Am. Steel Erectors, Inc. v. Local Union No. 7, Int'l Ass'n of Bridge, Structural, Ornamental & Reinforcing Iron Workers

• Decision Date: 25 February 2016
• Docket Number: 13–1714,13–1705.,Nos. 13–1531,13–1665,s. 13–1531
• Court: U.S. Court of Appeals — First Circuit
• Parties: AMERICAN STEEL ERECTORS, INC.; Ajax Construction Company, Inc.; American Aerial Services, Inc.; Bedford Ironworks, Inc. ; and D.F.M. Industries, Inc., Plaintiffs–Appellants/Cross–Appellees, Ronald Beauregard, d/b/a Independent Welding Services Industries, Inc., Plaintiffs, v. LOCAL UNION NO. 7, INTERNATIONAL ASSOCIATION OF BRIDGE, STRUCTURAL, ORNAMENTAL & REINFORCING IRON WORKERS, Defendant–Appellee/Cross–Appellant, Charles Wright; Steel Erection and Ornamental Iron Industry Advancement Fund, Defendants.

815 F.3d 43

AMERICAN STEEL ERECTORS, INC.; Ajax Construction Company, Inc.; American Aerial Services, Inc.; Bedford Ironworks, Inc. ; and D.F.M. Industries, Inc., Plaintiffs–Appellants/Cross–Appellees,

Ronald Beauregard, d/b/a Independent Welding Services Industries, Inc., Plaintiffs,

v.LOCAL UNION NO. 7, INTERNATIONAL ASSOCIATION OF BRIDGE, STRUCTURAL, ORNAMENTAL & REINFORCING IRON WORKERS, Defendant–Appellee/Cross–Appellant,Charles Wright; Steel Erection and Ornamental Iron Industry Advancement Fund, Defendants.

Nos. 13–1531

13–1714

13–1665

13–1705.

United States Court of Appeals, First Circuit.

Feb. 25, 2016.

Michael E. Avakian, with whom Wimberly, Lawson & Avakian, Thomas M. Triplett, Schwabe Williamson & Wyatt, Geoffrey R. Bok, and Stoneman, Chandler & Miller LLP were on brief, for appellants/cross-appellees.

Indira Talwani, with whom Paul F. Kelly, Jasper Groner, and Segal Roitman, LLP were on brief, for appellee/cross-appellant.

Maurice Baskin and Littler Mendelson, PC on brief for Associated Builders and Contractors, Inc., amicus curiae in support of appellants/cross-appellees.

Before HOWARD, Chief Judge, STAHL and LIPEZ, Circuit Judges.

HOWARD

, Chief Judge.

On December 2, 2004, five structural steel contractors filed a complaint against a local union alleging antitrust law violations under the Sherman Act, labor law violations under the Labor Management Relations Act ("LMRA"), and other violations under state law. Over the intervening decade, the case has evolved in complex ways. Although we reviewed this matter once before, Am. Steel Erectors, Inc. v. Local Union No. 7, Int'l Ass'n of Bridge, Structural, Ornamental & Reinforcing Iron Workers ("ASE I "), 536 F.3d 68 (1st Cir.2008)

, we found elements pertaining to the federal claims undeveloped and remanded for further proceedings. The case now reaches us again following trial, with both parties appealing and cross-appealing aspects of the final judgment. After considerable reflection, and for the reasons set forth below, we affirm.

I. Background

A. Factual History

As we explained in ASE I, the structural steel industry is comprised of steel fabricators, who manufacture steel products to meet design specifications, and steel erectors, who assemble the fabricated steel. When a developer or owner taps a general contractor to lead the construction of a building, that general contractor typically solicits bids for a combined "fab and erect" package, which is submitted by the fabricator and includes the combined price for both the fabrication and erection of the structural steel. As such, the steel fabricators must themselves solicit bids for the erection work from the steel erectors in order to finalize their combined bid price. And, in turn, the erection companies must incorporate the significant costs associated with paying their laborers into their own steel erection price.

In New England, at the time of the complaint, there were relatively few fabricators (around twenty) and many erectors (over 200). The plaintiffs in this case are five nonunionized steel erector companies,¹ and the defendant is Labor Union No. 7 of the International Association of Bridge, Structural, Ornamental & Reinforcing Iron Workers ("Local 7"), a teamsters local union for member iron workers (including steel erector laborers) in eastern Massachusetts. Local 7 has a collective bargaining agreement ("CBA") with the Building Trades Employers' Association of Boston and Eastern Massachusetts ("BTEA"), which is an entity that represents hundreds of construction companies. Among the "union signatory" firms that have agreed to the CBA are numerous erector companies with whom the plaintiffs compete.

Under the CBA, the signatory erectors must pay Local 7 workers a union scale wage. Nonunion erectors, on the other hand, are not bound to the CBA and can negotiate their own labor costs with their employees. Because labor expenditures account for approximately half of the total steel erection costs, nonunion erectors are often able to submit lower bids for erection contracts to fabricators looking to formulate a combined "fab and erect" bid. Over time, not unexpectedly, that can lead to nonunion erectors and laborers gaining market share from union erectors and laborers.

In order to prevent such erosion in its labor market share, Local 7 incorporated a "Market Recovery Program" ("MRP") into its 2000–2006 CBA. Under the MRP, signatory erectors withheld a fraction of each union laborer's paycheck, which was then paid into a target fund (the "Fund") operated by Local 7. Local 7 could then identify construction projects likely to draw competition from nonunion erectors and, on a case-by-case basis, send "blast faxes" or "project alerts" to its signatory union erectors with an offer to subsidize their bids and make them more competitive with nonunion bids. In the event that a union signatory won the subcontract, Local 7 (sometimes in conjunction with other regional unions) would enter into a job targeting fund agreement with that erector company governing the terms of the MRP subsidy for that specific project ("JTF agreement").

B. Procedural History

In 2004, the plaintiffs filed a complaint in federal district court in Massachusetts alleging, in addition to state law claims, that actions of Local 7 violated both (1) the LMRA, which provides civil liability for damages resulting from unfair labor practices, 29 U.S.C. §§ 158

, 187 ; and (2) Sections 1 and 2 of the Sherman Act, which forbid practices that unlawfully impair competition, 15 U.S.C. §§ 1, 2. In general, the complaint alleged that Local 7 employed coercion and unlawful economic pressure to ensure that contracts were awarded to signatory erectors, rather than plaintiffs, and to foreclose nonunion erectors from a large portion of the structural steel erection market in the greater Boston area.

After the district court granted Local 7's request for summary judgment on all claims, we reversed in part. See ASE I, 536 F.3d at 76–85

. We agreed that the plaintiffs' state claims were preempted, but remanded the surviving federal labor and antitrust claims for further proceedings. The district court set the plaintiffs' LMRA claims for trial and reserved the antitrust claims to be addressed after several of the factual disputes underlying both claims had been resolved by the jury.

At trial on the LMRA claims, the court limited the plaintiffs to presenting evidence about union conduct relating to four particular construction projects: two, referred to as Cardi's Furniture and Archstone Apartments, involved plaintiff Ajax; the other two projects, Fox 25 and Brickworks, involved plaintiff DFM. The jury found for the plaintiffs on each of the four projects, awarding Ajax $211,956.00 in damages and awarding DFM $78,757.60. The district court denied Local 7's motion for judgment as a matter of law or a new trial, see Fed.R.Civ.P. 50(b)

, 59, which challenged the sufficiency of the evidence supporting liability and the damages calculations.

Following the jury verdict, the district court relied on the evidence presented at trial in its subsequent consideration of the antitrust issues, as the plaintiffs had represented earlier in the litigation that identical evidence undergirded both the LMRA claims and the antitrust claims. Ultimately, the court entered judgment on the Sherman Act claims in favor of Local 7, concluding that the plaintiffs' evidence failed to give rise to antitrust liability as a matter of law. See Am. Steel Erectors, Inc. v. Local Union No. 7, Int'l Ass'n of Bridge, Structural, Ornamental & Reinforcing Iron Workers ("ASE II "), 932 F.Supp.2d 240, 252 (D.Mass.2013)

.

II. Analysis

The plaintiffs appeal from the summary judgment decision on their antitrust claims. Local 7 cross-appeals the court's decision to keep in place the jury's verdict on the LMRA claims. We address the appeals in reverse order, review the merits de novo, and consider all trial evidence in the light most favorable to the plaintiffs. See Long v. Fairbank Reconstruction Corp., 701 F.3d 1, 3 (1st Cir.2012)

.

A. Labor Law Claims

1. Liability

The LMRA extends a private right of action to those injured in business or property by reason of certain unlawful union practices proscribed by the National Labor Relations Act ("NLRA"). See 29 U.S.C. § 187

. As we explained in ASE I, § 8(b)(4)(ii) of the NLRA makes it an unfair labor practice for a union to threaten, coerce, or restrain an employer with an object of forcing the employer (A) to enter into an agreement prohibited by § 8(e) of the NLRA, or (B) to cease doing business with another party. See 29 U.S.C. § 158(b)(4)(ii)(A) and (B) ; Intercity Maint. Co. v. Local 254, Serv. Employees Int'l Union, 241 F.3d 82, 87 (1st Cir.2001). An illegal § 8(e) agreement is, in turn, defined in relevant part as an agreement by an employer to cease doing business with any other person. See 29 U.S.C. § 158(e). In other words, a union may incur liability under subparagraph B of § 8(b)(4)(ii) if it coerces an employer to cease doing business with another party or under subparagraph A of § 8(b)(4)(ii) if it coerces an employer to enter into an agreement to cease doing business with another party.

Such an agreement can be express or implied, ASE I, 536 F.3d at 83

, and it need not be of a "generalized exclusionary nature to fall afoul of § 8(e); rather, the use of coercive measures by a union to pressure a single neutral employer into a single agreement to cease doing business with a single non-union employer, or the application of such measures on a project-by-project basis" is sufficient to find liability. Id. (citing N.L.R.B. v. Bangor Bldg. Trades Council, 278 F.2d 287, 289–90 (1st Cir.1960) ).

Of course, Local 7 rightfully points out that a neutral employer's mere decision to acquiesce to a union's unlawful coercion and cut ties with the nonunion party is not, standing alone, sufficient to imply the existence of a § 8(e) agreement and incur liability under subparagraph A....