Merit Constr. Alliance v. City of Quincy

• Decision Date: 16 July 2014
• Docket Number: No. 13–2189.,13–2189.
• Citation: 759 F.3d 122
• Court: U.S. Court of Appeals — First Circuit
• Parties: MERIT CONSTRUCTION ALLIANCE et al., Plaintiffs, Appellees, v. CITY OF QUINCY, Defendant, Appellant.

759 F.3d 122

MERIT CONSTRUCTION ALLIANCE et al., Plaintiffs, Appellees,

v.CITY OF QUINCY, Defendant, Appellant.

No. 13–2189.

United States Court of Appeals, First Circuit.

July 16, 2014.

James S. Timmins, City Solicitor, for appellant.

Christopher N. Souris and Krakow & Souris, LLC on brief for New England Regional Council of Carpenters, amicus curiae.

Christopher C. Whitney, with whom Scott K. Pomeroy and Pierce Atwood LLP were on brief, for appellees.

Maurice Baskin and Littler Mendelson, P.C. on brief for Associated Builders and Contractors, Inc., amicus curiae.

Before THOMPSON and SELYA, Circuit Judges, and McCONNELL,^* District Judge.

SELYA, Circuit Judge.

This case presents not one, but two, questions of considerable import, each of which implicates the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001–1461. The first concerns whether the reach of ERISA's preemption provision, 29 U.S.C. § 1144(a), extends to a municipal ordinance mandating the establishment of a specific type of apprentice training program. The second concerns the scope of ERISA's fee-shifting provision, 29 U.S.C. § 1132(g)(1). After careful consideration, we conclude that the district court answered the first question correctly, but not the second. Accordingly, we affirm in part, reverse in part, and remand for reconsideration of the fee award.

I. BACKGROUND

In 2012, defendant-appellant City of Quincy (the City) solicited bids for a construction project at a middle school. Would-be bidders were required to certify compliance with the City's euphemistically named Responsible Employer Ordinance (the Ordinance). Pertinently, the Ordinance demands that bidders on municipal public works projects “engage[ ] in a bona fide apprentice training program” registered with the Massachusetts Department of Labor Standards. Quincy, Mass., Code § 15.26.010(C); seeMass. Gen. Laws ch. 23, §§ 11H, 11I (providing relevant definitions). The Ordinance further mandates that at least one apprentice have graduated from the program in the twelve months immediately preceding the bid. See Quincy, Mass., Code § 15.26.010(C).

This bidding condition brought with it a legal cloud; a federal district court had ruled that ERISA preempted a similar ordinance passed in Fall River, Massachusetts. See Util. Contrs. Ass'n of New Eng., Inc. v. City of Fall River, No. 10–10994, 2011 WL 4710875, at *7 (D.Mass. Oct. 4, 2011). Merit Construction Alliance (the Alliance), a trade association of construction companies, asked whether the City would continue to enforce its apprentice training requirement. When the City responded affirmatively, ¹ the Alliance, joined by two of its members (Grasseschi Plumbing & Heating, Inc. and D'Agostino Associates, Inc.), and a Grasseschi employee (David Ross), sued the City in the federal district court. Among other things, the complaint sought injunctive and declaratory relief on the ground that ERISA preempted the Ordinance's apprentice training requirement.²

The district court granted a preliminary injunction barring enforcement of the apprentice training requirement, based largely on its earlier decision in the Fall River case. See Merit Constr. All. v. City of Quincy (Merit I), No. 12–10458, 2012 WL 1357656, at *2, *4 (D.Mass. Apr. 18, 2012). Summary judgment in favor of the plaintiffs followed apace. See Merit Constr. All. v. City of Quincy (Merit II), No. 12–10458, 2013 WL 396123, at *3 (D.Mass. Feb. 1, 2013).

To the victor belong the spoils, and the next stage of the battle involved attorneys' fees. The district court granted the plaintiffs' motion for fees and awarded them the amount of $81,007.85. See Merit Constr. All. v. City of Quincy (Merit III), No. 12–10458, 2013 WL 3984596, at *3 (D.Mass. Aug. 2, 2013). The City unsuccessfully sought reconsideration of the fees order. See Merit Constr. All. v. City of Quincy (Merit IV), No. 12–10458, 2013 WL 4446935, at *3 (D.Mass. Aug. 21, 2013). This timely appeal followed.

II. ANALYSIS

In this venue, the City for the first time questions the plaintiffs' standing to sue. Because this challenge implicates subject matter jurisdiction, we are obligated to address it despite its lateness. See Am. Fiber & Finishing, Inc. v. Tyco Healthcare Grp., LP, 362 F.3d 136, 138–39 (1st Cir.2004) (“[I]t is firmly settled that challenges to federal subject matter jurisdiction may be raised for the first time on appeal.”).

The Constitution limits federal-court jurisdiction to actual cases and controversies. See U.S. Const. art. III, § 2. In line with this limitation, a litigant seeking to enlist federal court jurisdiction must demonstrate his standing to bring suit: he must have “such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues.” Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 7 L.Ed.2d 663 (1962).

When an unincorporated association seeks to open the doors of a federal court, it must demonstrate that “(a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.” Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333, 343, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977). For an individual to have standing, he must establish injury in fact, causation, and redressability. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992).

The first element of this triad inquires into the existence of “an invasion of a legally protected interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical.” Id. at 560, 112 S.Ct. 2130 (internal quotation marks and citations omitted). The second element asks whether the alleged injury is “fairly traceable to the challenged action of the defendant.” Id. (internal quotation mark and alterations omitted). The third element asks whether it is “likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” Id. at 561, 112 S.Ct. 2130 (internal quotation marks omitted).

The Alliance's members pass this tripartite test with flying colors. Among their ranks are contractors that neither maintain apprentice training programs nor satisfy the Ordinance's graduation quota. Those members suffer injury because they want to bid on public works projects in Quincy but are constrained from doing so by the strictures of the Ordinance. If the plaintiffs prevail, the Ordinance will be declared null and void, thus removing the injury-causing obstruction to their bidding eligibility.

Similarly, the Alliance meets the criteria for associational standing. At least some of its members have individual standing, and preserving its members' bidding capabilities closely relates to its raison d'être. To cinch matters, nothing about an ERISA preemption challenge calls for enlisting the participation of individual Alliance members. See Retail Indus. Leaders Ass'n v. Fielder, 475 F.3d 180, 187 (4th Cir.2007).

The City, in effect, attempts to confess and avoid. It disputes none of the conclusions recounted above but, rather, tries to graft a requirement of an ERISA-covered apprentice training program onto the test for constitutional standing. This is pie in the sky: the City offers no authority for the proposition that the Constitution imposes any such requirement.

Of course, ERISA's statutory enforcement provision contemplates the existence of an ERISA plan. See29 U.S.C. § 1132(a)(3). But the question of standing that the City raises here is constitutional in nature, and we see no reason that such a condition is necessary to render this action an actual case or controversy within the meaning of Article III. See Wright Electric, Inc. v. Minn. State Bd. of Elec., 322 F.3d 1025, 1028–29 (8th Cir.2003) (holding that plaintiff need not “show that its apprenticeship program was an ERISA plan in order to establish subject matter jurisdiction”). We therefore hold that the Alliance has standing to challenge the Ordinance on the ground of ERISA preemption.

Having determined that an actual case and controversy exists, we proceed to chew on the meat of the appeal: preemption and attorneys' fees. We address these subjects sequentially.

A. Preemption.

The City assigns error to the district court's ruling that ERISA preempts the Ordinance's apprentice training requirement. Since this ruling was made on summary judgment, our review is plenary. See Geshke v. Crocs, Inc., 740 F.3d 74, 76 (1st Cir.2014); see also Carpenters Local Union No. 26 v. U.S. Fid. & Guar. Co., 215 F.3d 136, 139 (1st Cir.2000).

“ERISA is a comprehensive statute designed to promote the interests of employees and their beneficiaries in employeebenefit plans.” Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983). Enacted in part “to safeguard employees from the abuse and mismanagement of funds that had been accumulated to finance various types of employee benefits,” the statutory scheme “sets forth reporting and disclosure obligations for plans, imposes a fiduciary standard of care for plan administrators, and establishes schedules for the vesting and accrual of pension benefits.” Massachusetts v. Morash, 490 U.S. 107, 112–13, 109 S.Ct. 1668, 104 L.Ed.2d 98 (1989).

When considering a claim of preemption, “our task is to ascertain Congress' intent in enacting the federal statute at issue.” Shaw, 463 U.S. at 95, 103 S.Ct. 2890. With respect to ERISA, this intent is express, if somewhat “opaque.” De Buono v. NYSA–ILA Med. & Clinical Servs. Fund, 520 U.S. 806, 809, 117 S.Ct. 1747, 138 L.Ed.2d 21 (1997). By its terms and subject to exemptions not relevant here, ERISA “supersede[s] any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.” 29 U.S.C. §...