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Trustees of the Plumbers & Pipefitters Nat'l Pension Fund v. Plumbing Services, Inc.

United States Court of Appeals, Fourth Circuit

June 29, 2015


Argued, January 27, 2015

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Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. (1:13-cv-00118-TSE-JFA). T. S. Ellis, III, Senior District Judge.


Gregory F. Yaghmai, RUTLEDGE & YAGHMAI, Birmingham, Alabama, for Appellants.

Dinah S. Leventhal, O'DONOGHUE & O'DONOGHUE LLP, Washington, D.C., for Appellee.


 John R. Harney, O'DONOGHUE & O'DONOGHUE LLP, Washington, D.C., for Appellee.

Before MOTZ and DIAZ, Circuit Judges, and DAVIS, Senior Circuit Judge. Judge Diaz wrote the opinion, in which Judge Motz and Senior Judge Davis joined.


Page 440

DIAZ, Circuit Judge:

For nearly thirteen years, Plumbing Services, Inc. (" PSI" ) made contributions to the Plumbers and Pipefitters National Pension Fund (the " Fund" ), a multiemployer pension benefit plan governed by the Employment Retirement Income Security Act of 1974 (" ERISA" ), 29 U.S.C. § 1001 et seq. (2012). On March 10, 2011, however, PSI stopped contributing to the Fund. The Fund, in turn, informed PSI that it (and its successor entity, PSI Mechanical, Inc., collectively " Defendants" ) owed " withdrawal liability" pursuant to 29 U.S.C. § 1381. When Defendants failed to pay the sum owed, the Fund filed suit.

Defendants moved to dismiss the action on the ground that the district court did not have personal jurisdiction over them. In the alternative, they sought a change in venue. The district court denied both motions. On the merits, Defendants claimed that PSI never agreed to be bound by an existing collective bargaining agreement requiring participating employers to make contributions to the Fund. The district court disagreed, and granted the Fund's motion for summary judgment. Because we find that (1) the district court had personal and subject matter jurisdiction, (2) venue was proper in Virginia, and (3) PSI bound itself to make contributions to the Fund, we affirm.



We begin by briefly setting out the relevant statutory framework. Congress enacted ERISA to promote the " soundness and stability of [employee benefit] plans" in private industry. 29 U.S.C. § 1001(a). Specifically, ERISA protects " the interests of employees and their beneficiaries" by establishing " minimum standards . . . assuring the equitable character of such plans and their financial soundness." Id. To further that end, Congress in 1980 passed the Multiemployer Pension Plan Amendments Act (the " MPPAA" ). In part, the MPPAA

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 vested benefits and the current value of the plan's assets.

Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 725, 104 S.Ct. 2709, 81 L.Ed.2d 601 (1984) (citing 29 U.S.C. § § 1381, 1391). The purpose of assessing withdrawal liability is " to assign to the withdrawing employer a portion of the plan's unfunded obligations in rough proportion to that employer's relative participation in the plan over the last 5 to 10 years." Borden, Inc. v. Bakery & Confectionery Union & Industry Int'l Pension, 974 F.2d 528, 530 (4th Cir. 1992).

An employer owes withdrawal liability when it makes a complete or partial withdrawal from a pension plan. 29 U.S.C. § 1381(a). In the building and construction industry, a complete withdrawal occurs when: (1) " an employer ceases to have an obligation to contribute under the plan, and" (2) the employer " continues to perform work in the jurisdiction of the collective bargaining agreement of the type for which contributions were previously required." 29 U.S.C. § 1383(b)(2). ERISA treats all trades or businesses that are under common control as a single employer. 29 U.S.C. § 1301(b)(1).[1]

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An employer who disputes an assessment of withdrawal liability may file an objection with the plan sponsor. 29 U.S.C. § 1399(b)(2)(A). " After a reasonable review of any matter raised," the plan sponsor must notify the employer of (1) its decision, (2) the basis for its decision, and (3) " the reason for any change in the determination of the employer's liability or schedule of liability payments." Id. § 1399(b)(2)(B).

An employer dissatisfied with the plan sponsor's response must demand arbitration within a 60-day period after the earlier of the date of the plan sponsor's notification that it has rejected the employer's request for review, or 120 days after the employer's request for review. 29 U.S.C. § 1401(a). " [U]nlike the Federal Arbitration Act, the MPPAA treats an award issuing from such a § 1401 arbitration like an agency determination--the arbitrator decides the issues in the first instance but then the decision is subject to ...

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