Conn. Ironworkers Employers' Ass'n v. New Eng. Reg'l Council of Carpenters, 3:10–cv–00165 (SRU)

• Decision Date: 23 May 2018
• Docket Number: No. 3:10–cv–00165 (SRU),3:10–cv–00165 (SRU)
• Citation: 324 F.Supp.3d 293
• Parties: CONNECTICUT IRONWORKERS EMPLOYERS' ASSOCIATION, et al., Plaintiffs, v. NEW ENGLAND REGIONAL COUNCIL OF CARPENTERS, Defendant.
• Court: U.S. District Court — District of Connecticut

324 F.Supp.3d 293

CONNECTICUT IRONWORKERS EMPLOYERS' ASSOCIATION, et al., Plaintiffs,

v.NEW ENGLAND REGIONAL COUNCIL OF CARPENTERS, Defendant.

No. 3:10–cv–00165 (SRU)

United States District Court, D. Connecticut.

Signed May 23, 2018

George J. Kelly, Jr., Siegel, O'Connor, O'Donnell & Beck, P.C., Richard D. O'Connor, Siegel, O'Connor, Zangari, O'Donnell & Beck, Thomas W. Meiklejohn, Livingston, Adler, Pulda, Meiklejohn & Kelly, Hartford, CT, Paul C. Hetterman, Bartley Goffstein, LLC, Ronald C. Gladney, Hartnett Gladney Hetterman, LLC, St. Louis, MO, for Plaintiffs.

Bruce D. Sokler, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, Washington, DC, Christopher N. Souris, Krakow & Souris, LLC, Keith P. Carroll, Kevin M. McGinty, Lisa F. Glahn, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C., Boston, MA, Daniel M. Shanley, Desmond C. Lee, John T. DeCarlo, Sook Y. Won, DeCarlo & Shanley, APC, Los Angeles, CA, for Defendant.

RULING AND ORDER

Stefan R. Underhill, United States District Judge

This case involves a "turf battle" between two sets of construction organizations. The defendant, New England Regional Council of Carpenters (the "Carpenters"), has entered into collective bargaining agreements ("CBAs") with non-party construction companies and construction managers (collectively, the "employers"). The agreements contain restrictive subcontracting clauses (sometimes known as "hot cargo" clauses, but which I call the "CBA clauses") that prohibit signatories from subcontracting work to any employer that has not acceded to a Carpenters' CBA. The plaintiffs—construction trade unions,¹ contractors,² and trade associations³ (collectively, the "Ironworkers")⁴ —allege that the Carpenters have used the CBA clauses to expand the scope of their work by preventing the Ironworkers from bidding on and performing work that traditionally was assigned to the Ironworkers. According to the complaint, that conduct constitutes anticompetitive behavior, in violation of sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 & 2, and unfair labor practices, in violation of 29 U.S.C. § 1987.

I previously granted summary judgment for the Carpenters, see Conn. Ironworkers Emp'rs Ass'n v. New Eng. Reg'l Council of Carpenters , 157 F.Supp.3d 173, 175 (D. Conn. 2016) (" Ironworkers I "), after I concluded that the Carpenters' conduct was shielded from antitrust scrutiny by both the non-statutory exemption to the antitrust laws and the construction industry proviso contained in Section 8(e) of the National Labor Relations Act ("NLRA"), 29 U.S.C. § 158(e). On appeal by the Ironworkers, the Second Circuit agreed that the Carpenters' actions fell within the construction industry proviso, and affirmed with respect to the unfair labor practices claim. See Conn. Ironworkers Emp'rs Ass'n v. New Eng. Reg'l Council of Carpenters , 869 F.3d 92, 96–97 (2d Cir. 2017) (" Ironworkers II "). The Court concluded, however, that "there are factual disputes that preclude a decision on whether the conduct falls within the non-statutory exemption," and reversed with respect to the Ironworkers' Sherman Act claim. Id. The Court remanded "for further proceedings consistent with this opinion, including for such additional discovery as will permit the District Court to be informed of the relevant history and permit the parties to move for summary judgment or, if necessary, to proceed to trial." Id. at 97.

Following the remand, and before allowing additional discovery, I scheduled a new argument on the undecided issue raised by the Carpenters' previously-briefed motion for summary judgment. After examining the parties' submissions, I conclude that the Ironworkers have failed to provide evidentiary support for the actual adverse effect on competition required to state a prima facie case for violation of the Sherman Act under the rule of reason. Therefore, I again grant the Carpenters' motion for summary judgment.

I. Standard of Review

Summary judgment is appropriate 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). When ruling on a summary judgment motion, the court must "view the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in its favor." Sologub v. City of New York , 202 F.3d 175, 178 (2d Cir. 2000) ; Aldrich v. Randolph Ctrl. Sch. Dist. , 963 F.2d 520, 523 (2d Cir. 1992) (court is required to "resolve all ambiguities and draw all inferences in favor of the nonmoving party"). "The burden of showing that no genuine factual dispute exists rests upon the moving party." Carlton v. Mystic Transp. , 202 F.3d 129, 133 (2d Cir. 2000). When a motion for summary judgment is properly supported by documentary and testimonial evidence, however, the nonmoving party may not rest upon the mere allegations or denials of the pleadings, but must present sufficient evidence supporting its position "to require a jury or judge to resolve the parties' differing versions of the truth at trial." Anderson v. Liberty Lobby , 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; Colon v. Coughlin , 58 F.3d 865, 872 (2d Cir. 1995).

"The trial court's function at this stage is to identify issues to be tried, not decide them," Graham v. Long Island R.R. Co. , 230 F.3d 34, 38 (2d Cir. 2000), and so "[o]nly when no reasonable trier of fact could find in favor of the non-moving party should summary judgment be granted." White v. ABCO Eng'g Corp. , 221 F.3d 293, 300 (2d Cir. 2000). Summary judgment therefore is improper "[w]hen reasonable persons, applying the proper legal standards, could differ ... on the basis of the evidence presented." Sologub , 202 F.3d at 178. Nevertheless,

the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.... Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.

Anderson , 477 U.S. at 247–48, 106 S.Ct. 2505.

"[A] complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial," and in such circumstances, there is "no genuine issue as to any material fact." Celotex Corp. v. Catrett , 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; accord Goenaga v. March of Dimes Birth Defects Found. , 51 F.3d 14, 18 (2d Cir. 1995) (movant's burden satisfied if it can point to an absence of evidence to support an essential element of nonmoving party's claim). To present a "genuine" issue of material fact and avoid summary judgment, the record must contain contradictory evidence "such that a reasonable jury could return a verdict for the non-moving party." Anderson , 477 U.S. at 248, 106 S.Ct. 2505.

"In the context of antitrust cases," the Second Circuit has noted that "summary judgment is particularly favored because of the concern that protracted litigation will chill pro-competitive market forces." PepsiCo v. Coca–Cola Co. , 315 F.3d 101, 104 (2d Cir. 2002) (per curiam). Thus, "[a]lthough all reasonable inferences will be drawn in favor of the non-movant, those inferences ‘must be reasonable in light of competing inferences of acceptable conduct.’ " Id. at 105 (quoting Top Mkts. v. Quality Mkts. , 142 F.3d 90, 95 (2d Cir. 1998) ).

II. Background

The Ironworkers and the Carpenters are both construction organizations that operate throughout New England. The Carpenters have entered into CBAs with many construction companies and construction managers in the region that contain restrictive subcontracting clauses.⁵ Those clauses—"colloquially called ‘hot cargo’ clauses"—"bar signatories from subcontracting work to any employer that is not also a signatory to a Carpenters' CBA." See Ironworkers II , 869 F.3d at 97. The Ironworkers allege that the Carpenters have used the CBA clauses anticompetitively "to prevent the Ironworkers from performing the relevant work," thereby "secur[ing] work in the New England area that allegedly belonged to the Ironworkers." See id. at 97–98. They assert that the Carpenters' conduct constitutes anticompetitive behavior in violation of sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 & 2.

The Carpenters moved for summary judgment in May 2014, Doc. No. 85, arguing that their actions were "shield[ed] ... from antitrust scrutiny" by "the non-statutory labor exemption and the ‘construction industry proviso’ provided in Section 8(e)" of the NLRA. See Ironworkers I , 157 F.Supp.3d at 175. I granted the Carpenters' motion. In a ruling issued on January 20, 2016, I held that the Carpenters had "established the requisite elements to be afforded the protection of the construction industry proviso" and had also shown that "the subcontracting provisions at issue," as "lawful provisions of a valid CBA, ... [were] protected by the non-statutory labor exemption." Id. at 187. Therefore, I concluded, "the Carpenters [were] not subject to antitrust scrutiny for their attempts to enforce the subcontracting agreements." Id. at 188.

The Ironworkers appealed and the Second Circuit reversed in part. Although the Court agreed that "the construction industry proviso applies to the disputed subcontracting practices," it decided that "disputes of material fact prevent [it] from deciding ... whether the non-statutory exemption applie[d]." Ironworkers II , 869 F.3d at 104. The Court referred to the standard for applying the non-statutory exemption set forth in Local 210, Laborers' International Union of North America v. Labor Relations Division, Associated General Contractors of America, New York State Chapter , 844 F.2d 69 (2d Cir. 1988) (" Local 210 "):

First, the agreement at issue must further goals that are protected by national labor law and that are within the scope of traditionally mandatory subjects

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