National Stabilization Agreement of the Sheet Metal Industry Trust Fund v. Commercial Roofing & Sheet Metal

655 F.2d 1218, 210 U.S. App. D.C. 401, 108 L.R.R.M. (BNA) 3125, 2 Employee Benefits Cas. (BNA) 1306, 1981 U.S. App. LEXIS 13662
CourtCourt of Appeals for the D.C. Circuit
DecidedMay 4, 1981
Docket78-1761, 78-2071
StatusPublished
Cited by18 cases

This text of 655 F.2d 1218 (National Stabilization Agreement of the Sheet Metal Industry Trust Fund v. Commercial Roofing & Sheet Metal) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Stabilization Agreement of the Sheet Metal Industry Trust Fund v. Commercial Roofing & Sheet Metal, 655 F.2d 1218, 210 U.S. App. D.C. 401, 108 L.R.R.M. (BNA) 3125, 2 Employee Benefits Cas. (BNA) 1306, 1981 U.S. App. LEXIS 13662 (D.C. Cir. 1981).

Opinion

Opinion for the court filed by Circuit Judge TAMM.

TAMM, Circuit Judge:

In this case we must determine whether the alleged existence of certain “structural defects” in a joint labor-management trust fund constitutes an adequate defense to a collection suit for delinquent contributions brought under section 502 of the Employee Retirement Income and Security Act (ERI-SA), 29 U.S.C. § 1132 (1976). The National Stabilization Agreement of the Sheet Metal Industry Trust Fund (SASMI) and its trustees initiated this action in the District Court for the District of Columbia for employer contributions due under a collective bargaining agreement between various labor organizations representing sheet metal workers and appellants, members of the Central Florida Sheet Metal Contractors Association, Inc. (CFSMCA or the Association). Appellants contended in the district court that their contractual obligation was unenforceable because the trust fund violated the “equal representation” requirement of section 302(c)(5)(B) of the Labor Management Relations Act (LMRA), 29 U.S.C. § 186(cX5)(B) (Supp. II 1978). District Judge June L. Green rejected this contention, however, holding, inter alia, that an equal representation argument is an insufficient defense to an ERISA claim. Accordingly, she granted plaintiffs’ motion for summary judgment and denied defendants’ cross-motion for summary judgment. She also awarded plaintiffs attorney’s fees pursuant to section 502(g) of ERISA, 29 U.S.C. § 1132(g) (1976). We agree with Judge Green that a remedy exonerating defendant-appellants from their contractual obligation is inappropriately broad in these circumstances and find that her award of attorney’s fees in this case was reasonable. We therefore affirm her decision.

I. BACKGROUND

A. SASMI and the 1974 Agreement

SASMI is a comprehensive supplemental employment compensation plan developed in 1973 to encourage maximum employment in the sheet metal industry and to minimize the hardships workers endure in periods of less than full employment. As conceived, the plan sought a rough approximation in disposable income between union workers who were fully employed and those unemployed for a major portion of the year due to local economic conditions. Economic assistance in the form of four types of benefits was to be provided to those deemed underemployed. Funding was to be obtained from sheet metal contractors agreeing to SASMI’s incorporation into local collective bargaining agreements. Sheet Metal Workers’ International Association, 234 N.L.R.B. 1238, 1239 (1978), appeal docketed, No. 79-2396 (5th Cir. June 12, 1979).

In July 1974, representatives of Local 493 demanded that the Association .agree to SASMI’s incorporation into the collective bargaining agreement then under negotiation. When the Association rejected this demand, and protracted bargaining produced no consensus, the Local and the Sheet Metal Workers’ International Association (SMWIA) initiated a strike against CFSMCA members. The Association then acquiesced in SASMI’s inclusion, and the parties concluded in October 1974 a contract in which Association members agreed to make monthly payments into the SASMI fund beginning in August 1976.

This apparent resolution of the SASMI dispute was, however, merely temporary. Dissatisfaction with the agreement and the *1220 obligations it imposed prompted the Association to file unfair labor practice charges against the SMWIA and Local 493, and to pay the sums into an escrow account rather than into the SASMI fund. The unfair labor practice charges were ultimately resolved by the National Labor Relations Board (Board or NLRB), and its decision is presently on appeal, Sheet Metal Workers’ International Association, 234 N.L.R.B. 1238, 1239 (1978), appeal docketed, No. 79-2396 (5th Cir. June 12, 1979); 1 the refusal to pay prompted the fund and its trustees to bring the suit presented here on appeal.

B. The District Court Decision

In October 1976, plaintiffs filed a complaint in the District Court for the District of Columbia, requesting that defendants be restrained from refusing to pay the amounts due the SASMI fund under the 1974 collective bargaining agreement; to this complaint defendants filed neither answer nor counterclaim. Thereafter plaintiffs moved for summary judgment. Defendants responded with a cross-motion for summary judgment 2 in which they alleged that the contract obligations were unenforceable because the administrative structure of the trust did not conform to the equal representation requirement of section 302(c)(5)(B) of the LMRA, and because the trust fund authorization payments for incentive and travel benefits violated section 302(c)(5)(A). 3 Defendants argued that these violations rendered SASMI a nonman-datory subject of bargaining for which coercive strike pressure could not be utilized. The strike initiated by SMWIA and the Local to compel the Association’s acceptance of SASMI was, therefore, an unfair labor practice which vitiated the payment obligations of CFSMCA members under the 1974 agreement.

District Judge June L. Green declined, however, to assess the structure of SASMI in light of the requirements of section 302(c). Instead, she noted, the suit before the court was a collection action; defendants had not requested, by answer or counterclaim, that the court exercise its jurisdiction under section 302(e) 4 to “restrain violations” of section 302(c)(5). Therefore, defendants’ allegations could be evaluated only with regard to their sufficiency as a defense to plaintiffs’ ERISA claim. After considering defendants’ allegations in that posture, Judge Green found them inadequate to sustain the grant of relief afforded *1221 by summary judgment. Accordingly, she denied defendants’ motion for summary judgment and granted that of plaintiffs. National Stabilization Agreement of the Sheet Metal Industry Trust Fund v. An-ning-Johnson, Co., No. 76-1957 (D.D.C., filed May 31,1978), Joint Appendix (J.A.) at 1-6.

The district judge justified her decision on four grounds. First, she found “no statutory or decisional authorities to justify the notion that a commitment under an otherwise valid collective bargaining contract between labor and management to make certain payments to a welfare and benefits trust fund should be set aside because of violations of the equal representation clause.” J.A. at 4. Second, she believed that the relief provided defendants by summary judgment — “total absolution” from their contractual obligations — was inappropriately drastic.

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655 F.2d 1218, 210 U.S. App. D.C. 401, 108 L.R.R.M. (BNA) 3125, 2 Employee Benefits Cas. (BNA) 1306, 1981 U.S. App. LEXIS 13662, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-stabilization-agreement-of-the-sheet-metal-industry-trust-fund-v-cadc-1981.