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Educational Financial Service v. Stephanie Henry (In re Henry)

Summarizing by Bradley Pearce

Steel Workers Pension Trust v. The Renco Group, Inc.

Case Type:
Business
Case Status:
Affirmed
Citation:
16-3751 (3rd Circuit, May 31,2017) Not Published
Tag(s):
Ruling:
The United States Court of Appeals for the Third Circuit affirmed the United States District Court for the Western District of Pennsylvania (the "District Court") order dismissing the Amended Complaint of the Steelworkers Pension Trust (the "Trust") and denying its motion to stay arbitration. Under the Employee Retirement Income Security Act of 1974 ("ERISA") and the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), both counts of the Amended Complaint that seek withdrawal liability must be resolved through arbitration under 29 U.S.C. § 1401(a)(1).
Procedural context:
The Trust filed a complaint in the District Court alleging that defendant Renco Group ("Renco") waived its right to arbitrate its defenses to withdrawal liability. The District Court dismissed the Trust's complaint and ordered the parties to arbitration. This appeal followed.
Facts:
This case arose from the bankruptcy of RG Steel. The Trust is a multiemployer, defined benefit pension plan. RG Steel was one of over 500 employers contributing to the Trust. When RG Steel ceased operations and went into bankruptcy, it triggered RG steel's withdrawal liability to the Trust under ERISA and MPPAA. Prepetition, Renco purchased 100% of RG Steel. Therefore, RG Steel became part of the Renco Controlled Group along with other Renco subsidiaries that were defendants in this action. In January 2012, Renco transferred a 24.5% interest in RG Steel to Cerberus. The Trust contended that this transaction was designed to remove RG Steel from the Renco Controlled Group so that Renco would not be liable for RG Steel's withdrawal liability to the Trust if RG Steel ceased operations. Shortly after, RG Steel filed for bankruptcy and ceased operations, triggering withdrawal liability to the Trust. The Trust filed proofs of claim for withdrawal liability. The Trust later filed the a complaint, commencing this litigation.
Judge(s):
Greenaway, Jr., Shwartz, Circuit Judges; and Simandle, Chief District Judge of the United States District Court for the District of New Jersey, sitting by designation

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