The district court, in March 2023, found that the arbitrator had applied “inconsistent standards” to assess whether Allied Painting experienced prejudice due to the fund’s delayed payment request. The court determined these standards differed from those established by the Third Circuit, leading to the conclusion that no prejudice was consistent with case law.
Third Circuit’s Analysis
Affirming the district court’s ruling, the Third Circuit underscored the MPPAA’s requirement for timely requests. Judge Matey outlined the steps under the law when a fund makes a withdrawal liability claim: a company withdraws, and the fund must then notify and demand payment “as soon as practicable.” This requirement means within a reasonable time frame, not necessarily “as soon as possible.”
Judge Matey clarified that a company doesn’t need to show prejudice at this stage. The arbitrator had already determined that the fund did not act “as soon as practicable,” and neither party disputed this finding. Therefore, the arbitrator’s error in requiring a demonstration of prejudice, which the MPPAA does not mandate, justified vacating the award.
Conclusion
Representatives of the involved parties did not immediately respond to requests for comment.
