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I.A.M. NATL. PENSION FUND BEN. PLAN v. DRAVO CORP.

October 23, 1985

I.A.M. NATIONAL PENSION FUND BENEFIT PLAN A, et al., Plaintiffs,
v.
DRAVO CORPORATION, Defendant


Louis F. Oberdorfer, United States District Judge.


The opinion of the court was delivered by: OBERDORFER

LOUIS F. OBERDORFER, UNITED STATES DISTRICT JUDGE

 I.

 Plaintiff, I.A.M. National Pension Fund Benefit Plan A ("the Plan"), *fn1" is a "multiemployer pension plan" as defined by 29 U.S.C § 1002(37). Defendant, Dravo Corporation, is an employer which contributed to the Plan from 1969 to 1982 for the account of its employees at a fabricating division in Hastings, Nebraska. On April 27, 1982, Dravo agreed to and did sell the assets of that division to Hastings Industries, Inc. Pursuant to the assets sale agreement, Hastings Industries assumed Dravo's obligation for contributions to the Plan under 29 U.S.C. § 1384 and secured that obligation with a bond as contemplated by 29 U.S.C. § 1384(a)(1)(B). By letter dated August 11, 1982, the Plan advised Dravo that the Plan accepted documents submitted by Dravo as "permitting the avoidance of the payment of a withdrawal liability by Hastings Industries." By letter dated July 27, 1984, the Plan notified Dravo that withdrawal liability was due and assessed $ 339,418.00, payable in eight quarterly installments. Dravo disputed this assessment, has not paid any portion of it, and the withdrawal liability dispute is now in arbitration pursuant to 29 U.S.C. § 1401(a)(1). A hearing on that arbitration was scheduled and was conducted July 12, 1985.

 The Plan brought this suit on the theory that Dravo is obligated to pay the withdrawal liability upon demand and that arbitration does not suspend that obligation. It seeks a summary judgment for the installments which would be due if Dravo had not contested its withdrawal liability, plus interest, penalties and attorney fees which are imposed by 29 U.S.C. § 1132(g) upon employers who force a plan to sue for past due contributions.

 Defendant opposes the summary judgment motion on the theory that the statute does not require payment of withdrawal liability pending arbitration of a dispute as to whether an employer is liable. According to defendant, arbitration suspends the employer's withdrawal payment obligation except where the dispute in arbitration is the amount of the liability. Defendant further contends that the Plan has a burden of proving withdrawal before it can be awarded a judgment, and that there is a material issue as to whether defendant had withdrawn from the Plan when it transferred its Hastings assets.

 II.

 While certain equities might support defendant's theory, its position is overwhelmed by the plain language of the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), its legislative history and several court decisions in this district and elsewhere. 29 U.S.C. § 1399(c)(2) (emphasis added) provides that:

 
withdrawal liability shall be payable in accordance with the schedule set forth by the plan sponsor . . . no later than 60 days after the date of the demand notwithstanding any request for review or appeal of determinations of the amount of such liability or of the schedule.

 This provision is implemented by 29 U.S.C. § 1401(d) relating to "payments by employer prior and subsequent to determination by arbitrator." It provides that:

 
Payments shall be made by an employer in accordance with the determinations made under this part until the arbitrator issues a final decision with respect to the determination submitted for arbitration, with any necessary adjustments in subsequent payments for overpayments or underpayments arising out of the decision of the arbitrator with respect to the determination.

 The legislative history of MPPAA indicates that one of its purposes was to reduce the incentive inherent in the original act for employers to withdraw from financially troubled plans. See H.R. Rep. No. 96-869, Part I, 96th Cong., 2d Sess. 60, 67, reprinted in 1980 U.S. Code Cong. & Ad. News 2918 at 2928 and 2935. As succinctly summarized in a Second Circuit decision:

 
no matter what disputes arise between the old plan sponsor and the employer over the amount of liability, the employer is obligated to pay the withdrawal liability demanded as soon as the plan sponsor has provided notice of the payment schedule. . . .
 
. . . Congress made the requirement that the employer promptly pay its withdrawal liability ...

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