Board of Trustees of Trucking Employees of North Jersey Welfare Fund, Inc.-Pension Fund v. Kero Leasing Corp.

Opinions of the United
2004 Decisions States Court of Appeals
for the Third Circuit

7-12-2004

Bd Trustees Trucking v. Kero Leasing Corp
Precedential or Non-Precedential: Precedential

Docket No. 03-2176

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 PRECEDENTIAL

UNITED STATES COURT BOARD OF TRUSTEES OF
OF APPEALS FOR THE TRUCKING EMPLOYEES OF
THIRD CIRCUIT NORTH JERSEY WELFARE FUND,
INC-PENSION FUND

Nos. 03-2176, 03-2344, v.
03-3283 and 03-3448
KERO LEASING CORPORATION,
a New Jersey Corporation;
BOARD OF TRUSTEES ROBERT C. HOLMES, a proprietor,
OF TRUCKING EMPLOYEES individually, jointly and severally;
OF NORTH JERSEY WELFARE HOLMES LEASING COM PANY, a
FUND, INC-PENSION FUND proprietorship
(D.C. Civil No. 98-cv-1476)
v.
ROBERT C. HOLMES
KERO LEASING CORPORATION,
a New Jersey Corporation; v.
ROBERT C. HOLMES, a proprietor,
individually, jointly and severally; BOARD OF TRUSTEES OF
HOLMES LEASING COM PANY, a TRUCKING EMPLOYEES OF
proprietorship NORTH JERSEY WELFARE FUND,
(D.C. Civil No. 98-cv-1476) INC.-PENSION FUND
(D.C. Civil No. 02-cv-0059)
ROBERT C. HOLMES
ROBERT C. HOLMES,
v. Appellant Nos. 03-2344
and 03-3448
BOARD OF TRUSTEES OF
TRUCKING EMPLOYEES OF
NORTH JERSEY WELFARE Appeals from the United States
FUND, INC.-PENSION FUND District Court for the
(D.C. Civil No. 02-cv-0059) District of New Jersey
(D.C. Civil Nos. 98-cv-1476
BOARD OF TRUSTEES OF and 02-cv-0059)
TRUCKING EMPLOYEES District Judge:
OF NORTH JERSEY, WELFARE Honorable Joseph A. Greenaway, Jr.
FUND, INC.-PENSION FUND,
Appellant Nos. 03-2176
and 03-3283 Argued February 24, 2004
 Before: RENDELL, BARRY and pension fund against Holmes was
ROSENN, Circuit Judges. untimely, as the complaint was filed seven
years after the cause of action accrued, one
(Filed July 12, 2004 ) year beyond the statute of limitations set
forth in the Multiemployer Pension Plan
Amendments Act of 1980 (“MPPAA”), 29
Elizabeth Roberto (ARGUED) U.S.C. §§ 1381-1461. For the reasons set
Roberto Law Offices forth below, we will affirm in part and
811 Fitzwater Street reverse in part.
Philadelphia, PA 19147
David W. New I.
Herbert New & David New
300 Broadacres Drive, 3rd Floor The appellant, Board of Trustees of
Bloomfield, NJ 07033 Trucking Employees of North Jersey
Counsel for Appellant/Cross Appellee Welfare Fund, Inc. – Pension Fund (“the
Fund”), is the plan sponsor of a
Arthur G. Telegen (ARGUED) multiemployer fund established under the
Robert A. Fisher Employee Retirement Income Security Act
Foley Hoag of 1974 (“ERISA”). 29 U.S.C. §§
155 Seaport Boulevard 1 0 0 2 (3 7 ) , 1 3 0 1 ( 3 ) . E m p l o y e rs
Boston, MA 02210 participating in the Fund’s pension plan
Counsel for Appellee/Cross Appellant made contributions to the Fund based on
terms set forth in collective bargaining
agreements they negotiated with their
employees.
OPINION OF THE COURT
Holmes was once the chief
executive officer of a trucking company
RENDELL, Circuit Judge. called Holmes Transportation Inc.
(“HTI”). During the 1980s, Holmes
In these appeals we are called upon c r e a te d w h o l l y- o w n e d s u b s i d ia ry
to determine the relevant statute of c ompa nies to su pp ly e mploy ee s,
limitations for an action brought by the equipment, and land to HTI. One of these
trustees of a pension fund to recover companies was Holmes Leasing Company
withdrawal liability. The appellee, Robert (“Holmes Leasing”), a sole proprietorship
Holmes, is the former sole shareholder of that owned and leased equipment to HTI.
a company that ceased making payments to Another was Kero Leasing Corporation
the plan, and the former sole proprietor of (“Kero”), a New Jersey corporation that
another related company. The District provided employees to work at a certain
Court held that the action instituted by the HTI terminal. Holmes was the sole

2
proprietor of Holmes Leasing and the sole assessment for withdrawal liability was
shareholder of Kero. Kero entered into a mandatory under the provisions of the
collective bargaining agreement with the MPPAA. See 29 U.S.C. § 1381. On
union representing its workers. 1 The February 27, 1990, upon realizing that
agreement required Kero to make Kero had withdrawn from the plan, the
contributions on behalf of its employees to Fund sent a notice of the statutory
the Fund’s pension plan. assessment of withdrawal liability to Kero.

In March of 1987, Holmes agreed On March 7, 1991, after no
to sell HTI to Route Resources, a payments were made by Kero, the Fund
Canadian-owned holding company. The sent a letter to Route Resources regarding
sale was consummated in September of the default in payments, and the
1988, and Kero’s stock was included in the withdrawal liability was demanded in full.
sale along with all interests in Holmes’s When Kero continued to default on its
sole proprietorships. In December of withdrawal liability payments, the Fund
1988, after Route Resources had assumed filed a complaint in the United States
ownership and control of his businesses, District Court for the District of New
Holmes retired to Florida. According to Jersey against Route Resources, alleging
the Fund’s complaint in this action, Kero that it was under common control with
stopped making contributions to the Fund Kero at the time of its withdrawal and was
in December of 1989, prior to the therefore responsible for the liability. No
expiration of its duties under the collective answer was filed, and on December 13,
bargaining agreement.2 As a result, an 1995, a default judgment was entered
against Route Resources.
1
Holmes initially signed the agreement Notwithstanding its success in
himself, since the agreement was formed obtaining the default judgment, the Fund
just prior to Kero’s incorporation. Once continued to be unable to collect any of the
Kero was incorporated in October of 1985, withdrawal liability. On January 8, 1998,
Holmes assigned the collective bargaining counsel for the Fund sent a letter to
agreement, and the duty to contribute to Holmes asking him to appear for a
the Fund, to the corporation. deposition, to provide information about
2 Route Resources, Kero, and any other
The District Court made no specific
finding with respect to this fact, noting that
it was disputed by the parties and that the
withdrawal occurred sometime during this However, our analysis is not impacted by
sale or a subsequent sale of the businesses the choice of a specific date, as Holmes
by Route Resources. We rely on the time had indisputably severed his ties to his
of withdrawal asserted in the complaint for companies at the time the relevant notices
purposes of describing the factual setting. were sent and the complaints were filed.

3
related corporations that might be U.S.C. § 1399(c)(2); Bd. of Trs. of
responsible for the withdrawal liability. Trucking Employees of N. Jersey Welfare
The letter also specified the amount that Fund, Inc. – Pension Fund v. Centra, 983
Kero owed and noted that a default F.2d 495, 507 (3d Cir. 1992).
judgment had been entered against Route
Resources. However, the letter did not During arbitration, Holmes argued,
contain any indication that the Fund would inter alia, that the Fund failed to provide
seek to impose liability on Holmes notice of its intention to seek the
personally. Meanwhile, the Fund withdrawal liability from Holmes
instituted the instant action by filing a personally “as soon as practicable” after
complaint in the District of New Jersey on Kero’s withdrawal, as required by 29
March 31, 1998, naming Kero, Holmes U.S.C. § 1399(b)(1), and should therefore
Leasing, and Holmes personally as be barred from assessing the withdrawal
defendants. After his deposition on July penalty against him. In December of
22, 1998, Holmes received a copy of the 2001, the arbitrator issued an opinion
complaint in this matter from the Fund’s agreeing with Holmes and dismissing the
counsel. According to Holmes, this was Fund’s claim for withdrawal liability.3
his first notice that the Fund was seeking
to collect the withdrawal liability from
him. 3
The dissent implies that the Fund and
its attorneys acted diligently from the time
II.
the withdrawal liability accrued, and that
they were constantly engaged in good faith
The Fund’s complaint in the instant
attempts to track down “Kero’s phantom
case demands judgment against all three
owners.” Dissent at 8. However, the
named defendants, including Holmes
arbitrator’s findings, which were based on
personally, in the amount of the
information that came to light during
withdrawal liability, plus interest,
disc ove r y a s sociate d w ith th o s e
attorneys’ fees, and costs. Holmes was the
proceedings, indicate that the Fund knew
only defendant to answer the complaint,
or should have known of Holmes’s
and he is the only appellee to file a brief in
connection to Kero, its sale, and the
this appeal. Initially, both the Fund and
withdrawal liability in the early 1990s. In
Holmes filed motions for summary
other words, the six year limitations period
judgment on the merits. The District Court
created by Congress in the MPPAA did
denied both motions and referred the
provide enough time for the Fund to learn
matter to arbitration in accordance with the
of potential controlled group members.
MPPAA, 29 U.S.C. § 1401. The Court
The Fund had the option of pursuing
also ordered Holmes to make interim
Holmes personally several years earlier
withdrawal liability payments to the Fund
than it did, and well within the statute of
while the arbitration was pending. See 29
limitations, but it simply chose not to do

4
While the arbitration was proceeding, the new statute of limitations starts to run with
Fund appealed the District Court’s order each missed payment or when payment of
denying summary judgment and referring the debt is accelerated). Strictly applying
the matter to arbitration. Holmes cross- the six year statute of limitations in this
appealed and moved to reopen the record case, the Court then concluded that the
to explore whether the six year statute of limitations period expired in 1997, and that
limitations under the MPPAA had expired, the action was brought approximately one
based on the fact that, during discovery year too late.
related to the arbitration, he became aware
for the first time that the Fund had sent a The Fund urged the Court to
letter in March of 1991 accelerating the characterize the 1998 action as an
withdrawal liability. Accordingly, he enforcement, as against Holmes, of the
urged that the action commenced in 1998 1995 default judgment that had been
should be dismissed as untimely. entered against Route Resources. The
Court rejected this theory, adopting
Another panel of our court reasoning similar to that employed in
considered these appeals and remanded the Central States, Southeast & Southwest
matter in September of 2001, directing the Areas Pension Fund v. Mississippi
District Court to determine whether the Warehouse Corp., 853 F. Supp. 1053
statute of limitations had expired prior to (N.D. Ill. 1994), and distinguishing
the filing of the 1998 action. The District controlled group liability under the
Court reopened the record, and the parties MPPAA from other alter-ego theories of
filed another round of motions for liability. In doing so, the Court declined to
summary judgment. The Court ultimately follow the lead of certain other New Jersey
granted summary judgment in favor of district courts that had permitted actions
Holmes on April 22, 2003, and ordered the brought after the six year limitations
Fund to reimburse him in an amount equal period to proceed by characterizing them
to the interim payments, interest, as enforcement actions against persons
attorneys’ fees and costs Holmes had who were not previously named, but who
already paid to the Fund as required by the were admittedly controlled group members
MPPAA, as well as interest on those with the defendants that had been named.
payments. The Court first determined that The Court emphasized that Holmes had
the cause of action accrued with the sold his interests in the entities in 1988 –
sending of the March 1991 letter. See Bay before the liability arose and before notice
Area Laundry & Dry Cleaning Pension of it was given – and that he continued to
Trust Fund v. Ferber Corp. of Cal., Inc., dispute his status as a member of the
522 U.S. 192, 194 (1997) (holding that a controlled group with Kero. Cf. Bd. of
Trs. of Trucking Employees of N. Jersey
Welfare Fund, Inc. v. Gotham Fuel Corp.,
860 F. Supp. 1044 (D.N.J. 1993) (applying
so.

5
New Jersey’s twenty year statute of Fund appealed certain aspects of the
limitations for enforcing judgments to an Judgment, and Holmes cross-appealed
action seeking to enforce a default once more. Before us now are both sets of
judgment, where defendants were not appeals and cross-appeals, which have
parties to the earlier action but did not been consolidated for our review.
dispute their status as members of the
relevant controlled group); Bd. of Trs. of III.
Trucking Employees of N. Jersey Welfare
Fund, Inc. v. Able Truck Rental Corp., 822 This action was brought under
F. Supp. 1091 (D.N.J. 1993) (same). ERISA and the M PPAA. The District
Court had jurisdiction over it pursuant to
Ultimately, the District Court held 29 U.S.C. § 1451(c). We review the
that any action by the Fund seeking to hold District Court’s final order granting
a potential controlled group member like summary judgment in favor of Holmes
Holmes jointly and severally liable for the based on 28 U.S.C. § 1291. Because the
withdrawal assessment had to be brought issues involved are purely legal, we
within the MPPAA’s six year statute of exercise plenary review of the District
limitations. Thus, the Fund’s action was Court’s grant of summary judgment, its
dismissed with prejudice, and the Fund interpretation of the MPPAA’s statute of
was ordered to return all payments made limitations provision, and its award of
by Holmes, with interest. 4 The Fund damages in light of ERISA’s anti-
appealed this order, and Holmes cross- inurement provision. IUE AFL-CIO
appealed. The District Court also issued a Pension Fund v. Barker & Williamson,
Judgment ordering that the payments made Inc., 788 F.2d 118, 122 (3d Cir. 1986).
by Holmes were to be reimbursed. The However, where the relevant statutes are
silent or ambiguous, we will defer to any
reasonable regulations promulgated by the
4 Department of Labor in connection with
The District Court also vacated the
the statutory provisions at issue in this
arbitrator’s opinion without discussing the
case. See Chevron, U.S.A., Inc. v. Natural
merits of the determinations made by the
Res. Def. Council, Inc., 467 U.S. 837
arbitrator, as the statute of limitations
(1984).
mandated dismissal and rendered the
arbitration moot. Thus, the District Court
IV.
did not discuss whether Holmes received
notice “as soon as practicable,” nor shall
In their various briefs, the parties
we. Such an inquiry would only become
raise numerous issues related to the proper
relevant after a finding that the action was
application of the statute of limitations to
filed within the six year limitations period,
this action, the merits of the District
and that further issues governed by the
Court’s first opinion ordering arbitration,
MPPAA could be explored.

6
the enforcement of the arbitrator’s order, The MPPAA extends responsibility for
and the amount of reimbursement included
in the District Court’s final judgment. We
will not reach many of these issues, as we
schedule. Id. at §§ 1382(2), 1382(3),
will affirm the District Co urt’s
1399(b)(1)(B). The employer then has
determination related to the MPPAA’s
ninety days to request that the trustees
statute of limitations. In light of our
conduct a reasonable review of the amount
conclusion that the action was untimely,
of liability. Id. at § 1399(b)(2)(A)(I). If
the only other issues that require our
the dispute is not resolved at that time,
attention are those related to the
either party may initiate arbitration within
calculation of the Fund’s reimbursement to
the relevant time period set forth in §
Holmes. We will discuss both of the
1401(a)(1). An employer will waive its
pertinent issues – the statute of limitations,
statutory rights to dispute aspects of the
and the judgment amount – in turn.
Fund’s liability determination where
arbitration is not demanded within the time
A.
period prescribed by the statute. Barker &
Williamson, 788 F.2d at 129. During
We first consider what the
arbitration, determinations made by the
applicable statute of limitations is in the
Fund regarding withdrawal liability
context of the Fund’s action as it is stated
amounts or classification of an employer
in the 1998 complaint. Under the
as a responsible party are entitled to a
MPPAA, when an employer prematurely
presumption of correctness, unless the
ceases making payments into a pension
employer shows by a preponderance of the
plan, the trustees of the plan can assess the
evidence that the determinations are
w i t h d r a w a l lia bi lity a g a inst th e
unreasonable or clearly erroneous. Id. at §
withdrawing employer in an amount
1401(a)(3)(A).
representing that employer’s pro rata share
of the payments remaining due to the
Regardless of requests for review or
pension fund. 5 29 U.S.C. § 1381(b)(1).
arbitration, an employer must begin
making interim payments of the
withdrawal liability, follow ing the
5
In disputes that arise under the schedule set forth by the trustees, within
MPPAA, the following sequence of events sixty days of receiving the initial notice of
normally occurs. First, the trustees of the liability. Id. at §§ 1399(c)(2), 1401(d); see
plan determine that an employer has Galgay v. Beaverbrook Coal Co., 105 F.3d
withdrawn within the meaning of the 137, 139 (3d Cir. 1997). When the
MPPAA. 29 U.S.C. §§ 1382(1), arbitration concludes, either party may
1399(b)(1)(A)(I). The trustees then notify bring an action in federal district court “to
the employer of its liability, demand enforce, vacate or modify the arbitrator’s
payment, and offer an amortization award.” Id. at § 1401(b)(2).

7
payment of withdrawal liability beyond the MPPAA each time an employer fails to
withdrawing employer to “all employees make a payment as scheduled by the plan
of trades or businesses (whether or not trustees, and the trustees have no
incorporated) which are under common obligation to accelerate the debt when an
control.” 29 U.S.C. § 1301(b)(1). In this employer defaults. Bay Area, 522 U.S. at
case, the Fund seeks to use this provision 194-95. However, in a case where the
in order to hold Holmes liable for Kero’s trustees elect to accelerate the liability by
withdrawal liability, as he was once the demanding payment in full following an
CEO of one business under common employer’s default, which is permissible
control with Kero, and sole proprietor of under 29 U.S.C. § 1399(c)(5), the six year
another. period begins to run when the liability is
accelerated. See id. at 209 n.5 (“The
In setting forth the parameters for statute of limitations on an accelerated
civil actions brought under the MPPAA, debt runs from the date the creditor
Congress imposed a specific statute of exercises its acceleration option . . . .”);
limitations that governs actions to recover see also Bd. of Trs. of Dist. No. 15
withdrawal liability. According to § Machinists’ Pension Fund v. Kahle Eng’g
1451(f)(1) of the statutory scheme, the Corp., 43 F.3d 852, 857 (3d Cir. 1994)
Fund’s MPPAA action must have been (discussing the application of a statute of
brought within “6 years after the date on limitations to a debt payable in
which the cause of action arose,” in order installments).
for it to be considered timely. 6 According
to the Supreme Court, a cause of action for The parties here apparently do not
withdrawal liability arises under the dispute the fact that the letter sent to Kero
by the Fund in March of 1991 accelerated
the liability by demanding payment in full.
6 Thus, the District Court correctly
The statute provides an alternative time
identified the date of that letter as the
limitation, which allows an action to be
event that marked the starting point for the
brought within “3 years after the earliest
six year statute of limitations according to
date on which the plaintiff acquired or
the Supreme Court’s discussion in Bay
should have acquired actual knowledge of
Area. In light of that fact, the period for
the existence of such cause of action.” 29
bringing actions under the MPPAA to
U.S.C. § 1451(f)(2). The provision
recover Kero’s withdrawal liability ended
indicates that the longer of the two
in March of 1997, one full year prior to the
limitation periods described should apply.
filing of the instant complaint. Without
Here, the Fund has never argued that the
looking any further, it appears as though a
alternative period should apply to save its
straightforward application of the six year
claims, so we will only consider the six
limitations period leads to the conclusion
year limitations period described in the
that the Fund’s action here was untimely.
first paragraph of subsection (f).

8
However, the Fund seeks to avoid that $3,670,093.70, but proceeds to demand a
conclusion by characterizing the instant judgment against Holmes in a different
action as one to enforce the 1995 default amount, listing payments that would be
judgment it obtained against Route sought in an original action under the
Resources, and not as an original action MPPAA.
under the MPPAA to impose withdrawal
liability against Holmes. The MPPAA Only two paragraphs of the 1998
does not contain a separate provision for complaint even mention the 1995 default
enforcement of judgments. Presumably, judgment, and nothing related to that
therefore, the enforcement of the judgment judgment is referenced, either explicitly or
would be a matter of state law, here implicitly, in the Fund’s prayer for relief.
carrying a twenty year statute of Thus, the most obvious reading of the
limitations, so the Fund urges that the complaint – and, we think, the only
action was timely. plausible reading – leads us to conclude
that it states an original action brought
However, the Fund’s 1998 under the MPPAA, rather than one to
complaint very clearly states an original enforce the 1995 judgment. 7
action to recover withdrawal liability
under the M PPAA, not one to enforce a B.
judgment. Like the complaint filed in
1995 against Route Resources, the first Notwithstanding the manner in
paragraph of the 1998 complaint explicitly which the complaint is framed, the Fund
describes the case as “an action for
collection of withdrawal liability under the
[MPPAA].” In fact, the complaint is 7
Indeed, even if we were to adopt the
replete with statements indicating that the
dissent’s position and hold that a pension
action was brought to collect withdrawal
fund may only bring one original action
liability from Holmes directly under the
under the MPPAA to fix withdrawal
MPPAA. For example, paragraph 32
liability and must thereafter seek to
states that “Defendants have failed to
enforce the one judgment obtained in that
make any of the monthly payments of the
action, rather than to assert new original
withdrawal liability assessment; thus, it is
actions, we would conclude that the Fund
necessary to bring this action to enforce
has not done so here. In other words, if
payment.” Paragraphs 33 and 34 go on to
the correct course of action for the Fund to
describe original actions brought under the
take was to seek enforcement of the 1995
MPPAA, 29 U.S.C. § 1451(b), to “enforce
default judgment, we would remain
payment of a withdrawal liability
convinced that the Fund’s failure to
assessment.” Further, the complaint
articulate such a cause of action in its 1998
indicates in paragraph 17 that the amount
complaint precludes it from prevailing on
of the 1995 default judgment was
this appeal.

9
urges us to view the complaint differently to enforce prior default judgments for
based on the following argument. The withdrawal liability under the MPPAA.
Fund’s initial notice of the withdrawal See Gotham Fuel, 860 F. Supp. at 1050
liability, sent in 1990, constituted (holding that the state limitations period
constructive notice to all businesses or for enforcement of judgments applies once
persons that were ever under common a fund establishes that the defendants were
control with Kero. See Barker & part of the relevant single employer
Williamson, 788 F.2d at 127 (holding that group); Able Truck, 822 F. Supp. at 1095
actual notice to an employer serves as (same).
constructive notice to all other members of
a controlled group). The Fund relies on We conclude that the Fund’s
this principle for the further proposition position regarding the statute of limitations
that a judgment obtained against one is flawed. Initially, we emphasize our
member of a controlled group is a conclusion, explained fully above, that the
judgment against all other members. In complaint as written simply does not lend
other words, the Fund asserts that a timely itself to such a reading. The second
filed suit to recover withdrawal liability amended complaint in this matter, which
that results in default judgment against one was nearly identical to the Fund’s earlier
entity determines the liability of all other complaint that resulted in the 1995 default
controlled group members, whether or not judgment, explicitly seeks to collect
they are named as parties to the action. withdrawal liability from Holmes. Such
Thus, this principle would allow the Fund an action is governed by the MPPAA’s six
to enforce the 1995 default judgment year limitations period. We would find it
obtained against certain members of difficult to read the 1998 complaint as
Kero’s controlled group against any other setting forth an action to enforce a prior
entity they deem to be an additional judgment without disregarding the clear
member of that controlled group, including language of the complaint and engaging in
Holmes. illogical contortions.8 But even if we

Because it characterizes this action
as one to enforce a prior judgment, the 8
Additionally, adopting the Fund’s
Fund urges that it should be governed by
alternative description of this action as one
New Jersey’s twenty year statute of
to enforce the default judgment would
limitations for enforcement of judgments,
require us to ignore the character of the
N.J. Stat. Ann. § 2A:14-5, rather than by
proceedings as they were conducted during
the MPPAA’s six year limitations period.
the first three or four years of this
The Fund finds support for this view in
litigation. Prior to our remand instructing
two cases decided by New Jersey district
the District Court to examine the statute of
courts, both of which applied the twenty
limitations issue, the proceedings in the
year limitations period to actions seeking
District Court and before the arbitrator

10
chose to reinterpret the complaint as the which he was not a named party, and in
Fund suggests, we still think the action is which no one actively represented his
barred, and that the application of a twenty interests.
year statute for enforcement of judgments
is problematic here. This is so for several In attempting to accomplish this
basic reasons. feat, the Fund relies heavily on our
discussion in Barker & Williamson.
First, the Fund acknowledges the There, we were asked to decide whether a
fact that it has not obtained a default company, Sentinel Electronics, was in a
judgment against Holmes personally. controlled group with the withdrawing
Additionally, the District Court refused to company, Barker & Williamson, and if so,
find that Holmes was notified of the whether notice to Barker & Williamson
withdrawal liability prior to 1998. The constituted constructive notice to Sentinel.
Fund, therefore, must engage in the 788 F.2d at 121. We first determined that
difficult task of convincing us that Holmes Sentinel and Barker & Williamson had
is somehow liable when he was not become members of the same controlled
notified of the claim in a timely manner; group prior to the pension plan withdrawal
further, it must persuade us that Holmes is that gave rise to the action. Id. at 122-26.
somehow bound by a judgment in an After deciding that the two companies
action of which he had no actual notice, in were a “single employer” within the
meaning of the MPPAA, we held that
actual notice of the withdrawal liability to
Barker & W illiamson cons tituted
were structured as they would be in an
constructive notice to all other members of
original action brought under the MPPAA.
its controlled group, including Sentinel.
The arguments made by the Fund in its
Id. at 126-30. Thus, like other courts of
first motion for summary judgment and
appeals, we adopted a “notice to one is
before the arbitrator never indicated a
notice to all” rule to be applied in MPPAA
desire to simply enforce the 1995
cases. Id. at 127; see also, e.g., Cent.
judgment. For example, the Fund argued
States, Southeast & Southwest Areas
in its first summary judgment motion that
Pension Fund v. Slotky, 956 F.2d 1369,
Holmes could not dispute the amount of
1375 (7th Cir. 1992); I.A.M. Nat’l Pension
the withdrawal liability because he failed
Fund, Plan A, A Benefits v. Slyman
to request arbitration in a timely manner,
Indus., Inc., 901 F.2d 127, 129 (D.C. Cir.
and not because he was already bound by
1990); Teamsters Pension Trust Fund –
an existing judgment. The Fund’s conduct
Bd. of Trs. of W. Conference v. Allyn
throughout the early stages of this
Transp. Co., 832 F.2d 502, 506-07 (9th
litigation reaffirms our reading of the
Cir. 1987).
complaint as stating an original action
under the MPPAA, rather than an action to
enforce a prior judgment.

11
 However, the principle of “notice to incorporated by the MPPA A for
one is notice to all” announced in Barker determining controlled group status. 788
& Williamson does not lead to the F.2d at 123; see 29 U.S.C. § 1301(b)(1).
conclusion suggested by the Fund Here, Holmes had divested himself of his
regarding enfo rcem ent of default interests in his former businesses and
judgments. In Barker & Williamson, there retired to Florida in 1988, so it is far from
was no statute of limitations issue before certain that such a “brother-sister”
us, because the pension fund had brought relationship could be imputed to Holmes
timely actions under the MPPAA against and Kero at the time of the withdrawal.9
both the employer and the potential Further, without first determining whether
members of the controlled group. The Holmes was in fact a member of the
relevant parties were all joined in the controlled group at the time of the
initial litigation, so the fund was not withdrawal, as we did in Barker &
attempting to enforce any prior judgment, Williamson, we would be hesitant to apply
and the limitations period for arbitrating the “notice to one is notice to all” rule on
disputes under the MPPAA had not yet the facts of this case, let alone expand the
run. Also, the issue there involved rule to support a finding that a default
whether the defendant company had judgment obtained in 1995 is enforceable
become a member of the controlled group against Holmes. 10
prior to the employer’s withdrawal, rather
than whether the defendant had terminated 9
its membership in the controlled group We note that it would be even more of
prior to the withdrawal. Therefore, no a stretch to find a “brother-sister”
question was presented that required relationship between Holmes and Route
arbitration under the MPPAA; all issues Resources, the company against whom the
could be decided by the court on its own. 1995 default judgment was entered. It
See Galgay v. Beaverbrook Coal Co., 105 appears as though Holmes passed his ties
F.3d 137, 141-42 (3d Cir. 1997); see also to Kero along to Route Resources in the
Flying Tiger Line v. Teamsters Pension sale of his companies, so any controlled
Trust Fund of Philadelphia, 830 F.2d 1241, group connection between Holmes and
1249-50 (3d Cir. 1987) (distinguishing Route Resources would be fairly
Barker & Williamson from a case in which attenuated.
the issue involved termination of 10
The Fund has not pointed us to a case,
controlled group status).
and we are not aware of any, in which we
have applied Barker & Williamson’s
In Barker & Williamson, we
constructive notice concept to a situation
determined that, at the time of the
where an employer had severed all ties to
withdrawal, Barker & Williamson and
the controlled group entities before the
Sentinel were “brother-sister corporations”
trustees sent notice of the liability. Under
under the Internal Revenue Code standards
the cases we have examined, application of

12
 In an effort to provide further judgment against a newly-located member
support for its proposed rule, the Fund of the controlled group within the state
directs our attention to two cases decided statute of limitations for enforcement of
by district courts in New Jersey. In those judgments.11 Gotham Fuel, 860 F. Supp.
cases, the lower courts extended our at 1050; Able Truck, 822 F. Supp. at 1095.
reasoning in Barker & Williamson to However, several factors counsel against
create a “judgment against one is judgment reliance on the New Jersey district court
against all” rule that they applied to cases cited by the Fund. Obviously, we
MPPAA controlled group situations where are not bound by the manner in which the
a pension fund sought to enforce a prior New Jersey district courts have interpreted
the MPPAA and our relevant precedent.
Furthermore, whereas the courts in Able
Truck and Gotham Fuel indicated that the
the “notice to one is notice to all” concept
actions before them were characterized as
is only proper after there has been a
actions to enforce prior default judgments,
determination regarding membership in the
controlled group. See Barker &
Williamson, 788 F.2d at 126-27
11
(developing the rule regarding notice after Other district courts facing facts
first concluding that the relevant parties similar to those presented here have
were controlled group members); see also refused to apply a statute of limitations
Bd. of Trs. of Teamsters Local 863 other than the one described in the
Pension Fund v. Foodtown, Inc., 296 F.3d MPPAA. See Mississippi Warehouse, 853
164, 175 (3d Cir. 2002) (applying the F. Supp. at 1059 (“[E]ach action brought
notice rule after establishing alter ego against an alleged controlled group
status and likening the situation presented member on the basis of joint and several
to a controlled group ); Trs. of liability must be brought within the ERISA
Amalgamated Ins. Fund v. Sheldon Hall limitations period . . . . [A fund] may not
Clothing, Inc., 862 F.2d 1020, 1024 (3d invoke ERISA withdrawal provisions
Cir. 1988) (applying the notice rule after while simultaneously appealing to a state
noting that the district court finding statute of limitations for the collection of a
regarding controlled group status was not judgment.”); see also Langone v. Esernia,
appealed); Trs. of Chicago Truck Drivers, 847 F. Supp. 214, 218-19 (D. Mass. 1994)
Helpers & Warehouse Workers Union (considering a complaint seeking to bring
(Indep.) Pension Fund v. Rentar Indus., an original MPPAA action and to enforce
Inc., 1989 WL 153559, at *4 (N.D. Ill. a prior judgment, and granting summary
Nov. 8, 1989) (“[O]wners who sell a judgment in favor of defendant sole
business cannot be expected to know of proprietor based on statute of limitations
withdrawal liability assessments which are and failure to show why the court should
served on their successors after control has pierce the corporate veil and hold
been transferred.”). proprietor responsible for liability).

13
applying such a view in this case would time of the withdrawal, leaving us faced
require us to substantially recharacterize with a dispute that would require
the action originally set forth in the Fund’s arbitration as dictated by the MPPAA,
complaint, as we explained above. We are including its statute of limitations
simply unwilling to do so. Finally, provision.12 Thus, we think that the
a key distinction separates the facts before ultimate problem with the Fund’s position
us from those at issue in Able Truck and is the fact that there has been no finding
Gotham Fuel and convinces us that the here by any court or arbitrator that Holmes
Fund is time-barred from proceeding with was an employer or a member of the
this action. The defendants in both of the controlled group within the meaning of the
New Jersey district court cases conceded MPPAA at the time Kero withdrew from
membership in the relevant controlled the Fund. We conclude that such a finding
groups, leaving no unresolved issues that would be a necessary predicate to our even
would require arbitration pursuant to the considering the application of the Barker
MPPAA. Thus, those courts were able to & Williamson rule, and to any proposed
apply the state enforcement statutes of
limitations without implicating other
MPPAA provisions that would require 12
Because the facts of the New Jersey
resolution through arbitration. Indeed,
district court cases are distinguishable on
those district courts emphasized this fact
this basis, we need not decide whether the
as they reached their conclusions
“judgment against one is judgment against
extending the liability determined in prior
all” concept adopted by the New Jersey
judgments to the new parties before them.
courts is more generally proper under the
See Gotham Fuel, 860 F. Supp. at 1048
MPPAA, or whether the MPPAA allows
(“It is conceded that defendants . . . were,
for “enforcement” actions to be brought in
as of the date of the withdrawal, members
federal court at all. Cf. Peacock v.
of a controlled group with the contributing
Thomas, 516 U.S. 349 (1996) (concluding
employer . . . .”); Able Truck, 822 F. Supp.
that district courts lack jurisdiction over an
at 1093-94 (“Defendants do not deny that
action seeking to enforce, as against a
[they] were members of a controlled group
corporation’s officer, a judgment obtained
with [the withdrawing company at the
in a previous ERISA suit involving the
relevant time]. Thus, the only contested
corporation). While a statutory basis for
issue is whether plaintiff’s action is
importing state statutes of limitations
timely.”).
governing enforcement of judgment
actions does not seem apparent to us as we
Here, Holmes cites the sale of his
read the relevant provisions of the
interests in all of his businesses and his
MPPAA, we will not engage in a lengthy
retirement to Florida, and vigorously
examination and resolution of that issue
objects to any claim that he should be
here. The issue before us is narrower than
deemed a controlled group member at the
that.

14
extension thereof. See supra note 10. thereby responsible for the withdrawal
liability, and allow the Fund to enforce the
C. 1995 default judgment against Holmes.

Hoping to avoid the need to obtain It is true that, in an arbitration
such a finding, the Fund seeks to have the proceeding, a pension fund’s finding that
1995 judgment enforced against Holmes a defendant engaged in a transaction
by asserting a challenge to the sale of described in the “evade or avoid”
Holmes’s companies, saying that the provision of the MPPAA is accorded a
purpose of that transaction was to evade presumption of correctness, which must be
withdrawal liability. So, under the overcome by proof to the contrary offered
MPPAA, since any transaction undertaken by the defendant. See 29 U.S.C. §
for the “principal purpose” of evading or 1401(a)(3)(A). And the Fund is correct
avoiding withdrawal liability must be that a court may not evaluate whether a
disregarded, Holmes’s sale should be company, which has already been deemed
ignored. 29 U.S.C. § 1392(c). In other to have been a member of the controlled
words, an employer might still be group at one time prior to the withdrawal,
responsible for withdrawal liability, even has engaged in a transaction to evade
after he sells his businesses, if the purpose liability. 13 See Flying Tiger, 830 F.2d at
of the sale is deemed to bring the
transaction within the scope of § 1392(c).
Here, the Fund urges that Holmes’s sale of 13
We have interpreted the MPPAA to
Kero and his other businesses to Route
require that “where the party against which
Resources, which occurred prior to Kero’s
withdrawal liability is being asserted was
withdrawal from the plan, should not
certainly part of the controlled group of an
shield him from liability. We are
employer subject to the MPPAA at some
unconvinced by this theory as well.
point in time, and where the issues in
dispute fall within the purview of MPPAA
According to the Fund, we must
provisions that are explicitly designated
accept its assertion, stated for the first time
for arbitration,” the parties must comply
in its 1998 complaint, that Holmes’s sale
with the MPPAA arbitration provisions in
of his companies to Route Resources was
resolving their dispute. Flying Tiger, 830
undertaken so that he could avoid
F.2d at 1247. In other words, a federal
withdrawal liability under the MPPAA.
district court may not, for example, make
Based on that assertion and its theory that
a determination as to whether a particular
“judgment against one is judgment against
transaction was undertaken in order to
all” under the MPPAA’s controlled group
evade or avoid withdrawal liability; rather,
provision, the Fund contends that we must
that issue is one that is explicitly reserved
disregard Holmes’s sale, find that he was
for resolution through arbitration. Id.; see
in the controlled group with Kero and is
also Galgay, 105 F.3d at 141. However, a

15
1247. However, this does not mean that allow collection of a judgment against
we must allow a pension fund to bring a those clearly liable, as the New Jersey
claim against a defendant, alleging for the district courts have done, but quite another
first time that he engaged in a transaction to sanction an attempt to bypass the
with a purpose of evasion and is thus MPPAA’s limitations provision and
liable, after the six year limitations period litigate issues related to withdrawal
under the MPPAA has expired. Neither liability in such a belated action. We hold
does it imply that we must entertain such that an “evade or avoid” determination
an action when a pension fund asserts it must be asserted, allowing for the
under the guise of enforcing a judgment, necessary arbitration proceedings that
conclusive as to liability. would be governed entirely by provisions
of the MPPAA, within the six year statute
We are not persuaded that the of limitations that governs proceedings
MPPAA allows a pension fund, once it has involving the MPPAA. Thus, applying the
obtained a default judgment within the six plain language of the statutory provisions,
year period, to initiate a string of suits the Fund is time-barred from raising and
against purported members of a controlled litigating the issue of whether Holmes’s
group anytime in the following twenty year sale of his companies to Route Resources
period. This strikes us as especially in 1988 was undertaken in order to evade
troublesome in view of the fact that, if or avoid Kero’s withdrawal liability.
permitted to avoid the MPPAA’s statute of
limitations here and force Holmes to The dissent asserts that our ruling
litigate this matter beyond the statutory will vitiate the remedial purpose of the
period, the Fund would have managed to
do so by merely adding a simple paragraph
to its complaint alleging that Holmes’s sale
a member of the controlled group until he
of his businesses “was to evade or avoid
refutes the Fund’s “determination” in
withdrawal liability.” 14 It is one thing to
arbitration, we would still conclude that
the Fund’s action was untimely. As we
district court may preliminarily determine have indicated above, the complaint that
whether the MPPAA applies at all to a first announces the Fund’s “determination”
given entity, and it may resolve other was filed beyond the six year statute of
issues where arbitration would cause limitations. Further, the only method for
irreparable harm to the employer, or where challenging that “determination” is
the question is one of statutory arbitration, as described by the MPPAA.
interpretation. Flying Tiger, 830 F.2d at Under these circumstances, we find no
1251-54; see also Galgay, 105 F.3d at 142 basis in either the statutory scheme or the
case law interpreting it to apply a statute of
14
Even if we would be required to accept limitations other than the one clearly
the Fund’s assertion and consider Holmes delineated in the M PPAA itself.

16
MPPAA and do an injustice to pension claims to languish over a twenty year
funds seeking to enforce judgments related limitations period.1 5 Accordingly,
to delinquent withdraw al liability Congress has given funds sufficient time
payments. But we do not view our opinion to discover the owners of closely held
as doing either of those things. It is true, corporations and trace the paths of
as we have previously observed, that the complicated sales transactions, while at the
MPPAA sets up a single-employer, or same time encouraging funds to act in a
controlled group, scheme because a fund manner that serves the best interests of the
“has no way of knowing the ownership of plan participants.
a closely held corporation.” Barker &
Williamson, 788 F.2d at 128. But we V.
made that observation in the context of a
case involving notice of withdrawal Because we agree with the District
liability, which, under the MPPAA, must Court that this matter should have been
be given “as soon as practicable.” 29 dismissed as untimely, Holmes is entitled
U.S.C. § 1399(b)(1). Thereafter, a pension to a reimbursement of the interim
fund has six full years to investigate and payments he made while the action was
prepare to bring a cause of action to pending. See 29 C.F.R. § 4219.31(d)
recover the withdrawal liability in a district (requiring a plan sponsor to refund
court. 29 U.S.C. § 1451(f). Congress overpayments of withdrawal liability).
elected to create a relatively long The Fund does not dispute the fact that,
limitations period to govern actions given our conclusion regarding the statute
brought under the MPPAA, giving pension of limitations, it is required to return some
funds adequate time to locate corporations portion of Holmes’s payments. However,
and persons who are pote ntially the Fund does assert that the return of
responsible for withdrawal liability. See certain amounts described in the District
Central States, Southeast & Southwest
Areas Pension Fund v. Navco, 3 F.3d 167,
171 (7th Cir. 1993), abrogated on other 15
We see it fit to emphasize here that we
grounds by Bay Area, 522 U.S. at 194.
are to construe this remedial scheme in
favor of the plan participants. This does
On the other hand, the M PPAA is a
not always equate to construing the
remedial statutory scheme which is to be
scheme in a way that grants wide latitude
“liberally construed in favor of protecting
to the pension funds. Here, it is in the best
the participants in employee benefit
interests of the plan participants to allow
plans.” Id. at 127. The discrete six year
sufficient time for a fund to engage in the
limitations period furthers this goal,
necessary inves tigation related to
requiring a fund to act expeditiously in
identifying potentially liable entities, but to
pursuing payment from members of a
also motivate the fund to do so in an
controlled group, rather than allowing such
expeditious manner.

17
Court’s judgment would violate ERISA’s making the overdue payments, the Court
anti-inurement provision. See 29 U.S.C. § entered judgment for the delinquent
1103(c) (preventing plan assets from payments and ordered Holmes to pay any
inuring to the benefit of an employer). attorneys’ fees and costs associated with
Specifically, the Fund asserts that it should the Fund’s efforts to secure payment
only be required to return the interim pursuant to the original order.
payments made by Holmes – the return of
which is explicitly provided for in an In its final order related to this
exception to the anti-inurement provision matter, after dismissing the Fund’s action
of ERISA, see 29 U.S.C. § 1103(c)(3) – based on the statute of limitations, the
without having to return his payments of District Court included these attorneys’
attorneys’ fees and costs, and without fees and costs paid by Holmes in the total
having to pay interest on the total amount. amount the Fund was ordered to return to
him. The Fund offers two reasons
A. explaining why it thinks the District Court
erred, and why it should not have to return
We agree with the Fund that it that portion of the total amount: first, the
should be permitted to retain the payments Fund notes that the payment arose from
of attorneys’ fees and costs. A few more Holmes’s failure to comply with a court
facts are necessary here in order to order; and second, the Fund urges that the
understand the context in which these payments are now plan assets, which
payments were made, as well as our cannot be returned absent a specific
decision to allow the Fund to keep them. statutory exception to the anti-inurement
In the District Court’s first order referring provisions of ERISA. We agree that, for
this matter to arbitration, the Court ordered the first reason offered by the Fund,
Holmes to begin making interim Holmes is not entitled to reimbursement of
withdrawal liability payments to the Fund these costs and fees.
in accordance with 29 U.S.C. § 1399(c)(2).
Following this decision, Holmes refused to Regardless of the ultimate
make the interim payments that had come disposition of the case, Holmes had an
due between the date that he received the obligation to comply with the District
complaint and the date that the Court Court’s orders that preceded its final
ordered him to make the payments. The judgment. By refusing to obey the initial
Fund filed a Motion for Entry of order regarding interim payments, Holmes
Judgment, seeking the overdue payments, forced the Fund to engage in further
and Holmes filed a Motion for litigation in order to secure enforcement of
Clarification, asking whether the Court’s what was at the time a valid order of the
order mandated the backpayments. After District Co urt. The subsequent
determining that its order had been clear determination regarding the untimeliness
and that Holmes was responsible for of the Fund’s action does not serve to

18
negate the costs incurred due to Holmes’s overpayments).17 In Huber, we examined
wrongful failure to make the interim a regulation promulgated by the
payments ordered by the Court. Thus, we Department of Labor allowing for the
will reverse the District Court’s judgment payment of interest on overpayments under
insofar as it orders the Fund to reimburse the MPPAA, and we deferred to the
Holmes for the payments of these agency’s reasonable construction of the
attorneys’ fees and costs.16 MPPAA and the anti-inurement provision
of ERISA.18 See 29 C.F.R. § 4219.31(d)
B.
17
The second issue related to the We note that Huber was partially
reimbursement amount involves the abrogated, with respect to a separate
District Court’s award of interest and its holding not relevant here, by the Supreme
use of the interest rate set forth in the Court’s decision in Milwaukee Brewery
Fund’s plan agreement as the interest rate Workers’ Pension Plan v. Jos. Schlitz
applicable to delinquent contributions and Brewing Co., 513 U.S. 414, 421 (1995).
payments. The Fund contends that it 18
The Fund urges that Huber’s analysis
should not be required to pay interest on
on this point has been undermined by
the amount of the reimbursement, and, in
intervening developments in this area of
the alternative, that the interest rate should
the law. Specifically, the Fund asserts that
be based on prevailing market rates. We
our discussion in Huber rested upon our
reject both of these arguments. As to the
holding in an earlier case that was
Fund’s obligation to pay interest, we are
subsequently abrogated by a decision of
bound by a prior decision of our court.
the Supreme Court. See United Retail &
See Huber v. Casablanca Indus., Inc., 916
Wholesale Employees Teamsters Union
F.2d 85, 103 (3d Cir. 1990) (holding that
Local No. 115 Pension Plan v. Yahn &
an ERISA fund may be required to pay
McDonnell, Inc., 787 F.2d 128 (3d Cir.
interest on refunds of withdrawal liability
1986), abrogated in part by, Concrete Pipe
& Prods. of Cal, Inc. v. Constr. Laborers
Pension Trust for S. Cal., 508 U.S. 602
(1993) (involving the constitutionality of
the MPPAA’s presumptions favoring
16
Because we are persuaded by the liability determinations made by
Fund’s first point, we need not determine multiemployer plans). We are not
w h e t h e r E R IS A ’s a n t i- i n u re m e n t persuaded that our conclusion in Huber
provision, viewed in light of other regarding payment of interest was dealt a
provisions of the MPPAA related to fatal blow by the Supreme Court’s
withdrawal liability refunds, would bar the decision in Concrete Pipe, as it is far from
return of previously paid attorneys’ fees clear that our holding on this point was
and costs here. dictated solely by our mention of United

19
(“The plan sponsor shall credit interest on judgment order. We see no basis for
the overpayment from the date of the questioning that determination. While the
overpayment to the date on which the rate set by the Fund might be slightly
overpayment is refunded . . . .”); see also higher than the current prevailing market
Chevron, 467 U.S. at 844. In light of this rate, the average rates over time have been
binding precedent, the District Court was recorded both above and below ten
correct to include an award of interest in percent. Further, we note that it seems
its judgment order outlining the amount of somewhat problematic for the Fund to be
Holmes’s reimbursement. challenging its own rate as being
unreasonable, while it presumably
Regarding the interest rate to be continues to apply that rate against
applied when a fund reimburses an e m ployers with delinq uent p la n
employer for overpayments of withdrawal contributions and overdue withdrawal
liability, we again look to the Department liability payments. In any event, we
of Labor’s regulation for guidance. conclude that the District Court’s award of
According to 29 C.F.R. § 4219.31(d), the interest at a rate of ten percent was proper.
Fund must credit interest on the
overpayment “at the same rate as the rate VI.
f o r o v e r due w ithdrawal liability
payments.” In determining what rate Accordingly, we will AFFIRM the
should apply, the Fund may choose order of the District Court granting
between the rate specified in 29 C.F.R. § summary judgment in favor of Holmes and
4219.32, which sets out a rate that is dismissing the Fund’s action as untimely.
essentially equivalent to the prevailing We will also AFFIRM the judgment of the
market rate for short-term commercial District Court to the extent that it orders
loans, or the rate specified by the plan the Fund to reimburse Holmes in the
itself pursuant to 29 C.F.R. § 4219.33, amount of his interim payments, the
which allows ERISA funds to adopt interest he paid, and interest on that
reasonable rules setting out interests rates amount to be computed at a rate of ten
that will apply to overdue or overpaid percent. However, we will REVERSE the
withdrawal liability. Here, the Fund’s plan judgment of the District Court to the extent
agreement sets the interest rate for overdue that it orders the Fund to return the
withdrawal liability at ten percent, and the attorneys’ fees and costs paid by Holmes.
Court applied that rate in constructing its

ROSENN, Circuit Judge, dissenting.
Retail. Thus, absent a clear statement to
The majority has fashioned a
the contrary by the Supreme Court or our
principle that eviscerates the intent of the
own court sitting en banc, we remain
Multiemployer Pension Plan Amendments
bound by Huber.

20
Act of 1980 (“MPPAA” or “the Act”) and precedent in this circuit. Therefore, I
vitally undermines a pension fund’s ability respectfully dissent.
to enforce its judgment against a
defaulting employer. Although the I.
MPPAA provides for a six-year statute of
limitations within which to initiate suits When drafting the MPPAA,
for the determination of the underlying Congress endowed the legislation with
pension liability, it is silent with respect to several key provisions designed to assist
enforcement of judgments, leaving that pension funds in collecting withdrawal
aspect to existing state and federal laws. liability from delinquent or evasive
The enforcement of judgments often employers in situations such as the case at
requires prolonged investigations in an bar. The statutory scheme provides: (1) all
effort to identify and find related entities trades or businesses in a “control group”
and their resources. The majority expands will be treated as a “single employer,” 29
the Act’s six-year statute of limitations not U.S.C. § 1301(b)(1); (2) if a pension fund
only to govern an underlying claim for makes a factual determination that an
withdrawal liability against an employer, employer has conducted a transaction for
but also to deny the pension fund an the primary purpose of “evading or
opportunity to make factual determinations avoiding” pension liability, the pension
regarding the liability of related entities. fund may disregard the transaction, 29
U.S.C. § 1392(c); (3) if an employer
The evidence in this case shows disputes a factual determination made by a
that the employer shifted its liability pension fund, that dispute must be
among a tangled web of domestic and resolved through arbitration before a civil
foreign corporate entities, frustrating the suit may proceed, 29 U.S.C. § 1401(a)(1);
Trucking Employees of North Jersey and (4) suits against an employer to collect
Welfare Fund’s (the “Fund”) continuous withdrawal liability must be brought
efforts to collect pension liability under the within six years of the accrual of the
mechanisms prescribed by ERISA and the action, 29 U.S.C. § 1451(f).
MPPAA . The majority, by treating the
judgment against the employer, Route In the seminal case of IUE AFL-
Resources, as a nullity with respect to CIO Pension Fund v. Barker &
members of the “control group,” thus Williamson, Inc., 788 F.2d 118 (3d Cir.
enables the latter to evade statutory 1986), this court recognized that a liberal
liability under the Act. I believe that the construction of the MPPAA’s provisions
majority’s expansive and unrealistic in favor of pension funds is consistent with
interpretation of the MPPAA’s statute of the statute’s legislative intent. 788 F.2d at
limitations and its narrow view of the 127 (citing H.R.Rep. No. 869, 96 th Cong.,
control group is contrary to the letter and 2d Sess. 71, reprinted in 1980 U.S. Code
purpose of the MPPAA, as well as the Cong. & Ad. News 2918, 2939).

21
Furthermore, “[c]ourts have indicated that group constitutes constructive notice to all
because ERISA (and the M PPAA) are entities in the control group. 788 F.2d at
remedial statutes, they should be liberally 127. We noted the practical necessity for
construed in favor of protecting the this principle, acknowledging that pension
participants in employee benefit plans.” funds have no way of knowing ownership
Id. (citing Smith v. CMAT-IAM Pension arrangem ents among closely held
Trust, 746 F.2d 587, 589 (9 th Cir. 1984); corporations. Id. at 128. The court
Rettig v. PBGC, 744 F.2d 133, 155 (D.C. reasoned that:
Cir. 1984)). In this case, the majority has [h]olding the fund responsible for
disregarded these guideposts, and instead providing notice to all other
engages in a rigid construction of the poss ible entities that m ight
MPPAA that is inconsistent with the subsequently be deemed to be in a
statute, departs from the prior holdings of controlled group with the employer
this court, and defies the MPPAA’s corporation would place the fund in
legislative intent acknowledged by this and an untenable position. In contrast,
other courts. the stockholders and officers of
corporations . . . certainly are aware
There are two significant provisions of their holdings. If they choose to
in the MPPAA that underlie the analysis in ignore . . . potential liability as a
this case. First, the MPPAA stipulates that member of a controlled group
pension funds may treat all trades and under the MPPAA, then they
businesses under “common control” as a should suffer the consequences if
“sing le employer.” 29 U.S .C. § t h a t i s sue is subseque ntl y
1301(b)(1).19 This “single employer” determined adversely to them.
principle allows pension funds to deal Id.
exclusively with the defaulting employer
known to the fund, while at the same time Second, Congress acknowledged
assuring themselves that legal remedies that employers owing significant pension
can be maintained against all related liability may attempt to avoid their
entities in the control group. In Barker & obligations through evasive transactions.
Williamson, we derived from the See Flying Tiger Line v. Teamsters
MPPAA’s “single employer” principle the Pension Trust Fund of Philadelphia, 830
logical corollary that notice of pension F.2d 1241, 1248 (3d Cir. 1987). For
liability provided to one entity in a control example, a corporate entity with pension
liability may be sold to a separate,
undercapitalized corporate entity that then
19 declares bankruptcy, thereby frustrating a
The MPPAA utilizes the definition of
pension fund’s efforts to collect from the
“control group” as prescribed in the
employer. To remedy this evasive
Internal Revenue Code. 29 U.S.C. §
practice, the MPPAA states that if the
1301(b)(1).

22
primary purpose of a transaction is to matter, the Fund asserts that Holmes
“evade or avoid” pension liability, a participated in a transaction intended to
pension fund may disregard the “evade or avoid” pension liability. Thus,
transaction, and “liability shall be as Congress provided in the MPPAA, the
determined and collected . . . without Fund may disregard the transaction and
regard to such transaction.” 29 U.S.C. § treat Holmes as a continuing member of
1392(c). Notably, if an employer disputes the control group. 29 U.S.C. § 1392(c).
a pension fund’s determination that a Second, as a matter of law, the Fund
transaction was primarily conducted to argues that because it brought a claim
“evade or avoid” pension liability, the against a member of the employer control
employer must seek arbitration to resolve group in 1995, it has satisfied the MPPAA
this factual dispute before the court statute of limitations, leaving the Fund free
proceeding may continue. 29 U.S.C. § bring the present suit against Holmes as an
1401(a)(1); Flying Tiger Line, 830 F.2d at action to enforce the 1995 judgment.
1248. Once in arbitration, Congress
further tipped the scales in favor of A.
pension funds by granting a presumption
that any factual determination by the fund Through a combination of stock and
is correct, unless the employer shows by a trust, Holmes was the owner of Holmes
preponderance of the evidence that the Transportation, Inc., (“HTI”), Kero
fund’s finding was “unreasonable or Leasing Corp. (“Kero”) and other related
clearly erroneous.” 29 U .S.C . § personal proprietorships.20 In 1988,
1401(a)(3)(A). The Supreme Court has Holmes transferred his interest in these
interpreted this language to place the related companies to Route Resources, a
burden of persuasion on the employer Canadian-owned holding company. The
during arbitration to “disprove a Fund points to significant evidence in the
challenged factual determination by a record indicating that Holmes’ transaction
preponderance.” Concrete Pipes and was intended to evade pension liability.
Prod ucts of C alifornia, In c. v . For example, Holmes originally signed a
Construction Laborers Pension Trust of collective bargaining agreement with the
Southern California, 508 U.S. 602, 629 Teamsters Local Union No. 560 in May of
(1993). 1985, constituting his initial personal
promise to make payments to the Fund.
II.

The Fund’s position in this case 20
The Fund is able to bring an action
may be boiled down to two arguments that
against Holmes personally because he
support its claim to collect pension liability
operated proprietorships under common
from the Defendant/Appellee Robert
control with Kero in his personal capacity
Holmes (“Holmes”). First, as a factual
without corporate protection.

23
Then, several months later in October of during the negotiation of the alleged sale
1985, Holmes incorporated Kero and or soon after the transaction closed, Kero
assigned the ag reem ent (an d the and/or Route Resources stopped making
corresponding pension liability) to it. At payments to the Fund. In July of 1989,
that point, Kero had no apparent assets shortly after the execution of the purchase
except the bare collective bargaining agreement, Route Resources conveyed the
agreement. In what may have been a capital stock of HTI to Anthony
further attempt to isolate assets from Matarozzo, the owner of Arrow Carrier,
liabilities, the record indicates that Holmes Inc. Six months later, HTI filed a petition
transferred a large piece of real estate in in bankruptcy.
Framingham, Mass., worth over $10
million, from HTI to himself personally in Almost immediately after Kero
December 1987, prior to conducting the stopped making pension payments, the
sale to Route Resources. Next, Holmes Fund did its best to follow this elusive
transferred HTI’s remaining assets into chain of ownership and serve notice of
two shell corporations to facilitate the sale withdrawal liability on the appropriate
to Route Resources. Kero’s stock, which parties as required under the MPPAA.
may be better characterized as the large The Fund’s efforts included several notice
pension liability, was then transferred to letters sent to Matarozzo from 1990
Route Resources separately from the through 1992, as well as letters sent to
corporations now containing the assets. Route Resources and Kero Leasing at their
last known addresses. The Fund received
Despite the sale, Holmes displayed no response until 1992, when Matarozzo
an initial intent to remain involved with finally informed the Fund that his purchase
the companies through a fifteen year of HTI from Route Resources did not
management consulting contract worth include Kero or Kero’s pension liability.
$4,725,000, which was included as part of Thus, the Fund’s pursuit of Matarozzo
the sale agreement. Yet, the parties over a three year period was a red herring.
walked away from the agreement after Interestingly, the District Court in this case
only a single payment of $78,750 covering noted that when Anthony Matarozzo
three months of services. Not surprisingly, eventually responded to the Fund, he was
a bankruptcy trustee appointed for the HTI in prison serving a sentence for theft from
estate opined that the Route Resources a separate pension fund. Bd. of Trustees
transaction “was made upon insufficient of Trucking Employees of N. Jersey
consideration.” Trucking Employees of Welfare Fund, Inc. - Pension Fund v. Kero
North Jersey Welfare Fund, Inc. v. Route Leasing Corp., et al., No. 98-1476, slip op.
USA Real Estate, Inc., No. 90-4489, slip at 4 (D.N.J. Oct. 26, 1999).
op. at 2 (D.N.J. May 23, 1991).
While the actual determination of
At some point in 1988, either whether this transaction was intended to

24
“evade or avoid” pension liability is a under the MPPAA, should be construed as
matter for arbitration, the claims presented enforcement actions against the different
by the Fund and reinforced by the District entities comprising the “single employer.”
Cou rt facially support a factual
determination of evasive intent. This The Fund believed that by bringing
determination should not be undermined an initial suit against one member of the
by Holmes’ dubious effort to invoke the control group, it would satisfy the MPPAA
statute of limitations. statute of limitations and provide further
time to investigate the complicated history
B. of private transactions to find other
resources to satisfy its judgment. The
After years of frustration from Fund was justified in this belief because
chasing Kero’s phantom owners, the Fund courts in this circuit have consistently held
decided to switch tactics, retain new that this approach is permissible under the
counsel, and address the matter in court. MPPAA. Specifically, this same pension
The Fund’s new counsel brought an action fund was the plaintiff in two prior cases
in the U.S. District Court for the District of before the New Jersey district court,
New Jersey in April of 1995 against Route raising almost identical claims. In Bd. of
Resources and its related companies to Trustees of Trucking Employees of N.
collect the withdrawal liability, again Jersey Welfare Fund, Inc. v. Gotham Fuel
following the MPPAA procedures. Route Corp., 860 F.Supp. 1044, 1051 (D.N.J.
Resources did not respond to the 1993) and Bd. of Trustees of Trucking
complaint, and the District Court awarded Employees of N. Jersey Welfare Fund, Inc.
the Fund a default judgment. v. Able Truck Rental Corp., 822
F.Supp.1091, 1095 (D.N.J. 1993), Judges
The Fund argues that because the Ackerman and Lifland, respectively, held
1995 suit was brought within the six-year that under the MPPAA, members of a
statute of limitations period under the control group are “statutory alter egos.” 21
MPPAA, it satisfied the statute of Thus, as courts have held in other “alter
limitations as to all other entities in the ego” cases, Judges Ackerman and Lifland
same control group, due to the “single determined that the Fund’s claims should
employer” principle. The Fund claims that be “construed as actions to enforce
because the MPPAA allows the Fund to judgment” and will be considered timely
treat all entities in a control group as a
single entity, there can be only one
judgment against that single entity. In 21
This argument should not be confused
short, “judgment against one is judgment
with an alter ego claim brought under state
against all.” Therefore, all future litigation
common law. The MPPAA’s “single
against other entities in the same control
employer” provision makes members of a
group, even if postured as new claims
control group “statutory” alter egos.

25
“if the underlying action against the exist against members of a
corporation was timely and the subsequent controlled group. Thus, it follows
action to pierce the corporate veil to that all subsequent actions against
enforce the judgment was brought within different members of a controlled
the limitations period for enforcement of group are actions to enforce the
judgments.” Able Truck, 822 F.Supp. at judgment previously entered . . . .”
1095 (emphasis added) (citing Wm.
Passalacqua Builders v. Resnik Developers
Able Truck, 822 F.Supp. at 1095. The
South, Inc., 933 F.2d 131 (2 nd Cir. 1991)).
District Court opinion in the present case,
The use of the word “construed” is
as affirmed by the majority here,
noteworthy, as it shows a willingness
eviscerates the concepts set forth in Barker
among the courts to read complaints
& Williamson, and imposes a highly
liberally when a plaintiff is seeking to
technical pleading requirement that
enforce a prior judgment under an “alter
frustrates the letter and the intent of the
ego” theory, or the statutorily analogous
MPPAA.
“single employer” theory.
The majority here would prohibit
Although the complaints filed in the Fund from collecting its debt partly
Able Truck and Gotham Fuel are not a part because it failed to adequately express the
of the record in this case, counsel for the magic words “enforcement of judgment”
Fund certified at oral argument before us in its complaint. However, even if this
that she was involved in those prior cases court would impose a strict pleading rule,
on behalf of the Fund. She stated that in requiring an explicit statement that an
those cases she filed substantially the same action seeks to enforce a prior judgment
complaint that she filed in the present case. under ERISA, the complaint filed here by
Based on counsel’s explanation, which is the Fund arguably would meet that
further supported by the language of the requirement. The claim for relief pled all
district courts in Gotham Fuel and Able of the factual predicates required for
Truck “construing” the complaints as enforcement of judgment, including
actions to enforce judgment, it appears that acknowledgment of the 1995 judgment
the complaints in all of these cases filed by against Route Resources (paragraph 17), a
the Fund used the same terminology. factual determination that Holmes
However, in the previous cases, the courts remained part of the control group due to
were his evasive transaction (paragraph 24), and
a statutory basis for joint and several
persuaded that pursuant to the liability for the judgment among all control
single employer concept adopted by group members as required under the
the Third Circuit in Barker &
Williamson, supra, only one
withdrawal liability judgment can

26
MPPAA (paragraph 31).22 Therefore, under the applicable New
Jersey law, the twenty year statute of
The majority’s narrow view of the
limitations for enforcement of judgment
pleading, coupled with an impractical
applies to the present suit to enforce the
extension of the MPPAA statute of
1995 judgment. N.J. Stat. Ann. § 2A:14-5.
limitations requiring that actions to enforce
an underlying judgment must also be
brought within a six-year period, severely
III.
limits the purpose of the Act. I believe, in
agreement with the district courts in The majority attempts to distinguish
Gotham Fuel and Able Truck, that the Able Truck and Gotham Fuel on the facts
Fund satisfied the MPPAA statute of by noting that in those cases, membership
limitations when it brought the original in the control group was conceded by the
suit against Route Resources in 1995. defendants, while in the present case,
Holmes contests his control group status.
The majority further holds that because six
22
In an attempt to justify its position years expired prior to filing this suit
that this complaint cannot be read as an against Holmes, the Fund is now
enforcement action, the majority discusses prohibited from asserting that Holmes
at length the legal steps taken by the Fund remained a control group member because
that can be interpreted to show an intent to his sale to Route Resources was intended
pursue Holmes through a new action under to evade or avoid liability, effectively
the MPPAA. I believe that the actions blocking the Fund from reaching Holmes’
referenced by the majority do not prohibit assets. Both of these arguments miss the
the Fund from asserting that its current mark.
action is intended to enforce the 1995
judgment. Rather, the multiple allegations
put forth by the Fund to describe its claim A.
against Holmes are better interpreted as
First, by distinguishing Able Truck
alternate legal theories that the Fund
and Gotham Fuel based on Holmes’
pursued. Given the silence in the MPPAA
dispute of his control group status, the
regarding enforcement of judgments that
majority states in a footnote that it need
we now attempt to resolve, and this
not decide the crucial issue of whether the
particular Fund’s past experience in
“single employer” theory requires that
Gotham Fuel and Able Truck, it is not
“judgment against one is judgment against
surprising that the Fund pursued multiple
all.” Yet, in my view, we cannot
theories of liability. The Fund should not
effectively resolve this appeal without
now be penalized for its comprehensive
deciding this crucial legal question.
approach to this litigation, much of which
was initiated in response to the District The importance of resolving
Court’s early rulings in the case.

27
whether “judgment against one is limitations bars a suit cannot be affected,
judgment against all” is highlighted by a as the majority allows, by whether the
disagreement among several district courts defendant concedes or denies liability in
across the country. For example, both the the underlying suit. The operation of the
District Court opinion and the majority in statute of limitations is a legal concept,
this case draw support from a case decided completely separate from the defendant’s
in the Northern District of Illinois, Central underlying defenses, or lack thereof. The
States, Southeast and Southwest Areas majority’s willingness to uphold a narrow
Pension Fund v. Mississippi Warehouse interpretation of the MPPAA statute of
Corp., 853 F.Supp. 1053 (N.D. Ill. 1994). limitations against those who concede
Although the majority attempts to liability, and yet apply a broader
distinguish Mississippi Warehouse from interpretation when the underlying liability
Able Truck and Gotham Fuel on the facts, is disputed, confuses the issue and fails to
even a cursory reading of Mississippi address the operative legal principle at bar.
Warehouse shows a fundamental legal The majority position essentially means
difference between these cases. The that if a defendant challenges his
district court in Mississippi Warehouse underlying liability in an action to enforce
plainly stated its disagreement with the an MPPAA judgment, he can obtain the
New Jersey cases and refused to adopt the benefit of an abbreviated statute of
rule construing secondary suits as limitations. Such a legal concept has no
enforcement claims under the “single basis in the law, nor should it.
employer” theory, regardless of whether
the defendant conceded or contested
control group status.23 853 F.Supp. at B.
1058.
Second, the majority acknowledges
Furthermore, the majority’s effort that the MPPAA requires disputes
to distinguish the New Jersey district court involving the “evade or avoid” provision
cases from Mississippi Warehouse and the to be resolved through arbitration. 29
present case based on the defendants’ U.S.C. §§ 1392(c), 1401(a)(1). However,
dispute of their control group status the majority adopts the non sequitur that
produces an untenable legal anomaly. The because the process for resolving the
determination of whether a statute of “evade or avoid” issue is prescribed under
the MPPAA statutory framework, the six-
year statute of limitations also applies as a
23
The court in Mississippi Warehouse bar to resolving this issue. There is
only recognized the factual distinction absolutely no support in the MPPAA or
from the New Jersey cases in a footnote, the prior case law for this proposition, and
while discussing its disagreement on the the majority cites to none.
law extensively in the body of the opinion.
The statute of limitations in the
853 F.Supp. at 1058, n.2.

28
MPPAA clearly refers to “action[s] acknowledged duty to interpret ERISA and
brought under this section.” 29 U.S.C. § the MPPAA liberally as remedial statutes.
1451(f) (emphasis added). On the other Barker & Williamson, 788 F.2d at 127.
hand, the MPPAA’s arbitration provision
I believe that the majority
requires that “disputes between an
ultimately errs in its interpretation of the
e m p l o y er and the plan sponsor
MPPAA by treating the question of
. . . concerning a determination made
whether Holmes can be considered a
under sections 1381 through 1399 of this
member of the control group as the
title shall b e resolved through
threshold issue. The majority holds that
arbitration.” 24 29 U.S.C. § 1401(a)(1)
regardless of whether the statute of
(emphases added). Section 1401(a)(1)
limitations will be satisfied by a prior,
r e f e r s t o “ d is p u t e s” co ncern in g
timely claim against a member of the
“determinations” because the items in
control group, this particular suit may not
sections 1381 through 1399 are all factual
proceed because the statute of limitations
determinations that the MPPAA entrusts to
bars the Fund from asserting that Holmes
the discretion of the Fund. These factual
is still a member of the control group
determinations, such as w hether a
against whom the prior judgment may be
transaction was intended to “evade or
enforced. I believe that this approach is ill
avoid” liability, are not causes of action in
advised, given the ability of employers in
and of themselves subject to the MPPAA
close corporations to hide their evasive
statute of limitations. Rather, as the
intent behind a thicket of private
Supreme Court acknowledged in Concrete
transactions that may take several years to
Pipes, they are “factual determinations” to
untangle, as occurred in this case.
be resolved through arbitration before a
civil suit may proceed. 508 U.S. at 629. Our review should be limited to the
The majority’s expansive application of legal question of whether the “single
the statute of limitations covering not only employer” principle requires that a timely
an original claim, but also the Fund’s claim against one control group member
ability to make factual determinations satisfies the MPPAA statute of limitations,
regarding an evasive transaction as part of leaving future actions against other control
an effort to enforce judgment, is contrary group members to be governed by the
to a reasonable construction of the statute. applicable state law statute of limitations
Also, it is contrary to this court’s for enforcement of judgment. If, as I
suggest, the answer is affirmative, then the
current action should be allowed to
24 proceed as an enforcement suit. The
The “evade or avoid” provision, 29
MPPAA would then require recognition of
U.S.C. 1392(c), falls within the applicable
the Fund’s factual determination that
range of sections 1381 through 1399,
Holmes should be treated as a member of
thereby designating it as a determination
the control group because his sale was
subject to arbitration.

29
primarily intended to “evade or avoid” F.2d 495, 501 (3d Cir. 1992). This court
liability. If Holmes wishes to dispute that should limit its inquiry to the legal
factual finding, he may do so in question of whether the MPPAA statute of
arbitration, as required under the MPPAA, limitations bars this suit. To that end, the
before the claim proceeds in the District majority has fashioned a six-year time
Court. Flying Tiger Lines, 830 F.2d at limit that applies to a pension fund’s
1248. original suit on the underlying claim, as
well as all efforts to enforce a judgment
against entities later determined to be
IV. members of the control group. Such a rule
encourages employers to impede the
The majority contends that allowing
collection of monies lawfully due pension
this suit to proceed against Holmes in such
funds and negates the arbitration
a “belated” manner would be somehow
provisions of the MPPAA for the factual
unfair to Holmes, given that he sold his
determinations of whether members of the
companies in 1988 and retired to Florida.
control group engaged in evasive and
This approach punishes the Fund for its
fraudulent schemes. The MPPAA never
investigation and delayed legal action,
intended such a result. Furthermore, the
despite evidence that Holmes and Route
majority’s rule is based, in part, on the
Resources may have engineered a scheme
unsupportable ground that it applies only
designed to conceal assets from the Fund
to situations where a defendant disputes
and obstruct detection of the culpable
control group status that has not yet been
entities. Our court has held on several
conclusively determined by a court or
occasions that factual determinations
arbitrator. As a result, the majority
regarding evasive transactions are left for
establishes an illusory dichotomy that
pension funds and arbitrators to decide.
avoids the operative legal issue.
The Fund’s factual determination should
not be disregarded by granting summary I would affirm this circuit’s line of
judgment on the basis of an affirmative MPPAA cases by following the precedent
defense. Such a decision denies the Fund set in Barker & Williamson. I would hold
the opportunity set forth in the Act to that judgment against one control group
challenge evasive and fraudulent member shall be deemed judgment against
transactions and transfers. We need only all, construe the Fund’s claim as an action
verify that Holmes was a member of the to enforce the 1995 judgment, vacate the
control group at some time prior to summary judgment against the Fund in this
withdrawal from the Fund, and leave the proceeding, and remand the case to the
resolution of this factual dispute to District Court for further proceedings
arbitration. See Bd. of Trustees of
Trucking Employees of N. Jersey Welfare
Fund, Inc. – Pension Fund v. Centra, 983

30
consistent with this opinion.25

25
Because my analysis of this case
would vacate the District Court judgment,
I do not reach the issue of whether Holmes
is entitled to interest payments and
attorneys’ fees

31