Key Takeaways
- • Judge Thomas Durkin of the U.S. District Court for the Northern District of Illinois denied Steelcase Inc.'s motion for attorneys' fees against Central States, Southeast and Southwest Areas Pension Fund in Central States v. Steelcase Inc., No. 24-cv-663 (July 31, 2025), despite the employer prevailing on the underlying withdrawal liability issue.
- • Central States conceded it should have excluded post-2014 contribution rate increases when calculating Steelcase's withdrawal liability, reducing payments by approximately $2.8 million over the 20-year payment period.
- • The court found the Fund's position "undoubtedly weak" but not "so baseless" as to warrant fees, citing two prior arbitration awards in the Fund's favor and the absence of binding precedent.
- • The ruling illustrates the difficulty employers face in recovering defense costs from multiemployer pension plans, even after a favorable outcome, according to Jackson Lewis.
Summary
A federal court in Illinois has declined to award attorneys' fees to Steelcase Inc. against Central States, Southeast and Southwest Areas Pension Fund, despite Steelcase's success in reducing its withdrawal liability, according to an analysis published by Jackson Lewis. The decision in Central States, Southeast and Southwest Areas Pension Fund v. Steelcase Inc., No. 24-cv-663 (N.D. Ill. July 31, 2025), was issued by District Court Judge Thomas Durkin.
The dispute concerned Central States' practice of calculating withdrawal liability payments using post-2014 contribution rate increases. Multiple employers had challenged this method, and arbitrators and district courts had largely ruled against the Fund. The U.S. Court of Appeals for the Seventh Circuit resolved the issue in Event Media v. Central States, 135 F.4th 529 (7th Cir. 2025), holding that the Fund's interpretation "ignores the language of the statute." Following that decision, Central States conceded that the post-2014 increases should have been excluded from Steelcase's calculations, reducing its payments by approximately $2.8 million over 20 years.
Steelcase then moved for fees, arguing bad faith under the standard governing arbitration fee awards, and alternatively under Federal Rule of Civil Procedure 11. Steelcase characterized the Fund's position as "opportunistic" and "nonsensical." Judge Durkin rejected both arguments. He described the Fund's position as "undoubtedly weak" but concluded it was not "so baseless that they call out for an award of attorneys' fees," pointing to the two arbitration awards in the Fund's favor and the lack of controlling precedent. On Rule 11, he wrote that "the fact that several arbitrators and district court judges had agreed that the Fund's statutory interpretation was wrong did not render the Fund's argument frivolous," citing the absence of binding precedent and an issue the Seventh Circuit treated as one of first impression.
Jackson Lewis notes that the outcome underscores the obstacles employers face in recouping defense costs from multiemployer plans, even when they prevail. The author observes that the ruling turned largely on the absence of binding precedent at the time and suggests the result might differ for events occurring after Event Media. The analysis also notes that Central States may eventually change its "high contribution rate" policy. The author characterizes the decision as a reminder of judicial reluctance to award attorneys' fees against multiemployer pension plans.
The dispute concerned Central States' practice of calculating withdrawal liability payments using post-2014 contribution rate increases. Multiple employers had challenged this method, and arbitrators and district courts had largely ruled against the Fund. The U.S. Court of Appeals for the Seventh Circuit resolved the issue in Event Media v. Central States, 135 F.4th 529 (7th Cir. 2025), holding that the Fund's interpretation "ignores the language of the statute." Following that decision, Central States conceded that the post-2014 increases should have been excluded from Steelcase's calculations, reducing its payments by approximately $2.8 million over 20 years.
Steelcase then moved for fees, arguing bad faith under the standard governing arbitration fee awards, and alternatively under Federal Rule of Civil Procedure 11. Steelcase characterized the Fund's position as "opportunistic" and "nonsensical." Judge Durkin rejected both arguments. He described the Fund's position as "undoubtedly weak" but concluded it was not "so baseless that they call out for an award of attorneys' fees," pointing to the two arbitration awards in the Fund's favor and the lack of controlling precedent. On Rule 11, he wrote that "the fact that several arbitrators and district court judges had agreed that the Fund's statutory interpretation was wrong did not render the Fund's argument frivolous," citing the absence of binding precedent and an issue the Seventh Circuit treated as one of first impression.
Jackson Lewis notes that the outcome underscores the obstacles employers face in recouping defense costs from multiemployer plans, even when they prevail. The author observes that the ruling turned largely on the absence of binding precedent at the time and suggests the result might differ for events occurring after Event Media. The analysis also notes that Central States may eventually change its "high contribution rate" policy. The author characterizes the decision as a reminder of judicial reluctance to award attorneys' fees against multiemployer pension plans.
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