This dispute arose under the Multiemployer Pension Plan Amendments Act of 1980, or MPPAA, which requires employers who withdraw from underfunded multiemployer pension plans to pay withdrawal liability. The International Painters and Allied Trades Industry Pension Fund sought to collect this liability from Industrial Maintenance Industries LLC and RTI Restoration Technologies, Inc., claiming they were successors to a defunct employer, Coating Technologies, Inc., which had closed in 2013. The Fund did not notify the companies of the purported liability until July 2021, an eight-year delay after the original employer ceased operations. The companies sued in federal court for a declaratory judgment, arguing they were not liable as employers and that the Fund's delay barred the claim. While the district court found genuine issues of material fact regarding whether the companies were actually liable as employers, it granted summary judgment to the companies on the separate ground that the Fund had failed to act 'as soon as practicable' in notifying them. The Fund appealed, arguing that the timeliness issue was a defense that should have been raised in arbitration and was waived by the companies for failing to do so.
Writing for the court, Circuit Judge Rendell explained that under the MPPAA, a pension fund must satisfy three prerequisites to recover withdrawal liability: the employer must have withdrawn, the fund must notify the employer and demand payment 'as soon as practicable,' and the employer must default on a payment. The court emphasized that the 'as soon as practicable' requirement is not merely an equitable defense of laches, which can be waived, but an independent statutory element of the claim itself. Citing its prior decision in Allied Painting and Decorating, Inc. v. Int'l Painters and Allied Trades Indus. Pension Fund, the court noted that 'the prompt delivery of notice and payment demand is a predicate to suing.' Because this requirement is an essential element of the cause of action, it does not ripen into a claim until the fund has acted timely. Consequently, the court held that the district court had the authority to address this issue sua sponte without requiring the parties to first submit the matter to arbitration. The court distinguished out-of-circuit cases that treated timeliness as a waivable defense, noting that those cases often conflated the statutory requirement with the equitable defense of laches. The court further reasoned that arbitration was not required here because the issue did not involve a 'determination' of liability amount or computation, but rather a threshold question of whether the claim existed at all. Additionally, the court found that bypassing arbitration served judicial economy, as the record was fully developed and the Fund's delay was undisputed and egregious.
The decision affirms that pension funds must act with diligence when assessing and demanding withdrawal liability, as an eight-year delay can permanently bar the claim. It clarifies that federal courts can resolve the timeliness of a fund's notice as a matter of law without forcing parties through arbitration, particularly when the issue is straightforward and the record is developed. The ruling limits the ability of funds to rely on arbitration to cure delays that are fatal to the claim's existence. The case is remanded to the district court to enforce the summary judgment in favor of the companies.