contribute
up to and including that day. Reading the “through” language this
way would not render the “expiration date” language meaningless.
For example, if John Doe’s driver’s license expires on December 31,
2008, John Doe would still be able to drive legally on that day.
Similarly, though the CBA expired on June 30, 2002, TMSI still had
an obligation to contribute on that day. See Parmac, Inc. v. I.A.M.
Nat’l Pension Fund Benefit Plan A, 872 F.2d 1069 (D.C. Cir. 1989)
(similarly interpreting the MPPAA). Thus, TMSI completely withdrew
from the Fund on July 1, 2002, because that was the first day that
it ceased to have an obligation to contribute to the Fund.3
3
In the last sentence of its brief, the Fund requested an
award of costs and attorney’s fees under 29 U.S.C. §§ 1401(b)(2),
1451(e). Though the Fund argues that it raised the attorney’s fee
issue below in its Prayer for Relief, nevertheless, the Fund has
forfeited this argument because it has been inadequately briefed on
appeal. See L & A Contracting Co. v. S. Concrete Servs., Inc., 17
6
IV. CONCLUSION
For the reasons stated above, we AFFIRM the order of the
district court.
AFFIRMED.
F.3d 106, 113 (5th Cir. 1994).
7