Courts may review arbitration issues at the beginning or the end, but not in the middle
Employers that withdraw from underfunded multiemployer pension plans must pay their share of the shortfall. They can invoke a process that 29 U.S.C. §1401(a) calls arbitration to dispute the plan’s assessments, “though unlike normal arbitration it is neither contractual nor consensual.”
The Central States Pension Fund concluded that US Foods withdrew and it assessed some liability for 2008 and some for 2009. US Foods made a timely request for arbitration of the 2009 assessment but it did not ask for arbitration of the 2008 assessment within the time limit.
In response to the Fund’s suit seeking to collect the 2008 assessment and prevent the arbitrator from considering how much US Foods owes for that year, US Foods asked the district court to order the arbitrator to calculate the amount due for 2008 and 2009 jointly. The court ruled that US Foods had missed the deadline for arbitral resolution of the 2008 assessment. US Foods appealed, relying on 9 U.S.C. §16(a)(1)(B), which authorizes an interlocutory appeal from an order “denying a petition under section 4 of this title to order arbitration to proceed.”
The court of appeals held that it was without jurisdiction to hear the appeal. US Foods asked that the 2008 assessment be added to the agenda of the arbitrator who was already serving. A judge who adds or subtracts issues in a pending arbitration has neither compelled nor forbidden arbitration; the judge has instead resolved an issue in the arbitration. Thus, a judge’s order declining to interfere in the conduct of an arbitration is not an order “denying a petition under section 4 of this title to order arbitration to proceed” for the purpose of appellate jurisdiction under §16(a)(1)(B).
The court concluded that “[o]nce the arbitration is over, the losing side can seek judicial review. 29 U.S.C. §1401(b)(2), 1451. Until then matters are in the hands of the arbitrator.” The court dismissed the appeal for want of jurisdiction.
Central States, Southeast and Southwest Areas Pension Fund v. US Foods, Inc., 2014 WL 3733773 (7th Cir. Jul. 30, 2014).