Trustees of the Plumbers v. Plumbing Services, Inc.
Filing
PUBLISHED AUTHORED OPINION filed. Originating case number: 1:13-cv-00118-TSE-JFA. [999610681]. [13-2403]
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PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-2403
THE TRUSTEES
PENSION FUND,
OF
THE
PLUMBERS
AND
PIPEFITTERS
NATIONAL
Plaintiff – Appellee,
v.
PLUMBING SERVICES, INC.; PSI MECHANICAL, INC.,
Defendants – Appellants.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria.
T. S. Ellis, III, Senior
District Judge. (1:13-cv-00118-TSE-JFA)
Argued:
January 27, 2015
Decided:
June 29, 2015
Before MOTZ and DIAZ, Circuit Judges, and DAVIS, Senior Circuit
Judge.
Affirmed by published opinion. Judge Diaz wrote the opinion, in
which Judge Motz and Senior Judge Davis joined.
ARGUED: Gregory F. Yaghmai, RUTLEDGE & YAGHMAI, Birmingham,
Alabama, for Appellants.
Dinah S. Leventhal, O'DONOGHUE &
O’DONOGHUE LLP, Washington, D.C., for Appellee. ON BRIEF: John
R. Harney, O’DONOGHUE & O’DONOGHUE LLP, Washington, D.C., for
Appellee.
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DIAZ, Circuit Judge:
For nearly thirteen years, Plumbing Services, Inc. (“PSI”)
made
contributions
to
the
Plumbers
and
Pipefitters
National
Pension Fund (the “Fund”), a multiemployer pension benefit plan
governed by the Employment Retirement Income Security Act of
1974 (“ERISA”), 29 U.S.C. § 1001 et seq. (2012).
On March 10,
2011, however, PSI stopped contributing to the Fund.
The Fund,
in turn, informed PSI that it (and its successor entity, PSI
Mechanical,
Inc.,
collectively
“Defendants”)
liability” pursuant to 29 U.S.C. § 1381.
owed
“withdrawal
When Defendants failed
to pay the sum owed, the Fund filed suit.
Defendants moved to dismiss the action on the ground that
the district court did not have personal jurisdiction over them.
In the alternative, they sought a change in venue.
court denied both motions.
The district
On the merits, Defendants claimed
that PSI never agreed to be bound by an existing collective
bargaining agreement requiring participating employers to make
contributions to the Fund.
The district court disagreed, and
granted the Fund’s motion for summary judgment.
that (1)
the
jurisdiction,
district
(2)
venue
court
was
had
personal
proper
in
and
Because we find
subject
Virginia,
and
(3)
bound itself to make contributions to the Fund, we affirm.
2
matter
PSI
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I.
A.
We
begin
framework.
by
briefly
setting
out
the
relevant
statutory
Congress enacted ERISA to promote the “soundness and
stability of [employee benefit] plans” in private industry.
U.S.C. § 1001(a).
29
Specifically, ERISA protects “the interests
of employees and their beneficiaries” by establishing “minimum
standards . . . assuring the equitable character of such plans
and
their
Congress
financial
in
1980
soundness.”
passed
Amendments Act (the “MPPAA”).
the
Id.
To
further
Multiemployer
that
Pension
end,
Plan
In part, the MPPAA
requires
that
an
employer
withdrawing
from
a
multiemployer pension plan pay a fixed and certain
debt to the pension plan.
This withdrawal liability
is the employer’s proportionate share of the plan’s
“unfunded
vested
benefits,”
calculated
as
the
difference
between
the
present
value
of
vested
benefits and the current value of the plan’s assets.
Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717,
725 (1984) (citing 29 U.S.C. §§ 1381, 1391).
The purpose of
assessing withdrawal liability is “to assign to the withdrawing
employer a portion of the plan’s unfunded obligations in rough
proportion to that employer’s relative participation in the plan
over
the
last
5
to
10
years.”
Borden,
Inc.
v.
Bakery
&
Confectionary Union & Indus. Int’l Pension, 974 F.2d 528, 530
(4th Cir. 1992).
3
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An
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employer
owes
Pg: 4 of 23
withdrawal
liability
when
it
complete or partial withdrawal from a pension plan.
§ 1381(a).
In
the
building
and
construction
makes
a
29 U.S.C.
industry,
a
complete withdrawal occurs when: (1) “an employer ceases to have
an
obligation
to
contribute
under
the
plan,
and”
(2)
the
employer “continues to perform work in the jurisdiction of the
collective
bargaining
agreement
of
type
for
were
§ 1383(b)(2).
ERISA treats all trades or businesses that are
common
control
as
a
required.”
single
employer.
29
which
contributions
under
previously
the
29
U.S.C.
U.S.C.
§
1301(b)(1). 1
An
employer
liability
U.S.C.
may
who
file
an
§ 1399(b)(2)(A).
disputes
objection
“After
an
assessment
with
a
the
plan
reasonable
of
withdrawal
sponsor.
review
of
29
any
matter raised,” the plan sponsor must notify the employer of (1)
its
decision,
(2)
the
basis
for
its
decision,
and
(3)
“the
reason for any change in the determination of the employer’s
1
The ERISA regulations define common control by reference
to the Treasury regulations prescribed under 26 U.S.C. § 414(c).
29 C.F.R. § 4001.3.
According to those regulations, one
instance where two or more businesses are under common control
is where the same five or fewer persons own a controlling
interest in each corporation and, “taking into account the
ownership of each such person only to the extent such ownership
is identical with respect to each such [corporation], such
persons” own more than 50 percent of the total shares of each
corporation. 26 C.F.R. § 1.414(c)-2(c).
4
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liability
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or
schedule
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of
liability
payments.”
Id.
§ 1399(b)(2)(B).
An employer dissatisfied with the plan sponsor’s response
must demand arbitration within a 60-day period after the earlier
of
the
date
of
the
plan
sponsor’s
notification
that
it
has
rejected the employer’s request for review, or 120 days after
the
employer’s
request
for
review.
29
U.S.C.
§
1401(a).
“[U]nlike the Federal Arbitration Act, the MPPAA treats an award
issuing
from
such
a
§ 1401
arbitration
like
an
agency
determination--the arbitrator decides the issues in the first
instance
but
then
the
decision
is
subject
to
judicial
review.”
Bd. of Trs., Sheet Metal Workers’ Nat’l Pension Fund
v. BES Servs., Inc., 469 F.3d 369, 375 (4th Cir. 2006).
If, however, the employer does not pursue arbitration, the
amount
assessed
by
the
plan
sponsor
as
withdrawal
liability
“shall be due and owing on the schedule set forth by the plan
sponsor,” which may then “bring an action in a State or Federal
court
of
competent
§ 1401(b)(1).
jurisdiction
for
collection.”
29
U.S.C.
In such a circumstance, an employer is deemed to
have waived review of all issues concerning the determination of
withdrawal liability.
BES Servs., 469 F.3d at 375.
B.
The Fund is a multiemployer pension benefit plan maintained
pursuant
to
a
collective
bargaining
5
agreement
between
the
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Associated
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Plumbing,
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Heating
and
Cooling
Contractors
of
Jefferson County, Alabama (the “Multiemployer Association”) and
affiliated local unions of the United Association of Journeymen
and Apprentices of the Plumbing and Pipefitting Industry of the
United States and Canada (the “Union”).
Defendants are Alabama
corporations engaged as plumbing and pipefitting contractors.
On April 8, 1998, Kenneth Julian--PSI’s sole shareholder-agreed in writing (on behalf of PSI) “to be bound by provisions
of the current labor Agreement executed and presently existing
between” the Multiemployer Association and the Union.
J.A. 448. 2
PSI further agreed to “make contributions to the . . . Plumbers
and Pipefitters National Pension Fund . . . . as provided for by
the [labor] Agreements now existing and as hereafter.”
Id.
The collective bargaining agreement then in effect, as well
as all successor agreements, required participating employers to
make contributions to the Fund for each hour worked by their
employees.
PSI began making contributions to the Fund in 1998,
and continued to do so until March 10, 2011.
On that date, PSI
(through Julian) wrote to the Union stating that it wished “to
abolish its working relationship with” the Union.
J.A. 139.
Under the terms of the collective bargaining agreement, PSI’s
obligation
2
to
contribute
to
the
Fund
ended
sixty
days
We refer to this writing as the “Letter of Assent.”
6
after
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tendering
sometime
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the
in
March
the
10
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letter.
summer
of
PSI
2011.
went
Shortly
out
of
before
business
then,
PSI
Mechanical filed articles of incorporation.
Well over a year after PSI sent the March 10 letter, the
Fund notified Julian that because PSI was “continuing to perform
work of the type for which it was previously obligated to make
contributions to the Fund” in the jurisdiction of the collective
bargaining agreement, PSI had incurred withdrawal liability of
$188,685.
and
PSI
J.A. 345.
Specifically, the Fund suspected that PSI
Mechanical
control.
In
were
fact,
trades
Julian
was
or
the
businesses
sole
under
shareholder
common
of
both
corporations.
The Fund gave PSI the option to pay the amount owed in one
lump sum or in monthly installments.
PSI objected and sought
review of the imposition of withdrawal liability.
The Fund in
turn asked PSI to respond to a questionnaire so as to better
enable
the
Fund
refused
to
stating
that
to
answer
it
answer” them.
assess
any
was
PSI’s
questions
“not
privy
objection.
related
to
to
PSI,
PSI
information
however,
Mechanical,
necessary
to
J.A. 368.
In the meantime, PSI was still required to make monthly
payments
on
§ 1399(c)(2).
Fund
sent
two
its
withdrawal
liability.
See
29
U.S.C.
Yet, PSI did not comply with its obligation.
late-payment
notices
7
to
PSI
and
received
The
no
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response
to
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either.
The
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Fund
subsequently
rejected
PSI’s
objection to the imposition of withdrawal liability, declared
PSI in default, and demanded payment of the entire sum of its
withdrawal liability plus accrued interest.
Defendants made no
payments, nor did they demand arbitration.
C.
The Fund filed suit in the United States District Court for
the
Eastern
District
of
Virginia
against
both
PSI
and
PSI
Mechanical, seeking to collect PSI’s unpaid monthly withdrawal
liability payments, along with interest, liquidated damages, and
attorney’s fees and costs. 3
to
make
amended
future
its
monthly
complaint
It also sought to compel Defendants
payments
to
ask
when
for
due.
the
The
entire
Fund
later
outstanding
withdrawal liability. 4
Defendants
moved
to
dismiss
the
lawsuit
for
lack
of
personal jurisdiction, or alternatively, on forum non conveniens
grounds.
They argued that because PSI and PSI Mechanical are
3
ERISA provides that a plan suing to recover withdrawal
liability may also recover interest, liquidated damages, and
attorney’s fees and costs. 29 U.S.C. § 1132(g)(2). Pursuant to
the terms of the Fund’s Plan document, liquidated damages are
equal to “the greater of: (i) the amount of interest charged on
the unpaid balance, or (ii) 20 percent of the unpaid amount
awarded.” J.A. 343.
4
The amended complaint also alleges that the Fund had
reviewed and rejected in writing PSI’s arguments raised in its
request for review and that PSI never demanded arbitration.
8
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Alabama corporations engaged in business exclusively in Alabama,
they do not have sufficient minimum contacts with Virginia for
the
exercise
of
personal
jurisdiction.
In
the
alternative,
Defendants urged that the lawsuit be dismissed because there is
an
adequate
alternative
forum
in
the
Northern
District
of
Alabama.
The district court denied the motions.
clear
that
there
is
The court found it
“pelucidly
[sic]
personal
jurisdiction.”
J.A. 316.
It noted that ERISA provides for nationwide service
of process and permits lawsuits to be brought in the district
where
the
plan
is
administered.
As
a
result,
the
court’s
exercise of personal jurisdiction over Defendants comported with
Fifth Amendment due process principles.
The
district
conveniens
court
claim
one
U.S.C. § 1404(a).
as
construed
seeking
a
Defendants’
change
of
forum
venue
under
non
28
It declined to grant relief, however, because
the Eastern District of Virginia was the Plaintiff’s forum of
choice and only moderately inconvenient for Defendants.
court
further
observed
that
witnesses
were
unlikely
The
to
be
needed, and that the interest of justice weighed in favor of
keeping the case in Virginia.
The Fund then moved for summary judgment on the sole count
of
its
amended
complaint,
which
the
district
court
granted.
Thereafter, the Fund sought liquidated damages, interest, and
9
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attorney’s
fees
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and
costs.
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Defendants
opposed
the
request,
claiming that the contract that the Fund was seeking to enforce
was
not
sufficiently
definite.
To
assess
this
claim,
the
district court reviewed the collective bargaining agreement in
effect when Julian signed the Letter of Assent, as well as a
successor agreement.
The
district
court
held
that
the
collective
bargaining
agreement was “neither fatally vague nor unclear; the Agreement
makes clear that a breaching party will be liable for unpaid
contributions upon complete withdrawal, interest on those unpaid
contributions,
costs.”
liquidated
J.A. 600.
damages,
and
attorney’s
fees
and
The court found immaterial and unpersuasive
Defendants’ allegation that “Julian never read nor understood
the Agreement” because he nevertheless “agreed to be bound” by
it.
Id.
The court entered judgment in favor of the Fund in the
amount of $247,013.21.
From the district court’s judgment, Defendants appeal.
II.
We
first
consider
the
district
court’s
order
denying
Defendants’ motions to dismiss for lack of personal jurisdiction
and to transfer venue.
We review the district court’s decision
as to personal jurisdiction de novo, although the underlying
factual findings are reviewed for clear error.
10
Carefirst of
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Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396
(4th Cir. 2003).
We review decisions on whether to transfer
venue under 28 U.S.C. § 1404 for abuse of discretion.
Brock v.
Entre Computer Ctrs., Inc., 933 F.2d 1253, 1257 (4th Cir. 1991).
Defendants
jurisdiction
say
over
that
them
the
district
because
they
court
are
lacked
Alabama
personal
corporations
that do business exclusively in Alabama and have no contacts
with
Virginia.
The
district
court
correctly
rejected
this
contention.
As the district court noted, any action brought under ERISA
“may be brought in the district where the plan is administered.”
29
U.S.C.
§ 1132(e)(2).
Furthermore,
nationwide service of process.
Id.
ERISA
provides
for
The Fund is administered in
Alexandria, Virginia, which is within the Eastern District of
Virginia,
and
Defendants
defendant
has
been
were
validly
properly
served
served.
pursuant
to
Where
a
a
federal
statute’s nationwide service of process provision, a district
court has personal jurisdiction over the defendant so long as
jurisdiction comports with the Fifth Amendment.
ESAB Grp., Inc.
v. Centricut, Inc., 126 F.3d 617, 626-27 (4th Cir. 1997).
To
make
out
a
Fifth
Amendment
challenge
to
personal
jurisdiction, Defendants had to show that “the district court’s
assertion of personal jurisdiction over [them] would result in
‘such extreme inconvenience or unfairness as would outweigh the
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congressionally
articulated
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policy’
service of process provision.”
evidenced
by
a
nationwide
Denny’s, Inc. v. Cake, 364 F.3d
521, 524 n.2 (4th Cir. 2004) (quoting ESAB, 126 F.3d at 627).
Normally, when a defendant is a United States resident, it is
“highly unusual . . . that inconvenience will rise to a level of
constitutional
concern.”
ESAB,
126
F.3d
at
627
(internal
quotation marks omitted).
Defendants have not satisfied this heavy burden.
Indeed,
in their brief, Defendants fail to apply the correct rule of
law, citing the “minimum contacts” standard we consider when
assessing whether personal jurisdiction is consistent with the
Due Process Clause of the Fourteenth Amendment.
See Int’l Shoe
Co. v. Washington, 326 U.S. 310, 316 (1945); ALS Scan, Inc. v.
Digital Serv. Consultants, Inc., 293 F.3d 707, 711 (4th Cir.
2002).
for
That standard, however, is not relevant when the basis
jurisdiction
nationwide
is
service
found
of
in
a
process
federal
statute
provision.
containing
Given
a
Defendants’
failure to show that the district court’s exercise of personal
jurisdiction raises a Fifth Amendment concern, they “must look
primarily
to
federal
onerous litigation.”
venue
requirements
for
protection
from
ESAB, 126 F.3d at 627 (quoting Hogue v.
Milodon Eng’g, Inc., 736 F.2d 989, 991 (4th Cir. 1984)).
On that score, Defendants contend that because they are
Alabama
corporations
with
no
business
12
ties
to
Virginia,
the
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district
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court
was
obligated
Northern District of Alabama. 5
Under
28
U.S.C.
Pg: 13 of 23
to
transfer
this
case
to
the
We do not agree.
§ 1404(a),
“[f]or
the
convenience
of
parties and witnesses, in the interest of justice, a district
court may transfer any civil action to any other district or
division where it might have been brought or to any district or
division to which all parties have consented.”
District courts
within this circuit consider four factors when deciding whether
to transfer venue: (1) the weight accorded to plaintiff’s choice
of venue; (2) witness convenience and access; (3) convenience of
the parties; and (4) the interest of justice.
E.g., Lynch v.
Vanderhoef Builders, 237 F. Supp. 2d 615, 617 (D. Md. 2002); Bd.
of Trs., Sheet Metal Workers Nat’l Fund v. Baylor Heating & Air
Conditioning, Inc., 702 F. Supp. 1253, 1255-56 (E.D. Va. 1988)
(citing Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947)).
As
a
general
rule,
a
plaintiff’s
“choice
of
venue
is
entitled to substantial weight in determining whether transfer
is appropriate.”
F.
Supp.
2d
Bd. of Trs. v. Sullivant Ave. Props., LLC, 508
473,
477
(E.D.
Va.
2007).
Moreover,
Congress
intended in ERISA cases to give a “plaintiff’s choice of forum
somewhat greater weight than would typically be the case,” as
5
Like the district court, we will treat Defendants’ motion
to dismiss for forum non conveniens as a request for transfer of
venue under 28 U.S.C. § 1404.
13
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evidenced by ERISA’s “liberal venue provision.”
Cross v. Fleet
Reserve Ass’n Pension Plan, 383 F. Supp. 2d 852, 856-57 (D. Md.
2005) (internal quotation marks omitted).
Given the substantial
weight accorded to this first factor, Defendants need to make a
compelling showing on the remaining factors to persuade us that
the district court abused its discretion by refusing to transfer
venue.
This they fail to do.
The salience of the witness convenience and access factor
is obviated by PSI’s failure to demand arbitration.
By failing
to arbitrate, PSI waived its right to raise any defenses to the
assessment of withdrawal liability.
Thus, the district court
properly concluded that there would be little, if any, need for
witnesses.
As to the third factor, Defendants have not persuaded us
that defending this case in Virginia was so inconvenient to them
as to warrant transfer.
On this point, Defendants emphasize
that Alabama is “where all events relative to the litigation
took place.”
Appellant’s Br. at 35.
However, it is not unusual
for some or all of the relevant acts in an ERISA lawsuit to have
taken place outside the district where the plan is administered.
Congress nonetheless saw fit to lay venue there, and we see no
reason why that legislative intent should yield in this case.
Defendants
also
make
no
argument
as
to
why
justice favors hearing this case in Alabama.
14
the
interest
of
Consequently, we
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hold that the district court did not abuse its discretion in
refusing to transfer venue.
III.
Defendants also urge that the district court lacked subject
matter
jurisdiction
over
the
Fund’s
claim.
Their
first
contention--that there was no enforceable contract requiring PSI
to make contributions to the Fund--is a merits argument that we
address later.
Here, we consider only Defendants’ claim that
the Fund’s action for withdrawal liability is actually a claim
for postcontract contributions and therefore arises under § 8 of
the National Labor Relations Act, 29 U.S.C. § 158(a), rather
than
ERISA.
court
did
In
not
essence,
have
Defendants
subject
matter
argue
that
the
jurisdiction
district
because
the
Fund’s claim involves an unfair labor practice that should have
been brought before the National Labor Relations Board.
That is
not correct.
Under ERISA, an employer that is contractually obligated to
make contributions to a retirement fund must do so in accordance
with the operative collective bargaining agreement.
29 U.S.C.
§ 1145.
Section 1145 thereby creates a federal right of action
allowing
a
multiemployer
contributions.
pension
plan
to
collect
delinquent
Bakery & Confectionary Union and Indus. Int’l
15
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Pension Fund v. Ralph’s Grocery Co., 118 F.3d 1018, 1020-21 (4th
Cir. 1997).
An action to compel an employer to pay overdue withdrawal
liability is treated the same as an action to collect delinquent
contributions.
29
U.S.C.
§ 1451(b).
And
federal
district
courts have jurisdiction to hear actions compelling an employer
to pay withdrawal liability.
action
to
collect
overdue
Id. § 1451(c).
withdrawal
This being an
liability
payments,
the
district court plainly had subject matter jurisdiction.
In support of its contention otherwise, Defendants draw our
attention to Laborers Health & Welfare Trust Fund for Northern
California v. Advanced Lightweight Concrete Co., 484 U.S. 539
(1988).
There, the Supreme Court held that the right of action
created by § 1145 “is limited to the collection of ‘promised
contributions’
and
does
not
confer
jurisdiction
on
district
courts to determine whether an employer’s unilateral decision to
refuse
to
make
postcontract
contributions
constitutes
violation of the [National Labor Relations Act].”
However,
different
an
action
from
one
to
collect
seeking
to
withdrawal
require
an
a
Id. at 549.
liability
employer
is
“to
far
make
postcontract contributions while negotiations for a new contract
are
being
conducted.”
Id.
at
548.
As
we
have
explained,
§ 1451(b)--in conjunction with § 1145--expressly creates a right
of action to collect overdue withdrawal liability.
16
We therefore
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reject
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Defendants’
contention
Pg: 17 of 23
that
the
district
court
lacked
subject matter jurisdiction.
IV.
A.
We
turn
judgment
to
now
the
to
the
Fund.
district
As
a
court’s
of
summary
matter,
threshold
grant
we
address
Defendants’ claim that the district court “flouted the wellknown and time-tested summary judgment standard.”
Appellant’s
Br. at 46 (quoting Greater Balt. Ctr. for Pregnancy Concerns,
Inc. v. Mayor & City Council of Balt., 721 F.3d 264, 283 (4th
Cir. 2013)).
Essentially, Defendants say that the Fund failed
to produce evidence supporting its motion for summary judgment.
Defendants are wrong.
A
party
moving
for
summary
judgment
“always
bears
the
initial responsibility of informing the district court of the
basis
for
its
pleadings,
motion,
and
depositions,
identifying
answers
those
to
portions
of
interrogatories,
the
and
admissions on file, together with the affidavits . . . which it
believes demonstrates the absence of a genuine issue of material
fact.”
(internal
Celotex
Corp.
quotation
v.
Catrett,
marks
omitted).
477
U.S.
In
317,
this
323
case,
(1986)
the
Fund
supported its motion with an affidavit from the administrator of
the
pension
fund,
correspondence
17
between
the
Fund
and
PSI
Appeal: 13-2403
Doc: 40
documenting
request
for
documents.
Filed: 06/29/2015
the
assessment
review,
PSI’s
of
Pg: 18 of 23
withdrawal
admissions,
liability
and
a
number
and
PSI’s
of
other
We find this evidence more than sufficient to shift
the burden to Defendants to “come forward with specific facts
showing that there is a genuine issue for trial.”
Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)
(internal quotation marks omitted).
Defendants
also
argue
that
the
district
court
erred
in
granting summary judgment on the basis of the Fund’s original
complaint,
rather
than
the
amended
version.
however, furnishes no ground for relief.
This
error,
In the first place,
the factual allegations in the two complaints are substantially
similar.
Moreover, we review summary judgment orders de novo,
based
our
on
independent
review
of
the
entire
record.
See
Turner v. Dammon, 848 F.2d 440, 444 (4th Cir. 1988), abrogated
on other grounds by Johnson v. Jones, 515 U.S. 304 (1995).
The
amended complaint is part of the record, and thus the district
court’s error poses no obstacle to our review of its decision.
B.
It is undisputed that neither PSI nor PSI Mechanical ever
demanded arbitration.
While this normally means judicial review
of all issues relating to the imposition of withdrawal liability
is waived, we have recognized a limited exception to ERISA’s
arbitration requirement where a party asserts that it is not an
18
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“employer” subject to the arbitration requirement.
Teamsters
Joint Council No. 83 v. Centra, Inc., 947 F.2d 115, 122 (4th
Cir.
1991);
Trust
Fund
(holding
see
of
that
also
Flying
Phila.,
the
Tiger
830
issue
F.2d
of
Line
1241,
whether
v.
Teamsters
1250
an
(3d
Pension
Cir.
organization
1987)
is
an
employer for ERISA purposes is one for the court).
As a result, the sole issue before the district court was
whether
PSI
requirement.
is
an
employer
subject
to
ERISA’s
arbitration
We hold that it is.
ERISA defines an employer as “any person acting directly as
an employer, or indirectly in the interest of an employer, in
relation to an employee benefit plan.”
29 U.S.C. § 1002(5).
Defendants argue that PSI is not an employer because there is no
valid collective bargaining agreement between PSI and the Fund
that bound PSI to make contributions.
Specifically, Defendants
say that the Letter of Assent is insufficient to bind PSI to its
promise
to
referenced
contribute
collective
agreements.
to
the
Fund
bargaining
in
accordance
agreement
and
its
with
the
successor
As a result, because there is no valid agreement,
PSI was never acting as an employer “in relation to an employee
benefit plan.”
The
parties
disagree
resolution of this issue.
as
to
what
law
applies
to
the
Defendants contend that we should
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Pg: 20 of 23
consult Alabama law for this purpose, while the Fund says we
should look to federal common law.
We
have
been
clear
that
including state common law.”
We agree with the Fund.
“ERISA
preempts
state
law,
Phx. Mut. Life Ins. Co. v. Adams,
30 F.3d 554, 563 (4th Cir. 1994).
ERISA preemption is construed
broadly, and displaces any state law that “has a connection with
or reference to” an employee benefit program.
Lines, Inc., 463 U.S. 85, 97 (1983).
Shaw v. Delta Air
Similarly, in the labor
law context, the Supreme Court has emphasized the importance of
national
uniformity
when
deciding
issues
involving
the
“consensual processes that federal labor law is chiefly designed
to promote--the formation of the collective agreement and the
private settlement of disputes under it.”
DelCostello v. Int’l
Bhd. of Teamsters, 462 U.S. 151, 162-63 (1983) (emphasis added).
Consulting
state
law
to
determine
when
a
collective
bargaining agreement is formed would undermine uniformity and
“exert a disruptive influence upon . . . the negotiation . . .
of collective agreements.”
Int’l Union, United Auto., Aerospace
& Agric. Implement Workers of Am., AFL-CIO v. Hoosier Cardinal
Corp.,
383
U.S.
696,
701-02
(1966).
Thus,
when
determining
whether an obligation to contribute to an employee benefit plan
exists, state contract law must give way.
In the Letter of Assent, PSI agreed to be bound by the
collective bargaining agreement in effect between the Union and
20
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Pg: 21 of 23
the Multiemployer Association.
to
the
Fund
as
required
It further agreed to contribute
by
the
then-existing
bargaining agreement and any successors.
collective
We have previously
held that an employer can execute a letter of assent allowing “a
multi-employer bargaining association to represent it in § 8(f)
negotiations.[ 6]
In such an arrangement, the individual employer
agrees to be bound by the § 8(f) agreement reached between the
multi-employer bargaining association and the union.”
Indus.
TurnAround Corp. v. NLRB, 115 F.3d 248, 252 (4th Cir. 1997).
We believe that this principle is equally applicable in the
present context, and thus hold that the Letter of Assent is
sufficient to bind PSI to make contributions to the Fund in
accordance
with
agreement.
Defendants insist, nonetheless, that the Letter of
Assent
invalid
is
the
terms
because
contract.”
Appellant’s Br. at 39.
even
collective
if
the
bargaining
Letter
accept
of
agreement
6
collective
“leaves
of
that
to
it
the
obligation
is
Defendants
of
open
future
bargaining
the
unbridled
changes
to
the
The gist of their argument
Assent
in
is
effect
valid
in
1998
as
to
the
when
the
Under § 8(f) of the National Labor Relations Act,
“employers or multi-employer associations in the [building and]
construction industry [may] enter into collective-bargaining
agreements, commonly called ‘pre-hire agreements,’ with unions
that have not formally established majority status.” Industrial
TurnAround, 115 F.3d at 252; see also 29 U.S.C. § 158(f).
21
Appeal: 13-2403
Letter
Doc: 40
was
Filed: 06/29/2015
signed,
agreements.
it
Pg: 22 of 23
does
not
bind
them
to
successor
However, in Industrial TurnAround, we approved a
similar letter of assent that bound the employer to successor
contracts.
115 F.3d at 252 (“[Employer] executed . . . a letter
of assent . . . binding [employer] to the then current . . .
agreement and to all successor agreements.”).
We see no reason
to depart from that holding here.
Finally, even if the Letter of Assent alone did not bind
PSI
to
make
certainly
future
did.
contributions
While
we
have
to
not
the
Fund,
previously
its
conduct
addressed
this
issue, today we join several of our sister circuits in holding
that a collective bargaining agreement can be adopted by conduct
manifesting an intention to be bound by its terms.
Bricklayers
Local 21 of Ill. Apprenticeship & Training Program v. Banner
Restoration, Inc., 385 F.3d 761, 766 (7th Cir. 2004); Carpenters
Amended & Restated Health Benefit Fund v. Holleman Constr. Co.,
751 F.2d 763, 770 (5th Cir. 1985); Trs. of Atl. Iron Workers,
Local 387 Pension Fund v. S. Stress Wire Corp., 724 F.2d 1458,
1459-60 (11th Cir. 1983).
The most obvious manifestation of PSI’s intent to be bound,
of
course,
was
its
decision
to
sign
the
Letter
of
Assent.
However, that it intended to be bound is also made unmistakably
clear by the fact that PSI made contributions to the Fund in
accordance with the governing collective bargaining agreements
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Pg: 23 of 23
for thirteen years before its complete withdrawal.
The district
court was therefore correct to reject PSI’s belated effort to
avoid withdrawal liability.
The record also shows that shortly after PSI went out of
business, PSI Mechanical was incorporated and began performing
the same work.
Because Julian is the sole shareholder of both
corporations, ERISA treats them as a single employer.
§
1301(b)(1).
Consequently,
PSI
Mechanical’s
29 U.S.C.
work
in
the
jurisdiction of the type for which contributions were previously
required is attributed to PSI.
This also means that the Fund
may look to PSI Mechanical to satisfy the withdrawal liability
owed by PSI.
In sum, given the existence of a valid contract requiring
PSI to contribute to the Fund, PSI is an employer under ERISA.
And because PSI failed to timely demand arbitration, all the
Fund had to prove to win summary judgment was that it gave PSI
proper notice of the assessed withdrawal liability.
Chi. Truck
Drivers v. El Paso Co., 525 F.3d 591, 597 (7th Cir. 2008).
record
shows
therefore
that
correctly
the
Fund
did
this.
The
district
granted
the
Fund’s
motion
for
The
court
summary
judgment, and its judgment is
AFFIRMED.
23
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