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Decided: April 21, 2015

The Fourth Circuit held that bringing an action by filing a complaint, rather than filing an application by motion under the Federal Arbitration Act, is the proper way for a party to an arbitration under the Multiemployer Pension Plan Amendments Act of 1980 (“MPAA”) to seek to have an arbitration award modified or vacated.  On this basis, the Fourth Circuit reversed the district court’s dismissal of the Freight Drivers and Helpers Local Union No. 557 Pension Fund’s (“Pension Fund”) claim against Penske, and remanded to the district court.  

Between 2001 and 2004, Penske Truck Leasing transferred ownership of a subsidiary, Leaseway Motorcar Transport Company, to a third party in which Penske Truck Leasing retained a minority interest.  Leaseway stopped making contributions to the Pension Fund, which responded by assessing withdrawal liability against Penske Truck Leasing and affiliate Penske Logistics LLC.  The Penske Companies did not pay the liability, and the parties entered arbitration as provided for by the MPAA.  The arbitrator ultimately dismissed Pension Fund’s claim, finding that the Penske Companies were exempt from liability under an exception for trucking industry funds.  Pension Fund filed a complaint alleging that the trucking industry exception had been misapplied, and brought suit as “‘Freight Drivers and Helpers Local Union No. 557 Pension Fund, by its Trustee, William Alexander’” v. “‘Penske Logistics LLC [and] Penske Truck Leasing Co., LP.’”  The Penske Companies filed a motion to dismiss on the basis that Pension Fund did not have standing because it attempted to sue through one trustee, rather than through its four person Board of Trustees.  The district court granted Penske’s motion, and allowed Pension Fund 21 days to amend its complaint.  Pension Fund filed an amended complaint within the 21 day period, bringing suit through its Board of Trustees.  The Penske Companies filed a second motion to dismiss, arguing that a challenge to an arbitration award under the MPAA must be brought through a motion in accordance with the FAA rather than through a complaint.  Penske further argued that, even if Pension Fund’s amended complaint was a motion, it was untimely because more than 30 days had passed since the arbitration award, and it also failed to comply with local rules requiring a motion to be accompanied by a memorandum.  The district court granted Penske’s motion to dismiss, finding that the MPAA provides that arbitration proceedings should be conducted in accordance with the FAA, and the FAA requires parties wishing to vacate an arbitration award to do so by bringing a motion.  The district court, however, treated Penske’s complaint as a motion, but found it deficient for untimeliness, since under the Federal Rules of Civil Procedure, a motion cannot relate back to the original filing date as a complaint can, and for not containing a memorandum.  The district court denied Pension Fund’s motion for reconsideration, and Pension Fund appealed to the Fourth Circuit.

The Fourth Circuit first found that the MPAA requires that a party to an arbitration challenge the arbitration award through filing a complaint, rather than by filing a motion. The court argued that the plain meaning of the MPAA statutes, language surrounding those statutes, and parallel procedure under the statute for collecting withdrawal liability where there was no arbitration all suggest that a complaint is the proper form for challenging an arbitration award under the MPAA.  The court also found that the House Committee Report on the MPAA bolstered the argument that a complaint was the proper form for challenging an award.  The court also noted that even the district court here, reviewing the original complaint and motion to dismiss, analyzed the MPAA as requiring a civil action or complaint to review an arbitration award.  The court further found, on the basis of statutory and regulatory language, and case law, that there is a distinction between arbitrations under the MPAA, which must be conducted in accord with the FAA, and review of arbitration awards under the MPAA, which are to be commenced under MPAA rules by filing a complaint.  Having concluded that filing a complaint is the proper method to gain review of an arbitration award under the MPAA, the court then held that Pension Fund’s amended complaint was timely, because it related back, under Federal Rule of Civil Procedure 15, to Pension Fund’s original complaint.  The court reasoned that in Pension Fund’s amended complaint, Pension Fund remained the named party, and both the conduct challenged and the claim against Penske remained the same.  Thus, Pension Fund’s amended complaint could relate back to the filing date of the original complaint, which was within 30 days of the arbitration award.  The Fourth Circuit thus found that Pension Fund’s amended complaint was timely.  On this basis, the Fourth Circuit reversed the district court’s dismissal of Pension Fund’s claim, and remanded to the district court.

Full Opinion

Katherine H. Flynn