Line Construction Benefit Fund v. Asomeo Environmental Restoration Industry, LLC

CourtDistrict Court, N.D. Illinois
DecidedAugust 17, 2023
Docket1:20-cv-02741
StatusUnknown

This text of Line Construction Benefit Fund v. Asomeo Environmental Restoration Industry, LLC (Line Construction Benefit Fund v. Asomeo Environmental Restoration Industry, LLC) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Line Construction Benefit Fund v. Asomeo Environmental Restoration Industry, LLC, (N.D. Ill. 2023).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

LINE CONSTRUCTION BENEFIT FUND et al.,

Plaintiffs, No. 20-cv-02741

v. Judge John F. Kness

ASOMEO ENVIRONMENTAL RESTORATION INDUSTRY, LLC,

Defendant.

MEMORANDUM OPINION AND ORDER Plaintiffs Line Construction Benefit Fund (“LINECO”), National Electrical Benefit Fund (“NEBF”), and National Electrical Annuity Plan (“NEAP”) are multiemployer pension funds suing Defendant Asomeo Environmental Restoration Industry, LLC for unpaid pension contributions. Plaintiffs allege that Defendant owes these missing payments under the terms of collective bargaining agreements (“CBAs”) entered into between Defendant and IBEW Local Union 1245 (the “Union”). Defendant has moved to dismiss the complaint under Rules 12(b)(6) and (b)(7) of the Federal Rules of Civil Procedure, arguing that Plaintiffs’ suit must be dismissed because Plaintiffs failed to use the mandatory grievance procedures set out in the CBAs and failed to join the Union to this action. As explained below, however, the CBAs, and the Trust Agreement that governs Plaintiffs’ operations, provide Plaintiffs with broad authority to sue for unpaid contributions without first submitting the dispute to the CBA grievance procedures. Moreover, because the Union’s absence will not subject Defendant to the risk of duplicative damages nor impede Defendant’s defense, the Union does not need to be

joined to this action. Accordingly, Defendant’s motion to dismiss (Dkt. 37) is denied. Plaintiffs’ motion for leave to file an amended complaint (Dkt. 79) is granted. I. BACKGROUND Plaintiffs are multiemployer benefit funds governed by the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1101 et seq. (Dkt. 1 ¶¶ 1, 3.) Plaintiffs receive contributions from numerous employers, including Defendant, under CBAs entered between Defendant and the Union.1 (Id. ¶ 3.)

Plaintiffs operate in accordance with the terms and provisions of the Restated Agreement and Declaration of Trust (“Trust Agreement”). (Id.) Under the Trust Agreement, Plaintiffs must receive, hold, and manage all monies that are required to be contributed under the applicable CBA between Defendant and the Union. (Id. ¶ 7.) Plaintiffs allege that Defendant “has repeatedly failed to submit accurate contribution reports and the required payments” under the CBAs. (Id. ¶ 10.)

Defendant allegedly owes Plaintiffs contributions for the months of June 2019 through November 2019 and January, February, and March 2020, in the amount of $921,942.60. (Id. ¶ 14.) Defendant’s failure to make these contributions allegedly

1 Defendant entered two CBAs with the Union that required contributions to Plaintiffs. (See Dkt. 1-2 and Dkt. 1-3.) The First CBA obligated Defendant to make contributions only to Plaintiff LINECO, and the Second CBA obligated Defendant to make contributions to all three Plaintiffs. (See Dkt. 1-2, at 22–23; Dkt. 1-3, at 18–19.) violates the CBAs and the Trust Agreement. Plaintiffs therefore seek to enforce provisions of these agreements under Sections 502(g)(2) and (a)(3) of ERISA, 29 U.S.C. § 1132(a)(3) and (g)(2), and Section 301(a) of the Labor Management Relations

Act of 1947, 29 U.S.C. § 185(a). Defendant has moved to dismiss the complaint under Rules 12(b)(6) and (b)(7) of the Federal Rules of Civil Procedure. (Dkt. 37.) According to Defendant, Plaintiffs are “third-party beneficiaries of the CBAs” and must resolve any dispute arising from the CBAs according to the grievance procedures provided in those agreements. Plaintiffs’ suit should thus be dismissed under Rule 12(b)(6) as untimely because, Defendant contends, Plaintiffs “exceeded the contractually agreed [] 15-day time

frame within which relief could be sought”; as unripe because Plaintiffs “failed to follow the mandatory dispute resolution provisions set out in the CBAs”; or, due to the CBAs’ arbitration provisions, this Court must compel Plaintiffs to arbitrate their claims. (Dkt. 38 at 2–3.) In the alternative, Defendant moves to dismiss under Rule 12(b)(7) for failing to join an indispensable party (namely, the Union). (Id. at 3.) Plaintiffs respond that they are not subject to the grievance and arbitration

provisions within the CBAs, relying on the Supreme Court’s decision in Schneider Moving & Storage Co. v. Robbins, 466 U.S. 364 (1984), and the Seventh Circuit’s analysis in Pipe Fitters’ Welfare Fund, Local Union 597 v. Mosbeck Industrial Equipment, Inc., 856 F.2d 837 (7th Cir. 1988). (Dkt 42 at 3.) Plaintiffs contend that the CBAs and Trust Agreement, when interpreted together, do not show that the parties intended Plaintiffs to submit contribution claims through the CBA grievance procedures. (Id. at 4.) In addition, Plaintiffs maintain that, because Plaintiffs “do not seek to recover damages for or on behalf of the Union or its members,” the Union is not an indispensable party. (Id. at 13.)

II. LEGAL STANDARD A motion under Rule 12(b)(6) “challenges the sufficiency of the complaint to state a claim upon which relief may be granted.” Hallinan v. Fraternal Ord. of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). Each complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). These allegations “must be enough to raise a

right to relief above the speculative level.” Twombly, 550 U.S. at 555. Put another way, the complaint must present a “short, plain, and plausible factual narrative that conveys a story that holds together.” Kaminski v. Elite Staffing, Inc., 23 F.4th 774, 777 (7th Cir. 2022) (cleaned up). A motion under Rule 12(b)(7) seeks dismissal based on the failure to join “a necessary and indispensably party” as required by Rule 19 of the Federal Rules of Civil Procedure. Ochs v. Hindman, 984 F. Supp. 2d 903, 906

(N.D. Ill. 2013). In evaluating a motion to dismiss under Rules 12(b)(6) and (b)(7), the Court must accept as true the complaint’s factual allegations and draw reasonable inferences in the plaintiff’s favor. Iqbal, 556 U.S. at 678; Ochs, 984 F. Supp. 2d at 906. But even though factual allegations are entitled to the assumption of truth, mere legal conclusions are not. Iqbal, 556 U.S. at 678–79. III. DISCUSSION A. Defendant’s Motion to Dismiss is Denied.

i. Plaintiffs are Not Required to Use the CBAs’ Grievance Procedures.

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Related

Schneider Moving & Storage Co. v. Robbins
466 U.S. 364 (Supreme Court, 1984)
Bell Atlantic Corp. v. Twombly
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Joanne Kaminski v. Elite Staffing, Inc.
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Lewis v. Quality Coal Corp.
243 F.2d 769 (Seventh Circuit, 1957)
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372 F. Supp. 644 (N.D. Illinois, 1974)

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Line Construction Benefit Fund v. Asomeo Environmental Restoration Industry, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/line-construction-benefit-fund-v-asomeo-environmental-restoration-ilnd-2023.