Carpenters Dist. Council v. Bowlus School Supply

• Decision Date: 28 June 1989
• Docket Number: No. 89-0088-CV-W-3.,89-0088-CV-W-3.
• Parties: CARPENTERS DISTRICT COUNCIL OF KANSAS CITY PENSION FUND, et al., Plaintiffs, v. BOWLUS SCHOOL SUPPLY, INC., Defendant.
• Court: U.S. District Court — Western District of Missouri

716 F. Supp. 1232

CARPENTERS DISTRICT COUNCIL OF KANSAS CITY PENSION FUND, et al., Plaintiffs, v. BOWLUS SCHOOL SUPPLY, INC., Defendant.

No. 89-0088-CV-W-3.

United States District Court, W.D. Missouri, W.D.

June 28, 1989.

Michael G. Newbold, Michael C. Arnold, Yonke, Arnold & Newbold, P.C., Kansas City, Mo., for plaintiffs.

James Kevin Checkett, Esterly & Checkett, Carthage, Mo., Kurtis I. Loy, Loy & Loy, Pittsburg, Kan., for defendant.

ORDER

ELMO B. HUNTER, Senior District Judge.

Before the Court is defendant's motion to dismiss plaintiffs' complaint pursuant to Rule 12(b), Fed.R.Civ.P. Specifically, defendant moves to dismiss plaintiffs' complaint for the following reasons: (1) this Court lacks subject matter jurisdiction; (2) venue is improper in this district; (3) plaintiffs' complaint fails to state a claim upon which relief can be granted; and (4) plaintiffs' complaint is barred in whole or in part by the applicable statute of limitations. Plaintiffs in this case are the Carpenters District Council of Kansas City Pension Fund, Carpenters District Council of Kansas City & Vicinity Welfare Fund ("plaintiff Funds"), and the trustees of plaintiff Funds.

Taking as true the allegations of the complaint, as the Court must do in a motion to dismiss, Cooper v. Pate, 378 U.S. 546, 84 S.Ct. 1733, 12 L.Ed.2d 1030 (1964), and all reasonable inferences therefrom, the pertinent facts must be stated as follows. Plaintiff Funds were established on April 1, 1968, pursuant to the collective bargaining agreement entered into between the Builders Association of Missouri ("Association") and the United Brotherhood of Carpenters and Joiners of America, District Council of Kansas City AFL-CIO ("Union"). Plaintiff Funds are "trust funds" existing pursuant to the Labor Management Relations Act of 1947 ("LMRA"), 29 U.S.C. § 186(c), and are "employee benefit plans" within the meaning of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1002(2). Employers agreeing to be bound by the collective bargaining agreement between the Association and the Union are required to make fringe benefit contributions of certain monetary amounts to plaintiff Funds on a monthly basis.

On February 10, 1975, Glen Gintner signed a contract stipulation purportedly on behalf of defendant. The effect of the contract stipulation was to bind defendant not only to the then current collective bargaining agreement between the Association and the Union, but also to all subsequent such agreements, unless defendant properly notified the Association and the Union of its intent to terminate. Defendant neither submitted fringe benefit reports nor made fringe benefit contributions to plaintiff Funds for the period beginning June 1, 1977, and ending in September, 1988. Furthermore, defendant has refused to allow plaintiffs to audit its books and records for the purpose of determining the amount of fringe benefit contributions which should have been paid to plaintiff Funds since June 1, 1977. Plaintiffs seek monetary relief in the form of fringe benefit contributions, liquidated damages, and interest, and injunctive relief.

I.

Defendant maintains that ERISA does not grant subject matter jurisdiction to the federal courts to hear ERISA actions filed by employee benefit funds.¹ 29 U.S.C. § 1132(e)(1) gives the district courts "exclusive jurisdiction of civil actions under this subchapter brought by the Secretary of Labor or by a participant, beneficiary, or fiduciary."² Similarly, section 1132(a)(3), the ERISA standing provision, states that a "participant, beneficiary, or fiduciary" may bring a civil action "(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...." The circuits have disagreed whether the grant of jurisdiction in section 1132(e)(1) is exclusive, thereby prohibiting an ERISA action by an entity not specifically enumerated therein, such as an employee benefit plan.

Pressroom Unions — Prints League Income Security Fund v. Continental Assurance Co., 700 F.2d 889 (2d Cir.), cert. denied, 464 U.S. 845, 104 S.Ct. 148, 78 L.Ed.2d 138 (1983), was the first important pronouncement addressing the issue of whether a district court has subject matter jurisdiction over a suit brought by an employee benefit plan under ERISA. The Second Circuit concluded that section 1132(e)(1) should be viewed as an exclusive jurisdictional grant. Id. at 892. The court held it lacked subject matter jurisdiction over ERISA actions brought by employee benefit plans, because the plans are not specifically named in ERISA's jurisdictional provisions. Id. at 892-93. A majority of other courts have similarly decided that the standing and jurisdictional provisions of section 1132 are limited to suits by the entities specified in the statute. See Giardono v. Jones, 867 F.2d 409, 413 (7th Cir. 1989) (grant of subject matter jurisdiction in § 1132(e)(1) is exclusive to the parties enumerated); Gulf Life Insurance Co. v. Arnold, 809 F.2d 1520, 1524 (11th Cir.1987) (ERISA standing provisions limited only to those parties enumerated in § 1132); Grand Union Co. v. Food Employers Labor Relations Association, 808 F.2d 66, 71 (D.C.Cir.1987) (court indicated it would limit suits brought under § 1132 to the parties enumerated therein); Stanton v. Gulf Oil Corp., 792 F.2d 432 (4th Cir.1986) (Fourth Circuit indicated it would read ERISA provisions narrowly); Whitworth Brothers Storage Co. v. Central States, Southeast and Southwest Areas Pension Fund, 794 F.2d 221, 228 (6th Cir.), cert. denied, 479 U.S. 1007, 107 S.Ct. 645, 93 L.Ed.2d 701 (1986) (§ 1132(e)(1) is an exclusive grant of jurisdiction); Northeast Department ILGWU Health and Welfare Fund v. Teamsters Local Union No. 229 Welfare Fund, 764 F.2d 147, 153 (3d Cir.1985) (jurisdictional provisions of § 1132 must be read narrowly and literally); Great Lakes Steel v. Deggendorf, 716 F.2d 1101, 1105 (6th Cir. 1983) (§ 1132(e)(1) does not confer jurisdiction over an action brought by an employer as an employer); Crown Cork & Seal Co. v. Teamsters Pension Fund of Philadelphia, 549 F.Supp. 307, 310 n. 3, 311 (E.D. Pa.), aff'd, 720 F.2d 661 (3d Cir.1983) (action brought by employer as employer is not included within the scope of § 1132); Central States v. Admiral Merchants Motor Freight, Inc., 511 F.Supp. 38, 46 (D.Minn.1980), aff'd, 642 F.2d 1122 (8th Cir. 1981) ("ERISA by its terms permits actions only by the Secretary of Labor and participants, beneficiaries, and fiduciaries of trust funds"); International Union of Bricklayers and Allied Craftsmen Local # 1 v. Menard & Co. Masonry Building Contractors, 619 F.Supp. 1457 (D.R.I.1985) (court lacked jurisdiction over employee benefit funds' action since funds were not participants, beneficiaries, or fiduciaries); Cameron Manor, Inc. v. United Mine Workers of America, 575 F.Supp. 1243, 1245 (W.D.Pa.1983) (federal jurisdiction under ERISA limited to entities listed in statute); Amalgamated Industrial Union Local 44-A Health and Welfare Fund v. Webb, 562 F.Supp. 185 (N.D.Ill.1983) (court adopted reasoning of Pressroom Unions); District 65, UAW v. Harper & Row Publishers, Inc., 576 F.Supp. 1468, 1476 (S.D. N.Y.1983) (union had no standing under the clear language of § 1132).

A small minority of courts, however, have concluded that the provisions of section 1132 are not exclusive to the entities enumerated therein. In Fentron Industries, Inc. v. National Shopmen Pension Fund, 674 F.2d 1300 (9th Cir.1982), an employer and a class of its employees brought suit against a pension fund alleging violations of ERISA. The Ninth Circuit stated that Congress, in enacting ERISA, did not intend to prohibit employers from suing to enforce the provisions of ERISA, so that the omission of employers from section 1132 was not significant. Id. at 1305. The court held that section 1132 did not preclude employers from bringing an action under ERISA. See Donovan v. Schmoutey, 592 F.Supp. 1361, 1390 (D.Nev.1984) (pension trust had independent standing to sue under ERISA).

In a few cases, entities such as employee benefit plans and employers have been labeled a "fiduciary," "participant," or "beneficiary" and have been allowed to bring an action under ERISA. Saramar Aluminum Co. v. Pension Plan for Employees of the Aluminum Industry and Allied Industries of Youngstown Ohio Metropolitan Area, 782 F.2d 577 (6th Cir.1986), involved an action by an employer against an employee benefit plan and the plan's administrators. The plan counterclaimed against the employer for delinquent contributions, asserting jurisdiction for the counterclaim under section 1132. The Sixth Circuit noted that the plan necessarily included its administrators and stated that "if the Plan, or its administrators acting on behalf of the Plan, may be deemed to be a "fiduciary" within the meaning of the Act, the type of action represented by the Plan's counterclaim may be brought in the district court under § 1132(e)(1)." Id. at 581. Because the Court found the plan's administrators to be fiduciaries, it concluded that the plan came within the ERISA definition of "fiduciary," despite the fact that the plan had entered into a separate agreement with a bank as trustee. Thus, the Court held that jurisdiction existed under section 1132 to entertain the plan's counterclaim. Id. In a concurring opinion, however, Judge Contie criticized the majority's conclusion as stretching the scope of the statute and impermissibly broadening federal jurisdiction. Id. at 584. See American Federation of Unions, Local 102 Health & Welfare Fund v. Equitable Life Assurance Society of the United States, 647 F.Supp. 947, 949 (M.D.La.1985), aff'd in part and rev'd in part on other grounds, 841 F.2d 658 (5th Cir.1988) (employee welfare benefit plan...