The opinion of the court was delivered by: SPRIZZO
SPRIZZO, District. Judge.
The parties have stipulated to the following facts. Plaintiff Textile Workers Pension Fund ("Pension Fund") is a multiemployer pension plan trust, established pursuant to a collective bargaining agreement between the Amalgamated Clothing and Textile Workers Union, AFL-CIO (the "Union") and various employers in the dyeing, finishing and printing industry. Defendant Standard Dye & Finishing Co., Inc. ("Standard Dye") is a corporation engaged in the business of processing and distributing dye and textile materials, and has contributed to the multiemployer pension plan administered by Pension Fund.
On or about May 6, 1980, Standard Dye notified the Union of its intention to close down and cease all of its operations in the dyeing and textile business. On June 6, 1980, Standard Dye was formally dissolved by the unanimous vote of its shareholders. In June of 1980, Standard Dye closed its plant, ceased all of its normal business operations, liquidated its assets and began distributing liquidating dividends to its shareholders. During that month, all production workers employed by Standard Dye were terminated. However, three employees were retained to aid in "clean-up work" and in the dismantling of equipment through October of 1980, during which time Standard Dye made contributions to the Pension Fund on their behalf. See Stipulation of Material Facts.
Plaintiff now seeks to collect withdrawal assessments made against defendant Standard Dye. Defendants have moved for summary judgment pursuant to Fed. R. Civ. P. 56, contending that Standard Dye had withdrawn from the plan prior to September 26, 1980 and thus liability has been eliminated by § 558 of the Tax Reform Act of 1984, Pub. L. No. 98-369, § 558, 1984 U.S. Code Cong. & Ad. News (98 Stat.) 494, 899.
The sole issue presented in this case is whether Standard Dye "completely withdrew" from the Pension Fund prior to September 26, 1980, the effective date of the MPPAA.
Plaintiff Pension Fund argues that because Standard Dye continued to employ various individuals through October, 1980, and was obligated to contribute to the Plan for those workers through October, 1980, it did not effect "complete withdrawal," within the meaning of the MPPAA, until after its effective date of September 26, 1980. See Plaintiff's Memorandum of Law in Opposition to Defendants' Motion for Summary Judgment at 4-5.
Defendants argue that "covered operations," as referred to in 29 U.S.C. § 1383(a)(2), should be construed as those operations which gave rise to the employer's contributions to the pension plan, i.e., the processing and distribution of dye and textile materials. See Defendants' Proposed Conclusions of Law, [P] 7. Defendants assert that those operations ceased no later than June 20, 1980, when Standard Dye ceased all normal business operations, closed its plant, formally dissolved the company and terminated all of its production workers. See id. at [P] 8. Defendants further contend that the term "covered operations" should not be construed to include work activities, such as clean-up and dismanting of equipment, which are incidental to cessation of normal business activities, even though pension fund contributions are made by the employer for workers performing those incidental activities. See id. at [P] 9.
The only courts which have passed on this issue have agreed with defendants' view of the statute. Thus, in Speckman v. Barford Chevrolet, 535 F. Supp. 488 (E.D. Mo. 1982), an automobile dealership closed down and sold its facilities prior to the effective date of the MPPAA. The employer retained one employee to perform phase-out work and made pension plan contributions on behalf of that employee subsequent to the effective date of the MPPAA. Id. at 489-90.
The court in Speckman noted that the employer's "retention of a sole employee and its contribution to the Plan on his behalf . . . did not prevent its cessation [of "all covered operations"] from being 'complete' within the meaning of the Act. A permanent cessation can occur even though an employer remains signatory to a collective bargaining agreement requiring contributions to the plan." Id. at 491.
In F.H. Cobb Co. v. N.Y.S. Teamsters Conference, 584 F. Supp. 1181 (N.D. N.Y. 1984), a distributor of food and non-food items to retail customers ceased its distribution operations and sold its assets prior to the MPPAA's effective date. The company laid off all employees, except for a "skeleton" crew of nine to sixteen employees, who remained to move inventory and equipment until after such date. Id. at 1182. The Cobb court reasoned that although these remaining employers constituted between 5% and 9% of the company's preclosure work force, the company had "ceased all covered operations within the meaning of the MPPAA." Id. at 1184.
Plaintiff in the instant action contends that these cases were decided erroneously, and argues that "covered operations" and "normal business operations" are two distinct concepts. See Plaintiff's Memorandum of Law in Opposition to Defendants' Motion for Summary Judgment at 5. Plaintiff asserts that a "covered operation" is an operation, covered under a collective bargaining agreement, for which an employer is required to contribute under a plan. See id. at 12-13. Thus, in plaintiff's view, "Standard ceased all covered operations on October 31, 1980 when all its employees for whom it made pension contributions ceased working for Standard." See id. at 3 (emphasis in original).
Plaintiff's argument is not supported by the express language of § 1383(a), or by its legislative history. That statute provides that "a complete withdrawal for a multiemployer plan occurs when an employer -- (1) permanently ceases to have an obligation to contribute under the plan, or (2) permanently ceases all covered operations under the plan." 29 U.S.C. § 1383(a)(emphasis added). There is no justification for this Court to accept plaintiff's argument, which would render the second clause of § 1383(a) mere surplusage, especially since it is clear that a court must "give effect, if possible, to every clause and word of a statute." See Montclair v. Ramsdell, 107 U.S. 147, 152, 27 L. Ed. 431, 2 S. Ct. 391 (1882); see also United States v. Menasche, 348 U.S. 528, 538-39, 99 L. Ed. 615, 75 S. Ct. 513 (1955); National Labor Relations Board v. Jones & Laughlin Steel Corp., 301 U.S. 1, 30, 81 L. Ed. 893, 57 S. Ct. 615 (1937) ("The cardinal principle of statutory construction is to save and not to destroy.")
Moreover, the legislative history demonstrates that Congress clearly contemplated that a complete withdrawal could occur even where, as here, an obligation to make pension contributions for a relatively small number of employees continued. As the House Report on the MPPAA makes clear, "a virtually complete cessation of contributions, e.g., a 98-percent reduction, that has the same effect on the plan as a complete cessation of contributions, is a complete withdrawal." H.R. Rep. No. 896, 96th Cong., 2d ...