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DORN'S TRANSP., INC. v. TEAMSTERS PENSION TRUST FU

October 25, 1984

DORN'S TRANSPORTATION, INC. and ONEIDA MOTOR FREIGHT, INC., Plaintiffs,
v.
TEAMSTERS PENSION TRUST FUND OF PHILADELPHIA AND VICINITY, Defendant



The opinion of the court was delivered by: DEBEVOISE

 DEBEVOISE, District Judge.

 Introduction

 This case arises out of a demand by defendant Teamsters Pension Trust Fund of Philadelphia and Vicinity (Teamsters Fund) for payment by Dorn's -- now Oneida's wholly-owned subsidiary -- of $315,516 which the Teamsters Fund claims as "withdrawal liability" due under the Multiemployer Pension Plan Amendments Act of 1980, 29 U.S.C. § 1381 et seq. (MPPAA).

 Dorn's and Oneida now seek summary judgment on two alternative grounds: (1) that the undisputed facts show that there has been no "withdrawal" from the Teamsters Fund such as to create a statutory basis for its claim for withdrawal liability, and (2) if the statute were construed to require the payment demanded, then, on the facts of this case, it would violate the Fifth Amendment to the Federal Constitution. Since, however, this motion can be decided on statutory, rather than constitutional, grounds, the Fifth Amendment claim will not be reached.

 Statement of Facts and Procedural History

 Until March 1981, plaintiffs Dorn's Transportation, Inc. (Dorn's) and Oneida Motor Freight, Inc. (Oneida) operated separately as motor common carriers of freight over routes in the Northeastern United States. Oneida and Dorn's had no relationship to one another except as competitors until 1980, when the two began negotiating for the sale of Dorn's to Oneida. On March 2, 1981, Oneida contracted to purchase all of the outstanding stock of Dorn's for $1,035,000. At that time, Dorn's was in financial difficulty and had a negative net worth of $995,000.

 On March 5, 1981, the Interstate Commerce Commission (ICC) granted temporary authority to Oneida to control and operate Dorn's business, pending disposition of Oneida's application for final authority to control Dorn's and purchase its stock. The ICC gave its final approval in an Order entered July 22, 1981. Dorn's Pennsauken, New Jersey terminal, one of nine Dorn's terminals, was shut down on March 6, 1981, the day after the ICC grant of temporary authority. Dorn's employees were told to report to the Oneida terminal in Pennsauken on the following Monday morning. Ten of the twelve Dorn's full time employees at Pennsauken, all members of the International Brotherhood of Teamsters, Chauffeurs and Warehousemen, Local 107, accepted employment with Oneida. Overall, more than 700 of the approximately 800 Teamsters members employed by Dorn's became employees at Oneida terminals. All such employees were unionized.

 Prior to Oneida's purchase of Dorn's, both plaintiffs were parties to a collective bargaining agreement with Local 107 of the Teamsters which covered their Pennsauken employees. The agreement in effect in March 1981 was first effective April 1, 1979. It required each of the employers to contribute to defendant Teamsters Fund, a multiemployer pension fund, on behalf of employees who were Local 107 members.

 For the year prior to March 1981, Dorn's had made pension contributions to the Teamsters Fund on behalf of approximately twelve full time Teamster employees and varying numbers of "casual" employees who were members of Local 107. Local 107 had had advance notice of the pending Oneida-Dorn's transaction and participated in a proceeding which resulted in a March 3, 1981 determination by the Teamsters' Philadelphia and Vicinity Joint Area Committee that Dorn's Pennsauken terminal employees should be "dovetailed" into Oneida's Pennsauken terminal employees seniority list. See Decision of Joint Area Committee, Plaintiffs' App. at 52.

 Since Oneida acquired Dorn's, plaintiffs have continued to make pension plan contributions on behalf of all Dorn's former employees now employed by Oneida. In the years following the acquisition, plaintiffs' contributions have been approximately 90% of the combined contributions made by Oneida and Dorn's separately in the five years preceding 1981.

 Upon the termination of Dorn's operations, the defendant Teamsters Fund submitted a claim to Dorn's for payment of "withdrawal liability" from the fund in the amount of $315,516. Defendant made this claim under the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA), 29 U.S.C. § 1381 et seq. *fn1"

 The MPPAA was enacted to provide a statutory scheme under which employers who chose to terminate, or significantly reduce the levels of, their contributions to a multiemployer pension plan are liable for a proportionate share of the "unfunded vested benefit liability" of that plan. The MPPAA was intended to prevent employers from evading their obligations under collective bargaining agreements to ...


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