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Roughneck Concrete Drilling & Sawing Co. v. Plumbing Contractors' Association of Chicago.

September 30, 2009

ROUGHNECK CONCRETE DRILLING & SAWING COMPANY, PLAINTIFF,
v.
PLUMBING CONTRACTORS' ASSOCIATION OF CHICAGO AND COOK COUNTY; CHICAGO JOURNEYMEN PLUMBERS' LOCAL UNION 130; PLUMBERS' PENSION FUND, LOCAL 130, UA AND ITS TRUSTEES; PLUMBERS' WELFARE FUND, LOCAL UNION 130, UA AND ITS TRUSTEES; TRUST FUND FOR APPRENTICE AND JOURNEYMEN EDUCATION AND TRAINING, LOCAL UNION 130, UA AND ITS TRUSTEES; THE PLUMBING COUNCIL OF CHICAGOLAND AND ITS TRUSTEES; GROUP LEGAL SERVICES PLAN FUND, LOCAL 130, U.A. AND ITS TRUSTEES; THE JOINT ARBITRATION BOARD AND ITS INDIVIDUAL MEMBERS, TEN JOHN DOES AND/OR JANE DOES,*FN1 DEFENDANTS.



The opinion of the court was delivered by: Joan Humphrey Lefkow United States District Judge

Judge Joan H. Lefkow

OPINION AND ORDER

Plaintiff, Roughneck Concrete Drilling and Sawing Company ("Roughneck"), filed this action under Section 10 of the Federal Arbitration Act ("FAA") to vacate an arbitration award entered on July 22, 2008 by the joint arbitration board ("JAB") established pursuant to the collective bargaining agreement between the Plumbing Contractors' Association of Chicago and Cook County ("Plumbing Contractors' Association") and Chicago Journeymen Plumbers' Local Union 130, U.A. ("Plumbers' Union"), which ordered Roughneck to pay approximately $3.3 million to certain fringe benefit funds established by the agreement. Count I requests that the court vacate the JAB's July 22, 2008 decision and award, alleging, inter alia, that the JAB exceeded the scope of its powers in making the award. Count II requests that the court vacate the award under the doctrine of promissory estoppel. This court's jurisdiction rests on 9 U.S.C. § 10 and 28 U.S.C §§ 1331 and 1367(a). Defendants, Plumbers' Pension Fund, Local 130, U.A.; Plumbers' Welfare Fund, Local Union 130, U.A.; Trust Fund for Apprentice and Journeymen Education and Training, Local Union 130, U.A.; The Plumbing Council of Chicagoland; and Group Legal Services Plan Fund, Local 130, U.A. (collectively the "Funds"), now move to dismiss under to Federal Rule of Civil Procedure 12(b)(6). For the following reasons, the Funds' motion [#28] will be granted.

RELEVANT FACTS*fn2

Roughneck is a concrete core drilling, cutting, and sawing contractor that does business in the Chicago area, as well as Northwest Indiana and Southern Wisconsin. As a member of the Plumbing Contractors' Association, Roughneck was a signatory to a collective bargaining agreement between the association and the Plumbers' Union ("CBA"). The CBA creates the JAB to which the Plumbers' Union and Roughneck agreed to submit "all arbitrable disputes arising between them." CBA, Art. III, Sec. 3.2, attached as Ex. A to Compl. The Funds are established pursuant to Article IX of the CBA. The Funds are entitled to conduct audits of members of the Plumbing Contractors' Association.*fn3

I. The Funds' Audit of Roughneck

On August 9, 2006, Roughneck was notified that an audit was to be conducted by the Funds for the period of October 1, 2002 through June 30, 2006. Compl. ¶ 28. The auditors determined Roughneck owed in excess of $2.2 million to the Funds in fringe benefit payments. Id. ¶¶ 43-44. That amount was based on work performed not only by members of the Plumbers' Union (whom Roughneck had not employed since 2004), but also by members of Plumbers Local 93, Plumbers & Pipe Fitters Local 501, the Laborers' International Union of North America, Local Nos. 1, 2, 4, 76, 96, 118, 152, 727 and 1006 ("Laborers' Union") and the International Brotherhood of Electrical Workers, AFL-CIO, Local Nos. 134, 150, and 176 ("Electrical Workers' Union") (collectively referred to as the "non-Plumbers' Unions"). Id. ¶¶ 41, 49, 51. The auditors sent Roughneck the results of the audit on January 7, 2008. Id. ¶ 43.

II. The Grievances filed by the Funds and Roughneck with the JAB

Douglas Lindsay ("Lindsay"), counsel to the Funds, filed notice with the JAB of the dispute over the audit on January 22, 2008.*fn4 Id. ¶ 53. On February 12, 2008, Roughneck filed its own grievance with the JAB. Id. ¶ 55. Although Roughneck does not attach a copy of this grievance, Paragraph 56 of its complaint alleges that Roughneck's grievance involved a dispute over whether all the work performed by Roughneck employees was work within the trade jurisdiction of the Plumbers to the exclusion of other trade unions whose members were employed by Roughneck to perform the work, in particular, the Laborers and Electrical Workers.

Id. ¶ 56. On the same day that Roughneck filed its grievance, Roughneck's president, Karen Johnson ("Johnson"), sent a letter to Mr. Lindsay which read, in relevant part,

Since this is a jurisdictional matter, I do not believe it can be resolved in any meeting with you or the [Funds]. For that reason, I am asking you to advise the Joint Arbitration Board of a dispute under my firm's collective bargaining agreement with [the Plumbers' Union] and request a hearing before the Joint Arbitration Board, as provided under Sections 3.3 and 3.5 of the Agreement.

Letter from Johnson, President, Roughneck, to Lindsay, Counsel for Funds (Feb. 12, 2008), attached as Ex. O to Compl. Roughneck admits that Mr. Lindsay subsequently notified the JAB of the dispute in accordance with Johnson's request.Pl.'s Resp. in Opp. to Funds' Mot. to Dismiss at 12 (hereinafter "Pl.'s Resp."). The JAB did not segregate the Funds' and Roughneck's grievances. See Letter from Todd L. Sarver, Counsel for Roughneck, to Richard Resnick, Administrator to the Plan for the Settlement of Jurisdictional Disputes in the Construction Industry (July 16, 2008) at 3, attached as Ex. Q to Compl. (hereinafter "Sarver Letter").

The first JAB hearing was scheduled for April 30, 2008 but, prior to that date, Roughneck requested that the Secretary of the JAB postpone the matter. Compl. ¶ 57. The postponement was granted and the hearing was continued to May 28, 2008. Id. Roughneck appeared at the May 28, 2008 hearing and requested an additional continuance in order to secure new counsel, which the JAB granted. Id. ¶ 59. On July 14, 2008, the Secretary of the JAB notified Roughneck that it had rescheduled the hearing for July 22, 2008 at 8:00 a.m. Id. ¶¶ 60, 69.

III. Roughneck's Invocation of the National Plan

On July 16, 2008, two days after Roughneck was given notice of the JAB hearing, Roughneck sought to invoke a dispute resolution mechanism under the Plan for the Settlement of Jurisdiction Disputes in the Construction Industry ("National Plan").*fn5 In a letter to Richard Resnick, the administrator of the National Plan, captioned "Notice of Impediment to Job Progress," Sarver stated, in relevant part

Dear Mr. Resnick

We represent [Roughneck]. This letter is to provide you of written notice of an impediment to job progress that is now taking place in Cook County, Illinois by the [Plumbers' Union]. . . .

This impediment to job progress has been caused by the filing of a notice of dispute (grievance) on January 22, 2008 by the [Funds'] under the parties' CBA, and a separate grievance filed on February 12, 2008 by Roughneck. . . . The issue at the JAB hearing involves a dispute over whether the Plumbers have jurisdiction over all work performed by Roughneck to the exclusion of other trade unions that performed the work at issue, in particularly, the [Electrical Workers' and Laborers' Unions].

The Fund[s] contend[s] that all work performed by Roughneck for the time period October 1, 2002 to present is work subject to the Plumbers' jurisdiction and accordingly, contributions for all work performed must be made to the Fund[s] by Roughneck. The Fund[s] submit[] that the contributions required for the work performed are in excess of $2 million. A determination by the JAB regarding Roughneck's liability for the alleged amounts due to the Fund[s] turns entirely upon whether the work performed was within ...


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