Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint Crafts Council, AFL-CIO et al
Filing
63
ORDER granting 51 Motion for Summary Judgment; denying 52 Motion for Summary Judgment. Signed by Judge Sharon L. Gleason on 4/3/20. (JLH, COURT STAFF)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
CHICAGO BRIDGE AND IRON
COMPANY, N.V.,
Plaintiff,
v.
Case No. 3:18-cv-00100-SLG
FAIRBANKS JOINT CRAFTS
COUNCIL, AFL-CIO;
INTERNATIONAL BROTHERHOOD
OF ELECTRICAL WORKERS,
LOCAL #1547,
Defendants.
ORDER RE MOTIONS FOR SUMMARY JUDGMENT
Before the Court at Docket 51 is Defendants International Brotherhood of
Electrical Workers Local #1547 (“IBEW 1547) and Fairbanks Joint Crafts Council,
AFL-CIO’s (“FJCC”) Motion for Summary Judgment. Plaintiff Chicago Bridge and
Iron Company, N.V. (“Chicago Bridge”) responded in opposition at Docket 54.
Defendants IBEW 1547 and FJCC replied at Docket 56. Also before the Court, at
Docket 52, is Chicago Bridge’s Motion for Summary Judgment. Defendants IBEW
1547 and FJCC responded in opposition at Docket 55. Chicago Bridge replied at
Docket 57. Defendants requested oral argument and the Court heard argument
on the motions on January 13, 2020.1
Due to the coronavirus pandemic, by Miscellaneous General Order 20-11, the District of
Alaska imposed a stay on all civil matters for 30 days, effective March 30, 2020. As the
1
BACKGROUND
Plaintiff Chicago Bridge2 and Defendants IBEW 1547 and FJCC were cosignatories to a Collective Bargaining Agreement with a term from October 1, 2014
to September 30, 2016 (“2014 CBA”).3 Plaintiff is one of multiple employers that
was a signatory to the agreement; Defendants are labor organizations
representing employees.4
The 2014 CBA governed work performed by the
signatory employers at U.S. Army Alaska bases under the terms of a support
services contract.5 As a signatory to the 2014 CBA, Plaintiff was required to (and
did) make contributions to the Alaska Electrical Pension Fund (“Fund”), a multiemployer pension plan.6 Prior to the 2014 CBA, Defendants were signatories to a
CBA with Shaw Environmental and Infrastructure, Inc. (“Shaw Environmental”)
presiding judge in this matter, the undersigned vacates the stay in this case to allow entry
of judgment, taxing of costs, and post-judgment motions. See MGO-20-11 at 6–7.
However, the parties may move or stipulate to extend any filing deadlines.
Chicago Bridge took an assignment of a claim from CBI Federal Services LLC, the party
that was actually a signatory to the 2014 CBA. Docket 62 at 12: 17–22. See also Docket
1-2 (2014 CBA). However, as Plaintiff does not distinguish between the entities in its
Complaint or in its Motion for Summary Judgment, the Court will refer to both entities as
Plaintiff in this Order. See, e.g., Docket 1 at 3, ¶¶ 6–7 (Complaint); accord Docket 1-2 at
3 (agreement between CB&I Federal Services LLC and unions).
2
Docket 1 at 2, 3 ¶¶ 3, 7; Docket 13 at 2, ¶ 3 (IBEW 1547 Answer); Docket 14 at 2, ¶ 2
(FJCC Answer). See also Docket 1-2.
3
Docket 1 at 2, ¶ 3; Docket 13 at 2, ¶ 3; Docket 14 at 2, ¶ 3. The FJCC is an affiliation
of local labor unions, including IBEW 1547. Docket 51 at 8. FJCC negotiates CBAs for
its affiliate unions on behalf of workers. Docket 51 at 8.
4
5
Docket 1-2 at 3; Docket 13 at 2, ¶ 3.
6
Docket 1 at 3–4, ¶¶ 5–11; Docket 13 at 2–3, ¶¶ 5–11; Docket 1-2 at 15.
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 2 of 30
with a term from October 1, 2012, to September 30, 2014 (“2012 CBA”).7 Like the
2014 CBA, the 2012 CBA also required contributions to the Fund.8 During the term
of the 2012 CBA, Plaintiff acquired the Shaw Group, Inc., of which Shaw
Environmental was a subsidiary, and assumed Shaw Environmental’s obligations
under the CBA, including its pension contributions.9
The mandatory employer contributions to the Fund are governed by Article
15.04 of the 2014 CBA, which provides that:
With respect to employees covered by the Agreement, the Employer
will contribute to the applicable Trust Fund according to Schedule “A,”
which is attached to this Agreement, for the purpose of providing
retirements benefits for employees. . . .
The Union warrants and represents that the Employer’s liability, with
respect to providing retirement benefits, shall be no greater than as
provided above, that the respective Trust Funds are jointly established
Trust Funds administered, operated, and maintained in accordance
with the law, and further that the Trust Funds have been and continue
to be qualified by the Internal Revenue Service.10
The 2012 CBA contains identical language, as did two earlier CBAs between FJCC
and Shaw dating back to 2004 and 2009, respectively.11
7
Docket 1 at 3, ¶ 6; Docket 13 at 2, ¶ 6; Docket 14 at 2–3, ¶ 6; Docket 1-1 (2012 CBA).
8
Docket 1-1 at 15.
9
Docket 1-1 at 3; Docket 1 at 3, ¶ 6; Docket 51 at 9 n.4, 9–10.
10
Docket 1-2 at 15.
11
Docket 51 at 9–10; see also, e.g, Docket 1-1 at 15.
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 3 of 30
In 2015, when the U.S. Government re-bid certain projects at military bases
in Alaska, Plaintiff lost its projects to another bid.12 As such, Plaintiff stopped
making contributions to the Fund.13 In a letter dated September 15, 2016, the Fund
requested $678,171 of withdrawal liability from Plaintiff, which Chicago Bridge
paid.14 In turn, Plaintiff requested reimbursement from Defendants, relying on
Article 15.04 of the CBA to assert that “the Union unequivocally warranted and
represented that [Plaintiff’s] cost of providing pension benefits to . . . employees
would be limited to those amounts expressly provided for in Schedule A of the
CBA.”15 Defendants declined to reimburse Plaintiff.16
Plaintiff commenced this action against Defendants on April 20, 2018,
alleging breach of contract and seeking a declaratory judgment “that Section 15.04
12
Docket 1 at 4, ¶ 12.
13
Docket 1-4 at 1.
Docket 1 at 4–5, ¶¶ 12–15; Docket 1-3. Pursuant to 29 U.S.C. § 1381, “[i]f an employer
withdraws from a multiemployer plan in a complete withdrawal or partial withdrawal, then
the employer is liable to the plan in the amount determined under this part to be
withdrawal liability.” The withdrawal liability amount was based on contributions dating
back to 2010. Docket 1-3 at 3. The pre-2014 contributions are covered by the earlier
CBAs, which contained the identical language governing mandatory employer
contributions to retirement benefits. See Docket 51 at 9; Docket 1-1 at 15.
14
Docket 1-5 at 2. See also Docket 1-4 (letter from CB&I to union seeking reimbursement
of withdrawal liability)
15
Docket 1 at 6, ¶ 21; Docket 13 at 6, ¶ 21; Docket 14 at 4, ¶ 21; Docket 1-6 (August 29,
2017 letter from unions declining to reimburse Chicago Bridge). Plaintiff reached a
settlement with the Fund during arbitration proceedings in the amount of $550,000, the
amount it now seeks to recover from Defendants. Docket 52 at 7; Docket 52-4 at 2
(settlement agreement between Fund and Chicago Bridge).
16
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 4 of 30
of the CBA requires the Union to reimburse CB&I for any and all future withdrawal
liability payments by CB&I to the Fund.”17 On August 6, 2018, Defendants moved
for judgment on the pleadings, contending that Plaintiff “failed to use the required
grievance and arbitration machinery” provided for in the CBA and that Plaintiff’s
claim for damages was “futile because a union cannot contractually assume
withdrawal liability for an employer.”18 On October 3, 2018, the Court denied
Defendants’
motion,
holding
that
the
mandatory
arbitration
provision
“unambiguously applies to employee grievances only,” and finding that Defendants
failed to establish a “well-defined and dominant public interest that the scope of
[Plaintiff’s] relief would violate,” as Plaintiff was not seeking that Defendants be
directly liable to the Fund.19 On October 30, 2019, Defendants filed a joint motion
for summary judgment and requested oral argument.20 On October 31, 2019,
Plaintiff filed a cross-motion for summary judgment.21
The Court heard oral
argument on both motions on January 13, 2020.22
17
Docket 1 at 1, 8.
18
Docket 19 at 6, 20.
19
Docket 25 at 7, 9.
20
Docket 51.
21
Docket 52.
22
Docket 62.
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 5 of 30
On January 23, 2020, Plaintiff filed a Notice of Bankruptcy for McDermott
International, Inc. and Certain of Its Affiliates, and Notice of Automatic Stay of
Proceedings.23 The notice indicates that McDermott International, Inc. and certain
of its affiliates (together “Debtors”) filed petitions for relief under Chapter 11 of Title
11 of the U.S. Bankruptcy Code.24 Plaintiff is among those affiliates.25 Plaintiff’s
notice states that:
[P]ursuant to section 362(a) of the Bankruptcy Code, the Debtors’
filing of their respective voluntary petitions gives rise to a stay,
applicable to all entities, of, among other things: (a) the
commencement or continuation of any judicial, administrative, or other
action or proceeding against the Debtors (i) that was or could have
been commenced before the commencement of the Chapter 11
Cases or (ii) to recover a claim against the Debtors that arose before
the commencement of the Chapter 11 Cases; (b) the enforcement
against any of the Debtors or against any property of each of the
Debtors’ bankruptcy estates of a judgment obtained prior to the
commencement of the Chapter 11 Cases; and (c) any act to obtain
possession of property of or from any of the Debtors’ bankruptcy
estates, or to exercise control over property of any of the Debtors’
bankruptcy estates.26
On February 3, 2020, Defendants responded to Plaintiff’s Notice of
Bankruptcy and Automatic Stay of Proceedings, stating that they “do not believe
that the automatic stay has any application to this case, because it is an action
23
Docket 60.
24
Docket 60 at 1.
25
Docket 60-1 at 7.
26
Docket 60 at 2–3.
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 6 of 30
Plaintiff initiated.”27 Defendants indicated that the parties conferred over the effect
of the notice, but that “Plaintiff’s counsel is conferring with his client and is not yet
in a position to inform the Court if Plaintiff has a different position.”28 There have
been no subsequent filings by either party on this issue. Regardless, the Court
agrees with Defendants that the automatic stay provision of 11 U.S.C. § 362(a)
does not apply to judicial proceedings that are initiated by the debtor.29 It applies
to actions “against the debtor” and is inapplicable to suits such as this one,
commenced by Plaintiff.30 Accordingly, the Court addresses the parties’ motions
for summary judgment.
27
Docket 61 at 2.
28
Docket 61 at 3.
See, e.g., Palmdale Hills Prop., LLC v. Lehman Commercial Paper, Inc., 654 F.3d 868,
875 (9th Cir. 2011) (“The [automatic] stay does not prevent a plaintiff/debtor from
continuing to prosecute its own claims nor does it prevent a defendant from protecting its
interests against claims brought by the debtor. This is true even if the defendant’s
successful defense will result in the loss of an allegedly valuable claim asserted by the
debtor.”); Mitchell v. Fukuoka Daiei Hawks Baseball Club, 206 B.R. 204, 212 (Bankr. C.D.
Cal. 1997) (“The 11 U.S.C. § 362 automatic stay only stays lawsuits against the debtor
and the debtor’s bankruptcy estate. The Section 362 stay does not apply where, as here,
the debtor is the plaintiff in a lawsuit.” (emphasis in original)).
29
See Gordon v. Whitmore, 175 B.R. 333, 336 (B.A.P. 9th Cir. 1994) (“[T]he operative
subsections in the case at hand . . . contemplate actions ‘against’ the debtor . . . .”
(emphasis in original)).
30
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 7 of 30
LEGAL STANDARD
I.
Summary Judgment
Federal Rule of Civil Procedure 56(a) directs a court to grant summary
judgment “if the movant shows that there is no genuine dispute as to any material
fact and the movant is entitled to a judgment as a matter of law.” An issue is
“genuine” if there is a sufficient evidentiary basis on which a reasonable fact-finder
could find for the non-moving party and a dispute is “material” if it could affect the
outcome of the suit under the governing law.31 When considering a motion for
summary judgment, “[t]he evidence of the nonmovant is to be believed, and all
justifiable inferences are to be drawn in his favor.”32
II.
Interpretation of Collective Bargaining Agreements
Courts apply federal common law principles of contract interpretation when
construing a CBA.33 As the Ninth Circuit recently explained, “the Supreme Court
has long interpreted the [Labor Management Relations Act] as authorizing federal
courts to create a uniform body of federal common law to adjudicate disputes that
arise out of labor contracts.”34 It continued: “any suit ‘alleging a violation of a
31
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Moldex-Metric, Inc. v. McKeon Prods., Inc., 891 F.3d 878, 881 (9th Cir. 2018)
(alteration in original) (quoting Anderson, 477 U.S. at 255).
32
33
Alday v. Raytheon Co., 693 F.3d 772, 782 (9th Cir. 2012).
Curtis v. Irwin Indus., 913 F.3d 1146, 1151 (9th Cir. 2019) (citing Allis-Chalmers Corp.
v. Lueck, 471 U.S. 202, 210 (1985) and Teamsters v. Lucas Flour Co., 369 U.S. 95, 103–
34
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 8 of 30
provision of a labor contract must be brought under § 301 [of the LMRA, 29 U.S.C.
§ 185,] and be resolved by reference to federal law.’”35 Indeed, “this federal
common law preempts the use of state contract law in CBA interpretation and
enforcement.”36 But “state law, if compatible with the purpose of § 301, may be
resorted to in order to find the rule that will best effectuate the federal policy.”37
Thus, courts “interpret collective bargaining agreements . . . according to
ordinary principles of contract law, at least when those principles are not
inconsistent with federal labor policy,”38 and CBAs should be read “in the context
of an entire agreement’s language, structure, and stated purpose.”39 “‘In this
endeavor, as with any other contract, the parties’ intentions control.’ ‘Where the
words of a contract in writing are clear and unambiguous, its meaning is to be
ascertained in accordance with its plainly expressed intent.’”40
04 (1962)).
Id. at 1151–52 (quoting Lueck, 471 U.S. at 210). As the Supreme Court has explained,
“the meaning given to terms in collective-bargaining agreements must be determined by
federal law [because] . . . ‘[t]he possibility that individual contract terms might have
different meanings under state and federal law would inevitably exert a disruptive
influence upon both the negotiation and administration of collective agreements.’” Lueck,
471 U.S. at 210 (quoting Lucas Flour Co., 369 U.S. at 103).
35
Kobold v. Good Samaritan Reg’l Med. Ctr., 832 F.3d 1024, 1031 (9th Cir. 2016) (quoting
Cramer v. Consol. Freightways, Inc., 255 F.3d 683, 689 (9th Cir. 2001)).
36
37
Textile Workers Union of Am. v. Lincoln Mills of Ala., 353 U.S. 448, 457 (1957).
38
M&G Polymers USA, LLC v. Tackett, 135 S. Ct. 926, 933 (2015).
Am. Fed’n of Musicians v. Paramount Pictures Corp., 903 F.3d 968, 977 (9th Cir. 2018)
(quoting Alday v. Raytheon Co., 693 F.3d 772, 782 (9th Cir. 2012)).
39
40
Tackett, 135 S. Ct. at 933 (first quoting Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp.,
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 9 of 30
III.
Withdrawal Liability
The Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”), 29
U.S.C. § 1381, created withdrawal liability to prevent employers from withdrawing
from a multiemployer pension plan without paying their share of unfunded, vested
benefits, and thereby threatening the plan’s solvency.41 The plan determines
whether an employer has withdrawn from the fund and assesses the employer’s
share of any “unfunded vested benefits” as withdrawal liability.42
DISCUSSION
The parties’ dispute arises from conflicting interpretations of Article 15.04 of
the 2014 CBA; the parties do agree, however, that the case is resolvable on
summary judgment.43 Indeed, in their cross-motions for summary judgment, each
party maintains that Article 15.04 is unambiguous and that its plain meaning
559 U.S. 662, 682 (2010) then quoting 11 Richard A. Lord, A Treatise on Contracts § 30:6
(4th ed. 2012)).
Concrete Pipe & Prods. v. Constr. Laborers Pension Trust., 508 U.S. 602, 608 (1993)
(explaining that MPPAA was enacted in part to “alleviate the problem of employer
withdrawals” by instituting “rules under which a withdrawing employer would be required
to pay whatever share of the plan’s unfunded liabilities was attributable to that employer’s
participation” (quoting Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211, 216
(1986))).
41
29 U.S.C. §§ 1382, 1399(b)(1). See also Connolly, 475 U.S. at 217 (“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 the vested benefits and the
current value of the plan’s assets.” (quoting Pension Benefit Guar. Corp. v. R.A. Gray &
Co., 467 U.S. 717, 725 (1984))).
42
43
Docket 62 at 22:7–23 and at 26:24–27:6.
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 10 of 30
governs.
Defendants contend that the plain language of the article and the
extrinsic evidence confirm that Article 15.04 is a warrants-and-represents clause,
and nothing more, and that, in any event, the provision applies only to retirement
benefits and not to withdrawal liability.44 Plaintiff, in contrast, contends that by its
plain language, Article 15.04 guarantees that Defendants will indemnify Plaintiff if
it has to pay more than the scheduled amount in retirement benefits—including
any withdrawal liability—and that there is no extrinsic evidence that alters this plain
meaning.45
I.
Language of Article 15.04
The Court first considers the plain language of the disputed term of Article
15.04, in the context of the agreement as a whole.46 Article 15.04 provides that:
The Union warrants and represents that the Employer’s liability, with
respect to providing retirement benefits, shall be no greater than as
provided above, that the respective Trust Funds are jointly established
Trust Funds administered, operated, and maintained in accordance
with the law, and further that the Trust Funds have been and continue
to be qualified by the Internal Revenue Service.47
The parties disagree as to whether the language “[t]he Union warrants and
represents that the Employer’s liability . . . shall be no greater than as provided
44
Docket 51 at 20–37.
45
Docket 52 at 14–23.
46
Alday v. Raytheon Co., 693 F.3d 772, 782 (9th Cir. 2012).
47
Docket 1-2 at 15.
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 11 of 30
above” is a promise to indemnify the employer for any additional incurred liability.
They also dispute whether “retirement benefits” encompasses withdrawal liability.
The Court considers each phrase in turn.
a.
The “warrants and represents” language
Defendants emphasize that the term “indemnify” does not appear in Article
15.04, whereas it does elsewhere in the CBA.48 Accordingly, Defendants conclude
that “where the parties wanted to draft express indemnification provisions . . . , they
knew how to do so,” and that Plaintiff’s proposed construction requires the Court
to read an implied right of indemnification into Article 15.04 even where express
indemnification rights exist elsewhere in the CBA.49 Defendants contend that the
“Court should presume the parties’ omission of any indemnification language in
Article 15 is intentional” under basic canons of construction.50
Defendants further contend that the “warrants-and-represents” language in
the article is express and intentional. They maintain that the term “warrants” is
“generally understood to be ‘an assurance by one party to a contract of the
Docket 51 at 22–23. Specifically, Defendants highlight Article 3 of the 2014 CBA, which
provides that Defendants agreed “to indemnify the Employer for any costs, including legal
fees, or liability incurred as a result of the Union’s implementation and enforcement of”
union membership obligations, and Article 4, which states that “the Union agrees to
indemnify and hold harmless the Employer from any and all claims, actions and/or
proceedings arising out of” union dues deductions. See Docket 51 at 23 (quoting Docket
1-2 at 5).
48
49
Docket 51 at 22–23.
50
Docket 51 at 23–24 (collecting cases).
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 12 of 30
existence of a fact upon which the other party may rely,’”51 and that the
“representation” language is a “presentation of fact—either by words or by
conduct—made to induce someone to act, esp[ecially] to enter into a contract.”52
Defendants contend that, in the context of Article 15.04, the “warrants-andrepresents” provision is best understood as an “assurance and representation of
an existing fact” for each of the three separate clauses contained within it.53
Defendants contend that the first clause—the one at issue in this case—should be
read “as an assurance that there are no side deals with individual signatory local
unions that would force the employer to make additional pension contributions to
generate additional benefits.”54
Citing three non-precedential opinions,
Defendants contend that this more “limited construction . . . is particularly
persuasive” where a CBA contains other provisions with express indemnification
language.55
51
Docket 51 at 24 (quoting Metro. Coal. Co. v. Howard, 155 F.2d 780, 784 (2d. Cir. 1946)).
52
Docket 51 at 24 (quoting Representation, Black’s Law Dictionary (11th ed. 2019)).
Docket 51 at 25. Defendants contend that the “second and third clauses of the
provision assure the signatories that the pertinent pension plans ‘are jointly established
Trust Funds administered, operated, and maintained in accordance with the law’ and that
the plans are ‘qualified by the Internal Revenue Service.’” Docket 51 at 25. See also
Docket 55 at 22 (identifying three clauses within “warrants-and-represents” provision).
53
54
Docket 51 at 25–26; Docket 56 at 10–11.
Docket 51 at 26 (citing Fontenot v. Mesa Petroleum Co., 791 F.2d 1207, 1219 (5th Cir.
1986); In re TOUSA, Inc., 408 B.R. 913, 919 n.6 (Bankr. S.D. Fla. 2009); In re Air Crash
Near Peggy’s Cove, MDL No. 1269, 99-5998, 2004 WL 2486263, at *8 (E.D. Pa. Nov. 2,
2004)).
55
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 13 of 30
Plaintiff, on the other hand, maintains that Article 15.04 “should be
interpreted to obligate the unions to reimburse Plaintiff for withdrawal liability.”56
Plaintiff contends that the “warrants and represents” provision is not acting as mere
introductory language, as it does in some contracts, but “has teeth.”57 Plaintiff
notes that “hold-harmless” and “indemnity” clauses are often referred to
interchangeably,58 and quotes Judge Learned Hand for the proposition that:
A warranty is an assurance by one party to a contract of the existence
of a fact upon which the other party may rely. It is intended precisely
to relieve the promisee of any duty to ascertain the fact for himself; it
amounts to a promise to indemnify the promisee for any loss if the fact
warranted proves untrue, for obviously the promisor cannot control
what is already in the past.59
Plaintiff emphasizes that the provision uses the word “shall,” which it
interprets as a “word of command [that] denotes mandatory action.”60 Thus,
Plaintiff concludes that the language in Article 15.04 providing that its liability with
respect to retirement benefits “shall be no greater than” the amount set forth in
Schedule A is a “definite future promise by the Union that if [Plaintiff’s] payments
56
Docket 52 at 14.
57
Docket 52 at 14–15.
58
Docket 52 at 15 (citing Indemnity Clause, Black’s Law Dictionary (11th ed. 2019)).
Docket 54 at 8 (quoting Metro. Coal Co. v. Howard, 155 F.2d 780, 784 (2d Cir. 1946)).
See also Docket 54 at 8 (collecting cases including Glacier Gen. Assur. Co. v. Casualty
Indem. Exch., 435 F. Supp. 855 (D. Mont. 1977) and In re Nexus 6P Prod. Liab. Litig.,
293 F. Supp. 3d 888 (N.D. Cal. 2018)).
59
60
Docket 52 at 15–16.
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 14 of 30
for retirement benefits exceed the amounts set forth in the Schedules, it will
reimburse the employer for those amounts.”61 Plaintiff contends that Defendants
present “no evidence whatsoever” in support of their construction of the term as
an “assurance that there are no side deals,”62 and adds that if Article 15.04 is not
read as a promise to indemnify, the provision is rendered meaningless.63 Thus,
while Plaintiff acknowledges that “the parties used the word ‘indemnify’ in other
portions of the agreement,” it maintains that the “omission of the magic word
should not override the other canon of construction that the Court should not apply
a construction to a term that would effectively render the provision meaningless.”64
Plaintiff seeks to distinguish Defendants’ trio of cases to the contrary, first,
based on the language of the warranty provisions at issue in those cases—which
it contends were not, as here, “clear warranty promis[es]”—and second, based on
the facts.65 Plaintiff maintains that “[t]he use of indemnify and hold-harmless
61
Docket 52 at 16. See also Docket 54 at 10.
62
Docket 54 at 9 (quoting Docket 51 at 25–26).
63
Docket 52 at 17.
64
Docket 54 at 10.
Specifically, Plaintiff contends that in Fontenot v. Mesa Petroleum Co., the “case
involved competing provisions between the same parties each seeking indemnity from
the other for the same loss” and the warranty provision was a representation of
workmanlike performance rather than an “affirmative promise.” Docket 54 at 11–12 (citing
791 F.2d 1207, 1219 (5th Cir. 1986)). Plaintiff seeks to distinguish In re TOUSA, Inc.
because there, the parties sought indemnification based on a debtor’s representation in
an agreement that it would remain solvent, even though there was an express (and
seemingly applicable) indemnity provision. Docket 54 at 12 (citing 408 B.R. 913, 916–
17, 919 n.6 (S.D. Fla. 2009)). Lastly, Plaintiff contends that in In re Air Crash Disaster
65
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 15 of 30
language elsewhere in the CBA between the parties in the present case concerned
different subject matters,” and thus that the “failure of the parties to the CBA there
to include the magic words ‘indemnity’ or ‘hold harmless’ in Article 15.04 should
not be fatal to the claim that indemnity was intended.”66 Plaintiff contends that “the
Union does not argue or provide any support for the proposition that the application
of Article 15.04 to create an indemnity obligation for withdrawal liability is otherwise
covered by another contractual provision regarding ‘the same subject matter.’”67
Finally, it adds that under Alaska law, the doctrine of expression unius est
exclusion alterius has “limited application.”68
The Court “interpret[s] written terms in the context of the entire agreement’s
language, structure, and stated purpose.”69 As the Ninth Circuit has explained:
Under federal law, [a] written contract must be read as a whole and
every part interpreted with reference to the whole, with preference
given to reasonable interpretations. Contract terms are to be given
their ordinary meaning, and when the terms of a contract are clear,
the intent of the parties must be ascertained from the contract itself.
Near Peggy’s Cove, the plaintiff sought indemnification based on a warranty of fitness
and workmanlike performance, but the agreement had an express provision that the
remedy for breach of warranty was repair/replacement, and not money damages. Docket
54 at 12–13 (citing MDL No. 1269, 99-5998, 2004 WL 2486263, at *7–8 (E.D. Pa. Nov. 2,
2004)).
66
Docket 57 at 13.
67
Docket 57 at 10–11 (emphasis in original).
Docket 57 at 11 (quoting Chevron USA, Inc. v. LeResche, 663 P.2d 923, 930–31
(Alaska 1983)).
68
Trs. of the S. Cal. IBEW-NECA Pension Trust Fund v. Flores, 519 F.3d 1045, 1047 (9th
Cir. 2008).
69
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 16 of 30
Whenever possible, the plain language of the contract should be
considered first.70
Here, the plain language of Article 15.04, in light of the structure of that article, and
of the CBA as a whole, compels the Court to find that the disputed warrants-andrepresents language is best understood as a warranty—providing assurance and
representation of an existing fact—and not as an indemnification provision.
First, the provision uses the language “warrants and represents” and not
“indemnifies.” However, as Defendants point out, the parties expressly provided
for indemnification elsewhere in the 2014 CBA. The parties specified that the
Union would indemnify the Employer for costs (including legal fees) or liability
incurred as a result of Article 3.01 or for any “claims, actions, and/or proceedings”
arising from Article 4.01.71
Thus, the parties clearly delineated the limited
circumstances under which the Union agreed to indemnify the Employer. Although
Plaintiff cites Metropolitan Coalition Co. v. Howard for Judge Learned Hand’s
statement that a warranty “amounts to a promise to indemnify the promisee for any
loss if the fact warranted proves untrue,” there is no indication that the parties in
that case had elsewhere provided expressly for indemnification.72 Where, as here,
the CBA contains express indemnification language, the Court finds that the
Flores v. Am. Seafoods Co., 335 F.3d 904, 910 (9th Cir. 2003) (alteration in original)
(internal quotations omitted).
70
71
Docket 1-2 at 5.
72
Docket 54 at 8 (155 F.2d 780 (2d Cir. 1946)).
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 17 of 30
parties could not have intended the “warrants and represents” language to create
an implied promise of indemnification.
While the Court agrees with Plaintiff that the trio of cases cited by
Defendants—Fontenot, In re Air Crash Disaster Near Peggy’s Cove, and In re
TOUSA, Inc.—are distinguishable factually, they are nonetheless informative. In
particular, the Court finds the reasoning in In re Air Crash Disaster Near Peggy’s
Cove persuasive.73 In that case, Interactive Flight Technologies (“IFT”) sought
indemnification from Hollingshead International (“HI”) based on an alleged breach
of an express warranty term in the parties’ agreement.74
Specifically, the
agreement contained a warranty provision that stated, “HI hereby represents and
warrants to IFT that . . HI shall comply with all applicable federal, state and local
laws in effect . . . [and] that all Services and Installation Labor shall be performed
consistent with generally accepted professional standards.”75 Another subsection
of the same provision stated that any product defects within the first 60 months
after installation would be remedied by replacement or repair.76
IFT sought
indemnification from HI based on the warranty provision.77 The District Court for
73
MDL No. 1269, 99-5998, 2004 WL 2486263 (E.D. Pa. Nov. 2, 2004).
74
Id. at *2.
75
Id. at *8.
76
Id. at *7.
77
Id.
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 18 of 30
the Eastern District of Pennsylvania concluded that the parties had agreed to the
scope of remedial action—repair or replacement of a defective product and
“nothing more”—and added that “the only express indemnification specified in the
Agreement is found in [another provision], which pertains to infringement of
intellectual property rights.”78 The district court found that “there is no basis for
IFT’s contention that it is entitled to express contractual indemnification from [HI]
premised upon [HI’s] alleged violation of a warranty provision.”79 Although the
parties here did not expressly provide for the scope of remedial action in the event
of a breach of the warranty provision, they did provide for express indemnification
in two other places in the CBA. Accordingly, the Court concludes that Plaintiff has
no basis to seek contractual indemnification premised on Defendants’ alleged
breach of the warranty provision.
Moreover, this plain reading of the warrants-and-represents clause is
underscored by the remainder of Article 15.04, which provides that the Union
“warrants and represents . . . that the respective Trust Funds are jointly established
Trust Funds administered, operated, and maintained in accordance with the law”
and “warrants and represents . . . that the Trust Funds have been and continue to
be qualified by the Internal Revenue Service.”80 As applied to those additional
78
Id. at 8.
79
Id.
80
Docket 1-2 at 15.
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 19 of 30
clauses, the “warrants and represents” language is naturally understood as an
assurance and representation of those facts, and indeed, Plaintiff does not contend
that these clauses amount to a promise of indemnification. Plaintiff’s proposed
construction would require the term “warrants and represents” to have two
meanings within the same phrase—as a promise to indemnify with respect to the
clause relating to liability for retirement benefits, and as a standalone warranty of
fact as it pertains to the establishment and maintenance of the Trust Funds and to
their qualification for the IRS.
Lastly, the Court is not persuaded by Plaintiff’s assertion that the provision
is meaningless unless the Court adopts Plaintiff’s proposed meaning.81
As
Defendants correctly note, the provision serves to assure Plaintiff that its
contributions to the retirement benefits of the employees are as outlined in
Schedule A, and supersedes anything requiring additional contributions.82
81
Docket 54 at 10.
Defendants contend that the provision serves many purposes: to assure the employer
there are no side deals and guarantee that if there are, the CBA supersedes them; to
preclude former employees from seeking retirement benefits direction from the employer
in the event the pension fund becomes insolvent; and potentially to entitle the employer
to remedies if the warranty is breached. Docket 56 at 11. Defendants add that even
Plaintiff’s interpretation of the clause supports Defendants, insofar as Plaintiff contends
that the clause is meant as a promise that liability for pension benefits will not exceed the
amount in Schedule A, thereby necessarily overriding any side deals in other agreements.
Docket 56 at 11–12.
82
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 20 of 30
For the aforementioned reasons, the Court finds that the warrants-andrepresents clause does not provide a basis for Plaintiff to obtain indemnification
from Defendants for withdrawal liability.
b.
The “retirement benefits for employees” language
The parties also dispute whether withdrawal liability is, in fact, a “retirement
benefit[] for employees” within the meaning of Article 15.04. Defendants contend
that “providing retirement benefits” cannot be read to extend to withdrawal
liability.83 They emphasize that “no benefits accrue or vest to any employee on
account of the payment of withdrawal liability.”84 Defendants cite to the District
Court for the Middle District of Pennsylvania’s opinion in Nitterhouse Concrete
Products, Inc. v. Glass, Molders, Pottery, Plastics & Allied Workers International
Union, where the employer relied on contract language providing that “[t]he
Company shall have no liability for the payment of benefits other than to make
contributions to the Plan as above required” as a basis to seek indemnification
from the Union for withdrawal liability.85 Although the district court ultimately
decided the case based on the expiration of the CBA, it expressly disagreed with
the employer’s reliance on that particular provision, finding that “paying withdrawal
83
Docket 51 at 21.
84
Docket 51 at 28.
Docket 51 at 28 (citing Case No. 1:15-cv-2154, 2018 WL 656013, at *14 (M.D. Pa. Feb.
1, 2018)).
85
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 21 of 30
liability is not the same thing as paying benefits,” because “withdrawal liability is
not payable to Plaintiffs’ employees, as benefits would be, but to the Plan, tied to
the Plan’s unfunded estimated liabilities.”86 Defendants propose that the additional
liability contemplated by the parties in Article 15.04 “might encompass, for
example, additional promises (outside of the . . . CBAs) of pension contributions
that would have led to the accrual or vesting of pension benefits for the
employees,” as opposed to withdrawal liability.87
Plaintiff, for its part, contends that it is undisputed that the withdrawal liability
it paid “was in excess of its contributions” as contemplated by the CBA
schedules.88 It rationalizes that “[a]ny payments made by a withdrawing employer
are meant to go towards future retirement benefits payable by the Plan.”89 Plaintiff
acknowledges that withdrawal liability “may not go directly to the pockets of the
employees with vested benefits” but insists that “it goes to replenishing fund assets
for that purpose by defraying the shortfall.”90 It contends that “[i]n the sense that
withdrawal liability amounts are intended to make up for the shortfall in plan assets
in the future as to certain unfunded vested pension benefit liabilities, there is a
86
Id.
87
Docket 51 at 27.
88
Docket 52 at 20, 27.
89
Docket 52 at 20 (emphasis in original).
90
Docket 54 at 15 (emphasis in original).
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 22 of 30
correlation between the withdrawal liability and the ‘retirement benefits’ payable
into the future.”91 Plaintiff disputes Defendants’ reliance on Nitterhouse, noting
that the outcome of the case turned on the fact that expiration of the CBA barred
the claim.92 Plaintiff instead relies on the Third Circuit’s opinion in Pittsburgh Mack
Sales & Service, Inc. v. International Union of Operating Engineers, where the
employer sought indemnification from a union for claims for withdrawal liability
brought by a multiemployer pension fund.93
However, the Court finds that
Pittsburgh Mack does not further Plaintiff’s position on the meaning of “retirement
benefits.” Not only was the provision at issue in Pittsburgh Mack an express “hold
harmless” provision, rather than a “warrants and represents” provision, but, more
importantly, due to the procedural posture of the case, the Third Circuit indicated
it had accepted as true “Pittsburgh Mack’s contention that [a provision of the] CBA
constitutes an agreement by the Union to indemnify or hold it harmless from
91
Docket 54 at 15.
Docket 54 at 16 (“Pronouncements by the district court as to whether indemnity for
withdrawal liability under the 1970 CBA were mere dicta as they had no bearing on the
court’s holding.”). Plaintiff also asserts that the Nitterhouse plan was enacted prior to the
MPPAA, Docket 54 at 16; however, as the Nitterhouse court noted, “the Union agreed,
from 1982 through 2014, to the same indemnification language, after withdrawal liability
became a distinct possibility in connection with the existence of the Plan,” concluding “that
the indemnity language should be construed consistent with the circumstances present
at the time the CBAs were entered into, not just in 1976.” Nitterhouse Concrete Prods.,
Inc. v. Glass, Molders, Pottery, Plastics & Allied Workers Int’l Union, Case No. 1:15-cv2154, 2018 WL 656013, at *13 (M.D. Pa. Feb. 1, 2018)).
92
93
Docket 52 at 20–21 (citing Pittsburgh Mack, 580 F.3d 185, 188 (3d Cir. 2009).
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 23 of 30
withdrawal liability.”94 Thus, the Third Circuit did not determine whether a hold
harmless provision relating to benefits encompassed withdrawal liability.95
Having considered the plain language of the provision, the Court finds that
the parties did not intend that “retirement benefits for employees”—within the
context of Article 15.04 and the CBA—extend to withdrawal liability. In light of the
Court’s finding, supra, that the warrants-and-represents language serves to assure
and represent an existing fact, and not as a promise to indemnify, the term
“retirement benefits” does not logically extend to cover withdrawal liability, which
is a future event that may never occur.96 More critically, however, and as Plaintiff
concedes, withdrawal liability does “not go directly to the pockets of the employees
with vested benefits.”97
Thus, withdrawal liability—which employees will not
Id. at 192. In its reply brief, Plaintiff acknowledges that the case was only cited for the
“nature of withdrawal liability” and as “supporting the argument that indemnity for
withdrawal liability in this context did not violate public policy.” Docket 57 at 13–14.
94
Id. at 196, n.5 (“We note that there are other issues raised by the parties, such as how
to construe Section 1 of the CBAs and whether it is explicit enough to show that the Union
agreed to indemnify Pittsburgh Mack . . . . While the District Court touched on these
issues below, its ultimate conclusions were explicitly based on whether, in the context of
a motion to dismiss, a violation of public policy made Section 1 of the CBAs
unenforceable. Accordingly we will not address these issues.”).
95
At oral argument, counsel for Plaintiff characterized the language “with respect to
providing retirement benefits” as meaning “all benefits provided to bargaining unit
employees for pension benefits, and . . . those that are funded immediately and
withdrawal liability for unfunded, vested pension benefits that may arise.” Docket 62 at
23:21–25.
96
Docket 54 at 7, 15 (emphasis in original). Plaintiff contends instead that “there is a
correlation between the withdrawal liability and the ‘retirement benefits’ payable into the
future.” Docket 54 at 6–7, 15.
97
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 24 of 30
actually receive as benefits—is not a retirement benefit according to the plain
meaning of the term.
This conclusion is consistent with the use of the term
“retirement benefits” earlier in Article 15.04, which provides that “the Employer will
contribute to the applicable Trust Fund according to Schedule ‘A,’ which is
attached to this Agreement, for the purpose of providing retirement benefits for
employees.”98 The reference to a benefit “for employees” supports a plain reading
of the term “retirement benefits” as encompassing only those benefits that are paid
directly to employees.
The Court cautions that there may well be contexts in which “retirement
benefits” would encompass withdrawal liability, and that its holding here should not
be understood to foreclose such an interpretation under all circumstances.
However, in the context of Article 15.04 of the 2014 CBA, for the aforementioned
reasons, the Court finds that the term “retirement benefits” does not include
withdrawal liability.
II.
Extrinsic Evidence
Although both parties maintain that the CBA provision is unambiguous, each
addresses extrinsic evidence as well. For their part, Defendants contend that the
available extrinsic evidence shows that during negotiations, the parties did not
understand the disputed provision to provide for indemnification.99 Defendants
98
Docket 1-2 at 15 (emphasis added).
99
Docket 51 at 30–34. Defendants contend that, according to their deposition testimony,
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 25 of 30
contend the same was true for other employers to the CBA.100 Defendants further
maintain that extrinsic evidence shows that Plaintiff was on notice of Defendants’
interpretation of the clause during negotiations for the 2014 CBA, and yet did not
suggest a different interpretation before willingly entering the contract.101
Moreover, Defendants assert that Plaintiff’s course of performance under
the CBA confirms that Plaintiff did not understand the clause to indemnify it;
specifically, Defendants emphasize that Plaintiff was “required to pay pension
surcharges and supplemental pension contributions in excess of the contributions
required under the CBAs” but never sought reimbursement or indemnification from
Defendants.102
Defendants contend that Plaintiff’s additional payments were
Plaintiff’s representatives in the CBA negotiation did not understand the language as an
indemnification provision. Docket 51 at 31; Docket 56 at 23 (asserting one negotiator
testified he had never negotiated CBAs providing for reimbursement of withdrawal liability
and the other “was not even aware of any withdrawal-liability indemnification language
that could be included in a contract.” (emphasis in original)). Defendants further contend
that FJCC’s lead negotiator and CEO, Eileen Whitmer, also did not understand the
provision as an indemnification provision. Docket 51 at 31–32.
Defendants maintain that other employers to the CBA attempted to “supplement the
2012 CBA with express indemnification language” which “indicates that they themselves
believed that they were not entitled to indemnification for withdrawal liability in the
absence of that additional language.” Docket 51 at 32. Defendants contend that “those
parties’ conduct supplies . . . evidence of industry usage.” Docket 56 at 15.
100
Docket 51 at 39–40. According to Defendants, Plaintiff’s subcontractor, Inuit Services,
Inc., which was also bound by the 2012 CBA, sought to supplement the agreement with
a term that would have obligated one of the unions to “indemnify and hold harmless the
Employer . . . for any contingent or withdrawal liability of any kind.” Docket 55 at 12–13.
According to Defendants, the FJCC’s negotiator refused and forwarded the exchange
memorializing her refusal to Plaintiff. Docket 51 at 39–40.
101
102
Docket 51 at 35.
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 26 of 30
“effectively identical to the payment of withdrawal liability” in that they “were not
required by the CBAs and did not result in the accrual of pension benefits to any
individual.”103 Finally, Defendants conclude that “Plaintiff can point to no fact
supporting its interpretation.”104
Plaintiff, on the other hand, contends that there is no relevant extrinsic
evidence, representing that “the discovery taken in this case has established that
there is no . . . evidence” of “intent of the parties to the CBAs” as to the language
of Article 15.04.105 Specifically, Plaintiff contends that there was no discussion of
the provision at issue during negotiations.106
It disputes Defendants’
characterization of the negotiators’ deposition testimony, maintaining that it shows
only that one of Plaintiff’s negotiators “did not remember the negotiation for the
initial” CBA at all and the other did not remember any discussion of Article 15.04.107
Plaintiff adds that the FJCC’s lead negotiator for the 2014 CBA was not part of the
negotiation of the 2004 CBA where the language first appeared and testified that
Docket 51 at 37. Defendant lists the following additional payments: monthly
surcharges between Dec. 1, 2010, and Sept. 30, 2012, amounting to $17,809.09; monthly
supplemental contributions between Oct. 12, 2012, and Apr. 30, 2015, amounting to
$37,821.26; and supplemental contributions during the term of the 2014 CBA. Docket 51
at 36. They add that this failure to seek indemnification predates the 2014 CBA and thus
the parties’ course of dealing is impliedly incorporated therein. Docket 51 at 37–38.
103
104
Docket 51 at 38 (emphasis in original).
105
Docket 52 at 22.
106
Docket 52 at 22.
107
Docket 54 at 17–18 (emphasis omitted); Docket 57 at 7–8.
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 27 of 30
the disputed provision was not discussed during the negotiations that she did
attend.108
In any event, Plaintiff maintains “there was no clear expression of intent on
the part of [Defendants] . . . as to its interpretation of Article 15.04 so as to put
[Plaintiff] on notice sufficient to bind it by silence.”109 Moreover, Plaintiff contends
that Defendants’ discussions and negotiations with other employers are irrelevant
as neither Plaintiff nor its predecessor were a party to those negotiations.110 It
emphasizes that “[w]hat [other employers] may have believed, understood, or
sought from the Union in bargaining has no bearing whatsoever on what [Plaintiff]
believed or understood.”111 Plaintiff adds that its failure to seek indemnification for
its supplemental contributions and surcharges “does not provide proof that it did
not have that right,” adding that those supplemental payments were governed by
separate letter agreements and “do not provide course of conduct evidence as to
108
Docket 54 at 18–19.
Docket 54 at 25. On this basis, Plaintiff seeks to distinguish Defendant’s cases,
including Perry & Wallis, Inc. v. United States, 192 Ct. Cl. 310 (1970) and Wash. State
Republican Party v. Wash. State Grange, 676 F.3d 784 (9th Cir. 2012). Docket 54 at 25–
26; see Docket 51 at 40–41 (discussing cases). Specifically, Plaintiff notes that in both
cases “there was direct back and forth between the parties as to expressions of intent
regarding interpretation of a particular of an agreement, or direct and clear prior
understanding of intent by the other party as to such provision.” Docket 54 at 26.
109
Docket 54 at 20–22. Plaintiff contends that its knowledge of these discussions was
limited to an email from FJCC’s President and lead negotiator, Eileen Whitmer, to
Plaintiff’s lead negotiator, forwarding her response to a different employer who was
seeking an indemnity provision. Docket 54 at 21.
110
111
Docket 54 at 21.
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 28 of 30
the treatment of withdrawal liability under Article 15.04.”112 Finally, Plaintiff urges
that because the available evidence suggests that “the FJCC initially proposed the
[Article] 15 language,” that the Court should construe it against the drafters.113
“A contract term is ambiguous only if ‘multiple reasonable interpretations
exist.’”114 “If a term is ambiguous, the court may look to extrinsic evidence to
determine the parties’ intentions.”115 The Ninth Circuit has explained that:
When the operation of an ordinary contract is not clear from its
language, a court generally may consider extrinsic evidence to
determine the intent of the parties in including that language. That
principle is applied with even greater liberality in the case of a [CBA].
In ascertaining the intent of the parties to a [CBA], ‘the trier of fact may
look to the circumstances surrounding the contract’s execution,
including the preceding negotiations . . . . It may also consider the
parties’ conduct subsequent to a contract formation. . . and such
conduct is to be given great weight.’116
The Court finds, as described above, that the meanings of the disputed
provisions in Article 15.04 are clear from the contract language and that the terms
112
Docket 54 at 22–24. See also Docket 57 at 16–17.
Docket 52 at 23–24 (applying the “rule of contra proferentem” and citing Barnes v.
Indep. Auto. Dealers of Cal., 64 F.3d 1389, 1393 (9th Cir. 1995)).
113
Am. Fed’n of Musicians of the U.S. v. Paramount Pictures Corp., 903 F.3d 968, 977
(9th Cir. 2018) (quoting Trs. Of S. Cal. IBEW-NECA Pension Tr. Fund v. Flores, 519 F.3d
1045, 1047 (9th Cir. 2008)).
114
115
Id.
Ariz. Laborers, Teamsters & Cement Masons Local 395 Health & Welfare Trust Fund
v. Conquer Cartage Co., 753 F.2d 1512, 1517–18 (9th Cir. 1985) (omissions in original)
(emphasis omitted) (quoting Laborers Health & Welfare Tr. Fund v. Kaufman & Broad,
707 F.2d 412, 418 (9th Cir. 1983)).
116
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 29 of 30
are not ambiguous. However, it is also the case that the extrinsic evidence in the
record is consistent with the plain and unambiguous meaning of Article 15.04.
Plaintiff does not cite to any extrinsic evidence that is inconsistent with Defendants’
proposed construction; indeed, it does not rely on any extrinsic evidence at all.117
Thus, for the purposes of summary judgment, when considering the extrinsic
evidence with all justifiable inferences made in Plaintiff’s favor, the Court finds that
Defendant is entitled to summary judgment.
For the aforementioned reasons, the Court concludes that Article 15.04 does
not require Defendants to indemnify Plaintiff for withdrawal liability and grants
summary judgment to Defendants.
CONCLUSION
In light of the foregoing, IT IS ORDERED as follows: Defendants IBEW
1547 and FJCC’s Motion for Summary Judgment at Docket 51 is GRANTED and
Plaintiff Chicago Bridge’s Motion for Summary Judgment at Docket 52 is DENIED.
The Clerk of Court is directed to enter a final judgment accordingly.
DATED this 3rd day of April, 2020 at Anchorage, Alaska.
/s/ Sharon L. Gleason
UNITED STATES DISTRICT JUDGE
117
Docket 52 at 22.
Case No. 3:18-cv-00100-SLG, Chicago Bridge and Iron Company, N.V. v. Fairbanks Joint
Crafts Council, AFL-CIO; International Brotherhood of Electrical Workers, Local #1547
Order re Motions for Summary Judgment
Page 30 of 30
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?