Associated General Contractors of America v. Metropolitan Water Dist. of Southern California

Decision Date23 October 1998
Docket NumberNos. 98-55630,98-56408,s. 98-55630
Parties159 L.R.R.M. (BNA) 2588, 22 Employee Benefits Cas. 2050, 98 Cal. Daily Op. Serv. 7954, 98 Daily Journal D.A.R. 11,039, Pens. Plan Guide (CCH) P 23949D ASSOCIATED GENERAL CONTRACTORS OF AMERICA, San Diego Chapter, Inc., a nonprofit corporation, Plaintiff-Appellant, v. METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA, a public corporation, Defendant-Appellee. ASSOCIATED GENERAL CONTRACTORS OF AMERICA, San Diego Chapter, Inc., a nonprofit corporation, Plaintiff-Appellant, v. METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA, a public corporation, Defendant-Appellee.
CourtU.S. Court of Appeals — Ninth Circuit

David P. Wolds, Merrill, Schultz & Wolds, San Diego, California, for plaintiff-appellant.

Andrew C. Peterson, Morgan, Lewis & Bockius, Los Angeles, California, for defendant-appellee.

John H. Widman, McAleese, McGoldrick & Susanin, King of Prussia, Pennsylvania, for amicus, Associated General Contractors of America, Inc.

Christine Williams, Feder & Associates, Washington, D.C., for amicus, National Coordinating Committee For Multiemployer Plans.

Appeals from the United States District Court for the Southern District of California; Jeffrey T. Miller, District Judge, Presiding. D.C. No. CV 98-00416-(JTM)LSP.

Before: BRUNETTI, FERNANDEZ, and McKEOWN, Circuit Judges.

FERNANDEZ, Circuit Judge:

Associated General Contractors of America, San Diego Chapter, Inc., brought this action against the Metropolitan Water District of Southern California for the purpose of preventing MWD from enforcing a project labor agreement (PLA) regarding MWD's Eastside Reservoir Project and a similar PLA regarding MWD's Inland Feeder Project. AGC argued that the PLAs were preempted by ERISA 1 and moved for a preliminary injunction. When that motion was denied, AGC appealed. Thereafter, the district court dismissed the action with prejudice, and AGC also appealed that dismissal. We affirm.


AGC is a trade association whose members include both general contractors and subcontractors. It exists to foster, protect and promote the common interests of its members. Its executive vice president declared that in pursuit of those goals it, among other things, "supports fair and nondiscriminatory competitive bidding practices for both public and private construction projects. AGC also MWD is a public corporation organized and existing under the laws of the state of California. It is a regional water agency, which imports water from northern California and the Colorado River into the coastal plain of southern California. MWD is authorized to prescribe "methods for construction of work and for the letting of contracts for the construction of works." Cal. Pub. Cont.Code § 21564. Contracts that exceed $25,000 must be awarded to the lowest responsible bidder after advance publication of notices inviting bids. See Cal. Pub. Cont.Code § 21565.

                is heavily involved with local, state and federal public works agencies to establish and maintain fair and nondiscriminatory competitive bidding practices."   In addition, it sponsors a retirement plan, a health and welfare plan, and an apprenticeship training program for use on both private projects, and state and federal public works projects.  It makes those plans available to its qualified general contractor and subcontractor members.  The AGC apprenticeship plan has been approved by the California Apprenticeship Counsel to train apprentices in various work classifications on public works projects in a number of counties in southern California

MWD determined that it would construct the Eastside Reservoir Project, which will expand water storage capacity for the area it serves. The cost of that project will be in the neighborhood of two billion dollars. It will, obviously, require large numbers of companies and laborers to bring it to completion. MWD also decided to construct the Inland Feeder Project, which is a water distribution pipeline that will cost about one billion dollars. In an attempt to assure a good measure of labor harmony, MWD pursued the negotiation of the PLAs with a number of unions. The terms were hammered out, and were then adopted and approved by the MWD board of directors. They are, therefore, what amount to collective bargaining agreements which are specific to the projects for which they were negotiated. When the projects end, the PLAs will expire.

Of course, the PLAs would not have much efficacy if they did not bind the contractors and subcontractors who work on the projects. Thus, the bid specifications for the projects require all contractors and subcontractors to agree to the terms of the PLAs. The provisions challenged by AGC require direct participation in certain designated employee benefit funds. In addition, general contractors and subcontractors working on these projects must obtain and train apprentices through established apprenticeship programs specified in the PLAs.

AGC filed this complaint against MWD for the purpose of obtaining declaratory relief and for the purpose of enjoining MWD from enforcing the provisions of the PLAs that require participation in the benefit plans. AGC filed a motion for a preliminary injunction, which requested that MWD be enjoined from requiring adoption of the PLAs as conditions to awarding contracts to perform work on the two projects, or any other public works project, until the employee benefit plan provisions were removed from them.

The district court concluded that AGC had standing, but that it had wholly failed to show a likelihood that it would prevail on its claim that the PLAs violated ERISA. It, therefore, denied the preliminary injunction. In addition, the district court dismissed AGC's complaint for "failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). It granted leave to amend, but then dismissed the amended complaint on the same ground. That dismissal was with prejudice. These appeals followed.


We review the district court's determination that AGC has standing de novo. See Inland Empire Chapter of Associated Gen. Contractors v. Dear, 77 F.3d 296, 299 (9th Cir.1996). We also review its determination regarding ERISA preemption de novo. See Aloha Airlines, Inc. v. Ahue, 12 F.3d 1498, 1500 (9th Cir.1993). Moreover, we review its determination that the preliminary injunction should be denied because AGC had no likelihood of success on the merits de novo. See Inland Empire Public Lands Council v. Schultz, 992 F.2d 977, 980 (9th Cir.1993). At the same time, our review In addition,

of denials of injunctive relief is limited, and we will reverse only if the district court "abused its discretion or based its decision on an erroneous legal standard or on clearly erroneous findings of fact." Herrington v. County of Sonoma, 12 F.3d 901, 907-08 (9th Cir.1993).

We review a dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6) de novo. We limit our review to the allegations of material facts set forth in the complaint, which we read in the light most favorable to the non-moving party and which, together with all reasonable inferences therefrom, we take to be true. However, conclusory allegations of law and unwarranted inferences are not sufficient to defeat a motion to dismiss.

Pareto v. FDIC, 139 F.3d 696, 699 (9th Cir.1998) (citations omitted).


MWD first argues that there is no jurisdiction to proceed because AGC does not have standing to bring this action. We disagree. The test for representational standing, which is what AGC seeks, is:

(a) its members would otherwise have standing to sue in their own right;

(b) the interests it seeks to protect are germane to the organization's purpose; and

(c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.

Associated Gen. Contractors v. Coalition for Econ. Equity, 950 F.2d 1401, 1406 (9th Cir.1991) (citation and internal quotations omitted).

There can be no doubt that AGC meets the second of these tests. Certainly its desire to remove restrictions which, as it sees it, will interfere with favorable bidding conditions sought by its members is germane, even central, to its purposes. See id. Similarly, there can be little doubt that the claims raised by AGC do not require the participation of individual members in this action. Individualized proof from the members is not needed where, as here, declaratory and injunctive relief is sought rather than monetary damages. See id. at 1408; cf. Inter-Modal Rail Employees Ass'n v. Atchison, Topeka and Santa Fe R.R. Co., 80 F.3d 348, 350 (9th Cir.1996), judgment vacated on other grounds, 520 U.S. 510, ----, 117 S.Ct. 1513, 1517, 137 L.Ed.2d 763 (1997). That leaves only the first part of the test: would the members themselves have standing? We are satisfied that they would.

This is not a case where there is a claim that some member might hypothetically be affected some day, but "without any description of concrete plans" or "any specification of when the some day will be." Lujan v. Defenders of Wildlife, 504 U.S. 555, 564, 112 S.Ct. 2130, 2138, 119 L.Ed.2d 351 (1992). Here AGC pointed out that its members regularly bid on public projects and are being deterred from bidding on these projects because of the PLAs alone. The member declarations that AGC presented were from officers of companies which, as the declarants swore, supply materials and labor to public works projects on a regular basis. One of the companies actually did perform work on the projects in question and was forced to follow the terms of the PLAs. The other company would bid to work on the projects were it not prevented from doing so because the PLAs would require it to participate in ERISA plans other than the ones that it already supplies to its employees. It is clear that these members have been and will be...

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