Trustees of the Local 138 Pension Trust Fund v. F.W. Honerkamp Co. Inc.
692 F.3d 127
2d Cir.2012Background
- Trustees of the Local 138 Pension Trust Fund sued Honerkamp for withdrawal from the Fund after critical-status designation under the PPA.
- Honerkamp withdrew from the Fund effective August 1 following CBAs that expired in 2008, entering a 401(k) plan.
- Trustees argued the PPA required continued participation and default schedule contributions under the rehabilitation plan.
- District court granted Honerkamp summary judgment, rejecting the Trustees’ claim and denying their cross-motion.
- Court evaluates whether PPA forecloses withdrawal in critical-status multiemployer plans, and whether rehabilitation-plan default contributions apply.
- The district court’s decision is appealed in this Circuit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the PPA bar withdrawal from a plan in critical status? | Trustees: PPA prevents withdrawal and requires default-schedule contributions. | Honerkamp: PPA does not prohibit withdrawal; withdrawal permitted with MPPAA liability. | PPA does not forbid withdrawal in critical status. |
| Did Congress intend to foreclose voluntary withdrawal by rehabilitated Plan rules? | Trustees: yes, to protect beneficiaries. | Honerkamp: no explicit prohibition; withdrawal consistent with goals. | Congress did not intend to foreclose withdrawal in these circumstances. |
| Are PBGC interpretations persuasive authority on the PPA withdrawal issue? | Trustees: PBGC interpretation supports non-withdrawal. | Honerkamp: PBGC interpretation aligns with withdrawal rights. | PBGC interpretations support neither side's exclusive position; court relies on text and intent. |
Key Cases Cited
- Connolly v. Pension Benefit Guaranty Corp., 475 U.S. 211 (1986) (ERISA framework and PBGC role in pension protection)
- Pension Benefit Guaranty Corp. v. LTV Corp., 496 U.S. 633 (1990) (deference to PBGC interpretations of ERISA provisions)
- R.A. Gray & Co. v. Pension Benefit Guaranty Corp., 467 U.S. 717 (1984) (withdrawal liability and multiemployer plan concerns)
- Concrete Pipe & Prods. v. Constr. Laborers Pension Trust Fund for S. Cal., 508 U.S. 602 (1993) (multiemployer plan funding and withdrawal context)
- In re Lehman Bros. Mortg.-Backed Secs. Litig., 650 F.3d 167 (2d Cir. 2011) (statutory-interpretation approach and congressional intent)