NY State Teamsters v. C&S Wholesale Grocers

20-1185-cv
NY State Teamsters v. C&S Wholesale Grocers

In the
United States Court of Appeals
for the Second Circuit

AUGUST TERM 2020

No. 20-1185-cv

NEW YORK STATE TEAMSTERS CONFERENCE PENSION AND
RETIREMENT FUND, by its Trustees, Michael S. Scalzo, Sr., John
Bulgaro, Daniel W. Schmidt, Tom J. Ventura, Bob Schaeffer, Brian
Hammond, Mark May and Paul Markwitz,
Plaintiff-Appellant,

C&S WHOLESALE GROCERS, INC.,
Defendant-Appellee. ∗

On Appeal from the United States District Court
for the Northern District of New York

ARGUED: MAY 3, 2021
DECIDED: JANUARY 27, 2022

∗
The Clerk of Court is directed to amend the caption as set forth above.
Before: CABRANES, RAGGI, and CARNEY, Circuit Judges.

This case presents four questions: (1) whether the United States
District Court for the Northern District of New York (Frederick J.
Scullin, Jr., Judge) erred in dismissing the claim of Plaintiff New York
State Teamsters Conference Pension and Retirement Fund (the
“Fund”) that Defendant C&S Wholesale Grocers (“C&S”) “evaded and
avoided” withdrawal liability under the Employee Retirement Income
Security Act (“ERISA”); (2) whether the District Court erred in
dismissing the Fund’s claim that C&S was subject to withdrawal
liability under a theory of “common control”; (3) whether the District
Court erred in not finding that C&S was subject to withdrawal liability
as an “employer”; and (4) whether the District Court erred in granting
C&S’s motion for summary judgment on the Fund’s claim that C&S
was subject to withdrawal liability as a “successor” under the
“substantial-continuity doctrine.” We hold that the District Court did
not err in dismissing the claims based on the first two liability theories
or in failing to find that C&S was an “employer.” We also hold that
while a “successor” can be subject to withdrawal liability under
ERISA, the District Court, in the circumstances presented here, did not
err in granting the Defendant’s motion for summary judgment as to
that claim. Accordingly, we AFFIRM the District Court’s order and
judgment.

2
EDWARD J. MEEHAN (Mark C. Neilsen,
Samuel I. Levin, on the brief), Groom Law
Group, Chartered, Washington, D.C.
(Vincent M. DeBella, Paravati, Karl, Green &
DeBella, LLP, Utica, NY, on the brief), for
Plaintiff-Appellant.

YAAKOV M. ROTH (Evan Miller, Stephen J.
Petrany, on the brief), Jones Day,
Washington, D.C., for Defendant-Appellee.

JOSÉ A. CABRANES, Circuit Judge:

3
not err in dismissing the claims based on the first two liability theories
or in failing to find that C&S was an “employer.” We also hold that
while a “successor” can be subject to withdrawal liability under
ERISA, the District Court, in the circumstances presented here, did not
err in granting the Defendant’s motion for summary judgment as to
that claim. Accordingly, we AFFIRM the District Court’s order and
judgment.

I. BACKGROUND

Penn Traffic Company (“Penn Traffic”) was a company based in
Syracuse, New York, that operated approximately 80 retail grocery
stores. Penn Traffic also operated two warehouses—one in Syracuse
and one in DuBois, Pennsylvania—where it stored wholesale
groceries, which it then distributed both to its own retail stores and to
other “independent” retail stores.

At its Syracuse warehouse, Penn Traffic employed
approximately 450 members of the Teamsters Local 317 union
(“Union”) under a collective bargaining agreement (“CBA”) that
required Penn Traffic to contribute to the Fund. The Fund, the
Plaintiff-Appellant in this action, is organized as a “multiemployer
plan” regulated by ERISA, under which Penn Traffic was subject to
significant “withdrawal liability” if it ceased to make contributions.
Briefly, if Penn Traffic “withdrew” from the Fund by ceasing to make

4
contributions to it, Penn Traffic was liable to the Fund for its share of
the Fund’s unfunded vested benefits. 1

Defendant C&S is a grocery wholesaler that also operates
warehouses and distributes groceries to retailers. In March 2008, C&S
began investigating a possible acquisition of Penn Traffic. C&S did not
want to acquire Penn Traffic’s Syracuse warehouse because of the
pension withdrawal liability associated with it. C&S therefore
attempted to structure its $43 million acquisition transaction, executed
in December 2008, in such a way as to limit its exposure to that liability:
C&S acquired “Penn Traffic’s wholesale distribution contracts,
customers, equipment, files, records, goodwill, intellectual property,
accounts receivable, and employees dedicated to Penn Traffic’s
wholesale distribution division who were not members of Teamsters
Local 317.” 2 And C&S did not purchase the Syracuse warehouse.

Following the transaction, Penn Traffic continued to run its
Syracuse warehouse and distributed products to both its own stores
and the independent stores that were now C&S customers based on
the December 2008 transaction. This activity was governed by a third-
party logistics agreement (“Logistics Agreement”) that created an
independent contractor relationship between Penn Traffic and C&S.
Penn Traffic retained responsibility for “all employees, [f]acility and
storage leases, material handling and transportation equipment,
contracts and all other liabilities associated with” the Syracuse

1 See Section II.A, infra.
2 App’x 44 ¶ 52 (emphasis in the original).

5
warehouse. 3 The Logistics Agreement made clear that Penn Traffic
was still responsible for employees at the Syracuse warehouse (the
“Teamsters”), and that C&S was not:

Penn Traffic Employees shall not be considered or
deemed in any way to be employees of C&S. C&S shall
not exercise any authority over the Penn Traffic
Employees, including, but not limited to, selecting,
engaging, fixing the compensation of, discharging and
otherwise managing, supervising and controlling the
Penn Traffic Employees and no joint employer
relationship shall exist. 4

In November 2009, Penn Traffic filed for protection under
Chapter 11 of the Bankruptcy Code. C&S then purchased the DuBois
warehouse. A Penn Traffic competitor and longtime C&S client
purchased many of Penn Traffic’s retail stores. The Syracuse
warehouse closed in May 2010, triggering the claimed withdrawal
liability for which the Fund filed a $63.6 million claim in Penn Traffic’s
bankruptcy proceeding. The bankruptcy estate was able to cover only
$5 million of that amount. The Fund then sought the remainder of the
withdrawal liability—about $58 million—from C&S in this action,
alleging various theories under which Penn Traffic’s withdrawal
liability was either transferred to, or jointly shared with, C&S.

3 Suppl. App’x 126.
4 Suppl. App’x 144.

6
The Fund’s initial complaint was filed on January 22, 2016. On
March 21, 2016, C&S moved under Federal Rule of Civil Procedure
12(b)(6) to dismiss the complaint for failure to state a claim upon which
relief can be granted. On April 8, 2016, the Fund filed an amended
complaint alleging theories of C&S’s liability in four counts: (1) C&S
was subject to the withdrawal liability as the “successor” to Penn
Traffic (“successor liability”); (2) C&S had intentionally avoided the
withdrawal liability, triggering a statutory provision, 29 U.S.C.
§1392(c), designed to re-impose the liability in such a case (“evade-or-
avoid liability”); (3) C&S was subject to the withdrawal liability
because it had “common control” over the Syracuse warehouse
Teamsters (“common control liability”); and (4) C&S was subject to the
withdrawal liability as a “joint employer” of the Syracuse warehouse
Teamsters (“joint employer liability”).

On April 22, 2016, C&S filed a supplemental motion to dismiss,
addressing the Fund’s amended complaint. On May 1, 2017, the
District Court granted C&S’s supplemental motion in part and denied
it in part. The District Court dismissed the theories of evade-or-avoid,
common control, and joint employer liability, leaving as viable only
the Fund’s theory of successor liability. The District Court held that
withdrawal liability could obtain under a successor liability theory
and that the Fund’s pleadings on this count were sufficiently plausible
to withstand a motion to dismiss.

C&S moved for a certificate of appealability, under 28 U.S.C.
§ 1292(b), seeking to argue before us that, as a matter of law, there was
no successor withdrawal liability under ERISA. On February 6, 2018,

7
the District Court denied that motion. The parties proceeded to
discovery, at the conclusion of which they filed cross-motions for
summary judgment.

On March 18, 2020, the District Court granted C&S’s motion for
summary judgment, holding that C&S “did not substantially continue
Penn Traffic’s business after the 2008 transaction” and therefore could
not “be held responsible for Penn Traffic’s withdrawal liability under
the doctrine of successor liability.” 5

On appeal, the Fund challenges: (1) the District Court’s
dismissal of the “evade-or-avoid liability” theory; (2) its dismissal of
the “common control liability” theory; (3) its finding that C&S was not
an “employer” for the purpose of determining withdrawal liability; 6
and (4) its grant of summary judgment to C&S on the “successor
liability” theory. We review each of these challenges in turn.

II. DISCUSSION

We review de novo a dismissal of a complaint for failure to state
a claim upon which relief can be granted. 7 Likewise, “[w]e review de
novo a district court’s grant of summary judgment after construing all

5 Special App’x 53–54 (emphasis omitted).
6 The Fund abandons its theory of “joint employer liability” on appeal and
asserts, instead, a challenge to the District Court’s failure to find that C&S’s logistics
agreement was a “subterfuge,” rendering C&S an “employer” of the Syracuse
warehouse Teamsters. See Section II.D infra.
7 Kelleher v. Fred A. Cook, Inc., 939 F.3d 465, 467 (2d Cir. 2019).

8
evidence, and drawing all reasonable inferences, in favor of the non-
moving party.” 8

A. Withdrawal Liability

Congress enacted ERISA in 1974 in part “to ensure that
employees and their beneficiaries would not be deprived of
anticipated retirement benefits by the termination of pension plans
before sufficient funds have been accumulated in the plans.” 9 Plans to
which multiple employers contributed jointly presented special
concerns in this regard, because if one employer pulled out, this
“reduce[d] a plan’s contribution base” and “pushe[d] the contribution
rate for remaining employers to higher and higher levels in order to
fund past service liabilities.” 10 Within the first few years after ERISA’s
enactment, a “significant number” of multiemployer plans were
experiencing “extreme financial hardship.” 11

To address this concern, in 1980, Congress passed the
Multiemployer Pension Plan Amendments Act (“MPPAA”), which
amended ERISA to provide that “[i]f an employer withdraws from
a multiemployer plan . . . then the employer is liable to the plan in the

8 Sotomayor v. City of New York, 713 F.3d 163, 164 (2d Cir. 2013).
9 Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 720 (1984).
10 Id. at 722 n.2 (quoting Pension Plan Termination Insurance Issues: Hearings
before the Subcomm. on Oversight of the H. Comm. on Ways and Means, 95th Cong. 22
(1978) (statement of Matthew M. Lind, Executive Director of the Pension Benefit
Guarantee Corporation)).
11 Id. at 721.

9
amount determined . . . to be the withdrawal liability.” 12 This statutory
scheme was designed to “reduc[e] the burden of withdrawal on the
plan and remaining employers,” 13 and thereby “protect the financial
solvency of multiemployer pension plans.” 14

Withdrawal liability is calculated based on the MPPAA, and
generally represents the portion of a multiemployer pension fund’s
“unfunded vested benefits” allocable to the withdrawing employer. 15
A “complete withdrawal,” which can trigger liability under the
statute, occurs when an employer “permanently ceases to have an
obligation to contribute under the plan” or “permanently ceases all
covered operations under the plan,” for example by going out of
business, or renegotiating the terms of its CBA. 16 When this occurs,
“the entity maintaining the plan[] must determine the amount of the
employer’s withdrawal liability, notify the employer of the amount[,]
and make a demand for payment.” 17

12 29 U.S.C. § 1381(a); see generally R.A. Gray, 467 U.S. at 720–25 (explaining
the history of the passage of the MPPAA).
13 R.A. Gray, 467 U.S. at 722 (internal quotation marks omitted).
14 Bay Area Laundry & Dry Cleaning Pension Tr. Fund v. Ferbar Corp. of Cal.,
Inc., 522 U.S. 192, 196 (1997).
15 29 U.S.C. § 1381(b)(1); see generally ILGWU Nat’l Ret. Fund v. Levy Bros.
Frocks, Inc., 846 F.2d 879, 881 (2d Cir. 1988) (outlining the statutory scheme for the
imposition of withdrawal liability).
16 29 U.S.C. § 1383(a); see HOP Energy, LLC v. Loc. 553 Pension Fund, 678 F.3d
158, 161 (2d Cir. 2012) (noting that a company may be subject to withdrawal liability
if “it permanently went out of business”).
17 Levy Bros. Frocks, 846 F.2d at 881; 29 U.S.C. § 1382.

10
B. Evade-or-Avoid Liability

The Fund argues that C&S acted intentionally to “evade or
avoid” withdrawal liability by structuring its 2008 acquisition of Penn
Traffic’s distribution business in such a way as to never assume control
of the Syracuse warehouse or its employees. According to the Fund,
C&S can therefore be held liable under 29 U.S.C. § 1392(c), a provision
of the MPPAA which establishes “evade-or-avoid” liability.

Section 1392 provides that “[i]f a principal purpose of any
transaction is to evade or avoid [withdrawal] liability,” then
withdrawal liability “shall be applied (and liability shall be
determined and collected) without regard to such transaction.” 18 In
other words, employers who are subject to withdrawal liability
generally cannot engage in a transaction—the sale of their assets, for
example—for the purpose of evading or avoiding that liability. If they
do, they are subject to the liability as though the transaction in question
did not occur. 19 Congress’s intent in imposing evade-or-avoid liability
was to “prevent withdrawing employers from threatening the

18 29 U.S.C. § 1392(c).
19 See, e.g., IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1053, 1056,
1057–58 (2d Cir. 1993) (noting that withdrawal liability claim was sufficiently
stated where the alleged “principal purpose” of a company’s sale of assets and
bonuses issued to the company’s owner “was to evade or avoid withdrawal
liability”).

11
financial stability of a plan by requiring the employers to pay their
share of unfunded vested benefit liability.” 20

C&S argues that it was never subject to withdrawal liability to
begin with, because it never owned the Syracuse warehouse or entered
into an employment relationship with the Teamsters who worked
there. Therefore, the first question we must answer is: Does “evade-or-
avoid” liability apply only to “employers” seeking to avoid their
withdrawal liability, or can non-employers also be held liable under
the statute?

In evaluating the issue, we consider our decision in IUE AFL-
CIO Pension Fund v. Herrmann. 21 There, an employer
(“Manufacturing”) entered into an agreement with a buyer
(“Mowers”), in which Mowers acquired Manufacturing’s assets but
did not assume any of Manufacturing’s liability under a
multiemployer pension plan. Manufacturing’s owner, Herrmann, was
alleged to have siphoned significant funds away from his company in
the course of the acquisition, in the form of signing bonuses and side-
deals. The pension fund alleged that “[t]hese transactions . . . rendered
Manufacturing insolvent.” 22 When Manufacturing went bankrupt and
withdrew from its multiemployer pension plan, the fund sued not just
Manufacturing (the relevant employer), but also Herrmann and

20SUPERVALU, Inc. v. Bd. of Trs. of Sw. Pa. & W. Md. Area Teamsters & Emps.
Pension Fund, 500 F.3d 334, 342 (3d Cir. 2007).
21 9 F.3d 1049.
22 Id. at 1053.

12
Mowers to recover under Section 1392. We held that “[t]o
calculate and collect liability, ‘without regard to [the] transaction,’ any
assets that were transferred in order to ‘evade or avoid liability,’ as
well as the parties to whom they were improperly transferred,”—i.e.,
non-employers Herrmann and Mowers—“must be within the reach of
the statute.” 23

According to the Fund, in the instant case, because C&S clearly
structured its acquisition of Penn Traffic’s assets in a way that limited
its exposure to the withdrawal liability associated with the Syracuse
warehouse and the Teamsters, the logic of Herrmann exposes C&S to
liability under Section 1392.

In our view, Herrmann does not require that C&S similarly
“must be within the reach of the statute.” First, the plaintiffs in
Herrmann sufficiently pleaded that the asset transfer at issue was
fraudulent. 24 There are no allegations of fraud in this case, and any
such claims would, at this stage, be waived.25 Herrmann allegedly
controlled Manufacturing and worked together with Mowers to illicitly
direct Manufacturing’s funds so that it could avoid Manufacturing’s
withdrawal liability. The analogous scenario in this case would be one
in which Penn Traffic worked with C&S to bankrupt itself in order to

23 Id. at 1056 (emphasis omitted) (quoting 29 U.S.C. § 1392(c)).
24 Id. at 1058 (finding that the “fraud claims alleged in the [c]omplaint are
legally sufficient”).
25See Amalgamated Clothing & Textile Workers Union v. Wal-Mart Stores, Inc.,
54 F.3d 69, 73 (2d Cir. 1995) (“Generally, a federal appellate court does not
consider an issue not passed upon below.” (internal quotation marks omitted)).

13
avoid its own withdrawal liability. As the District Court correctly
pointed out, while C&S and Penn Traffic may have structured their
deal so that C&S avoided assuming Penn Traffic’s withdrawal
liability, “they did not structure the transaction so that Penn Traffic
became . . . unable to pay [Penn Traffic’s] withdrawal liability.” 26 In
that hypothetical scenario, it might have made sense to bring Section
1392 claims against Penn Traffic, and C&S as well. But no such claims
are alleged here.

In Herrmann, the reason Section 1392 could be applied to non-
employers Herrmann and Mowers was that the assets at issue were
alleged to have been “improperly transferred” to them. 27 Apportioning
liability and engaging in recovery “without regard to [the]
transaction”—as contemplated by the MPPAA—effectively required
the plaintiffs to be able to negate the transaction and recover from the
non-employer parties then possessing those funds. 28

26 Special App’x 21.
27 Herrmann, 9 F.3d at 1056 (emphasis added).
28 Id. (“To calculate and collect liability, . . . any assets that were transferred
. . . as well as the parties to whom they were improperly transferred, must be
within the reach of the statute.”); see also Connors v. Marontha Coal Co., 670 F. Supp.
45, 47 (D.D.C. 1987) (“Whenever a transaction has removed assets from the formal
structure of the corporation being assessed for withdrawal liability, liability can only
be ‘collected’ if there is a right of action against the transferee, whether or not it
fits the definition of ‘employer.’ If, for example, a defendant company divided
itself into two corporations for the purpose of evading the collection of
withdrawal liability, liability would undoubtedly be collectible from both new
corporations.” (emphasis added)).

14
Here, by contrast, the Fund essentially alleges the opposite: that
C&S improperly failed to acquire the assets at issue from Penn Traffic.
This difference is critical. We agree with what the First Circuit has held
in a similar context: that Section 1392 “requires courts to put the parties
in the same situation as if the offending transaction never occurred;
that is, to erase that transaction. It does not, by contrast, instruct or
permit a court to take the affirmative step of writing in new terms to a
transaction or to create a transaction that never existed.” 29

This is not to say that non-employers cannot be liable for
withdrawal liability under an “evade or avoid” theory simply because
they were not the original employer subject to that liability. Herrmann
and the law of our Circuit are clearly to the contrary. 30 But it is the
exceptional circumstance—involving fraud, or an employer who is
otherwise working with a non-employer to make recovery on
withdrawal liability unavailable 31—that brings the collaborating

29Sun Cap. Partners III, LP v. New Eng. Teamsters & Trucking Indus. Pension
Fund, 724 F.3d 129, 149 (1st Cir. 2013); see also Lopresti v. Pace Press, Inc., 868 F.
Supp. 2d 188, 206 (S.D.N.Y. 2012) (“[T]here is a difference between declining to
assume withdrawal liability that one never had the obligation to pay and evading
withdrawal liability that one is already legally obligated to pay.”).
30 See N.Y. State Teamsters Conf. Pension & Ret. Fund v. Express Servs., Inc.,
426 F.3d 640, 647 n.6 (2d Cir. 2005) (“[A] non-employer . . . can be sued for
engaging in evade-or-avoid transactions. . . . The district court was therefore
mistaken when it stated that an evade-or-avoid lawsuit is more properly brought
against an admitted employer.” (cleaned up)).
See id. (noting that evade-or-avoid liability may obtain against a non-
31

employer who works “in conjunction with” an employer).

15
employers and non-employers together “within the reach” of Section
1392.

A non-employer cannot be said to evade or avoid liability merely
by declining to assume that liability in the first place. To hold
otherwise would be to paradoxically and imprudently encumber with
liability the perfectly sensible business decision precisely not to
purchase an encumbered asset. The District Court therefore properly
dismissed the Fund’s claim for “evade or avoid” liability.

C. Common Control Liability

The Fund argues separately that Penn Traffic and C&S were
under “common control,” and that C&S is therefore liable for
withdrawal liability.

Under 29 U.S.C. § 1301(b)(1), “all employees of trades or
businesses . . . which are under common control shall be treated as
employed by a single employer and all such trades and businesses as
a single employer” for the purposes of determining withdrawal
liability under ERISA. ERISA adopts a definition of “common control”
from tax regulations promulgated by the Secretary of the Treasury. 32

32See 29 U.S.C. § 1301(a)(14)(B). Such parallel definitions are common,
given that Title III of ERISA explicitly requires the Secretary of Labor and the
Secretary of the Treasury to work together to administer ERISA. See 29 U.S.C.
§ 1204(a) (“Whenever in this chapter or in any provision of law amended by this
chapter the Secretary of the Treasury and the Secretary of Labor are required to
carry out provisions relating to the same subject matter (as determined by them)
they shall consult with each other and shall develop rules, regulations, practices,
and forms which . . . are designed to reduce . . . conflicting or overlapping

16
Under that definition, businesses are under “common control” if they
are: (1) part of the same parent-subsidiary corporate structure; (2)
majority-owned by the same group of five or fewer persons; or (3) a
combination of (1) and (2). 33

Reviewing the Fund’s amended complaint, we find nothing to
suggest that Penn Traffic and C&S satisfied any part of this regulatory
definition for common control. In fact, the Fund does not plead that
C&S and Penn Traffic had any common owners. 34

On appeal, the Fund suggests that common control for the
purposes of ERISA can be established by a “partnership-in-fact.” Such
a claim is without any basis in the caselaw of our Circuit, but the First
Circuit has adopted an eight-part test from the jurisprudence of the
United States Tax Court to determine whether such a “partnership-in-
fact” exists and establishes common control under ERISA. 35 Even
assuming, without deciding, that the law of the First Circuit is
persuasive or applicable here, the Fund’s claim would not succeed.
The amended complaint’s allegation that “C&S and Penn Traffic each

requirements . . . .”); see also Colleen E. Medill, Introduction to Employee Benefits
Law: Policy and Practice 29–30 (5th ed. 2018) (explaining the division of authority
between the Department of Labor, the Treasury Department, and the Pension
Benefit Guaranty Corporation under ERISA).
33 See 26 C.F.R. § 1.414(c)-2.
34Cf. App’x 36 (acknowledging the “technical separation in ownership
between C&S and the Penn Traffic Company under state law”); id. at 38 ¶¶ 13–17.
35See Sun Cap. Partners III, LP v. New Eng. Teamsters & Trucking Indus. Pension
Fund, 943 F.3d 49, 57–58 (1st Cir. 2019) (citing Luna v. Comm’r, 42 T.C. 1067, 1077–78
(1964)).

17
stood to realize a profit or loss” based on whether the Syracuse
warehouse business was successful neither satisfies the First Circuit’s
test nor convinces us that a “partnership-in-fact” could have existed
between these businesses. 36

In sum, we agree with the District Court that the Fund has “not
even remotely” pleaded facts that would sustain a claim under
Section 1301(b). 37 The District Court was therefore correct to dismiss
the “common control” count.

D. Employer Liability

Next, the Fund argues that C&S used its Logistics Agreement as
a “subterfuge” to mask the fact that it was actually the “employer” of
the Syracuse warehouse Teamsters, and that C&S is therefore subject
to withdrawal liability. 38 This argument is before us in a somewhat
unusual posture that requires analysis.

At the outset, it is important to distinguish this argument from
the fourth count of the Fund’s amended complaint. Under that count,
the Fund argued that C&S was subject to withdrawal liability as an
“employer” under the “joint employer” doctrine, and the District
Court dismissed that count under Rule 12(b)(6) in its May 1, 2017

36 See App’x 51 ¶ 95.
37 Special App’x 23.
38 Appellant’s Br. 50-51.

18
order. 39 On appeal, the Fund abandons that argument and the
associated count of its amended complaint.

By contrast, the Fund first articulated a version of its
“subterfuge” argument in its opposition to C&S’s motion for summary
judgment. Therefore, on appeal, the “subterfuge” argument can only
be properly understood as an appeal of some error made by the
District Court in its summary judgment order of March 18, 2020, even
though that order dealt only with the “successor” liability count of the
amended complaint (the District Court having already dismissed the
other three counts). 40 In effect, therefore, the Fund in its “subterfuge”
argument attempts to shoe-horn an “employer” theory of liability (that
might have been more appropriate under the dismissed and
abandoned fourth count of the Fund’s amended complaint, or under a
separate count entirely) into its appeal of the District Court’s treatment
of the separate but sole-surviving first count of its amended complaint,
i.e., successor liability.

C&S therefore urges that the “subterfuge” argument is “new”
and “forfeited.” 41 We recognize instead that the argument was before
the District Court at the summary judgment stage, albeit in an
abbreviated and defensive form, rather than articulated—as it is on
appeal—as an independent theory of C&S’s withdrawal liability. Still,
we have no problem rejecting the Fund’s “subterfuge” theory of

39 Id. at 23–26.
40 Id. at 45.
41 Appellee’s Br. 50–51.

19
“employer” liability and finding that the District Court committed no
error with regard to it.

Under the Logistics Agreement, C&S agreed to reimburse a
portion of the costs—including a portion of the labor costs—Penn
Traffic incurred on behalf of C&S as an independent contractor
operating the Syracuse warehouse. 42 The Fund argues that this
reimbursement contract was essentially a facade that allowed C&S to
employ the Teamsters without doing so officially. Instead, in the
Fund’s view, Penn Traffic continued to act as the official employer,
and C&S simply reimbursed Penn Traffic’s costs—thereby reaping the
benefits of the Teamsters’ labor without having to assume the
liabilities of formal employment (such as withdrawal liability). This
argument relies on a single footnote in Division 1181 A.T.U.-New York
Employees Pension Fund By Cordiello v. City of New York Department of
Education. There, we opined:

There may be cases in which a plaintiff seeking to recover
withdrawal liability payments plausibly alleges that the
defendant used reimbursement as a subterfuge to avoid
accepting a contractual obligation to contribute. We do
not foreclose the possibility that such allegations, if
proven, could render the reimbursing entity an
“employer” under the MPPAA. 43

42 Suppl. App’x 129–31.
43 910 F.3d 608, 616 n.4 (2d Cir. 2018).

20
Far from “holding” that a defendant is made an employer for
the purpose of withdrawal liability by engaging in a so-called
subterfuge reimbursement, in Division 1181 we merely declined to
foreclose that possibility. 44 We found such a holding unnecessary,
because the plaintiffs in that case had not, in fact, shown any
subterfuge. 45

Just so here. The Fund submits that because agreements such as
the Logistics Agreement were “not part of the ordinary course of
C&S’s business,” the agreement was therefore the type of “subterfuge”
contemplated in our Division 1181 footnote. 46 This somewhat vague
suggestion runs up against our actual holding in Division 1181, and
solid caselaw from our sister circuits more broadly, that an obligation
to reimburse an independent contractor for contributions to a pension
plan is not the same as an obligation to contribute directly to that plan:
“[R]eimbursement and contribution are distinct concepts under the
MPPAA” and therefore “no obligation to contribute” to a
multiemployer pension plan “aris[es] under . . . contracts” that require
non-employers to reimburse an employer’s contributions under such
a plan. 47

44 Compare id. with Appellant’s Br. 51.
45 See Div. 1181, 910 F.3d at 616 n.4.
46 Appellant’s Br. 51.
47 Div. 1181, 910 F.3d at 616–17; accord Transpersonnel, Inc. v. Roadway Exp.,
Inc., 422 F.3d 456, 461 (7th Cir. 2005) (“[T]he obligation to reimburse for
contributions made by another is not the equivalent of an obligation

21
C&S entered into a well-recognized form of contractual
agreement in which C&S reimbursed Penn Traffic for certain expenses
that Penn Traffic incurred as an independent contractor operating the
Syracuse warehouse. The fact of a reimbursement arrangement
alone—even for a company that may not frequently enter into such
arrangements—does not a “subterfuge” make.

Is sum, the Fund failed to allege that C&S was an “employer”
based on its “subterfuge” theory, and the District Court committed no
error in this regard.

E. Successor Liability

The Fund’s final theory of liability is that, based on its
acquisition of Penn Traffic’s wholesale and distribution business, C&S
was the “successor” to Penn Traffic and therefore C&S assumed Penn
Traffic’s withdrawal liability. In allowing this theory to proceed past
the motion-to-dismiss stage, the District Court held that successor
liability could apply to withdrawal liability under ERISA.

Having never explicitly addressed that question ourselves, we
examine successor liability and its application to withdrawal liability
prior to turning back to the circumstances of the instant case.

to contribute in the first instance, and this distinction is important for purposes
of [the] definition of ‘employer’ under the MPPAA.”).

22
1. Successor Liability Generally

Under the general common law rule, “a corporation that merely
purchases for cash the assets of another corporation does not assume
the seller corporation’s liabilities.” 48 However, the Supreme Court has
“imposed liability upon successors beyond the bounds of the common
law rule in a number of different employment-related contexts in
order to vindicate important federal statutory policies.” 49 The
Supreme Court has held, for example, that a “successor employer may
be required to arbitrate with [a] union” under a predecessor’s CBA,50
or may be held liable for a “predecessor employer’s unfair labor
practices” under the National Labor Relations Act (“NLRA”). 51
Federal courts have further expanded the boundaries of “successor
liability” to include other federal statutory schemes, such as ERISA, 52

48Stotter Div. of Graduate Plastics Co. v. Dist. 65, 991 F.2d 997, 1002 (2d Cir.
1993) (internal quotation marks omitted).
Upholsterers’ Int’l Union Pension Fund v. Artistic Furniture of Pontiac, 920
49

F.2d 1323, 1326 (7th Cir. 1990).
50 John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 548 (1964).
Golden State Bottling Co. v. NLRB, 414 U.S. 168, 184 (1973); see also Fall
51

River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27 (1987).
52See, e.g., Resilient Floor Covering Pension Tr. Fund Bd. of Trs. v. Michael's Floor
Covering, Inc., 801 F.3d 1079, 1093–95 (9th Cir. 2015); Einhorn v. M.L. Ruberton Constr.
Co., 632 F.3d 89, 99 (3d Cir. 2011); Artistic Furniture, 920 F.2d at 1327.

23
the Fair Labor Standards Act, 53 the Family and Medical Leave Act, 54
and Title VII of the Civil Rights Act of 1964, 55 among others. 56

Successor liability is thus a “deviation” from the general
common law rule. 57 In fashioning this body of law, federal courts have
attempted to “strik[e] a balance between the conflicting legitimate
interests of the . . . successor, the public, and the affected
employee[s].” 58 In other words, “[s]uccessor liability is an equitable
doctrine, not an inflexible command.” 59 The Supreme Court has
therefore emphasized that there is “no single definition of ‘successor’
which is applicable in every legal context,” and that the question of
whether to hold a new employer to the obligations of a former

53See, e.g., Teed v. Thomas & Betts Power Sols., LLC, 711 F.3d 763, 766–77 (7th
Cir. 2013); Steinbach v. Hubbard, 51 F.3d 843, 845 (9th Cir. 1995).
54 See, e.g., Sullivan v. Dollar Tree Stores, Inc., 623 F.3d 770, 781 (9th Cir. 2010).
55 See, e.g., Bates v. Pac. Maritime Ass'n, 744 F.2d 705, 708 (9th Cir. 1984).
56 See, e.g., Scalia v. Wynnewood Refin. Co., 978 F.3d 1175, 1184 (10th Cir.
2020) (Occupational Safety and Health Act); EEOC v. G-K-G, Inc., 39 F.3d 740, 747–
48 (7th Cir. 1994) (Age Discrimination in Employment Act); Musikiwamba v. ESSI,
Inc., 760 F.2d 740, 748–50 (7th Cir. 1985) (race-based employment discrimination
under 42 U.S.C. § 1981).
57New York v. Nat'l Servs. Indus., Inc., 352 F.3d 682, 688 (2d Cir. 2003) (Leval,
J., concurring).
58 Golden State Bottling, 414 U.S. at 181.
Chi. Truck Drivers, Helpers & Warehouse Workers Union (Indep.) Pension Fund
59

v. Tasemkin, Inc., 59 F.3d 48, 49 (7th Cir. 1995).

24
employer is one that must be considered “in light of the facts of each
case and the particular legal obligation which is at issue.” 60

In the cases where we have found it appropriate to impose
successor liability, we have held that (1) a successor must have notice
of its predecessor’s liability, and (2) there must be “substantial
continuity of identity in the business enterprise.” 61 Other circuits have
employed similar formulations. 62

The Supreme Court has said that factors to consider in order to
establish “substantial continuity” include:

whether the business of both employers is essentially the
same; whether the employees of the new company are
doing the same jobs in the same working conditions
under the same supervisors; and whether the new entity

60 Howard Johnson Co. v. Detroit Loc. Joint Exec. Bd., 417 U.S. 249, 263 n.9 (1974).
61 See, e.g., Stotter, 991 F.2d at 1001 (quoting Wiley, 376 U.S. at 551); see also
Golden State Bottling, 414 U.S. at 185 (“[A] successor must have notice before
liability can be imposed . . . .”).
62 Ind. Elec. Workers Pension Benefit Fund v. ManWeb Servs., Inc., 884 F.3d
770, 777 (7th Cir. 2018) (“Successor liability under the MPPAA requires two
distinct components: notice of the potential liability and substantial continuity of
the business.”); Resilient Floor, 801 F.3d at 1095 (“[A] bona fide successor can be
liable . . . so long as the successor had notice of the liability.”); Einhorn, 632 F.3d at
99 (purchaser of assets may be liable “where the buyer had notice of the liability
prior to the sale and there exists sufficient evidence of continuity of operations
between the buyer and seller”).

25
has the same production process, produces the same
products, and basically has the same body of customers. 63

However, the Courts of Appeals have grouped these considerations
slightly differently, 64 or emphasized certain factors more than others,
depending on the statutory scheme to be vindicated and the
circumstances of the case. 65

In other words, “the concept of substantial continuity” is not
“satisfied in the same way in each circumstance,” and “the test
developed for one statute differs from the test developed for
another.” 66 Ultimately, the question of whether there is substantial

Fall River Dyeing, 482 U.S. at 43; see Proxy Commc’ns of Manhattan, Inc. v.
63

NLRB, 873 F.2d 552, 554 (2d Cir. 1989) (per curiam).
64 Compare, e.g., Resilient Floor, 801 F.3d at 1090–91 (“Whether there has been
a substantial continuity of the same business operations; whether the new employer
uses the same plant; whether the same or substantially the same work force is
employed; whether the same jobs exist under the same working conditions;
whether the same supervisors are employed; whether the same machinery,
equipment, and methods of production are used; and whether the same product is
manufactured or the same service is offered.” (cleaned up)), with Einhorn, 632 F.3d
at 99 (“Under the substantial continuity test courts look to, inter alia, the following
factors: continuity of the workforce, management, equipment and location;
completion of work orders begun by the predecessor; and constancy of
customers.”).
65 See, e.g., Resilient Floor, 801 F.3d at 1096 (explaining that certain “factors
are more relevant to NLRA contexts than to the MPPAA withdrawal liability
context,” and therefore weighting factors differently).
66 Nat’l Servs. Indus., 352 F.3d at 688 (Leval, J., concurring); accord Resilient
Floor, 801 F.3d at 1093 (“[T]he cases that have considered in various labor and
employment law contexts whether an employer is a successor have tailored their

26
continuity between a predecessor and a successor “is primarily factual
in nature and is based upon the totality of the circumstances of a given
situation.” 67

As the Supreme Court itself has indicated, this factual focus is
“especially appropriate” given the “difficulty” of the successorship
doctrine and “the absence of congressional guidance as to its
resolution.” 68

Therefore, some caution is appropriate when faced with a
decision—as we are in the instant case—as to whether the doctrine is
properly applied in a new context.

2. Successor Liability for ERISA Withdrawal Liability

We have previously applied successor liability to delinquent
pension fund contributions under ERISA. In Stotter Division of Graduate
Plastics Co. v. District 65, 69 we considered the purchase of the assets of
one plastic goods manufacturer (“Stotter”) by another (“GPC”). Stotter
had been obligated to make contributions to a union pension plan on
behalf of its employees. Stotter fell behind on its contributions, and the
union representing its employees commenced an arbitration. As the
arbitration was pending, GPC purchased Stotter, and the arbitration

analyses to the particular policy concerns underlying the applicable statute and to
the particular claim. The successorship standards are flexible and must be tailored
to the circumstances at hand.”).
67 Fall River Dyeing, 482 U.S. at 43.
68 Howard Johnson, 417 U.S. at 256.
69 991 F.2d 997 (2d Cir. 1993).

27
resulted in an award for the union that the arbitrator ruled was
enforceable against GPC as Stotter’s successor. 70 The district court
applied the Supreme Court’s decision in John Wiley & Sons, Inc. v.
Livingston, 71 which held that an arbitration provision in a predecessor’s
CBA was enforceable against a successor where there was “substantial
continuity of identity in the business enterprise.” 72 The district court
held that successor liability had therefore been properly applied to
Stotter’s delinquent ERISA contributions, and we affirmed.73

In doing so, we noted the “substantial continuity of Stotter’s
operations under GPC” and concluded that the arbitrator had
correctly “impos[ed] liability for the contribution delinquencies” on
GPC. 74

To be sure, the facts presented in Stotter differ from those
presented here. Most importantly, and as C&S emphasizes, GPC had
agreed to be bound by Stotter’s CBA. 75 Still, the logic of Stotter rested
on Wiley, in which the successor had not agreed to be bound by the
predecessor’s CBA—indeed, Wiley stands for the very proposition that
a successor “which did not itself sign the collective bargaining
agreement on which [a] [u]nion’s claim to arbitration depends” can

70 Id. at 998–99.
71 376 U.S. 543 (1964).
72 Id. at 551.
73 Stotter, 991 F.2d at 1000, 1002–03.
74 Id. at 1002–03.
75 Id. at 999.

28
still be “bound” by that arbitration provision. 76 Based on Stotter, at a
minimum, we are confident that ERISA is precisely the sort of
statute—embodying the sort of federal labor relations policy goals—
to which the successor liability doctrine can legitimately apply.

But we have never held that successor liability can be applied to
withdrawal liability under ERISA. Both the Seventh and Ninth Circuits
have considered that question squarely, and both have concluded that
it can. 77

Both of those circuits had, themselves, previously applied the
doctrine to delinquent ERISA contributions, 78 and neither saw any
reason not to apply the same rule to withdrawal liability as well. As
the Ninth Circuit explained:

We see no reason why the successorship doctrine should
not apply to MPPAA withdrawal liability just as it does
to the obligation to make delinquent ERISA
contributions. The primary reason for making a
successor responsible for its predecessor’s delinquent
ERISA contributions is that, “absent the imposition of
successor liability, present and future employer

76 Wiley, 376 U.S. at 547 (emphasis added).
77 See Tsareff v. ManWeb Servs., Inc., 794 F.3d 841, 845–47 (7th Cir. 2015);
Resilient Floor, 801 F.3d at 1093–95.
78See Artistic Furniture, 920 F.2d at 1327; Trs. for Alaska Laborers-Constr.
Indus. Health & Sec. Fund v. Ferrell, 812 F.2d 512, 516 (9th Cir. 1987); see also
Einhorn, 632 F.3d at 99 (same).

29
participants in the union pension plan will bear the
burden of the predecessor’s failure to pay its share,”
which will threaten the health of the plan while the
successor reaps a windfall. That rationale applies with
equal, if not greater, force to a predecessor’s MPPAA
withdrawal liability. 79

Relying on our decision in Stotter and persuaded by the
rationale of Resilient Floor, the District Court, in its May 1, 2017 order,
held that “the theory of successor liability is applicable to withdrawal
liability under ERISA.” 80 We agree.

On appeal, C&S argues that 29 U.S.C. § 1384 demonstrates that
successor liability ought not extend to withdrawal liability. That
section provides that, under certain conditions, a seller-employer does
not incur withdrawal liability “as a result of a . . . sale of assets to
an unrelated party.” 81 In other words, Section 1384 “protect[s] an
employer from withdrawal liability with respect to a sale of assets that
meets certain requirements.” 82

But those requirements are all “designed to shift the obligation
for contributions to the purchaser while leaving the seller secondarily

79 Resilient Floor, 801 F.3d at 1093–94 (alterations omitted) (quoting Artistic
Furniture, 920 F.2d at 1328).
80 Special App’x 10.
81 29 U.S.C. § 1384(a)(1).
82Cent. States, Se. & Sw. Areas Health & Welfare Fund v. Cullum Cos., 973 F.2d
1333, 1337 (7th Cir. 1992) (citation omitted).

30
liable.” 83 That is, sellers are protected from withdrawal liability by the
statute if their purchasers effectively assume responsibility for
contributing to the plan themselves. But that does not mean that,
under Section 1384, purchasers can only assume that liability “by
consent” as C&S suggests. 84 Rather, if purchasers find a way to not
assume withdrawal liability pursuant to the terms of the asset sale—
but they do, in fact, qualify as successors under the substantial
continuity doctrine—they may still be liable. 85

More theoretically, C&S urges that the extension of successor
liability to withdrawal liability is the sort of federal common
lawmaking prohibited by United States v. Bestfoods, 86 and analogous to
our now-overruled decision in BF Goodrich v. Betkoski, 87 which
extended the doctrine of successor liability to the Comprehensive

83 Id. (citation omitted).
84 Appellee’s Br. 43.
85Likewise inapposite is the specific case covered by § 1384(a)(1)(C), in
which the purchaser subsequently withdraws from the plan, triggering the seller’s
secondary liability. While this is “one circumstance in which a[] [purchaser]
employer who might . . . otherwise fit into the successor category is not liable for
withdrawal payments,” in that case the liability would shift back to the seller, and
such a scenario therefore “does not address whether the broader employment and
labor law successorship doctrine applies where those stringent conditions are not
met.” Resilient Floor, 801 F.3d at 1094 (emphasis omitted).
86 524 U.S. 51 (1998).
87 99 F.3d 505 (2d Cir. 1996).

31
Environmental Response, Compensation, and Liability Act of 1980
(CERCLA). 88

Following Bestfoods’s holding that CERCLA did not displace
common law principles regarding a parent corporation’s liability for
the actions of its subsidiary, and its admonition that “to abrogate a
common-law principle, the statute must speak directly to the question
addressed by the common law,” 89 we overruled Betkoski in New York v.
National Services Industries, Inc. 90

But National Services is easily distinguishable. There, the
question was “whether, in the context of CERCLA, the substantial
continuity rule for successor liability” could apply to liability for
environmental harms. 91 We held that while “the substantial continuity
doctrine is well established in the area of labor law,” the doctrine did
not apply “for CERCLA purposes.” 92 In other words, both Bestfoods and
National Services concerned CERCLA specifically. They did not
purport to address or undermine the concept of successor liability in
the labor law context.

Despite C&S’s suggestions to the contrary, the successor liability
doctrine is not limited to the NLRA or collective bargaining per se. The
Supreme Court has never suggested as much, and multiple authorities

88 Id. at 518–20.
89 524 U.S. at 63 (internal quotation marks omitted).
90 352 F.3d 682, 685 (2d Cir. 2003).
91 Id. at 684 (emphasis added).
92 Id. at 686, 687 (emphasis added).

32
demonstrate the opposite. 93 ERISA, too, effects the goals of federal
labor policy. It is therefore part of the labor law context in which
successor liability originates, and into which it can be carefully yet
confidently extended. 94

C&S’s warnings of a “potential policy catastrophe” that will
“wreak havoc on the free flow of capital” 95—while raising an
important issue worth considering in any decision to broaden
successor liability—are ultimately unpersuasive in this instance. As
the instant case demonstrates (and as we explain below), just because
successor liability can apply to withdrawal liability does not mean that
any asset purchaser qualifies as a successor under the substantial
continuity doctrine. To the contrary, a finding of substantial continuity
depends on a circumstance-specific inquiry.

3. Successor Liability Analysis for C&S and Penn Traffic

In a tightly reasoned and thorough opinion, the District Court
entered summary judgment for C&S on the successor liability count of
the Fund’s amended complaint, holding that C&S “did not
substantially continue Penn Traffic’s business after the 2008
transaction.” 96 We easily agree with this conclusion.

93 See supra notes 51–55.
Cf. Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355, 377 (2002)
94

(“Congress intended a ‘federal common law of rights and obligations’ to develop
under ERISA . . . .” (quoting Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 56 (1987)).
95 Appellee’s Br. 46–47.
96 Special App’x 53 (emphasis omitted).

33
Again, the proper substantial continuity analysis takes its
general shape from the Supreme Court’s guidance:

[T]he focus is on . . . whether the business of both
employers is essentially the same; whether the employees
of the new company are doing the same jobs in the same
working conditions under the same supervisors; and
whether the new entity has the same production process,
produces the same products, and basically has the same
body of customers. 97

The substantial continuity doctrine is applied most comfortably
when a purchaser acquires the assets of a seller—not when a purchaser
fails to acquire those assets. The latter situation in this case forces the
Fund to argue elliptically for each continuity factor, essentially asking
us (as it has, in different forms, for all its theories of liability) to
disregard Penn Traffic’s continued existence as C&S’s independent
contractor following the 2008 transaction. The result is that while the
factors in the substantial continuity analysis are the same, the framing
of our analysis differs from the standard case where a purchaser
acquires the assets of a seller. The relevant questions become, for
example, whether C&S acquired Penn Traffic’s Syracuse warehouse
employees and customers, not whether Penn Traffic’s Syracuse
warehouse employees and customers remained the same.

The District Court undertook this analysis in three parts
(workforce and management, customers, and facilities and

97 Fall River Dyeing, 482 U.S. at 43.

34
equipment), which was appropriate and useful “in light of the facts of
[the] case and the particular legal obligation . . . at issue.” 98

In our review, even construing all the facts in favor of the Fund
as we are required to do, one overriding fact is ultimately decisive:
C&S did not purchase the Syracuse warehouse or employ the Union members
who worked there. Penn Traffic continued to own the warehouse and
employ the Union members. 99

As to the continuity of workforce and management, the record
demonstrates that C&S did not acquire any of the relevant Union
employees from Penn Traffic (because they remained employed by
Penn Traffic). Similarly, as to the continuity of facilities and
equipment, C&S did not acquire the Syracuse warehouse or the
equipment there. And as to the continuity of customers, it is enough
to note—and Penn Traffic does not materially dispute—that about 70%
of the volume of product distributed by Penn Traffic from the Syracuse
warehouse was to Penn Traffic’s own retail stores, not to the wholesale

98 Howard Johnson, 417 U.S. at 262 n.9. Other circuits have enumerated
substantial continuity factors in “cleaner” lists. See, e.g., Leib v. Ga.-Pac. Corp., 925
F.2d 240, 247 (8th Cir. 1991) (enumerating a seven-factor test); United States v.
Carolina Transformer Co., 978 F.2d 832, 838 (4th Cir. 1992) (enumerating an eight-
factor test). We decline to do so here, lest such a formulation be confused as a
definitive “substantial continuity test” in our Circuit. On the contrary, unless the
Supreme Court itself or the Congress speak more definitively on substantial
continuity, in our view the concept must continue to be “flexible” and “tailored to
the circumstances at hand.” Resilient Floor, 801 F.3d at 1093.
99 App’x 465–66 ¶¶ 21–22; Suppl. App’x 126, 144.

35
customers acquired by C&S. 100 This is a large enough majority, for the
purpose of a substantial continuity analysis, to tip the customer
continuity question in C&S’s favor. In other words, given the structure
of the 2008 transaction, we agree with the District Court’s conclusion
that C&S did not “substantially continue” Penn Traffic’s business.

None of the Fund’s arguments on appeal upset this conclusion.

The Fund’s cited authorities concerning workforce continuity
amount to the argument that a change in workforce alone does not
automatically defeat successor liability. 101 This is true. After all,
substantial continuity is established through a multifactor analysis.
But this certainly does not somehow transform a change in workforce
into a factor weighing in favor of finding substantial continuity.

The Fund’s argument that the warehouse’s inventory—owned
by C&S—should be considered “facilities and equipment” for the
purposes of establishing substantial continuity, is also unconvincing.
Clearly, in assessing continuity in a grocery warehousing business, the
more appropriate consideration is who owns the warehouse itself (in
this case, a third party, but leased by Penn Traffic), 102 and who owns
the forklifts and other warehousing equipment (Penn Traffic itself),103

100 Appellant’s Br. 43; Appellee’s Br. 8; App’x 461 ¶ 7, 469 ¶ 32.
101 See Appellant’s Br. 39–42.
102 App’x 463 ¶ 15
103Id. at 467 ¶ 28. That the Supreme Court in Fall River Dyeing appeared to
consider a successor’s partial possession of a predecessor’s inventory as one factor
in a successorship analysis, see 482 U.S. at 32, again, only indicates that inventory

36
not who owns the crates of groceries passing through the warehouse
bound for retail.

Finally, even if, as the Fund suggests, 30% of the customers
receiving groceries from the warehouse were, after the 2008
transaction, buying those groceries from C&S, this does not tip the
balance back towards substantial continuity. Penn Traffic was still
performing the warehousing and distribution of C&S’s groceries for
those customers, which is the relevant “business” to consider with
reference to the Syracuse warehouse and its Union employees. 104

In sum, then, C&S did not take over any significant part of—
much less “substantially continue”—Penn Traffic’s relevant business:
the Syracuse warehouse or the employment of its Union employees. 105
C&S therefore is not subject to Penn Traffic’s withdrawal liability
under a theory of successor liability.

might be one factor considered in a multifactor analysis, depending on the
particularities of a given case. It does not upset our conclusion here.
104We likewise reject the Fund’s argument that C&S succeeded Penn Traffic
because it acquired as customers Penn Traffic’s retail stores that were sold to Tops
(a Penn Traffic competitor) in bankruptcy. Given the totality of the circumstances,
we find decisive that the Fund has adduced no evidence that these retail stores were
served out of the Syracuse warehouse, which was closed in 2010 after Penn Traffic’s
bankruptcy. Cf. Proxy Commc’ns, 873 F.2d at 554 (identifying successorship where
the successor “provided the same services . . . from the same location and for the
same customers”).
105We need not address the important requirement that a successor must
have notice of a predecessor’s liability, as the substantial continuity analysis
decides the question in this case.

37
III. CONCLUSION

To summarize, we hold as follows:

(1) the District Court did not err in dismissing the Fund’s
“evade-or-avoid” liability theory;

(2) the District Court did not err in dismissing the Fund’s
“common control” liability theory;

(3) the District Court did not err in finding that C&S was not an
“employer” of the Union employees at the Syracuse
warehouse; and

(4) “successor liability” can, as a matter of law, apply to
withdrawal liability under ERISA, but

(5) the District Court in this case did not err in granting C&S’s
motion for summary judgment because C&S did not
substantially continue Penn Traffic’s relevant business, and
therefore was not subject to “successor liability.”

For the foregoing reasons, we AFFIRM the District Court’s May
1, 2017 order and its March 18, 2020 judgment.

NY State Teamsters v. C&S Wholesale Grocers

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