Ceco Concrete Construction, LLC v. Centennial State Carpenters Pension Trust
75 F. Supp. 3d 1328
D. Colo.2014Background
- Ceco Concrete Construction (Ceco) withdrew from the Centennial State Carpenters Pension Trust (the Plan); last bargaining agreement expired April 30, 2010.
- The Plan assessed withdrawal liability of $917,904; Ceco paid installments and timely initiated arbitration under the MPPAA/ERISA.
- Arbitrator issued an Interim Award and a Final Award (June 7, 2013) concluding Ceco did not incur withdrawal liability and ordering refund of $348,273 paid during arbitration.
- Disputed theories: (1) CFA’s post-acquisition work should be attributed to Ceco under ERISA’s common-control rule; (2) Ceco and CFA are a “single employer”; (3) a sale-back transaction undertaken to avoid liability should be disregarded and Ceco deemed to have performed the work.
- District court review occurred under 29 U.S.C. § 1401; fact findings by the arbitrator are presumed correct unless rebutted by a clear preponderance, legal conclusions reviewed de novo, and mixed questions reviewed either de novo or for clear error depending on whether law or fact predominates.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CFA’s post-acquisition work can be treated as Ceco’s work under ERISA § 4001(b)(1) (common control) | Plan: any entity coming under common control within the 5-year resumption window counts; CFA’s Colorado work makes Ceco liable | Ceco: only entities under common control on the date of withdrawal count; CFA was acquired after withdrawal | Court: de novo review — limited to entities under common control at withdrawal; CFA not attributable to Ceco; no liability on this theory |
| Whether Ceco and CFA are a single employer (four-factor test) | Plan: common ownership and other indicia justify treating them as a single employer | Ceco: lack of interrelation of operations, common management, and centralized labor control precludes single-employer status | Court: factual review — arbitrator’s finding of no single-employer status not rebutted; no liability on this theory |
| Whether a sale-back transaction undertaken to evade liability must be disregarded such that Ceco is deemed to have performed the work (ERISA § 1392(c)) | Plan: if transaction is disregarded, Ceco should be treated as having performed the work, triggering liability | Ceco: even if disregarded, it did not actually perform the work and likely would not have done so (strategic default); deeming performance is unwarranted | Court: mixed review — arbitrator’s factual finding of evasion not clearly erroneous, but legal consequence reviewed de novo; disregarding the transaction does not require deeming Ceco to have performed the work; no liability on this theory |
| Whether prevailing party attorney’s fees should be awarded under ERISA § 1451(e) | Ceco: requests fees and costs as prevailing party | Plan/Board: opposed | Court: denied fees after balancing factors (merits, reasonableness of positions, deterrence, bad faith) |
Key Cases Cited
- Concrete Pipe & Products of California, Inc. v. Construction Laborers Pension Trust for Southern California, 508 U.S. 602 (U.S. 1993) (withdrawal timing is a mixed question of law and fact)
- Teamsters Pension Trust Fund of Philadelphia v. Brigadier Leasing Assocs., 880 F. Supp. 388 (E.D. Pa. 1995) (withdrawal liability attaches to entities under common control on date of withdrawal)
- Trustees of Colorado Pipe Industry Pension Trust v. Howard Electric & Mechanical, Inc., 909 F.2d 1379 (10th Cir. 1990) (arbitrator legal conclusions reviewed de novo under MPPAA)
- Zahn v. Louis, 890 F.2d 1405 (7th Cir. 1989) (mixed questions of purpose/evasion typically fact-intensive; clear-error review sometimes applied)
- Knowlton v. Teltrust Phones, Inc., 189 F.3d 1177 (10th Cir. 1999) (single-employer factors; absence of arm’s-length relationship is central inquiry)
- Sun Capital Partners III, L.P. v. New England Teamsters & Trucking Indus. Pension Fund, 724 F.3d 129 (1st Cir. 2013) (§ 1392(c) requires erasing the transaction and assessing what likely would have happened)
- SUPERVALU, Inc. v. Board of Trustees of Southwest Pennsylvania & Western Maryland Area Teamsters & Employers Pension Fund, 500 F.3d 334 (3d Cir. 2007) (after disregarding a transaction courts look to governing agreements and facts to determine liability)