Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Line Construction Benefit Fund v. Allied Electrical Contractors

January 8, 2010

LINE CONSTRUCTION BENEFIT FUND, PLAINTIFF-APPELLEE,
v.
ALLIED ELECTRICAL CONTRACTORS, INC., DEFENDANT-APPELLANT.



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 07 C 0950-Rebecca R. Pallmeyer, Judge.

The opinion of the court was delivered by: Wood, Circuit Judge.

ARGUED SEPTEMBER 21, 2009

Before CUDAHY, WOOD, and TINDER, Circuit Judges.

Line Construction Benefit Fund ("Lineco") is a multiemployer employee welfare fund that receives contributions from employers pursuant to collective bargaining agreements ("CBAs") negotiated between employers and unions. The Southeastern Line Constructors Chapter of the National Electrical Contractors Association ("NECA") and the International Brotherhood of Electrical Workers, Local Union 474 ("the Union") operate under such agreements, which require participating employers to pay into the fund for all covered employees. Sometimes, when so many different entities are involved in an arrangement, all of the "T's" are not crossed as clearly as they might be. Essentially, that kind of problem is what gave rise to this lawsuit.

The question before us is the extent to which Allied Electrical Contractors, Inc. ("Allied"), a Tennessee electrical contractor and a member of NECA since 2002, is obliged to contribute to Lineco. Allied was not an original signatory to the 2005 CBA between NECA and the Union; it did not execute a formal letter of consent until December 7, 2006. Allied argues that this means that it was not bound by the CBA until that date. But Allied's argument treats as irrelevant the fact that its course of conduct-making payments precisely in accordance with the 2005 CBA from the start-demonstrates its assent to that agreement. We conclude, as the district court did, that Allied is liable for the deficiencies at issue here.

I.

Lineco is a multiemployer welfare fund administered in accordance with section 302(c)(5) of the Labor Management Relations Act ("LMRA") and the Employee Retirement Income Security Act of 1974 ("ERISA"). Allied began making payments to Lineco for Union employee benefits in 1993. In 2005, the Southeastern Line Constructors Chapter of NECA and the Union entered into a CBA, which among other things set forth the terms under which Lineco would receive contributions pursuant to a trust agreement that established the fund. The 2005 CBA changed the hourly contribution rate from $4.50 per hour (set by an earlier CBA) to $4.75 per hour for the work of covered employees. The 2005 CBA included a clause making it applicable to "all firms who sign a letter of consent to be bound by the terms of this agreement." The CBA took effect on December 1, 2005.

In keeping with the 2005 CBA, Allied began making contributions at $4.75 per hour in December 2005. It continued to do so until July 2006, when it missed a payment. Allied did not make a contribution for August either. In October of 2006, the Union barred Allied President Michael Eskridge from a NECA-Union negotiating session, because Allied had not signed a letter of consent under the CBA. On December 7, 2006, Allied executed a form letter of consent. Yet Allied failed to make the contributions that it acknowledged were due for December 2006, January 2007, and February 2007. In March 2007, Allied resumed payments as required by the CBA.

When the missing funds were not forthcoming, Lineco brought suit in the United States District Court for the Northern District of Illinois. Citing the CBA and the Trust Agreement, Lineco alleged that Allied owes it a total of $138,605.25, representing the delinquent contributions for July, August, and December 2006, and January and February 2007. Allied moved to dismiss Lineco's action for lack of standing or, in the alternative, for partial summary judgment; Lineco responded with a cross-motion for summary judgment. On November 26, 2008, the district court dismissed Allied's motion and granted Lineco's cross-motion for summary judgment. Later, on January 29, 2009, it entered judgment requiring Allied to pay Lineco $200,816.36, the amount of the delinquent payments plus interest, statutory liquidated damages, attorneys' fees, and costs. Allied appeals, arguing that Lineco is not authorized to sue under section 502(e) of ERISA, 29 U.S.C. § 1132(e), and that Allied was not bound by the CBA until it executed the letter of consent.

II.

Allied has asserted throughout this action that Lineco lacks standing to bring suit under 29 U.S.C. § 1132(e). What Allied means, however, is that Lineco lacks a right of action. In order to evaluate this argument, we must look to the statute. The obligation of employers to make contributions in accordance with the terms of a collectively-bargained agreement is found in section 1145. The parties authorized to bring suit under the statute are described in section 1132(a), (e); proper plaintiffs include participants, beneficiaries, or fiduciaries of a plan. This court has held that multiemployer plans are fiduciaries for the purposes of section 1132(e). Auto. Mechs. Local 701 Welfare & Pension Funds v. Vanguard Car Rental USA, Inc., 502 F.3d 740, 744-45 (7th Cir. 2007). We reaffirm that holding today.

Section 1132(d)(1) establishes the legal status of multiemployer plans for purposes of ERISA: "An employee benefit plan may sue or be sued under this title as an entity." Section 1132(e), however, does not mention plans as such in the list of authorized plaintiffs. Instead, as we just noted, it grants a right of action to "fiduciaries of a plan." We must therefore determine who is a fiduciary of a plan and whether a plan itself may sue either as a fiduciary or on behalf of the fiduciaries. The first question is easy, because the statute ad-dresses it. A person is a fiduciary "to the extent (i) he exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets, (ii) he renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of such plan, or has any authority or responsibility to do so, or (iii) he has any discretionary authority or discretionary responsibility in the administration of such plan." 29 U.S.C. § 1002(21)(A).

Allied focuses on the second part of the inquiry and asserts that a plan cannot be a fiduciary of itself. In our view, however, this is too simplistic a view of a plan. Any and all actions taken by a plan are done by the administrators who act on its behalf-in other words, by the fiduciaries who exercise discretionary authority or control with respect to the management of a plan. Accord Saramar Aluminum Co. v. Pension Plan, 782 F.2d 577, 580-81 (6th Cir. 1986). But see Local 159 v. Nor-Cal Plumbing, Inc., 185 F.3d 978, 981-84 (9th Cir. 1999) (holding that the court lacked subject-matter jurisdiction for a suit by an ERISA plan under section 1132(a)(3)); Pressroom Unions-Printers League Income Sec. Fund v. Cont'l Assurance Co., 700 F.2d 889, 891-93 (2d Cir. 1983), cert. denied, 464 U.S. 845 (1983) (holding that the federal court lacked subject-matter jurisdiction under section 1132(e) for a suit brought by an ERISA plan). (The characterization of the issue in these cases as a problem of subject-matter jurisdiction is especially questionable in light of the Supreme Court's decision in Union Pac. R. Co. v. Bhd. of Locomotive Eng'rs and Trainmen Gen. Comm. of Adjustment, 130 S.Ct. 584, 596-97 (2009), which underscores the difference between issues relating to subject-matter jurisdiction and those relating to other claims-processing rules.)

Allied acknowledges that plans may sue under other provisions of ERISA and the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), such as 29 U.S.C. § 1381 (withdrawal liability) and 29 U.S.C. § 1109 (breach of fiduciary duty). See, e.g., Peoria Union Stock Yards Co. Retirement Plan v. Penn Mut. Life Ins. Co., 698 F.2d 320, 326 (7th Cir. 1983) (finding that a plan may bring suit for breach of a fiduciary duty pursuant to 29 U.S.C. §§ 1109(a), 1132(a)(2), (d)(1)). Allied notes that section 1109, for example, confers specific rights on plans (for example, the right to require another "to make good to such plan" for breach of a fiduciary duty) that are absent from section 1145, which imposes the substantive obligation that Lineco seeks to enforce. But this argument misapprehends the source of the right to sue under these provisions. It is section 1132, rather than sections 1109 and 1145, that grants to ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.