Allied Painting & Decorating, Inc v. International Painters and Allied Trades Industry Pension Fund

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 23-1537
_____________
ALLIED PAINTING & DECORATING, INC.
v.
INTERNATIONAL PAINTERS AND ALLIED TRADES
INDUSTRY PENSION FUND,
Appellant
_____________
On Appeal from the United States District Court
for the District of New Jersey
(D.C. Civil No. 3-21-cv-13310)
District Judge: Honorable Peter G. Sheridan
_____________
Argued January 18, 2024
Before: HARDIMAN, MATEY, and PHIPPS, Circuit Judges.
(Filed: July 11, 2024)
_____________
Neil J. Gregorio
Jill D. Helbling
Richard B. Tucker, III [ARGUED]
Tucker Arensberg
One PPG Place
Suite 1500
Pittsburgh, PA 15222
Counsel for Appellant
Gregory R. Begg [ARGUED]
Peckar & Abramson
70 Grand Avenue

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Suite 200
River Edge, NJ 07661
Counsel for Appellee
___________
OPINION OF THE COURT
____________
MATEY, Circuit Judge.
Twelve years after Allied Painting & Decorating, Inc.
withdrew from the International Painters and Allied Trades
Industry Pension Fund, the Fund sent Allied a demand for
$427,195. That is the amount the Fund says Allied owes for
leaving the pension plan all those years ago. Much is made of
whether Allied suffered prejudice from this lengthy delay. But
diligence is what the Multiemployer Pension Plan
Amendments Act of 1980 requires, and all agree that the Fund
did not send Allied the bill “[a]s soon as practicable” after
Allied’s withdrawal. 29 U.S.C. § 1399(b)(1). As a result, the
Fund cannot recover the claimed withdrawal liability, and we
will affirm the District Court’s order vacating the Arbitrator’s
Award.
I.
This dispute turns on the meaning of the MPPAA, 29
U.S.C. §§ 1381–1461, an amendment to the Employee
Retirement Income Security Act of 1974 enacted “to protect
the financial solvency of multiemployer pension plans.” Bay
Area Laundry & Dry Cleaning Pension Tr. Fund v. Ferbar
Corp. of Cal., Inc., 522 U.S. 192, 196 (1997). With it, Congress
put to paper a statutory scheme allowing private pension funds
to recoup money from employers that join, and then abandon,
pension plans. The idea is to keep the funds solvent and avoid
employers promising but not paying retirement benefits,
leaving workers without the security they earned from their
labor. So Congress created “withdrawal liability” to hold
employers responsible for their share of unfunded vested

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benefits accruing after they exit a pension plan.1 See 29 U.S.C.
§§ 1381, 1391. That liability is what is at issue.
A.
In 2001, Allied—a painting company—signed an
agreement with District Council 711 of the International
Painters Union running from May 1, 2000 to April 30, 20062
and requiring Allied to contribute to the Fund. In 2005, Allied
closed its painting operations and stopped contributing to the
Fund. For the next year, Allied submitted monthly reports to
the Fund showing that it utilized no Painters Union work
through the expiration of the agreement in April 2006.3
1 For the curious, “unfunded vested benefits” means an
amount equal to the value of nonforfeitable benefits under the
plan less the value of the assets of the plan. 29 U.S.C.
§ 1393(c). This arithmetic is not at issue here.
2 The Arbitrator found that Allied was covered by a
collective bargaining agreement between the Painters Union
and a coalition of employers—not including Allied—because
the agreement was “implemented by Allied,” App. 89—a
finding presumed correct because Allied has not shown a clear
preponderance to the contrary. See 29 U.S.C. § 1401(c). A
page with Allied owner Robert Smith’s signature provides that
Allied and the Painters Union “are desirous of entering into an
agreement to set forth control and regulate the wages, hours,
fringe benefits, terms and conditions of employment under
which the employer will employ painters, tapers, glaziers and
allied trades, effective May 1, 2000 through April 30, 2006.”
App. 1034 (cleaned up). This mirrors the terms of the collective
bargaining agreement. And records showed that Allied
contributed to the Fund for work performed through April 2005
and submitted reports to the Fund showing it utilized no
Painters Union work through April 2006—acts it would not
have taken if it were not bound by such an agreement.
3 Allied says it might have agreed with the Painters
Union to cancel the collective bargaining agreement by 2004
or 2005. But the Fund conceded before the Arbitrator that
Allied’s obligation to contribute under the agreement ceased
on April 30, 2005, and the Arbitrator accepted this fact.

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But Robert Smith—Allied’s owner—returned to
painting a few years later with a new company called Allied
Construction Management.4 The MPPAA kicks in when an
employer in the building and construction industry5 “ceases to
have an obligation to contribute under the plan”6 but “resumes
such work within 5 years after the date on which the obligation
to contribute under the plan ceases, and does not renew the
obligation at the time of the resumption.” 29 U.S.C.
§ 1383(b)(2).7 Meaning Allied’s return to painting potentially
triggered withdrawal liability. It just needed to hear from the
Fund.
B.
But the Fund did not rigorously track, much less assess,
employer withdrawals. After developing and implementing a
new computer system between 2008 and 2010, the Fund began
generating annual reports showing the employers that had not
contributed in the last five years. The reports revealed a
backlog of hundreds of cases for investigation to determine
whether each noncontributing employer owed withdrawal
liability and, if so, how much. And the investigations moved
slowly, with notices gradually trickling out to employers. So
4 Allied admitted as much before the Arbitrator. See
App. 466 (“Allied/[Allied Construction Management] had,
openly and notoriously, performed covered work immediately
after the cessation of the obligation to contribute, and for a
period of years thereafter.”). Because Smith owned both
entities, they were “under common control” and considered the
same employer for assessing withdrawal liability. See 29
U.S.C. § 1301(b)(1).
5 All agree that Allied is in the building and construction
industry.
6 “[O]bligation to contribute” means “an obligation to
contribute arising—(1) under one or more collective
bargaining (or related) agreements, or (2) as a result of a duty
under applicable labor-management relations law, but does not
include an obligation to pay withdrawal liability . . . or to pay
delinquent contributions.” 29 U.S.C. § 1392(a).
7 “[T]he date of a complete withdrawal is the date of the
cessation of the obligation to contribute or the cessation of
covered operations.” 29 U.S.C. § 1383(e).

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while Allied’s potential liability came to the Fund’s attention
in a 2011 report, the Fund did not notify Allied until July 2017.
C.
Finally served with a payment demand twelve years
after it last contributed to the Fund, Allied requested review8
and demanded arbitration.9 Objecting based on laches, Allied
explained that, by the time the Fund notified Allied of its
withdrawal liability and demanded payment, Allied had no
records about Painters Union work, having purged its records
under its standard retention practices. And, Allied contended,
anyone with personal knowledge about the matter was no
longer employed or, in some cases, even identifiable.
The Arbitrator issued several decisions and concluded
that Allied owed $427,195 for its withdrawal.10 The Arbitrator
first found that the Fund did not act “as soon as practicable” in
issuing a notice and demand to Allied and that the Fund’s delay
was unreasonable. See 29 U.S.C. § 1399(b)(1). But then the
Arbitrator concluded that Allied had failed to establish severe
or material prejudice, which doomed its laches defense.11 On
8 The employer has ninety days after it receives notice
of the withdrawal-liability amount to seek review by the fund,
identify inaccuracies in the calculation of the amount, and
furnish additional information to the fund. 29 U.S.C.
§ 1399(b)(2)(A). “After a reasonable review of any matter
raised,” the fund must notify the employer of its decision,
along with the basis for its decision and the reason for any
change in the determination of the employer’s liability or
schedule of payments. Id. § 1399(b)(2)(B).
9 “Any dispute between an employer and the plan
sponsor of a multiemployer plan concerning a determination
made under [the MPPAA provisions relating to the assessment,
notice, and demand of withdrawal liability, among other
provisions] shall be resolved through arbitration.” 29 U.S.C.
§ 1401(a)(1).
10 Allied did not contest the Fund’s withdrawal-liability
calculation.
11 “The elements of the equitable defense of laches are
‘(1) lack of diligence by the party against whom the defense is
asserted, and (2) prejudice to the party asserting the defense.’”

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appeal, the District Court found that Allied was prejudiced by
the delay and vacated the Award. We will affirm the District
Court’s order vacating the Award, though on different
grounds.12
II.
“We review the summary judgment that reversed the
arbitral award de novo, and we apply the same standard
required of the District Court” on summary judgment. Caesars
Ent. Corp. v. Int’l Union of Operating Eng’rs Loc. 68 Pension
Fund, 932 F.3d 91, 94 (3d Cir. 2019). When a district court
reviews an arbitration award under 29 U.S.C. § 1401(b)(2), the
district court “presumes that the arbitrator’s factual findings
are correct unless they are rebutted by a clear preponderance
of the evidence,” and “[t]he arbitrator’s legal conclusions are
reviewed de novo.” Crown Cork & Seal Co. v. Cent. States Se.
& Sw. Areas Pension Fund, 982 F.2d 857, 860 (3d Cir. 1992)
(citing 29 U.S.C. § 1401(c) and Huber v. Casablanca Indus.,
Inc., 916 F.2d 85, 89 (3d Cir. 1990)). “We may affirm on any
basis supported by the record, even if it departs from the
District Court’s rationale.” TD Bank N.A. v. Hill, 928 F.3d 259,
270 (3d Cir. 2019).
Although the District Court applied the Federal
Arbitration Act standard for vacating an arbitration award, see
9 U.S.C. § 10(a), the MPPAA provides that the FAA’s
provisions apply only “to the extent consistent” with the
MPPAA, 29 U.S.C. § 1401(b)(3). The FAA does not permit
vacating an arbitration award for “simply an error of law.”
Whitehead v. Pullman Grp., LLC, 811 F.3d 116, 120 (3d Cir.
Equal Emp. Opportunity Comm’n v. Great Atl. & Pac. Tea Co.,
735 F.2d 69, 80 (3d Cir. 1984) (quoting Costello v. United
States, 365 U.S. 265, 282 (1961)). “To establish prejudice, the
party raising laches must demonstrate that the delay caused a
disadvantage in asserting and establishing a claimed right or
defense; the mere loss of what one would have otherwise kept
does not establish prejudice.” U.S. Fire Ins. Co. v.
Asbestospray, Inc., 182 F.3d 201, 208 (3d Cir. 1999).
12 The District Court had jurisdiction under 29 U.S.C.
§§ 1401(b)(2) and 1451(c), and we have jurisdiction under 28
U.S.C. § 1291.

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2016) (quoting Newark Stereotypers’ Union No. 18 v. Newark
Morning Ledger Co., 397 F.2d 594, 599 (3d Cir. 1968)). But
the MPPAA permits review of the arbitration award by courts
“to enforce, vacate, or modify” the award, 29 U.S.C.
§ 1401(b)(2)—review that includes de novo consideration of
the arbitrator’s legal conclusions, see Crown Cork & Seal Co.,
982 F.2d at 860 (citing Huber, 916 F.2d at 89). So the FAA is
inconsistent with the MPPAA in this respect, and the
MPPAA’s standard applies.13
III.
“As soon as practicable” after an employer’s
withdrawal from a pension fund, the fund must “notify the
employer of” the amount of withdrawal liability and a schedule
for liability payments and “demand payment in accordance
with the schedule.” 29 U.S.C. § 1399(b)(1). No one challenges
the Arbitrator’s conclusion that the Fund did not act “as soon
as practicable” when it provided notice of Allied’s withdrawal
liability and demanded payment twelve years after Allied’s
obligation to contribute to the Fund ceased. That conclusion
ends this matter under the best reading of the MPPAA.
A.
The “as soon as practicable” deadline sets no rigid
timeframe. Congress’s “adoption of a looser ‘as soon as
practicable’ requirement for the initial determination of
withdrawal liability bespeaks a deliberate legislative choice to
afford some flexibility in gathering the information and
performing the complex calculations necessary to make that
assessment.” Bay Area, 522 U.S. at 205.14 In Bay Area, the
13 Several circuits agree. See, e.g., Republic Indus., Inc.
v. Teamsters Joint Council No. 83 of Va. Pension Fund, 718
F.2d 628, 641 (4th Cir. 1983); Union Asphalts & Roadoils, Inc.
v. MO-KAN Teamsters Pension Fund, 857 F.2d 1230, 1234
(8th Cir. 1988); Trs. of Iron Workers Loc. 473 Pension Tr. v.
Allied Prods. Corp., 872 F.2d 208, 212 (7th Cir. 1989); GCIU-
Emp. Ret. Fund v. MNG Enters., Inc., 51 F.4th 1092, 1097 (9th
Cir. 2022).
14 See also ILGWU Nat’l Ret. Fund v. Levy Bros.
Frocks, Inc., 846 F.2d 879, 887 (2d Cir. 1988) (“We do not
read the notice requirement of 29 U.S.C. § 1399(b)(1), which

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Supreme Court considered when the “MPPAA’s six-year
statute of limitations begin[s] to run on a pension fund’s action
to collect unpaid withdrawal liability[.]” Id. at 195. Congress’s
answer—the Court acknowledged—may not satisfy the long-
waiting employer. See id. at 204. The six-year statute of
limitations, 29 U.S.C. § 1451(f)(1), begins to run not when the
employer withdraws from the fund, when withdrawal liability
is assessed and noticed, or even when the demand is made, but
when the employer defaults on an installment “due and
payable” following the fund’s notice and demand. Bay Area,
522 U.S. at 202. “Only then has the employer violated an
obligation owed the [fund] under the [MPPAA].” Id.
Statutory meaning stated, the Court addressed the
concern that its interpretation of § 1451(f)(1) would place the
running of the statute of limitations in the control of the fund.
Id. at 204–05. Unfair it may seem, but “that is an unavoidable
consequence of the scheme Congress adopted. Congress did
not set a fixed time during which a pension fund’s trustees must
calculate the employer’s withdrawal liability, although it
surely could have done so.” Id. at 204. “Notably,” the Court
said, “Congress adopted specific time limits to govern a
number of other steps in the assessment and collection
process,” while its “adoption of a looser ‘as soon as
practicable’ requirement for the initial determination of
withdrawal liability” was a “deliberate legislative choice to
afford [the funds] some flexibility.” Id. at 204–05.
Not to worry, the Court assured, since financial and
prudential factors will motivate funds to bring claims for
unpaid amounts quickly, and employers can raise a laches
defense if a fund delays. Id. at 205. In particular, “‘significant
incentives . . . will, in the usual case, induce plan sponsors to
act promptly to calculate, schedule, and demand payment of
withdrawal liability,’” and “if an employer believes the trustees
have failed to comply with their ‘as soon as practicable’
provides that notice must be sent to employers ‘[a]s soon as
practicable’ after withdrawal, to impose ‘a strict deadline for
notifying employers of their withdrawal liability.’” (alteration
in original) (quoting I.A.M. Nat’l Pension Fund Plan A, A
Benefits v. Cullman Indus., Inc., 640 F. Supp. 1284, 1288
(D.D.C. 1986))).

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responsibility, the employer may assert that violation as a
laches objection at an arbitration contesting the withdrawal
liability assessment.” Id. (omission in original) (quoting Joyce
v. Clyde Sandoz Masonry, 871 F.2d 1119, 1126 (D.C. Cir.
1989)).
But the Court did not merge the words of Congress with
the protections of equity by interpreting “as soon as
practicable” to incorporate the two prongs of the laches
defense.15 Bay Area resolved only the issue of how to read the
time limitation on filing a suit under the MPPAA. The
reference to laches comes in that context, addressing—in
dicta—a potential defense to a suit brought within the six-year
statute of limitations from when the employer defaults on a
payment.
15 The alternative view reads Bay Area to say that laches
is the required vehicle to challenge the timeliness of the
withdrawal-liability notice and demand. See, e.g., PACE Indus.
Union-Mgmt. Pension Fund v. Troy Rubber Engraving Co.,
805 F. Supp. 2d 451, 464 (M.D. Tenn. 2011) (“This dicta not
only suggests that arbitration is the proper forum in which to
raise objections to a delay in the notice of liability and demand
for payment, but also intimates that laches is not a separate
defense to liability from a failure to provide notice ‘as soon as
practicable’ under the MPPAA, but instead is the proper means
of making this argument.”); Pavers & Rd. Builders Dist.
Council Pension Fund by Montelle v. Nico Asphalt Paving,
Inc., 248 F. Supp. 3d 374, 380 (E.D.N.Y. 2017) (viewing
“objection to the timeliness of the withdrawal notice [a]s
subsumed by [the] laches defense”). But this approach
mistakes “may” for “must” and turns dictum into a decision on
the meaning of statutory text outside the question presented.
And it suffers from the too-common trend of “treating judicial
opinions like statutes.” OI Eur. Grp. B.V. v. Bolivarian
Republic of Venez., 73 F.4th 157, 175 n.22 (3d Cir. 2023); see
also Brown v. Davenport, 596 U.S. 118, 141 (2022) (“This
Court has long stressed that ‘the language of an opinion is not
always to be parsed as though we were dealing with [the]
language of a statute.’” (alteration in original) (quoting Reiter
v. Sonotone Corp., 442 U.S. 330, 341 (1979))).

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B.
With the limits of Bay Area mapped, we turn to the
usual task of giving effect to Congress’s directive by looking
first to the text of the law and reading its words “in their usual
and most known signification.” Berkelhammer v. ADP
TotalSource Grp., Inc., 74 F.4th 115, 118 (3d Cir. 2023)
(quoting 1 William Blackstone, Commentaries *59). Doing so
yields three steps for a fund to assert a withdrawal-liability
claim:
Step One: The employer must withdraw from the plan.
See 29 U.S.C. §§ 1381, 1383.
Step Two: “As soon as practicable”16 after withdrawal,
the fund must A) provide notice to the employer of its
withdrawal-liability assessment and B) demand payment from
the employer. Id. § 1399(b)(1).
Step Three: The employer must default on a payment
“due and payable.” See Bay Area, 522 U.S. at 202. Until that
step is taken, the employer has not “violated an obligation
owed the [fund] under the [MPPAA],” and the fund’s “interest
in receiving withdrawal liability does not ripen into a cause of
action.” Id.
Once timely notice and demand is sent and payment is
not delivered when due, the fund’s six-year clock to file a claim
for payment under § 1451(f)(1) begins to run. Id. Because the
missed payment, not the withdrawal, triggers the statute of
limitations and because § 1399(b)(1)’s “as soon as practicable”
requirement is flexible, a fund’s claim may still be timely even
if filed many more than six years from the date of the
employer’s withdrawal.
Neither the statute nor Bay Area requires employers to
prove prejudice at Step Two. If a fund does not issue its
demand “as soon as practicable,” then it has not satisfied one
16 A phrase familiar to the common law, “as soon as
practicable” means “reasonable time,” but is “not synonymous
with ‘as soon as possible.’” As Soon As Practicable, Black’s
Law Dictionary 112 (5th ed. 1979).

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of the elements of the MPPAA.17 To read the statute otherwise
reads out the practicability requirement from the pages of the
United States Code. “[I]t is of course our job to apply faithfully
the law Congress has written, [and] it is never our job to rewrite
a . . . valid statutory text.” Henson v. Santander Consumer
USA Inc., 582 U.S. 79, 89 (2017).
An example illustrates the point: Consider the absent-
minded fund manager and the diligent employer. Following
withdrawal, the fund calculates, but never sends, a payment
demand. Decades pass before the fund finally delivers notice.
Meanwhile, the diligent employer has held onto all its records
and, for good measure, long ago escrowed enough to pay the
demand. The employer then refuses to pay, the fund sues, and
the diligent employer cannot raise a laches defense because the
17 See Joyce, 871 F.2d at 1126–27 (“A delinquent
sponsor may always be met in arbitration . . . with the argument
that the plan has by virtue of delay run afoul of the Act’s
command that the plan sponsor demand payment of
withdrawal liability ‘as soon as practicable after the
employer’s complete . . . withdrawal.’” (second omission in
original) (quoting 29 U.S.C. § 1399(b))), cited in Bay Area,
522 U.S. at 205; Giroux Bros. Transp., Inc. v. New Eng.
Teamsters & Trucking Indus. Pension Fund, 73 F.3d 1, 3–4
(1st Cir. 1996) (The “statutory framework governing a plan
sponsor’s demand for withdrawal liability payment [is]
sufficiently clear so that to the extent the general 6 year
limitation on actions conflicts, Congress did not intend it to
override,” and “questions concerning the timeliness of a plan
sponsor’s demand are governed exclusively by § 1399(b)(1),”
so “resolution of [the employer]’s claim turns solely on
whether the [f]und’s demand was made ‘as soon as practicable’
after [the employer]’s withdrawal.”).
Recall that the statute-of-limitations question and the
as-soon-as-practicable question are distinct inquiries. An
inquiry into whether an employer received notice “as soon as
practicable” following the employer’s withdrawal “would only
become relevant after a finding that the action was filed within
the six year limitations period, and that further issues governed
by the MPPAA could be explored.” Bd. of Trs. of Trucking
Emps. of N. Jersey Welfare Fund, Inc.-Pension Fund v. Kero
Leasing Corp., 377 F.3d 288, 294 n.4 (3d Cir. 2004).

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slow suit, even if unreasonable, produced no prejudice. But the
“as soon as practicable” requirement is not the same as a laches
defense. Section 1399(b)(1) addresses not the unreasonable,
prejudicial delay in starting a suit; it requires prompt delivery
of notice and payment demand as a predicate to suing. Where
the fund has not sent notice and demanded payment “as soon
as practicable” after the employer’s withdrawal, the fund has
not satisfied its requirements under § 1399(b)(1). The contrary
reading would render the “as soon as practicable” requirement
of § 1399(b)(1) meaningless.
C.
The Arbitrator concluded that “the Fund did not act [‘]as
soon as practicable’ in issuing an assessment of withdrawal
liability in 2017 with respect to a withdrawal which had
occurred no later than 2006.” App. 107, 121. The District Court
did not disturb this conclusion, and neither party disputes it.
That is the end of the case, since the Arbitrator’s conclusion
that the “as soon as practicable” requirement was not met
means the requirements of the MPPAA are also lacking.
The Arbitrator’s error in requiring prejudice not present
in the MPPAA warrants vacating the Arbitration Award. That
a fund provide notice of its withdrawal-liability assessment and
demand payment from the employer “as soon as practicable”
following the employer’s withdrawal is a requirement of
§ 1399(b)(1). If this statutory requirement is not met, the
fund’s claim for the employer’s withdrawal liability must fail.
* * *
The “as soon as practicable” requirement under
§ 1399(b)(1) is an independent statutory requirement, and it
was not met here. So the Fund cannot recover the withdrawal-
liability amount from Allied under the MPPAA, and we will
affirm the District Court’s order vacating the Arbitrator’s
Award.

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