Local 705 International Brothe v. Anthony Pitello, 3f4th949

Gradei’s Express ceased covered operations in Feb 2018 and the Local 705 Pension Fund assessed $221,932.55 in ERISA withdrawal liability.
The Fund sued Gradei’s, GX Warehousing (a corporation owned by the same family), and Anthony and Pat Pitello (owners of the corporations and of the Melrose Park Property) as trades or businesses under common control.
The Pitellos owned the real property used as principal business premises and never charged Gradei’s (or GX) rent while Gradei’s operated there; GX began leasing the property to unrelated third parties only after Gradei’s withdrew.
Gradei’s did not request a review or arbitration of the assessed liability and later filed Chapter 7 bankruptcy; no payments were made.
The district court found the rent‑free use/ownership of the property sufficient to establish common control and entered judgment for the Fund; the Pitellos appealed.
The Seventh Circuit affirmed, holding that leasing (and the economic equivalent here of providing rent‑free premises) to a withdrawing employer is a trade or business and the Pitellos failed to rebut that presumption.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether owners who provided premises rent‑free are "trades or businesses" under §1301(b)(1) and thus liable for withdrawal liability	Fund: Leasing or providing property used by the withdrawing employer is a trade/business that can be used to fractionalize assets; owners are liable	Pitellos: Ownership was a passive investment; rent‑free use does not amount to a trade/business	Leasing to (or providing premises for) a withdrawing employer is categorically a trade/business; rent‑free arrangement here was the economic equivalent of leasing and established common control—Pitellos failed to rebut the presumption
Whether failure to seek administrative review/arbitration allows defendants to contest the assessed liability	Fund: Failure to request review or arbitration forecloses contesting the assessment	Defendants: (did not effectively pursue the statutory review/arbitration process)	Defendants did not request review or arbitration; they therefore had no basis to contest the assessment, and summary judgment was proper (affirmed on the substantive common‑control ground)

Commissioner v. Groetzinger, 480 U.S. 23 (1987) (provides the two‑part test—primary profit motive and continuity/regularity—to define "trade or business")
Cent. States, Se. & Sw. Areas Pension Fund v. SCOFBP, LLC, 668 F.3d 873 (7th Cir. 2011) (holds leasing property to a withdrawing employer is categorically a trade or business)
Cent. States, Se. & Sw. Areas Pension Fund v. Nagy, 714 F.3d 545 (7th Cir. 2013) (applies categorical leasing rule and Groetzinger test in common‑control context)
Messina Prod., LLC, 706 F.3d 874 (7th Cir. 2013) (explains why leasing to or use by withdrawing employer strongly indicates nonpassive activity and risk of asset fractionalization)
Cent. States, Se. & Sw. Areas Pension Fund v. Ditello, 974 F.2d 887 (7th Cir. 1992) (construes "trade or business" in light of MPPAA's purpose to prevent dissipation of pension‑securing assets)
Cent. States, Se. & Sw. Areas Pension Fund v. Fulkerson, 238 F.3d 891 (7th Cir. 2001) (discusses common control and extended liability under §1301(b)(1))