from any obligation to make contributions to the Plans. The dispute between the defendants and their employees in this case is summarized in the Amended Complaint in the Kentucky litigation, which alleges that Adkins & Adkins Coal failed to withhold membership dues and union fees and remit those sums to the UMWA in accordance with a 1981 Wage Agreement. Plaintiffs' Memorandum, Ex. 6 paras. 9, 12. In addition, the defendants allege certain work stoppages and union confrontations since February of 1982.
Although the defendants and their employees are apparently involved in a labor dispute, this finding does not automatically insulate the defendants from all liability in connection with payment of contributions. The purpose of the labor dispute exception is to protect an employer from the threat of withdrawal liability for time period during which its contributions have been temporarily interrupted by labor problems. I.A.M. National Pension Fund, Benefit Plan C v. Schulze Tool and Die Co., Inc., 564 F. Supp. 1285, 1295 (N.D.Cal.1983). This exception, however, does not give an employer the unrestricted ability to permanently cease contributions to a pension plan merely because the "cessation . . . was precipitated by a labor dispute." 126 Cong.Rec. 23,038.
The facts and circumstances in this case strongly suggest that the defendants have permanently withdrawn from the Plans. They have admitted that the entity known as Adkins & Adkins Coal Company, Inc. ceased operations in February of 1982, and was reconstituted as the P & E Coal Company, Inc., a non-union shop. Affidavit of Phillip Adkins at para. 9, attached as Ex. 1 to Defendants' Reply to Plaintiffs' Memorandum in Opposition and Memorandum in Opposition to Plaintiffs' Motion for Summary Judgment and Statement of Facts, filed Aug. 31, 1984. Despite the issuance of withdrawal liability notices by the Fund, the defendants have not made any contributions since February of 1982. Affidavit of Deborah L. Gilleland, Assistant Comptroller of the Withdrawal Liability Section of the UMWA Health and Retirement Funds, at para. 4, filed Aug. 21, 1984. Based on this information, the trustees of the Fund reasonably determined that the defendants' failure to make payments constituted a permanent withdrawal from the Plans.
More importantly, the defendants have forfeited their opportunity to contest the existence or the amount of their withdrawal liability because they blatantly ignored the clear statutory requirements for resolution of disputed withdrawal liability determinations. Within 90 days of receipt of notice and demand for payment, an employer is required to request the plan sponsor to review any dispute concerning the withdrawal liability determination. 29 U.S.C. § 1399(b)(2)(A). If the employer disagrees with the sponsor's decision, it may initiate arbitration. This arbitration must be initiated within 60 days of the date the sponsor notified the employer of the decision on review or within 120 days of the date the employer requested review, whichever is earlier. 29 U.S.C. § 1401(a)(1)(A).
If arbitration is not initiated within the statutory time frame, "the amounts demanded by the plan sponsor . . . shall be due and owing." 29 U.S.C. § 1401(b)(1).
In June of 1983, the trustees notified Adkins & Adkins that it owed $36,171.82 and $11,102.12 in unpaid contributions to the 1950 and 1974 Plans, respectively, and established a payment schedule. The trustees also notified Adkins & Adkins that its failure to abide by the statutory timetable for review would preclude any dispute over the amount owed. Later, in October of 1983, the trustees again demanded payment of the unpaid contributions, in addition to interest. On July 23, 1984, the trustees revised their calculation of the defendants' liability to the 1974 Plan based on a recalculation of unfunded vested benefits. Gilleland Aff. at para. 9. This revision increased the defendants' obligation to the 1974 Plan from $11,102.12 to $14,127.89.
Despite notification of their obligation to pay $50,299.71 in unpaid contributions, Adkins & Adkins did not request review of this determination or seek arbitration.
The requirement of arbitration broadly covers disputes involving "the establishment or amount of withdrawal liability." Shelter Framing Corp. v. Pension Benefit Guaranty Corp, 705 F.2d 1502, 1509 (9th Cir.1983), reversed on other grounds sub nom. Pension Benefit Guaranty Corp. v. R.A. Gray & Company, 467 U.S 717, 104 S. Ct. 2709, 81 L. Ed. 2d 601 (1984). The Act delegates "factfinding functions to administrative-type bodies," Washington Star Co. v. International Typographical Union Negotiated Pension Plan, 235 U.S. App. D.C. 1, 729 F.2d 1502, 1511 (D.C.Cir.1984), and an arbitrator's responsibilities include the interpretation of the statutory language of the Act. Republic Industries, Inc. v. Teamsters Joint Council No. 83 of Virginia Pension Fund, 718 F.2d 628, 634 (4th Cir.1983) (meaning of "facility" under section 1397(a) is arbitrable issue), cert. denied, 467 U.S 1259, 104 S. Ct. 3553, 82 L. Ed. 2d 855 (1984). Thus, an arbitrator could have determined whether a "labor dispute" existed within the meaning of section 1398, and whether the trustees had correctly computed the amount of withdrawal liability owed.
Moreover, the defendants have taken no action which would toll the statutory time frames. See Republic Industries, Inc., 718 F.2d at 644 (filing of suit challenging constitutionality of Act tolls limitations period). Under these circumstances, they have conceded the existence and amount of withdrawal liability owed to the Fund. Board of Trustees of Western Conference of Teamsters Pension Trust Fund v. J. N. Ceazan, 559 F. Supp. 1210, 1218 (N.D.Cal.1983) (citing 29 U.S.C. § 1401(b)(1); Speckmann v. Paddock Chrysler Plymouth, Inc., 565 F. Supp. 469, 473 n. 2 (E.D.Mo.1983).
Amount of Defendants' Withdrawal Liability
While the foregoing discussion establishes that the defendants are legally liable to the Plans for withdrawal liability under ERISA, the amount owed must still be determined. Under 29 U.S.C. § 1132(g)(2), the amount of withdrawal liability equals the sum of unpaid contributions, interest on the unpaid contributions, and liquidated damages, as well as reasonable attorneys' fees and costs.
The $50,299.71 in unpaid contributions will be taken as established.
The Court rejects the defendants' contention that this sum should be decreased by the $50,000 reduction provided by the de minimis rule of 29 U.S.C. § 1389(a). This assertion is barred by the defendants' failure to pursue the arbitration scheme outlined in the statute, and furthermore, it is substantively incorrect. The de minimis rule is not uniformly applicable to all claims for unpaid withdrawal liability. Shelter Framing Corp., 705 F.2d at 1514. For instance, plans which are covered by section 404(c), are statutorily exempt from the operation of the de minimis rule. 29 U.S.C. § 1391(d). This exemption also extends to any continuation of a plan which was subject to section 404(c). Id. The 1950 Plan, as a trust established in the coal industry, is covered by section 404(c). H.R. Rep. No. 2543, 83d Cong., 2d Sess., reprinted in 1954 U.S.Code Cong. & Ad. News 4017, 5280, 5303 (conference report, Internal Revenue Code of 1954). The 1974 Plan is a continuation of the earlier plan. Short v. United Mineworkers of America 1950 Pension Trust, 728 F.2d 528, 531 (D.C.Cir.1984). Thus, the de minimis rule does not apply in this instance, and the full amount of withdrawal liability determined by the trustees is due and owing.
With respect to the determination of the amount of interest and liquidated damages owed to the plaintiffs, the detailed affidavit of Ms. Gilleland is in accordance with the applicable law, see Speckmann v. Paddock Chrysler Plymouth, Inc., 565 F. Supp. at 475, and the Court finds that her affidavit correctly sets forth the withdrawal liability owed as of August 21, 1984. In addition, this interest assessment shall be increased at a daily rate of $15.14, until such time as defendants tender payment of the unpaid contributions. Id. at 476; Gilleland Aff. at para. 11. The Court will entertain requests to amend this finding upon an appropriate showing of interest rate changes.
Moreover, each named defendant is liable to the Fund for the amount of the unpaid withdrawal liability. As the legislative history indicates, "[an] employer contributing to a plan -- will not be able to evade withdrawal liability by going out of business and resuming business under a different identity." 126 Cong.Rec. 23,038. Each entity is under the common control of the defendants Phillip and Earl Adkins, see Affidavits of Earl Adkins (para. 3) and Phillip Adkins (para. 5), attached to Defendants' Motion, filed July 27, 1984, and as such, each is considered a single employer under 29 U.S.C. § 1301(b)(1). Thus, the defendants are jointly and severally liable for the withdrawal of Adkins & Adkins Coal. 29 U.S.C. § 1301(b)(1).