INTERNATIONAL BROTH. v. Oregon Steel Mills

• Decision Date: 31 May 2000
• Citation: 168 Or. App. 101,5 P.3d 1122
• Parties: INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS LOCAL NO. 48, on behalf of its members previously employed by Industrial Construction Services, Inc.; Trustees of Harrison Electrical Workers Trust Fund, Edison Pension Trust, Metro Electrical Joint Apprenticeship and Training Trust, National Employees Benefit Fund, Ninth District Retirement Plan; and Collection Agent for Employees Covered Under The Electrical Workers Local 48 Administrative Fund, Appellants, v. OREGON STEEL MILLS, INC., a Delaware corporation, dba Oregon Steel Mills; Chemical Bank, as Trustee for the holders of the first mortgage notes due 2003, nka The Chase Manhattan Bank; Anixter, Inc., an active Delaware corporation; J.H. Kelly, Inc., an inactive Washington corporation; and Air Products and Chemical, Inc., an active Delaware corporation, Respondents, and Resource Technologies Group, Inc.; Star Industries, Inc., dba Star Rentals and Sales; Consolidated Electrical District; Vancouver Bolt and Supply, Inc.; Wesco Distribution, Inc.; A.C. Dellovade, Inc.; Dick Industrial, Inc., fka Dick Corporation; International Mills Services Corporation; and Industrial Construction Service, Defendants.
• Court: Oregon Court of Appeals

5 P.3d 1122

168 Or. App. 101

INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS LOCAL NO. 48, on behalf of its members previously employed by Industrial Construction Services, Inc.; Trustees of Harrison Electrical Workers Trust Fund, Edison Pension Trust, Metro Electrical Joint Apprenticeship and Training Trust, National Employees Benefit Fund, Ninth District Retirement Plan; and Collection Agent for Employees Covered Under The Electrical Workers Local 48 Administrative Fund, Appellants, v. OREGON STEEL MILLS, INC., a Delaware corporation, dba Oregon Steel Mills; Chemical Bank, as Trustee for the holders of the first mortgage notes due 2003, nka The Chase Manhattan Bank; Anixter, Inc., an active Delaware corporation; J.H. Kelly, Inc., an inactive Washington corporation; and Air Products and Chemical, Inc., an active Delaware corporation, Respondents, and Resource Technologies Group, Inc.; Star Industries, Inc., dba Star Rentals and Sales; Consolidated Electrical District; Vancouver Bolt and Supply, Inc.; Wesco Distribution, Inc.; A.C. Dellovade, Inc.; Dick Industrial, Inc., fka Dick Corporation; International Mills Services Corporation; and Industrial Construction Service, Defendants.

(9704-02954; CA A101903)

Court of Appeals of Oregon.

Argued and Submitted July 13, 1999.

Decided May 31, 2000.

Thomas W. Sondag, Portland, argued the cause for appellants. With him on the briefs was Lane Powell Spears Lubersky.

Daniel K. Reising argued the cause and filed the brief for respondent Oregon Steel Mills, Inc. No appearance for respondents Chemical Bank, Anixter, Inc., J.H. Kelly, Inc., and Air Products and Chemicals, Inc.

Before EDMONDS, Presiding Judge, and ARMSTRONG and KISTLER, Judges.

KISTLER, J.

The trial court granted defendants' motion to dismiss plaintiffs' complaint for failure to state a claim. It ruled that plaintiffs either lacked standing to foreclose a lien against defendants' property or that federal law preempted plaintiffs' lien. The court accordingly entered judgment in defendants' favor and awarded them attorney fees. Plaintiffs appeal. We affirm the judgment in part, reverse it in part, and remand.

The International Brotherhood of Electrical Workers Local Number 48 (the union) entered into a collective bargaining agreement with the Oregon-Columbia Chapter of the National Electrical Contractors Association.¹ The agreement requires subject employers to make contributions to various union trust and administrative funds. Beginning in March 1996, "employees of [Industrial Construction Services, Inc. (ICS) ] performed labor under the terms of the Bargaining Agreement, on certain construction projects" for defendant Oregon Steel Mills (OSM). ICS, however, failed to make contributions to the union trust and administrative funds for the work done on those projects. In December 1996, the union, the trustees of the trust funds, and the collection agent filed notice of a construction lien claim pursuant to ORS 87.010(1) and ORS 87.010(4) for $532,184.79 for delinquent contributions and penalties.²

In April 1997, three classes of plaintiffs filed this action to foreclose the lien. Plaintiffs consist of the union, the trustees of trust funds, and the collection agent for the employees covered under the administrative funds.³ OSM moved to dismiss the complaint for failure to state a claim. See ORCP 21 A(8). The trial court granted the motion. It ruled that none of the plaintiffs had standing to foreclose a lien created under ORS 87.010(1). It also ruled that, although the trustees had standing to enforce a lien created under ORS 87.010(4), the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq., preempted that lien. Finally, the court held that OSM was the prevailing party and ordered the trustees to pay OSM its attorney fees.⁴

With one exception, the parties pursue the same issues on appeal that they raised below.⁵ We begin with the question of standing to enforce a lien created under ORS 87.010(1). ORS 87.010 provides in part:

"(1) Any person performing labor upon, transporting or furnishing any material to be used in, or renting equipment used in the construction of any improvement shall have a lien upon the improvement for the labor, transportation or material furnished or equipment rented at the instance of the owner of the improvement or the construction agent of the owner.

" * * * * *

"(4) Trustees of an employee benefit plan shall have a lien upon the improvement for the amount of the contributions, due to labor performed on that improvement, required to be paid by agreement or otherwise into a fund of the employee benefit plan."

The parties do not dispute that because ICS's employees performed labor on the OSM project, they have a lien under ORS 87.010(1). The question is whether any of the plaintiffs may also foreclose a lien created under that subsection.

Plaintiffs argue that the trustees may foreclose a lien created under ORS 87.010(1) to recover the amount of the contributions that ICS was supposed to pay the trust funds. ORS 87.010(4), however, expressly gives the trustees a lien for that purpose. If plaintiffs' interpretation of ORS 87.010(1) were correct, ORS 87.010(4) would become a nullity. Settled principles of statutory construction counsel against that interpretation. See ORS 174.010; State v. Cook, 163 Or.App. 578, 586, 989 P.2d 474 (1999). Moreover, the legislature added what is now ORS 87.010(4) in 1973 to order to provide a lien for "fringe benefits payable by contributions from employers." Minutes, House Judiciary Committee, HB 3272, June 21, 1973, p. 4 (testimony of Paul Bailey). If the trustees of a trust fund have a lien against OSM's project, it arises under ORS 87.010(4), not ORS 87.010(1).⁶

If the trustees may not enforce a lien created under ORS 87.010(1), the next question is whether the union may do so. Plaintiffs argue that it may for two reasons. First, relying on Christman v. Salway, 103 Or. 666, 686, 205 P. 541 (1922), plaintiffs claim that the union "has standing in its own right as the provider of labor" to enforce a lien on OSM's property. The court recognized in Christman that if a subcontractor's employees performed the labor on a project either the subcontractor or its employees would qualify as "persons performing labor" within the meaning of the lien statute.⁷ Id.; accord Nicolai-Neppach Co. v. Poore et al., 120 Or. 163, 174, 251 P. 268 (1926) (accepting that either the laborers or the laborers' employer would be entitled to a lien). Although the court did not explain the rationale for its holding, it presumably relied on principles of agency law to hold that if a contractor's employees perform labor on a project within the meaning of the lien law, so does the contractor. See id.

Christman does not advance the union's argument here. The complaint does not allege that the union's employees or its agents performed work on the project. Rather, it alleges that the union's members performed work as ICS's employees. Under Christman's interpretation of what is now ORS 87.010(1), that allegation would be sufficient to give ICS a lien against OSM's project, but it is insufficient to give the union one. See Bicycle Transportation Alliance v. City of Portland, 133 Or.App. 422, 424, 891 P.2d 692, rev. den. 321 Or. 429, 899 P.2d 1197 (1995) (in reviewing a dismissal for failure to state a claim, a court is limited to the facts alleged in the complaint). Plaintiffs advance a separate argument. They argue that the union may bring an action to enforce a lien, not on its own behalf, but on its members' behalf.⁸ Under Oregon law, the question "whether an organization has standing [to bring an action to enforce its members' rights] depends upon whether the statute under which the organization brings suit allows it to do so." Oregon Taxpayers United PAC v. Keisling, 143 Or.App. 537, 541, 924 P.2d 853,rev. den. 324 Or. 488, 930 P.2d 852 (1996), cert. den. 520 U.S. 1252, 117 S.Ct. 2410, 138 L.Ed.2d 176 (1997). Applying familiar principles of statutory construction, the Supreme Court held in Local No. 290 v. Dept. of Environ. Quality, 323 Or. 559, 565-67, 919 P.2d 1168 (1996), that a union did not have standing to assert claims on behalf of its members under ORS 183.484 because that statute made no mention of representational standing and the statutory context did not support an inference that the statute authorized such standing.

Plaintiffs face the same problem here. ORS 87.010(1) provides that "[a]ny person performing labor upon * * * any improvement" has a lien for that labor. The terms of that subsection give the person who performs the labor a lien. The statute, however, does not authorize an organization to sue in a representational capacity, nor does the context suggest such an intent. Rather, the context points in the other direction. ORS 87.035(1) specifies the steps "[e]very person claiming a lien under ORS 87.010(1)" shall take to perfect the lien. Finally, ORS 87.060 provides that "[a] suit to enforce a lien perfected under ORS 87.035 shall be brought in circuit court, and the pleadings, process, practice and other proceedings shall be the same as in other cases." Read together, those statutes establish that the lien claimant—the person to whom ORS 87.010(1) gives the lien—is the person who may bring a foreclosure action to enforce the lien.⁹ As a matter of state law, the union lacks standing to enforce its members' lien rights.¹⁰

Plaintiffs argue, however, that federal labor law authorizes the union to bring an action to protect its members' rights in the collective bargaining agreement. See Automobile Workers v. Hoosier Corp., 383 U.S. 696, 700, 86 S.Ct. 1107, 16 L.Ed.2d 192 (1966); Office and Professional Employees v. FDIC, 962 F.2d 63 (D.C.Cir.1992). The federal cases on which plaintiffs rely are based on section 301 of the Labor Management Relations Act, 29 USC § 185. Although section 301 authorizes labor organizations...