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April 15, 1986


The opinion of the court was delivered by: LASKER


On September 29, 1982 the defendants, Local 807 Labor-Management Pension Fund ("Fund") and its Board of Trustees ("Trustees") authorized the pursuit of a claim against plaintiff, Refined Sugars, Inc. ("RSI"), for withdrawal liability pursuant to the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001 et seq., Pub.L. 93-406, 88 Stat. 832, as amended by the Multiemployer Pension Plan Amendments Act, Pub.L. 96-364, 94 Stat. 1208 (1980) ("MPPAA"). Thereafter, plaintiff filed this suit for a declaratory judgment and now moves for summary judgment pursuant to Rule 56(a) of the Federal Rules of Civil Procedure on the theory that it is not an "employer" in relation to the Fund and therefore cannot be subject to a withdrawal liability. Defendants have cross-moved for summary judgment dismissing the complaint, for a declaration that plaintiff is an employer in relation to the Fund and for referral the issues regarding the amount of withdrawal liability to arbitration pursuant to ERISA as amended by MPPAA, 29 U.S.C. § 1381 et seq.

Plaintiff is a refiner of cane sugar for various industrial, wholesale and retail uses. The defendants represent the members of Truck Drivers Union Local 807 of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America who were employed to distribute plaintiff's products. To operate and maintain its fleet of trucks, RSI contracted with the Francrete Corporation, an independent trucking company. Francrete negotiated with Local 807 regarding the various labor agreements which would govern relations between them, and Francrete has directly employed the drivers and made contributions to the Fund since November 15, 1976.

 On June 30, 1982, RSI sold its fleet of trucks to Francrete. Francrete continued to serve RSI after the purchase of RSI's trucks, continued to employ Local 807 drivers, and continued to make contributions to the Fund on the drivers' behalf. Upon learning of the proposal to transfer ownership of the trucks from RSI to Francrete, the defendants attempted to assert a withdrawal liability claim against Francrete. However, this claim was dropped in November 1982. Instead, the defendants chose to assert their claim for withdrawal liability against RSI.

 The issue before the court is thus whether RSI may be defined as an "employer" so as to be subject to a withdrawal liability claim pursuant to ERISA and MPPAA. For the reasons discussed below, plaintiff's motion is granted and defendants' cross-motion is denied. RSI cannot properly be deemed to be an employer subject to a withdrawal liability claim.

 Although both plaintiff and defendants have moved for summary judgment, implying that both would maintain that there are no material factual disputes, there are some discrepancies between their Rule 3(g) Statements which could suggest that summary disposition would be inappropriate. However, because RSI's submission of affidavits and other supporting papers so strongly supports its version of the facts and thereby undermines the genuineness of the disputes, summary judgment is proper. See Schering Corporation v. Home Insurance Company, 712 F.2d 4, 9 (2d Cir. 1983).


 Withdrawal liability from multi-employer plans is addressed in Subtitle E of Subchapter III (also called Title IV) of ERISA, and it is to Title IV of the statute which plaintiff directs the court's attention for the applicable definition of "employer". Subtitle E does not define "employer", but Subtitle A of Title IV does define the conditions under which two or more enterprises shall be treated as a single employer in connection with pension plan terminations or withdrawals:

For purposes of this subchapter, under regulations prescribed by the corporation, all employees of trades or businesses (whether or not incorporated) which are under common control shall be treated as employed by a single employer and all such trades or businesses as a single employer. The regulations prescribed under the preceding sentence shall be consistent and coextensive with regulations prescribed for similar purposes by the Secretary of the Treasury under Sec. 414(c) of Title 26.

 29 U.S.C. § 1301(b)(1).

 The Treasury Regulations prescribed under 26 U.S.C. § 414(c) define a group "under common control" as a parent-subsidiary group, brother-sister group or combined group and define these terms according to the degree and nature of common stock ownership. See generally PBGC v. Ouimet Corporation, 630 F.2d 4, 9-12 (1st Cir. 1980).

 Since Francrete, not RSI, acted as the direct employer, and since there is no common ownership between Francrete and RSI, there is no basis under the statute for extending withdrawal liability to RSI. RSI was neither the direct employer nor part of a single employer as defined by Title IV. Defendants are therefore without a statutory basis for their claim.

 Defendants argue, however, that the definitional section of Subchapter I (also called Title I) is applicable to the MPPAA enacted in Title IV. Defendants' theory is that since the MPPAA provides no express definition and since the MPPAA amends ERISA, which does expressly define employer, it is appropriate to construe the definition contained in Title I broadly and to apply it to Title IV. Defendants argue that the statute is remedial in nature and therefore should be liberally construed in order to effectuate congressional objectives.

 Defendants' argument is flawed for two reasons. First, it ignores the express limitation "for purposes of this subchapter", which Congress included at the beginning of the definitional section of Title I. As the Supreme Court noted in a similar situation where a petitioner sought to apply a Title I definition to resolve a question arising under Title IV, "Definitions in that section are not necessarily applicable to Title IV, because they are limited by the introductory phrase, 'For purposes of this Title'." Nachman v. PBGC, 446 U.S. 359, 370, 100 S. Ct. 1723, 64 L. Ed. 2d 354 (1980). Furthermore, had Congress intended the definitional section of Title I to be generally applicable to Title IV, it is reasonable to believe that it would not have made the specific incorporation found in section 1301(a)(1), which linked the definition of "administrator" for the purposes of Title IV to the definition of "administrator" supplied in Title I. Had Congress intended its Title I definition of "employer" to ...

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