Bd. of Trs. v. ILA Local 1740, AFL-CIO
| Docket Number | Civ. 18-1598 (SCC) |
| Decision Date | 13 June 2022 |
| Parties | Board of Trustees, Plaintiff, v. ILA Local 1740, AFL-CIO, Defendant. |
| Court | U.S. District Court — District of Puerto Rico |
The Board of Trustees of the ILA PRSSA Pension Fund has filed suit against ILA Local 1740, seeking to collect delinquent contributions and withdrawal liability. Both parties have moved for summary judgment. Docket Nos. 122, 126. For the reasons below, the Court grants the Board's motion and denies Local 1740's motion.
The Board administers the Pension Fund. One of its duties is collecting delinquent contributions and withdrawal liability from employers that are obligated to contribute to the fund. Local 1575 is one of these employers. The Board claims that Local 1575 merged into Local 1740 and therefore Local 1740, as the surviving entity, is obligated to pay Local 1575's delinquent contributions and withdrawal liability. It asserts two claims against Local 1740: (1) a delinquent contribution claim under the Employment Retirement Income and Security Act (ERISA) of 1974, 29 U.S.C. § 1145, and (2) a withdrawal liability claim under the Multiemployer Pension Plan Amendments Act (MPPAA) of 1980, 29 U.S.C. § 1381. Earlier, Local 1740 filed a motion to dismiss these claims on the grounds that it is not an employer that is obligated to contribute to the fund and the merger never occurred. We converted it into a motion for summary judgment and denied it, concluding that Local 1575 is an employer under both ERISA and the MPPAA, there is a genuine dispute of material fact as to whether these locals merged, and whether they merged will resolve this lawsuit. Docket No. 69.
Now that discovery has concluded, both the Board and Local 1740 have moved for summary judgment. The Board moves for summary judgment on the ground that the merger between Locals 1575 and 1740 was effective, so Local 1740 has assumed Local 1575's liability to the Pension Fund. Docket No. 122. And even if the merger was ineffective, the Board argues, Local 1740 is liable under the alter-ego doctrine. Local 1740 moves for summary judgment on the same grounds as before: It is not an employer under ERISA or the MPPAA and it never merged with Local 1575. Docket No. 126.
The purpose of summary judgment is to “pierce the boilerplate of the pleadings and assay the parties' proof in order to determine whether trial is actually required.” Tobin v. Fed. Express Corp., 775 F.3d 448, 450 (1st Cir. 2014) (quoting Wynne v. Tufts Univ. Sch. of Med., 976 F.2d 791, 794 (1st Cir. 1992)). The movant must first “demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). A fact is material if it might affect the outcome of the lawsuit. Zampierollo-Rheinfeldt v. Ingersoll-Rand de P.R., Inc., 999 F.3d 37, 50 (1st Cir. 2021). And there is a genuine dispute over it when “the evidence, viewed in the light most flattering to the nonmovant, would permit a rational factfinder to resolve the [fact] in favor of either party.” Id. (quoting Medina-Muñoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir. 1990)). After the movant has met his initial burden, the burden shifts to the nonmovant to “produc[e] specific facts sufficient to deflect the swing of the summary judgment scythe.” Joseph v. Lincare, Inc., 989 F.3d 147, 157 (1st Cir. 2021). The nonmovant, in other words, must show that a “trialworthy issue exists.” Mulvihill v. Top-Flite Golf Co., 335 F.3d 15, 19 (1st Cir. 2003). In the end, summary judgment is appropriate only when the record demonstrates 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); Alston v. Town of Brookline, 997 F.3d 23, 35 (1st Cir. 2021).
We begin by laying out the undisputed material facts. Then we turn to whether either party has shown, based on these facts, that it is entitled to judgment as a matter of law. Barnes v. Fleet Nat'l Bank, 370 F.3d 164, 170 (1st Cir. 2004).
The International Longshoremen's Association (ILA) is the largest labor union of maritime workers in North America. LUF 1; RLUF 1. There used to be several local labor unions, which were all ILA entities, at the Port of San Juan: Locals 1575, 1740, 1901, and 1902. LUF 3; RLUF 3; BUF 9; RBUF 9. In March 2015, a stevedoring company called Horizon Lines, LLC (“Horizon”), stopped operating at the port. BUF 12; RBUF 12. When Horizon left, Local 1575's members lost their jobs. BUF 13; RBUF 13; LUF 36; RLUF 36. ILA tried to find them jobs but there were not enough on ILA's piers. LUF 49-52; RLUF 49-52. Many of Local 1575's members retired, left Puerto Rico, or went to work at Crowley. LUF 45, 52; RLUF 45, 52.
Later that year, another stevedoring company, Luis A. Ayala Colón Sucres, Inc. (“Ayala”), expanded its operations and took over piers E and F, which Horizon had occupied. BUF 14; RBUF 14. But only Locals 1740, 1901, and 1902 had work contracts with Ayala. BUF 15; RBUF 15. So according to them, only they could work in Ayala's new territory on those piers. BUF 15; RBUF 15. Local 1575, however, saw things differently. It believed that its contract with Horizon carried over to its successors and assigns, including Ayala, and thus it had the right to work for whatever entity occupies those piers. BUF 16; RBUF 16; Docket No. 128-16.[2] ILA appointed a committee to investigate and resolve this dispute. BUF 17; RBUF 17. In March 2015, ILA's executive counsel decided to resolve it by merging the locals. BUF 20; RBUF 20.
ILA is the locals' highest governing body. BUF 5; RBUF 5. Its constitution states that it owns all money (e.g., fees, dues, assessments) paid to the locals and all their assets but the locals may possess and control them. BUF 6; RBUF 6. And it also states that ILA has the power to merge local unions under any terms and conditions that its executive officers deem proper. LUF 125-26; RLUF 125-26. Each local has its own ILA charter, bylaws, officers, boards, members, collective-bargaining agreements, and benefits. LUF 9-10; RLUF 9-10. So, by and large, the locals run themselves. LUF 12; RLUF 12.
ILA can amend a local's charter if it chooses to merge it with another that has a different craft or job classification. LUF 114; RLUF 114. It amended Local 1740's charter in May 2015, before the locals signed the merger agreement. LUF 116; RLUF 116. When a merger ends a local's existence, that local no longer has authority under its charter. LUF 157; RLUF 157.
Before the locals signed the merger agreement, the ILA committee required the locals to enter into a work-sharing agreement, BUF 21; RBUF 21, which was intended to keep Local 1575's members employed, BUF 22; RBUF 22. Under the agreement, Local 1575's members retained their seniority and paid their dues to Locals 1740, 1901, and 1902. BUF 24; RBUF 24. But generally, seniority does not transfer when a person transfers from one local to another. BUF 100; RBUF 100. If members want to transfer, they call ILA for transfer cards, and if there is work available, the members transfer. LUF 99-100; RLUF 99-100. ILA encouraged Local 1575's members to transfer to the other locals. BUF 25; RBUF 25.
After the locals signed the work-sharing agreement, ILA sent them a letter saying that it “is fully committed” to merging them and that the ILA committee would “pursue this goal until the merger is fully realized and completed.” BUF 27; RBUF 27. ILA believed that one large local with unified finances and membership would be stronger than four smaller ones, BUF 28; RBUF 28, and that unity would allow them to better resolve issues, BUF 32; RBUF 32.
On April 1, 2015, James Paylor, one of the members of the ILA committee and ILA's vice president, BUF 17; RBUF 17, sent an email titled “Puerto Rico Merger.” BUF 29; RBUF 29. In it, he stated that Local 1575 wanted to know if ILA is committed to the merger and if the new structure would include its representatives. BUF 30; RBUF 30. Paylor said that he had assured it that it would be part of the merged local, it would have representation, and that ILA is committed to working towards a merger. BUF 31; RBUF 31. He sent notices to the locals and held meetings to explain why ILA wanted the merger. BUF 37; RBUF 37. He also prepared worksheets that showed how Local 1740's structure and compensation would be organized afterwards. BUF 38; RBUF 38. The ILA committee placed former Local 1575 officer, Angel López, in a leadership role in Local 1740's proposed post-merger structure, which was memorialized in the merger agreement.
BUF 39; RBUF 39. Individuals from the locals with the authority to execute the merger agreement on behalf of their respective local signed it, and by its terms, except as otherwise provided in it, it became effective on August 1, 2015. BUF 42; RBUF 42; Docket 128-37, pg. 7. The locals did not send ILA a copy of the agreement for its approval. LUF 174; RLUF 174.
The agreement provided that the locals “shall merge into and become an integral part of Local 1740.” BUF 43; RBUF 43. It stated as well that the locals agree that the “approval of this merger will constitute an assignment to Local 1740 of all of the rights, title and interest in and to all of the assets of Locals 1575, 1901, and 1902.” BUF 45; RBUF 45. Under the merger agreement, Local 1740 expressly assumed all Local 1575's obligations. BUF 47; RBUF 47; Docket No. 128-37, pg. 4. And the locals would have a merged membership list. LUF 164; RLUF 164. But the locals' fringe benefits funds did not merge as part of the agreement. LUF 259; RLUF...
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