The Board of Trustees v. ILA Local 1740, AFL-CIO

CourtCourt of Appeals for the First Circuit
DecidedAugust 22, 2024
Docket22-1872
StatusUnpublished

This text of The Board of Trustees v. ILA Local 1740, AFL-CIO (The Board of Trustees v. ILA Local 1740, AFL-CIO) 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
The Board of Trustees v. ILA Local 1740, AFL-CIO, (1st Cir. 2024).

Opinion

Not for Publication in West's Federal Reporter

United States Court of Appeals For the First Circuit

Nos. 22-1591; 22-1872

THE BOARD OF TRUSTEES, in its capacity as trustees and fiduciaries of the ILA PRSSA PENSION FUND,

Plaintiff, Appellee,

v.

ILA LOCAL 1740, AFL-CIO, an Unincorporated Labor Organization,

Defendant, Appellant,

JOHN DOES 1 THROUGH 10, inclusive,

Defendants.

APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO

[Hon. Silvia Carreño-Coll, U.S. District Judge]

Before

Montecalvo, Lipez, and Thompson, Circuit Judges.

Carlos R. Paula, with whom Jaime E. Picó-Rodríguez and Labor Counsels, LLC were on brief, for appellant. Clarissa A. Kang, with whom Dylan D. Rudolph, Catherine L. Reagan, Trucker Huss, APC, Enrique J. Mendoza Mendez, and Mendoza Law Offices were on brief, for appellee. August 22, 2024 THOMPSON, Circuit Judge. The International

Longshoremen's Association ("ILA") is the largest labor union of

maritime workers in North America. This appeal asks us to consider

whether two of its Puerto Rico labor union affiliates, Appellant

ILA Local 1740 ("Local 1740") and ILA Local 1575 ("Local 1575"),

merged in August 2015 following their execution of a Merger

Agreement. Appellee, the Board of Trustees of the ILA PRSSA

Pension Fund (the "Board") says yes, the merger happened and sued

Local 1740, as the surviving ILA entity, for the collection of

outstanding financial obligations it says Local 1575 owed to the

ILA PRSSA Pension Fund (the "Pension Fund"), an ERISA pension

benefit plan that the Board manages. Responding to cross motions

for summary judgment, the district court sided with the Board and

awarded it damages and attorney's fees. Now, before us, Local

1740 insists that the district court got it all wrong chiefly

because it erroneously found that the merger occurred after

incorrectly refusing to consider relevant extrinsic evidence, and

after failing to find the record replete with genuine issues of

disputed material fact relevant to the hotly contested merger

controversy. Writing just for the parties, we assume their

familiarity with the facts, procedural history, and arguments

presented -- which we reference only as needed to give the gist

behind why we find ourselves affirming the judgment below for

substantially the same reasons offered by the district judge.

- 3 - HOW WE GOT HERE1

In March 2015, a (metaphorical) storm was brewing at the

Port of San Juan (the "Port") in San Juan, Puerto Rico. There,

Horizon Lines, LLC ("Horizon"), a stevedoring company,2 ceased its

operations at the Port. At the time of the shutdown, Horizon was

the exclusive employer of workers belonging to Local 1575. The

result was bedlam: All Local 1575 members lost their jobs. And,

in the wake of Horizon's departure another stevedoring company,

Luis A. Ayala Colon Sucrs., Inc. ("Ayala"), expanded its operations

and took over Horizon's former piers. Union strife ensued3 because

Local 1575 members believed they were contractually entitled to

continue working their old docks. But Ayala already had existing

contracts with other ILA chapters, specifically Locals 1901, 1902,

and 1740, similarly operating at the Port. Seeking to calm the

tempest and simplify the organizational structures, ILA --

pursuant to a provision within its Constitution -- decided to

exercise its authority and merge the four ILA Locals operating at

1 We draw the relevant facts presented herein from the parties' statements of undisputed facts.

2 For the less initiated, stevedoring simply refers to the process of loading and unloading ships in port. Stevedore, Merriam-Webster, https://www.merriam-webster.com/dictionary/stevedor ing (last visited August 6, 2024) [perma.cc/X9PV-T8L3].

3 For example, Ayala filed National Labor Relations Board ("NLRB") charges against Local 1575 for "picketing the facilities of [Ayala], the Employer, and blocking all ingress and egress to and from the facilities of the Employer at its Piers E and F."

- 4 - the Port into one consolidated local. ILA made this decision after

"finding that a merger [was] in the best interests of all the union

members involved." It then designated Local 1740 to be the last

man standing. Following that decision, authorized representatives

of the four Locals executed a Merger Agreement that, by its terms,

purportedly became effective August 1, 2015.

Of import to the dispute here is the Pension Fund, a

multiemployer benefit plan established in 1973, and maintained

under the Employee Retirement Income Security Act of 1974 ("ERISA")

and the Multiemployer Pension Plan Amendments Act of 1980

("MPPAA"), which provides pension, retirement, and other related

benefits to its participants. The Trust Agreement is administered

by the Board and ERISA sets forth its fiduciary duties. Those

responsibilities include collecting liabilities owed to the

Pension Fund from participating employers. Local 1575, which prior

to the merger had been a participating plan employer, owed the

Pension Fund delinquent pension contributions as well as

withdrawal liability payments4 because of a mass withdrawal of

4 UnderERISA, the federal statute regulating employee benefit plans, an employer that has assumed an obligation to contribute to and subsequently withdraws in whole or in part from a multiemployer pension plan is liable for its allocable share of any underfunding. See 29 U.S.C. § 1381. The liability amount is calculated based on a formula set forth in 29 U.S.C. § 1381 entitled "Withdrawal liability established; criteria and definitions."

- 5 - employers from the Pension Fund5 following Horizon's cessation of

operations at the Port. Unlike Local 1575, Local 1740, the

remaining ILA-merged entity at the Port, was not an employer to

the Pension Fund at issue here.

After sending multiple notices and demands for payment

to Local 1740, all of which went unanswered, the Board filed suit

in August 2018 seeking to collect Local 1575's delinquent financial

obligations to the Pension Fund from Local 1740, contending it had

assumed Local 1575's liabilities when the unions merged and was

therefore contractually liable for Local 1575's preexisting debt

obligations.6 During the summary judgment proceedings below, Local

1740 advanced several arguments as to why it was not liable to the

Pension Fund. However, as most pertinent to our ensuing

discussion, Local 1740 primarily argued that the merger between it

and Local 1575 was never effectuated because the Merger Agreement

contained several conditions precedent that Local 1575 had to

fulfill to complete the merger, none of which had been done.

5 Those withdrawing from the Pension Fund were Horizon Lines of Puerto Rico (due to Horizon shutting down its Port operations), ILA Local 1575 AFL-CIO, ILA New York AFL-CIO (ITF Inspector ILA), ILA-PRSSA Welfare Fund, and ILA-PRSSA Pension Fund.

6 In its complaint, the Board filed two claims against all defendants: (1) withdrawal liability under ERISA § 4201, 29 U.S.C. § 1381

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