Fourth Circuit Says Proceeding to Overturn ERISA MPPAA Pension Plan Dispute Arbitration Award is Commenced by Filing a Complaint—not a Federal Arbitration Act Application, Petition or Motion
Introduction
“Sorry, I’m a bit of a stickler for paperwork. Where would we be if we didn’t follow the correct procedures?”
Sam Lowry (played by Jonathan Pryce ), Brazil (1985)
Dystopian-future bureaucratic procedure may be one thing, but federal court litigation procedure is quite another—not because of where we might or might not be if we don’t follow it—but simply because not following it can have disastrous consequences. That is true in spades in Federal Arbitration Act enforcement litigation, where proceedings to enforce arbitration agreements and awards are governed by a strange amalgam of procedural rules derived from the Federal Arbitration Act, the Federal Rules of Civil Procedure and district court local rules. See Fed. R. Civ. P. 1, 2, 3, 6(c), 7, 8, 9, 10, 12, 15, 43(c) & 81(a)(6)(B); 9 U.S.C. §§ 6, 9, 10, 11, 12 & 13; see, e.g., IFC Interconsult v. Safeguard Int’l Partners, 438 F.3d 298, 308-09 (3rd Cir. 2006); Productos Mercantiles Industriales, S.A. v. Faberge USA, Inc., 23 F.3d 41, 46 (2d Cir. 1994).
On April 21, 2015 the U.S. Court of Appeals for the Fourth Circuit decided Freight Drivers and Helpers Local Union No. 557 Pension Fund v. Penske Logistics LLC, ___ F.3d ___, No. 14-1464, slip op. (4th Cir. April 21, 2015), a case that helps illustrate the risks associated with assuming that the Federal Rules of Civil Procedure’s liberal pleading and amendment rules apply to applications for relief under the Federal Arbitration Act. As it turns out, the appellant did nothing wrong by assuming that the Federal Arbitration Act’s procedural rules did not trump Federal Rules of Civil Procedure, because the case fell under the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”), and the district court erred by interpreting the MPPAA to require compliance with Federal Arbitration Act litigation procedure rules.
The MPPAA was enacted to strengthen the Employee Retirement Income Security Act (“ERISA”)’s provisions designed to protect multi-employer pension plans (i.e., collectively bargained pension plans funded by multiple employers, which are generally participants in the same industry). It features a mandatory arbitration requirement applicable to disputes about collectively bargained pension plans funded by multiple employers, including disputes about an employer’s withdrawal liability—that is the amount an employer must contribute to the fund when it stops participating in it.
It requires a party seeking judicial review of an award to do so in 30-days and, as we’ll see, it contains a provision that at first glance appears to make the Federal Arbitration Act’s litigation procedure rules applicable to judicial review of an MPPAA arbitration award. The Court held that under the MPPAA, the Federal Arbitration Act governed only arbitration procedure, not litigation procedure, and that accordingly, the award challenger’s amended complaint related back to the timely-filed original one.
Freight Drivers illustrates how important compliance with Federal Arbitration Act procedures can be, especially given the short limitation periods applicable to motions to confirm, vacate, modify and correct awards. Had the Federal Arbitration Act’s litigation procedures applied, then the plaintiff’s “amended complaint” might have been deemed time-barred on the ground that Fed. R. Civ. P. 15(c)’s relation-back provisions apply to pleadings only, and under the Federal Rules of Civil Procedure, and the Federal Arbitration Act, the amended complaint had to be deemed to be a motion, not a pleading. As we’ll see, that’s what the district court concluded, and the Fourth Circuit decided the case on the sole ground that the Federal Arbitration Act did not apply to MPPAA litigation procedure. Continue Reading »
