Plumbing Industry Bd., Plumbing Local Union No. 1 v. Howell Co., Inc.

• Citation: 126 F.3d 61
• Decision Date: 15 September 1997
• Docket Number: D,No. 608,608
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
• Parties: PLUMBING INDUSTRY BOARD, PLUMBING LOCAL UNION NO. 1, Plaintiff-Appellant, v. E.W. HOWELL CO., INC.; American Home Assurance Co., Inc., Defendants-Appellees, L & L Masons; T & L Fabricators and Fire End & Coker Corp., New York City School Construction Authority, Defendants. ocket 96-7620.

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126 F.3d 61

PLUMBING INDUSTRY BOARD, PLUMBING LOCAL UNION NO. 1 Plaintiff-Appellant, v. E.W. HOWELL CO., INC.; American Home Assurance Co., Inc. Defendants-Appellees L & L Masons; T & L Fabricators and Fire End & Coker Corp New York City School Construction Authority, Defendants.

No. 608, Docket 96-7620.

United States Court of Appeals, Second Circuit.

Argued Dec. 13, 1996.

Decided Sept. 15, 1997.

Jack B. Levitt, New York City (Edward J. Reich, Cooperman Levitt Winikoff Lester & Newman, P.C., New York City, of counsel), for Plaintiff-Appellant.

Eli S. Cohn, New York City (K. Richard Marcus, Lorraine D'Angelo, McDonough Marcus Cohn & Tretter, New York City, of counsel), for Defendants-Appellees.

Jennifer A. Clark, Blitman & King, LLP, Syracuse, NY, filed a brief for Onondaga County Laborers' Health and Welfare and Pension Funds; Onondaga County Carpenters' Health and Pension Funds; I.B.E.W. Local No. 328 Welfare and Pension Funds; Plumbers Local 73 Health and Welfare Fund and Retirement Funds; and Iron Workers District Council of Western New York and Vicinity Welfare and Pension Funds as Amicus Curiae.

Denis A. Engel, Colleran, O'Hara & Mills, Garden City, NY, filed a brief for Amicus Curiae New York State AFL-CIO.

Diana L.S. Peters, Washington, DC (Gerald M. Feder, Feder & Associates, P.C., Washington, DC, of counsel), filed a brief for the National Coordinating Committee for Multiemployer Plans as Amicus Curiae.

Before: CARDAMONE, PARKER, Circuit Judges, and WEXLER, ^* District Judge.

CARDAMONE, Circuit Judge.

This appeal requires us to determine whether New York Lien Law § 5 is preempted by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq. The lien statute permits laborers on public works projects, as well as "any trust fund to which benefits and wage supplements are due or payable for the benefit of such [laborers]" to file a lien for the value of the labor performed against the funds earmarked to pay for the public improvement. N.Y. Lien Law § 5 (McKinney 1993).

In June, 1994 plaintiff-appellant Plumbing Industry Board, Plumbing Local Union No. 1 (Board) filed a lien against the funds due the general contractor on a high school construction project after the plumbing subcontractor on the project failed to make timely payments to the Board's employee benefit plan as required under the applicable collective bargaining agreement. When the Board moved to enforce the lien in the United States District Court for the Southern District of New York (Chin, J.), the district court dismissed the Board's action after determining that Lien Law § 5 is preempted by ERISA § 514(a).

BACKGROUND

A. New York Lien Law § 5

Continuously in force in one form or another since 1878, New York's Lien Law § 5 applies to public construction projects and is designed to protect "those who, by their labor and materials, enhance the value of real property." See Niagara Venture v. Sicoli & Massaro, Inc., 77 N.Y.2d 175, 180-81, 565 N.Y.S.2d 449, 566 N.E.2d 648 (1990) (discussing purpose of analogous mechanic's lien provisions). As a public improvement lien, the lien created by § 5 does not attach to real property or to the improvements thereon. See Albany County Indus. Dev. Agency v New York amended Lien Law § 5 in 1985, extending the ability to file such liens--formerly limited to laborers or materialmen--to "any trust fund to which benefits and wage supplements are due or payable for the benefit of such [laborers]." 1985 N.Y. Laws ch. 137, § 9. The legislative history informs us that the purpose of the amendment was to better protect the rights of workers by "supplement[ing]" the scheme for enforcing employee benefit obligations arising in connection with public works contracts, see 1985 N.Y. Laws ch. 137, § 1. To accomplish this goal, the statute was amended to ensure that public improvement liens could be filed for benefits and wage supplements, and to "guarantee that any trust fund to which benefits and wage supplements are due or payable has the right to file a lien." New York State Assembly Memorandum of Introduction, A. 2460-A, 208th Sess., 1985 Reg. Sess. Similar amendments were made to Lien Law § 3, which governs the filing of mechanic's liens against private property. See N.Y. Lien Law § 3 (McKinney 1993) (permitting a mechanic's lien on real property to be filed by "any trust fund to which benefits and wage supplements are due or payable for the benefit of such laborers.").

Gastinger Ries Walker Architects, Inc., 144 A.D.2d 891, 892, 534 N.Y.S.2d 823 (3d Dep't 1988). Instead, it attaches to any sums that have been appropriated for the making of the improvement. John Kennedy & Co. v. New York World's Fair 1939, Inc., 260 A.D. 386, 22 N.Y.S.2d 901, 903-04 (2d Dep't 1940), aff'd, 288 N.Y. 494, 41 N.E.2d 789 (1942).

B. The Public Improvement Lien

The present action arises out of a project for the construction of Townsend Harris High School in Queens, New York. In February 1992 defendant general contractor E.W. Howell Co., Inc. (Howell) entered into a contract with the New York City School Construction Authority for the construction of the school. Howell subcontracted out certain plumbing work for the project to Alumni Plumbing & Heating Co., Inc. (Alumni). In December 1993 Alumni defaulted on the fringe benefits obligations it owed under a multiemployer collective bargaining agreement with the Board, allegedly in part because Howell refused to pay the amounts it owed to Alumni under the subcontract. Alumni thereafter filed for bankruptcy.

In June 1994 the Board, as trustee of the union benefits plan, filed a public improvement lien under Lien Law § 5 in the amount of $160,000 against the funds appropriated to pay for the construction of the high school. To discharge the lien, Howell posted a surety bond issued by defendant American Home Assurance Co., Inc. (American).

C. Prior Proceedings

The Board began this action in state court, seeking to enforce the lien to recover the unpaid benefits contributions. After answering the complaint, defendants Howell and American removed the action to the Southern District of New York, asserting that federal jurisdiction existed because ERISA preempts the Board's state law claims. Upon removal, defendants moved for summary judgment contending that the plaintiff Board had no ground of recovery under ERISA and could not make a valid claim under its state law causes of action because such actions are preempted by ERISA. The Board cross-moved to remand the matter to state court on the ground that the district court lacked subject matter jurisdiction. On April 16, 1996 the district court, after determining that Lien Law § 5 is preempted by ERISA, granted the defendants' motion for summary judgment and denied the plaintiff's motion for remand. From this determination, the Board appeals. We affirm.

ANALYSIS

I Removal Jurisdiction

On appeal the Board maintains that ERISA does not preempt Lien Law § 5 and that the district court therefore lacked removal jurisdiction over the action. We review the district court's conclusions regarding its subject matter jurisdiction de novo. Scelsa v. City Univ. of New York, 76 F.3d 37, 40 (2d Cir.1996).

A defendant in a state court civil action may remove to federal court any case over which the district court has original jurisdiction Ordinarily, a claim of preemption is a defense to be raised in the defendant's answer, and thus cannot support jurisdiction under 28 U.S.C. § 1331 because it would not appear on the face of a well-pleaded complaint. See Louisville & N.R. Co. v. Mottley, 211 U.S. 149, 154, 29 S.Ct. 42, 44, 53 L.Ed. 126 (1908); Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63, 107 S.Ct. 1542, 1546, 95 L.Ed.2d 55 (1987). Nonetheless, when Congress mandates "complete preemption" in a specific area of the law, any civil complaint raising a state law claim in that area is of necessity so federal in character that it arises under federal law for purposes of 28 U.S.C. § 1331 and permits removal to federal court under 28 U.S.C. § 1441. Taylor, 481 U.S. at 63-67, 107 S.Ct. at 1546-48. ERISA preemption provides a valid basis for removal jurisdiction only if (1) the state law cause of action is preempted by ERISA, and (2) that cause of action is "within the scope" of the civil enforcement provisions of ERISA § 502(a), 29 U.S.C. § 1132(a). See id.; Greenblatt v. Delta Plumbing & Heating Corp., 68 F.3d 561, 573 (2d Cir.1995). We address each of these jurisdictional prerequisites in turn.

28 U.S.C. § 1441, including any action that arises under federal law, 28 U.S.C. § 1331. In removing the plaintiff's state court enforcement action to federal court, the defendants relied upon the assertion that the plaintiff's cause of action was preempted by ERISA.

II ERISA Preemption

ERISA promotes the interests of employees and their beneficiaries in employee benefit plans. The statute, comprehensive in its scope, accomplishes its aims not by requiring employers to provide any particular level of benefits, but by controlling the administration of the plans through rules regarding participation, funding and vesting, and by promulgating uniform standards for reporting, disclosure and fiduciary responsibility. It also provides for administrative oversight, imposes criminal penalties and establishes a civil enforcement scheme. See New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 651, 115 S.Ct. 1671, 1674-75, 131 L.Ed.2d 695 (1995).

To ensure uniformity in benefits law, ERISA contains an express preemption clause, § 514(a), which provides, with certain exceptions not relevant here, that ERISA shall supersede "any and all State laws insofar as they may now or hereafter relate to any employee benefit plan" covered by ERISA. 29 U.S.C. § 1144(a) (emphasis added). In enacting this provision, Congress sought principally to address concerns that lack of uniformity and...