Mar-Can Transportation Company, Inc. v. Local 854 Pension Fund

Background

The court previously entered judgment for Mar-Can under 29 U.S.C. § 1415. The judgment required Local 854 Pension Fund, described as the “Old Plan,” to transfer pension assets and liabilities to the ATW Fund, described as the “New Plan,” and to reduce Mar-Can’s withdrawal liability. The Fund appealed the judgment, and Mar-Can filed a cross-appeal.

Before the court in this opinion was the Fund’s request to stay enforcement of the judgment while the appeal was pending. The Fund also sought to keep Mar-Can’s escrowed withdrawal-liability payments in place. Although the motion did not expressly request a stay of Mar-Can’s attorneys’ fees application, both parties briefed that issue, and the court considered it.

Statutory and Prior Ruling Framework

The court explained that the Employee Retirement Income Security Act and the Multiemployer Pension Plan Amendments Act generally require an employer to make withdrawal-liability payments according to a pension plan’s payment schedule while the employer pursues review or arbitration. This is commonly described as a “pay now, dispute later” system.

In the earlier decision, the court interpreted § 1415(c) to mean that the reduction in Mar-Can’s withdrawal liability should be calculated by subtracting the value of the transferred assets from the value of the total transferred liabilities. Applying the undisputed values discussed in the earlier decision, the court understood that the reduction would bring Mar-Can’s withdrawal liability to the Old Plan to zero. The resulting payments would therefore be overpayments.

The court held that the Fund’s calculation and application of the § 1415(c) reduction would require the Fund to determine the amount of any overpayment. Under the cited regulation, an overpayment must be refunded with interest. Because Mar-Can had paid the disputed amounts into the court’s registry rather than directly to the Fund, the court concluded that the escrowed funds should be returned to Mar-Can.

Stay Pending Appeal

The court treated the judgment as monetary in nature. For a monetary judgment, Federal Rule of Civil Procedure 62 generally allows a stay through a supersedeas bond or other approved security. The court stated that the Fund had not addressed the factors governing waiver of the bond requirement, so it declined to treat the motion as requesting such a waiver.

The court also concluded that the Fund had not satisfied the traditional stay factors. The Fund had not made a strong showing that it was likely to succeed on appeal; pointing to conflicting interpretations of § 1415(c) was not enough. The Fund also had not shown irreparable harm from returning the escrowed payments. The court noted that the money was already unavailable to the Fund while held in escrow, that Mar-Can had made its interim payments, and that the Fund offered no evidence that Mar-Can would be unable to repay money if the Fund later prevailed. Because the Fund failed to satisfy the two most important factors, the court did not address the remaining factors.

Attorneys’ Fees

The court exercised its discretion to defer ruling on Mar-Can’s attorneys’ fees application until the appeal was resolved. If the Fund prevailed on appeal, Mar-Can would no longer be the prevailing party for purposes of seeking fees. If Mar-Can remained the prevailing party, it could file its fee motion within 14 days after the appellate mandate was entered on the district court’s docket.

Disposition

Judge Cathy Seibel denied the Fund’s motion for a stay pending appeal. She granted the Fund’s motion for a stay of Mar-Can’s motion for attorneys’ fees. The court directed the Clerk to return Mar-Can’s escrowed payments, with accumulated interest, and directed the Clerk to terminate the pending motion and close the case.