Charles Langone, et.al v. J. Tartaglia Trucking, Inc. et al
Chief Judge Patti B. Saris: MEMORANDUM and ORDER entered. The Fund's motion for summary judgment on Counts I, II, and IV (Docket No. 50 ) is ALLOWED. The Funds motion to dismiss Counts III, V, VI, and VII is ALLOWED.Parties should file proposed form of judgment by February 10, 2017 (Geraldino-Karasek, Clarilde)
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
EDWARD F. GRODEN, as EXECUTIVE
DIRECTOR of the NEW ENGLAND
TEAMSTERS AND TRUCKING INDUSTRY
J. TARTAGLIA TRUCKING, INC.,
TARTAGLIA TRUCKING CO., INC.,
TRI CITY PETROLEUM INC., and
MEMORANDUM AND ORDER
January 27, 2017
This is an action for the collection of withdrawal
liability under the Employee Retirement Income Security Act
of 1974 (“ERISA”), 29 U.S.C. §§ 1001–1461, as amended by
the Multiemployer Pension Plan Amendments Act of 1980
(“MPPAA”). Edward Groden1 brought suit on behalf of the New
England Teamsters and Trucking Industry Pension Fund
The named plaintiff at the commencement of the suit
was Charles Langone, the fund manager of the New England
Teamsters and Trucking Industry Pension Fund. Upon
Langone’s retirement, Groden, the Executive Director of the
Fund, was substituted as plaintiff.
(“Fund”) to collect from J. Tartaglia Trucking, Inc.
(“JTT”). Groden also names as defendants Tartaglia Trucking
Co., Inc. (“TTC”) and Tri City Petroleum, Inc. (“Tri City”)
on the basis that they are businesses under common control
with JTT and therefore jointly and severally liable for the
payment of withdrawal liability.
The Fund moves for summary judgment on Counts I, II,
and IV and moves to dismiss the remaining counts, namely
Counts III, V, VI, and VII. The Fund’s motion (Docket No.
50) is ALLOWED.
The following facts are undisputed except where
The Fund is an “employment benefit plan” within the
meaning of section 3(3) of ERISA, 29 U.S.C. § 1002(3), and
a “multiemployer plan” within the meaning of section
3(37)(A) of ERISA, 29 U.S.C. § 1002(37)(A). Pursuant to the
Fund’s Agreement and Declaration of Trust (“Trust
Agreement”), the Fund receives pension contributions from
participating employers and provides pension benefits to
eligible employees of those employers. Contributing
employers are obligated to pay into the Fund pursuant to
collective bargaining agreements (“CBAs”) between the
employers and the unions participating in the Fund.
Payments into the Fund must be accompanied by monthly
remittance reports identifying each employee performing
work within the scope of the CBA, the number of hours
worked, and the hourly contribution rate.
JTT was a Rhode Island corporation in the business of
hauling dirt, gravel, and asphalt. The sole shareholder was
JTT began participating in the Fund in 1988. JTT’s
obligation to contribute to the Fund arose from a series of
CBAs between JTT and Teamster Local Union 251. The last CBA
that JTT signed expired on April 30, 2003. JTT states that
it did not enter into any subsequent CBA. Nonetheless, JTT
continued to make contributions to the Fund on behalf of
its employees until July 2009, when its last union employee
retired.2 The Fund continued to award pension credit and
benefits to the employees of JTT until 2009 based upon the
Even after 2003, the Fund continued to provide JTT
with preprinted remittance reports for each month.
One of the preprinted fields of the remittance reports
was the hourly contribution rate. The contribution rate
increased every year that JTT was signed onto the CBA and,
after 2003, the contribution rate continued to increase
annually in the statewide Rhode Island construction
agreement. The preprinted remittance reports reflected
those annual increases even after 2003, when JTT ceased to
be a CBA signatory. The rate was $4.21 per hour at the time
the 2000–2003 CBA expired. The rate rose to $5.26 per hour
contributions paid and the hours of service reported by
JTT. Between August 2009 and August 2013, JTT submitted “no
hours” remittance reports to the Fund.
On December 10, 2013, Jesse Tartaglia notified the
Fund that JTT would no longer contribute to the Fund
because its last union employee retired in July 2009.
On January 6, 2014, the Fund notified JTT of its
withdrawal from the Fund and demanded payment of JTT’s
proportionate share of the Fund’s unfunded vested benefit
liability. See 29 U.S.C. § 1399(b)(1). The notice
determined a withdrawal date of August 1, 2009 and
calculated an unpaid withdrawal liability of $544,308 based
on contributions paid from October 1998 to September 2008.3
In letters dated March 13 and 17, 2014, JTT requested
review of the withdrawal liability assessment. See id.
In a letter dated April 7, 2014, the Fund responded to
the request for review by confirming the amount of the
withdrawal liability. See id. § 1399(b)(2)(B). The letter
informed JTT that “[i]f you disagree with this
determination, you have the right to dispute the decision
A worksheet attached to the Notice explains the
calculation, which is based on the formula in Article XV of
the Fund’s Rules and Regulations.
in accordance with the attached Article XV of the Fund’s
Rules and Regulations.”
In a letter dated April 14, 2014, JTT requested
further review of the withdrawal liability assessment on
the basis of the construction industry exemption in ERISA
section 4203(b), 29 U.S.C. § 1383(b).
In a letter dated July 7, 2014, the Fund replied with
a determination that JTT was ineligible for the
construction industry exemption.
The parties agree that since that time, JTT has not
made any payments or filed a request for arbitration.
TTC is a corporation in the business of freight
trucking. Jesse Tartaglia was the sole shareholder of TTC
at the time of JTT’s withdrawal from the Fund.
Tri City is a corporation in the oil industry. At the
time of JTT’s withdrawal from the Fund, ownership of Tri
City was split evenly between Jesse Tartaglia and his wife,
The operative complaint is the First Amended
Complaint, filed by the Fund on April 21, 2015. There are
seven counts: (1) withdrawal liability against JTT; (2)
withdrawal liability against TTC as a business under common
control; (3) withdrawal liability against TTC as an alter
ego of JTT; (4) withdrawal liability against Tri City as a
business under common control; (5) failure to complete a
required withdrawal questionnaire by Jesse Tartaglia, in
violation of section 4219(a) of ERISA, 29 U.S.C. § 1399(a);
(6) failure to pay pension contributions by JTT; (7)
failure to pay pension contributions by TTC as an alter ego
The Fund moved for summary judgment on Counts I, II,
and IV. The Fund also moved to dismiss the remaining
counts, Counts III, V, VI, and VII.
Summary Judgment Standard
Summary judgment is appropriate when 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). To succeed on a motion for summary judgment, the
moving party must demonstrate that there is an “absence of
evidence to support the nonmoving party’s case.” Sands v.
Ridefilm Corp., 212 F.3d 657, 661 (1st Cir. 2000) (citing
Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)). Once
such a showing is made, “the burden shifts to the nonmoving
party, who must, with respect to each issue on which she
would bear the burden of proof at trial,” come forward with
facts that demonstrate a genuine issue of material fact.
Borges ex rel. S.M.B.W. v. Serrano–Isern, 605 F.3d 1, 5
(1st Cir. 2010) (citing Celotex, 477 U.S. at 324).
“A genuine issue exists where a reasonable jury could
resolve the point in favor of the nonmoving party.” Meuser
v. Fed. Express Corp., 564 F.3d 507, 515 (1st Cir. 2009).
“A party cannot survive summary judgment simply by
articulating conclusions the jury might imaginably reach;
it must point to evidence that would support those
conclusions.” Packgen v. BP Expl. & Prod., Inc., 754 F.3d
61, 67 (1st Cir. 2014). A material fact is “one that has
the potential of affecting the outcome of the case.”
Calero–Cerezo v. U.S. Dep’t of Justice, 355 F.3d 6, 19 (1st
In its review of the evidence, the Court must
“examin[e] the facts in the light most favorable to the
nonmoving party” and draw all reasonable inferences in its
favor to “determine if there is sufficient evidence
favoring the nonmoving party for a jury to return a verdict
for that party.” Sands, 212 F.3d at 661. The Court must
ignore “conclusory allegations, improbable inferences, and
unsupported speculation” at the summary judgment stage.
Chiang v. Verizon New England Inc., 595 F.3d 26, 30 (1st
Cir. 2010). “Ultimately, credibility determinations, the
weighing of the evidence, and the drawing of legitimate
inferences from the facts are jury functions, not those of
a judge.” Sensing v. Outback Steakhouse of Fla., LLC, 575
F.3d 145, 163 (1st Cir. 2009).
MPPAA/ERISA Withdrawal Liability
“The MPPAA was enacted in response to a crisis facing
multi-employer pension plans from which employers had
withdrawn in increasing numbers, leaving the plans without
adequate funds to pay vested employee benefits.” Giroux
Bros. Transp. v. New England Teamsters & Trucking Indus.
Pension Fund, 73 F.3d 1, 2–3 (1st Cir. 1996). “The MPPAA
was enacted by Congress to protect the viability of defined
pension benefit plans, to create a disincentive for
employers to withdraw from multiemployer plans, and also to
provide a means of recouping a fund’s unfunded liabilities.
As such, the MPPAA requires employers withdrawing from a
multiemployer plan to pay their proportionate share of the
pension fund’s vested but unfunded benefits.” Sun Capital
Partners III, LP v. New England Teamsters & Trucking Indus.
Pension Fund, 724 F.3d 129, 138 (1st Cir. 2013). A pension
plan’s unfunded vested liability is “the difference between
the present value of vested benefits and the current value
of the plan’s assets.” Pension Ben. Guar. Corp. v. R.A.
Gray & Co., 467 U.S. 717, 725 (1984); see also 29 U.S.C.
§§ 1381, 1391. An employer completely withdraws from a
multiemployer plan when it “permanently ceases to have an
obligation to contribute under the plan” or “permanently
ceases all covered operations under the plan.” 29 U.S.C.
“As soon as practicable after an employer’s complete
or partial withdrawal,” a pension plan must notify the
employer of the amount of the withdrawal liability and
demand payment. Id. § 1399(b)(1). No later than ninety days
after receiving that notice, the employer may ask the
pension plan to review its determination of the withdrawal
liability. Id. § 1399(b)(2)(A). “After a reasonable review
of any matter raised,” the pension plan must notify the
employer of its decision. Id. § 1399(b)(2)(B).
Any dispute about “a determination made under [28
U.S.C. § 1381] through [28 U.S.C. § 1399]” is subject to
mandatory arbitration. Id. at § 1401(a)(1). The arbitration
must be initiated within sixty days of the earlier of (A) a
plan’s notification to the employer of its decision on a
request for review or (B) 120 days after the employer’s
request for review. Id.
If no arbitration is initiated, “the amounts demanded
by the plan sponsor . . . shall be due and owing on the
schedule set forth by the plan sponsor. The plan sponsor
may bring an action in a State or Federal court of
competent jurisdiction for collection.” Id. at
It is undisputed that none of the defendants ever
sought arbitration or made a payment on the withdrawal
liability. The Fund calculates the arbitration filing
deadline as having been June 8, 2014, based on JTT’s April
9, 2014 receipt of the Fund’s response to its request for
review. See 29 U.S.C. § 1401(a)(1)(A). The Fund argues that
at that point, the amount of the withdrawal liability
became “due and owing,” id. at § 1401(b)(1), meaning that
the amount was no longer subject to dispute by the
Courts have uniformly held that by failing to
arbitrate, an employer waives any defenses to withdrawal
liability that could have been heard before the arbitrator.
See Bd. of Trustees, Sheet Metal Workers’ Nat’l Pension
Fund v. BES Servs., Inc., 469 F.3d 369, 376 (4th Cir.
2006); Cent. States, Se. & Sw. Areas Pension Fund v.
Midwest Motor Exp., Inc., 181 F.3d 799, 805 (7th Cir.
1999); Trustees of Colo. Pipe Indus. Pension Trust v.
Howard Elec. & Mech. Inc., 909 F.2d 1379, 1385 (10th Cir.
1990); I.A.M. Nat’l Pension Fund, Plan A, A Benefits v.
Clinton Engines Corp., 825 F.2d 415, 429 (D.C. Cir. 1987).
That is the case here.
Courts have explained that seemingly harsh result by
noting Congress’s intention to enact a broad arbitration
requirement in the MPPAA. “[A]rbitration reigns supreme
under the MPPAA. And the consequences of failing to
arbitrate . . . are clearly enunciated by the statute.”
I.A.M. Nat’l Pension Fund, 825 F.2d at 422; see also
Robbins v. Admiral Merchs. Motor Freight, Inc., 846 F.2d
1054, 1056 (7th Cir. 1988) (“The resounding message is that
arbitration is the preferred method for resolving pension
plan disputes and that failure to arbitrate will have
The defendants’ make three types of arguments in
response: lack of employer status, deficient notice, and
laches. None carries the day for the defendants.
The defendants argue that JTT, TTC, and Tri City were
not “employers” within the meaning of the MPPAA so they
could not be subject to withdrawal liability. The
defendants argue that for the same reason, they could not
be subject to the mandatory arbitration requirement.
Employer status is a threshold legal question that
determines the applicability of the MPPAA and its
arbitration provision, so judicial resolution of that
question is required. N.Y. State Teamsters Conference
Pension & Ret. Fund v. Express Servs., Inc., 426 F.3d 640,
645 (2d Cir. 2005); Galgay v. Beaverbrook Coal Co., 105
F.3d 137, 142 (3d Cir. 1997); Mason & Dixon Tank Lines,
Inc. v. Cent. States, Se. & Sw. Areas Pension Fund, 852
F.2d 156, 167–68 (6th Cir. 1988).
However, “a number of courts have drawn a distinction
between disputes over (1) whether the defendant was ever an
employer obligated under the MPPAA to make payments to the
plaintiff pension fund, and (2) whether the defendant
ceased to have that obligation before the payments in
question became due. Courts addressing this distinction
have uniformly held that the former question is for the
court, while the latter is for the arbitrator.” N.Y. State
Teamsters Conference Pension & Ret. Fund, 426 F.3d at 646
As to JTT, the dispute is over the latter: whether in
2003, JTT ceased to become an “employer” subject to
withdrawal liability. JTT does not contest that, at some
point previously, it was an employer under the MPPAA that
contributed to the Fund pursuant to a CBA obligation. As
such, JTT’s employer status was subject to arbitration.
As to TTC and Tri City, whether those companies were
“under common control” with JTT and should therefore be
treated as a “single employer” with JTT for purposes of
withdrawal liability, 29 U.S.C. § 1301(b)(1), might be a
question subject to judicial resolution. But TTC and Tri
City do not contest that they are businesses under common
control with JTT because of their shared ownership. See 29
C.F.R. §§ 4001.2, 4001.3. As TTC and Tri City conceded at
the motion hearing, their defense against withdrawal
liability rises and falls with that of JTT.
First, the defendants argue that they were not
sufficiently notified of the MPPAA’s arbitration
requirement. Specifically, the defendants complain that the
Fund’s notice of withdrawal liability did not explain that
failure to seek arbitration would cause the defendants to
lose their ability to assert their defenses. The only
notice that is statutorily required is notice of the amount
of withdrawal liability and the schedule for liability
payments. 29 U.S.C. § 1399(b)(1)(A). The Fund had no
obligation to explain to the defendants the statutory
consequences of their failure to seek arbitration.
Second, the defendants argue that the Fund’s notice of
withdrawal liability was prejudicially misleading because
the notice referred to the Fund’s Rules and Regulations,
which stated that any dispute had to be filed with the
American Arbitration Association. The defendants claim that
they never signed the Fund’s Rules and Regulations so all
that they were legally required to do under 29 C.F.R.
§ 4221.3(d) was to send a notice of arbitration to the
Fund. Therefore, the defendants argue, the Fund’s notice
was prejudicially misleading by suggesting that the
arbitration had to be initiated specifically with the
American Arbitration Association and that the defendants
would have to pay the $6,200 filing fee.
But the MPPAA provides that “[a]n arbitration
proceeding under this section shall be conducted in
accordance with fair and equitable procedures to be
promulgated by the [Pension Benefit Guaranty Corporation].”
29 U.S.C. § 1401(a)(2). The PBGC regulations prescribe
arbitration procedures but also provide that the PBGC may
approve alternative arbitration procedures. 29 C.F.R.
§ 4221.14. One of those approved procedures is the
“Multiemployer Pension Plan Arbitration Rules” by the
International Foundation of Employee Benefit Plans, which
provides for arbitration to be initiated by filing with the
American Arbitration Association and paying the requisite
fee. See 50 Fed. Reg. 38046-03 (Sept. 19, 1985) (approving
alternative procedure). Whether or not JTT ever signed on
to the Fund’s Rules and Regulations is beside the point
because the requirement in the Rules and Regulations that
arbitration be conducted through the American Arbitration
Association was approved by the PBGC, as provided for by
the MPPAA. Anyway, it bears pointing out that defendants
never demanded arbitration in any forum.
The defendants raise the defense of laches and claim
that the Fund’s 2014 determination of withdrawal liability
was untimely given that JTT ceased having an obligation to
make contributions to the Fund in 2003. The First Circuit
has held that “questions concerning the timeliness of a
plan sponsor’s demand are governed exclusively by [29
U.S.C.] § 1399(b)(1).” Giroux Bros. Transp., 73 F.3d at 3.
That section requires that the Fund’s notice be “[a]s soon
as practicable after an employer’s complete or partial
withdrawal.” 29 U.S.C. § 1399(b)(1). “[A]ny dispute
regarding the timeliness of the Fund’s demand under
§ 1399(b)(1) [i.e. whether it was “as soon as practicable”]
is statutorily committed to arbitration in the first
instance. This is no less so because it may also involve a
measure of statutory interpretation.” Giroux Bros. Transp.,
73 F.3d at 4; see also Vaughn v. Sexton, 975 F.2d 498, 502
(8th Cir. 1992).
The Fund’s motion for summary judgment on Counts I,
II, and IV (Docket No. 50) is ALLOWED. The Fund’s motion to
dismiss Counts III, V, VI, and VII is ALLOWED.
Parties should file proposed form of judgment by
February 10, 2017.
/s/ PATTI B. SARIS
Patti B. Saris
Chief United States District
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