Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

MILLER v. LEHIGH COAL AND NAVIGATION COMAPANY

January 16, 2004.

MATT MILLER and DAVID H. SWISHER, Trustees of the ANTHRACITE HEALTH AND WELFARE FUND, Plaintiffs
v.
LEHIGH COAL AND NAVIGATION COMPANY, Defendants



The opinion of the court was delivered by: JAMES MUNLEY, District Judge

MEMORANDUM

Before the court for disposition is the plaintiffs' motion for preliminary injunction. The plaintiffs are Matt Miller and David H. Swisher, Trustees of the Anthracite Health and Welfare Fund (hereinafter "Fund") and the defendant is Lehigh Coal and Navigation Company (hereinafter "Lehigh"). A hearing on this matter was held on December 30, 2003. At the hearing, the Court, with the parties' agreement, indicated that the preliminary injunction hearing would be consolidated with the trial on the merits pursuant to FED. R. Civ. P. 65(a)(2). The matter is thus ripe for disposition. The issue in the case is whether the defendant coal company must tender interim withdrawal liability payments to the plaintiffs pending the arbitration of withdrawal liability issues.

Background

  Lehigh was in the anthracite coal business located in Pottsville, Pennsylvania. It Page 2 ceased doing business in January 2001. The company was a contributing employer to the Fund, a multiemployer plan providing retirement benefits to employees of the anthracite coal industry under the provisions of the Employee Retirement Income Security Act of 1974 (hereinafter "ERISA"), as amended 28 U.S.C. § 1001, et seq. The contributions to the Fund were in the form of royalties for each ton of anthracite coal produced for use or sale.

  The United States Supreme Court has described the system as follows:
Congress enacted ERISA in 1974 to provide comprehensive regulation for private pension plans. In addition to prescribing standards for the funding, management, and benefit provisions of these plans, ERISA also established a system of pension benefit insurance. This comprehensive and reticulated statute was designed to ensure that employees and their beneficiaries would not be deprived of anticipated retirement benefits by the termination of pension plans before sufficient funds have been accumulated in the plans. Congress wanted to guarantee that if a worker has been promised a defined pension benefit upon retirement — and if he has fulfilled whatever conditions are required to obtain a vested benefit — he will actually receive it.
To achieve this goal of protecting anticipated retirement benefits, Congress created the Pension Benefit Guaranty Corporation (PBGC), a wholly owned Government corporation, to administer an insurance program for participants in both single-employer and multiemployer pension plans. . . .
  During the period between the enactment of ERISA and 1978, when mandatory multiemployer guarantees were due to go into effect, the PBGC extended coverage to numerous plans. Congress became concerned that a significant number of plans were experiencing extreme financial hardship and that implementation of mandatory guarantees for multiemployer plans might induce several large plans to terminate, thus subjecting the insurance system to liability beyond its means. As a result, Congress delayed the effective date for mandatory guarantees . . . and directed the PBGC to prepare a report analyzing the problems of multiemployer plans and recommended possible Page 3 solutions.
 
The PBGC's Report found, inter alia, that ERISA did not adequately protect plans from adverse consequences that resulted when individual employers terminate their participation in, or withdraw from, multiemployer plans. The basic problem, the Report found, was the threat to the solvency and stability of multiemployer plans caused by employer withdrawals, which existing law actually encouraged.
"A key problem of ongoing multiemployer plans, especially in declining industries, is the problem of employer withdrawal. Employer withdrawals reduce a plan's contribution base. This pushes the contribution rate for remaining employers to higher and higher levels in order to fund past service liabilities, including liabilities generated by employers no longer participating in the plan, so-called inherited liabilities. The rising costs may encourage — or force — further withdrawals, thereby increasing the inherited liabilities to be funded by an ever decreasing contribution base. This vicious downward spiral may continue until it is no longer reasonable or possible for the pension plan to continue." Pension Plan Termination Insurance Issues: Hearings before Subcommittee on Oversight of the House Committee on Ways and Means, 95th Cong., 2nd Sess., 22 (1978) (statement of Matthew M. Lind)
To alleviate the problem of employer withdrawals, the PBGC suggested new rules under which a withdrawing employer would be required to pay whatever share of the plan's unfunded liabilities was attributable to that employer's participation. . . . Congress agreed with the analysis put forward in the PBGC Report, and drafted legislation which implemented the Report's recommendations. As enacted, the [Multiemployer Pension Plan Amendments Act of 1980] requires that an employer withdrawing from a multiemployer pension plan pay a fixed and certain debt to the pension plan. This withdrawal liability is the employer's proportionate share of the plan's unfunded vested benefits, calculated as the difference between the present value of the vested benefits and the current value of the plan's assets.(internal quotations, citations and footnote omitted).
Connolly v. Pension Benefit Guaranty Corporation, 475 U.S. 211, 214-17 (1986).

  In the instant case, subsequent to Lehigh ceasing its business operation in January Page 4 2001, the Fund assigned it a withdrawal liability in the amount of $1,875,264, which was due in monthly installments for approximately 38 months. Lehigh has challenged this assignment of withdrawal liability through arbitration. Plaintiffs now seek to have the court order the defendant to make payments on the withdrawal liability until arbitration is completed*fn1.

  The Multiemployer Pension Plan Amendments Act of 1980 (MPPAA) directs employers to begin payments upon notification of withdrawal liability, whether or not they choose to dispute the determination. 29 U.S.C. § 1399(c)(2). Therefore, the general rule set forth by the MPPAA is to pay now, dispute later. In the instant case, the defendants seeks to have the court recognize an equitable exception to general rule regarding making interim payments and argue that the plaintiffs' claim is without merit and that the defendant will suffer irreparable harm from making such payments. Plaintiffs contend that no equitable exception exists and even if it does, the defendants have not shown the necessary elements.

  Jurisdiction

  As this case arises out of the MPPAA, we have jurisdiction pursuant to 29 U.S.C. § 1451(c) (providing that the district courts of the United States shall have exclusive jurisdiction of an action under this section [the MPPAA] without regard to the amount in controversy.)

  Discussion Page 5

  With regard to a preliminary injunction seeking interim withdrawal liability payments, the traditional four-prong preliminary injunction test does not apply. The Third Circuit Court of Appeals has explained as follows:
The traditional four-prong test for garden-variety preliminary injunctions is not applicable in this context. In enacting the interim withdrawal liability provisions of MPPAA, 29 U.S.C. § 1399(c)(2), 1401(d), and the judicial mechanism for their enforcement, 29 U.S.C. § 1451(b) & (c), Congress has effectively determined that pension funds will be irreparably harmed unless employers are enjoined to make interim payments while litigation proceeds. By enacting the withdrawal liability provisions, Congress has concluded that the uninterrupted flow of payments is important in itself,[Pantry Pride, Inc. v. Retail Clerks Tri-State Pension, 747 F.2d 169, 171 (3d Cir. 1984)] and that the ultimate recovery of payments will not suffice to make the Fund whole. Congress has likewise determined that neither party's probability of success in litigation is relevant: interim payments must be made regardless.
Galgay v. Beaverbrook Coal Co., 105 F.3d 137, 140 (3d Cir. 1997).

  The following are the requirements for a preliminary injunction in these situations: 1) The Fund assessed withdrawal liability against the employer; 2) the employer was notified; and 3) payments were not made. Id. at 141. The parties are in agreement that these requirements have been met. However, as stated above, defendant seeks to have us recognize an "equitable exception" to the interim payments.

  The Third Circuit Court of Appeals has never held that there are any equitable exceptions to the statutory provisions on interim payments. Id. The Galgay court noted that the language in the statute indicates that "[w]ithdrawal liability shall be payable in accordance with the schedule set forth by the plan sponsor . . . beginning no later than 60 Page 6 days after the date of the demand notwithstanding any request for review or appeal of determinations of the account of such liability or of the schedule." Id. (quoting 29 U.S.C. § 1399(c)(2)). In addition, section 4221(d) of the MPPAA, 29 U.S.C. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.