This case involved a company’s liability when a partially owned subsidiary goes bankrupt and failed to pay a pension plan withdrawal liability under the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA). Here, the pension fund filed a withdrawal liability proof of claim against the subsidiary, but did not notify the parent or otherwise make a claim against it for more than 5 years. At that point, it tried to hold the parent responsible for the liability, and the trial court agreed. The court found the company barred from offering a defense because it had not immediately sought to arbitrate the question of its own liability when it first learned that a claim had been filed against its subsidiary.The NAM and the U.S. Chamber of Commerce filed an amicus brief in the Seventh Circuit arguing that the company should not be held liable because the proof of claim was not filed against it. The company could not have reasonably understood that a claim against a former subsidiary was seeking to impose withdrawal liability on the former parent. The law does not allow a multiemployer pension plan to “lie in wait, concealing determinations that could impose millions of dollars in withdrawal liability on innocent parties, only to spring the trap once the time has expired to challenge the plan’s self-interested determination.”
On 2/27/2007, the Seventh Circuit denied our motion to file the amicus brief. In May, 2008, it ruled that the company could not contest its liability because it had actual notice of the claim.