Penske Truck Leasing, LP v. Central States Southeast and Southwest Areas Pensi

── Penske Truck Leasing, LP v. Central States Southeast and Southwest Areas Pensi ── Court: Court of Appeals for the Seventh Circuit Date: May 29, 2026 Category: General In the United States Court of Appeals For the Seventh Circuit ____________________ Nos. 25-1738 & 25-1872 PENSKE TRUCK LEASING, LP, Plaintiff-Appellant/Cross-Appellee, v. CENTRAL STATES SOUTHEAST AND SOUTHWEST AREAS PENSION PLAN and TRUSTEES OF CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, Defendants-Appellees/Cross-Appellants. ____________________ Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:21-cv-05518 — Andrea R. Wood, Judge. ____________________ ARGUED DECEMBER 9, 2025 — DECIDED MAY 29, 2026 ____________________ Before HAMILTON, ST. EVE, and PRYOR, Circuit Judges. HAMILTON, Circuit Judge. Multiemployer pension plans depend on employers making regular contributions to a single fund. When an employer stops making contributions and withdraws from a plan, it is assessed withdrawal liability, which can be expensive. An employer has an incentive to 2 Nos. 25-1738 & 25-1872 minimize its total bill, while the plan has an incentive to maximize the amount owed. This case arises from such a dispute between an employer, plaintiff Penske Truck Leasing, L.P., and a multiemployer plan, defendant Central States, Southeast and Southwest Areas Pension Plan, which believed Penske was trying to manipulate its bill for withdrawal liability. During negotiations, Central States threatened to expel one union of Penske employees, Local No. 745, from the plan. Penske sued Central States and its trustees to enjoin the union’s termination and moved for a temporary restraining order (TRO), arguing that Central States had no authority to expel Local 745. Though the TRO was granted, the district court vacated it some months later. Central States counterclaimed, seeking a declaration establishing Local 745’s withdrawal date, a fact crucial for calculating withdrawal liability. These appeals arise from events later in the litigation. On summary judgment, the district court held that Central States had the authority to expel Local 745 and did not do so arbitrarily or capriciously. Penske challenges those conclusions. Citing 29 U.S.C. § 1401, the district court dismissed Central States’ counterclaim, explaining that the substance of the counterclaim must be arbitrated before it can proceed in federal court. Central States challenges that dismissal. We affirm across the board. Part I of this opinion introduces a few basics of withdrawal liability and then lays out the relevant facts and procedural history. Part II concludes that Central States had the authority to expel Local 745. Part III explains why the undisputed facts show that Central States’ decision to expel Local 745 was not arbitrary or capricious. Part IV affirms the Nos. 25-1738 & 25-1872 3 dismissal of Central States’ counterclaim because the dispute has not yet been submitted to arbitration as required by § 1401. I. Factual Background and Procedural History A. Withdrawal Liability In a multiemployer pension plan, employers make contributions that are pooled in a single fund, which is then used to pay benefits for the employees covered by the plan. 29 U.S.C. § 1002(37)(A); Concrete Pipe & Products of California, Inc. v. Construction Laborers Pension Trust for Southern California, 508 U.S. 602, 605–07 (1993). Under this arrangement, an employee may change employers without losing the ability to accumulate pension credit. Concrete Pipe, 508 U.S. at 605–07. These multiemployer plans work particularly well in industries that rely on short-term or seasonal workers, such as construction and trucking. Chicago Truck Drivers, Helpers & Warehouse Workers Union (Independent) Pension Fund v. CPC Logistics, Inc., 698 F.3