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Central States, Southeast and Southwest Areas Pension Fund v. Infrasource Construction, LLC

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

March 30, 2015

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and ARTHUR H. BUNTE, JR., as Trustee, Plaintiffs,
v.
INFRASOURCE CONSTRUCTION, LLC, Defendant.

MEMORANDUM OPINION AND ORDER

GEORGE M. MAROVICH, District Judge.

Defendant is an employer who contributed to plaintiff pension fund pursuant to a collective bargaining agreement that expired on May 31, 2012. The replacement collective bargaining agreement required defendant to contribute to a different pension fund instead. Plaintiff, however, thinks defendant should contribute to its plan for some period of time after June 1, 2012, because defendant did not notify it soon enough about the existence of the new collective bargaining agreement. Everyone agrees that if the Court rules for plaintiff, defendants will be making double contributions (one contribution to each plan for each employee) and that the employees will earn double pension credits (one set under each plan). Everyone agrees that if the Court rules in defendant's favor, Central States will neither collect contributions nor pay pension benefits based on the time period after June 1, 2012.

Plaintiffs Central States Southeast and Southwest Areas Pension Fund ("Central States Pension Fund") and its Trustee Arthur H. Bunte, Jr. (the "Trustee") filed suit against defendant Infrasource Construction, LLC ("Infrasource"). (The Court refers to plaintiffs, collectively, as "Central States.") Plaintiffs seek relief under §515 of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1145. The parties have filed cross motions for summary judgment. For the reasons set forth below, the Court grants defendant's motion for summary judgment and denies plaintiffs' motion for summary judgment.

I. Background

The following facts are undisputed unless otherwise noted.

Central States Pension Fund is a multi-employer pension fund governed by ERISA. It accepts pension contributions from employers who have entered collective bargaining agreements with local unions affiliated with the International Brotherhood of Teamsters ("Teamsters"). All of the contributions (and income produced therefrom) are used either to pay pension benefits under its plan to participants and beneficiaries or to pay its administrative expenses.

Sometimes, the local unions negotiate not directly with employers but with associations representing employers. In this case, for example, the Teamsters negotiated collective bargaining agreements with the Pipe Line Contractors Association, a group that, among other things, negotiates collective bargaining agreements on behalf of member employers. Defendant Infrasource (a contractor that handles pipeline work) is a member of the Pipe Line Contractors Association.

In February 2006, the Pipe Line Contractors Association and the Teamsters entered a collective bargaining agreement (the "2005 Pipeline CBA"), which had an effective date of November 1, 2005. Infrasource did not sign on to the 2005 Pipeline CBA at the beginning. Infrasource adopted the 2005 Pipeline CBA on July 20, 2009, when it signed an agreement (the "2005 Participation Agreement") to participate in the 2005 Pipeline CBA. By signing the 2005 Participation Agreement, Infrasource also consented to most aspects of Central State's Trust Agreement. Specifically, the 2005 Participation Agreement stated, among other things:

NOW, THEREFORE, IT IS AGREED by and between the undersigned Employer and the International Brotherhood of Teamsters that such Employer hereby subscribes to the various agreements and declarations of trust and policies and procedures of the particular funds into which such Employer will be required to make contributions pursuant to the [2005 Pipeline CBA], and agrees to be bound thereby and to amendments made or to be made thereto; and authorizes the parties to such trust agreements to name the trustees and successor trustees, and to administer the trusts; and does hereby ratify and accept such trustees and the terms and conditions of said trusts as fully and as completely as if made by said undersigned Employer; provided, however, that no amendments or provisions of said trust agreements shall bind the Employer for any financial obligations or dues delinquency determinations beyond that set forth in the [2005 Pipeline CBA] pursuant to which such contributions are made.

(2005 Participation Agreement) (emphasis added).

The Trust Agreement, in turn, provides:

Amount of Contributions- Each Employer shall remit continuing and prompt contributions to the Trust Fund as required by the applicable collective bargaining agreement to which the Employer is a party, applicable law and all rules and requirements for participation by Employers in the Fund as established and interpreted by the Trustees in accordance with their authority... Upon execution of each new or successive collective bargaining agreement, including but not limited to interim agreements and memoranda of understanding between the parties, each Employer shall promptly submit such contract by certified mail to the:
Any agreement or understanding between the parties that in any way alters or affects the Employer's contribution obligation as set forth in the collective bargaining agreement shall be submitted promptly to the Fund in the same manner as the collective bargaining agreement; any such agreement or understanding between the parties that has not been disclosed to the Fund as required by this paragraph shall not be binding on the Trustees and shall not affect the terms of the collective bargaining agreement which alone shall be enforceable. Except as provided in this Section, Section 7(b) of Article III and Section 20 of Article IV, the obligation to make such contributions shall continue (and cannot be retroactively reduced or eliminated) after termination of the collective bargaining agreement until the date the Fund receives a) a signed contract that eliminates or reduces the duty to contribute to the Fund or b) written notification that the Employer has lawfully implemented a proposal to withdraw from the Fund or reduce its contributions at the above specified ...

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