In Holland v. Murray, No. 21-cv-567, 2023 WL 2645708 (D.D.C. Mar. 27, 2023), the court held that financial support provided by Congress to a multiemployer pension plan under the Bipartisan American Miners Act (“BAMA”) did not divest the plan of Article III standing to pursue the withdrawal liability it was owed.
After the contributing employer filed for bankruptcy, the plan assessed its controlled group members, the defendants, with $6.5 billion in withdrawal liability. The defendants argued that, as a result of the financial support provided under BAMA, the plan was in fact fully funded and therefore did not suffer the injury-in-fact necessary to collect any additional amounts from withdrawing employers or their controlled group members.
The court rejected this argument, holding that the plan established the requisite injury by alleging it demanded and did not receive payment in accordance with the statutory scheme set forth under the Multiemployer Pension Plan Amendments Act (“MPPAA”). The court rejected the defendants’ argument that the annual payments provided under BAMA extinguished the injury or provided a reasonable substitute for the withdrawal liability payments required under MPPAA. While the former could be modified by a future act of Congress, the latter accorded with MPPAA’s goal to protect multiemployer plans by ensuring immediate payment in a lump sum or with interest. The court also held that the standard set forth in Thole v. U.S. Bank, 140 S. Ct. 1615 (2020) (previously discussed here) did not apply because it dealt with the standing of plan participants, not plan fiduciaries. Finally, the court held that the plan’s injury was directly traceable to defendant’s failure to pay the demanded withdrawal liability. The defendants had argued that the alleged injury was not traceable to them, but to others, including the plan’s trustees because they caused the employer to withdraw from the plan. The court rejected this argument because withdrawal liability must be paid even if the employer’s withdrawal is not voluntary or results from factors outside its control.
Proskauer’s Perspective
Separate and apart from BAMA, which provides financial support to coal industry plans, many other multiemployer pension plans have been approved to receive special financial assistance under the American Rescue Plan Act of 2021 (“ARPA”). Unlike BAMA, this special financial assistance (“SFA”) is paid in a lump sum. Even though ARPA specifically provides that employers still owe withdrawal liability notwithstanding the plan’s receipt of SFA, this decision does not bode well for employers that may seek to assert a similar argument to challenge the plan’s standing to collect some or all of its share of the plan’s withdrawal liability after having received the SFA.
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