Carpenters Pension Trust Fund v. Michael Moxley, 734 F.3d 864

Michael G. Moxley, a former signatory to a multiemployer carpenters' collective bargaining agreement, stopped making contributions to the Carpenters Pension Trust Fund after the agreement expired in 2004 but continued working in the jurisdiction.
The Fund assessed statutorily created withdrawal liability under ERISA in the amount of $172,045; Moxley did not dispute the amount and later filed for bankruptcy, seeking discharge.
The Fund sued in bankruptcy court under 11 U.S.C. § 523(c) to except the debt from discharge as one for "fraud or defalcation while acting in a fiduciary capacity" under § 523(a)(4).
The Fund argued unpaid withdrawal liability is a plan asset (per the collective bargaining agreement) and that Moxley therefore was an ERISA fiduciary who committed defalcation by withholding those funds.
Moxley argued (1) unpaid withdrawal liability is statutory and distinct from contractual unpaid contributions (which may be plan assets); (2) fiduciary status under § 523(a)(4) must preexist the misconduct; and (3) bankruptcy courts have jurisdiction to decide dischargeability.
The bankruptcy and district courts ruled for Moxley; the Ninth Circuit affirmed, holding Moxley was not an ERISA fiduciary with respect to withdrawal liability and the debt was dischargeable; arbitration default did not waive his bankruptcy discharge rights.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the bankruptcy court had Article III jurisdiction to decide dischargeability	Fund: bankruptcy court could adjudicate its claim	Moxley: Stern v. Marshall limits bankruptcy courts; dischargeability is not a "public right"	Court: bankruptcy court had jurisdiction—dischargeability is integral to claims-allowance (public rights)
Whether unpaid withdrawal liability is a plan asset making Moxley an ERISA fiduciary (§ 523(a)(4))	Fund: Agreement defines "plan assets" to include all contributions required to be made; unpaid liability thus an asset and Moxley controlled it => fiduciary	Moxley: Withdrawal liability is statutory and arises only after contractual obligations end; unpaid statutory liability is not the same as unpaid contractual contributions and is not a plan asset giving fiduciary status	Court: Withdrawal liability is distinct from contractual contributions; unpaid withdrawal liability is not an asset for ERISA fiduciary purposes, so Moxley was not a fiduciary
Whether failing to arbitrate withdrawal liability waived bankruptcy discharge rights	Fund: ERISA requires arbitration of withdrawal liability and failure to arbitrate should bar bankruptcy relief	Moxley: He did not contest amount; arbitration governs existence/amount, but dischargeability is governed by Bankruptcy Code	Court: Arbitration requirement did not waive or preclude § 523 dischargeability adjudication in bankruptcy

Cline v. Indus. Maint. Eng’g & Contracting Co., 200 F.3d 1223 (9th Cir.) (unpaid employer contributions are not plan assets until paid)
Collins v. Pension & Ins. Comm. of S. Cal. Rock Products & Ready Mixed Concrete Ass’ns, 144 F.3d 1279 (9th Cir.) (ERISA fiduciary analysis and plan-asset issues)
In re Hemmeter, 242 F.3d 1186 (9th Cir.) (fiduciary relationship for § 523(a)(4) must preexist alleged wrongdoing)
Stern v. Marshall, 131 S. Ct. 2594 (U.S. 2011) (limits on bankruptcy courts adjudicating non-public-rights claims)
Cent. Va. Cmty. Coll. v. Katz, 546 U.S. 356 (U.S. 2006) (bankruptcy discharge and claims-allowance as integral to federal bankruptcy function)
Chi. Truck Drivers, Helpers & Warehouse Workers Union (Indep.) Pension Fund v. CPC Logistics, Inc., 698 F.3d 346 (7th Cir.) (description of withdrawal liability as an "exit price" reflecting plan underfunding)