Carpenters Local Union No. 26 v. United States Fidelity & Guaranty Co.

215 F.3d 136, 24 Employee Benefits Cas. (BNA) 2102, 2000 U.S. App. LEXIS 14066, 2000 WL 768014
CourtCourt of Appeals for the First Circuit
DecidedJune 16, 2000
DocketNo. 99-1786
StatusPublished
Cited by94 cases

This text of 215 F.3d 136 (Carpenters Local Union No. 26 v. United States Fidelity & Guaranty Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Carpenters Local Union No. 26 v. United States Fidelity & Guaranty Co., 215 F.3d 136, 24 Employee Benefits Cas. (BNA) 2102, 2000 U.S. App. LEXIS 14066, 2000 WL 768014 (1st Cir. 2000).

Opinion

SELYA, Circuit Judge.

In this matter, the district court, understandably deeming itself bound by our holding in Williams v. Ashland Eng’g Co., 45 F.3d 588 (1st Cir.1995), ruled that the plaintiffs’ action — brought to enforce claims under a labor and materials bond for wages and fringe benefit contributions allegedly due in respect to construction of a public works project in Peabody, Massachusetts — was preempted by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001-1461, and in particular, 29 U.S.C. § 1144(a). Accordingly, the court terminated the action by entering judgment on the pleadings.

We have considerably greater freedom than the district courts to evaluate the impact of recent Supreme Court precedent on our previous decisions. Having reexamined Williams against the changed legal landscape that now confronts us, we are persuaded that subsequent developments have overtaken our decision. Consequently, we abrogate the central holding of Williams,1 reverse the judgment below, and remand for further proceedings consistent with this opinion.

I. BACKGROUND

The individual plaintiffs performed carpentry work on a public works project in Peabody, Massachusetts. All of them belonged to Carpenters Local No. 26 (the union). At the times relevant hereto, their employer, Henry Construction, Inc. (Henry), was a party to a collective bargaining agreement with the union that required contributions to various fringe benefit funds on the individual plaintiffs’ behalf. Henry defaulted on this obligation before completing the Peabody job.

In Massachusetts, a so-called bond statute, Mass. Gen. Laws ch. 149, § 29, the pertinent text of which is set forth in the margin,2 requires the general contractor [139]*139on a public works project to post a bond covering labor and materials (including indebtedness incurred by subcontractors and suppliers for wages and fringe benefits). The general contractor on the Peabody project obtained such a bond from defendant-appellee United States Fidelity & Guaranty Company (USF & G). When Henry, a subcontractor, failed to make contributions in respect to fringe benefits, the union’s collection agent, Massachusetts Carpenters Central Collection Agency (MCCCA), acting for the aggrieved employees, staked a claim on the bond.

Resolution of the controversy eluded the parties. The individual plaintiffs, the union, and MCCCA (hereinafter collectively the appellants) then sued USF & G in the state superior court. The surety removed the action, see 28 U.S.C. § 1441, and immediately sought judgment on the pleadings. The appellants opposed this initiative and moved to remand the action to the state court. On November 3, 1998, the federal district court denied the motion to remand. Some seven months later, it granted USF & G’s motion for judgment on the pleadings. Relying on Williams, the court anchored both orders in ERISA preemption. This appeal followed.

II. DISCUSSION

We review the district court’s preemption ruling de novo. See Demars v. CIGNA Corp., 173 F.3d 443, 445 (1st Cir.1999); Graham v. Balcor Co., 146 F.3d 1052, 1054 (9th Cir.1998).

ERISA is a comprehensive statutory scheme that governs employee benefit plans. It was enacted in response to growing concerns about “the mismanagement of funds accumulated to finance employee benefits and the failure to pay employees benefits from accumulated funds.” Massachusetts v. Morash, 490 U.S. 107, 115, 109 S.Ct. 1668, 104 L.Ed.2d 98 (1989). The statute brooks no interference; it contains an express preemption clause providing that it shall “supersede any and all State laws insofar as they may now or hereafter relate to any [covered] employee benefit plan.” 29 U.S.C. § 1144(a). Thus, when state-law claims “relate to” ERISA plans, those claims are transmuted into ERISA claims. See Whitt v. Sherman Int’l Corp., 147 F.3d 1325, 1329 (11th Cir.1998); Parrino v. FHP, Inc., 146 F.3d 699, 703 (9th Cir.), cert. denied, 525 U.S. 1001, 119 S.Ct. 510, 142 L.Ed.2d 423 (1998). In that situation, “any civil complaint raising [such] a state law claim ... is of necessity so federal in character that it arises under federal law for purposes of 28 U.S.C. § 1331 and permits removal to federal court.” Plumbing Indus. Bd. v. E.W. Howell Co., 126 F.3d 61, 66 (2d Cir.1997).

Despite this prophylaxis, ERISA preemption is not inexorable. As the language of section 1144(a) makes plain, the incidence of ERISA preemption turns on the parameters of the phrase “relate to.” See California Div. of Labor Standards Enforcement v. Dillingham Constr., 519 U.S. 316, 324, 117 S.Ct. 832, 136 L.Ed.2d 791 (1997). That locution is not self-defining, and the Justices have been at least mildly schizophrenic in mapping its contours. The Court initially glossed the phrase by portraying the scope of ERISA preemption as “deliberately expansive.” Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 46, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987). As time passed, it grew more guarded, emphasizing the “starting presumption that Congress does not intend to supplant state law,” New York State Conf. of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 654, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995); accord De Buono v. NYSA-ILA Med. & Clin. Servs. Fund, 520 U.S. 806, 813, 117 S.Ct. 1747, 138 L.Ed.2d 21 (1997), and warning that, unless congressional intent to preempt clearly appears, ERISA will not be deemed to [140]*140supplant state law in areas traditionally regulated by the states, see Dillingham, 519 U.S. at 325, 117 S.Ct. 832; Travelers, 514 U.S. at 655, 115 S.Ct. 1671.

Importantly, these variations in emphasis have led the Court to conclude in recent years that the phrase “relate to,” as used in ERISA’s preemption provision, cannot be read literally.

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215 F.3d 136, 24 Employee Benefits Cas. (BNA) 2102, 2000 U.S. App. LEXIS 14066, 2000 WL 768014, Counsel Stack Legal Research, https://law.counselstack.com/opinion/carpenters-local-union-no-26-v-united-states-fidelity-guaranty-co-ca1-2000.