Kenneth J. Bauwens, et al., Plaintiffs-Appellants,
Revcon Technology Group, Inc., et al., Defendants-Appellees.
April 17, 2019
from the United States District Court for the Northern
District of Illinois, Eastern Division. No. l:18-cv-00707 -
Ronald A. Guzman, Judge.
Manion, Sykes, and Brennan, Circuit Judges.
BRENNAN, CIRCUIT JUDGE.
companies set up a pension plan for their employees, then
withdrew from it. This triggered federal requirements that
the companies contribute to the plan. This withdrawal
liability became the subject of a dance between the companies
and the pension plan's trustees: defaults and lawsuits,
followed by partial payments and dismissals of the lawsuits.
most recent lawsuit was dismissed as time-barred. On appeal
the trustees ask us to create a federal common law mechanism
which would allow them to decelerate the withdrawal liability
they previously accelerated. This would, in turn, preserve
the timeliness of their claim. We say "create"
because the statute makes no mention of such a deceleration
mechanism. We decline to do so, and agree the plan
trustees' claim is time-barred.
serve as trustees of a pension plan for unionized electrical
workers governed by the Employment Retirement Income Security
Act of 1974, 29 U.S.C. § 1001 et seq. (ERISA).
Several decades ago, the unions set up the pension plan with
defendants Revcon Technology Group and S & P Electric,
two electrical contractors that share common
ownership. Revcon withdrew from the plan completely
in 2003; S & P followed a year later. The Multiemployer
Pension Plan Amendments Act of 1980 (MPPAA), 29 U.S.C. §
1381 et seq., requires employers who withdraw from
underfunded pension plans to pay a withdrawal liability,
either in installments or a lump sum. In 2006, the plan's
trustees notified the companies they owed $394, 788 in
withdrawal liability and demanded payment in eighty quarterly
payments of $3, 818, starting in October 2006.
2008, after Revcon missed several payments, the trustees
informed defendants of their defaults and demanded immediate
payment. When Revcon still failed to pay after 60 days, the
trustees accelerated the outstanding liability under 29
U.S.C. § 1399(c)(5) and filed suit in the Northern
District of Illinois for the entire amount plus interest,
totaling $521, 553. Before appearing in the case, Revcon
offered to cure its defaults and resume making quarterly
payments in exchange for the trustees' dismissal of the
lawsuit. The trustees agreed and voluntarily dismissed the
suit under Fed. R. CIV. P. 41(a).
cured its defaults, made three more payments, then defaulted
again in April 2009. The trustees again sued seeking the
defaulted payments and the entire outstanding balance, now
$492, 988. Revcon again promised to cure its defaults and
resume making payments, and the trustees again voluntarily
dismissed the suit under Fed. R. Crv. P. 41(a).
parties repeated this cycle of default, lawsuit, promise to
cure, and voluntary dismissal three more times in 2011, 2013,
and 2015. All the complaints were identical, except that the
total withdrawal liability due changed as interest accrued
and Revcon made certain payments. And each complaint referred
to the debt acceleration in 2008, making no claim the
acceleration was ever revoked. Finally, in 2018, after yet
another default by Revcon, the trustees filed this case. The
2018 complaint differs from its five predecessors in that,
instead of claiming the entire outstanding withdrawal
liability, it claims only the delinquent payments (plus
interest) that Revcon had missed since the last voluntary
dismissal in 2015, $33, 239.98.
than repeat this cycle for a sixth time, Revcon moved to
dismiss the case. Revcon argued claim preclusion applied
because the five previous complaints demanded the entire
withdrawal liability, which necessarily includes the
defaulted payments currently at issue. The "two
dismissal rule" of Fed.R.Civ.P. 41(a)(1)(B) therefore
barred the trustees from raising any claims arising from the
withdrawal liability. By the same reasoning, Revcon argued,
because the trustees first sought to collect the entire debt
in 2008, the six-year statute of limitations expired in 2014.
trustees countered that they revoked the 2008 acceleration of
the withdrawal liability when they voluntarily dismissed the
2008 Complaint. The trustees argued each of the subsequent
dismissals had the same decelerating effect. The trustees
claimed the two dismissal rule did not apply because all
parties consented to the previous dismissals by stipulation
in spirit (though, admittedly, they were dismissals by notice
district court agreed with Revcon that this case was untimely
filed. It noted that the trustees' 2009, 2011, 2013, and
2015 complaints all stated the withdrawal liability was
accelerated in 2008, which belied the trustees' argument
that acceleration had been revoked. Holding ...