Modern Woodcrafts, Inc. v. Hawley
| Decision Date | 16 February 1982 |
| Docket Number | Civ. A. No. H 80-316. |
| Citation | 534 F. Supp. 1000 |
| Court | U.S. District Court — District of Connecticut |
| Parties | MODERN WOODCRAFTS, INC., Kidde Merchandising Equipment Group, Inc., Hartford Builders Finish Company, Inc., Harry R. Nilson, Kenneth R. Conley, John R. Bartz, Charles Siemer, Peter Milliard, Donald C. Ramsay, Donald M. Jacobson, James D. Ricketson, William P. Fappiano, Kip Lockhart v. Paul H. HAWLEY, Howard G. Weiss, Francis DeLuca, V. Gibney Patterson, Robert J. McLevy, John Cunningham, Joseph Barile and David Saldibar as Trustees of the Connecticut State Council of Carpenters State-Wide Pension Plan and Trust. |
COPYRIGHT MATERIAL OMITTED
Emanuel N. Psarakis, Samuel Bailey, Jr., Charles B. Spadoni, Mary T. L. Fisher, Robinson, Robinson & Cole, Hartford, Conn., for plaintiffs.
Maurice T. Fitzmaurice, Lawrence H. Lissitzyn, Reid & Reige, P. C., Hartford, Conn., for defendants.
RULING ON DEFENDANTS' MOTION TO DISMISS
INTRODUCTION
This case concerns the structure and administration of a multiemployer pension benefit plan. It raises issues under the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 141 et seq., and the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq. In particular, it requires the court to consider (1) questions of standing and jurisdiction under the LMRA; (2) the types of claims upon which relief can be granted pursuant to the LMRA; (3) the question of standing under ERISA; and (4) the appropriate scope of the court's pendent jurisdiction in the circumstances of this case. These questions have been raised by defendants' pending motion to dismiss various claims in the Amended Complaint.1 A proper understanding of the legal issues raised by this motion requires an outline of the parties and the claims involved in the action.
Thirteen plaintiffs bring this action. All of the plaintiffs are engaged, in some way, in the woodwork manufacturing industry. More significant for purposes of this action, all of the plaintiffs are connected, in some way, with a multiemployer pension benefit plan called the Woodworkers Pension Plan and Trust ("Woodworker Plan").
Three of the plaintiffs—Modern Woodcrafts, Inc.; Kidde Manufacturing Equipment Group, Inc.; and Hartford Builders Finish Company, Inc. (collectively, "Woodworker Employers")—are woodwork manufacturing companies.2 The Woodworker Employers make financial contributions to the Woodworker Plan on behalf of their employees, and thereby provide pension benefits for those employees. Amended Complaint, First Count ("AC-I") ¶¶ 43-45 (filed July 7, 1980). From January 1, 1968, until December 31, 1977, however, the Woodworker Employers contributed to a different multiemployer pension benefit fund. AC-I ¶ 31. This was the Connecticut State Council of Carpenters State-Wide Pension Fund ("State-Wide Fund"), which administers the Connecticut State Council of Carpenters State-Wide Pension Plan ("State-Wide Plan"). AC-I ¶¶ 4, 10.
Created by a Declaration of Trust and Pension Plan, effective February 25, 1958, as amended April 1, 1975 and April 1, 1976 ("State-Wide Trust"), the State-Wide Fund was to "provide benefits for eligible employees and to receive contributions from employers in amounts set by collective bargaining agreements between unions and employers who joined the plan." AC-I ¶ 10.
Five employee plaintiffs—Bartz, Conley, Milliard, Nilson, and Siemer—are former members of Local 1717 of the United Brotherhood of Carpenters and Joiners of America ("Local 1717"). They sue on behalf of themselves and all other employees of the Woodworker Employers similarly situated (such employees, collectively, "Woodworker Employees"). AC-I ¶¶ 2, 6.3 The class action allegations of the Woodworker Employees are not at issue in the present motion.
Four of the plaintiffs—Fappiano, Jacobson, Ramsay, and Ricketson—are so-called "management trustees" of the Woodworker Plan. Three of the employee-plaintiffs— Bartz, Conley and Siemer—are also so-called "union trustees" of the Woodworker Plan. In addition, a final plaintiff, Lockhart, is also a union trustee of the Woodworker Plan. AC-I ¶ 3. Collectively, the union and management trustees of the Woodworker Plan comprise the plaintiff "Woodworker Trustees."
Eight persons are named defendants in this action. All are trustees of the State-Wide Fund. As trustees of the State-Wide Fund, these defendants (collectively, "State-Wide Trustees") administer the State-Wide Plan. AC-I ¶ 4. Four of the defendants—DeLuca, Hawley, Patterson, and Weiss—are "management trustees" of the State-Wide Fund. The remaining four defendants—Barile, Cunningham, McLevy, and Saldibar—are "union trustees" of the State-Wide Fund. Id.
This case arises from the circumstances which led the Woodworker Employers and Woodworker Employees to end their participation in the State-Wide Fund, and to create the Woodworker Plan. More specifically, it concerns an amendment to the State-Wide Trust, which took effect on April 1, 1976, and the action which the State-Wide Trustees took pursuant to that amendment after the Woodworker Employers and Woodworker Employees had withdrawn from the State-Wide Plan.
The Woodworker Employers are woodwork manufacturing companies engaged in the "design and manufacture of cabinets, and fixtures for stores, offices, schools, and other commercial and institutional buildings." AC-I ¶ 18. According to the Amended Complaint, "none of the Woodworker Employers is a general contractor." AC-I ¶ 19. The central allegation is that the State-Wide Fund, to which the Woodworker Employers contributed, and in which the Woodworker Employees participated until December 31, 1977, AC-I ¶ 31, was administered primarily for the benefit of the employers and employees of the general contracting and related construction industries who also participated in the State-Wide Fund. AC-I ¶¶ 57-58.
Two trade associations of employers act as employer co-sponsors of the State-Wide Fund. One is the Associated General Contractors of America, Incorporated ("Associated"); its members are general contractors who erect or alter buildings and other structures. AC-I ¶¶ 14-15. The other is the Connecticut Construction Industries Association, Incorporated ("CCIA"); its members engage in road building, concrete, sewer, utility, excavation, and other related construction businesses. AC-I ¶ 16. No Woodworker Employer "has ever been a member of either Associated or CCIA." AC-I ¶ 20. Indeed, because none of the Woodworker Employers is either a "general contractor" or engaged in "construction" as those terms are defined by Associated and CCIA, no Woodworker Employer is even eligible for membership in Associated or CCIA. AC-I ¶ 19.
Despite the fact that the Woodworkers Employers and other employers contributing to the State-Wide Fund were engaged in different industries, the Woodworker Employers and Local 1717 agreed, effective January 1, 1968, to join the State-Wide Fund. AC-I ¶ 12. Thereafter, the Woodworker Employers contributed funds to the State-Wide Fund for the benefit of their employees. AC-I ¶¶ 10, 31.
At some point, the Woodworker Employers came to doubt the wisdom of their decision to join the State-Wide Fund. By the terms of the State-Wide Trust, each employer contributed "a fixed dollar amount to the State-Wide Fund for each hour of employment of each of its employees." AC-I ¶ 23. The Woodworker Employers hire carpenters to work full-time for the entire year. AC-I ¶ 32. Most other employers who participated in the State-Wide Fund, however, were either general contractors or engaged in seasonal construction trades. Id. These employers hired carpenters to work on only a part-time or seasonal basis. Id. Plaintiffs allege that this difference between the nature of the Woodworker Employers' business and the general contracting and construction industries created an adversity of interests between the Woodworker Employers and the other employers contributing to the State-Wide Fund. AC-I ¶ 22.
In 1975, the Woodworker Employers, suspecting that they were making proportionally greater contributions to the State-Wide Fund on behalf of the Woodworker Employees than other employers were contributing on behalf of their own employees, AC-I ¶ 32, requested that the State-Wide Trustees authorize a study of the proportional cost and benefit levels which were being supported by the contributions of the Woodworker Employers. AC-I ¶ 33. Such a study was performed, and revealed that the Woodworker Employers' contributions were greater than necessary to fund the benefits of the Woodworker Employees. AC-I ¶¶ 33-34.
In 1976, the Woodworker Employers asked a number of insurance companies to estimate "the annual cost of providing the exact level of benefits provided by the State-Wide Fund, including the cost of amortizing all past service costs for all employees." AC-I ¶ 43. From these inquiries, the Woodworker Employers concluded that the insurance company plans would provide the same level of benefits at substantially less cost than continued contributions to the State-Wide Fund would have imposed. Id. As a result, the Woodworker Employers and Local 1717 "bargained to cease making contributions to the State-Wide Fund, effective December 31, 1977, and to establish a new pension plan, the Woodworker Plan, effective January 1, 1978," AC-I ¶ 44. Under the terms of the Woodworker Plan, benefits provided to Woodworker Employees are reduced by "benefits received from, or provided by, funds from the State-Wide Fund." AC-I ¶ 46.
The Woodworker Employers and Woodworker Employees allege that both during and after their association with the State-Wide Fund, the State-Wide Trustees took actions which caused them financial injury. Plaintiffs allege, inter alia, that, during their involvement with the State-Wide Fund, the State-Wide Trustees (1) overcharged them for the "normal...
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