Key Points

  • Prompt MPPAA notice and demand are elements of a withdrawal-liability claim, not merely waivable defenses.
  • An employer’s failure to request arbitration did not bar a court from deciding whether the fund acted “as soon as practicable.”
  • The Third Circuit affirmed judgment for the companies after an eight-year delay in the fund’s demand.
  • The dissent would have required arbitration of the notice-timeliness issue.

The Court of Appeals for the Third Circuit affirmed a judgment against the International Painters and Allied Trades Industry Pension Fund, rejecting the fund’s argument that RTI Restoration Technologies Inc. and Industrial Maintenance Industries LLC waived a challenge to the timing of its withdrawal-liability demand by not first seeking arbitration. The ruling treats prompt notice and demand under the Multiemployer Pension Plan Amendments Act as a prerequisite to a fund’s claim, rather than solely as an employer defense subject to procedural forfeiture.

The fund sought to collect withdrawal liability from the companies as alleged successors to Coating Technologies Inc., a former contributing employer that closed in 2013. In July 2021, the fund notified the companies that it had determined they were connected to CTI and asserted a single-sum withdrawal-liability amount of $800,445. The companies denied that they were employers, members of a controlled group, or successors liable for CTI’s obligation, and filed a federal declaratory-judgment action rather than initiating arbitration.

The district court found factual disputes over whether the companies could be treated as employers or successors under the MPPAA. But it entered judgment for the companies on a separate ground: the fund had not acted “as soon as practicable” in issuing its assessment and payment demand, as required by 29 U.S.C. § 1399(b)(1). The court pointed to the eight-year gap between CTI’s closure and the fund’s notice to the companies.

On appeal, the fund maintained that the companies could raise the timing issue only through MPPAA arbitration and had waived it by allowing the arbitration period to lapse. The Third Circuit disagreed, relying on its 2024 Allied Painting and Decorating decision involving the same fund. Allied held that timely notice and demand are among the statutory requirements a fund must satisfy before its withdrawal-liability claim accrues.

“It is an independent statutory requirement,” the court said in explaining why the fund’s position conflated the notice rule with an equitable laches defense. Under Allied, the court explained, the MPPAA requires an employer’s withdrawal, a fund’s notice and demand issued as soon as practicable, and an employer’s default on a due and payable installment. Without those steps, the fund does not have a ripe claim for collection.

The panel distinguished the statutory requirement from laches, which can require a showing of prejudice and may be waived. The court said that although a delayed fund demand can be challenged through laches, “laches is one vehicle for challenging timeliness, but it is not the exclusive means by which alleged delay may be addressed.” The fund therefore could not convert the prompt-notice requirement into an affirmative defense that the companies lost by declining arbitration.

The court also concluded that the timing question was not itself a “determination” that must be arbitrated under the MPPAA’s dispute-resolution provision. The statute’s arbitration language concerns determinations regarding matters such as the amount of withdrawal liability and the mechanics of payment, the panel reasoned. Whether a fund timely made its notice and demand instead bears on whether the fund has a cause of action at all.

The court further held that this dispute fit within the narrow circumstances in which arbitration may be bypassed. The companies had put their status as employers before the district court, discovery had occurred, and the record did not require an arbitrator’s specialized expertise to determine whether the fund acted promptly. The fund did not challenge the district court’s findings that it had sufficient information to identify the alleged withdrawal years earlier and that its delay was not excused by its internal assessment process.

A dissenting judge would have required arbitration. In the dissent’s view, the statutory command that disputes concerning determinations under the relevant MPPAA provisions “shall be resolved through arbitration” encompasses the as-soon-as-practicable requirement because that requirement appears in the covered statutory range. The majority, however, affirmed the judgment for the companies, leaving the fund unable to collect the asserted withdrawal liability on the record before the court.