The U.S. Supreme Court will decide the length of time a plan member is still obligated to pay its share into a multiemployer pension fund.
The case involves The Bay Area Laundry and Dry Cleaning Pension Fund and Ferbar Corp., San Francisco, which withdrew its Superior French Laundry unit from the multiemployer plan on Dec. 12, 1986. Ferbar ignored a notice from fund officials ordering it to pay the full amount of $45,580 by Feb. 10, 1987 or to begin monthly installments by Feb. 1.
No payment was made, and on Feb. 9, 1993, pension fund officials sued Ferbar in the U.S. District Court for the missing payment and asked for judgment on whether the statute of limitations had expired. The suit was lost by the fund because it was filed after a six-year statute of limitations.
The 9th U.S. Circuit Court of Appeals agreed, although it thought the district court misread the law which says to apply the later of the two periods of limitations. Judges held that the clock started running on March 1985 when Ferbar completely withdrew from the fund.
In its high court appeal, the union pointed out that other federal appeals courts have not sided with the 9th Circuit and in similar cases have used other starting points for the six-year deadline.
Lawyers representing the union said the fact the pension fund did not sue within the six years after the first missed payment should not bar the fund's claim to the remaining missed payments.