Opposition Brief — Pettit v. Bay Area Pipe Trades Pension Trust Fund

Supreme Court, U.S,

7 rs Ce

— JAN 6 2000

No. 99-962 m

CLERK ~ °-“*

IN THE

Supreme Court of the United States

ELMAR LEE PETTIT; NoRTH BAY PLUMBING, INC.

and Nor-CaL PLUMBING, INC.,

ra Petitioners,

Bay AREA PipE TRADES PENSION TRUST FUND; Bay

AREA Pipe TRADES HEALTH & WELFARE TRUST FUND;

U.A. LocaL No. 343 HEALTH & WELFARE TRUST

FunpD; U.A. LocaL No. 343 PENSION TRUST FUND;

NORTHERN CALIFORNIA PIPE TRADES HEALTH & WEL-

FARE TRUST FUND; NORTHERN CALIFORNIA PIPE

TRADES PENSION TRUST FUND and U.A. LocaL No.

343 JOURNEYMAN AND APPRENTICE TRAINING TRUST

FUND, Respondents.

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

BRIEF IN OPPOSITION

JOHN J. DAVIS, JR.

Counsel of Record

McCARTHY, JOHNSON & MILLER

595 Market Street, Suite 2200

San Francisco, California 94105

(415) 882-2992

Attorneys for Respondents

| arent te er te

WILSON-Eres Printinc Co., INc. - (202) 789-0096 - WASHINGTON, D.C. 20001

® GES» «0

COUNTERSTATEMENT OF THE

QUESTIONS PRESENTED

1. This Court held in Peacock v. Thomas that there

is no federal jurisdiction over an action brought to en-

force a pre-existing ERISA judgment through corporate

veil-piercing, where the action asserts no federal claim.

Here the court of appeals ruled that a corporate veil can

be pierced in a lawsuit that does assert federal claims. Is

there any conflict between these holdings?

2. This Court and the Ninth Circuit have long held

that LMRA § 301 creates federal jurisdiction over suits

for violations of collective bargaining agreements, even if

neither party to the action is an employer or a union.

ERISA is a separate statute that specifies the parties who

may bring suit under it, but by its terms ERISA does not

pre-empt other federal laws or rules. Should ERISA con-

tinue to be construed as not divesting trust funds of their

right to bring § 301 actions?

3. Like every other circuit court of appeals, the Ninth

Circuit allows some of its opinions to be designated “un-

published.” A portion of the Ninth Circuit’s opinion in

this case is unpublished, but the entire opinion remains

fully reviewable by this Court. Since the unpublished

status of the decision has not affected this case in any

way, should this circuit-court practice first be addressed

by the Judicial Conference rather than by means of cer-

tiorari?

(i)

TABLE OF CONTENTS

COUNTERSTATEMENT OF THE QUESTIONS

PRESENTED

That Ste Mae ROSES TOOEES OR ndatenasbeseaeteoonentesnnensaddibnes

eth te ntti aha acts aetna tans nt ne neuen

OP PR OCOOC COL OLOS SC OREESS CCeCeeoeCSceesCS

REASONS THE PETITION SHOULD BE DENIED..

I. THERE IS NO CONFLICT BETWEEN THE

IT.

ITI.

CONCLUSION ...000o...u.......

NINTH CIRCUIT’S DECISION AND PEA-

Rae UMA i

ERISA DOES NOT PRE-EMPT THE TRUST

FUNDS’ CAUSE OF ACTION UNDER LMRA

CR ee ee ge

A. ERISA Does Not Pre-empt Other Federal

cae EOE MI a

B. The Sixth Circuit’s Opinion In United Engi-

neering Does Not Conflict With The Opinion

ak __, SR ELS

C. This Court Should Not Decide This Issue

Because No Lower Court Has Reached It....

CERTIORARI IS NOT THE PROPER PRO-

CEDURE FOR ADDRESSING PETITION-

ERS’ OBJECTIONS TO UNPUBLISHED DE-

oo oo gg et MT SEE ROS tale Te ee

A. A Writ Of Certiorari Is Not The Appro-

priate Means To Address This Issue_.__

B. Petitioners Have Not Been Harmed By The

Ninth Circuit’s Decision Not To Publish

Part Of Its Opinion.

Page

iv

11

12

13

14

14

15

16

iv

TABLE OF AUTHORITIES

CASES

Air Line Pilots Ass’n. v. Northwest Airlines, Inc.,

ee Wc Ee CRs aes, ROOD sks sncancteccspbicanaiosicns

Alvares v. Erickson, 514 F.2d 156 (9th Cir. 1975)..

American Bell, Inc. v. Federation of Telephone

Workers, 736 F.2d 879 (3d Cir. 1984) ................

Associated Builders & Contractors v. Local 302

IBEW, 109 F.3d 1353 (9th Cir. 1997) ...............

Audit Services, Inc. v. Rolfson, 641 F.2d 757 (9th

Ch: ATE ccc cetien cnsiectitinntaiinaicaccainittaabuat a eaiiciccnbais

BAC Local 33 Benefit Funds v. America’s Marble

Source, Inc., 950 F.2d 114 (8d Cir. 1991)..........

Board of Trustees of the Chicago Plastering In-

dustry Pension Trust Fund v. Duguid Co., 761

FB. 1B45 CE D.. Tes BD cette actin

' Contractors, Laborers, Teamsters and Engineers

Health & Welfare Plan v. Hroch, 757 F.2d 184

(Ol: CR: SE sea ee ee

D.E.W., Inc. v. Local 93 Laborers’ Int'l Union,

967 F.2d 106 (6th Civ. 1902) ...............uissi.......

Evans v. Einhorn, 855 F.2d 1245 (7th Cir. 1988)...

Franchise Tax Board v. Construction Laborers

Vacation Trust, 463 U.S. 1 (1988) .......00 2.

Laborers Clean-Up Contract Administration Trust

Fund v. Uriarte Clean-Up Service, 736 F.2d 516

COUR Cie, SIO so siecciscsiiis, saptcictiatiedienantahcaniuiiitanibleneinn.

Laborers Health and Welfare Trust Fund v. Kauf-

man & Broad, 707 F.2d 412 (9th Cir. 1983)......

Laborers’ Pension Fund v. Concrete Structures of

the Midwest, Inc., 999 F.2d 1209 (7th Cir. 1998)...

Local 159, 342, 343 & 444 v. Nor-Cal Plumbing,

Inc., 185 F.2d 978 (9th Cir. 1999) (“Nor-Cal

PROUD BED: iticcccuiinatihickssoniitincpeneneeliahscteibintbisninimsnses

Local 159, 342, 348 & 444 v. Nor-Cal Plumbing,

Inc., 189 F.8d 473 (9th Cir. 1999) ow.

Lewis v. Benedict Coal Corp., 361 U.S. 459

(1960) ..

Louisiana Bricklayers & Trowel Trades Pension

Fund & Welfare Fund v. Alfred Miller General

Masonry Contracting Co., 157 F.3d 404 (5th Cir.

RD incsdisnihinis iceman

10

Vv

TABLE OF AUTHORITIES—Continued

Page

Mason Contractors’ Assoc. of America v. Int'l

Council of Employers of Bricklayers & Allied

Craftsmen, 853 F.Supp. 515 (D.D.C. 1994)... 11

McCray v. New York, 461 U.S. 961 ho pelea ag 13

Milne Employees Association v. Sun Carriers, 960

F.2d 1401 (9th Cir: 1992)... 10

Miner v. Atlass, 368 U.S. 641 6. Gielen aor 14

Mo-Kan Teamsters Pension Fund and M o-Kan

Teamsters Health & Welfare Fund v. Creason,

716 F.2d 772 (10th Cir, 1988) ............... |. 10

Morse v. Adams, 857 F.2d 339 (6th Cir. 1988) ...... 11

National Stabilization Agreement Trust Fund v.

Commercial Roofing & Sheet Metal, 655 F.2d

RMA, CEPA COP, BORD ge 11

NLRB v. Fullerton Transfer & Storage, 910 F.2d

es (umn tae. SOO) ee Si 8

NLRB v. Greater Kansas City Roofing, 2 F.3d 1047

(EGG Gir. 008) ke 9

Painting and Decorating Contractors Association

v. Painters and Decorators Joint Committee, 707

ems 007 (Oth Civ.“ 9008) 10

Peacock v. Thomas, 516 U.S. 349 ¢ |) pebiaetaie ae passim

Reeves v. Sanderson Plumbing Products, Ine.

(Case No. 99-536), cert. granted, —— USS.

» 68 U.S.L.W. 8810 (1999) 15

Rehmar v. Smith, 555 F.2d 1362 (9th Cir. 1976).. 10

Seymour v. Hull & Moreland Engineering, 605

F.2d 1106 (9th Cir, 1979) 8

Smith v. Evening News Association, 371 U.S. 195

So BRON SSE Nee teal 7 te 10

Stewart v. KHD Deutz of America Corp., 75 F.3d

Wee (EAU ts SOD cece 11

Teamsters Local 174 v. Lucas Flour Co., 369 U.S.

sop ee; MO et dE a, Ok ON 8

Teamsters Local 348 Health and Welfare Fund v.

Kohn Beverage Co., 749 F.2d 315 (6th Cir.

i RY LU OU RR OS LT CORTESE NAO Ce a 9

Teamsters Pension Trust Fund of Philadelphia

and Vicinity v. John Tinney Delivery Service,

132 F.2d 819 (8d Cir. 1984) ............................... 10

vi

TABLE OF AUTHORITIES—Continued

Page

Textile Workers Union of America v. Lincoln

Milla, SES WB. BEB CROGT) ao csiccvcesinssecercrterto sede 8

Textron Lycoming Reciprocating Engine Division

v. United Automobile Workers, 523 U.S. 653

(RGIS D siicscetdbicknatatucnctiaaliaiibas 7,8

U.A. Local 348 v. Nor-Cal Plumbing, 48 F.3d 1465

CBS aa, TI iets ccs ttt cnscnenisioccircnactdinamiecaaene 4

U.A. Local No. 343 v. Nor-Cal Plumbing, 797 F.

Supe. TOT CCD. Gel, TOD scse sitcicisinincettineses 3,4

United Steelworkers of America v. United Engi-

neering, Inc., 52 F.3d 1386 (6th Cir. 1995)....12, 18, 16

Washington Area Carpenters’ Welfare Fund v.

Overhead Door Co., 681 F.2d 1 (D.C. Cir.

RIED Sincivinciibcahvenestiincstnarsisdithiadaie Missicestes ebSaniilen cecilia 10

Wright v. Universal Maritime Service Corp., 525

Ry HO CIID itiiceicenas Mi 15

STATUTES AND RULES

Bis Foke |) RReRR ewer -silediusailti 14

SB RIBAS. BPO i tiic cain snchhidas 14

29 U.S.C. § 185 [LMRA § 801] ............000000 passim

29 U.S.C. § 185(a) [LMRA § 801 (a)] ........ 7

29 U.S.C. § 1182 [ERISA § 502] ......2. 18

29 U.S.C. §1144(d) [ERISA § 514(d)] -00000 9,11

29 U.S.C. § 1145 [ERISA § 515] ..........202..000... 13

29 U.S.C. § 1844 [ERISA § 4044] ..... 12, 13

29 U.S.C. § 1844(a) [ERISA § 4044(a)] 000... 12

Ninth Circuit Rules 36-1—36-6 ..... 14

Se

IN THE

Supreme Court of the United States

No. 99-962

ELMAR LEE Pettit; NorTH BAY PLUMBING, INC.

and Nor-CaL PLuMBING, INC.,

‘ Petitioners,

Bay AREA PIPE TRADES PENSION TRUST FUND; Bay

AREA PIPE TRADES HEALTH & WELFARE TRUST FUND;

U.A. Loca No. 343 HEALTH & WELFARE TRUST

FuNnD; U.A. LocaL No. 343 PENSION TRUST FUND;

NORTHERN CALIFORNIA PIPE TRADES HEALTH & WEL-

FARE TRUST FUND; NORTHERN CALIFORNIA PIPE

TRADES PENSION TRUST FuND and U.A. Loca. No.

343 JOURNEYMAN AND APPRENTICE TRAINING TRUST

FunD, Respondents,

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

BRIEF IN OPPOSITION

INTRODUCTION

The petition in this case presents no question worthy

of review here. First, it asserts that the decision below

conflicts with this Court’s holding in Peacock v. Thomas,}

1516 U.S. 349 (1996).

2

but even a cursory reading of the two opinions shows that

they deal with entirely different situations. Peacock held

that there is no federal jurisdiction over a veil-piercing

action where no substantive federal claim is asserted,

while here the Ninth Circuit held that there is federal

jurisdiction over a sham corporation’s owners where a

substantive federal claim is asserted. Therefore the two

holdings do not conflict. In fact, the one relevant dictum

in Peacock affirmatively supports the Ninth Circuit’s hold-

ing here.

Petitioners’ second argument is that ERISA should pre-

empt LMRA § 301 with respect to the parties who can

sue an employer to recover unpaid fringe benefit contri-

butions. The argument ignores both ERISA’s express pro-

vision that it does not pre-empt other federal law and the

courts’ uniformly expansive readings of who may sue

under § 301. The Sixth Circuit case on which petitioners

rely for a conflict treats an issue so different from this

one that there is no conflict between it and the Ninth

Circuit’s holding here.

Finally, petitioners object to the Ninth Circuit’s issuing

part of its decision in an unpublished opinion. The ob-

jection is not an appropriate basis for a certiorari petition,

both because such issues are entrusted in the first instance

to the Judicial Conference and because petitioners have

not been harmed: the unpublished opinion is reviewable

—albeit undeserving of review—regardless of whether it

was published.

The petition thus raises no question worthy of the

Court’s time and effort. It should therefore be denied.

STATEMENT OF THE CASE

This case involves the fraudulent scheme of a union-

signatory plumbing contractor to escape the obligations

of a collective bargaining agreement. To carry out their

sn

3

scheme, the defendants concealed and misrepresented an

illegal relationship between the union side and the non-

union side of their “double-breasted” business.

In labor-law parlance, “double-breasted” means that the

owners of a union-signatory business also have an interest

in another, similar non-union business. If the two busi-

nesses are entirely separate, and if they deal with each

other only at arm’s length, then the double-breasted rela-

tionship is not unlawful. But where their separateness is

not scrupulously maintained, the non-union business may

be found to be the “alter ego” of the union signatory.

In that event, the non-union company will be bound to

the union signatory’s labor agreements.

Here, the petitioners transferred the business of Nor-

Cal Plumbing, Inc., a long-time union-signatory contrac-

tor owned by Elmar Lee Pettit, to North Bay Plumbing,

Inc. North Bay was a newly established non-union com-

pany purportedly owned by his wife, Audrey Jean Pettit,

but in fact owned and managed by Mr. Pettit. North Bay

continued Nor-Cal’s business, but did not honor Nor-Cal’s

labor agreements.

The respondent labor-management Trust Funds sued in

May 1987 to recover the pension and other fringe benefit

contributions they would have received had defendants

applied the labor agreement to their entire plumbing busi-

ness, not just the union side. The Trust Funds also sued

for fraud.

On April 22, 1992, the district court granted summary

judgment to the Trust Funds, finding that Nor-Cal and

North Bay were alter egos. The court awarded the Trust

Funds $2,551,244.28 in unpaid contributions, liquidated

damages, interest and attorneys’ fees, plus $2,000,000.00

in punitive damages.” Finding that the circumstances jus-

2U.A. Local No. 343 v. Nor-Cal Plumbing, 797 F. Supp. 767

(N.D. Cal. 1992).

4

tified disregarding the corporate form, the court held the

Pettits personally liable for the damages.®

On appeal, the Ninth Circuit affirmed most of the dis-

trict court’s findings.* However, it held that there were

genuine issues as to alter ego liability and the imposition

of personal liability.5 Accordingly, the court remanded

the case for a trial of those issues.

After a seven-week trial, a jury found that Nor-Cal and

North Bay were alter egos and had defrauded the Trust

Funds. Applying federal standards for piercing corporate

veils, the jury found that Mr. Pettit was personally liable.

The jury awarded the Trust Funds $1,812,897.60. The

district court found that the Trust Funds were also en-

titled to recover their attorneys’ fees and other expenses.®

The Ninth Circuit affirmed the judgment in all re-

spects,” even though it found ERISA jurisdiction lacking

because the lawsuit had been brought in the names of the

Trust Funds rather than in the names of the Funds’

trustees.®

REASONS THE PETITION SHOULD BE DENIED

I. THERE IS NO CONFLICT BETWEEN THE NINTH

CIRCUIT’S DECISION AND PEACOCK v. THOMAS

In Peacock v. Thomas this Court held that ERISA

does not create a separate claim for corporate veil-pierc-

3 Jd. at 772-773.

4U.A. Local 343 v. Nor-Cal Plumbing, 48 F.8d 1465, 1473 (9th

Cir. 1995), cert. denied, 516 U.S. 912 (1995) (“Nor-Cal Plumb-

ing I’’).

5 Id. at 1474, 1476.

6 The district court has not yet determined the amount of that

award.

1 Local 159, 342, 343 & 444 v. Nor-Cal Plumbing, Inc., 189 F.3d

473 (9th Cir. 1999).

8 Local 159, 342, 343 & 444 v. Nor-Cal Plumbing, Inc., 185 F.3d

978 (9th Cir. 1999) (“Nor-Cal Plumbing II’).

9516 U.S. 349 (1996).

5

ing in an action where no underlying federal claim is

asserted.” This holding has no bearing where, as here,

federal claims are asserted in the very same lawsuit in

which personal liability is decided.”

In Peacock the plaintiff had brought an earlier, sepa-

rate ERISA action for benefits against both his former

corporate employer and Mr. Peacock, an officer and share-

holder of the corporation. In the earlier case the plain-

tiff had alleged that Peacock was liable as an ERISA

fiduciary, but he had not attempted to pierce the corpo-

rate veil to hold Peacock liable. The district court had

found the corporation liable, but not Peacock.

After failing to collect the judgment against the corpo-

ration, the plaintiff sued Peacock again, this time alleging

state-law fraud, state-law conspiracy and veil-piercing

under ERISA.23 This lawsuit was based entirely on Pea-

cock’s conduct after entry of the earlier judgment against

the corporation. It asserted that Peacock had siphoned

off the corporation’s assets to prevent satisfaction of the

judgment. The veil-piercing allegations thus had no con-

nection to the facts underlying the first lawsuit.

This Court held that the district court lacked subject

matter jurisdiction over the second lawsuit because it

stated no independent ERISA cause of action:

Thomas’ complaint in this lawsuit alleged no viola-

tion of ERISA or of the plan... . Moreover,

Thomas’ veil-piercing claim does not state a cause

10 Jd. at 354.

11 Jd.

12 Id. at 351. The petition incorrectly states (at pp. 10 and 12)

that Peacock was an action to recover unpaid contributions.

13 Jd. at 351-352.

14 Id.

6

of action under ERISA and cannot independently

support federal jurisdiction. Even if ERISA permits

a plaintiff to pierce the corporate veil to reach a

defendant not otherwise subject to suit under ERISA,

Thomas could invoke the jurisdiction of the federal

courts only by independently alleging a violation of

an ERISA provision or term of the plan. Piercing

the corporate veil is not itself an independent ERISA

cause of action, “but rather is a means of imposing

liability on an underlying cause of action.” *

Thus, in Peacock the Court clearly distinguished the

case before it from cases like this one. Here, in the same

action, the Trust Funds prosecuted the underlying federal

violations and asserted that the Pettits were individually

liable for those very violations through veil-piercing. It

was on this ground that the Ninth Circuit correctly distin-

guished Peacock from this case.%* Moreover, in Peacock

the “veil-piercing conduct” was not part of the ERISA

violation giving rise to the first lawsuit, and in fact took

place after entry of judgment in that action. Here Mr.

Pettit’s “veil-piercing conduct” was part of the same course

of conduct that proved the Trust Funds’ labor law claims.

Because Peacock and this case are entirely different,

they do not conflict. In fact, Peacock strongly suggests

that federal jurisdiction over the Pettits is proper here,

where both the underlying federal claim and the veil-

piercing have been pursued in the same lawsuit. In Pea-

cock this Court observed that “{e]ven if ERISA permits

a plaintiff to pierce the corporate veil to reach a defend-

ant not otherwise subject to suit under ERISA, Thomas

could irvoke the jurisdiction of the federal courts only by

independently alleging a violation of an ERISA provision

15 Jd. at 354 (emphasis added).

16 Nor-Cal Plumbing II, 185 F.3d at 985.

7

or term of the plan.” #7 This is what the Trust Funds did

here. In a single lawsuit they asserted LMRA § 301 and

ERISA claims and asked the court to hold Mr. Pettit per-

sonally liable on those claims through veil-piercing. More-

over, in asserting that the corporate form should be dis-

regarded, the complaint alleged that Mr. Pettit was the

employer and was subject to liability under § 301 and

ERISA.”

Thus, the Ninth Circuit’s holding is entirely consistent

with Peacock. The petition is wrong in claiming a con-

flict.

Finally, the petition’s reliance on Textron Lycoming

Reciprocating Engine Division v. United Automobile

Workers ™ is entirely misplaced. LMRA § 301(a) pro-

vides federal jurisdiction over “{s]uits for violation of

contracts between an employer and a labor organization

_ 2” In Textron Lycoming, this Court held that § 301

jurisdiction requires an allegation that a collective bar-

gaining agreement has been violated. Petitioners argue

that Textron Lycoming so strictly limits § 301 jurisdic-

tion to questions of contract violation that issues of per-

sonal liability for those violations cannot be reached. But

Textron Lycoming holds just the opposite—it states that

once parties allege a contract violation, § 301 “does not

restrict the legal landscape they may traverse.” 74

Here it is undisputed that the Trust Funds alleged and

proved a claim within the express language of § 301:

petitioners’ violation of their collective bargaining agree-

17516 US. at 354.

18 Appendix A hereto, {ff 6 and 13.

19 §23 U.S. 653 (1998).

20 29 U.S.C. § 185(a). |

21 Jd. at 657-658.

8

ment. Moreover, corporate veil-piercing made Mr. Pettit

the employer in every legal sense. Accordingly, there is

no conflict with Textron Lycoming, either, and no reason

to grant review.

Petitioners argue that trust funds attempting to recover

unpaid contributions from corporate employers’ owners

should be relegated to separate veil-piercing actions

brought in state court under state law. This proposal is

not only unsupported in law or logic, but would defeat

the purposes of § 301. In Textile Workers Union of

America v. Lincoln Mills this Court held that § 301

is a mandate for federal courts to fashion a body of fed-

eral labor law governing collective bargaining agreements.

And in Teamsters Local 174 vy. Lucas Flour Co.2* the

Court held that “in enacting § 301 Congress intended

doctrines of federal labor law uniformly to prevail over

inconsistent local rules.”

The Ninth Circuit has been true to this principle in

deciding veil-piercing issues in § 301 actions for unpaid

fringe benefit contributions. Based on the need for uni-

formity in this important aspect of § 301 enforcement, it

has held that federal veil-piercing standards—not the vary-

ing state-law rules—should govern.> The Third, Sixth,

Seventh, Eighth and Tenth Circuits have concurred.

22 Petition, p. 12. The petition cites no authority suggesting that

state courts would entertain a “yeil-piercing” action separately

from the lawsuit in which the underlying claims are asserted

against the corporation.

23 353 U.S. 448, 456-457 (1957).

24 369 U.S. 95, 103-104 (1962).

25 Seymour v. Hull & Moreland Engineering, 605 F.2d 1105, 1109-

1110 (9th Cir. 1979) ; Audit Services, Inc. v. Rolfson, 641 F.2d 757,

764 (9th Cir. 1981).

26 American Bell, Inc. v. Federation of Telephone Workers, 736

F.2d 879, 886 (3d Cir. 1984); NLRB v. Fullerton Transfer & Stor-

9

Contrary to these long-settled holdings, and without

even discussing them, the petition urges a rule that would

tear a hole in the fabric of § 301 by injecting the vagaries

of state-law veil-piercing tests into actions for delinquent

contributions. Petitioners offer no good reason for such

a result, much less a compelling one. For this reason as

well, there is no reason to review the Ninth Circuit’s af-

firmance of the judgment against Mr. Pettit.

II. ERISA DOES NOT PRE-EMPT THE TRUST

FUNDS’ CAUSE OF ACTION UNDER LMRA § 301

Petitioners’ second argument is that the Trust Funds

cannot sue under LMRA § 301 because trust funds are

not parties authorized to sue under ERISA. They ignore

§ 301 itself and the plain language of ERISA’s pre-emp-

tion provision, which states that ERISA does not pre-empt

other federal laws or rules.””

Before ERISA was enacted, trust funds were permitted

to sue for delinquent contributions under LMRA § 301.%

And petitioners do not dispute that the circuits have uni-

formly held § 301 to provide jurisdiction for trust funds’

contribution collection actions.” Petitioners cite the

age, 910 F.2d 331, 335 (6th Cir. 1990); Evans v. Einhorn, 855 F.2d

1245, 1255 (7th Cir. 1988); Contractors, Laborers, Teamsters and

Engineers Health & Welfare Plan v. Hroch, 757 F.2d 184, 190 (8th

Cir. 1985); NLRB v. Greater Kansas City Roofing, 2 F.3d 1047,

1054 (10th Cir. 1993) (collecting cases).

27 29 U.S.C. § 1144(d).

28 BAC Local 33 Benefit Funds v. America’s Marble Source, Inc.,

950 F.2d 114, 121 (3d Cir. 1991) (citing Lewis v. Benedict Coal

Corp., 361 U.S. 459 (1960)).

29 D.E.W., Inc. v. Local 93 Laborers’ Int’l Union, 957 F.2d 196,

202-203 (5th Cir. 1992); Teamsters Local 348 Health and Welfare

=: Fund v. Kohn Beverage Co., 749 F.2d 315, 316-317, n.2 (6th Cir.

1984); Laborers Health and Welfare Trust Fund v. Kaufman &

; Broad, 707 F.2d 412, 416-417 (9th Cir. 1983); Board of Trustees

; of the Chicago Plastering Industry Pension Trust Fund v. Duguid

ee ee

10

Court’s discussion of ERISA’s party limitations in Fran-

chise Tax Board y. Construction Laborers Vacation

Trust but they fail to mention that in the same opinion,

the Court contrasted § 301 and its lack of party limita-

tions: “We have not taken a restrictive view of who may

sue under § 301 for violations of {collective bargaining]

contracts... .”%! Likewise, the Ninth Circuit has ruled

consistently that § 301 jurisdiction exists “as long as the

suit is for violation of a contract between a union and em-

ployer even if neither party is a union or an employer.” >

ERISA itself explicitly states that it does not pre-empt

other federal laws, and petitioners have not shown any

conflict between ERISA and LMRA § 301 on the issue

presented here. Accordingly, the petition should be denied.

Co., 761 F. Supp. 1345, 1347 n.2 (N.D. Tl. 1991). And courts have

frequently noted § 301 and ERISA jurisdiction in trust funds’ con-

tribution collection actions. Teamsters Pension Trust Fund of

Philadelphia and Vicinity v. John Tinney Delivery Service, 732

F.2d 319, 320, 321 n.1 (3d Cir. 1984); Louisiana Bricklayers &

Trowel Trades Pension Fund & Welfare Fund v. Alfred Miller

General Masonry Contracting Co., 157 F.3d 404, 406 (5th Cir.

1998); Laborers’ Pension Fund v. Concrete Structures of the Mid-

west, Inc., 999 F.2d 1209, 1210 (7th Cir. 1993); Contractors,

Laborers, Teamsters and Engineers Health and Welfare Plan v.

Hroch, 757 F.2d 184, 186 (8th Cir. 1985); Laborers Clean-Up Con-

tract Administration Trust Fund v. Uriarte Clean-Up Service, Inc.,

736 F.2d 516, 518 (9th Cir. 1984); Mo-Kan Teamsters Pension

Fund and Mo-Kan Teamsters Health & Welfare Fund v. Creason,

716 F.2d 772, 773 (10th Cir. 1983); Washington Area Carpenters’

Welfare Fund v. Overhead Door Co., 681 F.2d 1, 3 (D.C. Cir. 1982).

30 463 U.S. 1 (1983).

31 463 U.S. at n.28 (emphasis in original; citations omitted).

32 Rehmar v. Smith, 555 F.2d 1362, 1366 (9th Cir. 1976), citing

Smith v. Evening News Association, 371 U.S. 195, 199-201 (1962) );

accord, Alvares v. Erickson, 514 F.2d 156, 162 (9th Cir. 1975);

Painting and Decorating Contractors Association v. Painters and

Decorators Joint Committee, 707 F.2d 1067, 1071 (9th Cir. 1983) ;

Milne Employees Association v. Sun Carriers, 960 F.2d 1401, 1407

(9th Cir. 1992); Associated Builders & Contractors v. Local 302

IBEW, 109 F.3d 1358, 1857 n.6 (9th Cir. 1997).

11

A. ERISA Does Not Pre-empt Other Federal Law.

Petitioners argue that the Trust Funds’ long-established

right to sue under LMRA § 301 for delinquent contribu-

tions has now “disappeared” because ERISA contains a

similar cause of action. They contend that ERISA now

“occupies the field” of delinquent contribution collections

and pre-empts other laws in this area, including § 301.

But by its own terms, ERISA does not pre-empt other

federal laws. Section 514(d) of ERISA® states:

Nothing in this subchapter shall be construed to

alter, amend, modify, invalidate, impair or supersede

any law of the United States (except as provided in

sections 1031 and 1137(c) of this title) or any rule

or regulation issued under any such law.

The District of Columbia Circuit has held that § 514(d)

preserves not only other federal legislation,** but also fed-

eral case law. In National Stabilization Agreement Trust

Fund v. Commercial Roofing & Sheet Metal,® the same

court found that ERISA’s legislative history “reveal{s] no

congressional intent to undermine the validity of existing

[federal] legislation, or, inferentially, of its construction

by the judiciary.” The Sixth and Eleventh Circuits have

held that this includes § 301 and its accompanying com-

mon law.

LMRA § 301 suits to collect fringe benefit contribu-

tions are thus clearly preserved after ERISA’s enactment

by ERISA § 514(d).

33 29 U.S.C. § 1144(d).

34 Air Line Pilots Ass’n. v. Northwest Airlines, Inc., 627 F.2d

272, 275-276 (D.C. Cir. 1980).

35 655 F.2d 1218, 1222-1223 (D.C. Cir. 1981).

36 Stewart v. KHD Deutz of America Corp., 75 F.3d 1522, 1528

(11th Cir. 1996); Morse v. Adams, 857 F.2d 339, 843 (6th Cir.

1988); Mason Contractors Association v. International Council of

Employers of Bricklayers, 853 F. Supp. 515, 525 (D.D.C. 1994).

12

B. The Sixth Circuit’s Opinion In United Engineering

Does Not Conflict With The Opinion In This Case.

Petitioners cite only one case as a purported conflict on

this issue: the Sixth Circuit’s decision in United Steel-

workers of America v. United Engineering, Inc In fact,

there is no conflict because United Engineering is readily

distinguishable from this case.

In United Engineering, a pension plan had been termi-

nated. ERISA § 4044* provided a detailed method by

which the Pension Benefit Guarantee Corporation was to

allocate the assets of a terminated plan among competing

claimants, including a set of allocation priorities. Instead

of pursuing the plan participants’ ERISA rights with

PBGC, the Union sued their employers directly under

LMRA § 301 for nonguaranteed pension benefits.

The court ruled that such a lawsuit conflicted too di-

rectly with the ERISA allocation scheme. It found that

the ERISA provisions governing such benefits “establish

a detailed priority scheme by which the PBGC allocates

the nonguaranteed amounts. 29 U.S.C. § 1344(a). These

detailed provisions seem to allocate all responsibility for

disbursement of nonguaranteed benefits to the PBGC,

strongly suggesting that suits against plan sponsors to re-

cover those same benefits are precluded.” *

The court concluded that allowing plan participants

to bring suit directly against the plan sponsor would

not only contravene Congress’ carefully crafted priority

scheme, in which guaranteed benefits are disbursed before

nonguaranteed benefits, but would also raise the possi-

bility of double recovery for participants.*

37 52 F.3d 1386 (6th Cir. 1995).

38 29 U.S.C. § 1344.

39 Jd, at 1393.

40 Jd. at 1394. See 29 U.S.C. § 1344.

13

In United Engineering, the Sixth Circuit was faced with

a use of LMRA § 301 that could override the priority

system prescribed by ERISA § 4044 for allocating the

assets of a terminated plan. By contrast, here there is no

such conflict between § 301 and ERISA’s collection pro-

visions, §§ 502 and 515.44 ERISA contains no scheme

of collection priorities that could be defeated by allowing

contribution collection actions under § 301, and there is

no possibility of a double recovery here.

The LMRA § 301 issues addressed in United Engineer-

ing are thus entirely different from those presented here.

Unlike the situation in United Engineering, here there is

no plausible argument that ERISA was meant to displace

suits like this one. And given the express language of

ERISA § 514(d), no such displacement can be inferred.

Because United Engineering addresses a wholly differ-

ent issue than the one in this case, its holding does not

conflict with the Ninth Circuit’: decision here.

C. This Court Should Not Decide This Issue Because

No Lower Court Has Reached It.

As discussed above, the decision in United Engineer-

ing does not conflict with the Ninth Circuit’s opinion

below because United Engineering does not treat ERISA’s

pre-emptive effect on contribution collection actions under

LMRA § 301. In fact, it appears that no court has held

that ERISA limits the parties who can sue or be sued in

§ 301 collection actions. In the absence of any conflict

of decision, certiorari should be denied.*”

41 29 U.S.C. §§ 1132 and 1145.

#2 McCray v. New York, 461 U.S. 961, 963 (1983) (Stevens, J.).

14

Ill. CERTIORARI IS NOT THE PROPER PROCEDURE

FOR ADDRESSING PETITIONERS’ OBJ ECTIONS

TO UNPUBLISHED DECISIONS

Petitioners’ final argument is that the Ninth Circuit's

decision should be reviewed because part of it was un-

published. This issue is not appropriate for certiorari.

A. A Writ Of Certiorari Is Not The Appropriate Means

To Address This Issue.

The Ninth Circuit has promulgated local rules of prac-

tice, including rules regarding publication of its opinions,

pursuant to 28 U.S.C. § 2071 and FRAP 47. Under 28

U.S.C. § 331, the Judicial Conference of the United

States reviews those rules “for consistency with federal

law” and may modify or abrogate them. The Judicial

Conference also advises this Court regarding its rules of

practice and procedure.

This Court has held that these statutory procedures are

“designed to insure that basic procedural innovations shall

be introduced only after mature consideration of informed

opinion from all relevant quarters . . . .”*® Thus, the

Judicial Conference is the appropriate body to address

this issue in the first instance. It can then advise this

Court on rules regarding publication.

The parties to this litigation, by contrast, are unequipped

to present “informed opinion from all relevant quarters,”

especially the circuit judges’ views. Because this issue is

entrusted to the Judicial Conference in the first instance,

it should not be addressed by means of a writ of certio-

rari.

43 Ninth Circuit Rules 36-1 through 36-6.

44 Id.

45 Miner v. Atlass, 363 U.S. 641, 650 (1960).

15

B. Petitioners Have Not Been Harmed By The Ninth

Circuit’s Decision Not To Publish Part Of Its

Opinion.

Petitioners identify no harm that they have suffered

from the partial publication. In fact, they have not been

harmed—the unpublished opinion resolved the issues of

their appeal, and unpublished decisions are fully review-

able by this Court.”

Nor can petitioners show how an order to publish the

decision would change the result of this case. Because

the publication status of the Ninth Circuit’s decision does

not affect the petitioners in any way, they have no stand-

ing to complain about it.

Petitioners have also tried to frame this issue as a

“conflict” among the courts of appeal. But here, too, peti-

tioners have identified no conflict which affects the instant

case. Every circuit court has a rule allowing for unpub-

lished opinions. The only “conflict” among these rules is

whether unpublished opinions are to be given precedential

effect. Again, this works no harm on the petitioners.

Because petitioners have cited no conflict that has any

bearing on the instant case, certiorari is not appropriate

here.

46 For example, the Court has recently granted review in two

unpublished court of appeals decisions, Wright v. Universal Mari-

time Service Corp., 525 U.S. 70, —, 119 S. Ct. 391, 394 (1998) and

Reeves v. Sanderson Plumbing Products, Inc. (Case No. 99-536),

cert. granted, —— U.S. ——, 120 S. Ct. 444, see 68 U.S.L.W. 3310

(1999). After certiorari was granted on November 8, 1999, the

Fifth Circuit published its decision in Reeves. ——— F.3d ——,, 1999

U.S. App. LEXIS 29724 (5th Cir. Dec. 1, 1999).

16

CONCLUSION

As the foregoing discussion demonstrates, the petition

presents no good reason for granting review. The Ninth

Circuit’s decision does not conflict with this Court’s in

Peacock or the Sixth Circuit’s in United Engineering.

In fact, the holding below is in accord with the relevant

dictum in Peacock.

Nor is there any conflict between this exercise of LMRA

§ 301 jurisdiction and ERISA’s party limitations. ERISA

does not pre-empt § 301, and as this Court noted in Con-

struction Laborers Vacation Trust, the two statutes confer

standing very differently.

Finally, certiorari is not the proper means for review-

ing circuit rules on unpublished decisions. The J udicial

Conference should consider petitioners’ objections in the

first instance, and in any event petitioners have suffered

no harm from lack of publication.

For all of these reasons, the petition should be denied.

Respectfully submitted,

JouHN J. DAVIS, JR.

Counsel of Record

McCARTHY, JOHNSON & MILLER

595 Market Street, Suite 2200

San Francisco, California 94105

(415) 882-2992

January 6, 2000 - Attorneys for Respondents

) APPENDIX

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| XS

a

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APPENDIX A

{Filed May 8, 1987]

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

Case No. C 87 2365 WWS

U.A. Locat No. 343 of the United Association of Jour-

neymen and Apprentices of the Plumbing and Pipe-

fitting Industry of the United States and Canada. AFL-

CIO: U.A. LocaL No. 159, 342, 343 and 444 Com-

BINED PENSION TRUST Funp; and U.A. LOCAL No.

343 JOURNEYMAN AND APPRENTICE TRAINING TRUST

FUND,

Plaintiffs,

v.

Nor-Cat PLUMBING, Inc.; NoRTH BAY PLUMBING, INC.;

ELMAR LEE PETTIT, a.k.a. Elmer Lee Pettit; and

AupDREY JEAN PETTIT.

Defendants.

COMPLAINT FOR VIOLATION OF COLLECTIVE

BARGAINING AGREEMENT AND FOR FRAUD

(29 U.S.C. §§ 185(a) & 1132]

Plaintiffs allege:

JURISDICTION

1. This action is brought for redress of defendants’

violations of a collective bargaining agreement. The

Court has jurisdiction of these claims pursuant to the pro-

visions of Section 301 (a) of the Labor Management Re-

2a

lations Act, as amended [“LMRA;” 29 U.S.C. Section

185(a)]. This action is also brought to compel defend-

ants’ compliance with their obligations to account for and

pay fringe benefits to the plaintiff Trust Funds under the

Employee Retirement Income Security Act of 1974

{“ERISA;” 29 U.S.C. Section 1001, et seq.]. The Court

has jurisdiction of these claims pursuant to Section 502

of ERISA {29 U.S.C. Section 1132].

VENUE

2. Plaintiffs U.A. Local No. 159, 343, [sic] 343 and

444 Combined Health & Welfare Trust Fund; U.A. Local

No. 159, 342, 343 and 444 Combined Pension Trust Fund;

and U.A. Local No. 343 Journeyman and Apprentice

Training Trust Fund (collectively “Bay Area Pipe Trades

Trust Funds” or “Trust Funds”) are employee benefit

plans governed by ERISA. Said Trust Funds are admin-

istered in San Francisco, California. Accordingly, venue

is proper within the Northern District of California pur-

suant to Section 502(e)(2) of ERISA [29 U.S.C. Sec-

tion 1132(e)(2)].

PARTIES

3. Plaintiff U.A. Local No. 343 of the United Asso-

ciation of Journeymen and Apprentices of the Plumbing

and Pipefitting Industry of the United States and Canada,

AFL-CIO, (“U.A. Local 343”) is an unincorporated

labor organization which represents, inter alia, workers

employed in the building and construction industry in

Napa and Solano Counties, California.

4. Plaintiffs Bay Area Pipe Trades Trust Funds are

jointly administered labor-management trust funds estab-

lished pursuant to the provisions of Section 302 of the

LMRA [29 U.S.C. Section 186] for the purpose of pro-

viding employee benefits within the meaning of Sections

3 and 4 of ERISA [29 U.S.C. Sections 1002 and 1003].

3a

5. Defendants Nor-Cal Plumbing, Inc. (“Nor-Cal”)

and North Bay Plumbing, Inc. (“North Bay”) are Cali-

fornia corporations conducting a construction contracting

business in Napa and Solano Counties, California.

6. Defendant Elmar Lee Pettit, also known as Elmer

Lee Pettit, is the chief executive of defendants Nor-Cal

and North Bay and is the president of defendant Nor-Cal.

Defendant Audrey Jean Pettit is the president of defend-

ant North Bay. Defendants Elmar Lee Pettit and Audrey

Jean Pettit are husband and wife, are the owners of de-

fendants Nor-Cal and North Bay, and are “employers”

within the meaning of Section 3(2) of the National Labor

Relations Act [29 U.S.C. Section 152(2)] and Section

3(5) of ERISA (29 U.S.C. Section 1002(5)].

STATEMENT OF CLAIM

7. For a continuous period since at least 1965, defend-

ant Nor-Cal has been a party signatory to successive col-

lective bargaining agreements with plaintiff U.A. Local

343. On or about June 30, 1983, defendant Nor-Cal exe-

cuted a two-year Memorandum of Understanding modify-

ing the then-existing Master Labor Agreement by and

between the Plumbing, Heating and Cooling Contractors

Association of Napa, Solano and Lake Counties and

plaintiff U.A. Local 343. A true and correct copy of said

Memorandum of Understanding is attached hereto as Ex-

hibit 1 and incorporated herein by this reference. A true

and correct copy of the 1983-1985 Master Labor Agree-

ment, as modified by said Memorandum of Understand-

ing, is attached hereto as Exhibit 2 and incorporated

herein by this reference.

8. On or about May 7, 1984, defendant Nor-Cal exe-

cuted the Residential Plumbing Addendum to the Master

Labor Agreement, thereby modifying the Master Labor

4a

Agreement and extending said agreement to at least June

30, 1987. A true and correct copy of said Residential

Plumbing Addendum is attached hereto as Exhibit 3 and

incorporated herein by this reference.

9. Defendant North Bay has performed work which is

covered by the Residential Plumbing Addendum and the

Master Labor Agreement and which is required to be

performed by members of the stipulated bargaining unit

set forth in the Master Labor Agreement to which de-

fendant Nor-Cal is and has been bound. Plaintiffs are

informed and believe and thereupon allege that said per-

formance of work has been conducted by said defendants

at least since some time in 1983, and possibly for a much

longer period of time.

10. Defendants Nor-Cal and North Bay are the “alter

ego's” of each other within the meaning of federal labor

law. The relationship between defendants Nor-Cal and

North Bay is characterized by:

a) common ownership;

b) interrelation of operations;

c) common management; and

d) centralized control of labor relations.

Further, defendants have diverted business from defendant

Nor-Cal to defendant North Bay for the express purpose

of avoiding defendant Nor-Cal’s obligations under the

Residential Plumbing Addendum and the Master Labor

Agreement.

11. By reason of the relationship described above, de-

fendants Nor-Cal and North Bay became bound as a

single entity to the Residential Plumbing Addendum and

the Master Labor Agreement as of the time said relation-

ship was created.

Sa

12. Defendants have failed and refused to apply the

terms and conditions of the Residential Plumbing Adden-

dum and the Master Labor Agreements to defendant

North Bay, and have thereby violated their obligations

thereunder and under Section 515 of ERISA baci US.C.

Section 1145].

13. Defendants Elmar Lee Pettit and Audrey Jean

Pettit should be held personally and individually liable

to plaintiffs for the damages sought herein on the follow-

ing grounds:

(a)

(b)

(c)

(d)

in doing the acts herein alleged, said individual

defendants have shown little or no respect for

the separate identities of the defendant corpo-

rations;

in conducting the business and corporate affairs

of the defendant corporations, said individual

defendants have given little or no respect to the

separate identities of said corporations;

recognition of the defendant corporations as

separate entities would result in injustice to

plaintiffs; and

there was a fraudulent intent employed in the

establishement and operation of the corpora-

tions, as is more specifically alleged below.

14. Plaintiffs have fully performed their obligations

under the Residential Plumbing Addendum and the Mas-

ter Labor Agreements.

6a

COUNT I

CLAIM OF PLAINTIFF U.A. LOCAL 343

FOR DAMAGES

15. By reason of defendants’ failure and refusal to

apply the terms of the Residential Plumbing Addendum

and the Master Labor Agreement to defendant North

Bay, persons represented by plaintiff U.A. Local 343 who

have been employed and are entitled to employment by

defendants at: work covered by the Residential Plumbing

Addendum and the Master Labor Agreement have lost

wages, vacation pay and other contractually guaranteed

benefits. Plaintiff U.A. Local 343 is informed and be-

lieves and thereupon alleges that such damages exceed

$3,500,000.00. The exact amount of damages is pres-

ently unknown to plaintiff U.A. Local 343, but will be

proved at the trial of this lawsuit.

16. By reason of defendants’ failure and refusal to

apply the terms of the Residential Plumbing Addendum

and the Master Labor Agreement to defendant North

Bay, plaintiff U.A. Local 343 has lost dues monies it is

and has been entitled to receive from the persons unlaw-

fully deprived of the work performed by defendants under

the guise of defendant North Bay. Plaintiff U.A. Local

343 is informed and believes and thereupon alleges that

such damages exceed $115,000.00. The exact amount of

such damages is presently unknown to plaintiff U.A. Local

343, but will be proved at the trial of this lawsuit.

COUNT II

CLAIM OF PLAINTIFF TRUST FUNDS

FOR AUDIT AND DAMAGES SHOWN DUE

17. The trust agreements governing plaintiff Trust

Funds authorize and obligate the trustees of plaintiff

Ta

Trust Funds to adopt appropriate collection procedures

to enforce, by suit in court or otherwise, the prompt pay-

ment of contributions to the funds and to audit the books

and records of any participating employer to determine

whether or not contributions are being made in accord-

ance with the trust agreements: and the Master Labor

Agreement. In adopting the Master Labor Agreement

and the trust agreements, defendant Nor-Cal agreed, upon

request of an authorized representative of the Trust

Funds, to permit auditors designated by the Trust Funds

to review any and all records relevdnt to the enforcement

of the provisions of the collective bargaining agreement

and the trust agreements. Defendant Nor-Cal further

agreed to pay the cost of the audit and also agreed that

if it failed or refused to permit audit entry as required

by the aforementioned agreements, it would be responsi-

ble for all attorneys’ fees and costs expended by the Trust

Funds in securing compliance, in addition to any other

relief provided by the court.

18. By reason of defendants’ failure and refusal to

apply the terms of the Residential Plumbing Addendum

and the Master Labor Agreement to defendant North

Bay, defendants have deprived plaintiff Trust Funds of

fringe benefit contributions to which said plaintiffs are

entitled and have precluded plaintiff Trust Funds from

determining by audit the fringe benefit contributions owed

to said plaintiffs based on work performed by defendants.

In the absence of such an audit and review of defendants’

books and records, plaintiff Trust Funds are not able to

determine the extent of defendants’ obligations to report

and to pay fringe benefit contributions for each hour paid

for or worked under the coverage of the Residential

Plumbing Addendum and the Master Labor Agreement.

Plaintiff Trust Funds are informed and believe and there-

upon allege that the amount of fringe benefits owed and

unpaid by defendants exceeds $1,000,000.00.

8a

19. Plaintiff Trust Funds have no plain, speedy or

adequate remedy at law.

20. Under the terms of the aforementioned agree-

ments, defendant Nor-Cal agreed to make contributions

as required by those agreements and to be subject to and

bound by all terms and conditions of the various trust

agreements, and further promised that in the event any

monthly contributions were not paid when due, defendant

Nor-Cal would pay the sum of $100.00 or ten percent

(10%) of the amount of the particular contributions,

whichever is the greatest amount, for each delinquency

to each plaintiff Trust Fund as and for liquidated dam-

ages, and not as a penalty. Under the afore-mentioned

trust agreements, defendant Nor-Cal further agreed that

if it failed to pay the contributions in full, including the

liquidated damages, before the last business day of the

calendar month following the due date, the liquidated

damages would be increased to twenty percent (20% ) of

the amount due and unpaid. At all times herein men-

tioned it was and now would be extremely difficult, if not

impracticable, to fix the amount of actual damages in-

curred by plaintiff Trust Funds as a result of the non-

payment of said contributions. The amounts agreed upon

for liquidated damages represent a reasonable endeavor

to ascertain and compensate for damages caused the

plaintiff Trust Funds by the nonpayment of contributions.

Under the afore-mentioned trust agreements, the liqui-

dated damages are added to the principal sum due and

unpaid and the whole thereof bears interest at the rate of

twelve percent (12% ) per annum until paid.

21. It has been necessary for plaintiff Trust Funds to

engage counsel for the purpose of enforcing defendants’

obligations under the aforementioned agreements. Plain-

tiff Trust Funds are entitled to reasonable attorneys’ fees,

accounting costs and other reasonable expenses incurred

ammeter ta Tat)

9a

in connection with this matter, in addition to the fringe

benefit contributions, liquidated damages and interest

owed by defendants due to defendants’ failure and re-

fusal to apply the terms of the Residential Plumbing Ad-

dendum and the Master Labor Agreement to defendant

North Bay.

COUNT III

CLAIM OF ALL PLAINTIFFS

FOR FRAUD

22. In doing the acts and conducting their business as

described above, defendants have deliberately concealed

from plaintiffs the true nature and extent of their busi-

ness. Said concealment has been accomplished through

affirmative acts of deception as well as failures to dis-

close material information. Defendants thereby have

withheld from plaintiffs material information concerning

plaintiffs’ rights and entitlements under the Residential

Plumbing Addendum and the Master Labor Agreement

and have withheld said rights and entitlements themselves.

Moreover, defendants have made affirmative, knowing,

material misrepresentations to plaintiffs in sending them

monthly fringe benefit contribution reports reflecting only

the hours worked under the name of defendant Nor-Cal

rather than the full number of hours worked by defend-

ants’ employees within the coverage of the Residential

Plumbing Addendum and the Master Labor Agreement.

23. In committing the above-described acts of fraud,

defendants acted willfuly, maliciously, oppressively and

with the intent to deceive and defraud plaintiffs and to

deprive the persons represented by plaintiff U.A. Local

343 of the work opportunities, wages and fringe benefits

to which they were and are entitled. Plaintiffs are there-

fore entitled to recover punitive and exemplary damages

from defendants in the amount of $2,500,000.00.

10a

COUNT I'V

CLAIM OF PLAINTIFF TRUST FUNDS

FOR PUNITIVE DAMAGES

24. In failing to make the required contributions de-

fendants acted knowingly and deliberately to defraud

plaintiff Trust Funds, and did so in a willful and mali-

cious manner. Plaintiff Trust Funds are therefore entitled

under ERISA to an award of punitive or exemplary dam-

ages from defendants in the amount of $2,500,000.00.

WHEREFORE, plaintiffs pray judgment against de-

fendants as follows:

1. For an order compelling defendants to submit to

an audit as requested and to allow the inspection and

‘audit of the payroll records of defendants;

2. For such damages by way of unpaid wages, vaca-

tion pay, dues and fringe benefit contributions as are dis-

closed by the audit;

3. For damages in a sum equal to the cost of per-

forming the audit;

4. For liquidated damages on the vacation pay and

fringe ‘benefit contribution shortages disclosed by the

audit, plus interest on the whole sum due at the rate of

twelve percent (12%) per annum from the due date

until paid;

5. For reasonable attorneys’ fees and litigation ex-

penses;

6. For punitive damages in the amount of $5,000,-

000.00;

7. For their costs of suit; and

lla

8. For such other and further relief as the Court

deems just and proper.

McCarTHY, JOHNSON & MILLER

By /s/ John J. Davis, Jr.

JoHN J. Davis, JR.

DATED: May 8, 1987 Attorneys for Plaintiffs