PITTSBURGH MACK SALES & SERVICE, INC., doing business as PITTSBURGH TRUCK CENTER v. INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL UNION NO. 66 On Appeal From the…

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 07-3938
_____________
PITTSBURGH MACK SALES & SERVICE, INC.,
doing business as PITTSBURGH TRUCK CENTER,
Appellant
v.
INTERNATIONAL UNION OF OPERATING ENGINEERS,
LOCAL UNION NO. 66
On Appeal From the United States District Court
for the Western District of Pennsylvania
(Civil No. 07-cv-00092)
District Judge: Honorable Gary L. Lancaster
Argued September 29, 2008
Before: FISHER, CHAGARES, and HARDIMAN, Circuit
Judges.
Filed: September 4, 2009
James P. Thomas (Argued)
Richard I. Thomas
Pepper Hamilton LLP
500 Grant Street, 50th Floor
Pittsburgh, PA 15219
Counsel for Appellant

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The facts set forth are drawn from the complaint and1
because this is an appeal of an order granting a motion to dismiss,
we will accept the allegations of the complaint as true.
2
Joshua M. Bloom (Argued)
Joshua M. Bloom and Associates, P.C.
1230 Grant Building
310 Grant Street
Pittsburgh, PA 15219
Counsel for Appellee
__________________
OPINION OF THE COURT
__________________
CHAGARES, Circuit Judge.
This case requires us to determine whether an agreement by
a union to purportedly indemnify or hold harmless an employer for
the employer’s withdrawal liability to a pension plan under the
Employee Retirement Income Security Act of 1974, 29 U.S.C. §§
1001-1461 (“ERISA”), and the Multiemployer Pension Plan
Amendments Act of 1980, 29 U.S.C. §§ 1381-1461 (“MPPAA”),
is unenforceable because it violates public policy. We hold that it
is not. As a result, we will vacate the District Court’s judgment to
the contrary and will remand this matter to the District Court.
I.
Pittsburgh Mack Sales & Service, Inc. (“Pittsburgh Mack”)
serviced and sold Mack Trucks. At issue are two Collective1
Bargaining Agreements (“CBAs”) between Pittsburgh Mack and
the International Union of Operating Engineers Local Union No.
66 (the “Union”). The CBAs were effective January 13, 2004
through January 12, 2007, and applied to certain groups of
employees at Pittsburgh Mack’s Pittsburgh, Pennsylvania, facility.
The CBAs provided, inter alia, that Pittsburgh Mack would make
specific contributions to the Operating Engineer Construction

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Pittsburgh Mack contends that the “hold harmless”2
language was put in the CBAs as quid pro quo for Pittsburgh
Mack’s agreement to make the defined hourly contributions, and
that the language shows that the Union agreed to hold Pittsburgh
Mack harmless or indemnify it for any liability to the pension fund
above the $1.65 per man hour contribution. The Union counters
that the pension contributions were quid pro quo for the work that
the employees were performing, and that the Union did not agree
to hold Pittsburgh Mack harmless for liability to the pension fund
created by Pittsburgh Mack’s own conduct. Although we note this
factual dispute, we do not decide this issue on appeal as it is more
appropriate for the District Court to consider, if necessary, on
remand.
3
Industry and Miscellaneous Pension Fund (the “Fund”) – a
multiemployer pension fund covered by ERISA and the MPPAA
– and that the Union would hold Pittsburgh Mack harmless for
liability to the Fund in excess of its specified contribution.
Specifically, the relevant section of the CBAs (hereinafter “Section
1 of the CBAs”) provided:
During the term of this Agreement, the employer agrees to
contribute to [the Fund] for each man hour paid [] to the
Employees covered by this Agreement . . . $1.65.
The Union will hold [Pittsburgh Mack] harmless for any
liability to the Fund for any amounts claimed over and
above this hourly contribution.
Appendix (App.) 66, App. 104. Pittsburgh Mack made all of the2
hourly contributions to the Fund required under Section 1 of the
CBAs. The CBAs also contained a “successor clause,” which
provided that the contract would be binding on a new owner if
Pittsburgh Mack was purchased by an outside third party.
On October 5, 2005, during the period that the CBAs were
in effect, Pittsburgh Mack executed a letter of intent to sell
substantially all of its assets to Allentown Mack. During the
following two weeks, “the Union voluntarily negotiated a new

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4
labor agreement and/or agreements with Allentown Mack to
govern the wages, hours and other conditions of employment for
the bargaining unit employees of Allentown Mack after it
purchased the assets of Pittsburgh Mack.” App. 37 (Complaint ¶
11). A product of the Union’s bargaining with Allentown Mack
was that “the Union eliminated agreement provisions requiring
hourly contributions to the Fund on behalf of the bargaining unit
employees.” Id. (Complaint ¶ 12). Pittsburgh Mack had no
involvement in the negotiations between the Union and Allentown
Mack.
Pittsburgh Mack and Allentown Mack entered into an Asset
Purchase Agreement on December 19, 2005. In a letter dated
November 20, 2006, the Fund notified Pittsburgh Mack of its
determination that Pittsburgh Mack had “incurred a complete
withdrawal from the Plan on December 31, 2005,” and made a
demand on Pittsburgh Mack for the resulting withdrawal liability
in the amount of $413,389 plus interest.
In a letter dated November 29, 2006, Pittsburgh Mack
advised the Union of the Fund’s demand and, in turn, demanded
that the Union indemnify or otherwise hold it harmless for the
withdrawal liability. Pittsburgh Mack, in support of its demand on
the Union, cited Section 1 of the CBAs and argued that because
“the alleged withdrawal liability to the Plan is in addition to, and in
excess of, Pittsburgh Mack’s required hourly contribution, [the
Union] is responsible for this withdrawal liability to the Plan.”
App. 125. The Union has refused to indemnify or hold harmless
Pittsburgh Mack for the withdrawal liability to the Fund.
Pittsburgh Mack brought a declaratory judgment action
seeking a determination that pursuant to Section 1 of the CBAs, the
Union is obligated to indemnify it or hold it harmless against
claims for withdrawal liability by the Fund. The Union moved to
dismiss under Federal Rules of Civil Procedure 12(b)(1) and
12(b)(6), arguing, inter alia: (1) the District Court lacked
jurisdiction; (2) Pittsburgh Mack’s claims were not ripe; and (3)
Section 1 of the CBAs was unenforceable because it was contrary
to public policy.

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5
After considering a Magistrate Judge’s Report and
Recommendation (“R&R”), the District Court granted the Union’s
motion to dismiss and adopted the R&R. The District Court
determined that Section 1 of the CBAs was “unenforceable as
contrary to the public policy manifested in ERISA and the
MPPAA.” Pittsburgh Mack Sales & Serv., Inc. v. International
Union of Operating Engineers, No. 07-00092, 2007 WL 2907950,
at *8 (W.D. Pa. Sept. 30, 2007). In support of its determination,
the District Court noted that the “controlling principle” of the case
“is that Congress’ intent that withdrawal liability under the
MPPAA be born by the employer, and that the employees’
retirement benefits be thereby protected, may not be defeated by
private contractual arrangement.” Id. at *1. This appeal followed.
II.
A.
Pittsburgh Mack alleges that the District Court had
jurisdiction pursuant to section 301 of the Labor Management
Relations Act (“LMRA”), 29 U.S.C. § 185. Section 301 provides
that:
Suits for violation of contracts between an employer and a
labor organization representing employees in an industry
affecting commerce . . . may be brought in any district court
of the United States having jurisdiction of the parties,
without respect to the amount in controversy or without
regard to the citizenship of the parties.
29 U.S.C. § 185(a). The Union contends that there is no
jurisdiction under section 301 once a CBA has been terminated. It
further contends that because the CBAs were terminated when
Pittsburgh Mack no longer employed Union workers, the District
Court lacked jurisdiction. Pittsburgh Mack responds that the CBAs
were not terminated. It is unnecessary for us to resolve whether or
not the CBAs were terminated, however, because despite the
Union’s assertions to the contrary, the existence of a contract is not
a jurisdictional element of a section 301 claim.

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6
This Court has, in the past, noted that “a prerequisite for
section 301 jurisdiction is a contract between the employer and
labor organization.” International Brotherhood of Teamsters,
Chauffeurs, Warehousemen & Helpers of America, Local 249 v.
W. Pa. Motor Carriers Ass’n, 660 F.2d 76, 83 (3d Cir. 1981).
However, after the Supreme Court’s decision in Arbaugh v. Y &
H Corp., 546 U.S. 500 (2006), this is no longer the case.
In Arbaugh, the Supreme Court addressed concerns that
courts were conflating and confusing subject matter jurisdiction
with the need to prove the essential elements of a claim for relief.
Id. at 511. The Court adopted a “bright line” test to determine
whether a statute (or a provision thereof) was jurisdictional or part
of the merits. Id. at 515-16. The test, the Court in Arbaugh
explained, is as follows:
If the Legislature clearly states that a threshold limitation on
a statute’s scope shall count as jurisdictional, then courts
and litigants will be duly instructed and will not be left to
wrestle with the issue. But when Congress does not rank a
statutory limitation on coverage as jurisdictional, courts
should treat the restriction as nonjurisdictional in character.
Id. (citation and footnote omitted).
The Court of Appeals for the Sixth Circuit in Winnett v.
Caterpillar, Inc., 553 F.3d 1000, 1006, 1007 (6th Cir. 2009),
applied the Arbaugh test to the question of whether the existence
of a union contract is a jurisdictional prerequisite under section
301. The court in Winnett held that the existence of a union
contract is not a jurisdictional prerequisite under section 301
because Congress did not “clearly state[]” that the existence of
such a contract was a limit on subject matter jurisdiction. Id. at
1006. In so holding, the court in Winnett analyzed section 301,
noting that the only time jurisdiction is mentioned in the statute is
in the context of personal jurisdiction. Id. The court observed that
the statute actually “relaxes subject-matter jurisdiction by
permitting federal courts to handle such cases without regard to the
amount in controversy or the existence of diversity jurisdiction.”
Id. Finally, the court explained that because “[a]ll of the elements

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7
of a plaintiff’s prima facie case for the breach of a union contract
appear in the same subsection,” a finding that the existence of a
union contract had jurisdictional consequences would necessitate
a finding that all of the other parts of the subsection were also
jurisdictional in nature. Id. (emphasis in original). The court
concluded that even if Arbaugh was not considered, such a finding
would suggest that “Congress intended to create a cause of action
that has no non-jurisdictional elements,” a result that the court was
“reluctant” to reach. Id.
We adopt the reasoning of the Court of Appeals for the
Sixth Circuit in Winnett and hold that the existence of a union
contract is not a jurisdictional requirement under section 301.
Regardless of whether or not the CBAs were terminated, then, the
District Court had jurisdiction under section 301. This Court has
jurisdiction pursuant to 28 U.S.C. § 1291.
B.
The Union also contends that Pittsburgh Mack’s claim is not
ripe. Article III of the Constitution limits the “judicial Power” of
the United States to the adjudication of “Cases” or “Controversies.”
U.S. Const. art. III, § 2. Courts enforce the case-or-controversy
requirement through several justiciability doctrines that “‘cluster
about Article III.’” Allen v. Wright, 468 U.S. 737, 750 (1984)
(quoting Vander Jagt v. O’Neill, 699 F.2d 1166, 1178-79 (D.C.
Cir. 1983) (Bork, J., concurring)). They include standing, ripeness,
mootness, the political-question doctrine, and the prohibition on
advisory opinions. See DaimlerChrysler Corp. v. Cuno, 547 U.S.
332, 352 (2006).
The ripeness doctrine determines “whether a party has
brought an action prematurely, and counsels abstention until such
time as a dispute is sufficiently concrete to satisfy the constitutional
and prudential requirements of the doctrine.” Peachlum v. City of
York, 333 F.3d 429, 433 (3d Cir. 2003) (citation omitted).
However, “[r]ipeness is a matter of degree whose threshold is
notoriously hard to pinpoint.” NE Hub Partners, L.P. v. CNG
Transmission Corp., 239 F.3d 333, 341 (3d Cir. 2001). This is
especially so in declaratory judgment actions “because declaratory

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8
judgments are typically sought before a completed injury has
occurred.” Pic-A-State PA, Inc. v. Reno, 76 F.3d 1294, 1298 (3d
Cir. 1996).
In Step-Saver Data Systems, Inc. v. Wyse Tech., 912 F.2d
643 (3d Cir. 1990), we outlined the test to determine ripeness in the
declaratory judgment context. First, we analyze the “adversity of
the interest of the parties.” Id. at 647. Though “a plaintiff need not
suffer a completed harm to establish adversity of interest between
the parties,” “to protect against a feared future event, the plaintiff
must demonstrate that the probability of that future event occurring
is real and substantial, of sufficient immediacy and reality to
warrant the issuance of a declaratory judgment.” Armstrong World
Indus., Inc. v. Adams, 961 F.2d 405, 412 (3d Cir. 1992) (quotation
marks, citations, and alterations omitted) (emphasis added). We
have held that a potential harm that is “contingent” on a future
event occurring will likely not satisfy this prong of the ripeness
test. See Step-Saver, 912 F.2d at 647-48; Armstrong, 961 F.2d at
413.
Second, we look to “the conclusiveness of the judicial
judgment.” Step-Saver, 912 F.2d at 647. In analyzing this factor,
we must “determine whether judicial action at the present time
would amount to more than an advisory opinion based upon a
hypothetical set of facts.” Presbytery of N.J. of the Orthodox
Presbyterian Church v. Florio, 40 F.3d 1454, 1468 (3d Cir. 1994).
“[P]redominantly legal questions are generally amenable to a
conclusive determination in a preenforcement context,” so long as
Article III standing exists. Id. Third, we look to “the practical
help, or utility, of that judgment.” Step-Saver, 912 F.2d at 647. If
all three of these requirements are met, the claim is ripe. Travelers
Ins. Co. v. Obusek, 72 F.3d 1148, 1154 (3d Cir. 1995). But see
Armstrong, 961 F.2d at 412 (citing Step-Saver, 912 F.2d at 647)
(explaining that this list is not “exhaustive of the principles courts
have considered in evaluating ripeness challenges.”).
The Union contends that Pittsburgh Mack has failed to meet
these three factors. It argues that the first Step-Saver factor has not
been established because Pittsburgh Mack has not yet actually paid
any withdrawal liability, and therefore has suffered no harm.

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9
Instead, payments have been made by Robert Arnoni, the sole
remaining shareholder of Pittsburgh Mack. The Union also argues
that the second Step-Saver factor has not been established because
the Fund could pursue withdrawal liability “against other
individuals or commonly controlled companies,” and the
declaratory judgment would therefore be inconclusive. Union Br.
at 39. Third, the Union claims that a judgment in this case would
not be “practical” because the Fund could pursue withdrawal
liability against other entities, and therefore the third Step-Saver
factor has not been established.
We disagree with the Union on all three of these points, and
hold that this case is ripe for adjudication. Our analysis in Step-
Saver is instructive here. In Step-Saver, the plaintiff, Step-Saver,
sought a declaratory judgment that the defendant was liable to it if
collateral actions filed by Step-Saver’s customers established a
defect in the products sold by the defendants to Step-Saver, and
subsequently by Step-Saver to its customers. Step-Saver, 912 F.2d
at 645. We held that Step-Saver’s declaratory judgment request
was not ripe. Step-Saver’s request was based on a “contingency”
– the determination that the defendant was responsible to Step-
Saver was only relevant if the actions between Step-Saver and the
consumers resulted in Step-Saver’s liability based on the
defendant’s actions. Id. at 647. This contingency, coupled with the
fact that the defendant did not yet have to admit or deny liability to
Step-Saver based on the alleged defects in the products, resulted in
an insufficient adversity of interests between Step-Saver and the
defendant. Id. at 647-48. See also Armstrong, 961 F.2d at 413
(finding that the adversity of interest prong was not met because
the plaintiffs’ complaint was based on a contingency – that of a
takeover attempt of a corporation in violation of Pennsylvania law
and the subsequent hypothetical actions of the directors of the
corporation). The facts in Step-Saver are distinguishable from
those in this case. Here, the interests of the parties are sufficiently
adverse because the Union has explicitly refused to indemnify or
hold Pittsburgh Mack harmless for the withdrawal liability.
Furthermore, Pittsburgh Mack’s claim is not based on a
contingency – it has already received correspondence from the

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The Union is correct that, in general, to pursue an3
indemnity claim, the indemnitee must have made a payment to a
third party, and here Pittsburgh Mack has not done so. See Fleck
v. KDI Sylvan Pools, Inc., 981 F.2d 107, 122 (3d Cir. 1992).
However, at this juncture, Pittsburgh Mack is not seeking actual
monetary indemnification from the Union. Rather, it only seeks a
declaration that the Union has agreed to indemnify Pittsburgh
Mack for any liability above and beyond the payment of $1.65 per
man hour to the pension fund. Therefore, whether any payments
have been made or by whom is irrelevant. Cf. Board of Trustees
of Teamsters Local 863 Pension Fund v. Foodtown, Inc., 296 F.3d
164, 169 (3d Cir. 2002) (“With regard to alter ego liability in cases
involving claims to pension benefits protected by ERISA, as
amended by the MPPAA, there is a federal interest supporting
disregard of the corporate form to impose liability.” (quotation
marks, citation, and emphasis omitted)).
10
Fund that Pittsburgh Mack is liable for withdrawal liability. The3
first Step-Saver factor, then, points in favor of a finding of
ripeness.
In Step-Saver, we also determined that the second factor, the
conclusiveness of the judgment, was not met because Step-Saver’s
request for declaratory relief was itself based on a contingency, so
“even if we issued the requested declaration, the legal status of the
parties would not change (nor would it be clarified), because our
declaration itself would be a contingency.” 912 F.2d at 648. Here,
in contrast, the declaratory judgment will be conclusive because it
will establish whether the Union is obligated to indemnify or hold
harmless Pittsburgh Mack (or some derivative of it) for the
withdrawal liability.
Finally, in Step-Saver, we found that the third factor, the
utility of the judgment, was not satisfied because Step-Saver would
take the same steps whether or not it was granted a declaratory
judgment. Id. at 650. In the present case, however, determining
this issue is practical and useful because at the conclusion of
Pittsburgh Mack’s declaratory judgment action, it will know
whether or not it can proceed with an indemnification suit against

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11
the Union for any withdrawal liability it has incurred. This case is
therefore ripe for adjudication.
C.
This Court’s review of the District Court’s order granting
the Union’s motion to dismiss is de novo. McTernan v. City of
York, Pa., 564 F.3d 636, 646 (3d Cir. 2009). In analyzing a motion
to dismiss, “[w]e must ‘accept all factual allegations as true,
construe the complaint in the light most favorable to the plaintiff,
and determine whether, under any reasonable reading of the
complaint, the plaintiff may be entitled to relief.’” Id. (quoting
Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008)).
“A complaint may not be dismissed merely because it appears
unlikely that the plaintiff can prove those facts or will ultimately
prevail on the merits.” Id. (citation omitted).
III.
Pittsburgh Mack argues that public policy does not bar
enforcement of Section 1 of the CBAs because “Pittsburgh Mack
would still be primarily liable to the Fund for the withdrawal
liability, the Fund would still be fully insulated from Pittsburgh
Mack’s withdrawal, the Union employees still would receive their
full pension benefits, the MPPAA’s stated goal of ensuring fully-
funded pension benefits would still be achieved, and the integrity
of the collective bargaining process would be maintained.”
Pittsburgh Mack Br. at 11. We will accept, as we must, Pittsburgh
Mack’s contention that Section 1 of the CBAs constitutes an
agreement by the Union to indemnify or hold it harmless from
withdrawal liability. For the reasons that follow, we will vacate the
judgment of the District Court and remand for further proceedings.
Courts may not enforce a contract – including a collective
bargaining agreement – that violates public policy. See W.R.
Grace & Co. v. Local Union 759, Int’l Union of United Rubber,
Cork, Linoleum & Plastic Workers of Am., 461 U.S. 757, 766
(1983) (observing that “a court may not enforce a collective-
bargaining agreement that is contrary to public policy”); Twin City
Pipe Line Co. v. Harding Glass Co., 283 U.S. 353, 356-57 (1931);

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12
see also Fields v. Thompson Printing Co., Inc., 363 F.3d 259, 268
(3d Cir. 2004) (“It is axiomatic that a court may refuse to enforce
a contract that violates public policy.”). Because the phrase
“public policy” is vague, courts must find “definite indications in
the law of the sovereignty to justify the invalidation of a contract
as contrary to that policy.” Muschany v. United States, 324 U.S.
49, 66 (1945). The Supreme Court has instructed that public policy
“must be well defined and dominant, and is to be ascertained ‘by
reference to the laws and legal precedents and not from general
considerations of supposed public interests.’” W.R. Grace, 461
U.S. at 766 (quoting Muschany, 324 U.S. at 66). Accordingly, the
principle that courts may not enforce a contract that violates public
policy is “cautiously applied” by the courts “only in clear cases.”
Steele v. Drummond, 275 U.S. 199, 205 (1927); see Twin City, 283
U.S. at 356 (noting that the principle “should be applied with
caution and only in cases plainly within the reasons on which that
doctrine rests”).
We now examine “the law and legal precedents” to
determine whether there exists public policy that would compel a
court not to enforce Section 1 of the CBAs.
A.
ERISA was enacted in 1974 “after careful study of private
retirement pension plans.” Pension Benefit Guar. Corp. v. R.A.
Gray & Co., 467 U.S. 717, 720 (1984). One of the “principal
purposes of this comprehensive and reticulated statute was to
ensure that employees and their beneficiaries would not be
deprived of anticipated retirement benefits by the termination of
pension plans before sufficient funds have been accumulated in the
plans.” Id. (quotation marks and citation omitted); see also
Foodtown, Inc., 296 F.3d at 168 (“ERISA was enacted by Congress
to protect employees’ pension rights.”). Indeed, “Congress wanted
to guarantee that if a worker has been promised a defined pension
benefit upon retirement – and if he has fulfilled whatever
conditions are required to obtain a vested benefit – he actually will
receive it.” Pension Benefit Guar. Corp., 467 U.S. at 720
(quotation marks and citation omitted); see Concrete Pipe and

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13
Products of Cal., Inc. v. Construction Laborers Pension Trust for
Southern California, 508 U.S. 602, 607 (1993).
The MPPAA is an amendment to ERISA. Before it was
enacted, “many employers were withdrawing from multiemployer
plans because they could avoid withdrawal liability if the plan
survived for five years after the date of their withdrawal,” and
Congress was concerned “‘that ERISA did not adequately protect
multiemployer pension plans from the adverse consequences that
result when individual employers terminate their participation or
withdraw.’” SUPERVALU, Inc. v. Board of Trustees of Sw. Pa.
& W. Md. Area Teamsters & Employers Pension Fund, 500 F.3d
334, 336 (3d Cir. 2007) (quoting Warner-Lambert Co. v. United
Retail & Wholesale Employee’s Local No. 115 Pension Plan, 791
F.2d 283, 284 (3d Cir. 1986)). The MPPAA was therefore enacted
and was “designed ‘(1) to protect the interests of participants and
beneficiaries in financially distressed multiemployer plans, and (2)
to encourage the growth and maintenance of multiemployer plans
in order to ensure benefit security to plan participants.’” Board of
Trustees of Trucking Employees of North Jersey Welfare Fund,
Inc.- Pension Fund v. Centra Inc., 983 F.2d 495, 504 (3d Cir. 1992)
(quoting H.R. Rep. No. 96-869, 96th Cong., 2d Sess. 71 (1980), as
reprinted in 1980 U.S.C.C.A.N. 2918, 2939); see also Vornado,
Inc. v. Trustees of the Retail Store Employees’ Union Local 1262,
829 F.2d 416, 420 (3d Cir. 1987) (“[T]he amendments as a whole
clearly were meant to facilitate effective plan management and
protect the interests of beneficiaries and participants.”); Foodtown,
296 F.3d at 168 (explaining that the MPPAA works to “protect the
retirement benefits of covered employees”). Cf. IUE AFL-CIO
Pension Fund v. Barker & Williamson, Inc., 788 F.2d 118, 127 (3d
Cir. 1986) (“Courts have indicated that because ERISA (and the
MPPAA) are remedial statutes, they should be liberally construed
in favor of protecting the participants in employee benefit plans.”).
To accomplish these goals, the MPPAA “requires that a
withdrawing employer pay its share of the plan’s unfunded
liability,” which “insures that the financial burden will not be
shifted to the remaining employers” in the fund. SUPERVALU,
500 F.3d at 337; see also 29 U.S.C. § 1381(a); Foodtown, 296 F.3d
at 168 (“[T]he MPPAA requires employers who withdraw from

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14
underfunded multiemployer pension plans to pay a withdrawal
liability.” (quotation marks and citation omitted)).
The pension fund “determine[s] whether withdrawal liability
has occurred and in what amount.” SUPERVALU, 500 F.3d at 337
(citing 29 U.S.C. §§ 1382, 1391). Under 29 U.S.C. § 1383(a), a
“complete withdrawal . . . occurs when an employer - - (1)
permanently ceases to have an obligation to contribute under the
plan, or (2) permanently ceases all covered operations under the
plan.” 29 U.S.C. § 1383(a)). “[T]he amount of an employer’s
withdrawal liability is the employer’s proportionate share of the
unfunded vested benefits existing at the end of the plan year
preceding the plan year in which the employer withdraws.”
SUPERVALU, 500 F.3d at 337 (citing 29 U.S.C. § 1391(b)(2)(A));
see also Concrete Pipe, 508 U.S. at 609.
We hold that there are not enough “definite indications” of
public policy in ERISA or the MPPAA to preclude an
indemnification agreement between an employer and a third party
for the employer’s withdrawal liability, where the employer agrees
that it will always remain primarily liable for the liability. We
agree with the District Court that ERISA was designed to protect
the pension benefits of employees, see, e.g., Pension Benefit Guar.
Corp., 467 U.S. at 720; Foodtown, 296 F.3d at 168, and that to help
accomplish this goal, Congress enacted the MPPAA, which created
rules of withdrawal liability for employers to ensure the continued
funding of the plan, see Centra, 983 F.2d at 504; see also
SUPERVALU, 500 F.3d at 336-37. Nevertheless, these policy
concerns are not specific enough to preclude the kind of indemnity
agreement that Pittsburgh Mack contends it has with the Union
here, where Pittsburgh Mack asserts that it will always remain
primarily liable for its withdrawal liability. The purposes behind
ERISA and the MPPAA – ensuring that pension funds will be
adequately funded, even when employers withdraw from them, and
that the employees who are relying on those funds will be protected
– will be served even if indemnification agreements between

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Pittsburgh Mack argues that the District Court engaged in4
improper fact finding when it determined that the employees who
were members of the Union – and not the Union as a separate
entity and signatory to the CBAs – would ultimately pay the
withdrawal liability to the Fund if Section 1 of the CBAs is
enforced. Pittsburgh Mack has conceded that it will always remain
primarily liable for the withdrawal liability to the Fund, and it is
immaterial for purposes of this motion to dismiss whether the
Union (through what Pittsburgh Mack describes as non-dues funds
such as investments, dividends, rents, and other income) or the
employee/union members themselves would indemnify Pittsburgh
Mack. The Fund will be compensated and the employees’ pensions
will be safe, thus satisfying the purposes of ERISA and the
MPPAA.
15
employers and third parties are permitted, so long as the employer
remains primarily liable for the funding.4
B.
The District Court relied upon the Supreme Court’s
decisions in Connolly v. Pension Benefit Guaranty Corp., 475 U.S.
211 (1986), and Concrete Pipe & Products of California, Inc. v.
Construction Laborers Pension Trust for Southern California, 508
U.S. 602 (1993), two cases in which parties attempted to use
private contracts to eliminate their withdrawal liability. In both
cases, the Supreme Court explained that such contracts were
impermissible in light of Congressional authority in enacting the
MPPAA. See Connolly, 475 U.S. at 223-24 (“‘Contracts, however
express, cannot fetter the constitutional authority of [the] Congress
. . . . Parties cannot remove their transactions from the reach of
dominant constitutional power by making contracts about them.’”
(quoting Norman v. Baltimore & Ohio R.R. Co., 294 U.S. 240,
307-08 (1935))); id. at 224 (“If the regulatory statute is otherwise
within the powers of Congress . . . its application may not be
defeated by private contractual provisions.”); Concrete Pipe, 508
U.S. at 641-43 (same). As a result, the Court held that the parties
could not use private agreements to eliminate withdrawal liability.
See Concrete Pipe, 508 U.S. at 605, 641-42 (enforcing the

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MPPAA’s assessment and arbitration provisions even though
employer attempted to limit liability through private agreements);
Connolly, 475 U.S. at 217-19, 223-24 (applying rules of ERISA
even though employers attempted to limit their liability to pension
fund through private agreement); cf. SUPERVALU, 500 F.3d at
340-42 (finding an agreement was unenforceable and violated
ERISA Section 4212(c), 29 U.S.C. § 1392(c), which prohibits
“transaction[s]” whose “principal purpose” is “evad[ing] or
avoid[ing] liability” when employer made agreement with union
employees to avoid withdrawal liability).
Pittsburgh Mack, in contrast, is not attempting to eliminate
withdrawal liability under the MPPAA – indeed, it admitted both
in its briefing and at oral argument that it will always remain
“primarily liable” for the payment of that liability. Rather,
Pittsburgh Mack seeks to enforce a private contractual provision
which may obligate the Union to indemnify it for its withdrawal
payments. Enforcing a private contract in this context – one in
which the employer will always be primarily liable for the
withdrawal liability, ensuring the funding of the pension fund and
thus protecting the pension benefits earned by employees – will not
result in the purposes of ERISA or the MPPAA being “defeated,”
and therefore does not come within the ambit of the rule overriding
private contracts in this arena, as stated in Concrete Pipe and
Connolly.
* * * * *
After analyzing “the law and legal precedents,” including
ERISA, the MPPAA, as well as the Supreme Court’s decisions in
Connolly and Concrete Pipe, we can discern no “well defined and
dominant” public policy that would justify invalidating Section 1
of the CBAs. We hold that the District Court erred in granting the
motion to dismiss. However, we express no opinion on the
resolution of the various issues raised by the parties that are either

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We note that there are other issues raised by the parties,5
such as how to construe Section 1 of the CBAs and whether it is
explicit enough to show that the Union agreed to indemnify
Pittsburgh Mack; whether Pittsburgh Mack unilaterally made the
decision to withdraw from the fund or whether the Union played
any part in that withdrawal; and whether field preemption should
bar Pittsburgh Mack’s claim, among others. While the District
Court touched on these issues below, its ultimate conclusions were
explicitly based on whether, in the context of a motion to dismiss,
a violation of public policy made Section 1 of the CBAs
unenforceable. Accordingly, we will not address these issues.
17
not pertinent to our analysis or not appropriately raised in the
context of this motion to dismiss.5
VI.
Accordingly, we will vacate the judgment of the District
Court and remand for further proceedings.

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