153 F. Supp. 3d 1217
E.D. Cal.2015Background
- Four family-owned California dairies (Irigaray, Van Der Kooi, Jongsma, Cow‑West) stopped contributing to a pension plan run by Dairy Employees Union Local No. 17 Christian Labor Association and its Board (the Pension Fund); the Fund assessed withdrawal liability under the MPPAA.
- Plaintiffs sued seeking declaratory relief that they owe no withdrawal liability, that the Trust Agreement arbitration clause is unconscionable, and seeking restitution and UCL relief for alleged mismanagement/misappropriation by the union and Trustees.
- Defendants moved for summary judgment and for a protective order to limit discovery into Fund management; arbitration of withdrawal liability has been initiated and stayed pending this litigation.
- The record includes the Trust Agreement, Master Labor Agreements, arbitration filings, and multiple depositions; parties disputed relevance and admissibility of documents and testimony about Fund/union practices.
- The magistrate judge analyzed (1) whether the Pension Fund is an ERISA plan and MPPAA multiemployer plan, (2) whether Plaintiffs are "employers" under MPPAA, (3) whether lack of union certification or Fund mismanagement can defeat withdrawal liability, (4) arbitration enforceability and allocation of arbitration costs, and (5) preemption of restitution and UCL claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the Pension Fund an ERISA plan? | Fund was improperly managed/invalid so not an ERISA plan | Fund documents + historical contributions show an ERISA plan | Fund is an ERISA plan (meets Donovan factors) |
| Is it a MPPAA multiemployer plan? | Mismanagement or unequal trustee representation disqualifies it | Statutory definition controls; multiple employers and CBAs exist | Fund qualifies as a multiemployer plan under MPPAA |
| Are Plaintiffs "employers" or obligated to contribute; can lack of ALRB certification defeat liability? | No valid obligation because CBAs/union certification allegedly invalid under California ALRA | Plaintiffs employed union members and made contributions; statutory scheme and precedent bar such contractual defenses to withdrawal liability | Plaintiffs are employers; lack of ALRB certification and similar defenses do not defeat withdrawal liability (must be raised in arbitration) |
| Is the arbitration clause unconscionable re: cost allocation? | Clause shifts disproportionate arbitration costs/fees to employers and is unconscionable | Arbitration required by MPPAA; plan presumptions favor sponsor | Cost allocation term conflicts with PBGC regulations (29 C.F.R. § 4221.10); parties represented they will follow regs; no justiciable controversy — arbitration remains required |
| Are restitution and UCL claims viable? | Plaintiffs seek disgorgement of contributions due to alleged mismanagement | ERISA provides exclusive remedial scheme and statutory refund provision for mistaken contributions | State-law restitution and UCL claims preempted by ERISA; no adequate §403(c)(2)(A) claim pleaded |
| Protective order on discovery into Fund operations | Plaintiffs want discovery to prove mismanagement/defenses | Defendants say discovery irrelevant and burdensome given legal framework | Protective order granted; Fund‑management discovery not relevant to standing/MPPAA issues; arbitration issues govern contribution defenses |
Key Cases Cited
- Milwaukee Brewery Workers’ Pension Plan v. Jos. Schlitz Brewing Co., 513 U.S. 414 (1995) (explains MPPAA purpose and framework for withdrawal liability)
- Concrete Pipe & Products of Cal. v. Construction Laborers Pension Trust, 508 U.S. 602 (1993) (arbitration and presumptions in MPPAA withdrawal disputes)
- Aetna Health Inc. v. Davila, 542 U.S. 200 (2004) (ERISA preemption of state-law claims that duplicate or supplement ERISA remedies)
- Resilient Floor Covering Pension Fund v. M & M Installation, Inc., 630 F.3d 848 (9th Cir. 2010) (definition of “employer” under MPPAA includes those obligated to contribute)
- MacKillop v. Lowe’s Mkt., 58 F.3d 1441 (9th Cir. 1995) (limits contractual defenses to ERISA collection actions; fraud-in-execution survives but many formation defenses do not)