Sheet Metal Wrks Local 44 v. Scranton Sheet Metal

881 F. Supp. 955, 1994 U.S. Dist. LEXIS 20098
CourtDistrict Court, M.D. Pennsylvania
DecidedJune 29, 1994
DocketCiv. A. Nos. 1:CV-93-1526 through 1:CV-93-1534
StatusPublished

This text of 881 F. Supp. 955 (Sheet Metal Wrks Local 44 v. Scranton Sheet Metal) is published on Counsel Stack Legal Research, covering District Court, M.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sheet Metal Wrks Local 44 v. Scranton Sheet Metal, 881 F. Supp. 955, 1994 U.S. Dist. LEXIS 20098 (M.D. Pa. 1994).

Opinion

MEMORANDUM

CALDWELL, District Judge.

In each of these related actions, defendant, National Stabilization Agreement of the Sheet Metal Industry Trust Fund (“SAS-MI”), has filed a motion pursuant to Fed. R.Civ.P. 12(b)(1) and 12(b)(6) to dismiss the plaintiffs’ claim against it. The plaintiffs, Sheet Metal Workers Local Union No. 44 (the “Union”), Sheet Metal Workers Local No. 44 Pension Fund, Sheet Metal Workers Local No. 44 Welfare Fund, and Sheet Metal Workers Local No. 44 Annuity Fund, filed these actions against the defendant employers and SASMI to recover delinquent payments due to the Pension Fund, Welfare Fund and Annuity Fund (collectively the “Funds”). We will evaluate the motions to dismiss under the well established standard. See Labov v. Lalley, 809 F.2d 220 (3d Cir.1987).

The plaintiffs have also filed motions to amend their complaints to substitute for the Funds a trustee of each the Funds as a plaintiff. We will grant this motion on the condition that each of the amended complaints be in conformity with our decision on the defendant’s motion to dismiss.

[957]*957The complaints make the same claims although they differ on the amounts owing in each case. Count One is based on the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001-1461, and the Labor Management Relations Act (LMRA). 29 U.S.C. § 185. It alleges that the Pension, Welfare and Annuity Funds are employee benefit plans under ERISA. It seeks recovery against the employer named in each case for unpaid contributions required under a collective bargaining agreement.

Count Three is the claim against SASMI.1 It avers that SASMI “is a welfare benefit trust fund established under § 302 of the Labor Management Relations Act for the exclusive benefit of employees and beneficiaries of persons employed in the sheet metal industry.” (complaint in No. l:CV-93-1526, ¶ 28). SASMI “maintains a benefit program under which it enters into agreements with certain employers and agrees to make contributions to certain employee benefit funds on behalf of the Fund’s participants.” (Id., ¶ 30). “SASMI entered into an agreement with [each defendant employer] under which it agreed to pay to Plaintiff Funds contributions for each hour worked, on the job covered by the agreement, by [the defendant’s] employees who were participants in Plaintiff Funds.” (Id., ¶ 31) (brackets added). The Union and each employer executed an addendum to the collective bargaining agreement requiring the employer “to contribute additional monies to SASMI to be used solely for the payment of benefits by SASMI under its agreement with” the employer. (Id., ¶ 32). Plaintiffs aver that SASMI has failed to make the contributions to the Funds as required by its agreement with the employers, and the plaintiffs, as “intended third party beneficiaries” of that agreement seek recovery against it. (Id., ¶¶ 34 and 35).

Because the complaints invoked supplemental jurisdiction under 28 U.S.C. § 1367, it appeared that plaintiffs were setting forth a state law cause of action, so SASMI understandably moved to dismiss based on preemption of state law in relation to ERISA plans. See generally Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139, 111 S.Ct. 478, 483, 112 L.Ed.2d 474, 484 (1990). However, in opposition to the motion to dismiss, the plaintiffs argue that they are really setting forth a federal common law claim, relying on case law recognizing the authority of federal courts to create such a cause of action under the law of trusts in connection with ERISA-regulated plans. See Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). Thus, although the plaintiffs probably originally intended Count Three to be a state law cause of action, the issue presented is whether fiduciaries of ERISA plans can assert a federal common law claim against a party that has contracted with an employer to pay the employer’s obligations to the ERISA plans as intended third party beneficiaries of that contract. See Provident Life & Accident Insurance Co. v. Waller, 906 F.2d 985, 989 (4th Cir.1990) (“it is well settled that the courts may excuse pleading defects if the facts alleged in the complaint demonstrate the existence of a substantial federal question”).

As conceded by SASMI, Congress has authorized federal courts to create an ERISA common law cause of action when it is “necessary to fill in interstitially or to otherwise effectuate the statutory pattern enacted in the large by Congress,” Plucinski I.A.M. National Pension Fund, 875 F.2d 1052, 1056 (3d Cir.1989) (internal quotation marks and quoted case omitted), although the courts should not do so lightly. Id.

SASMI argues, however, that a common law cause of action should not be recognized here because ERISA already provides a remedy by authorizing suit by a fiduciary against an employer for delinquent contributions. See Bricklayers And Allied Craftsmen International Union Local SS Benefit Funds v. America’s Marble Source, Inc., 950 F.2d 114, 121 (3d Cir.1991) (noting that authority for such a suit arises under 29 U.S.C. [958]*958§§ 1132(a)(3), 1132(g)(2) and 1145). According to the defendant, when ERISA already provides a remedy, no common law cause of action can be created.

If the Funds were trying to sue only the employers under federal common law, we would agree with the defendant. See Hazier v. Midwest Fasteners, Inc., 908 F.2d 1155, 1162 and n. 8 (3d Cir.1990) (claim by beneficiaries of an ERISA plan styled as one under federal common law was really one under section 1132(a)(1)(B) since that section authorized the cause of action being pursued). However, the Funds are also suing a party that contracted with the employers to make the contributions to the Funds required by the collective bargaining agreement. ERISA does not provide a cause of action in these circumstances, and it is therefore necessary to decide whether the plaintiffs can assert a common law cause of action. In making that decision, it is not fatal to the potential claim that ERISA provides a remedy against the employers.

Northeast Department ILGWU Health and Welfare Fund v. Teamsters Local Union No. 229 Welfare Fund, 764 F.2d 147 (3d Cir.1985), supports the latter point.

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881 F. Supp. 955, 1994 U.S. Dist. LEXIS 20098, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sheet-metal-wrks-local-44-v-scranton-sheet-metal-pamd-1994.