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Midwest Operating Eng'rs Welfare Fund v. Quarry

United States District Court, N.D. Illinois, Eastern Division

August 25, 2014

MIDWEST OPERATING ENGINEERS WELFARE FUND, et al., Plaintiffs,
v.
CLEVELAND QUARRY, a division of RIVERSTONE GROUP, INC., Defendant

For Midwest Operating Engineers Welfare Fund, Midwest Operating Engineers Pension Trust Fund, Operating Engineers Local 150 Apprenticeship Fund, Local 150 I.U.O.E. Vacation Savings Plan, Midwest Operating Engineers Retirement Enhancement Fund, Construction Industry Research and Service Trust Fund, Plaintiffs: Dale D. Pierson, LEAD ATTORNEY, Steven A. Davidson, International Union of Operating Engineers, Countryside, IL.

For Cleveland Quarry, a division of Riverstone Group, Inc., an Illinois Corporation, Defendant: Andrew J Martone, LEAD ATTORNEY, Matthew Blanton Robinson, Hesse Martone, P.C., St. Louis, MO; John Kenneth Kallman, Law Offices of John Kenneth Kallman, Chicago, IL.

Page 1034

MEMORANDUM OPINION AND ORDER

Milton I. Shadur, Senior United States District Judge.

Midwest Operating Engineers Welfare Fund (" the Welfare Fund" ) and Midwest Operating Engineers Pension Fund (" the Pension Fund" ), collectively referred to as " the Funds," bring this action against Cleveland Quarry (" Quarry" ), asserting that Quarry violated the Employee Retirement Income Security Act (" ERISA" ). As the Funds would have it, Quarry is liable to them under 29 U.S.C. § 1145 (" Section 1145" ) because it stopped contributing payments to the Funds sometime after September 2013 despite a continuing obligation to contribute. Quarry, however, contends that the decertification of the union with which the company had entered into a collective bargaining agreement (" CBA" ) -- the document that had established its obligation to make contributions to the Funds -- terminated that obligation.

Because that dispute appeared to this Court to pose a pure question of law, it ordered Quarry and the Funds to submit motions pursuant to Fed.R.Civ.P. 16 on the issue of liability. They have done so. For the reasons set out below, this Court finds as a matter of law that the Funds are entitled to enforce Quarry's obligation to contribute to the Funds under the CBA.

Factual Summary

Effective May 3, 2010 Quarry entered into a CBA with Local 150 of the International Union of Operating Engineers (" the Union" ). By its terms the CBA was to run until May 3, 2015 (CBA Art. 24).

Under CBA Art. 8 Quarry promised to make payments to the Welfare Fund for the benefit of its employees, while under Art. 21 it made a like promise of payments to the Pension Fund. Quarry also agreed to abide by each Fund's separate Agreement and Declaration of Trust, which the CBA incorporated by reference (CBA Art. 8 § 1 and Art. 21 § 1).

Quarry honored those contribution obligations until September 2013,[1] when the

Page 1035

NLRB decertified the Union as the collective bargaining representative for Quarry's employees (Funds Mem. 2). At that point Quarry stopped making reports and payments to the Funds (id.). On April 9, 2014 the Funds filed this action, alleging violations of Section 1145 and demanding back payments from October 2013 onward (Amended Complaint ¶ 9).

Continued Liability for Contributions

First at issue is the question whether the Funds can effectively enforce the CBA at all. Quarry argues they cannot. When a union that has entered into a CBA with an employer is decertified before the expiration of that agreement, the decertification renders the CBA unenforceable by the union for most purposes (see Central States, S.E. & S.W. Areas Pension Fund v. Schilli,420 F.3d 663, 669 (7th Cir. 2005)). Quarry seeks to extend that principle to a claimed automatic extinction of its contribution ...


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