09-2608 Central States Southeast & Southwest Areas Pension Fund v. O’Neill Bros. Transfer & Storage Co.

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Labor
MPAA; ERISA

Under 29 U.S.C. 1399(c)(5)(B), the entire amount of a withdrawal payment is immediately payable upon default and that obligation is not deferred because of the pendency of arbitration.

“[T]he PBGC’s interpretation of the statute is a reasonable reading of the statutory text. It is compatible with the overall Congressional intent of the statutory scheme. With respect to subsection (B), the PBGC’s view is essentially that, when an event occurs indicating a substantial likelihood that the employer will be unable to pay its withdrawal liability, ‘the risk of nonpayment is especially acute.’ Amicus Br. 10. The ’employer’s election to arbitrate will not mitigate’ that risk. Id. at 12. ‘[T]he purpose of section 1399(c)(5)(B) is to allow multiemployer plans to protect themselves and their participants against events indicating a substantial likelihood of an employer’s inability to pay its withdrawal liability . . . .’ Id. If there is a substantial likelihood that an employer will be unable to meet its obligations, then there is a need for urgent action that is not present if the employer simply misses a payment. In the former situation, if the fund is unable to collect quickly, it likely never will collect. The fund, and the employees whose pensions it serves, therefore would be unprotected. Because the PBGC’s reading of the default provision is a reasonable interpretation of an ambiguous statutory text and compatible with the manifest intent of the statute when read as a whole, we must accord it deference. Chevron U.S.A., 467 U.S. at 843.”

Affirmed.

09-2608 Central States Southeast & Southwest Areas Pension Fund v. O’Neill Bros. Transfer & Storage Co.
Appeal from the United States District Court for the Northern District of Illinois, Der-Yeghiayan, J., Ripple, J.

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