In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 14-‐‑2512
CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION
FUND and ARTHUR H. BUNTE, JR.,
Plaintiffs-‐‑Appellees,
v.
ALLEGA CONCRETE CORP.,
Defendant-‐‑Appellant.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 13 C 6896 — John J. Tharp, Jr., Judge.
____________________
ARGUED NOVEMBER 12, 2014 — DECIDED NOVEMBER 26, 2014
____________________
Before EASTERBROOK, MANION, and SYKES, Circuit Judges.
EASTERBROOK, Circuit Judge. An employer that withdraws
from an underfunded pension plan must cover its share of
the shortfall. 29 U.S.C. §§ 1381, 1391. After concluding that
Allega Concrete had withdrawn, the Central States Pension
Fund sent it a bill for about $375,000. The Multiemployer
Pension Plan Amendments Act of 1980 (MPPAA) gives an
employer 90 days to ask a pension plan to review its deci-‐‑
2 No. 14-‐‑2512
sion. 29 U.S.C. §1399(b)(2)(A). If the plan adheres to the orig-‐‑
inal decision—or if it does not act within 120 days—the em-‐‑
ployer has a further 60 days to seek arbitration. 29 U.S.C.
§1401(a)(1). For Allega, the last day was July 16, 2013.
On July 9 Allega sent the Fund a letter demanding arbi-‐‑
tration. It followed up on July 29 with a notice to the Ameri-‐‑
can Arbitration Association. Problem: The AAA’s rules re-‐‑
quire that notices go to both the pension administrator and
the AAA. Privately adopted dispute-‐‑resolution rules require
the approval of the Pension Benefit Guaranty Corporation.
29 U.S.C. §1401(a)(2); 29 C.F.R. §4221.14(a). In 1985 the PBGC
approved the AAA’s rules for arbitration under the MPPAA,
50 Fed. Reg. 38,046 (Sept. 19, 1985), and in 1986 it approved
some amendments, 51 Fed. Reg. 22,585 (June 20, 1986). The
Fund has adopted those rules, but Allega did not notify the
AAA within the statutory time limit.
The district court concluded that Allega had waited too
long to seek arbitration and must pay withdrawal liability as
the Fund calculated it. 2014 U.S. Dist. LEXIS 78998 (N.D. Ill.
June 10, 2014). It relied on §7 of the AAA’s rules, which pro-‐‑
vides in part:
Arbitrations under these Rules are initiated in the following
manner:
(a)(i) The initiating party gives notice to the other party of its in-‐‑
tention to arbitrate (Demand) which notice shall set forth a brief
description of the dispute and shall include the amount in-‐‑
volved, and (ii) files at any Regional Office of the AAA two (2)
copies of said notice, together with the appropriate administra-‐‑
tive fee as provided in the Administrative Fee Schedule.
Allega concedes that it did not do what §7 requires. It con-‐‑
tends that it did not need to do so because some of the
No. 14-‐‑2512 3
AAA’s and the Fund’s procedures and requirements have
not been submitted to or approved by the PBGC.
In February 2013 the AAA raised the fees that must ac-‐‑
company a demand for arbitration. (These fees appear in the
“Administrative Fee Schedule” to which §7(a)(ii) refers.) The
schedule in force in 1985 called for $650 with any demand
for arbitration; as amended in 2013, the schedule specifies an
initial payment of $4,350 and a “final payment” (due at the
arbitration’s close) of $1,750, for a total of $6,100. (Cases with
larger stakes may require higher fees; the numbers we’ve
given are what Allega would have been required to pay.)
The Fund’s rules provide that arbitration will be conducted
in Chicago (the Fund’s home base), while §8 of the AAA’s
rules says that the parties and the arbitrator will select a
venue jointly, with the arbitrator to decide if the parties can-‐‑
not agree. See also 29 C.F.R. §4221.6. The Fund also calls for
an award of attorneys’ fees in its favor if it prevails. Section
38 of the AAA’s rules, by contrast, gives the arbitrator dis-‐‑
cretion whether to award fees. See also 29 C.F.R. §4221.10(c).
According to Allega, these provisions relieve it of any ob-‐‑
ligation to serve the AAA with the demand for arbitration.
But why? Let us suppose that both the AAA’s higher fees
and the differences between the Fund’s rules and the AAA’s
required the PBGC’s approval. (That may or may not be
true; we need not decide. If it is true, then any conflict be-‐‑
tween the AAA’s approved rules and the unilaterally adopt-‐‑
ed regulations of the Fund would be resolved in favor of the
AAA’s rules.) The fact remains that the PBGC did approve
the AAA’s rules in 1985 and 1986. It is the approved rules
that call for the demand to be sent to the AAA (as well as the
Fund) during the 60 days allowed by statute.
4 No. 14-‐‑2512
If Allega had sent a timely demand to the AAA, together
with a check for $650, and the AAA had refused to proceed
with arbitration, then we might have to decide whether an
amendment of the fee schedule requires the PBGC’s approv-‐‑
al. But that’s not what happened. And because Allega did
not make a timely demand for arbitration, questions about
venue and legal fees never arose. They could have been re-‐‑
viewed by the district court on a petition to review an arbi-‐‑
trator’s final decision; any dispute about the AAA’s fees
could have been reviewed the same way. But Allega did not
take the essential first step: a timely demand for arbitration
sent to the AAA.
Allega does not contend that the Fund needed the
PBGC’s approval to adopt the AAA’s rules. Nor does it con-‐‑
tend that, if the AAA’s rules apply, its demand for arbitra-‐‑
tion was effective nonetheless. That is, Allega does not main-‐‑
tain that notice to the Fund but not the AAA suffices. It does
argue that the Fund’s failure to act within 120 days on its re-‐‑
quest for reconsideration tolls the time to seek arbitration,
but that contention boils down to disagreement with the
statutory rule that the 60 days to demand arbitration begins
to run when 120 days have passed without action. The dis-‐‑
trict court’s judgment therefore is
AFFIRMED.