Sheet Metal Emp'rs Promotion Fund v. Absolut Balancing Co.

• Decision Date: 24 August 2012
• Docket Number: No. 12–10752.,12–10752.
• Citation: 884 F.Supp.2d 617
• Parties: SHEET METAL EMPLOYERS INDUSTRY PROMOTION FUND, and Sheet Metal Employers Industry Apprenticeship Reimbursement Fund, Plaintiffs, v. ABSOLUT BALANCING CO. INC., Enviro–Aire/Total Balance Company, Inc., Aerodynamics Inspecting Co., Airflow Testing, Inc., and Barmatic Inspecting Co., Defendants.
• Court: U.S. District Court — Eastern District of Michigan

884 F.Supp.2d 617

SHEET METAL EMPLOYERS INDUSTRY PROMOTION FUND, and Sheet Metal Employers Industry Apprenticeship Reimbursement Fund, Plaintiffs,

v.ABSOLUT BALANCING CO. INC., Enviro–Aire/Total Balance Company, Inc., Aerodynamics Inspecting Co., Airflow Testing, Inc., and Barmatic Inspecting Co., Defendants.

No. 12–10752.

United States District Court,

E.D. Michigan,

Southern Division.

Aug. 1, 2012.

Order Denying Reconsideration Aug. 24, 2012.

Douglas M. Lash, Anthony A. Asher, Sullivan, Ward, Southfield, MI, for Plaintiff.

Scott W. Rooney, Thomas C. Nemes, Nemes, Rooney & McKindles, P.C., Farmington Hills, MI, for Defendants.

OPINION AND ORDER

LAWRENCE P. ZATKOFF, District Judge.

I. INTRODUCTION

This matter is before the Court on Plaintiffs' Motion for Summary Judgment to Confirm an Arbitration Award [dkt. 13]. The motion has been fully briefed by the parties. The Court finds that the facts and legal arguments are adequately presented in the parties' papers such that the decision process would not be significantly aided by oral argument. Therefore, pursuant to E.D. Mich. L.R. 7.1(f)(2), it is hereby ORDERED that the motion be resolved on the briefs submitted. For the reasons set forth below, Plaintiffs' Motion for Summary Judgment to Confirm an Arbitration Award is DENIED.

II. BACKGROUND

Plaintiffs are trust funds that bring this action under § 301 of the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185(c), to confirm arbitration awards against Defendants for purported breaches of a collective bargaining agreement (“CBA”). The CBA provided to the Court is effective from June 1, 2009, through May 31, 2013, and was entered into between the Sheet Metal and Air Conditioning Contractor National Association–Metropolitan Detroit Chapter (“SMACNA”) and Sheet Metal Worker's International Association (“SMWIA”) Local Union No. 80 (“Local 80”). SMACNA is the bargaining unit for sheet metal contractors that specialize in heating, ventilating and air conditioning; speciality stainless steel work; and testing and balancing.

Defendants include Absolut Balancing Co. Inc. (“Absolut”), Enviro–Aire/Total Balance Company, Inc. (“Enviro–Aire”), Aerodynamics Inspecting Co. (“Aerodynamics”), Airflow Testing, Inc. (“Airflow”), and Barmatic Inspecting Co. (“Barmatic”). They are testing and air balancing control (“TAB”) contractors. Defendants are allegedly not members of Local 80 and are represented by the Associated Air Balance Council (“AABC”). According to Defendants, their only affiliation with SMWIA and Local 80 is based on an agreement between AABC and SMWIA.

Plaintiffs claim that Defendants were bound by the CBA, which required the payment of fringe benefits to Plaintiffs under Sections 15 and 16 of Addendum 1 of the CBA. Section 15 creates the Industry Promotion Fund (“Promotion Fund”) and requires the employer of members of the union to contribute to the Promotion Fund for each hour worked by each of the employers' employees. ¹ Similar to Section 15, Section 16 creates the Industry Apprenticeship Reimbursement Fund (“Reimbursement Fund”). Contributions to the fund are based on the hours worked by each of the employers' employees.

Plaintiffs filed grievances against Defendants for failing to make contributions to the two funds since 2006. Pursuant to Article X, Section 2, of the CBA, the grievances were heard by the Local Joint Adjustment Board (“LJAB”) for final and binding arbitration on February 15, 2011. While Defendants received notice of the grievance hearings by letters from the LJAB, Defendants opted to not be present at the hearings. The LJAB issued the following decisions on February 25, 2011, and March 9, 2011, finding that Defendants violated the CBA by failing to contribute to the Promotion Fund and Reimbursement Fund:

a decision issued against Defendant Absolut in the amount of $39,447.20—comprising $21,121.48 to the Promotion Fund and $18,355.73 to the Reimbursement Fund;

a decision issued against Defendant Aerodynamics in the amount of $92,564.52—comprising $49,636.32 to the Promotion Fund and $42,928.20 to the Reimbursement Fund;

a decision issued against Defendant Barmatic in the amount of $35,241.56—comprising $18,967.53 to the Promotion Fund and $16,274.03 to the Reimbursement Fund;

a decision issued against Defendant Airflow in the amount of $74,130.94—comprising $39,698.97 to the Promotion Fund and $34,431.98 to the Reimbursement Fund; and

a decision issued against Defendant Enviro–Aire in the amount of $189,823.54—comprising $102,278.85 to the Promotion Fund and $87,544.69 to the Reimbursement Fund.²

Defendants have neither complied with the decisions nor moved to vacate the decisions. After Plaintiff filed separate cases against each Defendant in this Court, the cases were consolidated based on similarity of the parties, facts and controlling law. On May 25, 2012, Plaintiffs filed the instant motion for summary judgment. Plaintiffs argue that the Court should summarily enter judgment in their favor because Defendants are precluded from asserting any defenses based on the three-month limitations period for challenging arbitration awards under § 301 of the LMRA. Defendants claim they are not foreclosed from defending against this action because the CBA is not applicable to them. According to Defendants, the CBA is between SMACNA and Local 80, not Defendants.

III. STANDARD OF REVIEW

“The court shall grant summary judgment if the movant shows 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); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A party must support its assertions by:

(A) citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials; or;

(B) showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.

Fed.R.Civ.P. 56(c)(1).

The moving party bears the initial burden of demonstrating the absence of any genuine dispute as to a material fact, and all inferences should be made in favor of the nonmoving party. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party discharges its burden by “ ‘showing’—that is, pointing out to the district court—that there is an absence of evidence to support the nonmoving party's case.” Horton v. Potter, 369 F.3d 906, 909 (6th Cir.2004) (citing Celotex, 477 U.S. at 325, 106 S.Ct. 2548).

Once the moving party has met its initial burden, the burden then shifts to the nonmoving party, who “must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). “[T]he mere existence of a scintilla of evidence in support of the [nonmoving party's] position will be insufficient [to defeat a motion for summary judgment]; there must be evidence on which the jury could reasonably find for the [nonmoving party].” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).³

IV. ANALYSIS

The Sixth Circuit applies a three-month limitations period to a § 301 claim brought to vacate an arbitrator's award in a Michigan district court. Occidental Chem. Corp. v. Int'l Chem. Workers Union, 853 F.2d 1310, 1314–15 (6th Cir.1988); accord Bacashihua v. U.S.P.S., 859 F.2d 402, 406 (6th Cir.1988). The Sixth Circuit explained that since the employer failed to timely file an action to vacate the award, the employer could not later challenge the award during a subsequent action brought by the union to enforce the award on any similar grounds that could have been raised in a timely action to vacate. Occidental, 853 F.2d at 1317;Prof'l Adm'rs Ltd. v. Kopper–Glo Fuel, Inc., 819 F.2d 639, 642–43 (6th Cir.1987). The Sixth Circuit reasoned that barring defenses was consistent with the quick resolution of arbitrated disputes and resulted in an action to confirm an arbitration award being a summary proceeding. Occidental, 853 F.2d at 1317. “Arbitration is meant to be a quick and final resolution by which parties are bound. Moreover, an action to confirm the award should be a summary proceeding, not a proceeding in which the defendant seeks affirmative relief.” Kopper–Glo Fuel, Inc., 819 F.2d at 642.

Guided by Occidental and Kopper–Glo Fuel, Inc., Defendants' ability to challenge the LJAB decisions is procedurally and substantively foreclosed. See id.

While Defendants are foreclosed from attacking the LJAB decisions, the Court's review of the LJAB decisions does not end here. Even though Defendants failed to timely move to vacate the award, the Court must determine if enforcing the CBA is contrary to public policy. W.R. Grace & Co. v. Local Union 759, Int'l Union of the United Rubber Workers, 461 U.S. 757, 766, 103 S.Ct. 2177, 76 L.Ed.2d 298 (1983). The public policy at issue must be “an explicit, well defined and dominant public policy” that “specifically militates against the relief ordered by the arbitrator.” E. Associated Coal Corp. v. United Mine Workers of Am., 531 U.S. 57, 63, 121 S.Ct. 462, 148 L.Ed.2d 354 (2000). The Court determines this policy “ ‘by reference to the laws and legal precedents and not from general considerations of supposed public interests.’ ” W.R. Grace & Co., 461 U.S. at 766, 103 S.Ct. 2177 (quoting Muschany v. United States, 324 U.S. 49, 66, 65 S.Ct. 442, 89 L.Ed. 744 (1945)); see also United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29 at 43, 108 S.Ct. 364, 98 L.Ed.2d 286 (1987).

In sum, the issue left before the Court is whether enforcement of the LJAB decisions is against public policy. See Occid...