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UNITED FOODS, INC. v. WESTERN CONF. OF TEAMSTERS P

March 3, 1993

UNITED FOODS, INC., Plaintiff,
v.
THE WESTERN CONFERENCE OF TEAMSTERS PENSION TRUST FUND, et al., Defendants.


PATEL


The opinion of the court was delivered by: MARILYN HALL PATEL

The Western Conference of Teamsters Pension Trust Fund and its Trustees ("the Fund"), defendant in action number C-92-2725 MHP and plaintiff in action number C-92-2740 MHP, and United Foods, Inc. ("United") bring this consolidated action, seeking review and modification of an arbitrator's calculation and award of United's withdrawal liability under the Multiemployer Pension Plan Amendments Act of 1900 ("MPPAA"), 29 U.S.C. § 1381, et seq. The matter is currently before the court on cross-motions for summary judgment. Having considered the submissions and arguments of the parties, the court enters the following Memorandum and Order.

 BACKGROUND

 The Fund is a "multiemployer pension fund" which administers a "multiemployer pension plan" as defined by the Employee Retirement Income security Act ("ERISA"), 29 U.S.C. § 1002(37)(A), and regulated under the relevant provisions of ERISA, 29 U.S.C. § 1001 et seq. The Fund collects amounts owed by various employers in the Western United States and uses those funds to provide pensions and other benefits to employees of those employers. The plan is a "defined benefit plan" under ERISA, 29 U.S.C. § 1002(35), which means that employees' benefits are not limited solely to contributions made by the employer and therefore employer contributions do not necessarily cover the full cost of the employees' vested benefits. Woodward Sand Co. v. Western Conference of Teamsters Pension Trust Fund, 789 F.2d 691, 694 (9th Cir. 1986). As a result, defined benefit plans often have an "unfunded vested benefit liability," that is, the difference between the fund's current assets and the present actuarial value of employees' vested benefits. Id.

 Congress passed the MPPAA in 1980 to establish a system for calculating and collecting the unfunded vested benefit ("UVB") liability from employers who withdraw from pension plans. See 29 U.S.C. § 1381 et seq.; Woodward Sand, 789 F.2d at 694 (citation omitted). The MPPAA requires that when employers withdraw from a multiemployer pension plan regulated by ERISA, they must pay their proportionate share of the UVB as "withdrawal liability" so that the plan is compensated for benefits which have already vested with the employees at the time of the employer's withdrawal. Id. Otherwise, the financial burden of the employees' vested benefits would shift to other employers in the plan, and ultimately to the Pension Benefit Guaranty Corporation ("PBGC"), which insures such benefits. Central State Pension Fund v. Slotky, 956 F.2d 1369, 1371 (7th Cir. 1992).

 United contributed to the Fund under collective bargaining agreements with Locals 748 and 890 of the International Brotherhood of Teamsters in Modesto and Salinas, California. After various impasses in labor negotiations, United withdrew completely from the Fund in 1988. Pursuant to 29 U.S.C. § 1382, which requires the plan's sponsor to determine the amount of the employer's withdrawal liability, the Fund calculated United's withdrawal liability at $ 1,066,025.23.

 In March 1990 United initiated arbitration under 29 U.S.C. § 1401 to challenge the Fund's withdrawal liability assessment. After extensive discovery, ten days of hearings, and weighty post-hearing submissions, the Arbitrator issued an award and a 98 page decision. The Arbitrator found that the actuarial methods and assumptions used by the Fund were "reasonable in the aggregate and not clearly erroneous" and therefore denied United's request to substantially reduce its withdrawal liability. *fn1" Arbitrator's Award ("Award") at 2. The Arbitrator did, however, hold that death benefits payable to a participating employee's estate or to relatives other than the surviving spouse or dependant children were improperly included in the UVB calculation and ordered that they be deducted from United's withdrawal liability and paid back. Id. Finally, pursuant to 29 U.S.C. § 1401(2), the Arbitrator awarded the Fund $ 135,720 in attorneys' fees, $ 25,218 in expenses, and $ 95,254 in witness fees against United.

 The Fund argues that the Arbitrator's ruling excluding the above mentioned death benefits from the UVB calculation was erroneous and the Fund's full assessment should be reinstated. Except for this slight modification, the Fund urges the court to enforce the Arbitrator's award.

 United challenges the Fund's withdrawal liability assessment and the Arbitrator's award on several grounds: (1) forfeitable death, disability and early retirement benefits were improperly included in the UVB calculation for United's withdrawal liability assessment, (2) the Fund's actuarial assumptions were unreasonable in the aggregate, and (3) the Arbitrator's opinion should be vacated because he refused to hear pertinent and material evidence. United also maintains that the Fund's assessment was not entitled to any presumption of correctness because the Fund's trustees breached various statutory and fiduciary obligations. Finally, United asks this court to vacate the Arbitrator's award of attorneys' fees and costs against them and seeks its fees and costs for the proceedings before this court and the Arbitrator.

 LEGAL STANDARDS

 I. Summary Judgment

 Under Federal Rule of Civil Procedure 56, summary judgment shall be granted:

 
against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial . . . since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial.

 Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986); T.W. Elec. Serv. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987). The moving party bears the initial burden of identifying those portions of the record which demonstrate the absence of a genuine issue of material fact. The burden then shifts to the nonmoving party to "go beyond the pleadings, and by [its] own affidavits, or by 'depositions, answers to interrogatories, or admissions on file' designate 'specific facts showing that there is a genuine issue for trial. Celotex, 477 U.S. at 324; see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986) (a dispute about a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.").

 The moving party does not surmount its initial burden through conclusory allegations as to the state of the material on file, however, it is not required to "support its motion with affidavits or other similar material negating the opponent's claim." Celotex, 477 U.S. at 323. The moving party discharges its burden by showing that the nonmoving party has not disclosed the existence of any "significant probative evidence tending to support the complaint." First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 290, 20 L. Ed. 2d 569, 88 S. Ct. 1575 (1968).

 The court's function on a motion for summary judgment is not to make credibility determinations. Anderson, 477 U.S. at 249. The inferences to be drawn from the facts must be viewed in a light most favorable to the party opposing the motion. T.W. Elec. Serv., 809 F.2d at 631.

 II. Scope of Review

 Under the MPPAA, an arbitrator's factual findings are presumed correct, and the presumption is "rebuttable only by a clear preponderance of the evidence." 29 U.S.C. § 1401 (c); CMSH Co. v. Carpenters Trust Fund For N. Cal., 963 F.2d 238, 239-40 (9th Cir.), cert. denied, 121 L. Ed. 2d 130, U.S. , 113 S. Ct. 185 (1992). The arbitrator's conclusions of law are reviewed de novo. CMSH, 963 F.2d at 240 (citations omitted).

 Although the MPPAA does not provide an explicit standard for reviewing an arbitrator's resolution of mixed questions of law and fact, mixed questions generally are reviewed de novo because they require the court to consider legal concepts and exercise judgment about the values that animate legal principles. Boone v. United States, 944 F.2d 1489, 1492 (9th Cir. 1991); see also Rozay's Transfer v. Local Freight Drivers, L. 208, 850 F.2d 1321, 1331 (9th Cir. 1988) (de novo review for mixed questions of fact and law that require court to assess whether legal duties arise under a given set of facts). If, however, the application of the law to the facts requires an inquiry that is "essentially factual," review is for clear error. Boone, 944 F.2d at 1492; see also Chicago Truck Drivers Pension ...


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