Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_07-cv-00373/USCOURTS-casd-3_07-cv-00373-3/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:2201 Declaratory Judgement

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

CALLAWAY GOLF COMPANY and

DAILEY & ASSOCIATES,

Plaintiff,

CASE NO. 07CV0373-LAB (WMc)

ORDER DENYING MOTION FOR

JUDGMENT ON THE

PLEADINGS; 

ORDER DENYING LEAVE TO

FILE AMENDED COMPLAINT;

AND

ORDER DENYING EX PARTE

APPLICATION TO STAY

PROCEEDINGS 

[Docket. Nos. 21, 51, 64]

vs.

SCREEN ACTORS GUILD, INC.,

TRUSTEES OF THE SCREEN ACTORS

GUILD - PRODUCTIONS PENSION

PLAN AND TRUSTEES OF THE

SCREEN ACTORS GUILD –

PRODUCERS HEALTH PLAN,

Defendants.

Currently pending are three related motions: a motion by certain of the Defendants

for judgment on the pleadings (“MJP”), Plaintiffs’ motion for leave to file an amended

complaint (“Motion to Amend”), and certain Defendants’ ex parte application to stay

proceedings in light of Trustees of the Screen Actors Guild-Producers Pension and Health

Plans v. NYCA, Inc., Case no. 07cv56867, currently pending before the Ninth Circuit

(“Motion to Stay”).

/ / /

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I. Motion to Stay

Defendants and Counter-Claimants Trustees of the Screen Actors Guild-Producers

Pension Plan, and Trustees of the Screen Actors Guild-Producers Health Plan (collectively

“Trustees”) filed this ex parte application, arguing staying this action will result in judicial

economy. Plaintiffs oppose the Motion to Stay. Although staying this action may serve the

interests of judicial economy, the Court is also mindful of the need to adjudicate matters in

a reasonably timely manner. See Fed. R. Civ. P. 1. Acknowledging the Ninth Circuit’s

decision might require modification of this Court’s decision or obviate the need for further

proceedings, the Court is persuaded the better course is to rule on these related motions

now in light of existing precedential authority. 

In their opposition to the Motion to Stay, Plaintiffs request oral argument on this issue

and request sanctions because they believe Trustees’ decision to seek ex parte relief was

inappropriate. Because of the pending MJP and Motion to Amend, both of which were fully

briefed and ready for decision, seeking ex parte relief on the limited issue of a stay rather

than filing a noticed motion resulted in a considerable savings of time. Besides, the Motion

to Stay is being denied, so Plaintiffs’ request for oral argument is moot.

II. Motion for Judgment on the Pleadings

Trustees moved, pursuant to Fed. R. Civ. P. 12(c) for judgment on the pleadings on

Plaintiffs’ first claim for relief. Defendant Screen Actors Guild, Inc. (“SAG”) did not join in this

motion. Specifically, Plaintiffs have sought declaratory relief stating they are not liable under

the Labor Management Relations Act (LMRA) or Employee Retirement Income Security Act

(ERISA) for contributions to the two plans administered by the Trustees (collectively, the

“Plans”), because the professional golfers who provide paid endorsements for Plaintiffs are

independent contractors. (Compl. at 7:20–9:15.) Trustees argue this issue is moot, because

whether the professional golfers are employees or independent contractors does not affect

Plaintiffs’ responsibility for contributing to the Plans. (MJP at 1:17–2:15.)

/ / /

/ / /

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A. Factual Background

The facts, except where noted, are taken from the allegations in the Complaint, and

Trustees do not contest them for purposes of this motion. Plaintiff Callaway Golf

(“Callaway”) entered into endorsement contracts (the “Endorsement Agreements”) with

certain professional golfers (the “Golf Professionals”) to endorse Callaway’s golf equipment.

The Golf Professionals agreed to use Callaway’s equipment, to wear Callaway’s logo while

playing in golf tournaments, to make personal appearances at events, and to promote

Callaway’s products in both print and broadcast media, including television commercials if

requested. The Endorsement Agreements provide that the Golf Professionals are

independent contractors. Trustees are not parties to the Endorsement Agreements.

Plaintiff Dailey & Associates (“Dailey”) entered into agreements with Callaway for

advertising services, and pursuant to these agreements, created television commercials.

Dailey also entered into a contract (the “Golf Professionals Agreement”) directly with the Golf

Professionals to appear in the television commercials. Neither Callaway nor Trustees are

parties to the Golf Professionals Agreement.

SAG has entered into a collective bargaining agreement (“Commercials Contract”)

with certain advertising agencies, including Dailey. Both the Endorsement Agreements and

the Commercials Agreement refer to fees at the minimum SAG rate. The Commercials

Contract was modified twice from its 1997 version, in 2000 and again in 2003. While

Callaway was not a party to the Commercials Contract, Callaway reimbursed Dailey for

payments made pursuant to the Commercials Contract, believing it was obligated to do so.

Plaintiffs’ first claim, which is the subject of the MJP, is for declaratory relief that the

Plaintiffs have no liability for contributions to the Plans because the Golf Professionals are

independent contractors, and such contributions are prohibited under the LMRA and not

required by ERISA.

B. Legal Standards

“Judgment on the pleadings is proper when the moving party clearly establishes on

the face of the pleadings that no material issue of fact remains to be resolved and that it is

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entitled to judgment as a matter of law.” Hal Roach Studios, Inc. v. Richard Feiner and Co.,

Inc., 896 F.2d 1542, 1550 (9th Cir. 1990) (citation omitted). Under Fed. R. Civ. P. 12(c), if

matters outside the pleadings are presented and not excluded by the Court, the motion is

treated as one for summary judgment under Rule 56. In addition to pleaded facts, the

Court may also consider documents attached to the complaint or referred to in the complaint

if its authenticity is not questioned, without converting the motion to a Rule 56 motion. Stone

v. Writer’s Guild of America West, Inc., 101 F.3d 1312, 1313–14 (9th Cir. 1996).

Determination of whether the provisions of a contract are “clear and unambiguous,”

and interpretation of provisions deemed “clear and unambiguous,” are questions of law,

allowing summary judgment. See United Sates v. Sacramento Mun. Util. Dist., 652 F.2d

1341, 1343–44 (9th Cir. 1981). However, if the Court determines that the contractual

language is unclear, even summary judgment is inappropriate, because “differing views of

the intent of the parties will raise genuine issues of material fact.” Id. Not every potential

controversy renders contractual language ambiguous, but only genuine ambiguities that

could reasonably be interpreted in more than one way. See United States v. Dahan, 369 F.

Supp.2d 1187, 1190 (holding that mere disagreement about a contract’s meaning does not

mean the contract is ambiguous, but that a contract is ambiguous only if reasonable people

could find its terms susceptible to more than one interpretation) (citing Kennewick Irrigation

Dist. v. United States, 880 F.2d 1018, 1032 (9th Cir. 1989)). 

C. Discussion

Under the LMRA, an employer may not generally make contributions to a labor union,

but may do so on behalf of employees to a pension or benefits plan. 29 U.S.C. § 186

(LMRA, § 302). This is an anti-corruption provision, intended to prevent bribery of employee

representatives by employers. Arroyo v. United States, 359 U.S. 419, 425–26 (1959).

ERISA likewise prohibits contributions inconsistent with law, 29 U.S.C. § 1145 (ERISA,

§ 515). Contributions may be made only on behalf of true employees, and may not be made

on behalf of independent contractors, regardless of how contractual language describes

them. Todd v. Benal Concrete Const. Co., Inc., 710 f.2d 581, 584 (9th Cir. 1983).

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Under Walsh v. Schlecht, 429 U.S. 401, 409–10 (1977), however, the LMRA does not

dictate how the contributions on behalf of eligible employees are to be measured. Under the

reasoning of Walsh, this measure can include even hours worked by non-employees,

provided the payments are made for the benefit of eligible employees only. Id. at 409. As

Justice White’s dissent in that case points out, this results in the employer having to make

the same payments regardless of whether the workers whose hours were measured were

eligible plan participants. Id. at 412.

The Seventh Circuit’s application of Walsh’s holding explains that a collective

bargaining agreement may require contributions as measured by hours worked by eligible

employees and non-eligible workers alike, provided, contributions are made “on behalf of”

or “for the benefit of” eligible employees only. Illinois Conference of Teamsters and

Employers Welfare Fund v. Mrowicki, 44 F.3d 451, 461 (7th Cir. 1994). “An employer's

obligation to pay into a [section] 302(c)(5) trust can be measured by any standard acceptable

to both the union and the employer.” Burke v. French Equipment Rental, Inc., 687 F.2d 307,

311–12 (9th Cir. 1982) (citing Walsh; Seymour v. Hull & Moreland Engineering, 605 F.2d

1105, 1114–15 (9th Cir. 1979)). A contract provision requiring an employer to make

contributions is not illegal or unenforceable simply because the contributions owed are

measured by the hours worked by people who are not eligible beneficiaries under the plan.

Id. at 312.

In Walsh, the employer was a signatory to a collective bargaining agreement, but the

subcontractor at issue was not. No one working for the subcontractor, therefore, was an

eligible participant. This did not affect the signatory employer’s obligation to make

contributions as measured by all hours worked by employees, including those worked by the

subcontractor’s employees. As explained in Mrowicki, all hours worked should be counted

as provided for in the contract, even if worked by workers who under the common law would

have been considered independent contractors rather than true employees. 44 F.3d at 461.

Therefore, the court merely construed the contract, and did not have to apply the common

/ / /

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law test to decide whether the workers in question were employees or independent

contractors. Id. at 462.

Plaintiffs do not dispute the validity of these interpretations, but argue they are

inapplicable to the facts of this case. As Plaintiffs correctly point out, part of the Walsh’s

holding is that “employers may make contributions only to trust funds established for their

own employees, and not for the benefit of a non-employee independent contractor.”

Seymour, 605 F.2d at 1115. There is no dispute, however, Dailey may make contributions

to the Plans, and it is Dailey’s obligation that is at stake here. No party has alleged Callaway

is making contributions to the Plans, or that Dailey does not have employees who are eligible

for benefits under the Plans. Callaway reimburses Dailey pursuant to an agreement

between those two entities, but this arrangement does not transform Callaway’s

reimbursements into contributions. 

Plaintiffs also arguethe Commercials Contract includes no subcontracting clause, and

that Dailey is therefore not a general contractor nor is Callaway a subcontractor. (Opp’n to

MJP at 12:23–13:4.) They therefore argue the Walsh line of cases is inapplicable. Plaintiffs

have not explained why this distinction is meaningful. Although a similar independent

contractor relationship was at issue in Todd, the court relied on the fact that contributions

were required on behalf of the independent contractors to reach its decision. The Todd

court’s treatment of independent contractors suggests work performed by independent

contractors is comparable, for these purposes, to work performed by employees of

subcontractors. See 710 F.2d at 583 (distinguishing independent contractors from

subcontractors’ employees in another case on the basis of whether contributions were

“measured by” hours worked by non-employees or “on behalf of” non-employees) (citing

Brogan v. Swanson, 682 F.2d 807, 809 (9th Cir. 1982)).

Plaintiffs also attempt to distinguish the Walsh line of cases because, they argue, the

Commercials Contract requires Dailey to contribute a percentage of performers’ gross

compensation, and is not based on hours worked. (Opp’n to MJP at 14:1–16.) Plaintiffs cite

Todd’s explanation that Walsh stood for the principle that “contributions may reflect work

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performed by employees of such independent subcontractors, but only if the amounts are

‘measured by’ the number of hours worked.” 710 F.2d at 583 (citing Walsh, 429 U.S. at

407). Their citation misconstrues the language of Todd, however. The point of the opinion’s

explanationwas merely to distinguish payments “measured by” hours worked from payments

“on behalf of” or “for the benefit of” independent contractors. In Todd, the court was dealing

with a contract requiring the employer to treat independent contractors as bona fide

employees and make contributions on their behalf even though they were not in fact

employees. 710 F.2d at 582. The court was not overruling Burke and holding that the only

acceptable standard for measurement was hours worked. Plaintiffs cite no authority for the

proposition that “any standard,” see Burke, 687 F.2d at 311–12, cannot include gross

compensation.

Plaintiffs also argue Walsh and its progeny do not govern this dispute because

section 302(c)(5) of the LMRA requires the detailed basis for contributions to be spelled out

in a written agreement with the employer. Plaintiffs point out in Walsh and Mrowicki a flat

amount per hour worked was to be contributed. They do not, however, explain why the

percentage of gross compensation provided for in the Commercials Contract does not

likewise constitute an adequately detailed basis for the contributions. As with the flat amount

per hour worked, the percentage of gross compensation is a figure capable of exact

calculation.

It is apparent the parties have no real disagreement regarding the statutory or

precedential framework. Rather, their disagreement lies in the proper application of the law

to the Commercials Contract. The heart of their disagreement is whether Dailey was

contractually obligated to make contributions to the Plans on behalf of the Golf

Professionals, or whether the contributions the Commercials Contract obligated Daily to

make were measured in part by the Golf Professionals’ compensation. This is a matter of

contract construction.

As concerns the Commercials Contract, the Counterclaim and MJP muddy the waters

somewhat. The Counterclaim, ¶¶ 6 and 7, alleges the Commercials Contract requires

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signatory employers to make contributions “on behalf of” performers. This included the Golf

Professionals. ¶ 17. The MJP confirms Trustees’ understanding that Plaintiffs are

challenging their “obligation to pay contributions on behalf of professional golfers whom

Plaintiffs characterize as independent contractors and ineligible for benefits.” (MJP at

2:23–25.) Plaintiffs explain they sought declaratory relief in anticipation of this counterclaim.

Trustees contend, citing the Complaint, Dailey agreed to pay the Golf Professionals

SAG scale compensation and to make contributions to the Plans based on this. (MJP at

5:3–7 (citing Compl., ¶¶ 1–2).) Trustees also contend the Commercials Contract requires

contributions be made based solely on compensation paid for acting services, and not for

non-acting endorsement activities. (MJP at 5:7–11 (citing Compl., ¶¶ 11, 20–24).) As the

Complaint points out, section 45(A) of the 1997 version of the Commercials Contract

required Dailey to contribute a percentage of “gross compensation paid to principal

performers as herein defined with respect to television commercials . . . .” (Compl. at 7,

¶ 23.) It goes on to point out section 6(A) of the Commercials Contract defines “principal

performer” as “[a]nyone, who is seen and who speaks a line or lines of dialogue . . . .” (Id.,

¶ 24.) 

In support of their opposition to the MJP, Trustees have submitted the declaration of

Wendy Wallace, attesting to the authenticity of certain attached documents. Among the

attached documents are excerpts of the SAG Pension and Health Contributions Report Form

(the “Report Form”), which Trustees allege was incorporated into the 2003 version of the

Commercials Contract; as well as excerpts of the 1997, 2000, and 2003 versions of the

Commercials Contract. 

The Report Form puts contributors on notice that only signatories may submit

contributions, and that they may only submit contributions “on behalf of eligible Performers.”

(Wallace Decl. at D-3, D-5.) The only language in the Report Form arguably supporting

Trustees’ position is a certification clause, stating “I further certify that they [sic] information

contained herein is correct, and that all compensation subject to contributions earned by

Performers in our employ during the period covered has been reported herein.” (Id.) The

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Court finds, however, the phrase “in our employ” in the certification clause only is insufficient

to create an ambiguity. Dahan, 369 F. Supp.2d at 1190.

The apparent meaning of this clause is that a signatory is certifying all compensation

paid to performers it utilized in producing television commercials has been reported. While

a few cases use “in the employ” to identify an employee as distinct from an independent

contractor, see, e.g., Taylor v. Hubbell, 188 F.2d 106, 109 (9th Cir. 1951); Lake Valley Farm

Products v. Milk Wagon Drivers’ Union, Local 753, 108 F.2d 436 (7th Cir. 1939), this phrase

is also used to describe the utilization of independent contractors. See, e.g., Cruz v. United

States, 70 F. Supp.2d 1290 (S.D.Fla. 1998) (“[T]he United States was not liable under the

FTCA for the acts or omissions of independent contractors in its employ.”) Neither this

phrase nor its equivalents appear to be terms of art. See Black’s Law Dictionary 564 (8th

Ed. 2004) (defining “employ” solely as a verb, and providing four definitions potentially

encompassing various agency relationships). See also id. at 566 (in defining “employment,”

omitting the phrase “in the employ” or any similar phrases). Bearing in mind this phrase

occurs only once, in the certification clause, the Court finds nothing in the Report Form to

show that only common law employees’ compensation must be reported. 

The attached excerpts of the 1997, 2000, and 2003 Commercials Contract for the

most part agree with this interpretation. Section 46(A) of the 2003 Commercials Contract

(Wallace Decl. at E-3), section 46(A) of the 2000 Commercials Contract (Id. at F-2), and

section 45(A) of the 1997 Commercials Contract (Id. at G-2) all provide contributions are to

be made as measured by percentages of principal performers’ gross compensation. Section

46(G) makes clear not all performers may be eligible for benefits under the Plans, by

explaining the Plans are for the purpose of providing benefits only for employees covered

by the SAG’s various collective bargaining agreements and by providing that the Trustees

are solely responsible for determining the rules of eligibility for benefits. (See id. at E-4.)

Applying this to the Report Form, it is apparent compensation must be reported, and that the

Trustees then will decide whether the performer whose compensation was reported is in turn

eligible for benefits under the plan. Reporting of compensation and the making of

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1

 A loan-out company is an entity through which a performer offers his services to

others. See, e.g., Home Box Office, Inc. v. Directors Guild of America, Inc., 531 F. Supp

578, 597 (S.D.N.Y. 1982).

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contributions, on the one hand, are functions of signatory employers, while decisions

regarding eligibility are committed to the Trustees, who are not bound by the signatory

employer’s decision to report compensation and to make contributions. If the performer

whose compensation is reported is not an eligible beneficiary, the effect would be that the

contributions would have been made on behalf of other, eligible performers, even though

they were based on the compensation of an ineligible performer. (See Wallace Decl. at F3

to F-4 (explaining that the Plans’ trust funds are to be used solely to provide benefits to

employees covered by SAG’s collective bargaining agreements).)

As Plaintiffs point out, however, the Commercials Contract contains an apparent

ambiguity. Section 45(F) of the 1997 Commercials Contract (Wallace Decl. at G-2 to G-3)

and section 46(E) of the 2000 and 2003 Commercials Contract (id. at E-3 to E-4, F-3)

explain in part that, where a signatory either borrows the services of a performer from a loanout company1

 or contracts directly with a performer to perform both acting and non-acting

services, only compensation for acting services is serve as a basis for contributions to the

Plans. Because Golf Professionals contracted directly with Dailey, if the services contracted

for included both acting and non-acting services, the compensation could be separated

under this provision and contributions would be based solely on compensation for acting

services. The fact that Dailey contracted directly with the Golf Professionals for television

commercials suggests this is one of the possible arrangements contemplated by the

Commercials Contract.

These sections contemplate the performers’ eligibility for benefits in sections 45(F)(4)

and (5) of the 1997 Commercials Contract, and 46(E)(4) and (5) of the 2000 and 2003

Commercials Contract, where they discuss the limitations period for bringing actions to

collect contributions “on behalf of” the principal performers subject to these kinds of

arrangements. This is where the ambiguity arises. The enforcement limitations period

specifically addresses “contributions on behalf of principal performers” subject to these

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arrangements, and fails to set any limitations period for contributions measured by the

compensation of such performers but not made for their benefit or on their behalf. No

contractual language or evidence is presented to the Court that would explain why

performers subject to these types of arrangements — as opposed to performers generally

— would be assumed to be eligible Plan participants. On the basis of the language of this

provision, it appears the basis for calculating contributions owed to the Plans is limited to

performers who appear to be eligible participants, even though the Trustees will later make

the eligibility decision.

It is possible this ambiguity is the result of loose drafting and extrinsic evidence will

be needed to clarify it. It is also possible it can be explained with reference to other

contractual language not presented in the briefing on the MJP. It may also be necessary to

consider extrinsic evidence to establish the meaning of the Commercials Contract. However,

based on the evidence before it, the Court cannot resolve the ambiguity. The Court

therefore concludes judgment as a matter of law cannot be granted based on the pleadings;

rather, the ambiguity raises an issue of material fact. Sacramento Mun. Util. Dist., 652 F.2d

at 1343–44. The Court could at this point either deny the MJP, which would be appropriate

if the ambiguity can be resolved by reference to other contractual language not briefed, or

convert the MJP to a Rule 56 motion if extrinsic evidence must be considered, although it

is unclear which would be necessary, nor have the parties explained whether either is

available.

III. Plaintiffs’ Motion to Amend

Defendants have filed their answer to the Complaint. Plaintiffs have moved for leave

to amend the complaint, citing Fed. R. Civ. P. 15(a)’s “very liberal” amendment provision

requiring the Court to grant leave freely when justice so requires. AmerisourceBergen Corp.

v. Dialysist West, Inc., 465 F.3d 946, 951 (9th Cir. 2006). This liberal policy “is subject to the

qualification that the amendment not cause undue prejudice to the defendant, is not sought

in bad faith, and is not futile.” Thornton v. McClatchy Newspapers, Inc., 261 F.3d 789, 799

(9th Cir. 2001).

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Plaintiffs state they have discovered documents shedding light on the nature of the

required contributions. (Motion to Amend, at 5:12–28.) They argue their proposed amended

complaint merely incorporates newly discovered facts found in these documents. (Id. at

6:1–11.)

Defendant SAG has opposed this motion, arguing the proposed amended complaint

eliminates incorrect allegations regarding SAG’s claims, and therefore contending

amendment under which SAG would remain a party would be futile. SAG argues Plaintiffs

have no claim against it, nor does it have claims against Plaintiffs, and it is not a necessary

party. Therefore, SAG argues, it should simply be dismissed. SAG’s opposition does not,

however, show why it would be in any worse position if amendment were allowed rather than

denied. SAG has not moved for dismissal, so the Court would not dismiss it as a party

simply on the basis of arguments in its opposition to the Motion to Amend.

Trustees also filed their opposition, arguing the allowing proposed sixth and seventh

claims, which arise from the newly discovered evidence, would be futile. The Court has

reviewed both this opposition and Plaintiffs’ reply, and is persuaded the amendments would

be futile. The authority Trustees cite, Southern California Retail Clerks v. Bjorklund, 728

F.2d 1262, 1265 (9th Cir. 1984) and Southwest Admin. v. Rozay’s Transfer, 791 F.2d 769,

773 (9th Cir. 1986) make clear that under 29 U.S.C. § 1145 (ERISA § 306(a)), an employer

is obligated to make payments to a multiemployer plan unless such payments are prohibited

by law. No party has contested Dailey is an employer (although Plaintiffs contend Daily was

not the Golf Professionals’ employer). If Dailey is an employer, it owes contributions unless

they are illegal. 29 U.S.C. § 1145. The legality of the contributions at issue here does not,

however, appear to be the subject of the sixth and seventh claims.

Plaintiffs cite Plucinski v. I.A.M. Nat’l Pension Fund, 875 F.2d 1052, 1058 (3d Cir.

1989) for the principle that an employer has a cause of action to recover contributions paid

due to fraud or mistake. In this Circuit, employers may bring actions to recover payments

mistakenly made to a trust fund pursuant to 29 U.S.C. § 1103(c) (ERISA § 403(c)). Alaska

Trowel Trades Pension Fund v. Lopshire, 103 F.3d 881, 885 (9th Cir.1996). See also

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Trustees of Operating Engineers Pension Trust v. Tab Contractors, Inc. 224 F. Supp.2d

1272, 1282–83 (D.Nev. 2002) (explaining that in spite of changes in the law, Ninth Circuit

decisions holding employers have a right to sue for mistaken contributions under ERISA are

still good law). While the sixth claim does not say so directly, it appears to be suggesting

that the amount of contributions is arbitrarily selected. If this claim were accepted at face

value, the Trustees’ allegedly arbitrary and capricious application of those guidelines would

render virtually all contributions involving application of guidelines uncollectible. (See Motion

to Amend at 15:21–22 (alleging the guidelines are unenforceable because Trustees apply

them arbitrarily and capriciously).) Plaintiffs’ Motion to Amend does not, however, show why

uneven application of the guidelines to a wide range of employers would be actionable, or

that inaccurate calculation of amounts owed means nothing at all is owed. 

It may be that Plaintiffs are intending to challenge the Trustees’ interpretation of the

guidelines, to which the Court would ordinarily defer unless they were shown to be arbitrary,

capricious, or contrary to law. See Board of Trustees of the Watsonville Frozen Food

Welfare Trust Fund v. Cal. Cooperative Creamery, 877 F.2d 1415, 1420 (9th Cir. 1989).

Plaintiffs have not, however, explained this or shown why declaratory relief would be

available under this theory. Such a finding would depend on examining the Trustees’ actual

interpretation, not on a showing that the Trustees had been arbitrary and capricious in

interpreting the guidelines in other situations.

In fact, it appears this claim relates to the manner of calculating contributions owed,

and not whether any contributions at all are owed. Another way of stating this argument

would be to say that the contributions Dailey paid were not actually owed, or at least not

owed in full. If Dailey mistakenly paid contributions based on the Golf Professionals’ gross

compensation (as well as on the basis of Dailey’s employees’ gross compensation), Dailey

would have a cause of action for restitution, as explained in Alaska Trowel. Although

Plaintiffs assert Callaway also has a claim for restitution (Reply to Opp’n to Motion to Amend,

at 5:8–10), Callaway merely reimbursed Dailey for Dailey’s contributions; it made no

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contributions of its own. While this proposed claim might be saved by amendment, adding

the amendment in its present condition would be futile.

Plaintiffs, as the party seeking to invoke the Court’s jurisdiction, has the burden of

pleading facts to show they have standing to pursue their claims. Schmier v. U.S. Court of

Appeals for the Ninth Circuit, 279 F.3d 817, 821 (9th Cir. 2002). The proposed amended

complaint’s seventh claim, that Trustees lacked authority under the trust agreement to adopt

or apply the guidelines at all. Plaintiffs have not, however, pleaded facts showing they have

standing to challenge the Trustees’ actions, nor have they briefed this issue in connection

with their Motion to Amend. The trust agreements do not exist for Plaintiffs’ benefit and

Plaintiffs have not alleged they are parties to these agreements or have standing for any

other reason. See 29 U.S.C. § 1132(a) (ERISA § 502(a)) (providing for civil enforcement of

ERISA).

The parties have also briefed the issue of the 2003 Commercials Contract’s arbitration

clause. Plaintiffs contend the Court cannot consider this clause in ruling on the Motion to

Amend. (Reply to Opp’n to Motion to Amend at 5:17–6:6.) The Court need not reach this

issue, and therefore need not consider the arbitration demand submitted in support of

Trustees’ opposition. Nevertheless, for purposes of briefing of any future motions, the

parties are informed that the Court may consider documents such as the Commercials

Contract attached to or referred to in the Complaint or proposed complaint, where their

authenticity is unquestioned. See Stone, 101 F.3d at 1313–14 (explaining that in ruling on

a motion under Rule 12(b)(6), a court may consider documents attached to or referred to in

the complaint); Redwood Christian Schools v. County of Alameda, 2007 WL 164743, slip op.

at *1 (N.D.Cal., Jan. 19, 2007) (explaining that in analyzing whether amendment would be

futile, a court applies the same standards as for a Rule 12(b)(6) motion) (citation omitted).

In addition, the proposed sixth and seventh claims seek declaratory relief, not

restitution (which is sought in the Complaint’s seventh claim and the proposed complaint’s

eighth claim). Plaintiffs’ proposed sixth and seventh claims do not show Plaintiffs have

standing to sue for declaratory relief under ERISA. Furthermore, it is open to question

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 The parties have not briefed the issue of an employer’s (or alleged employer’s)

standing to seek declaratory relief to Plaintiffs under ERISA, so the court will not examine

other claims for declaratory relief at this time. The parties requested to brief this issue as

appropriate in connection with any future motions, in order to assist the Court in examining

its own jurisdiction.

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whether an employer can sue for declaratory relief under these circumstances. See Tab

Contractors, 224 F. Supp.2d at 1284 (“[T]his Court will not infer from ERISA nor [Ninth

Circuit precedent] that an employer has standing to sue for declaratory relief under ERISA.”)

(citing Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002)).2 Plaintiffs have

not addressed this and shown standing as required.

Because it appears permitting Plaintiffs to amend the Complaint to add these two

claims would be futile, the request to add these claims will be denied. Plaintiffs may,

however, withdraw what is now their fifth claim, which they have omitted from the proposed

amended complaint.

IV. Conclusion and Order

Plaintiffs, apparently anticipating that the available information might be insufficient,

request the Court to postpone ruling on the MJP until discovery can be taken. (Opp’n to MJP

at 17:1–9.) As noted, Trustees request a stay of proceedings altogether. The Court

considers it appropriate to rule on the pleadings as submitted. The Motion to Stay is

DENIED. 

Because a question of material fact is presented, the MJP is DENIED WITHOUT

PREJUDICE. If the parties seek reconsideration in light of the Ninth Circuit’s decision in

Trustees of the Screen Actors Guild-Producers Pension and Health Plans v. NYCA, Inc.,

Case no. 07cv56867, they are directed to comply with ¶ 4(j) of the Court’s standing order.

If additional evidence or information is uncovered during discovery, making clear Plaintiffs

cannot prevail on their first claim for relief, summary judgment would be available for that

reason. 

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Plaintiffs’ Motion to Amend is GRANTED IN PART AND DENIED IN PART. Plaintiffs’

request for leave to file an amended complaint is DENIED. To the extent they seek to

withdraw their fifth claim for declaratory judgment that Plaintiffs are not fiduciaries and

breached no duty under ERISA, however, they may do so by filing a notice so stating.

IT IS SO ORDERED.

DATED: March 26, 2008

HONORABLE LARRY ALAN BURNS

United States District Judge

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