135 F.3d 671 (9th Cir. 1998), 96-16709, Operating Engineers Health & Welfare Trust Fund v. JWJ Contracting Co.

Docket Nº:96-16709, 96-16721.
Citation:135 F.3d 671
Party Name:4 Wage & Hour Cas.2d (BNA) 600, 98 Cal. Daily Op. Serv. 846, 98 Daily Journal D.A.R. 1169, OPERATING ENGINEERS HEALTH AND WELFARE TRUST FUND, a Trust; Operating Engineers Pension Trust Fund, a Trust; Operating Engineers Vacation-Savings Trust Fund, a Trust; Operating Engineers Joint Apprenticeship Program, a Trust, Plaintiffs-Appellants, and United
Case Date:February 02, 1998
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 671

135 F.3d 671 (9th Cir. 1998)

4 Wage & Hour Cas.2d (BNA) 600,

98 Cal. Daily Op. Serv. 846,

98 Daily Journal D.A.R. 1169,

OPERATING ENGINEERS HEALTH AND WELFARE TRUST FUND, a Trust;

Operating Engineers Pension Trust Fund, a Trust; Operating

Engineers Vacation-Savings Trust Fund, a Trust; Operating

Engineers Joint Apprenticeship Program, a Trust, Plaintiffs-Appellants,

and

United States of America, for the use and benefit of Arizona

State Carpenters Health and Welfare Trust Fund, Arizona

State Carpenters Vacation-Savings Trust Fund, Arizona State

Carpenters Joint Apprenticeship Program, Operating Engineers

Health and Welfare Trust Fund, Operating Engineers Pension

Trust Fund, Operating Engineers Vacation-Savings Trust Fund,

and Operating Engineers Joint Apprenticeship Programs;

Arizona State Carpenters Health and Welfare Trust Fund;

Arizona State Carpenters Pension Trust Fund; Arizona State

Carpenters Vacation-Savings Trust Fund; Arizona State

Carpenters Joint Apprenticeship Program, Plaintiffs,

v.

JWJ CONTRACTING CO., Defendant,

and

The Continental Insurance Companies, a New Hampshire

corporation, Defendant-Appellee.

ARIZONA STATE CARPENTERS HEALTH AND WELFARE TRUST FUND;

Arizona State Carpenters Vacation-Savings Trust Fund;

Arizona State Carpenters Joint Apprenticeship Program;

Arizona State Carpenters Pension Trust Fund, a Trust,

Plaintiffs-Appellants,

and

United States of America, for the use and benefit of Arizona

State Carpenters Health and Welfare Trust Fund, Arizona

State Carpenters Vacation-Savings Trust Fund, Arizona State

Carpenters Joint Apprenticeship Program, Operating Engineers

Health and Welfare Trust Fund, Operating Engineers Pension

Trust Fund, Operating Engineers Vacation-Savings Trust Fund,

and Operating Engineers Joint Apprenticeship Programs;

Operating Engineers Health and Welfare Trust Fund, a Trust;

Operating Engineers Pension Trust Fund, a Trust; Operating

Engineers Vacation-Savings Trust Fund, a Trust; Operating

Engineers Joint Apprenticeship Program, a Trust, Plaintiffs,

v.

JWJ CONTRACTING CO., an Arizona corporation, Defendant,

and

Continental Ins. Co., a New Hampshire corporation, Defendant-Appellee.

Nos. 96-16709, 96-16721.

United States Court of Appeals, Ninth Circuit

February 2, 1998

Argued and Submitted Sept. 18, 1997.

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Michael J. Keenan, Ward, Keenan & Barrett, Phoenix, Arizona, for the plaintiffs-appellants; April D. Miller, Charles T. Stegall, Lee, Stegall & Katz, Phoenix, Arizona, for plaintiffs-appellants.

Curtis A. Jennings, Paul S. Ruderman, Edward Rubacha, Jennings & Haug, Phoenix, Arizona, for defendants-appellees.

Appeals from the United States District Court for the District of Arizona; Stephen M. McNamee, District Judge, Presiding.

Before: KOZINSKI, MAYER,* [*] and FERNANDEZ, Circuit Judges.

MAYER, Circuit Judge:

The United States for the Use of Arizona State Carpenters Pension Fund, a trust; Arizona State Carpenters Health & Welfare Trust Fund, a trust; Arizona State Carpenters Vacation Savings Trust Fund, a trust; Arizona State Carpenters Joint Apprenticeship Program, a trust, et al. (collectively "Carpenters Trust Funds"), and the United States for the use and benefit of (a trust), Operating Engineers Health and Welfare Trust Fund; the United States for the use and benefit of (a trust), Operating Engineers Joint Apprenticeship Program; the United States for the use and benefit of (a trust) Operating Engineers Vacation-Savings Trust Fund (collectively "Operating Engineers Trust Funds") separately appeal the judgment of the United States District Court for the District of Arizona, Docket No. CIV 94-2122-PHX-SMM, granting summary judgment in favor of JWJ Contracting Company, Inc. ("JWJ") and Continental Insurance Company ("Continental") on the Trust Funds' Miller Act claim and dismissing their remaining claims. We reverse the judgment as to the Little Miller Act claim, affirm the judgment in all other respects, and remand.

Background

JWJ entered into public-works contracts with the following Arizona state and municipal entities: the Arizona Department of Transportation ("ADOT") for bridge construction work near Cordes Junction and Cottonwood, Arizona; the city of Phoenix for parking lot construction work in the Cave Creek Detention Basin; the city of Tempe for city street improvements; the city of Phoenix with funding from the Federal Aviation Administration ("FAA") for ramp construction work at Sky Harbor International Airport; and ADOT with funding from the Federal Highway Administration ("FHA") for improvements to two interstate highways, construction of a state route to benefit federal land and resource management activities, and the removal of a bridge connecting two interstate highways and construction of its replacement.

To perform its obligations under these contracts, JWJ signed collective bargaining agreements to employ members of the Operating Engineers and Arizona State Carpenters unions, who are beneficiaries, respectively, of the Operating Engineers Trust Funds and the Carpenters Trust Funds (collectively "Trust Funds"). The Trust Funds are multi-employer Taft-Hartley trust funds created pursuant to Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185, and are administered according to the Employee

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Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (ERISA). As part of the Master Labor Agreements, these parties entered into various trust agreements, under which JWJ posted bonds, as required by Arizona law, Ariz.Rev.Stat. § 34-222(A)(2), on each of the projects. Along with these bonds, JWJ was required to report to the coordinators of the Trust Funds the number of hours worked by union employees and the amount of money JWJ withheld from paychecks to make its contributions. In May 1992, JWJ arranged for Continental, as its surety, to begin issuing statutory surety bonds for the labor and materials that it used for these projects, which Continental did on state-approved forms, pursuant to state law, and for the benefit of the various Arizona state and municipal entities.

JWJ did not pay over the contributions it withheld between December 27, 1993, and July 3, 1994, yet the Trust Funds allowed JWJ to forgo these contributions until JWJ filed for bankruptcy. To collect the delinquent contributions, the Trust Funds filed suit in the United States District Court for the District of Arizona, demanding a jury trial. The Trust Funds sought payment under the Miller Act, 40 U.S.C. §§ 270a-270f; the Little Miller Act, Ariz.Rev.Stat. §§ 34-222, 34-223; the Davis-Bacon Act, 40 U.S.C. § 276a--a-7; ERISA, 29 U.S.C. § 1002; and the Labor Management Relations Act, 29 U.S.C. § 185 et seq.

The district court granted Continental's motions to dismiss claims based on the Little Miller Act (because it is preempted by ERISA), the Davis-Bacon Act (because it does not confer federal rights upon aggrieved laborers), and the Labor Management Relations Act (because jurisdiction for breach of the collective bargaining agreement does not exist where the action is not focused on the collective bargaining agreement). After further discovery and pursuant to a stipulation by the parties, the district court granted Continental's motion to dismiss the breach of ERISA claim, which left for resolution only the Miller Act claim. Concluding that the projects at issue were not "public works of the United States," the district court granted Continental's motion for summary judgment for lack of jurisdiction over this claim.

Discussion

The Trust Funds appeal the judgment of the district court as it relates to claims based on the Miller Act, the Little Miller Act, the Davis-Bacon Act, and for granting judgment without giving them the opportunity to amend their complaint to assert jurisdiction under 28 U.S.C. § 1352 (1994). We review the district court's interpretation and application of ERISA provisions in determining pre-emption of state law de novo. WSB Elec., Inc. v. Curry, 88 F.3d 788, 791 (9th Cir.1996). We also review the district court's grant of summary judgment de novo, to determine whether it correctly applied the relevant substantive law. Id.

  1. Miller Act

    The Trust Funds argue that eight of the projects were federally funded and are "public works of the United States" within the meaning of 40 U.S.C. § 270a, because the federal government was authorized to expend funds on these projects, these funds constituted the majority share of the funding for each project, the federal government was intimately involved in the control and monitoring of the projects, and the projects were constructed for the benefit of the general public. Although there is no clear test for designating a project a "public work of the United States," courts often look to the following as indicia: whether the United States is a contracting party, an obligee to the bond, an initiator or ultimate operator of the project; whether the work is done on property belonging to the United States; or whether the bonds are issued under the Miller Act. See, e.g., United States ex rel. Noland Co. v. Irwin, 316 U.S. 23, 62 S.Ct. 899, 86 L.Ed. 1241 (1942); see also Russell G. Donaldson, Annotation, What Constitutes "Public Work" Within Statute Relating to Contractor's Bond, 48 A.L.R.4th 1170 (1986).

    The absence of all of these indicia need not be determinative in this case, but it is unlikely that JWJ and Continental would have issued the bonds in the sum of the total amount payable by the terms of the contract,

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    as is required by Arizona law, Ariz.Rev.Stat. § 34-222(A)(1) when it could have issued them pursuant to the Miller Act, 40 U.S.C. § 270a(a)(2), at half that...

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