The National Retirement Fund v. The Ruprecht Company

Background

The National Retirement Fund and the Board of Trustees of the National Retirement Fund, acting for the Legacy Plan of the National Retirement Fund, sued The Ruprecht Company to collect unpaid withdrawal-liability payments and related damages. Withdrawal liability is an amount an employer may owe a multiemployer pension plan after withdrawing from it. The dispute arose under the Employee Retirement Income Security Act of 1974 (ERISA) and the Multiemployer Pension Plan Amendments Act.

Ruprecht withdrew from the Fund on November 1, 2014. In January 2015, the Fund issued an original assessment of $7,641,914, payable in 80 quarterly installments. After later litigation concerning the interest rate used to calculate withdrawal liability, the Fund issued a revised assessment in 2020. The revised assessment reduced the withdrawal-liability principal to $2,160,216 and required 27 quarterly payments totaling $2,664,072.91, including interest.

By the time of the revised assessment, Ruprecht had paid $2,284,440.96. The Fund nevertheless determined that four additional quarterly payments were due on December 1, 2020, March 1, 2021, June 1, 2021, and September 1, 2021. Ruprecht did not make those payments when due. The Fund filed this action on June 4, 2021, seeking the missed payments, interest, liquidated damages, attorneys’ fees, costs, and injunctive relief. Ruprecht paid all four missed payments on February 18, 2022, after the lawsuit had begun.

Motions and parties’ arguments

The Fund moved for summary judgment. Summary judgment is a decision without a trial when the evidence shows no genuine dispute over facts that could affect the result and the moving party is entitled to judgment under the law. Ruprecht filed a cross-motion for summary judgment.

The Fund argued that ERISA required an award of interest, liquidated damages, and attorneys’ fees and costs because the four payments were unpaid when the action was filed. Ruprecht argued that it should receive a refund of the four payments, with interest, because it was unfair for the Fund to retain them. Ruprecht also argued that the Fund’s original assessment had used an improper interest rate and that the Fund’s claim was not legally substantial enough to support the requested remedies.

Court’s analysis

The court applied ERISA’s requirement that an employer generally pay withdrawal liability while challenging the assessment—a rule commonly described as “pay now, dispute later.” Under the statute, a missed withdrawal-liability payment is treated like a delinquent pension contribution. The court explained that, in an action to collect delinquent contributions, ERISA requires the award of the unpaid amount, interest, the greater of interest or qualifying liquidated damages, and reasonable attorneys’ fees and costs.

The court held that the statute and Second Circuit precedent required the Fund’s requested relief because Ruprecht had outstanding payments when the Fund filed suit. Ruprecht’s later payment of those amounts did not eliminate the Fund’s entitlement to the additional remedies.

The court declined to adopt the equitable exception urged by Ruprecht. That proposed exception would excuse interim payments in some circumstances when a pension fund’s claim is frivolous or not legally substantial. The court noted that the Second Circuit had not adopted the exception and that district courts in the circuit had rejected similar arguments. The court further held that even if such an exception applied, the Fund’s claim based on the revised assessment was not meritless. The action concerned the revised assessment, not the original assessment, and Ruprecht did not dispute the revised assessment’s accuracy or the fact that the four payments were made only after the lawsuit began.

Disposition

The court granted Plaintiffs’ motion for summary judgment and denied Defendant’s cross-motion for summary judgment. It held that Plaintiffs were entitled to interest, liquidated damages, and reasonable attorneys’ fees and costs. The court ordered the parties to confer and submit a proposed judgment within ten days, with fees and costs limited to those incurred in this litigation. The opinion did not itself set the final dollar amounts of that judgment.