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

Background

This action arises under the Employee Retirement Income Security Act (ERISA) and concerns withdrawal liability and the potential transfer of pension assets and liabilities after Mar-Can’s employees changed union representation.

Mar-Can’s bargaining-unit employees previously were represented by International Brotherhood of Teamsters Local 553. Mar-Can contributed to the Local 854 Pension Fund under its collective bargaining agreement with that union. After the employees voted to join Amalgamated Transit Workers Local 854, and the National Labor Relations Board certified the election, the Local 854 Pension Fund sent Mar-Can a demand for $1,798,978 in withdrawal liability, payable in seventeen installments. The opinion states that Mar-Can made each payment. Mar-Can later began contributing to the Amalgamated Transit Workers Local 854 Pension Fund.

ERISA provides for the transfer of assets and liabilities between pension plans when an employer’s withdrawal results from a certified change in collective-bargaining representative and the employees will participate in another multiemployer plan. Mar-Can’s lawsuit seeks to compel the Local 854 Pension Fund to make that transfer and to reduce Mar-Can’s withdrawal liability accordingly.

Motion to Join the New Fund

The Local 854 Pension Fund moved under Federal Rule of Civil Procedure 19 to require Mar-Can to join the Amalgamated Transit Workers Local 854 Pension Fund as a party. Rule 19 requires joinder of a person when, among other circumstances, the court cannot provide complete relief among the existing parties or the person claims an interest that could be impaired by the case or could create a substantial risk of multiple or inconsistent obligations.

The Local 854 Pension Fund argued that the new fund had an interest in the pension transfer and that the new fund’s absence could expose the old fund to inconsistent obligations. The court rejected the motion for two reasons. First, the new fund had not come forward and claimed an interest in the litigation. Second, the old fund faced, at most, the possibility of a later lawsuit requiring it to readjust the transfer values. The court explained that a possibility of later litigation is not the same as a substantial risk of inconsistent obligations for purposes of Rule 19.

Disposition

The court held that the new fund was not a required party under Rule 19(a). Judge Paul E. Davison denied the Local 854 Pension Fund’s motion to compel Mar-Can to join the new fund and directed the Clerk to terminate the pending motion. The opinion does not resolve the underlying dispute over whether the transfer must occur or how Mar-Can’s withdrawal liability should be reduced.