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Structure Tone, Inc. v. New York City District Council of Carpenters Pension Fund

United States District Court, S.D. New York

March 30, 2018

STRUCTURE TONE, INC., Petitioner,
v.
NEW YORK CITY DISTRICT COUNCIL OF CARPENTERS PENSION FUND & DAVID STEWART, Respondents.

          OPINION AND ORDER

          RICHARD J. SULLIVAN. District Judge

         Now before the Court is Petitioner Structure Tone's motion to vacate an arbitration award (the "Award") entered in favor of Respondent the New York City District Council of Carpenters Pension Fund (the -'Fund"). (Doc. No. 21.) For the reasons set forth below, the motion is DENIED.

         I. Background

         A. Statutory Scheme

         This dispute concerns the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., which regulates private pension funds and, as amended by the Multiemployer Pension Plan Amendments Act of 1980 O"MPPAA"), contains specific provisions relating to multiemployer pension plans. See 29 U.S.C. §§ 1002(37)(A), 1381-1453. As indicated by its title, a multiemployer pension plan is a pension plan to which multiple employers contribute pursuant to one or more collective bargaining agreements. See Id. §1002(37)(A). In order to ensure that an employer's exit from a multiemployer plan does not undermine the plan's finances and place an undue burden on the employers remaining in the plan, the MPPAA created a regime of withdrawal liability. Specifically, if an employer withdraws from a multiemployer plan, that employer is assessed "withdrawal liability, " calculated to equal that employer's portion of the plan's unfunded pension benefits. See Id. §§ 1381, 1391.

         At issue here is whether Petitioner "withdrew" from the Fund. Generally, a withdrawal 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).[1]However, while that provision applies to most employers, Congress created a special withdrawal scheme for employers engaged in the "building and construction industry.*' That provision, commonly referred to as the "construction industry exemption/" effectively imposes withdrawal liability on employers in the building and construction industry only if:

(A) an employer ceases to have an obligation to contribute under the plan, and
(B) the employer -
(i) continues to perform work in the jurisdiction of the collective bargaining agreement of the type for which contributions were previously required, or
(ii) resumes such work within 5 years after the date on which the obligation to contribute under the plan ceases, and does not renew the obligation at the time of the resumption.

29 U.S.C. § 1383(b)(2).

         The MPPAA provides that when an employer withdraws from a multiemployer plan, the pension fund serving as the plan sponsor is responsible for determining the amount of withdrawal liability owed and collecting it. See Id. § 1382. If the employer disagrees with the plan sponsor's assessment, the employer must first submit the dispute to arbitration. See Id. § 1401. After arbitration, a party can bring an action in district court to enforce, vacate, or modify the arbitration award. See Id. §§ 1401, 1451.

         B. Factual Background

         Petitioner is a New York corporation involved in the construction industry as a general contractor and construction management firm.[2] (Pet. ¶ 3; Pet. Decl., Ex. J at 3.) The Fund is a multiemployer pension benefit plan as defined by ERISA, see 29 U.S.C. ยงยง 1002(3), 1002(37)(A), and Respondent David Stewart is the ...


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