Amicus Curiae Brief — Laborers Health & Welfare Trust Fund v. Advanced Lightweight Concrete Co.

\2

1 ego baal

3)

No. 85-2079

IN THE

Supreme Court of the United States

OCTOBER TERM, 1985

LABORERS HEALTH AND WELFARE TRUST

FUND FOR NORTHERN CALIFORNIA, et al.,

7 Petitioners,

ADVANCED LIGHTWEIGHT CONCRETE Co., INC.,

Respondent,

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

MOTION OF THE LABORERS INTERNATIONAL UNION

OF NORTH AMERICA NATIONAL (INDUSTRIAL)

PENSION FUND FOR LEAVE TO FILE A BRIEF

AND BRIEF AS AMICUS CURIAE

ROBERT J. CONNERTON *

JAMES S. RAY

TERESE M. CONNERTON

CONNERTON, BERNSTEIN & KATZ

Suite 800

1899 L Street, N.W.

Washington, D.C. 20036

(202) 466-6790

Attorneys for the

Laborers International Union

of North America National

(Industrial) Pension Fund

* Counsel of Record

WILSCN - Eres PrintiNG Co., Inc. - 789-0096 - WASHINGTON, D.C. 20001

@ RB 00

IN THE

Supreme Court of the United States

OCTOBER TERM, 1985

No. 85-2079

LABORERS HEALTH AND WELFARE TRUST

FUND FOR NORTHERN CALIFORNIA, et al.,

Petitioners,

V.

ADVANCED LIGHTWEIGHT CONCRETE Co., INC.,

7 Respondent.

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

MOTION OF THE LABORERS INTERNATIONAL UNION

OF NORTH AMERICA NATIONAL (INDUSTRIAL)

PENSION FUND FOR LEAVE TO FILE A BRIEF

AS AMICUS CURIAE

To the Honorable Chief Justice and Associate Justices

of the Supreme Court of the United States:

Pursuant to Rule 36 of the Rules of this Court, the

Laborers International Union of North America National

(Industrial) Pension Fund (the “Pension Fund’) re-

spectfully moves for leave to file the accompanying brief

as amicus curiae in support of the petition for Writ of

Certiorari. Petitioners have consented to the filing of this

brief; Respondents have not.

INTEREST OF THE PENSION FUND

The Pension Fund is a labor-management trust fund

established pursuant to section 302(c) (5) of the Labor-

Management Relations (“Taft-Hartley”) Act [29 U.S.C.

§ 186(c) (5)] and administered by a board of union and

employer appointed trustees to provide pension benefits

to workers represented for purposes of collective bargain-

ing by affiliates of the Laborers International Union of

North America (“LIUNA”). It is also a multiemployer

pension plan within the meaning of and covered by the

Employee Retirement Income Security Act of 1974

(“ERISA”), as amended.

More than twenty thousand workers are covered by the

Pension Fund. And currently more than five hundred em-

ployers scattered over nearly all fifty States (including

States within the Ninth Circuit) contribute to the Pension

Fund pursuant to collective bargaining agreements with

LIUNA local unions and district councils. Employer con-

tributions are based on a bargained amount for each

hour, day or week worked by a covered laborer.

The Pension Fund is typical of national and regional

multiemployer pension plans. And as with other such

plans, the prompt collection of employer contributions is

an essential function of the Pension Fund. Those contri-

butions provide the funding necessary to pay monthly

pension benefits to retirees.

The Multiemployer Pension Plan Amendments Act of

1980 (“MPPAA”) [P.L. 96-364, 94 Stat. 1208 (1980) ]

amendments to ERISA greatly enhanced the effectiveness

of the Pension Fund’s contribution collection program.

The provision in ERISA section 502(g)(2) [29 U.S.C.

§ 11382(g) (2)] of mandatory interest, liquidated damages

and attorneys’ fees remedies has discouraged employees

from becoming delinquent. Where employers fail in their

obligation to contribute, ERISA section 515 [29 U.S.C.

$1145], added by MPPAA, provides an effective and

generally efficient mechanism for judicial enforcement.

This is all in accordance with the Congressional design

of fostering the flow of employer contributions into

multiemployer plans, thereby improving the plans’ fund-

ing base and securing the pension benefits of plan

participants.

The decision by the Court of Appeals in this case, un-

less overturned by this Court, will impede the ability of

the Pension Fund, and all other multiemployer plans, to

promptly and fully collect vital employer contributions.

In view of the number of individual collective bargaining

relationships on which the Pension Fund depends for con-

tributions, the Pension Fund is frequently confronted

with having to collect contributions during the sometimes

long periods between collective bargaining agreements.

Commonly, an employer is delinquent for a period dur-

ing the term of a collective bargaining agreement as well

as for the period while bargaining on a new agreement

is progressing. By restricting the Pension Fund’s enforce-

ment recourse to filing an unfair labor practice charge

with the National Labor Relations Board, the decision

below would deprive the Pension Fund of (1) the de-

linquency disincentives of the ERISA section 502(g) (2)

remedies, (2) control over the essential, fiduciary func-

tion of contribution collection, and (3) an efficient, prompt

and effective means of maintaining contribution flow. As

a result, the funding of the Pension Fund and the retire-

ment income of the workers it covers would be less secure.

In short, this case presents an issue of federal law

that is of compelling importance to the Pension Fund and

all other multiemployer plans, and that raises national

policy concerns that can only be resolved by this Court.

ISSUES DEVELOPED BY THE PENSION FUND

The Pension Fund’s brief focuses on issues which it

believes may not be adequately addressed elsewhere, in-

cluding:

(a) resolution of the case requires interpretation

and accommodation of national employee benefits pol-

icy and natienal labor policy which only this Court

can authoritatively provide; and

(b) ERISA plainly vests exclusive jurisdiction in the

courts to make impasse determinations in an em-

ployer withdrawal liability context, and there is no

rational basis for precluding courts from making

such determinations in suits to collect employer con-

tributions.

The Pension Fund, therefore, moves for leave to file

the accompanying brief amicus curiae.

Respectfully submitted,

ROBERT J. CONNERTON

JAMES S. RAY

TERESE M. CONNERTON

CONNERTON, BERNSTEIN & KATZ

Suite 800

1899 L Street, N.W.

Washington, D.C. 20036

(202) 466-6790

Dated: July 17, 1986

TABLE OF AUTHORITIES .......

TABLE OF CONTENTS

INTEREST OF THE PENSION FUND |...

REASONS FOR GRANTING REVIEW ie

I. RESOLUTION OF THE CASE REQUIRES

Il.

INTERPRETATION AND ACCOMMODATION

OF NATIONAL LABOR POLICY WHICH

ONLY THIS COURT CAN AUTHORITA-

ee I itiieinntteneintintitniatititarennenemnies

ERISA PLAINLY VESTS EXCLUSIVE JU-

RISDICTION IN THE COURTS TO MAKE

IMPASSE DETERMINATIONS IN AN EM-

PLOYER WITHDRAWAL LIABILITY CON-

TEXT, AND THERE IS NO RATIONAL

BASIS FOR PRECLUDING COURTS FROM

MAKING SUCH DETERMINATIONS IN

SUITS TO COLLECT EMPLOYER CONTRI-

IY siedheh Adiaigiidliadeititansaterestiteddaiccpsiutinartenses

PUI Sctbdasdinaissatlatteartnniicnssnctetasassessacebhnnipnseeurmrcenansy

ii

TABLE OF AUTHORITIES

Cases

Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504

(1981) ..........

Carpenters Local 1846 v. Pratt-Farnsworth, 690

F.2d 489 (5th Cir. 1982), cert. denied, 464 U.S.

— ee ee

Central States, Southeast & Southwest Areas Pen-

sion Fund v. Central Transport, Inc., 472 U.S.

—, 86 L.Ed.2d 447 (1985) .......................--..-.---

Connell Construction Co. v. Plumbers & Steam-

fitters, 421 U.S. 616 (1975) ..........------2200..2......--.

Connolly v. Pension Benefit Guaranty Corp., 475

U.S. ——, 89 L.Ed.2d 166 (1986) ~.......................

Franchise Tax Board of the State of California v.

Construction Laborers Vacation Trust for So.

California, 463 U.S. 1 (19838) .............................-

Kaiser Steel Corp. v. Mullins, 455 U.S. 72 (1982)....

Massachusetts Mutual Life Ins. Co. v. Russell, 473

U.S. ——, 87 L.Ed.2d 96 (1985) -............-...-----.-.--

Menkorn v. Firestone Tire & Rubber Co., 738 F.2d

I I i cicittemectaeninaes

Moldovan v. Great Atlantic & Pacific Tea Co., Inc.,

790 F.2d 894 (3d Cir. 1986) —..........2222-22222-.-e--e

Nachman Corp. v. Pension Benefit Guaranty Corp.,

Re es Ce I cecinbdiieticnnciieencteltetptdadtinedsnniavenes

NLRB v. Amaz Coal Co., 453 U.S. 322 (1981) -........

Pension Benefit Guaranty Corp. v. R.A. Gray & Co.,

6 GB BEE RO aa ee

Producers Diary Delivery v. Western Conference

of Teamsters, 654 F.2d 625 (9th Cir. 1981) .........

Textile Workers v. Lincoln Mills, 353 U.S. 448

a a a

Trustees of Amalgamated Insurance Fund v. Gelt-

man Industries, Inc., 784 F.2d 926 (9th Cir.

i

U.A. 198 Health & Welfare, Education & Pension

Funds v. Rester Refrigeration Service, Inc.,

790 F.2d 423 (5th Cir. 1986) -.......022202..

Woodward Sand Co. v. Western Conference of

Teamsters Pension Trust Fund, 789 F.2d 691

(9th Cir. 1986)

Page

6, 7

iii

TABLE OF AUTHORITIES—Continued

Statutes Page

Employee Retirement Income Security Act of 1974,

29 U.S.C.

ae

I TTD si hcsatateesiedaccchichitineiagietniiceniniins

EE

IT hceriniadehaciathicanaiineialnnicciainions

ET ea ee ee

co

z

-o~

©

~~

eSCAIIIA A Pe

= NRE ee ec

Act,

Legislative Materials

Senate Committee on Labor and Human Resources,

96th Cong., 2d Sess. 44 (Comm. Print 1980) __.. 4

126 Cong. Rec. S11673-74 (daily ed. August 26,

REE ot SEP A SS EN 8

4 i

>, Cad >

i

oy

paler Janey LAY

TP age By GR RIG IS © SF

eo © by

'y

since: eee

a

IN THE

Supreme Court of the United States

OCTOBER TERM, 1985

No. 85-2079

LABORERS HEALTH AND WELFARE TRUST

FUND FOR NORTHERN CALIFORNIA, et al.,

7 Petitioners,

ADVANCED LIGHTWEIGHT CONCRETE Co., INC.,

Respondent.

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

BRIEF OF THE LABORERS INTERNATIONAL UNION

OF NORTH AMERICA NATIONAL (INDUSTRIAL)

PENSION FUND AS AMICUS CURIAE

IN SUPPORT OF PETITIONERS

The Laborers International Union of North America

National (Industrial) Pension Fund (the “Pension

Fund”) submits this brief as amicus curiae to urge the

Court to review the holding of the Court of Appeals that

the federal courts lack jurisdiction over suits brought by

multiemployer plan trustees pursuant to the Employee Re-

tirement Income Security Act of 1974 (“ERISA”), as

amended, to collect employer contributions due for the

period between the expiration of a collective bargaining

agreement and impasse in bargaining for a new agree-

2

ment. We submit that the appeals court’s conclusion—

that plan trustees’ only recourse for collecting such con-

tributions is to file unfair labor practice charges with the

National Labor Relations Board (“NLRB”’)—is errone-

ous, and that national employee benefits policy demands

reversal of the decision by this Court.

INTEREST OF THE PENSION FUND

As described in the motion for leave to file this brief,

the Pension Fund and its Board of Trustees have a keen

interest in the issue presented by this case. This Court

has already recognized and discussed the vital role of

employer contributions in the financing of multiemployer

pension as well as health and welfare plans. Unless re-

versed, the decision below will greatly impede the ability

of the Pension Fund, and all other multiemployer plans,

to promptly and fully collect employer contributions and

thereby jeopardize the financial] standing of the Pension

Fund and the retirement income security of the laborers

covered by the Pension Fund. The Pension Fund will be

denied access to the efficacious federal court forum which

Congress intended for collection of contribution delin-

quencies. The fiduciary function of collecting contribu-

tions will be taken from the Board of Trustees and placed

in the hands of NLRB personnel who are not responsible

to the Pension Fund’s trustees or participants. And the

Pension Fund will be deprived of the ERISA remedies

which Congress created to discourage employers from be-

coming delinquent in their contribution obligations.

The petition submitted by the Petitioners contains an

extensive discussion of several persuasive compelling rea-

sons for this Court to grant review. We also understand

that the National Coordinating Committee for Multi-

employer Plans (“NCCMP”) is filing a motion and brief

as an amicus curiae. The Pension Fund agrees with the

positions stated in the petition and the NCCMP’s brief,

and accordingly has attempted to avoid burdening the

Court with repetition. However, the Pension Fund urges

3

the Court to consider the additional points and authorities

contained herein.

REASONS FOR GRANTING REVIEW

I. RESOLUTION OF THE CASE REQUIRES INTER-

PRETATION AND ACCOMMODATION OF NA-

TIONAL LABOR POLICY WHICH ONLY THIS

COURT CAN AUTHORITATIVELY PROVIDE.

As the Court has repeatedly observed, ERISA was en-

acted in 1974 primarily to ensure that workers and their

beneficiaries received their anticipated pension benefits

upon retirement, and that they not bo deprived of those

benefits because of, among other reasons, insufficient

funds in their pension plans. See Nachman Corp. v. Pen-

sion Benefit Guaranty Corp., 446 U.S. 359 (1980) ; Alessi

v. Raybestos-Manhattan, Inc., 451 U.S. 504 (1981);

Central States, Southeast % Southwest Areas Pension

Fund v. Central Transport, . :c., 472 U.S. , 86 L. Ed.

2d 447, 457 (1985); Pension Benefit Guaranty Corp. v.

R.A. Gray & Co., 467 U.S. 717 (1984). In 1980, ERISA

was substantially amended with respect to multiemployer

plans by the Multiemployer Pension Plan Amendments

Act (“MPPAA”), P. L. 96-364, 94 Stat. 1208. MPPAA

was a response to Congress’ finding, after lengthy study,

that multiemployer pension plans were vulnerable to finan-

cial instability. Kaiser Steel Corn. v. Mullins, 455 U.S.

72, 86-87 (opinion of the Court), 91-99 (Brennan, J.,

dissenting) (1982); Pension Benefit Guaranty Corp. v.

R.A. Gray & Co., supra; Connolly v. Pension Benefit

Guaranty Corp., 475 U.S. ——, 89 L. Ed. 2d 166

(1986). See also NLRB v. Amax Coal Co., 453 U.S. 322,

338 n.22 (1981). And, as this Court has recognized,

Congress has identified the failure of some employers to

make full and timely contributions as a key factor under-

mining the financial soundness of plans. See Kaiser Steel,

supra; Central Transport, 86 L. Ed. 2d at 464 n.22.

d

Congress found further that the legal recourse then

available to plan trustees for the enforcement of contribu-

tion obligations was inadequate, and deliberately acted to

correct this deficiency and =rovide a simple, efficient and

effective means for plan trustees to collect delinquent con-

tributions. See Kaiser Steel, 455 U.S. at 87, 91-96 (quot-

ing pertinent MPPAA legislative history). It declared

that “[t]he public policy of ,[MPPAA] to foster the

preservation of the private multiemployer plan system

mandates that provision be made to discourage delinquen-

cies and simplify delinquency collection.” Jd. at 94 n.3,

quoting, Senate Committee on Labor and Human Re-

sources, 96th Cong., 2 Sess. 44 (Comm. Print 1980).

And to implement this policy, MPPAA added to ERISA

section 515 [29 U.S.C. § 1145], which provides trustees

with a statutory cause of action to collect delinquent con-

tributions, and section 502(g) (2) [29 U.S.C. § 1132(g)

(2)], which mandates courts to award interest, liqui-

dated damages, and attorneys’ fees to plan trustees who

prevail in a section 515 suit. Jd. Importantly, Congress

vested the federal courts with exclusive jurisdiction over

contribution collection actions. See ERISA § 502(a) (3),

(e) [29 U.S.C. §1182(a) (3), (e)]. See also Kaiser

Steel, 455 U.S. at 93-96.

This policy reflected in the MPPAA amendments com-

plements another aspect of the national employee bene-

fits policy expressed through the minimum standards of

fiduciary conduct set forth in ERISA §§ 401-409 [29

U.S.C. §§ 1101-1109]. Reading into these ERISA stand-

ards common law trust principles, this Court recently

held that multiemployer plan trustees bear a strict fidu-

ciary duty to identify workers on whose behalf contribu-

tions are owed and to make reasonable efforts to collect

delinquent employer contributions. See Central Transy ort,

86 L. Ed. 2d at 475-61. The Court further ruled that

this fiduciary duty is not delegatable to a union, whose

collective bargaining agreement requires the contribu-

tions, or to a governmental body. Jd. at 461-63.

5

The court of appeals in this case, like two other fed-

eral appeals courts which have since addressed the issue,’

subordinated these ERISA-based national employee bene-

fits concerns to its understanding of the current law of

NLRB preeniption. At the core of the court’s holding is

a belief that the fiduciary lacks jurisdiction to make de-

terminations as to whether a bargaining impasse has been

reached so as to terminate the employer’s post-contract

contribution obligations.

However, preemption is not a mechanical formula; nor

does it involve a rigid application of clear Congressional

intent. Rather, whether a court is preempted from ruling

on a matter normally within the province of the NLRB

often rests upon a judicial evaluation of the national labor

policy interests as compared with competing policies.

And on several occasions this Court has weighed the com-

peting interests more heavily and sanctioned judicial res-

olution of unfair labor practice issues and other matters

over which the NLRB normally exercises exclusive juris-

diction. See, e.g., Kaiser Steel, 455 U.S. at 83-85; Con-

nell Construction Co. v. Plumbers & Steamfitiers, 421

U.S. 616 (1975). Cf. Carpenters Local 1846 v. Pratt-

Farnsworth, 690 F.2d 489, 517-19 (5th Cir. 1982), cert.

denied, 464 U.S. 932 (1983) (court can decide the appro-

priateness of a bargaining unit in the context of a Taft-

Hartley Act section 301 suit to enforce a collective bar-

gaining agreement, particularly in view of the related

ERISA contribution collection claims).

In a case like this, involving a balance between national

employee benefits policy and national labor policy, review

by this Court is particularly appropriate. This is because

Congress in enacting ERISA charged the judiciary with

the obligation and the power to formulate a substantive

federal common law of employee benefits to implement

1 Moldovan v. Great Atlantic & Pacific Tea Co., Inc., 790 F.2d 894

(3d Cir. 1986); U.A. 198 Health & Welfare, Education & Pension

Funds v. Rester Refrigeration Service, Inc., 790 F.2d 423 (5th Cir.

1986).

6

and supplement the express statutory terms in a fashion

akin to the way the courts have carried out the mandate

of Textile Workers v. Lincoln Mills, 353 U.S. 448 (1957),

_ with respect to section 301 of the Taft-Hartley Act. [29

U.S.C. § 185] See, e.g., Franchise Tax Board of the State

of California v. Construction Laborers Vacation Trust

for So. California, 463 U.S. 1, 24 n.26, 26 (1983); Mas-

sachusetts Mutual Life Ins. Co. v. Russell, 473 U.S. ——,

87 L. Ed. 2d 96, 112-13 (Brennan, J., concurring in judg-

ment) (1985); Menhorn v. Firestone Tire & Rubber

Co., 7388 F.2d 1496, 1498-1500 (9th Cir. 1984). The

Court, we submit, has a special obligation under the

ERISA regulatory scheme to review the policy balance

struck by the Ninth Circuit.

II. ERISA PLAINLY VESTS EXCLUSIVE JURISDIC-

TION IN THE COURTS TO MAKE IMPASSE

DETERMINATIONS IN AN EMPLOYER WITH-

DRAWAL LIABILITY CONTEXT, AND THERE IS

NO RATIONAL BASIS FOR PRECLUDING COURTS

FROM MAKING SUCH DETERMINATIONS IN

SUITS TO COLLECT EMPLOYER CONTRIBU-

TIONS.

In concluding that only the NLRB can make bargain-

ing impasse determinations, the court of appeals failed

to consider that ERISA, as amended by MPPAA, on its

face vests exclusive jurisdiction in the courts to make

precisely the same impasse determinations in the context

of suits to collect employer withdrawal liability. Yet,

subsequently a different panel of the same appeals court

ruled that the courts (not the NLRB) are required to

make bargaining impasse determinations in suits by mul-

tiemployer plans to recover withdrawal liability from

employers, and it remanded the case to the lower court

for such a determination. See Woodward Sand Co. v.

Western Conference of Teamsters Pension Trust Fund,

789 F.2d 691 (9th Cir. 1986).

As discussed by this Court in the R.A. Gray and Con-

nolly cases, MPPAA introduced a statutory liability for

7

employers which withdraw from multiemployer pension

plans under certain conditions. This potential liability

was another aspect of the legislation’s overall design to

enhance the financial stability of multiemployer pension

plans.

Whether an employer has incurred a “complete with-

drawal” from a plan so as possibly to be subject to lia-

bility depends in part on whether the employer has per-

manently ceased “to have an obligation to contribute

under the plan.” ERISA § 4203(a) [29 U.S.C. § 1383

(a)]. The term “obligation to contribute” is defined by

ERISA § 4212(a) [29 U.S.C. § 1892(a)] to include “an

obligation to contribute arising . . . as a result of a duty

under applicable labor-management relations law. ... ”

This encompasses the employer’s obligation under the

National Labor Relations Act to continue contributing to

multiemployer plans after its collective bargaining agree-

ment has expired until such time as it bargains to impasse

with the union (or reaches a new agreement). Woodward

Sand, 789 F.2d at 695.

Under ERISA § 4301(a),(c) [29 U.S.C. § 1451(a),

(c)] exclusive jurisdiction is vested in the federal and

state courts over suits by plan trustees to collect employer

withdrawal liability. See generally R.A. Gray & Co., 467

U.S. at 717. And such suits, as we have shown, neces-

sarily involve the courts in determining whether the em-

ployer continues to have an obligation to contribute; that

is, whether the employer’s collective bargaining agree-

ment has expired and he has bargained to impasse.

The Advanced Lightweight panel seriously erred in

neglecting to consider this aspect of the MPPAA-ERISA

legislative scheme. First, it establishes that Congress does

not consider bargaining impasse determinations to be the

exclusive province of the NLRB any longer (if it ever

was *). Second, MPPAA and its legislative history clearly

2 See, e.9., Producers Dairy Delivery v. Western Conference of

Teamsters, 654 F.2d 625 (9th Cir. 1981).

8

reflect a Congressional intent that claims by multiem-

ployer withdrawal liability should be treated in the same

manner as claims for delinquent employer contributions.

See ERISA § 4301(b) [29 U.S.C. § 1451{b)]; 126 Cong.

Rec. S11673-74 (daily ed., August 26, 1980) (remarks

of Sen. Williams). See also Trustees of Amalgamated

Insurance Fund v. Geltman Industries, Inc., 784 F.2d

926, 931-32 (9th Cir. 1986). There is no rational basis

for holding that courts may make impasse determinations

in withdrawal liability collection suits but plans must

resort to the NLRB when confronted by eee em-

ployer contributions.

CONCLUSION

For these and the reasons stated in the petition and in

the NCCMP amicus brief, the petition for a writ of

certiorari should be granted.

Respectfully submitted,

ROBERT J. CONNERTON *

JAMES §S. RAY

TERESE M. CONNERTON

CONNERTON, BERNSTEIN & KATZ

Suite 800

1899 L Street, N.W.

Washington, D.C. 20036

(202) 466-6790

Attorneys for the

Laborers International Union

of North America National

(Industrial) Pension Fund

* Counsel of Record

Dated: July 17, 1986

‘fanlivs iy oaee

te