SUPERVALU Inc v. Bd Trustees SW PA ( 2007 )


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  •                                                                                                                            Opinions of the United
    2007 Decisions                                                                                                             States Court of Appeals
    for the Third Circuit
    8-29-2007
    SUPERVALU Inc v. Bd Trustees SW PA
    Precedential or Non-Precedential: Precedential
    Docket No. 06-3829
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    PRECEDENTIAL
    UNITED STATES COURT OF APPEALS
    FOR THE THIRD CIRCUIT
    No. 06-3829
    SUPERVALU, INC.
    v.
    BOARD OF TRUSTEES OF THE SOUTHWESTERN
    PENNSYLVANIA AND WESTERN MARYLAND AREA
    TEAMSTERS AND EMPLOYERS PENSION FUND,
    a/k/a THE TRUSTEES OF THE SOUTHWESTERN
    PENNSYLVANIA AND WESTERN MARYLAND AREA
    TEAMSTERS AND EMPLOYERS PENSION FUND
    a/k/a SOUTHWESTERN PENNSYLVANIA
    AND WESTERN MARYLAND AREA TEAMSTERS
    AND EMPLOYERS PENSION FUND
    BOARD OF TRUSTEES OF THE SOUTHWESTERN
    PENNSYLVANIA AND WESTERN MARYLAND AREA
    TEAMSTERS AND EMPLOYERS PENSION FUND,
    a/k/a THE TRUSTEES OF THE SOUTHWESTERN
    PENNSYLVANIA AND WESTERN MARYLAND AREA
    TEAMSTERS AND EMPLOYERS PENSION FUND,
    Appellant
    On Appeal from the United States District Court
    for the Western District of Pennsylvania
    (D.C. No. 05-cv-00737)
    District Judge: Honorable Joy F. Conti
    Argued May 17, 2007
    Before: FISHER and ROTH, Circuit Judges,
    and RAMBO,* District Judge.
    (Filed: August 29, 2007)
    Vince P. Szeligo (Argued)
    Brendan Delaney
    Wick, Streiff, Meyer, O’Boyle & Szeligo
    1450 Two Chatham Center
    Pittsburgh, PA 15219-3427
    Attorneys for Appellant
    Thomas M. Christina (Argued)
    Ogletree, Deakins, Nash, Smoak & Stewart
    300 North Main Street
    The Ogletree Building
    P.O. Box 2757
    *
    The Honorable Sylvia H. Rambo, United States District
    Judge for the Middle District of Pennsylvania, sitting by
    designation.
    2
    Greenville, SC 29602
    Attorneys for Appellee
    OPINION OF THE COURT
    FISHER, Circuit Judge.
    The Board of Trustees of the Southwestern Pennsylvania
    and Western Maryland Area Teamsters and Employers Pension
    Fund (the “Fund”) appeals the District Court’s grant of summary
    judgment in favor of SUPERVALU, Inc. (“SUPERVALU”).
    The Fund claims that the District Court improperly concluded
    that SUPERVALU did not violate § 4212(c) of the Employee
    Retirement Income Security Act (“ERISA”), 29 U.S.C.
    § 1392(c). We agree. For the reasons that follow, we will
    reverse the District Court’s judgment and remand the case to the
    District Court for enforcement of the Arbitrator’s Award.
    I.
    The Multiemployer Pension Plan Amendments Act of
    1980 (“MPPAA”), 29 U.S.C. § 1381 et seq., amended ERISA.
    The MPPAA was enacted “out of a concern that ERISA did not
    adequately protect multiemployer pension plans from the adverse
    consequences that result when individual employers terminate
    their participation or withdraw.” Warner-Lambert Co. v. United
    Retail & Wholesale Employee’s Teamster Local No. 115 Pension
    Plan, 
    791 F.2d 283
    , 284 (3d Cir. 1986) (internal citation
    3
    omitted). “The . . . amendments to ERISA were designed to
    prevent employers from withdrawing from a multiemployer
    pension plan without paying their share of unfunded, vested
    benefit liability, thereby threatening the solvency of such plans.”
    Mfrs. Indus. Relations Ass’n v. E. Akron Casting Co., 
    58 F.3d 204
    , 205-06 (6th Cir. 1995) (citing Mason & Dixon Tank-Lines,
    Inc. v. Cent. States Pension Fund, 
    852 F.2d 156
    , 158-59 (6th Cir.
    1988)). At the time the MPPAA was enacted many employers
    were withdrawing from multiemployer plans because they could
    avoid withdrawal liability if the plan survived for five years after
    the date of their withdrawal. Debreceni v. Outlet Co., 
    784 F.2d 13
    , 15-16 (1st Cir. 1986).
    Congress recognized that multiemployer pension plans
    affected millions of Americans and found that “withdrawals of
    contributing employers from a multiemployer pension plan
    frequently result in substantially increased funding obligations
    for employers who continue to contribute to the plan, its
    participants and beneficiaries, and labor-management relations.”
    29 U.S.C. § 1001a(a). It intended for the MPPAA to uniformly
    impose withdrawal liability and to “‘relieve the funding burden
    on remaining employers and to eliminate the incentive to pull out
    of a plan which would result if liability were imposed only on a
    mass withdrawal by all employers.’” 
    Debreceni, 784 F.2d at 16
    (quoting H.R. Rep. 869, 96th Cong., 2d Sess., 67, reprinted in
    1980 U.S. Code Cong. & Ad.News 2918, 2935). To solve this
    problem, the MPPAA requires that a withdrawing employer pay
    its share of the plan’s unfunded liability. See 
    Warner-Lambert, 791 F.2d at 284
    . This insures that the financial burden will not
    be shifted to the remaining employers. See Cent. States, Se. &
    4
    Sw. Areas Pension Fund v. Slotky, 
    956 F.2d 1369
    , 1371 (7th Cir.
    1992).
    Section 4201 provides that a withdrawing employer is
    liable for its share of the plan’s unfunded vested benefits. 29
    U.S.C. § 1381(a).1 It is the duty of the pension plan to determine
    whether withdrawal liability has occurred and in what amount.
    29 U.S.C. §§ 1382, 1391. Section 4211 provides that the amount
    of an employer’s withdrawal liability is the employer’s
    proportionate share of the unfunded vested benefits existing at
    the end of the plan year preceding the plan year in which the
    employer withdraws. 29 U.S.C. § 1391(b)(2)(A). A “complete
    withdrawal,” as in this case, occurs when an employer “(1)
    permanently ceases to have an obligation to contribute under the
    plan, or (2) permanently ceases all covered operations under the
    plan.” 29 U.S.C. § 1383(a). “[T]he date of complete withdrawal
    is the date of the cessation of the obligation to contribute or the
    cessation of covered operations.” 29 U.S.C. § 1383(e). The
    “obligation to contribute” arises “(1) under one or more
    collective bargaining (or related) agreements, or (2) as a result of
    a duty under applicable labor-management relations law.” 29
    U.S.C. § 1392(a). Although “all covered operations” is not
    defined in the statute, we have held that it means the “substantial
    cessation of normal business activity.” Crown Cork & Seal Co.,
    1
    Although statutory provisions exist that exempt
    withdrawing employers from incurring withdrawal liability in
    various situations, none of the exemptions are applicable to this
    case. See, e.g., 29 U.S.C. § 1384.
    5
    Inc. v. Cent. States Se. & Sw. Area Pension Fund, 
    982 F.2d 857
    ,
    865-66 (3d Cir. 1992).
    SUPERVALU, a wholesale food distributor, was a
    contributing employer to the Fund, which is a defined benefit
    multiemployer pension plan governed by ERISA, as amended by
    the MPPAA. Employers agree to contribute to the Fund based on
    collective bargaining agreements (“CBAs”) with various local
    Teamsters unions. The Fund, in turn, provides retirement
    benefits for the employees of the participating employers.
    SUPERVALU and the Teamsters Local 872 (the “Union”) had
    CBAs which required SUPERVALU to contribute to the Fund on
    behalf of employees at SUPERVALU’s Belle Vernon,
    Pennsylvania facility through January 31, 2003, or the cessation
    of covered work.
    At the beginning of 2002, SUPERVALU decided to close
    the Belle Vernon facility for business reasons. On March 14,
    2002, SUPERVALU informed its employees of the decision, and
    that the closure would occur by late summer 2002. As a result of
    the closure, approximately three-hundred employees would lose
    their jobs. SUPERVALU and the Union engaged in negotiations
    from March until May 2002 regarding the effects of the closing.
    The negotiations included discussions regarding
    SUPERVALU’s potential withdrawal liability to the Fund. If
    SUPERVALU withdrew prior to June 30, 2002, the end of the
    Fund’s 2001-2002 plan year, it would incur no withdrawal
    liability because the Fund did not have any unfunded vested
    benefits at the end of the prior plan year (2000-2001). See 29
    U.S.C. § 1391(b)(2)(A). However, if withdrawal occurred after
    6
    June 30, 2002, during the 2002-2003 plan year, SUPERVALU
    would incur significant withdrawal liability based on the
    unfunded vested benefits that would exist at the end of the 2001-
    2002 plan year. See 
    id. It is
    clear from the record that SUPERVALU was aware
    of its potential liability under both scenarios.          First, at
    SUPERVALU’s request, the Fund informed it of the status of the
    Fund’s assets as of April 2002: there was a negative return on
    the assets during the first three-quarters of the 2001-2002 plan
    year. Additionally, SUPERVALU informed the Union of the
    potential withdrawal liability if it were to withdraw in the 2002-
    2003 plan year. At a bargaining meeting, a SUPERVALU
    representative stated that terminating the CBAs after June 30,
    2002, would place SUPERVALU in another plan year and make
    it liable for a large unfunded liability. SUPERVALU also
    explained to the Union that its members would not benefit from
    SUPERVALU’s continued participation in the Fund, and that
    SUPERVALU would rather the money go directly to its
    employees.
    Based on this knowledge and its desire to maximize its
    employees’ benefits, SUPERVALU proposed that the CBAs,
    which were set to expire on January 31, 2003, be terminated and
    replaced prior to June 30, 2002. It informed the Union that the
    early termination would prevent SUPERVALU from being
    assessed withdrawal liability for the 2002-2003 plan year, which
    was estimated at the time to be in the range of $1 to $1.5 million.
    If the Union agreed to the early termination, SUPERVALU
    would make additional payments to its employees as
    consideration for the agreement.
    7
    In May 2002, the Union and SUPERVALU signed a new
    agreement (the “Termination Agreement”).           Under the
    Termination Agreement, the prior CBAs terminated at 11:59 p.m.
    on June 29, 2002. The Termination Agreement was identical to
    the prior CBAs, except that the provisions regarding
    SUPERVALU’s contributions to the Fund were deleted.
    Additionally, the new terms provided that employees who were
    entitled to severance payments would receive a lump sum of
    $2,600 and that employees that continued working after June 30,
    2002, would receive a $2.50 per hour salary increase.2 The
    Agreement was ratified by the Union’s members on May 31 and
    June 1, 2002.
    SUPERVALU submitted its final contributions to the
    Fund on June 26, 2002. It also informed the Fund that its
    obligations to contribute ceased on June 29, when it would
    withdraw as a participating employer from the Fund. As
    SUPERVALU withdrew during the 2001-2002 plan year, it
    believed that it would not incur any withdrawal liability.
    However, in February 2003, the Fund sent SUPERVALU
    a letter assessing $4,316,996 in withdrawal liability against
    SUPERVALU because it withdrew during the 2002-2003 plan
    year.3 See 29 U.S.C. § 1382. The letter explained that after
    2
    Most employees continued working at the facility until
    July 27, 2002.
    3
    The $4,316,996 was SUPERVALU’s pro rata share,
    twenty-three percent, of the Fund’s unfunded vested benefits at
    8
    conducting an investigation, the Fund believed that
    SUPERVALU entered the Termination Agreement with a
    principal purpose of evading or avoiding withdrawal liability in
    violation of ERISA § 4212(c).4 According to the Fund, even
    though the facility did not close until July 27, 2002,
    SUPERVALU withdrew on June 29, 2002, in order to avoid its
    share of the unfunded vested benefits that were expected to exist
    at the end of the 2001-2002 plan year. Therefore, for purposes
    of calculating SUPERVALU’s withdrawal liability, the Fund
    treated SUPERVALU as having withdrawn during the 2002-
    2003 plan year and ignored the June 29, 2002 date in the
    Termination Agreement in accordance with § 4212(c).
    In a letter dated May 1, 2003, SUPERVALU requested a
    review of the Fund’s demand letter as allowed under the Fund’s
    withdrawal liability procedures and the applicable statutory
    provisions, see 29 U.S.C. § 1399. SUPERVALU argued that its
    contribution obligations ended on June 29, 2002. Additionally,
    SUPERVALU argued that the Termination Agreement was a
    the end of the 2001-2002 plan year.        See, e.g., 29 U.S.C.
    1391(b)(2)(A).
    4
    The Fund’s letter also asserted an alternative theory of
    liability: SUPERVALU’s obligations to employees who were
    injured during the 2001-2002 plan year continued into the 2002-
    2003 plan year. As the Fund agreed during the proceedings
    before the Arbitrator to waive this argument, it is unnecessary
    for us to consider whether SUPERVALU could be held liable
    under such a theory.
    9
    bona fide, arm’s length agreement which took it outside of
    ERISA’s “evade or avoid” provision. Receiving no response to
    its letter, SUPERVALU initiated arbitration on October 23, 2002,
    pursuant to ERISA § 4221, 29 U.S.C. § 1401.
    Before the Arbitrator, the parties made cross-motions for
    summary judgment and agreed to limit argument to the issue of
    whether SUPERVALU engaged in the transaction to evade or
    avoid liability under § 4212(c) of ERISA.5 The Arbitrator found
    that § 4212(c) was unambiguous and that the plain language
    applied to the transaction at issue in this case. According to the
    Arbitrator, SUPERVALU was aware of its potential liability and
    persuaded the Union to enter the Termination Agreement to
    enable SUPERVALU to avoid the liability. The Union was
    willing to agree as SUPERVALU offered a bonus to each
    employee, as well as a pay increase for the remaining employees.
    Such an arrangement, according to the Arbitrator, fit squarely
    within the plain language of § 4212(c). Therefore, the Arbitrator
    granted summary judgment in favor of the Fund.
    SUPERVALU filed a complaint in the District Court
    seeking to modify the Arbitrator’s Award pursuant to ERISA
    5
    Depending on the outcome before the Arbitrator, the
    parties reserved questions such as whether SUPERVALU was
    required to continue contributing to the Fund on behalf of
    employees injured during the 2001-2002 plan year, and the
    calculations and methods used to determine the withdrawal
    liability. However, the parties later agreed not to make any
    additional arguments and the Arbitrator’s Award became final.
    10
    §§ 4301 and 4221, 29 U.S.C. §§ 1451 and 1401. The case was
    initially heard by a magistrate judge, Francis X. Caiazza, and the
    parties made cross-motions for summary judgment. After
    considering the motions, the Magistrate Judge issued a report and
    recommendation, which proposed setting aside the Award.
    Additionally, the Magistrate recommended granting summary
    judgment in favor of SUPERVALU.
    According to the Magistrate Judge, the Termination
    Agreement was not entered into to evade or avoid withdrawal
    liability. He recognized that SUPERVALU withdrew during the
    2001-2002 plan year in order to effect a less costly withdrawal.
    However, in the Magistrate’s view, because the Agreement was
    bona fide and made at arm’s length, § 4212(c) was not
    applicable.      The Magistrate rejected the Arbitrator’s
    determination that the withdrawal date in the Termination
    Agreement should be disregarded. He explained that the date of
    withdrawal is determined by the CBA, or in this case the
    Termination Agreement, and a fund cannot simply disregard the
    CBA and choose the date of an employer’s withdrawal. Such a
    rule would enable a fund to choose the date of withdrawal and
    prevent an employer and a union from entering an agreement to
    minimize withdrawal liability.
    The Fund filed objections to the Magistrate’s
    recommendations, but the District Court adopted the Magistrate’s
    Report and Recommendations. The District Court held that the
    language of § 4212(c) was not plain, and had to be considered in
    light of the entire statutory scheme. Additionally, it agreed with
    the Magistrate’s determination that the date of withdrawal is set
    by the Termination Agreement. The date of withdrawal is based
    11
    on a statutory formula ! when the employer completely
    withdraws ! and nothing in the record enabled the Court to find
    that a different withdrawal date applied. The District Court
    concluded by explaining that where it is not clear that an
    employer acted to evade or avoid, but rather acted to minimize,
    withdrawal liability, the court would not interfere. In order to
    find that SUPERVALU had violated § 4212(c), it would have
    had to alter the rules governing withdrawal liability, which was
    not within its province. Such an expansion of § 4212(c) would
    trump § 4212(a), and only Congress has the power to expand the
    provision. Therefore, the District Court granted summary
    judgment in favor of SUPERVALU.6
    The Fund brought this timely appeal.
    II.
    We have jurisdiction over this appeal pursuant to 28
    U.S.C. § 1291. Our review of a district court’s grant of summary
    judgment is plenary, and we employ the same standard used by
    the court below. See Kay Berry, Inc. v. Taylor Gifts, Inc., 
    421 F.3d 199
    , 203 (3d Cir. 2005). “Summary judgment is appropriate
    when ‘there is no genuine issue as to any material fact and . . . the
    6
    The District Court amended its order on September 1,
    2006, granting SUPERVALU’s motion to require the Fund to
    refund to SUPERVALU the money that it paid in withdrawal
    liability. SUPERVALU had paid $3,948,569 to the Fund. The
    District Court ordered the refund (plus interest) within ten days
    of the order.
    12
    moving party is entitled to a judgment as a matter of law.’” 
    Id. (quoting Fed.
    R. Civ. P. 56(c)). All reasonable inferences must
    be drawn in favor of the non-moving party. 
    Id. An arbitrator’s
    findings of fact are subject to clear error review, but his or her
    legal conclusions are subject to de novo review. See Crown Cork
    & 
    Seal, 982 F.2d at 860-61
    . The parties stipulated to the facts
    before the Arbitrator and District Court, so only a question of law
    remains.
    III.
    The main issue in this appeal is whether SUPERVALU
    violated ERISA § 4212(c) by entering the Termination
    Agreement with the Union. Section 4212(c) provides that “[i]f
    a principal purpose of any transaction is to evade or avoid
    liability under this part, this part shall be applied (and liability
    shall be determined and collected) without regard to such
    transaction.” 29 U.S.C. § 1392(c). The terms transaction, evade,
    and avoid are not defined in the statute, and therefore we must
    construe them in accordance with their ordinary and natural
    meaning, United States v. E.I. DuPont De Nemours & Co., Inc.,
    
    432 F.3d 161
    , 171 (3d Cir. 2005), and “the overall policies and
    objectives of the statute,” United States v. Lowe, 
    118 F.3d 399
    ,
    402 (5th Cir. 1997) (citing Brown v. Gardner, 
    513 U.S. 115
    , 117-
    19 (1994)).
    The noun “transaction” means “[t]he act of transacting or
    the fact of being transacted,” and the verb “transact” means “[t]o
    do, carry on, or conduct” or “[t]o conduct business.” Am.
    Heritage Dictionary 1899-1900 (3d ed. 1992). The verb “avoid”
    means “[t]o stay clear of” or “[t]o keep from happening” and is
    13
    synonymous with escape. 
    Id. at 128.
    The verb “evade” means
    “[t]o escape or avoid by cleverness or deceit” or “[t]o fail to
    make a payment of.” 
    Id. at 634.
    Under a plain language
    statutory reading the provision applies when a contributing
    employer enters a transaction with a principal purpose of
    escaping its duty to pay withdrawal liability to the plan or fund.
    In Dorn’s Transportation, Inc. v. Teamsters Pension Trust
    Fund of Philadelphia & Vicinity, 
    787 F.2d 897
    (3d Cir. 1986), we
    called § 4212(c) a “good faith requirement.” 
    Id. at 902.
    The use
    of the term “good faith requirement” has led to confusion in this
    case. The good faith requirement was simply shorthand for the
    language of the statute: an employer cannot act in bad faith, i.e.,
    with a principal purpose, of evading or avoiding withdrawal
    liability. By using such shorthand, we did not create an
    additional requirement that must be considered in determining
    whether the statute was violated. Rather, a principal purpose to
    evade or avoid connotes bad faith.
    The facts of Dorn’s are too dissimilar to the facts of this
    case for the opinion to provide much guidance. However, the
    case is important because we explained that § 4212(c) “was
    designed to guard against the intentional evasion of liability.” 
    Id. at 902.
    There was no violation in Dorn’s because a “‘principal
    purpose of the transaction’ as a whole [was not] to escape
    liability.” 
    Id. In other
    words, § 4212(c) is violated when one of
    14
    the main reasons for entering a transaction is to effectuate that
    goal.7
    There is no doubt that SUPERVALU had the intent
    required by the statute. SUPERVALU was aware of the
    significant withdrawal liability that it would incur by
    withdrawing during the 2002-2003 plan year when the facility
    closed and all covered operations ceased. Based on its desire to
    avoid such liability, SUPERVALU offered enhanced severance
    benefits and wages to the Union’s members as consideration for
    the Union’s agreement to enter the Termination Agreement. By
    entering the Termination Agreement, SUPERVALU withdrew
    7
    SUPERVALU cites our decision in Board of Trustees of
    the Trucking Employees of Northern Jersey Welfare Fund, Inc. -
    Pension Fund v. Centra, 
    983 F.2d 495
    (3d Cir. 1992), for the
    proposition that § 4212(c) should not be read literally. Centra
    dealt with a settlement between the fund and a withdrawing
    employer regarding withdrawal liability. 
    Id. at 506-07.
    We held
    that the employer did not violate § 4212(c), despite the fact that
    it entered into the transaction to limit its liability, because the
    agreement was voluntarily entered into by both the fund and the
    employer. Centra cannot be construed as rejecting a literal
    interpretation of § 4212(c), but rather demonstrates that a
    principal purpose of the transaction must be to evade or avoid
    withdrawal liability. The employer did not agree to the
    settlement with a principal purpose of evading or avoiding
    liability, rather the principal purpose was to settle the claim and
    avoid liability within the larger context of “avoid[ing] the
    possibility of a larger adverse verdict at trial.” 
    Id. 15 from
    the Fund during the 2001-2002 plan year, which enabled it
    to avoid incurring the significant liability that existed for
    withdrawal during the 2002-2003 plan year. The record indicates
    that the only reason that SUPERVALU chose to renegotiate the
    CBAs less than a month before the facility closed was to bring its
    withdrawal date within the 2001-2002 plan year in order to avoid
    withdrawal liability for the 2002-2003 plan year.8 As there was
    no other reason for SUPERVALU to enter the Termination
    Agreement, its intention to evade or avoid withdrawal liability
    was a principal purpose, if not its only purpose. Therefore,
    SUPERVALU acted with a principal purpose of escaping
    withdrawal liability in violation of § 4212(c).9
    As noted above, when interpreting undefined terms in a
    statute, we may also consider the statute’s policies and
    8
    We note that this case does not present the question of
    whether SUPERVALU could have withdrawn without liability
    had it simply closed the facility before the end of the 2001-2002
    plan year. As that question is not before us, it is unnecessary for
    us to determine whether such a situation would violate
    § 4212(c).
    9
    We note that although the timing of SUPERVALU’s
    withdrawal under the Termination Agreement was suspicious,
    our determination is not based on the fact that it withdrew on the
    last day of the 2001-2002 plan year. Rather, it is the transaction
    itself that violates the statute, regardless of what day
    SUPERVALU and the Union agreed to terminate the obligation
    to contribute to the Fund.
    16
    objectives.     SUPERVALU’s entering of the Termination
    Agreement was also contrary to the purpose of the MPPAA. As
    discussed above, Congress enacted the MPPAA to “protect
    multiemployer pension plans from the adverse consequences that
    result when individual employers terminate their participation or
    withdraw.” 
    Warner-Lambert, 791 F.2d at 284
    . By amending
    ERISA, Congress intended to prevent withdrawing employers
    from threatening the financial stability of a plan by requiring the
    employers to pay their share of unfunded vested benefit liability.
    See Akron 
    Casting, 58 F.3d at 205-06
    . By renegotiating the
    CBAs in order to withdraw from the Fund, SUPERVALU
    engaged in exactly the type of conduct Congress was trying to
    prevent. That is, SUPERVALU’s withdrawal threatened the
    financial stability of the Fund as SUPERVALU withdrew in
    order to avoid paying its share of the existing unfunded vested
    benefit liability. Therefore, SUPERVALU’s conduct violated
    not only the plain language of the statute, but also its purpose.10
    10
    The parties and the lower courts relied heavily on
    Cuyamaca Meats, Inc. v. San Diego & Imperial Counties
    Butchers’ & Food Employers’ Pension Trust Fund, 
    827 F.2d 491
    (9th Cir. 1987). Cuyamaca Meats dealt with a transaction
    in which the employers violated the plain meaning of the statute,
    but did not frustrate the purpose of the statute. 
    Id. at 499.
    Because the purpose of the statute was not frustrated, the court
    of appeals held that the employers did not violate the statute. 
    Id. As it
    is clear that the transaction in this case also violated the
    purpose of the statute, it is unnecessary for us to decide whether
    we agree that such a situation does not violate the statute.
    17
    The arguments raised by SUPERVALU do not persuade
    us that it did not violate § 4212(c).11 First, it argues that as a
    matter of law it withdrew on June 29, 2002, when its obligation
    to contribute ceased.       SUPERVALU misunderstands the
    language of § 4212(c), which provides that any transaction that
    violates the provision must be disregarded. As we have
    determined that the Termination Agreement violated § 4212(c),
    the Agreement must be disregarded. Therefore, we return to the
    statute to determine when SUPERVALU actually withdrew.12
    The date of complete withdrawal is the day on which the
    employer’s obligation to contribute to the plan ceases or when all
    covered operations cease. 29 U.S.C. §§ 1383(a), (e). Because
    11
    It is unnecessary for us to reach the additional
    arguments made by the Fund as we hold that SUPERVALU
    violated the statute based on its plain and unambiguous
    meaning.
    12
    We also reject SUPERVALU’s argument that ignoring
    the Termination Agreement enables the Fund to just pick a
    withdrawal date, which it is not authorized to do under the
    MPPAA. As evidenced by the discussion below, ignoring the
    Termination Agreement does not enable the Fund to pick
    SUPERVALU’s withdrawal date on a whim. Rather, once the
    Termination Agreement is out of the picture, we return to the
    statute, which provides that a withdrawal occurs when the
    obligation to contribute ceases, as dictated by a CBA, or when
    all covered operations cease. See 29 U.S.C. §§ 1383(a),
    1392(a).
    18
    we must ignore the Termination Agreement, the prior CBAs
    govern SUPERVALU’s obligation to contribute. The prior
    CBAs required SUPERVALU to continue contributing until
    January 2003. However, the definition of a complete withdrawal
    is disjunctive; it is either when the obligation to contribute ceases
    or the cessation of all covered operations. SUPERVALU’s
    cessation of all covered operations occurred before its obligation
    to contribute ceased. In other words, SUPERVALU actually
    withdrew when it ceased all covered operations. As noted above,
    we have defined “all covered operations” as “the substantial
    cessation of normal business activity.” Crown Cork & 
    Seal, 982 F.2d at 865-66
    . The facts indicate that normal business activity
    at the Belle Vernon facility substantially ceased on July 27, 2002,
    when most of SUPERVALU’s employees were laid off and the
    facility was closed. Therefore, SUPERVALU completely
    withdrew from the Fund on July 27, 2002, when it ceased all
    covered operations.13
    13
    Similarly, we reject SUPERVALU’s argument that the
    Arbitrator misunderstood how to calculate withdrawal liability.
    It is clear from his decision that he understood that a statutory
    formula was used which based the amount of liability on the
    unfunded vested benefits existing in the plan year prior to the
    year in which the employer withdrew. To the extent that
    SUPERVALU appears to argue that the calculation of
    withdrawal liability was improper in this case, SUPERVALU
    has waived any such argument as it agreed to not make such an
    argument before the Arbitrator.
    19
    SUPERVALU’s main argument is that § 4212(c) does not
    apply to bona fide collective bargaining agreements or other
    transactions that are negotiated at arm’s length. Essentially
    SUPERVALU is suggesting, and the District Court agreed, that
    bona fide, arm’s length transactions are exempt. We disagree.
    As discussed above, § 4212(c) is unambiguous. The text
    in no way suggests that it only applies to sham or fraudulent
    transactions. The
    statutory criterion is not whether the transaction is
    a sham, having no purpose other than to defeat the
    goals of the [MPPAA] by leaving the other
    employers in the multiemployer pension plan
    holding the bag. It is whether the avoidance of
    withdrawal liability . . . is one of the principal
    purposes of the transaction.
    Sante Fe Pac. Corp. v. Cent. States, Se. & Sw. Areas Pension
    Fund, 
    22 F.3d 725
    , 729-30 (7th Cir. 1994).
    Additionally, SUPERVALU claims that there is some
    support for its proposition in the legislative history.14 We will
    14
    The lower courts engaged in extensive discussions of
    International Typographical Union Negotiated Pension Plan &
    Ft. Worth Star Telegram, 5 E.B.C. (BNA) 1193 (1984)
    (Mittelman, Arb.) (hereinafter “ITU”). According to the
    arbitrator, “evade or avoid” refers to fraudulent transactions,
    therefore, a bona fide transaction does not violate the provision.
    20
    not allow an examination of the legislative history to create an
    ambiguity where none exists in the statute. Exxon Mobil Corp.
    v. Allapattah Servs., Inc., 
    545 U.S. 546
    , 567-68 (2005). “[T]he
    authoritative statement is the statutory text, not the legislative
    history or any other extrinsic material.” 
    Id. at 568.
    Therefore,
    we reject SUPERVALU’s claim that a bona fide arm’s length
    transaction is not within the purview of § 4212(c).15
    IV.
    For the reasons stated above, we will reverse the District
    Court’s grant of summary judgment in favor of SUPERVALU
    and remand the proceeding with directions that the District Court
    enforce the Arbitrator’s Award.
    
    Id. at 1197.
    In part, the arbitrator reached this decision based on
    legislative history. As explained above, we believe that the
    statute is clear and therefore we need not consider the legislative
    history. Additionally, we find no basis for the arbitrator’s
    interpretation of the provision as only applying to fraudulent or
    sham transactions. Therefore, we are unpersuaded by ITU.
    15
    We have fully considered the remaining arguments
    raised by SUPERVALU and we find them also to be without
    merit.
    21