Pension & Benefits Daily™ covers all major legislative, regulatory, legal, and industry developments in the area of employee benefits every business day, focusing on actions by Congress,...
Jan. 12 — The U.S. Supreme Court announced that it won't wade into the debate over how a company can become liable for the pension obligations of a different company under common ownership.
The case comes from the U.S. Court of Appeals for the Seventh Circuit, which has issued more significant rulings on pension plan withdrawal liability than any other appellate court over the past several years.
In the case, the Seventh Circuit found several companies jointly liable for a $1.3 million withdrawal liability assessment, because the companies were majority-owned by one individual and therefore under common control.
That common control caused the companies with no multiemployer pension plan obligations to become jointly liable under the Multiemployer Pension Plan Amendments Act for the withdrawal liability assessment of one company that had stopped making required pension contributions, the court said.
The U.S. District Court for the Northern District of Illinois also found the companies jointly liable in its 2012 opinion.
Both the district and the appellate court found that the defendant companies were under common ownership because one individual, George Cibula, satisfied the MPPAA's requirement of holding an 80 percent controlling interest in each company.
This was true even though Cibula only owned 73 percent of the shares in the company subject to the withdrawal liability assessment, the Seventh Circuit said, because he also held the right to vote the remaining 27 percent of the shares and to demand the release of those shares from escrow.
In their petition for Supreme Court review, the companies asked the justices whether the Seventh Circuit erred in ruling for the pension fund when there was evidence that the companies were neither under common control nor engaged in a trade and business as to be subject to withdrawal liability. They also asked the justices to consider their right to a jury trial and whether the district court wrongfully assessed fees and costs.
The Supreme Court announced its decision Jan. 12.
The petition for review was filed by Cassiday Schade LLP.
Text of the Seventh Circuit's opinion is at http://www.bloomberglaw.com/public/document/CENTRAL_STATES_SOUTHEAST_AND_SOUTHWEST_AREAS_PENSION_FUND_and_ART/2.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)