United States District Court, N.D. California
ORDER DENYING PLAINTIFFS' MOTION FOR SUMMARY
JUDGMENT AND GRANTING DEFENDANTS' CROSS-MOTION FOR
SUMMARY JUDGMENT Re: ECF No. 22, 23
TIGAR United States District Judge
the Court is Plaintiffs' motion for summary judgment, ECF
No. 22, and Defendants' cross-motion for summary
judgment, ECF No. 23. The Court will deny Plaintiffs' motion
and grant Defendants' motion.
South City Motors, Inc., Capital Expressway Ford, Inc., and
Sunnyvale/ Peninsula Ford of Sunnyvale, are motor dealerships
associated with Plaintiff, Ford Motor Company. ECF No. 22-1
at 6. Plaintiffs contributed to Defendant Automotive
Industries Pension Trust Fund (“the Trust Fund”)
at various times. ECF No. 20 at 390. The Trust Fund is a
multiemployer pension plan established under the Employee
Retirement Income Security Act of 1974 (“ERISA”)
as amended by the Multiemployer Pension Plan Amendments Act
of 1980 (“MPPAA”). ECF No. 20 at 213; ECF No. 23
2005, South City Motors and Capitol Expressway entered into
collective bargaining agreements that required each to make
contributions to the Fund. ECF No. 20 at 361. South City
Motors signed a Pension Agreement with the Trust Fund
agreeing to be bound by the provisions of the Trust Agreement
in September 2005. Id. at 360-61. Capitol Expressway
signed a Pension Agreement effective on August 27, 2005.
Id. at 361.
dispute in this case concerns Plaintiffs' withdrawal
liability to the Trust Fund. Under ERISA, pension plans may
“impose proportional liability on withdrawing employers
for the unfunded vested benefit obligations of multiemployer
plans.” Carpenters Pension Trust Fund for N.
California v. Underground Const. Co., Inc., 31 F.3d 776,
778 (9th Cir. 1994). “Where a withdrawing
employer's past contributions are insufficient to fund
pension plan obligations that have already vested at the time
of withdrawal, the MPPAA amendments enable plans ‘to
make withdrawing employers pay their proportionate share of
the deficit such that remaining employers [will] not be
unfairly saddled with increased payments.'”
Auto. Indus. Pension Tr. Fund v. Tractor Equip. Sales,
Inc., 73 F.Supp.3d 1173, 1179 (N.D. Cal. 2014),
aff'd, 672 Fed.Appx. 685 (9th Cir. 2016)
(quoting Carpenters Pension, 31 F.3d at 778).
This “withdrawal liability” is assessed against
the withdrawing employer, and 29 U.S.C. § 1301(b)(1)
defines “employer” to include not only the entity
obligated to contribute to the pension plan, but also all
“trades or businesses” that are under
“common control” with that entity. See
29 U.S.C. § 1301(b)(1). Congress enacted section
1301(b)(1) “to prevent businesses from shirking their
ERISA obligations by fractionalizing operations into many
separate entities.” Teamsters Pension Trust
Fund-Bd. of Trustees of W. Conference v. Allyn Transp.
Co., 832 F.2d 502, 507 (9th Cir.1987); see also, Bd.
of Trustees of W. Conference of Teamsters Pension Trust Fund
v. Lafrenz, 837 F.2d 892, 894 (9th Cir.1988) (“The
point of section 1301(b)(1) is simply to prevent the
controlling group . . . from avoiding withdrawal liability by
shifting corporate assets into other business ventures under
Id. at 1179-80.
ERISA also permits a multiemployer plan to adopt a walk-away
provision that allows employers to participate in that plan
for a limited period of time without incurring pension
withdrawal liability upon withdrawal from the plan.
See ERISA § 4201; 29 U.S.C. § 1390(a).
Such a term is called a “free look provision.”
The free look provision exempts an employer from withdrawal
liability if the employer had an obligation to contribute to
the plan after March 1, 2005 and meets certain conditions.
See U.S.C. § 1390.
March 1, 2005, the Trust Fund amended its Trust Agreement to
adopt a free look provision. ECF No. 20 at 360. This
provision allowed an employer participant to withdraw from
the plan if the employer had been participating for less than
five years. Id. South City Motors and Capitol
Expressway withdrew from the Plan after contributing for
fewer than five years. Id. at 361. The Trust Fund
issued a withdrawal assessment against South City Motors and
“and all commonly controlled trades or businesses
(‘the Ford Control Group').” ECF No. 29 at
221. This assessment calculated “withdrawal liability
on the basis of South City Motor's membership in a
controlled group of contributing employers that were at least
80% owned by Ford, including the Dealerships.” ECF No.
1 ¶ 33.
City Motors, Ford Motor Company, and the Ford control group
requested a review of the Trust Fund's 2012 withdrawal
liability assessment. Id. at 390-91. On or about
October 19, 2012, the Trust Fund rejected all of
Plaintiffs' grounds for review. Id. On December
17, 2012, South City Motors, Capitol Expressway, Ford Motor
Company, and the Ford control group demanded arbitration of
the Trust Fund's withdrawal liability assessments.
Id. at 391. On February 24, 2017, the Arbitrator
issued an award in favor of the Trust Fund. See Id.
at 11-23. On May 22, 2017, the Arbitrator issued an order
approving the Trust Fund's request for attorney's
fees. See Id. at 10. The Arbitrator issued a final
award on July 8, 2017. See Id. at 7. Plaintiffs
filed an action seeking to modify or vacate the award on
August 7, 2017. See ECF No. 1. Defendants filed an
action seeking to enforce the award on the same day. See
Automotive Industries Pension Trust Fund v. South City
Motors, Inc., et al, No. 17-cv-4491 JST, ECF No. 1.
judgment is proper when a “movant shows that there is
no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed.R.Civ.P.
56(a). Where the party moving for summary judgment would bear
the burden of proof at trial, that party “has the
initial burden of establishing the absence of a genuine issue
of fact on each issue material to its case.” C.A.R.
Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d
474, 480 (9th Cir.2000). Where the party moving for summary
judgment would not bear the burden of proof at trial, that
party “must either produce evidence negating an
essential element of the nonmoving party's claim or
defense or show that the nonmoving party does not have enough
evidence of an essential element to carry its ultimate burden
of persuasion at trial.” Nissan Fire & Marine
Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102 (9th Cir.
2000). If the moving party satisfies its initial burden of
production, the nonmoving party must produce admissible
evidence to show that a genuine issue of material fact
exists. Id. at 1102-03. If the nonmoving party fails
to make this showing, the moving party is entitled to summary
judgment. Celotex Corp. v. Catrett, 477 U.S. 317,
Review of Arbitration Proceedings
completion of the arbitration proceedings in favor of one of
the parties, any party thereto may bring an action, no later
than 30 days after the issuance of an arbitrator's award,
in an appropriate United States district court in accordance
with section 1451 of this title to enforce, vacate, or modify
the arbitrator's award.” 29 U.S.C. §
1401(b)(2). “In any proceeding under subsection (b),
there shall be a presumption, rebuttable only by a clear
preponderance of the evidence, that the findings of fact made
by the arbitrator were correct.” 29 U.S.C. §
1401(c). “The arbitrator's conclusions of law are
reviewed de novo. Whether a withdrawal within the meaning of
the statute has occurred presents a mixed question of law and
fact.” Penn Cent. Corp. v. W. Conference of
Teamsters Pension Tr. Fund, 75 F.3d 529, 533 (9th Cir.
1996) (internal quotation marks and citations omitted).
arbitrator's award of attorney fees is reviewed for an
abuse of discretion. GCIU-Employer Ret. Fund v.
Quad/Graphics, Inc., 250 F.Supp.3d 551, 558 (C.D. Cal.
2017) (citing Penn Cent. Corp. v. W. Conference of
Teamsters Pension Trust Fund, 75 F.3d 529, 533 (9th Cir.
1996); see also Trs. of Utah Carpenters' & Cement
Masons' Pension Trust v. Loveridge, 567 Fed.Appx.
659, 662 (10th Cir. 2014).
have submitted a joint stipulated record in support of their
motion for summary judgment. See ECF No. 20.
Plaintiffs argue that (1) the Arbitrator erred by denying
plaintiffs an evidentiary hearing and issuing an award on the
Trust Fund's summary judgment motion; (2) the Arbitrator
misapplied the law by failing to apply statutory withdrawal
liability exemptions applicable to control group members; (3)
the Arbitrator improperly interpreted the parties' 2007
settlement and permitted the Trust Fund to assess liability
based on contribution histories predating the settlement; and
(4) the Trust Fund is not entitled to attorney's fees.
ECF No. 22-1 at 2. Defendants argue that the Arbitrator did
not err. ECF No. 23 at 3. ...