Central States Area Pension Fund v. Old Dutch Foods

• Decision Date: 25 June 1997
• Docket Number: No. 94 C 3738.,94 C 3738.
• Parties: CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, trustee, Plaintiffs, v. OLD DUTCH FOODS, INCORPORATED, a Minnesota corporation, Defendants.
• Court: U.S. District Court — Northern District of Illinois

968 F.Supp. 1292

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, trustee, Plaintiffs, v. OLD DUTCH FOODS, INCORPORATED, a Minnesota corporation, Defendants.

No. 94 C 3738.

United States District Court, N.D. Illinois, Eastern Division.

June 25, 1997.

COPYRIGHT MATERIAL OMITTED

Margaret Mary Fahrenbach, Robert Anthony Coco, Patrick J. Connor, Central States Law Dept., Rosemont, IL, Albert M. Madden, Central States Law Dept.,Des Plaines, IL, for plaintiffs.

Patricia J. Hill, Edward B. Miller, Ronald J. Kramer, Seyfarth, Shaw, Fairweather & Geraldson, Chicago, IL, for defendant.

MEMORANDUM OPINION AND ORDER

ANN CLAIRE WILLIAMS, District Judge.

Plaintiffs Central States, Southeast and Southwest Areas Pension Fund, and Howard McDougall move the court to enter summary judgment on their behalf. Defendant Old Dutch Foods, Inc. moves the court to enter summary judgment on its behalf, under Rule 56 of the Federal Rules of Civil Procedure. For reasons set forth below. the court denies both motions.¹

Background

Central States, Southeast and Southwest Areas Pension Fund ("Pension Fund" or "Central States") brought this action under §§ 502(e)(1) and 515 of ERISA, 29 U.S.C. § 1132; 29 U.S.C. § 1145, against Old Dutch Foods, Inc. ("Old Dutch"). The Pension Fund claims that Old Dutch has not met its obligation to contribute to the pension fund on behalf of certain Old Dutch employees. Old Dutch's obligation to contribute to the fund is defined by the terms of the collective bargaining agreement ("Agreement") negotiated between Old Dutch and the International Brotherhood of Teamsters Local 471.

Old Dutch, with headquarters in St. Paul, Minnesota, produces and distributes snack food products to grocery stores and others. The route driver salespersons who work in respective territories in the State of Minnesota are represented by the Local 471 chapter of the International Brotherhood of Teamsters. Their employment relationship with Old Dutch is governed by a collective bargaining agreement that has been in effect since at least 1984. The Agreement describes the covered unit of employees as follows:

The employer recognizes Local 471 as the sole collective bargaining agent for the classification covered by this agreement within the territory now serviced by the employees of the company who are now within the bargaining unit as defined by the letter of January 14, 1969 to the union over the signature of E.C. Aanenson, Vice President of the employer.

(Stip. ¶ 5.)²

The reference to a 1969 letter deals with a clarification of the bargaining unit stemming from changes made in the employer's operation in 1968. In 1968, Old Dutch moved its plant from downtown Minneapolis to Roseville, Minnesota, a suburb of St. Paul. As a result of this move, the company was transferred from the jurisdiction of one Teamster local union to a different Teamster local union. Therefore, certain route drivers who had been members of the union were working outside of the defined geographical area covered by the bargaining unit. (Stip.¶ 10.) To clarify who was still eligible for continued pension coverage notwithstanding the change, the employer wrote the 1969 letter referenced above stating:

For the purpose of clarification we want to set forth in this letter the territory which is actually covered by the Agreement so that there can be no problem in the future. As you know, the old contract by its literal terms would not have included in the City of St. Paul or other suburbs of the City of St. Paul, so that you will find we have changed the second paragraph of the new contract to refer to this letter which will specify the territory covered as follows:

1. All city routes in the Twin City areas are clearly covered.

2. Feeder line routes now operated by McFarlane in Rochester, Uppman in Worthington, Carlson in Faribault, Westerman in New Prague, Krueger in Mankato, and Korpi in Rush City are covered.

(Stip 5.)

After the execution of this letter, Old Dutch continued to make contributions to the individuals specified in section 2 of the 1969 letter. However, as certain of those individuals left the company, they were replaced by others — some of whom Old Dutch started and has continued to make contributions to the fund and others for whom Old Dutch has not made contributions. Therein is the essential dispute of the parties. Old Dutch contends that the intent of the foregoing letter was to apply the collective bargaining unit to named individuals while the Pension Fund contends that the intent was to apply the collective bargaining agreement to designated routes.

In 1987, Central States audited Old Dutch for the period of 1984 to 1986 and decided that contributions were not due on 90 previously non-reported drivers. In 1993, Central States audited Old Dutch for the period of 1990 to 1992. During this audit the 1969 letter was reviewed. Based on this letter Central States claims that it has not received contribution to the find for 14 drivers. These 14 drivers are responsible for routes designated in the 1969 letter.

In April, 1994 Old Dutch petitioned the National Labor Relations Board ("NLRB"), under Section 9(c) of the National Labor Relations Act, for a clarification of its bargaining unit. On May 20, 1994 the Regional Director of the NLRB issued a decision and order with respect to the petition. He stated: "in view of the historical exclusion of the route driver sales employees in Rochester, New Prague, Mankato and Route 142 in Faribault, it is unnecessary to clarify the unit to exclude those employees." (Stip ¶ 21.) Specifically:

[It is not necessary] to determine which of the parties' interpretations of the January 14, 1969 [letter] is correct or whether Carlson's successor in Faribault was inadvertently included in the unit. Irrespective of what the parties had originally intended or any inadvertence on the Employer's part, the investigation established that the employees who succeeded McFarlane, Westerman, and Krueger have been consistently excluded from the recognized unit at least ten years; the employee who has succeeded Carlson in route 84 in Faribault has been included in the recognized unit for approximately 16 years; and route 142 in Faribault has been excluded from the unit since its inception. Accordingly, in view of the historical exclusion of the route driver sales employees in Rochester, New Prague, Mankato and route 142 in Faribault, it is unnecessary to qualify the unit to exclude those employees. Moreover, it would be inappropriate to clarify the unit to exclude 84 in Faribault where, as here, the route has been historically included in the unit, there is a current collective bargaining agreement and the Employer does not contend that it reserved the right to seek exclusion during negotiation for that agreement.

(Stip ¶ 21).

Old Dutch and Teamsters Local Union 471 were the parties to the petition before the NLRB. The Pension Fund was not a party to the NLRB action.

Motion for Summary Judgment

A court renders summary judgment only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law" Fed.R.Civ.P. 56(c). Conversely, the court does not render summary judgment "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). Thus, a court ruling on a motion for summary judgment asks "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Id. at 251-52, 106 S.Ct. at 2511.

On a motion for summary judgment, the movant "bears the initial responsibility of informing the district court of the basis of its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). The nonmovant must then "set forth specific facts demonstrating that there is a genuine issue for trial." Fed R. Civ. P. 56(e); Bank Leumi Le-Israel, B.M. v. Lee, 928 F.2d 232, 236 (7th Cir.1991). In determining whether a genuine issue of material fact precludes summary judgment, the court reviews the evidence and draws all inferences "in the light most favorable to the nonmovant." Id.; Federal Deposit Ins. Corp. v. Knostman, 966 F.2d 1133, 1140 (7th Cir.1992).

Analysis

I. Jurisdiction of the District Court

The primary jurisdiction of the National Labor Relations Board in particular areas of labor management relations law is well-established. San Diego Building Trades Council v. Garmon, 359 U.S. 236, 242-44, 79 S.Ct. 773, 777-79, 3 L.Ed.2d 775 (1959). However, for an issue to fall under the Board's primary jurisdiction, the issue must be subject to section 7 or 8 of the National Labor Relations Act ("NLRA"). See Id. at 245, 79 S.Ct. at 779-80. ("When an activity is arguably subject to Section 7 or Section 8 of the [NLRA], the States as well as the federal courts must defer to the exclusive competence of the National Labor Relations Board if the danger of state interference with national policy is to be averted."); DeSantiago v. Laborers Int'l Union, Local No. 1140, 914 F.2d 125, 129 (8th Cir.1990) (Although the Garmon directive has been refined somewhat in subsequent cases, it remains valid today).

However, this action is not subject to Section 7 or Section 8 of the NLRA. This action is brought under Section 502(e)(1) and 515 of ERISA. Therefore, the court must determine whether Section 502(e)(1), 29 U.S.C. § 1132(e)(1), grants jurisdiction to the NLRB or the district court. Section 502(e)(1) states:

Except for actions under subsection ...