Bugher v. Feightner

Decision Date19 December 1983
Docket NumberNo. 81-2899,81-2899
Citation722 F.2d 1356
Parties115 L.R.R.M. (BNA) 2292, 99 Lab.Cas. P 10,717, 4 Employee Benefits Ca 2604 Forrest BUGHER, et al., Plaintiffs-Appellees, v. Jack FEIGHTNER d/b/a Feightner Excavating Company, Defendant-Appellant.
CourtU.S. Court of Appeals — Seventh Circuit

Alan H. Lobley, Ice, Miller, Donadio & Ryan, Indianapolis, Ind., for defendant-appellant.

Louis E. Sigman, Baum, Sigman & Gold, Chicago, Ill., for plaintiffs-appellees.

Before BAUER and WOOD, Circuit Judges, and CAMPBELL, Senior District Judge. *

WILLIAM J. CAMPBELL, Senior District Judge.

This is an appeal brought by defendant Jack Feightner, d/b/a Feightner Excavating Company, from a judgment entered after a nonjury trial. Plaintiffs, the trustees of certain union trust funds, brought this action seeking delinquent contributions allegedly due as the result of a collective bargaining agreement between the defendant and the union. Feightner denied liability, claiming at trial that the multi-employer collective bargaining association which had purportedly signed on his behalf did not have authority to bind him. Feightner also made a timely demand for jury trial, however the district court granted the plaintiffs' motion to strike that demand. A bench trial was held and the trial judge found for the plaintiffs, entering a judgment against the defendant for the delinquent contributions, attorneys' fees, audit fees, costs, and a surcharge. Feightner brings this appeal contending that under the facts of this case he was not bound to the collective bargaining agreement, and that the district court erred in striking his demand for a jury trial.

Plaintiffs' complaint alleged that their claim arose under 29 U.S.C. Sec. 1132, the civil enforcement provision of the Employee Retirement Income Security Act (hereafter "ERISA"), and 29 U.S.C. Sec. 185(a) of the Labor-Management Relations Act. While seeking monetary relief the complaint only requested equitable remedies, i.e., an accounting and a grant of specific performance. Contemporaneously with the filing of his answer, the appellant demanded a jury trial. Prior to trial the appellees filed a Motion to Strike Defendant's Jury Demand and the issue was briefed for the court. The district judge granted the motion noting that plaintiffs had only requested equitable relief and that 29 U.S.C. Sec. 1132(a)(3) only authorized that type of remedy. Feightner has appealed that ruling, noting that under Dairy Queen, Inc. v. Wood, 369 U.S. 469, 82 S.Ct. 894, 8 L.Ed.2d 44 (1962) the form of remedy requested in the complaint does not control the characterization of the action as legal or equitable for purposes of the Seventh Amendment. Appellant argues that the complaint alleged, in essence, a breach of contract, a claim traditionally enforced in an action at law and thus triable to a jury under the Seventh Amendment. For the reasons stated below, we agree with the appellant.

The claim asserted in the complaint arises solely under federal statutes. The Supreme Court stated in Curtis v. Loether, 415 U.S. 189, 94 S.Ct. 1005, 39 L.Ed.2d 260 (1974):

The Seventh Amendment does apply to actions enforcing statutory rights, and requires a jury trial upon demand, if the statute creates legal rights and remedies, enforceable in an action for damages in the ordinary courts of law. 415 U.S. at 194, 94 S.Ct. at 1008.

In analyzing the nature of the rights created by the statutes in issue we must first look to legislative intent and if that is not decisive we must determine whether rights and remedies of that type were traditionally enforced in an action at law or in equity, see Pernell v. Southall Realty, 416 U.S. 363, 375, 94 S.Ct. 1723, 1729, 40 L.Ed.2d 198 (1974).

The Labor-Management Relations Act was enacted in 1947 and was designed to permit the federal courts to create a federal common law of labor contracts, see Textile Workers Union of America v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957). The statute is silent on the issue of the right to jury trial and the legislative history is similarly unenlightening. As a result, the Seventh Amendment issue has generally been resolved on a case-by-case basis through an analysis of the rights and remedies being asserted, see e.g. Minnis v. International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, UAW, 531 F.2d 850 (8th Cir.1975) (jury trial in employee action claiming breach of union's duty of fair representation); Nedd v. United Mine Workers of America, 556 F.2d 190 (3rd Cir.1977), cert. den. 434 U.S. 1013, 98 S.Ct. 727, 54 L.Ed.2d 757 (1978) (no jury trial in action by employee-beneficiaries to compel union to collect royalties for pension fund); Cox v. C.H. Masland & Sons, Inc., 607 F.2d 138 (5th Cir.1979) (jury trial in employee's action claiming breach of collective bargaining agreement by employer and breach of duty of fair representation by union).

The status of pensions within the statutory labor scheme was initially defined in Inland Steel Co. v. N.L.R.B., 170 F.2d 247 (7th Cir.1948), cert. den. 336 U.S. 960, 69 S.Ct. 887, 93 L.Ed. 1112 (1949). In that case the court concluded that pensions were a "condition of employment" within the meaning of 29 U.S.C. Sec. 158(a)(5) and thus were mandatory subjects of the collective bargaining process. Thereafter, 29 U.S.C. Sec. 185(a) became the jurisdictional and substantive basis for suits brought by plan trustees and unions to collect delinquent contributions for pension funds, see Lewis v. Benedict Coal Corp., 361 U.S. 459, 80 S.Ct. 489, 4 L.Ed.2d 442 (1960); Lewis v. Mill Ridge Coal, Inc., 298 F.2d 552 (6th Cir.1962); Calhoun v. Bernard, 333 F.2d 739 (9th Cir.1964); Huge v. Long's Hauling Co., Inc., 590 F.2d 457 (3rd Cir.1978), cert. den. 442 U.S. 918, 99 S.Ct. 2840, 61 L.Ed.2d 285 (1979); see also Alvares v. Erickson, 514 F.2d 156, 162-163 fn. 3 (9th Cir.1975). Under those cases the plan trustees are considered to be third party beneficiaries of the collective bargaining agreement between the union and the employer. In that capacity, the trustees can bring an action seeking damages for breach of contract, subject to the defenses of nonperforming promisors recognized at common law, see Kaiser Steel Corp. v. Mullins, 455 U.S. 72, 102 S.Ct. 851, 859 fn. 8, 70 L.Ed.2d 833 (1982). A suit for breach of contract seeking damages was traditionally an action at law and thus triable to a jury under the Seventh Amendment, Scott v. Neely, 140 U.S. 106, 110, 11 S.Ct. 712, 714, 35 L.Ed. 358 (1891); Dairy Queen, supra, 369 U.S. at 477, 82 S.Ct. at 899. Therefore, in an action brought for delinquent contributions under 29 U.S.C. Sec. 185(a) either party can properly demand a jury trial. 1 Our analysis cannot end here, however, for we must also determine whether ERISA altered the trustees' rights under 29 U.S.C. Sec. 185(a).

In 1974 Congress enacted ERISA which expanded the scope of remedies available to participants, beneficiaries, and fiduciaries of union pension plans. With regard to fiduciaries, the civil enforcement statute provides:

(a) A civil action may be brought--

* * *

* * *

(2) by the Secretary, or by a participant, beneficiary or fiduciary for appropriate relief under section 1109 of this title [relating to breaches of fiduciary duty];

(3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan; 29 U.S.C. Sec. 1132.

The plaintiffs' complaint in this cause alleged a cause of action under Sec. 1132(a)(3) which, by its own terms, authorizes only equitable actions. If that subsection is the only authority for a trustee's action against an employer, that is, if it was intended to supersede the trustees' third party beneficiary rights under 29 U.S.C. Sec. 185(a), we would have no difficulty holding that there is no right to a jury trial in this case. However, a review of the statutory scheme and legislative history of ERISA demonstrates that 29 U.S.C. Sec. 1132(a)(3) was intended to supplement rather than supersede the rights existing under 29 U.S.C. Sec. 185(a).

Initially, we note that Sec. 514(d) of ERISA (29 U.S.C. Sec. 1144(d)) provides:

(d) Nothing in this subchapter shall be construed to alter, amend, modify, invalidate, impair, or supersede any law of the United States (except as provided in sections 1031 and 1137(b) of this title) or any rule or regulation issued under any such law. 2

Furthermore, the legislative history does not conflict with that provision. In Senate Report 93-127 the Committee on Labor and Public Welfare discussed existing law:

At the federal level, there are essentially three federal statutes which, although accomplishing different purposes and vested within different federal departments for enforcement, are all compatible in their regulatory responsibilities. These are the Welfare and Pension Plans Disclosure Act (29 U.S.C. Sec. 301 et seq.), the Labor-Management Relations Act (29 U.S.C. Sec. 141, et seq.) and the Internal Revenue Code (I.R.C. of 1954, Secs. 401-404, 501-503).

* * *

* * *

The Labor-Management Relations Act, Sec. 302, provides the fundamental guidelines for the establishment and operation of pension funds administered jointly by an employer and a union. The Act is not intended to establish nor does it provide standards for the preservation of vested benefits, funding adequacy, security of investment, or fiduciary conduct. Senate Report No. 127, 93d Cong. 2d Sess. reprinted in 1974 U.S.Code Cong. & Admin.News, pp. 4838, 4840, 4814.

These latter concerns were the major objectives of the proposed act:

[ERISA] is designed (1) to establish minimum standards of fiduciary conduct for Trustees,...

To continue reading

Request your trial
58 cases
  • U.S. v. Lewis
    • United States
    • U.S. Court of Appeals — Eighth Circuit
    • March 22, 1985
  • In re Westmoreland Coal Co.
    • United States
    • U.S. Bankruptcy Court — District of Colorado
    • September 5, 1997
    ...law. Generally, an equitable remedy is available only when the remedy at law, typically damages, is inadequate. Bugher v. Feightner, 722 F.2d 1356 (7th Cir.1983), cert. denied, 469 U.S. 822, 105 S.Ct. 98, 83 L.Ed.2d 43 (1984). This principle is apparent in the ruling of the United States Di......
  • Golden v. Kelsey-Hayes Co.
    • United States
    • U.S. Court of Appeals — Sixth Circuit
    • January 18, 1996
    ...form of the plaintiffs' complaint does not control the characterization of the action as either equitable or legal." Bugher v. Feightner, 722 F.2d 1356, 1359 (7th Cir.1983). We do not base our characterization of this case as equitable on the form of the complaint alone, however. Implicit i......
  • In re Xcel Energy, Sec., Der. & "Erisa" Lit.
    • United States
    • U.S. District Court — District of Minnesota
    • March 10, 2004
    ...plan participant to seek injunctive or equitable relief for violations of the subchapter or of a plan directive. See Bugher v. Feightner, 722 F.2d 1356, 1358 (7th Cir.1983). As a matter of pleading under Fed.R.Civ.P. 8, plaintiffs have asserted legal claims for which relief can be f. Defend......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT