By George Kennedy
On April 21, 2015, the Fourth Circuit issued a published opinion in the civil case of Freight Drivers and Helpers Local Union No. 557 Pension Fund v. Penske Logistics LLC in which it held that commencing an action by filing a complaint is the proper procedure for seeking judicial review of an arbitration award under the Multiemployer Pension Plan Amendments Act (“MPPAA”), reversing the judgment of the District of Maryland. Additionally, the Court held that the amended complaint filed by Freight Drivers and Helpers Local Union No. 557 Pension Fund (“Pension Fund”) was timely because it related back to the original complaint.
Facts Leading up to the Dispute and Arbitration Proceedings
In 2004, Penske Logistics LLC (“Penske”) transferred ownership of its subsidiary, Leaseway Motorcar Transport Company, to a third party. After transferring control, Penske ceased making contributions to the Pension Fund. The Pension Fund responded by assessing withdrawal liability against Penske. Penske refused to pay the withdrawal liability, and soon thereafter, Penske and the Pension Fund submitted their dispute for arbitration.
The parties entered into arbitration proceedings and in July 13, 2012, the arbitrator dismissed the Pension Fund’s claims. The arbitrator decided that Penske was not liable for the withdrawal liability assessed against it because Penske was exempt as “‘a trucking industry fund as that term is described in [29 U.S.C. § 1383(d)].”
The Pension Fund Seeks Judicial Review
Following the arbitrator’s order against it, the Pension Fund sought judicial review of the order by filing a complaint in the District of Maryland on August 9, 2012. Subsequently, Penske filed a motion to dismiss the Pension Fund’s complaint. The District Court granted Penske’s motion, but granted leave for the Pension Fund to amend the complaint within 21 days of the filing of its original complaint.
The Pension Fund filed an amended complaint within 21 days. Again, Penske filed a motion to dismiss the complaint, and again, the District of Maryland granted the motion. In so holding, the District of Maryland argued that the proper mechanism for reviewing an arbitration award under the MPPAA is the filing of a motion under the provisions of the Federal Arbitration Act. As such, the District of Maryland treated the Pension Fund’s amended complaint as a motion, and held that it was deficient for two reasons. First, the Court held that it was untimely because motions cannot relate back pursuant to Federal Rule of Civil Procedure 15. Second, the Court held that it was lacking an attached memorandum stating the authority and reasoning in support as required for motions under Local Rule 105.
The Filing of a Complaint is the Appropriate Procedure
The Fourth Circuit first took up the issue of which procedure is correct for seeking review of an arbitration award under the MPPAA. It held, contrary to the District of Maryland, that the proper procedure is the filing of a complaint, and not the filing of a motion. In so holding, the Fourth Circuit appealed to: (1) the plain meaning of Sections 1401 and 1451 of the MPPAA, (2) the language of related provisions of the MPPAA, (3) the Rules of Civil Procedure, and (4) the legislative intent surrounding the enactment of the MPPAA.
The Fourth Circuit considered, and ultimately dismissed, Penske’s counterargument that Section 1401(b)(3) of the MPPAA is controlling in this case and mandates that judicial review be sought by filing a motion and not by filing a complaint. The Fourth Circuit explained that Section 1401(b)(3) applies only to arbitration proceedings and not to the process of seeking judicial review. Instead, the Fourth Circuit argued that Section 1401(b)(2) of the MPPAA controls judicial review of arbitration awards, and that it states that judicial review is to be sought by filing a complaint, and not a motion.
The Pension Fund’s Amended Complaint is Timely Because it Relates Back
After establishing that the filing of a complaint is the appropriate method for seeking review of an arbitration order under the MPPAA, the Fourth Circuit then ruled on whether the Pension Fund’s amended complaint was timely. The Fourth Circuit held that the amended complaint was timely because it related back to the original complaint pursuant to Federal Rule of Civil Procedure 15. The Court reasoned that since the amended complaint asserted claims arising out of the same conduct underlying the claims of the original complaint, the requirements for relation back under Rule 15 were satisfied. The Court quickly dismissed Penske’s argument to the contrary, holding that it was “hyper-technical, carrying no equitable or pragmatic weight.”
Judgment Reversed and Remanded
Accordingly, the Fourth Circuit reversed the judgment of the District of Maryland, remanding the case for further proceedings.