Einhorn v. Dubin Bros. Lumber
33 F. Supp. 3d 504
D.N.J.2014Background
- Dubin Brothers Lumber Co. participated in a multiemployer Teamsters pension plan governed by CBAs and plan documents; the Fund is administered by William Einhorn.
- Fund notified Dubin of a December 2008 complete withdrawal and sought withdrawal liability; parties later executed a May 18, 2011 settlement where Dubin agreed to make retroactive contributions ($9,218.97) and the Fund agreed to release the December 2008 liability conditioned on payment and continued participation.
- Dubin paid only $5,000 under the settlement, leaving $4,218.97 unpaid; Dubin made no regular contributions after early 2009 and had not employed covered union members since 2009, though one covered employee worked Jan 1, 2010–Sep 23, 2011.
- On April 18, 2012 the Fund assessed withdrawal liability for 2011 (covering 1979–2010) in the amount of $209,956.78; Dubin did not request administrative review or timely arbitration under MPPAA.
- Dubin had filed Chapter 11 in 2002 and received plan confirmation in 2004; the bankruptcy plan did not list any liability to the Fund and Dubin contends the 2004 discharge eliminated any pre-confirmation withdrawal liability.
- Fund sued to collect withdrawal liability and unpaid settlement contributions; Court considered (1) whether pre-confirmation bankruptcy discharged withdrawal liability assessed years later, and (2) whether failure to arbitrate waived the bankruptcy-defense.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Dubin waived bankruptcy discharge defense by failing to arbitrate under MPPAA | Einhorn: failing to initiate arbitration waives challenges to liability | Dubin: bankruptcy-discharge defense is separate and not waived by MPPAA arbitration rules | Court: No waiver — arbitration requirement covers disputes about sections 1381–1399 (assessment merits); bankruptcy discharge defense need not be arbitrated |
| Whether a Chapter 11 confirmed in 2004 discharged withdrawal liability later assessed for 2011 withdrawal | Einhorn: withdrawal liability arises at actual withdrawal and was not a pre-confirmation claim, so not discharged | Dubin: confirmed 2004 Chapter 11 discharged pre-confirmation withdrawal liability | Court: Held for Einhorn — withdrawal liability arises on actual withdrawal; Fund had no pre-confirmation claim in 2004, so discharge did not bar 2011 assessment |
| Whether the May 18, 2011 settlement barred later withdrawal claims or excused unpaid settlement contributions | Einhorn: settlement released only the December 2008 claim if Dubin complied; it preserved future withdrawal claims and retroactive contribution obligation | Dubin: settlement released December 2008 liability and Fund breached by later assessing withdrawal liability | Court: Held for Einhorn — Dubin breached settlement by failing to pay $4,218.97; settlement preserved future withdrawal liability |
| Whether Fund’s 2012 assessment is barred by laches | Einhorn: Fund complied with statutory notice and promptly sued after discovering withdrawal; no prejudice or inexcusable delay | Dubin: Fund unreasonably delayed from 2009 to 2012 after Dubin stopped prospective contributions | Court: Held for Einhorn — no laches: Fund satisfied statutory notice obligations and did not unreasonably delay |
Key Cases Cited
- SUPERVALU, Inc. v. Bd. of Trustees, 500 F.3d 334 (3d Cir. 2007) (context on MPPAA purpose to protect multiemployer plans)
- Warner-Lambert Co. v. United Retail & Wholesale Employees Teamster Local No. 115 Pension Plan, 791 F.2d 283 (3d Cir. 1986) (background on MPPAA concerns about withdrawals)
- Flying Tiger Line v. Teamsters Pension Trust Fund of Philadelphia, 830 F.2d 1241 (3d Cir. 1987) (distinguishing arbitrable MPPAA issues)
- Bd. of Trustees of Teamsters Local 863 Pension Fund v. Foodtown, Inc., 296 F.3d 164 (3d Cir. 2002) (withdrawal liability arises at cessation of obligation to contribute)
- In re Marcal Paper Mills, Inc., 650 F.3d 311 (3d Cir. 2011) (apportionment of withdrawal liability into pre- and post-petition amounts and administrative-expense treatment)
- Carpenters Pension Trust Fund v. Moxley, 734 F.3d 864 (9th Cir. 2013) (bankruptcy-discharge arguments and distinction between unpaid contributions and withdrawal liability)