notified by mail of a status conference scheduled for June 1, 1993. However, Defendants telephoned counsel for the Plaintiffs on May 28, 1993, explaining that they had not yet obtained counsel, and Defendants failed to appear at that status conference. In a letter dated June 4, 1993, Plaintiffs advised Defendants of a second status call scheduled for June 21, 1993, but Defendants did not appear at that conference. Plaintiffs filed an Application for Entry of Default in July 20, 1993, stating that (1) the Defendants were served on June 17, 1993; (2) the Court received proof of service on June 25, 1993; (3) the Defendants' time in which to answer or otherwise respond to the Complaint had expired; and (4) the Defendants failed to enter an appearance. On July 26, 1993, the Court issued an Order of Default and Judgment.
II. COURT'S JURISDICTION OVER DEFENDANT HARDEN
The threshold question before the Court is whether it has jurisdiction over Harden in this case. More specifically, the issue is whether Harden is an employer under the Employment Retirement Income Security Act of 1974 ("ERISA"), as amended by the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA").
Harden asserts that he is not an "employer" under ERISA, and therefore the Plaintiffs may not use ERISA's nationwide service of process provisions. The heart of Harden's argument is that because Harden Construction was out of operation when Old Mill and Harden Trucking withdrew, his sole proprietorship was not a trade or business under common control on that date and is consequently not an "employer" for the purposes of withdrawal liability. Contending that he was out of business well before the date of the alleged earliest withdrawal, he reasons that he dropped out of the controlled group in time to avoid liability.
The Court holds that because Harden qualifies as an employer under ERISA, the Court has jurisdiction and its entry of default judgment against Harden is valid. Once an employer withdraws from a multiemployer pension plan, Section 4001(b)(1) of ERISA, 29 U.S.C. § 1301(b), governs the withdrawal liability of other enterprises. This statute looks to two facets of an enterprise in making this assessment, and any entity that is (1) a "trade or business" and (2) under "common control" with the employer who withdraws is jointly and severally liable for the principal employer's withdrawal liability. Connors v. Incoal, Inc., 301 U.S. App. D.C. 345, 995 F.2d 245, 249 (D.C. Cir. 1993) ("Incoal II"). This statute holds unincorporated enterprises to the same standard of employer withdrawal liability as corporate enterprises.
Because the Defendant meets both standards, Harden cannot escape his withdrawal liability. In his Motion to Vacate, Harden states that he does not dispute control of Old Mill and Harden Trucking. Because Harden disobeyed the MPPAA's requirements to arbitrate disputes of withdrawal liability through arbitration, in that he failed to raise in arbitration his defense that he was no longer in business when Old Mill and Harden Trucking withdrew, he may not dispute its liability before this Court. The governing federal law and private agreements to which he consented clearly bind Harden to initiate arbitration for the dispute at hand. According to § 4221 of ERISA, "any dispute between an employer and the plan sponsor of a multiemployer plan concerning a determination made under sections 1381 through 1399 of this title shall be resolved through arbitration," and "if no arbitration proceeding has been initiated . . . , the amounts demanded . . . shall be due and owing . . . ." 29 U.S.C. §§ 1401(a)(1), 1401(b)(1).
Here, the 1990 Tolling Agreement also informed Harden of his rights to contest the Plans' determinations, specifically detailing the timeframe to initiate arbitration, and specifically incorporating § 4221 as its benchmark. In addition, the Plans sent a letter dated May 20, 1992, to all Defendants, notifying them of their right to initiate arbitration to challenge their revised withdrawal liability.
Despite the statute, the Tolling Agreement, and the letter addressed to Harden, Harden elected not to initiate arbitration on any related issue. There is no question that, despite repeated notice, Harden did not arbitrate his dispute about his status as an "employer" under § 1401(a)(1). Furthermore, Defendant Harden cites no case to support his proposition that "the issue of whether an entity is an employer under § 4001 of ERISA is not within the scope of arbitratable [sic] issues as set forth in § 4221 of ERISA." Defendant's Reply, at 3. As the Plaintiffs correctly point out, Harden improperly relies on Incoal II for this assertion. That case stated that the employer did not waive its right to contest its withdrawal liability, where the employer sought to raise the defense that it was not a trade or business under Section 1301(b)(1) of ERISA. Incoal II, 995 F.2d at 249 n.6. However, the facts before this Court are readily distinguishable from Incoal II, which focused on whether Double A Farms could qualify as a "trade or business." Here, the Defendant openly concedes that, at one point in time, his proprietorship was a trade or business in common control with Old Mill. Thus, Incoal II and Central States, Southeast and Southwest Pension Fund v. Personnel, Inc., 974 F.2d 789 (7th Cir. 1992), on which Harden also relies, are inapposite, because those cases concerned defendants arguing that at no point in time were they trades or businesses.
With respect to the issue of exhaustion of arbitration remedies, the caselaw cuts against the Defendant's assertion that he may challenge the withdrawal date of December, 1984. In a similar case, Connors v. S & S Coal Co., 92-1116 (August 6, 1993) (Lamberth, J.), Judge Lamberth adopted the Fourth Circuit's approach to this sort of issue, stating "that § 1401(a)(1) even precludes an employer's defense that it was not 'an employer' under § 140l(a)(1) where the alleged employer did not arbitrate that dispute." In the instant case, the Court does not even need to go as far as Connors v. S & S Coal -- the Defendant admits that he was an employer, and merely argues the timing of the termination of this status. Even more specifically, the Third Circuit rejected the Defendant's approach by stating that "where the party against which withdrawal liability is being asserted was certainly part of the controlled group of an employer subject to MPPAA at some point in time, and where the issues in dispute fall within the purview of MPPAA provisions that are explicitly designated for arbitration, the Act's dispute resolution procedures must be followed." Flying Tiger Line v. Teamsters Pension Trust Fund, 830 F.2d 1241, 1247 (3d Cir. 1987). As a result, Harden's belated attempt to refute his withdrawal liability is precluded.
Harden also relies heavily on Connors v. Incoal, Inc., 699 F. Supp 3 (D.D.C. 1988) ("Incoal I"), aff'd 285 U.S. App. D.C. 221, 907 F.2d 1227 (D.C. Cir. 1990), in arguing that he should not be held liable because he was not conducting a trade or business in common control with the other employers. The Court does not find this case persuasive, in that Incoal I also examined whether an enterprise ever actually attained "employer" status, as opposed to inquiring at what point in time an entity terminated that status. Such issues of timing are clearly within the province of an arbitrator, and Harden should not be allowed to benefit by flagrantly and repeatedly ignoring his commitment to arbitrate this issue over a period of months and years.
The broader policy implications of ERISA, pensions, and arbitration further support the Plaintiffs' arguments. As our Circuit has emphasized, ERISA and the MPPAA were designed to prevent employers from abandoning financially fragile pension plans, and to preserve judicial economy in handling disputes:
At the heart of the MPPAA's regime are provisions for informal, expeditious resolution of withdrawal liability disputes . . . . Thus, Congress' directive is clear. Any dispute over withdrawal liability as determined under the enumerated statutory provisions shall be arbitrated.