Am. Steel Erectors, Inc. v. Local Union No. 7

Decision Date25 March 2013
Docket NumberCivil Action No. 04–12536–RGS.
Citation932 F.Supp.2d 240
CourtU.S. District Court — District of Massachusetts
PartiesAMERICAN STEEL ERECTORS, INC. et al. v. LOCAL UNION NO. 7, INTERNATIONAL ASSOCIATION OF BRIDGE, STRUCTURAL, ORNAMENTAL & REINFORCING IRON WORKERS.

932 F.Supp.2d 240

AMERICAN STEEL ERECTORS, INC. et al.
v.
LOCAL UNION NO. 7, INTERNATIONAL ASSOCIATION OF BRIDGE, STRUCTURAL, ORNAMENTAL & REINFORCING IRON WORKERS.

Civil Action No. 04–12536–RGS.

United States District Court,
D. Massachusetts.

March 25, 2013.


[932 F.Supp.2d 242]


Michael E. Avakian Wimberly, Lawson & Avakian, Washington, DC, Carol Chandler Stoneman, Geoffrey R. Bok Stoneman, Chandler & Miller, Paul F. Kelly Segal Roitman, LLP, Boston, MA, for Plaintiff.

Mickey Long Law Offices of Mickey, Stephanie R. Pratt Segal Roitman, Burton E. Rosenthal Segal, Mary T. Sullivan Segal Roitman, Indira Talwani Segal Roitman, LLP, Boston, MA, for Defendant.


MEMORANDUM AND ORDER ON DEFENDANT LOCAL UNION NO. 7'S RENEWED MOTION FOR SUMMARY JUDGMENT

STEARNS, District Judge.

Plaintiffs—five nonunion steel erectors—American Steel Erectors, Inc., Ajax Construction Company, Inc., American Aerial Services, Inc., Bedford Ironworks, Inc., and D.F.M. Industries, Inc.—allege that defendant Local Union No. 7, International Association of Bridge, Structural, Ornamental & Reinforcing Iron Works (Local 7) conspired with the Building Trades Employers' Association of Boston and Eastern Massachusetts (BTEA) and other unionized employers to monopolize the structural steel erection industry in the greater Boston area through the use of a job targeting program and coercive tactics in violation of federal antitrust and labor laws. The labor law claims having been resolved in plaintiffs' favor by a jury verdict, Local 7 now moves for summary judgment on the antitrust claims.

BACKGROUND

Structural steel is the preferred framing material for the construction of multistory buildings.

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. General contractors requiring structural steel work typically solicit bids for “fab and erect” packages. The packages are submitted by fabricators, who solicit

[932 F.Supp.2d 243]

bids for the erection work from steel erectors. In New England there are relatively few fabricators (around twenty) and many erectors (over 200). As a result, the competition for erection subcontracts in the Boston area is fierce, and the general rule is that the lowest bidder will be awarded the erection contract.

Am. Steel Erectors, Inc. v. Local Union No. 7, Int'l Ass'n of Bridge, Structural, Ornamental & Reinforcing Iron Workers, 536 F.3d 68, 72 (1st Cir.2008) (ASE ).


Local 7 represents steel erection workers in eastern Massachusetts. Local 7's job targeting program—the Market Recovery Program (MRP)—which is at the center of the current dispute, was established in or around 1990. The MRP is intended to enable unionized erectors to compete with their nonunion counterparts, who because of lower labor costs, typically have a built-in bidding advantage. The MRP subsidizes the bids of unionized contractors competing for jobs “targeted” by Local 7 by paying the difference between union scale wages and the less handsome wages earned by nonunion workers.

The MRP is funded by union members' dues. The employer withholds the dues from the member's paycheck and pays them over to Local 7, which deposits them into the MRP fund. In 1993, Local 7 and the BTEA formally incorporated this check-off system into their master Collective Bargaining Agreement (CBA). The CBA provides that a signatory employer will make an MRP deduction of 2 percent plus 85 cents/hour from each member's weekly paycheck. The deduction obligation applies to all construction contracts for which Local 7 supplies unionized labor, including federally-funded projects subject to the “prevailing wage” provisions of the Davis–Bacon Act, 40 U.S.C. §§ 3141–3148.1

Plaintiffs allege that Local 7 used the MRP as a vehicle to effectuate a conspiracy with signatory contractors to freeze non-union contractors out of a significant portion of the Boston-area steel erection market, and more particularly, from the larger and more lucrative jobs.2 Plaintiffs claim that apart from the MRP, Local 7 engaged in coercive tactics, including threats of violence and secondary picketing, to pressure steel fabricators and others with control over job sites into breaching contracts with nonunion erectors and replacing them with unionized BTEA members.

In 2007, this court granted summary judgment to Local 7 on one aspect of the antitrust claims and on the labor law claims generally. See Am. Steel Erectors, Inc. v. Local Union No. 7, Int'l Ass'n of Bridge, Structural, Ornamental & Reinforcing Iron Workers, 480 F.Supp.2d 471 (D.Mass.2007). As relevant to this opinion, this court found that plaintiffs' antitrust claims fell within the “comprehensive statutory labor exemption to the antitrust laws.” 3Id. at 476–478, citing

[932 F.Supp.2d 244]

United States v. Hutcheson, 312 U.S. 219, 231–232, 61 S.Ct. 463, 85 L.Ed. 788 (1941) (labor activity is exempt from antitrust liability where a union acts unilaterally in its own self-interest and not in combination with a non-labor party). Because this court found that the MRP fell within the statutory exemption, it did not consider Local 7's other grounds (the nonstatutory exemption and lack of substantive merit) for seeking summary judgment on the antitrust claims.

Plaintiffs appealed and the First Circuit reversed. See ASE, 536 F.3d at 78–79. The Court found that because the effective operation of the MRP is dependent on the cooperation of the signatory employers (who collect the funds that are ultimately distributed to the unionized employer who successfully bids on a targeted job), the MRP failed the non-combination prong of the Hutcheson test. Id. at 78. The First Circuit left open the question of whether Local 7's conduct might be protected by the nonstatutory antitrust exemption. Id. at 79–81. Finally, the First Circuit, while agreeing with this court that plaintiffs' state law claims were preempted by federal law, reversed this court's summary judgment ruling for Local 7 as to the violation of section 8(b)(4)(ii)(A) of the National Labor Relations Act (specifically whether Local 7 had used coercive tactics to pressure neutral employers into entering unlawful section 8(e) agreements, as plaintiffs alleged). See id. at 81–84; 29 U.S.C. § 158(b)(4)(ii)(A), (e).

In 2009, after remand, the labor law claims were tried to a jury resulting in a favorable verdict for plaintiffs. The jury found that “plaintiffs [had] shown by a preponderance of the evidence that Local 7 threatened, coerced or restrained Cape & Island Steel (Fox 25), Capone Iron Works (Brickworks, Buildings 3 & 4), Famm Steel Inc (Cardi's Furniture), and [ ] Mandate Erectors (Archstone Apartments) into entering an explicit or implicit agreement with Local 7 to cease doing business with [plaintiffs] D.F.M. Industries and [ ] Ajax Construction Company” and that “the coerced agreement(s) ... were a proximate (substantial) cause of injury and damages to one or more of the plaintiffs.” 4 Jury Verdict, Dkt. # 151. The jury awarded Ajax $211,956.00 in damages, and D.F.M. $78,757.60. Id.5

The jury verdict left open the question of liability on the antitrust claims. After some further discovery, Local 7 renewed its motion for summary judgment on the grounds not previously considered by the court. The court heard oral argument on December 14, 2012.

DISCUSSION

Summary judgment is appropriate when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “A ‘genuine’ issue is one that could be resolved in favor of either party, and a ‘material fact’ is one that has the potential of affecting the outcome of the case.” Calero–Cerezo v. U.S. Dep't of Justice, 355 F.3d 6, 19 (1st Cir.2004), citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248–250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The moving party

[932 F.Supp.2d 245]

bears the burden of establishing that there is no genuine issue of material fact precluding the entry of judgment. See Celotex Corp. v. Catrett, 477 U.S. 317, 322–323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). “The evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.” Anderson, 477 U.S. at 255, 106 S.Ct. 2505.

The Nonstatutory Exemption

The nonstatutory exemption might more accurately be described as a necessary exception to the statutory exemption. If the statutory exemption were to be taken literally, it would outlaw collective bargaining agreements, which are “by definition a combination between a labor group and a non-labor group.” ASE, 536 F.3d at 78, citing Brown v. Pro Football, Inc., 518 U.S. 231, 237, 116 S.Ct. 2116, 135 L.Ed.2d 521 (1996). Thus, in order “ ‘to give effect to federal labor laws and policies and to allow meaningful collective bargaining to take place, some restraints on competition imposed through the bargaining process must be shielded from antitrust sanctions.’ ” ASE, 536 F.3d at 79, quoting Brown, 518 U.S. at 237, 116 S.Ct. 2116. The judicially crafted nonstatutory exemption provides an aegis for “alleged anticompetitive conduct [that] is anchored in the collective-bargaining process, concerns only the parties to the collective bargaining relationship, and relates to wages, hours, conditions of employment, or other mandatory subjects of collective bargaining.” ASE, 536 F.3d at 77. Its applicability is “the strongest where the alleged restraint operates primarily in the labor market and has only tangential effects on the business market.” Id. at 79.

Local 7 concedes (as it must) that the four agreements the jury found to constitute illegal section 8(e) agreements are not protected by the nonstatutory exemption. It argues rather that the MRP, the vehicle by which plaintiffs contend Local 7 wields monopoly power, is exempt from the antitrust regime and its limits on collective action. This is...

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  • Table of Cases
    • United States
    • ABA Antitrust Library Handbook on the Scope of Antitrust Procedural issues
    • January 1, 2015
    ...62, 233 American Steel Erectors, Inc. v. Local Union No. 7, Int’l Ass’n of Bridge, Structural, Ornamental & Reinforcing Iron Workers, 932 F. Supp. 2d 240 (D. Mass. 2013), 202, 203 American Steel Erectors, Inc. v. Local Union No. 7, Int’l Ass’n of Bridge, Structural, Ornamental, & Reinforcin......
  • Antitrust and Organized Labor
    • United States
    • ABA Antitrust Library Handbook on the Scope of Antitrust Issues of sector-wide applicability
    • January 1, 2015
    ...2000); American Steel Erectors, Inc. v. Local Union No. 7, Int'l Ass'n of Bridge, Structural, Ornamental & Reinforcing Iron Workers, 932 F. Supp. 2d 240, Antitrust and Organized Labor 203 Other courts hold that if a provision is valid under the labor laws, then the agreement does not violat......

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