On Appeal from the United States District Court for the District of New Jersey. D.C. Civil Action No. 92-00523.
Before: Scirica, Alito and Seitz, Circuit Judges.
This appeal concerns the subject matter and time limits for arbitration under the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA), Pub. L. No. 96-364, 94 Stat. 1208 (codified as amended in scattered sections of 5, 26 & 29 U.S.C., 1988 & Supp. IV 1992). Appellants are corporations, individuals, and a sole proprietorship that were assessed withdrawal liability under the MPPAA for the withdrawal of Arrow Carrier Corporation from a multiemployer pension fund, Appellee Teamsters Pension Trust Fund of Philadelphia. Appellants disputed their liability in an action in federal district court, and also attempted to initiate arbitration. The district court found the MPPAA required Appellants to arbitrate all their claims, and that their initiation of arbitration was untimely. The court therefore granted summary judgment for the Fund. Doherty v. Teamsters Pension Trust Fund, Civ. A. No. 92-523, Memorandum Opinions of Nov. 2, 1992 and Feb. 19, 1993 (D.N.J.). We hold one claim should be resolved in the courts rather than in arbitration. We also hold the determination of timeliness requires additional inquiry and that Appellants may qualify for equitable tolling of the time limit. For these reasons we will vacate and remand.
The MPPAA, amended to the Employee Retirement Income Security Act of 1974 (ERISA), Pub. L. No. 93-406, 88 Stat. 829 (codified as amended in scattered sections of 5, 18, 26, 29, 31 & 42 U.S.C., 1988 & Supp. IV 1992), regulates multiemployer pension plans. "Congress enacted MPPAA in particular because it found that existing legislation 'did not adequately protect plans from the adverse consequences that resulted when individual employers terminated their participation in, or withdrew from, multiemployer plans.'" Flying Tiger Line v. Teamsters Pension Trust Fund, 830 F.2d 1241, 1243 (3d Cir. 1987) (quoting Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 722, 81 L. Ed. 2d 601, 104 S. Ct. 2709 (1984)) (alteration in original). The act sets rules for determining responsibility for a plan's unfunded liabilities when an employer withdraws from the plan, and for collecting such liability.
Withdrawal liability is calculated and assigned as set forth in 29 U.S.C. §§ 1381-1399. When an employer withdraws from a multiemployer pension fund, it is liable for a pro rata share of the unfunded benefits the plan owes the employees. 29 U.S.C. §§ 1381, 1391. All entities under common control with a contributing employer, as defined under Internal Revenue Code standards, are treated as a single employer. Id. § 1301(b)(1). The plan sponsor calculates withdrawal liability, notifies the employer, and demands payment. Id. § 1399(b)(1). The employer may request that the plan sponsor review its determination, and, if the review is unsatisfactory or not timely, may initiate arbitration within a set period of time. Id. § 1401(a)(1). If no arbitration proceeding is initiated within the time limit (whose proper calculation is at issue in this case, as discussed infra at Part V), "the amounts demanded by the plan sponsor . . . shall be due and owing," and the plan sponsor may bring a collection action in court. Id. § 1401(b)(1).
Arrow, a trucking firm, was a contributing member of Teamsters Pension Trust Fund of Philadelphia. Paul S. Doherty and Richard St. Pierre owned all Arrow stock until January, 1988, when they sold it to Monomoy, Inc., another corporation they owned. At that time, St. Doherty Truck Lines, Inc. and Arrowpac, Inc., previously wholly owned subsidiaries of Arrow, became wholly owned subsidiaries of Monomoy. Arrowpac/San Juan Freight, Inc. was at all relevant times a wholly owned subsidiary of Monomoy.
On January 13, 1989, after Arrow transferred four of its trucking terminals to Monomoy for no consideration, Monomoy sold all its stock in Arrow to Anthony Matarazzo for $10,000.00. Appellants explain they sold Arrow because it was no longer profitable. They claim Matarazzo assumed all of Arrow's potential liabilities, including withdrawal liabilities.
Arrow ceased operations December 6, 1989 after it lost insurance coverage. It filed for bankruptcy December 15. This cessation of operations constituted complete withdrawal from the multiemployer pension fund. Id. § 1383(a)(2). On May 28, 1991, the Fund's administrator sent letters to Saddle Ridge Associates (owned solely by Doherty), Monomoy, St. Doherty, Arrowpac, and San Juan notifying them that they were former members of a group under common control with Arrow, that they had engaged in a transaction to evade or avoid liability, and that they were liable for Arrow's withdrawal liability. On the same date, the administrator sent letters to Doherty and St. Pierre, asserting that they were "alter egos" of Monomoy, that they had engaged in a transaction to evade or avoid liability, and that they were individually liable for Arrow's withdrawal liability.
By letters dated August 22, 1991, all Appellants except Monomoy requested review of the Fund's liability determination. These letters arrived August 26, 1991, except Arrowpac's, which arrived August 28. The Fund affirmed its decision on review by letter dated January 30, 1992.
On February 19, 1992, Appellants filed this action in federal court for declaratory judgment that they were not liable for withdrawal payments to the plan. On February 27, 1992, all Appellants except Monomoy sent a letter to the American Arbitration Association requesting arbitration. On March 6, they ...