Williams v. Ashland Engineering Co., Inc.

• Decision Date: 10 January 1995
• Docket Number: No. 94-2046,94-2046
• Citation: 45 F.3d 588
• Parties: , Pens. Plan Guide P 23908I William WILLIAMS, etc., et al., Plaintiffs, Appellants, v. ASHLAND ENGINEERING CO., INC., et al., Defendants, Appellees. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 588

45 F.3d 588

31 Fed.R.Serv.3d 1462, Pens. Plan Guide P 23908I

William WILLIAMS, etc., et al., Plaintiffs, Appellants, v. ASHLAND ENGINEERING CO., INC., et al., Defendants, Appellees.

No. 94-2046.

United States Court of Appeals First Circuit.

Heard Jan. 10, 1995.

Decided Jan. 31, 1995.

Robert O. Berger, Boston, MA, for appellants.

Bradford R. Carver, with whom Edward F. Vena, Michael S. Levitz, and Vena, Truelove & Riley, Boston, MA, were on brief, for appellees.

Before SELYA, BOUDIN and STAHL, Circuit Judges.

SELYA, Circuit Judge.

We are reminded today that malapropisms, despite their semantic shortcomings, often describe the human condition with unerring accuracy. There are, for example, certain situations that actually do evoke the sensation of "deja vu all over again." ¹ We explain below why this appeal falls into that category.

In McCoy v. Massachusetts Institute of Technology, 950 F.2d 13 (1st Cir.1991), cert. denied, --- U.S. ----, 112 S.Ct. 1939, 118 L.Ed.2d 545 (1992), the fiduciary of several union-sponsored employee benefit plans brought suit to enforce a lien on real property owned by a university. He alleged that an electrical contractor hired to construct improvements to school buildings had employed union members to do the work; that the contractor, heedless of its obligations under a collective bargaining agreement, neglected to defray the workers' employee benefit contributions; and that a state statute, Mass.Gen.L. ch. 254, quoted in the margin, ² authorized the fiduciary to collect unpaid contributions by asserting a mechanic's lien against real property that had been improved through the plan participants' labor. See McCoy, 950 F.2d at 15. We held that the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. Secs. 1001-1461 (1988), and specifically, ERISA Sec. 514(a), 29 U.S.C. Sec. 1144(a) (commanding that ERISA "shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan"), preempted use of the Massachusetts mechanic's lien law to recoup the unpaid contributions. See McCoy, 950 F.2d at 18-20.

The case at bar is hauntingly reminiscent of McCoy, and, thus, triggers the sense of deja vu. Appellants are the trustees of certain funds (the Funds) maintained by Local 4 of the International Union of Operating Engineers to fuel the union's employee benefit plans. In 1991, members of Local 4, then employed directly or indirectly by a subcontractor, Ashland Engineering Company (Ashland), participated in ongoing construction under the auspices of the Massachusetts Port Authority (Massport). A collective bargaining agreement obligated Ashland to contribute monies to the Funds commensurate with the number of hours each union member toiled on the Massport project.

In time, Ashland experienced financial problems, became delinquent on contributions to the Funds, and abandoned the Massport project. Noting that the general contractor, R.W. Granger and Sons, Inc. (Granger), had posted a performance-and-payment bond underwritten by United States Fidelity & Guaranty Company (USF & G), the trustees sued Ashland, Granger, and USF & G in an effort to extract the unpaid employer contributions.

The trustees' amended complaint contained three counts: count 1 sought to collect payments due from Ashland, count 2 sought to collect these payments from USF & G by invoking the Massachusetts statute under which the bond had been posted, ³ and count 3 sought to reach an asset of Ashland purportedly held by Granger--the bond--and to apply the proceeds to Ashland's debt.

Ashland did not defend and, therefore, count 1 is no longer velivolant. On June 1, 1993, the parties filed cross-motions for summary judgment on the two remaining counts. The district court granted the defendants' motions, concluding that ERISA preempted the section 29 claim as it pertains to employee benefit plans, and that Granger held none of Ashland's assets. See Williams v. Ashland Eng'g Co., 863 F.Supp. 46 (D.Mass.1994). Following the entry of separate judgments, the trustees appealed.

In this venue, the trustees agree that brevis disposition is warranted--the record reveals no genuine issues of material fact--but they contend that the lower court ruled in favor of the wrong parties. Affording plenary review, see, e.g., Mesnick v. General Elec. Co., 950 F.2d 816, 822 (1st Cir.1991), cert. denied, --- U.S. ----, 112 S.Ct. 2965, 119 L.Ed.2d 586 (1992); Garside v. Osco Drug, Inc., 895 F.2d 46, 48 (1st Cir.1990), we affirm. ⁴

The centerpiece of the trustees' appeal--count 2--is well within McCoy's precedential orbit. In McCoy, we acknowledged that Congress painted with a broad brush when it added an express preemption clause to the ERISA canvas. We described that clause as "sweeping" and "extensive in its scope." McCoy, 950 F.2d at 16. We also noted that the Massachusetts lien law at issue in McCoy referred specifically to the trustees of employee benefit plans and purported to grant them certain singular rights. In our view, these features rendered the law especially vulnerable to preemption, for "[s]tate statutes which expressly grant preferential benefits to ERISA plans cannot withstand the preemptive force of ERISA Sec. 514(a)." Id. at 20; accord Mackey v. Lanier Collection Agency & Serv., Inc., 486 U.S. 825, 829, 108 S.Ct. 2182, 2185, 100 L.Ed.2d 836 (1988). Thus, McCoy made clear that, at a bare minimum, state laws which "specifically refer to ERISA plans and grant them special treatment" are preempted regardless of a state legislature's good intentions or a particular law's consistency with ERISA's overall goals. McCoy, 950 F.2d at 18 (quoting Mackey, 486 U.S. at 829-30, 108 S.Ct. at 2185-86).

The statute before us today, Mass.Gen.L. ch. 149, Sec. 29, invites comparison with the statute we confronted in McCoy. Section 29 requires, inter alia, that a general contractor working on a public project furnish bond to secure payment of "any sums due trustees ... for health and welfare plans." Such plans come under the protective umbrella that ERISA spreads over the workplace. See 29 U.S.C. Sec. 1002(1)(B), (3) (defining covered employee welfare benefit plans); see also McCoy, 950 F.2d at 19-20. Since the statute specifically refers to ERISA-regulated employee benefit plans, and provides them with a special source of recovery for unpaid employer contributions, McCoy governs. Hence, the bond statute, as it applies to employee benefit plans, is preempted.

Appellants balk at the characterization of their case as McCoy redux. They loose an avalanche of arguments, but none is persuasive. Only four of these arguments require comment.

First: Appellants launch a ferocious attack on McCoy, intimating that it is wrongly decided and, therefore, should be limited to its facts. Statutes like the mechanic's lien law or the bond law, they tell us, affect employee benefit plans in "too tenuous, remote, or peripheral a manner," Shaw v. Delta Airlines, Inc., 463 U.S. 85, 100 n. 21, 103 S.Ct. 2890, 2901 n. 21, 77 L.Ed.2d 490 (1983), to warrant a conclusion that the statutes "relate to" such plans. This attack is wide of the mark.

First and foremost, we believe that our earlier opinion was--and is--clearly correct (that it is, so to speak, the real McCoy ). And we perceive no rational basis on which to distinguish between the mechanic's lien law and section 29 for the purpose of gauging ERISA's preemptive reach.

Because the two statutes are quite plainly sisters under the skin, there is also a prudential barrier that blocks the path of appellants' attack. In a multi-panel circuit, newly constituted panels are, for the most part, bound by prior panel decisions closely on point. See, e.g., Jusino v. Zayas, 875 F.2d 986, 993 (1st Cir.1989); Lacy v. Gardino, 791 F.2d 980, 985 (1st Cir.), cert. denied, 479 U.S. 888, 107 S.Ct. 284, 93 L.Ed.2d 259 (1986). In this instance, we are bound by McCoy.

To be sure, there are two exceptions to this manifestation of stare decisis principles. An existing panel decision may be undermined by controlling authority, subsequently announced, such as an opinion of the Supreme Court, an en banc opinion of the circuit court, or a statutory overruling. This exception is inapposite, for nothing of the kind has transpired here. The second exception pertains to those relatively rare instances in which authority that postdates the original decision, although not directly controlling, nevertheless offers a sound reason for believing that the former panel, in light of fresh developments, would change its collective mind. See generally Colby v. J.C. Penney Co., 811 F.2d 1119, 1123 (7th Cir.1987) (discussing "complex relationship ... between a court and its own previous decisions").

Appellants try to wriggle through this loophole. They suggest that a case recently decided by the Third Circuit casts a new light on ERISA preemption by focussing on "whether the existence of ERISA plans is necessary for the statute to be meaningfully applied," Keystone Chapter, Etc. v. Foley, 37 F.3d 945, 957 (3d Cir.1994), and that this shifted focus renders McCoy obsolete. However, appellants mischaracterize the holding in Keystone. There, the court reviewed a state minimum wage statute that did not refer explicitly to ERISA plans. After finding that the statute failed to single out such plans for special treatment, the court invoked the meaningfulness test to determine whether the statute might be said to "relate to" ERISA plans despite the absence of an express connection. See id. at 954-57. Since section 29 does single out ERISA plans for special swaddling, there is no need to consider the Keystone test in this case. ⁵

Second: Next, the trustees contend that section 29 is, in effect, a law regulating insurance and, therefore, is shielded from preemption by ERISA Sec. 514(b)(2)(A), 29 U.S.C. Sec. 1144(b)(2)(A) (a savings clause that, inter alia, renders ERISA preemption...