Petition — Bricklayers Fringe Benefit Funds, Metropolitan Area v. North Perry Baptist Church of Pontiac

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78-1758 J] MAY 24 90s

scastitcaeaesianitiniasiniaiiiaaia ilies ie ee

IN THE

Supreme Court of the United States

October Term, 1978

——--#

No. 78-

°

BRICKLAYERS FRINGE BENEFIT FUNDS, METROPOLITAN

AREA, a voluntary unincorporated trust fund, and the

DETROIT METROPOLITAN AREA EXECUTIVE COMMITTEE

OF THE BRICKLAYERS, MASONS AND PLASTERERS

INTERNATIONAL UNION OF AMERICA, AFL-CIO, a

voluntary unincorporated labor organization,

Petitioners,

v.

NORTH PERRY BAPTIST CHURCH OF PONTIAC, a Michigan

ecclesiastical corporation, WILLIAMSON COUNTY BANK, a

Tennessee banking corporation, and B. R. THOMAS,

Respondents.

4

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT “eal

5

SHELDON M. MEIZLISH

2437 First National Building

Detroit, Michigan 48226

ROLLAND R. O’HARE

1000 Farmer Street

Detroit, Michigan 48226

Counsel for Petitioners

OF COUNSEL:

MARSTON, SACHS, NUNN, KATES,

KADUSHIN & O’HARE, P.C.

1000 Farmer Street

Detroit, Michigan 48226

Interstate Brief & Record Co., Wurlitzer Bldg., 1509 Broad. ay, Detroit, MI 48226

962-8745 962-8746

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TABLE OF CONTENTS

Page

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i la Vaca sah vent nndsae's « 2

a ee ee eine GN ys Wh p03 oo «4 to 0 B'S e's 2

QUESTIONS PRESENTED ................0.0006. 3

STATUTES AND RULES INVOLVED ............. 3

Senses (or. irc CASE ..........: AS CE Poe 5

REASONS FOR GRANTING THE WRIT........... 7

ES eer ge Wc aka k son 54.04 3 54 dese s 8s 19

APPENDIX:

1. Initial Ruling of District Court (September

NORM Oe alk we 646, vd o'b ecb ace oe > Al

2. District Court’s Order of Dismissal (January

I Rash cigs SES 04 F444 4 aw a0 on 8 A2

3. District Court’s Amended Order of

Dismissal (January 21, 1976) ............... A5

4. District Court’s Order (Re: Defendant B. R.

Thomas) (January 18, 1977) .............4.. Ab

5. Opinion of Court of Appeals (January 19,

ES Wiehe on 6.5 va 0an so cis esd oe wes A7

il

CITATIONS

Page

Statutes:

Employee Retirement Income Security Act of

1974, 29 U.S.C. §§1001, et seq. ..... 6,7,13,14,15,17

Mechanics’ Lien Law (Michigan), M.C.L.A.

§§570.1, et seq. (M.S.A. §§26.281, et

SORTS: civtecskis vaciacniewateueos eel 4,5,6,11,12

Labor-Management Relations Act of 1947, as

amended, 29 U.S.C. §§141, et seq. ...... 6,13-17

Miller Act, 40 U.S.C. §§270a, et seq. .......... 10,11

Regulations:

Department of Labor Prohibited Transaction

Exemption 76-1 (1976 P-H Inc., Pension,

oo rere ery Per yee 15

Rules:

Federal Rule of Civil Procedure 64 ........ 3,6,17,18

Cases:

Aldinger v Howard, Treasurer of Spokane

County, 427 U.S. 1, 96 S. Ct. 2413, 49 L.Ed.2d

SPO CENT has io eva cde ces Ue eR eae 10

J. W. Bateson Company, Inc. v United States ex

rel. Board of Trustees of the National

Automatic Sprinkler Industry Pension Fund,

434 U.S. 586, 98 S. Ct. 873, 55 L.Ed.2d 50

bi PEPER POE UST CTET EPR TT ee tere 10,11

iil

Page

Bernard v Indemnity Insurance Company of

North America, 162 Cal. App.2d 479, 329 P.2d

OE, SOC SUES vena Paws PETA OM Oes faces 10,11

Crabtree v Lewis, 86 Wash.2d 282, 544 P.2d 10

CRS ett wel ein Tee CERO KIRW Gils Ge KAe es 11

General Insurance Company of America v Lamar

Corporation, 482 F.2d 856 (C.A. 6, 1973) .... 7,8

Martin v William Casey & Sons, Inc., 8 N.Y.2d

728, 201 N.Y.S.2d 104, 167 N.E.2d 646 (1960),

affirming 5 App. Div.2d 185, 170 N.Y.S.2d 228

CE is SRS TL Cva Re etna Shek ees 10,11

Mathis v Thunderbird Village, Inc., 236 Or. 425,

coe So of EP erry er epee eee 10

Pipeline Industry Benefit Fund v Aetna Casualty

and Surety Insurance Company, 503 P.2d 1286

te . Ge te a rr 10

Rosadio v Wyman, 397 U.S. 397, 90 S. Ct. 1207,

Oe CE IE TOE A Bd ks cide k ea ek ees ws 9

Selby v Ford Motor Company, 590 F.2d 642 (C.A.

rN a Sie Se Ci wks ei de iee ns Sed ASO OA 8 ke 8

Spartan Asphalt Paving Company v Grand Ledge

Mobile Home Park, 400 Mich. 184, 253

FELON A MOORE DT Vis VLAD Nice eee ese E S500 5 12

Textile Workers Union of America v_ Lincoln

Mills of Alabama, 353 U.S. 448, 77 S. Ct. 912,

ge RL oy.” Re ee 13,14,16,17

Tobler and Oliver Construction Company v

Board of Trustees of the Health and Insurance

Fund for Carpenters Local Union No. 971, 84

Nev. 438, 442 P.2d 904 (1968) ................ 10

iv

Page

United Mine Workers v Gibbs, 383 U.S. 715, 86

S. Ct. 1130, 16 L.Ed.2d 218 (1966) .......... ig | Supreme Court of the United States

United States ex rel. Sherman v Carter, 353 U.S. Cctanas Tus: 8

210, 77 S. Ct. 793, 1 L.Ed.2d 776 (1957) ..... 10,11 F

IN THE

United States Fidelity and Guaranty Company v

Arizona State Carpenters Health and Welfare No. 78+

Trust Fund, 584 P.2d 60 (Ariz. App., 1978) .... 10

Miscellaneous:

Abn, Se Residential Construction BRICKLAYERS FRINGE BENEFIT FUNDS, METROPOLITAN

Industry,”” In Adams (ed.), The Structure of

; AREA, a voluntary unincorporated trust fund, and the

American Industry 114 (The Macmillan DETROIT METROPOLITAN AREA EXECUTIVE COMMITTEE

Company, New York, N.Y. 2d ed. 1954) ...... 8 OF THE BRICKLAYERS, MASONS AND PLASTERERS

: INTERNATIONAL UNION OF AMERICA, AFL-CIO, a

Lefkoe, The Crises in Construction (The Bureau of voluntary unincorporated labor organization,

National Affairs, Inc., Washington, D.C., Petitioners,

| 4 |) rrr 8 v

NORTH PERRY BAPTIST CHURCH OF PONTIAC, a Michigan

ecclesiastical corporation, WILLIAMSON COUNTY BANK, a

Tennessee banking corporation, and B. R. THOMAS,

Respondents.

——_@e ——__

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

e

Petitioners, the Bricklayers Fringe Benefit Funds,

Metropolitan Area, and the Detroit Metropolitan Area

Executive Committee of the Bricklayers, Masons and

2

Plasterers International Union f America, AFL-CIO,!'

pray that a writ of certiorari issue to review the

judgment of the United States Court of Appeals for the

Sixth Circuit entered in this cause on January 19, 1979.

CITATIONS TO OPINIONS BELOW

The opinion of the Court of Appeals, which is

reported at 590 F.2d 207, appears in the appendix to

this petition. The District Court’s initial ruling, its

Order of January 9, 1976, which contained an opinion,

its Amended Order of Dismissal as to Pendent

Defendants and its Order of January 18, 1977, all of

which are unreported, also appear in the appendix to

this petition.

JURISDICTION

The judgment of the Court of Appeals was entered on

January 19, 1979. No application was made for a

rehearing. On March 27, 1979, an order was entered

extending the time for filing a petition for writ of

certiorari to June 18, 1979. The jurisdiction of this Court

is invoked under 28 U.S.C. §1254(1).

' Hereinafter, ‘Bricklayers’ Union”.

QUESTIONS PRESENTED

1. Where a pendent claim (although involving

defendants not subject to the federal claim) was an

integral part of the federal claim, did the District Court

abuse its discretion in refusing to decide the pendent

claim?

2. Where a remedy established by state law was

used for the purpose of securing satisfaction (in whole

or in part) of a federal labor claim, was the District

Court required by Federal Rule of Civil Procedure 64 to

decide the pendent claim?

STATUTES AND RULE INVOLVED

1. Federal Rule of Civil Procedure 64 provides:

“At the commencement of and during the course

of an action, all remedies providing for seizure

of person or property for the purpose of securing

satisfaction of the judgment ultimately to be

entered in the action are available under the

circumstances and in the manner provided by

the law of the state in which the district court is

held, existing at the time the remedy is sought,

**** The remedies thus available include

arrest, attachment, garnishment, replevin,

sequestration, and other corresponding or

equivalent remedies, however designated and

regardless of whether by state procedure the remedy

is ancillary to an action or must be obtained by an

independent action” (emphasis added).

4

2. The Michigan mechanics’ lien law, P.A. 1891, No.

179, as amended, M.C.L.A. §§570.1, et seq. (M.S.A°

§§26.281, et seq.), provides in relevant parts, as follows:

(i) Section 1: “Every person who shall, in

pursuance of any contract, express or implied,

written or unwritten, existing between himself

as contractor. and the owner, part owner or

lessee of any interest in real estate, ... furnish

any labor or materials in or for building,

altering, improving, repairing, erecting,

ornamenting or putting in any ... building...

and every person who shall be ... laborer .

perform any labor or furnish materials ... to

such original or principal contractor, or any

subcontractor, in carrying forward or completing

any such contract, shall have a lien therefor upon

such... building . . . to the extent of the right,

title and interest of such owner, part owner or

lessee at the time work was commenced .. . and

also to the extent of any subsequent acquired

interest of any such owner, part owner or lessee

.... M.C.L.A. §570.1 (M.S.A. §26.281).

(ii) Section 5: ‘Every person, or his agent or

attorney, Whether contractor, subcontractor,

materialman or laborer, who wishes to avail

himself of the provisions of this statute, shall

make and record in the office of the register of

deeds .. . a just and true statement or account of

the demand due him over and above all legal

setoffs, setting forth the time when such

materials were furnished or labor performed,

and for whom, and containing a correct

description of the property to be charged with

the lien, and the name of the owner, part owner

or lessee, if known, which statement shall be

verified by affidavit. ****’ M.C.L.A. §570.5

(M.S.A. §26.285), emphasis added.

(iii) Section 10: ‘Proceedings to enforce such

lien shall be by bill in chancery, under oath, and

notice of lis pendens recorded in the office of the

register of deeds, shall have the effect to

continue such lien pending such proceedings.

*** *" M.C.L.A. §570.10 (M.S.A. §26.290).

(iv) Section 25: ‘All liens or claims for liens

which may arise or accrue under the terms of

this act shall be assignable, and proceedings to

enforce such liens may be maintained by and in

the name of the assignees, who shall have as full

and ample power to enforce the same as if such

proceedings were taken under the provisions of

this act by and in the name of the lien claimant

[claimants] themselves. * * * *’’ M.C.L.A.

§570.25 (M.S.A. §26.305). 3

STATEMENT OF THE CASE?

Pursuant to a collective bargaining agreement which a

contractor? had entered into with the Bricklayers’

Union, a labor organization representing employees in

an industry affecting commerce, the contractor (as

employer) was required to make contributions for fringe

benefits for, or in respect to the account of, those of his

employees who were represented by the Bricklayers’

,

> Unless the context indicates otherwise, parenthetical reterences

preceded by “R” refer to the pages of the joint appendix filed with

the Court of Appeals.

* Raymond H. Bellows who did business as Ray Bellows

Masonry. Bellows was a defendant in the District Court. He did not

appeal the judgment, following default, which was entered against

him in that court.

6

Union. Under the contract, payment of such

contribution should have been made to the Bricklayers

Fringe Benefit Funds, Metropolitan Area, a trust fund

established under, and administered pursuant to,

Section 302 of the Labor-Management Relations Act of

1947, as amended, hereinafter ‘“‘LMRA’”’, 29 U.S.C. §186,

and the Employee Retirement Income Security Act of ©

1974, 29 U.S.C. §§1001, et seq. The contractor failed to

make the contributions for fringe benefits* and the

Bricklayers’ Union and the Bricklayers Fringe Benefit

Funds, Metropolitan Area, instituted suit against him

under LMRA §301, 29 U.S.C. §185. The District Court

ultimately entered a judgment, following default,

against the contractor for the amount of his

indebtedness. (R4 — R6, R12 — R15 and R27 — R28.)

Approximately 47 percent of the contractor’s

indebtedness accrued during the course of a

construction project that he had performed for B. R.

Thomas and the North Perry Baptist Church of Pontiac

on land owned by the Church and the Williamson

County Bank. To protect the interests of the contractor's

bricklayer-employees with respect to that portion of his

indebtedness which had accrued during the course of

this construction project, the Bricklayers’ Union,

pursuant to Michigan’s mechanics’ lien law, M.C.L.A.

§§570.1, et seq. (M.S.A. §§26.281, et seq.), recorded a

mechanics’ lien on the aforementioned realty. Count III

* Contributions are payable for each hour worked by each

bricklayer. The rights of-the bricklayer and his family to coverage for

medical, hospital, pension, optical, dental, pooled holiday and other

benefits are entirely dependent upon proper payment of

contributions by employers. Participation in plaintiffs’ programs is a

significant part of the bargained-for compensation of bricklayers and

an important aspect of their families’ economic security.

¥

of the Amended Complaint which was filed in the

District Court sought to foreclose that mecnanics’ lien.

(R15 — R18.)

The District Court dismissed Count III.5 (R30 and

R34 — R37.) the Sixth Circuit, on January 19, 1979,

affirmed, holding that (1) the District Court did not

abuse its discretion in declining to exercise its pendent

jurisdiction over the State mechanics’ lien claim and (2)

the petitioners’ foreclosure claims did not fall within the

remedies contemplated by Rule 64 of the Federal Rules

of Civil Procedure.

REASONS FOR GRANTING THE WRIT

The holding below, as it applies to an industry as

fragmented and interdependent as the construction

industry, represents a serious diminution of the

protection of workers’ rights by the federal judiciary

and, as it involves collection of amounts employers

have been found to owe to fringe benefit programs,

deprives fiduciaries of those programs of a needed

device to do that which the Employee Retirement

Income Security Act of 1974, 29 U.S.C.A. §§1001, et

seq., commands to protect workers and their families.

1. The problems inherent in the construction

industry are well known. See, e.g. Judge (now Solicitor

General) McCree’s opinion for the Sixth Circuit in

* Respondent B. R. Thomas was also a party (defendant) to the

“pendent” claim. At the District Court, his counsel stated that he

(Thomas) had no interest in the subject matter of the controversy.

No appearance was made on his behalf in the Court of Appeals and

it is unlikely that any appearance for him will be made in this

Court.

8

General Insurance Company of America v Lamar

Corporation, 482 F.2d 856, 860 (1973). Many

construction firms have little capital. Small firms which

handle only one job at a time (a not untypical situation)

cover all of their overhead with revenues from that job

(or out of profits from earlier jobs). Indeed, one of the

things peculiar to the construction ‘industry is that

financing is outside the control of contractors.

Financing is obtained from, or through, the owner. See

Abrams, “The Residential Construction Industry,” in

Adams (ed.), The Structure of American Industry, pp.

114, 117, 123-24 (The Macmillan Company, New York,

N.Y., 2d ed. 1954), and Lefkoe, The Crises in

Construction, pp. 30 — 43 (The Bureau of National

Affairs, Inc., Washington, D.C., 1970).

It is because of this situation that all states including

Michigan have enacted statutes, such as the mechanics’

lien statute, imposing derivative liability for labor and

labor related claims in the construction industry. The

purpose of each is to impose responsibility for payment

of such claims on the person who actually controls the

purse strings. If an employer for any reason does not

pay all of his labor obligations, the party who benefited

from the labor is derivatively liable. .

It is obvious that the claim against the respondents

(the pendent defendants) and the claim against the

employer are related. Absent the claim against the

* The Sixth Circuit was recently faced with construction industry

problems in Selby v Ford Motor Company, 590 F.2d 642 (Jan. 11,

1979), and the problems were discussed at some length at pp.

647-48.

9

employer, there would be no claim against the

respondents. If the employer had sati: ed that portion

of the claim which accrued on the respondents’ project,

then petitioners claim against the respondents would

also be satisfied. We have stressed the relationship

between the principal federal claim against the ©

employer and the pendent claim because, at the original

hearing on the respondents’ motion for summary

judgment, the District Court stated that “the claims are

totally unrelated’’ (R30)..In arriving at that conclusion,

the District Court was clearly in error.

The ‘‘commonsense policy of pendent jurisdiction” is,

this Court has stated, “‘the conservation of judicial

energy and the avoidance of multiplicity of litigation.”’

Rosadio v Wyman, 397 U.S. 397, 405, 90 S. Ct. 1207, 25

L.Ed.2d 442 (1970). For the doctrine to be applicable,

the ‘‘state and federal claims must arise from a common

nucleus of operative fact. But if considered without

regard to their federal or state character, a plaintiff's

claims are such that he would ordinarily be expected to

try them all in one judicial proceedings, then assuming

substantiality of the federal issues, there is power in

federal court to hear the whole.”’ United Mine Workers v

Gibbs, 383 U.S. 715, 725, 86 S. Ct. 1130, 16 L.Ed.2d 218

(1966) (footnote omitted).

As has been indicated, there is such a relationship

between the federal and pendent claims here. The

federal claim arose pursuant to a collective bargaining

agreement the employer had entered into with the

Bricklayers’ Union. Absent that agreement, the

employer would not have been liable to petitioners.

Absent such liability, the respondents would have no

derivative liability to plaintiffs.

10

The Sixth Circuit, in affirming, recognized that the

District Court had ‘discretion to exercise jurisdiction

with respect to such pendent state claims under Aldinger

v Howard, 427 U.S. 1 (1976), and United Mine Workers v

Gibbs, 383 U.S. 715 (1966).” (Slip Opinion, p. 2.)

However, it held “that the District Judge did not abuse

his discretion in declining to exercise pendent

jurisdiction, especially in light of the fact that the

foreclosure claims appear to raise unresolved questions

of Michigan law.” ([bid.) However, nowhere in the

opinion is it stated what “unresolved” questions of

Michigan law are raised by the pendent claim.

Virtually every court. which has considered the

situation, has held that contributions owing to union

trust funds can be recovered by the Trustees of such

funds under either a mechanic’s lien statute or the

Miller Act, 40 U.S.C.A. §§270a, et seq., or a state

equivalent. J]. W. Bateson Company, Inc. v United States

ex rel. Board of Trustees of the National Automatic

Sprinkler Industry Pension Fund, 434 U.S. 586, 588, 98 S.

Ct. 873, 55 L.Ed.2d 50, n. 1 (1978); United States ex rel.

Sherman v Carter, 353 U.S. 210, 218-20, 77 S. Ct. 793, 1

L.Ed.2d 776 (1957); United States Fidelity and Guaranty

Company v Arizona State Carpenters Health and Welfare

Trust Fund, 584 P.2d 60 (Ariz. App., 1978); Bernard v

Indemnity Insurance Company of North America, 162 Cal.

App. 2d 479, 329 P.2d 57 (1958); Tobler and Oliver

Construction Company v Board of Trustees of the Health

and Insurance Fund for Carpenters Local Union No. 971, 84

Nev. 438, 442 P.2d 904 (1968); Pipeline Industry Benefit

Fund v Aetna Casualty and Surety Insurance Company,

503 P.2d 1286 (Okla. App. 1972); Mathis v Thunderbird

Village, Inc., 236 Or. 425, 389 P.2d 343 (1964); Martin v

William Casey & Sons, Inc., 8 N.Y.2d 728, 201 N.Y.S.2d

1]

104, 167 N.E.2d 646 (1960), affirming 5 App. Div.2d 185,

170 N.Y.S.2d 228 (1958); and Crabtree v Lewis, 86

Wash.2d 282, 544 P.2d 10 (1975).

It is true that most of the cases cited in the previous

paragraph construed the Miller Act, supra, or state

equivalents, and not a mechanics’ lien statute. But this

distinction is of no importance. As this Court has

stated, the purpose of such statutes “was designed to

provide an alternative remedy to the mechanics’ liens

ordinarily available on private construction projects.”

|. W. Bateson Company, Inc., supra, 434 U.S. at 589. See

also United States ex rel. Sherman v Carter, supra, 353

U.S. at 216-17, and Bernard v Indemnity Insurance

Company of North America, supra, 162 Cal. App. 2d at

484-85, 329 P.2d at 60-61.

There is no reason to construe the Michigan

mechanics’ lien statute differently than the manner in

which this Court’ or the state courts have construed the

statutes involved in those cases. Certainly, there is no

contrary Michigan authority. Indeed, the Michigan

statute is consistent with this position. Section 5 of the

statute allows any laborer “‘or his agent or attorney’ to

make and record the lien. M.C.L.A. §570.5 (M.S.A.

§26.285). Section 25 of the Michigan statute authorizes

assignment of the lien and provides that ‘‘proceedings

to enforce such liens may be maintained by and in the

name of the assignees, who shall have as full and ample

Although the union trust funds did not get any relief in the

J]. W. Bateson Compeny, Inc., case, the reason for the demi! of reliet

has no relevance to any issues in the instant matter. In this

connection, see notes 5 and 6 to the Court's opinion in that case and

accompanying text.

12

power to enforce the same as if such proceedings were

taken under the provisions of this act by and in the

name of the lien claimant [claimants] themselves.

sew’ M.C.L.A. §570.25 (M.S.A. §26.305). And, as the

Michigan Supreme Court has stated, the Michigan

‘mechanics’ lien statute, because of its remedial nature,

must be construed liberally to carry out its intended

purpose of benefiting and protecting ... laborers... .”

Spartan Asphalt Paving Company v Grand Ledge Mobil

Home Park, 400 Mich. 184, 188-89, 253 N.W.2d 646, 649

(1977). The fact that union trust funds are not explicitly

mentioned is irrelevant because, as the Michigan Court

said (although in a slightly different context) in that

case:

“The construction industry has become much

more specialized than it was in the Nineteenth

Century when the mechanics’ lien statute was

enacted. To accept defendant's invitation to rule

that an object is excluded from lien coverage

unless expressly mentioned in the statute would

have the effect of removing the specialty

contractors from the protection of the statute.

More importantly, it would contravene the intent

of the Legislature to provide a remedial liberally

construed statute ‘to establish, protect, and

enforce by lien the rights of mechanics and other

persons furnishing labor or materials for the’

improvement of land.’’ 400 Mich. at 190, 253

N.W.2d at 649-50.

Petitioners in this case are a group of trust funds

established under federal law for the sole and exclusive

purpose of providing pension, medical, dental,

hospital, optical, pooled holiday pay, disability and

other forms of union-negotiated security programs for

bricklayers and their families and the union which

represents those bricklayers.

13

Each trust fund is controlled by a Board of Trustees,

half of whom are selected by the union and half by the

employers. The programs they administer are the

results of collective bargaining. They have been subject

to the relevant strictures of the Labor-Management

Relations Act of 1947, as amended, 29 U.S.C. §§141, et

seq.,* since their inception.

The assets of the funds are composed entirely of

employer contributions and the income generated from

investment of those contributions. The ability of the

Funds to provide the types of benefits bargained for

rests upon collection of the sums due as contributions.

The rate of contribution is set by collective bargaining

and the agreements setting out the rates are enforceable

under Section 301 of LMRA, 29 U.S.C. §185. This

lawsuit was instituted pursuant thereto.”

As in all 301 litigation, the applicable law is federal

law ‘‘which the courts must fashion from the policy of

our national labor laws.” Textile Workers Union of

America v Lincoln Mills of Alabama, 353 U.S. 448, 456-57,

77 S. Ct. 912, 1 L.Ed.2d 972 (1957).

‘‘The Labor Management Relations Act

expressly furnishes some substantive law. It

points out what parties may or may not do in

certain situations. Other problems will lie in the

8 Particularly Section 302(c) (5) of LMRA, as amended, 29 U.S.C.

§186(c)(5), added to the statute 30 years ago as part of the

Taft-Hartley amendments.

° It appears that, insofar as employers are concerned, by virtue

of Section 502(e)(1) of the Employee Retirement Income Security Act

of 1974, 29 U.S.C. §1132(e)(1), the Federal District Courts have

exclusive jurisdiction of civil actions to recover fringe benefit

contributions.

14

penumbra of express statutory mandates. Some

will lack express statutory sanction but will be

solved by looking at the policy of the legislation

and fashioning a remedy that will effectuate that

policy. The range of judicial inventiveness will

be determined by the nature of the problem.”

Textile Workers v Lincoln Mills, supra, 353 U.S., at

457, citation omitted.

The fashioning after more than 20 years, continues.

The national labor policy in respect to employee

benefit plans has evolved over the years through

legislation, administrative regulation and _ judicial

decision. The most recent Congressional expression of

policy is the Employee Retirement Income Security Act

of 1974 (ERISA), 29 U.S.C. §§1001, et seq. ERISA

regulates virtually every aspect of the operation and

structure of funds such as those involved here.'” Its

ERISA specifically preempts all state laws dealing with

fiduciary responsibility, reporting and disclosure, vesting, funding

and related matters to the full extent such laws might otherwise

affect pension and welfare benefit plans. ERISA §514(a), 29 U.S.C.

§1144(a). It forbids any state to classify these plans as insurers,

banks, trust companies or investment companies in order to bring

them within state statutes regulating such institutions. ERISA

§514(b) (2) (B), 29 U.S.C. §1144(b) (2) (B). ERISA enforcement is the

responsibility of both the Department of Labor and the Internal

Revenue Service, which have supplemented the statute with an

impressive array of regulations and other interpretative materials

(e.g., see footnote 11, infra). In fact, new sections were added to the

Internal Revenue Code by ERISA which relate only to plans of the

sort involved in this litigation. E.g., ERISA §1014, 26 U.S.C. §413;

ERISA §1015, 26 U.S.C. §414; ERISA §2003(a), 26 U.S.C. §4975. The

federal concern with, involvement in and regulation of such funds

may fairly be characterized as pervasive.

-

=

Ne

15

principal purpose is to set standards and a system of

regulation which will safeguard the accrued benefits of

participant employees and their families.

“It is hereby declared to be the policy of this Act

to protect interstate commerce and the interests of

participants in employees benefit plans and their

beneficiaries, by requiring the disclosure and

reporting to participants and beneficiaries of

financial and other information with respect

thereto, by establishing standards of conduct,

responsibility and obligation for fiduciaries of

employee benefit plans, and by providing - for

appropriate remedies, sanctions and ready access

to the Federal courts” (emphasis added). ERISA

§2(b), 29 U.S.C. §1001(b).

Multi-employer plans, such as those involved in the

instant case are specifically included in ERISA’s

coverage (29 U.S.C. §1002(37)(A)). The Trustees are

fiduciaries whose duties and liabilities are defined, for

the first time, by federal law. It is part of that duty to

use every means available to them (which means the

courts — no other means being available) to collect

delinquent contributions and, except for limited

situations specifically covered by regulation, they risk

personal liability for deviation from that duty.''

'! See Prohibited Transaction Exemption 76-1 (1976 P-H Inc.

Pension Paragraph 110,083) in which the Department of Labor,

exercising its regulatory authority under ERISA, interprets Section

406(a)(1)(B) of the Act, 29 U.S.C. §1106(a)(1)(B), to require

collectively bargained multi-employer funds, as a matter of federal

law, to make “systematic, reasonable and diligent efforts to collect

delinquent contributions.”

16

It is part of national labor policy to allow enforcement

of collective bargaining agreements in federal courts.

That is what 301’s minimum meaning is.

The teaching of Lincoln Mills is that Section 301 is

more than a simple grant of jurisdiction. It carries with

it federal substantive law fashioned to effectuate

national labor policy, beginning (but not ending) with

the texts of the relevant statutes.

The protection of employee rights in pension and

welfare benefit programs and collection of the money

contracted for (and needed) to properly finance those

programs is a part of that national labor policy. A

remedy must be fashioned to “effectuate that policy’.

This Court has suggested sources:

“The range of judicial inventiveness will be

determined by the nature of the problem.

Federal interpretation of federal law will govern,

not state law. But state law, if compatible with

the purpose of §301, may be resorted to in order

to find the rule that will best effectuate the

federal policy. Any state law applied, however,

will be absorbed as federal law and will not be

an independent source of private rights.’’ Textile

Workers v Lincoln Mills, supra, 353 U.S., at 457,

citations omitted.

Collection of amounts due to employee pension and

welfare programs such as those involved here will not

be effectuated, it will be impeded, if the District Court's

order of dismissal is allowed to stand. Contrary to

Lincoln Mills, the remedies required to effectuate the

national labor policy in this regard will not be

“absorbed as federal law’’, but will be sliced off and

relegated to the exclusive jurisdiction of the state court.

17

One of the primary Congressional purposes in

enacting LMRA §§301 and 302 and the Employee

Retirement Income Security Act of 1974, was to protect

the wages and fringe benefits of employees. To sanction

the District Court’s refusal to exercise its jurisdiction

ignores the realities of the construction industry and

flies in the face of that expressed Congressional

purpose. When a construction employer is found to

have failed to pay the promised contributions to

provide pension and welfare benefits, the remedy must

include the right to levy upon and collect from those

who actually hold the money, the customers, the

financing agencies and the general contractors. It is

neither beyond the power of the federal courts nor “‘the

range of judicial inventiveness’ required by Lincoln

Mills to fashion an effective, not an illusory or partial,

remedy. In dismissing the pendent claim, the District

Court abused its discretion.

2. Petitioners, both in the District Court and the

Court of Appeals, also argued that the mechanics’ liea

foreclosure claim fell within the remedies contemplated

by Rule 64 of the Federal Rules of Civil Procedure. Rule

64 provides in relevant parts that:

‘At the commencement of and during the course

of an action, all remedies providing for seizure

of ... property for the purpose of securing

satisfaction of the judgment ultimately to be

entered in the action are available under the

circumstances and in the manner provided by

the law,of the state in which the district court is

held, existing at the time the remedy is sought,

The remedies thus available include

arrest, attachment, garnishment, replevin,

sequestration, and other corresponding or

18

equivalent remedies, however, designated and

regardless of whether by state procedure the

remedy is ancillary to an action or must be

obtained by an independent action.”

Both the District Court and the Court of Appeals

rejected this contention. The Sixth Circuit “[did] not

believe that a lien foreclosure proceeding is ‘equivalent’

to any of these ancillary remedies because it is not a

remedy against the judgment debtor or against a person

who is personally indebted to, or in the possession of the

property of, the judgment debtor.’’ (Slip Opinion, p. 3,

emphasis added.) However, in imposing the

requirement that, as a prerequisite for using Rule 64,

the remedy sought must be a “remedy against the

judgment debtor or against the person who is

personally indebted to, or in the possession of the

property of, the judgment debtor’, the Sixth Circuit

added an embellishment not found in the rule which

appears to be contrary to its purpose.

3. The actions of the District Court and the Court of

Appeals serve no policy consideration. Their sole result

will be to place one more hurdle in the already difficult

path of enforcing the claims of laborers in the

construction industry for bargained-for wages and

fringe benefits. The actions of the court below benefit

the respondents not one iota. If sustained by this Court,

the inevitable result will be refiling in a state court.

As a general policy consideration, the inevitable

consequence of the decision of both courts below will

be that a multiplicity of lawsuiis in different courts will

be required to collect the varying portions of the

identical construction industry labor claim.

19

CONCLUSION

For the foregoing reasons, this petition for writ of

certiorari should be granted.

Respectfully submitted,

SHELDON M. MEIZLISH

2437 First National Building

Detroit, Michigan 48226

ROLLAND R. O’HARE

1000 Farmer Street

Detroit, Michigan 48226

Counsel for Petitioners

#

OF COUNSEL:

MARSTON, SACHS, NUNN, KATES,

KADUSHIN & O’HARE, P.C.

1000 Farmer Street

Detroit, Michigan 48226

Dated: May 3, 1979

APPENDIX

Al

EXCERPT OF PROCEEDINGS

— SEPTEMBER 29, 1975

(In the District Court of the United States

For the Eastern District of Michigan

Southern Division)

Bricklayers Benefit Funds, Metropolitan Area, et al.,

Plaintiffs, vs Raymond H. Bellows, et al., Defendants.

Case Number 5-70231

Proceedings had in the above-entitled matter before

the HONORABLE ROBERT E. DeMASCIO, District

Judge, Detroit, Michigan, on Monday, September 29,

1975.

Appearances: Sheldon M. Meizlish, Esq., Appearing

on behalf of the Plaintiffs.

Richard A. Campbell, Esq., Appearing on behalf of

the Defendants.

Elizabeth E. Montgomery, Official Court Reporter

961-5965.

+ +

(6) The Court: Well, the Court agrees with the

Defendant. There is no pendent jurisdiction here. The

claims are totally unrelated.

The motion to dismiss is granted. These two are

totally unrelated to the action.

You present an order, Counsel, and have Mr.

Meizlish approve it as to form.

* +

ORDER

(United States District Court

Eastern District of Michigan

Southern Division)

Bricklayers Fringe Benefit Funds, Metropolitan Area,

a voluntary unincorporated trust fund, et al., Plaintiffs,

v. Raymond H. Bellows, individually and dib/a Ray

Bellows Mason Contractors, et al., Defendants. Civil

No. 5-70231

Plaintiffs filed this action against defendant Raymond

H. Bellows under §301 LMRA, 29 U.S.C. §185, to

recover monies allegedly due and owing pursuant to the

terms of a collective bargaining agreement.' Plaintiffs

joined the North Perry Baptist Church and the

Williamson County Bank and seek to foreclose a

mechanics lien plaintiffs filed against them. The basis

for that lien is the same debt for which plaintiffs sue

defendant Bellows. Defendants North Perry Baptist

Church and Williamson County Bank moved to dismiss

pursuant to Rule 12(b) (1), Fed.R.Civ.P. These

defendants contend that the court lacks subject matter

jurisdiction. Plaintiffs argue that the court has pendent

jurisdiction to consider its claims against these

defendants. Alternatively, plaintiffs argue that Rule 64

Fed.R.Civ.P., which provides that all state remedies

providing for seizure of person or property to satisfy

judgments are available to federal court litigants,

somehow extends this court’s jurisdiction to parties

necessary for the implementation of those remedies.

' Plaintiffs obtained a default judgment against defendant

Bellows.

A3

The United States Supreme Court in Mine Workers v.

Gibbs, 383 U.S. 715 (1966) held that:

“Pendent jurisdiction, in the sense of judicial

power, exists whenever there is a claim ‘arising

under [the] Constitution, the Laws of the United

States, the Treaties made, or which shall be

made, under their Authority ...,’ U.S. Const.,

Art. III, §2, and the relationship between that

claim and the state claim permits the conclusion

that the entire action before the court comprises

but one constitutional ‘case.’ The federal claim

must have substance sufficient to confer subject

matter jurisdiction on the court .... The state

and federal claims must derive from a common

nucleus of operative fact.’’ p. 725

However, the Supreme Court also recognized that the

doctrine of pendent jurisdiction is one of discretion

whose “‘justification lies in considerations of judicial

economy, convenience and fairness to litigants... .”

Mine Workers v. Gibbs, at 726.

While this court may have the power to hear the state

claims under the standard in Mine Workers v. Gibbs, the

considerations outlined in that case for exercising our

discretion lead us to the conclusion that it would be

improper to invoke the doctrine in this case. Plaintiffs

have already received a default judgment against

defendant Bellows. At this juncture, the only claims left

are the state claims. Accordingly, fairness to these

litigants would require that a state court determine the

propriety of foreclosing a mechanics lien under these

Ad

circumstances.* Moreover, there would be little

economy achieved by hearing the state claims here,

rather than dismissing them with the result that

plaintiffs refile in state court.

We also reject plaintiffs’ alternative contention that

Rule 64 Fed.R.Civ.P. somehow provides this court with

jurisdiction over the state claims. Rule 82 Fed.R.Civ.P.

specifically provides that ‘‘These rules shall not be

construed to extend or limit the jurisdiction of the

United States District Courts... .’"-Having previously

held that jurisdiction over the state claim is not

otherwise present, the court is prevented by Rule 82

from using Rule 64 to obtain jurisdiction over the state

claims. We, therefore, lack jurisdiction over the

remaining defendants.

Accordingly, IT iS ORDERED that plaintiffs’

complaint be and the same hereby is dismissed.

s/ Robert E. DeMascio

United States District Judge

Dated: January 9, 1976

Without indicating any view on the merits of the state claims,

we note that this matter does not present a routine foreclosure of a

mechanics lien because it is plaintiffs and not the contractor that

supplied labor or materials who have perfected the lien.

A5

AMENDED ORDER OF DISMISSAL

AS TO PENDENT DEFENDANTS

(In the United States District Court

For the Eastern District of Michigan

Southern Division)

Bricklayers Fringe Benefit Funds, Metropolitan Area,

a voluntary unincorporated trust fund, et al., Plaintiffs,

vs Raymond H. Bellows, individually and dbia Ray

Bellows Mason Contractors, et al., Defendants. Civil

Action No. 75-70231

At a session of said Court held in the Federal

Building, Detroit, Michigan, on the 21st day of January,

1976.

Present! HONORABLE ROBERT E. DE MASCIO,

United States Distr -t Judge.

In accordance with Federal Rule of Civil Procedure

60(b), the last paragraph of this Court’s Order of

January 9, 1976, be, and it is hereby, amended to read

as follows:

Accordingly, IT Is ORDERED that plaintiffs’ amended

complaint be and the same is hereby dismissed as to

defendants North Perry Baptist Church of Pontiac and

the Williamson County Bank, and as to those

defendants only.

Hon. Robert E. DeMascio

United States District Judge

A True Copy

Henry R. Hanssen, Clerk

By Sherry Stamps, Deputy Clerk

A6

ORDER

(United States District Court

Eastern District of Michigan

Southern Division)

Bricklayers Fringe Benefit Funds, Metropolitan Area,

a voluntary unincorporated trust fund, et al., Plaintiffs,

v. Raymond H. Bellows, individualiy and d/b/a Ray

Bellows Mason Contractors, et al., Defendants. Civil

No. 5-70231

Plaintiffs in the above-captioned cause having filed

with the court a motion for default judgment against

defendant B. R. Thomas; and the court having read the

briefs of the parties and having heard oral argument on

said motion; and it appearing to the court that all

parties agree that defendant B. R. Thomas is similarly

situated to the defendant North Perry Baptist Church of

Pontiac and defendant Williamson County Bank, which

defendants were previously dismissed from this lawsuit

because the court declined to exercise its pendent

jurisdiction over the claims involving them, see Order

of January 9, 1976; and the court being otherwise fully

advised in the premises;

NOW THEREFORE, IT IS ORDERED that plaintiffs’

motion for a default judgment against defendant B. R.

Thomas be and the same hereby is denied;

IT IS FURTHER ORDERED That plaintiffs’ claim

against defendant B. R. Thomas be and the same

hereby is dismissed;

IT IS FURTHER ORDERED that defendant Williamson

County Bank’s motion for cost be and the same hereby

is denied.

s Robert E. DeMascio

United States District Judge

Dated: January 18, 1977

A7

OPINION

(United States Court of Appeais

For the Sixth Circuit

Bricklayers Fringe Benefit Funds, Metropolitan Area,

Detroit Metropolitan Area Executive Committee of The

Bricklayers, Masons and Plasterers International Union

of America, AFL-CIO, Plaintiffs-Appellants, v. North

Perry Baptist Church of Pontiac, Williamson County

Bank and B. R. Thomas, Defendants-Appellees. No.

77-1192.

On Appeal from the United States District Court for

the Eastern District of Michigan.

(Decided and Filed January 19, 1979)

Before: LIVELY and MERRITT, Circuit judges;

TAYLOR, District Judge.*

MERRITT, Circuit Judge. The question on appeal is

whether a lien foreclosure action is an ‘ancillary’

remedy for the collection of a judgment under Rule 64,

Federal Rules of Civil Procedure, and, if not, whether

the District Judge abused his discretion in refusing to

consider the foreclosure claim as a pendent state claim.

A contractor’s employees were laborers on a

construction project. They are members of the plaintiff

union, the appellant in this case. The contractor failed

to make contributions to the union for his employees’

fringe benefits as required by their collective bargaining

agreement. The labor union brought suit against the

contractor for breach of contract under § 301 of the

* The Honorable Robert L. Taylor, Judge, United States District

Court for the Eastern District of Tennessee, sitting by designation.

A8

Labor Management Relations Act, 29 U.S.C. § 185. The

District Court entered a default judgment against the

contractor for the amount of the unpaid employee fringe

benefits.

The union’s complaint against the contractor also

sought foreclosure of a mechanic’s lien against the

construction project property owned by a church and a

bank who were added party defendants below and are

the appellees here. The plaintiff labor union appeals

from a District Court order dismissing its mechanic lien

foreclosure claim against the church and the bank.

These foreclosure claims are characterized on appeal as

pendent state claims.

We affirm the District Court’s dismissal of the

foreclosure claims. The District Court has discretion to

exercise jurisdiction with respect to such pendent state

claims under Aldinger v. Howard, 427 U.S. 1 (1976), and

United Mine Workers v. Gibbs, 383 U.S. 715 (1966). Our

review of the record and briefs in the case disclose that

the District Judge did not abuse his discretion in

declining to exercise pendent jurisdiction, especially in

light of the fact that the foreclosure claims appear to

raise unresolved questions of Michigan law.

Neither do we believe that plaintiff's foreclosure

claims against the owners of the project fall within the

remedies contemplated by Rule 64 of the F.R.Civ.P.

governing seizure of property in order to satisfy the

judgment against the contractor. For the purpose of

executing on a judgment rendered by a federal court,

Rule 64 provides ‘‘ancillary’’ remedies including ‘‘arrest,

AY

attachment, garnishment ... and other . . . equivalent

remedies.’’ We do not believe that a lien foreclosure

proceeding is “equivalent” to any of these ancillary

remedies because it is not a remedy against the

judgment debtor or against a person who is personally

indebted to, or in possession of the property of, the

judgment debtor. Moreover, Rule 64 provides for such

execution on a federal judgment ‘in the manner

provided by the law of the state in which the District

Court is held.’’” We find no federal or Michigan

authority characterizing a lien foreclosure action under

Michigan law as an “‘ancillary’’ remedy for the purpose

of executing on a judgment. Indeed, it is unresolved

under Michigan law whether a labor union is entitled to

bring such a lien foreclosure action on behalf of its

members at all.

Accordingly, the judgment of the District Court is

affirmed.