UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT
Appeal from the United States District Court for the District of Columbia, (Civil Action No. 87-01894).
Starr, Williams and D. H. Ginsburg, Circuit Judges. Opinion for the Court filed by Circuit Judge Starr.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE STARR
This appeal requires us to determine whether a statutory time limitation bars a pension fund's suit to compel payments from an employer. The pension fund seeks relief under the Multiemployer Pension Plan Amendments Act ("MPPAA" or "Act"), which amended the Employee Retirement Income Security Act *fn1 to establish that participating employers who cease contributing to a covered pension fund are, in certain circumstances, liable to the fund for "withdrawal liability." The Act establishes a limitations period for bringing claims to recover payment of withdrawal liability. See 29 U.S.C. § 1451(f).
In the case before us, the trustees ("plan sponsors") of the Bricklayers and Trowel Trades International Pension Fund ("Fund") filed suit in federal district court to recover withdrawal liability from Clyde Sandoz Masonry, Inc., alleged to be doing business as Griffith Masonry, Inc. ("Sandoz" or "Sandoz Masonry").2 The sponsors brought the action, however, considerably after the employer's complete withdrawal from the fund. The plan sponsors appeal the District Court's determination that the employer's complete withdrawal from the plan had triggered the operation of section 1451's limitations provision, which the trial court held barred the plan sponsors' suit. For reasons that we shall presently set forth, we agree that section 1451's limitations period does not bar the plan sponsors' suit. I
The intersection of (1) the complicated statutory scheme governing collection of employers' withdrawal liability and (2) the plan sponsors' delay in pursuit of that collection in this case produces the conflict before us. Each aspect requires elaboration.
ERISA, as amended by the MPPAA, provides an elaborate system to ensure the financial integrity of multiemployer pension funds. See generally, Nachman Corp. v. Pension Benefit Guar. Corp., 446 U.S. 359, 100 S. Ct. 1723, 64 L. Ed. 2d 354 (1980). Congress passed the MPPAA in part because employers' withdrawals from multiemployer pension plans threatened those plans' solvency, and thus their ability to ensure that beneficiaries would ultimately receive benefits that were their due. See, e.g., Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211, 213-17, 106 S. Ct. 1018, 89 L. Ed. 2d 166 (1986); Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 721-25, 104 S. Ct. 2709, 81 L. Ed. 2d 601 (1984); I.A.M. Nat'l Pension Fund, Plan A v. Clinton Engines Corp., 263 U.S. App. D.C. 278, 825 F.2d 415, 416-17 (D.C.Cir. 1987).
The Act requires employers who cease contributing to a multiemployer fund to pay what the statute refers to as "withdrawal liability," a sum that represents a portion of the fund's "unfunded vested benefits." See 29 U.S.C. §§ 1381, 1399; see also Connolly, 475 U.S. at 216-17. That sum is based upon the employer's date of "complete withdrawal" from a multiemployer plan. See id. §§ 1383, 1391. Special provisions define the "complete withdrawal" of employers, like Sandoz, engaged in the construction and building trades. See id. § 1383(b).
The MPPAA grants the plan sponsor broad authority to assess and collect withdrawal liability. The Act requires that the fund "as soon as practicable after an employer's complete . . . withdrawal" (1) calculate the employer's withdrawal liability, (2) set forth a schedule of payments, and (3) demand that the employer make payments pursuant to that schedule. See id. § 1399(b)(1). Those plan determinations are entitled to substantial deference in subsequent arbitration proceedings. See id. § 1401 (a)(3). If no arbitration has been initiated within the prescribed period, the amounts demanded are "due and owing on the schedule set forth by the plan sponsor" and subject to a plan sponsor's suit for collection. Id. § 1401(b)(1). If the employer fails within 60 days to meet a payment (following notice of that failure), section 1399(c)(5)deems the employer to be in default and allows the plan sponsor to "require immediate payment of the outstanding amount of an employer's withdrawal liability." See id. § 1399(c) (5).
The parties are in dispute as to the time bar upon plan sponsor suits to collect withdrawal liability. Section 1451, which governs civil actions for withdrawal liability, provides that "[a] plan fiduciary, employer, plan participant, or beneficiary, who is adversely affected by the act or omission of any party under this subtitle with respect to a multiemployer plan . . . may bring an action for appropriate legal or equitable relief, or both." Id. § 1451(a) (1). The same section contains the limitations provision, the meaning of which is pivotal to this case:
An action under this section may not be brought after the later of --
(1) 6 years after the date on which the cause of action arose, or
(2) 3 years after the earliest date on which the plaintiff acquired or should have acquired actual knowledge of the existence of such cause of action; except that in the case of fraud or concealment, such action may be brought not later than 6 years ...