Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-05-07187/USCOURTS-caDC-05-07187-0/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 7, 2006 Decided March 20, 2007

No. 05-7187

JOHN FLYNN ET AL.,

APPELLANTS

v.

DICK CORPORATION,

APPELLEE

Appeal from the United States District Court

for the District of Columbia

(No. 03cv01718)

Ira R. Mitzner and Joseph E. Kolick, Jr. argued the cause for

the appellants. 

Charles F. Walters and Jessica R. Hughes argued the cause

for the appellee. 

Before: HENDERSON, TATEL and GRIFFITH, Circuit Judges.

Opinion for the court filed by Circuit Judge HENDERSON.

KAREN LECRAFT HENDERSON, Circuit Judge: The

appellants, John Flynn (Flynn) et al., trustees of the Bricklayers

& Trowel Trades International Pension Fund (IPF or the Fund),

USCA Case #05-7187 Document #1029432 Filed: 03/20/2007 Page 1 of 23
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sued Dick Corporation (Company) under the Employee

Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1001 et

seq., seeking employee benefit contributions, id. § 1145, based

on the Company’s construction projects in Florida. In response,

Dick Corporation challenged its liability under a Florida

collective bargaining agreement (CBA), claimed that the

requested contributions violated the Labor Management

Relations Act (LMRA), 29 U.S.C. § 186, and asserted that the

IPF failed to exhaust required arbitration procedures. The

district court agreed that no Florida CBA bound the Company

and that the requested contributions violated the LMRA,

granting summary judgment to Dick Corporation. Thereafter,

the IPF filed a motion for reconsideration, which the district

court granted in part—recognizing a genuine issue of material

fact as to the existence of a valid Florida CBA—but it

reaffirmed its conclusion that the contributions violated the

LMRA and thus affirmed its grant of summary judgment to the

Company. The Fund appeals. We reverse the district court,

concluding that the requested contributions are valid under the

LMRA, and remand for further proceedings.

I.

The factual history of this contract dispute is cumbersome

but essential to a proper understanding of the issues raised on

appeal. In 2002, Dick Corporation, a Pennsylvania-based

construction company, became the general contractor on two

construction projects in Florida. The Company decided to

subcontract the craftwork involved in the Florida projects. Its

chosen subcontractors, like all of the subcontractors submitting

bids on the two projects, did not employ members of the

International Union of Bricklayers and Allied Craftworkers

(BAC). In the past, however, the Company had used its own

employees to perform the type of work it subcontracted on the

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1

As a Pennsylvania corporation, the Company was not a member

of the Building Trades Employers’ Association of Boston and Eastern

Massachusetts, Inc. or the Mason Contractors Association of

Massachusetts, Inc., both of which signed the CBAs with the

Massachusetts BAC affiliates. See Agreement Between the

Bricklayers & Allied Craftsmen E. Mass. Dist. Council Local Unions

and Building Trades Employers’ Ass’n of Boston & E. Mass., Inc. and

Mason Contractors Ass’n of Mass., Inc., reprinted in JA at 15–69;

Agreement Between the Bricklayers & Allied Craftworkers Local #1

Mass. and Building Trades Employers’ Ass’n of Boston and E. Mass.,

Inc. and The Mason Contractors’ Ass’n of Mass., Inc., reprinted in JA

at 76–128. Thus, for Massachusetts construction projects, “Dick

Corporation signed the independent agreement in which they agreed

to abide by the local CBA then in effect.” Appellee’s Br. at 3 n.3.

two projects. Its employees were members of local bricklayer

unions, including BAC Local 1 of Northern New England, with

which the Company had a CBA. Under the CBA, it paid

employee benefit contributions into the Fund, thereby entitling

its employees to benefits under the Fund. See Second Decl. of

David F. Stupar, Exs. 3 & 4, reprinted in Joint Appendix (JA) at

540, 542.

In December 1989 the Company signed an Independent

Agreement (1989 IA) with the local BAC affiliates in eastern

Massachusetts, agreeing “to be bound by all the terms and

conditions of the effective Collective Bargaining Agreement and

any . . . successor agreements.” Independent Agreement

Between Dick Corp. and Dist. Council of E. Mass. Bricklayers

& Allied Craftsmen Local Unions (Dec. 1, 1989) ¶ 1, reprinted

in JA at 11. The CBA referenced in the 1989 IA was executed

in August 1989 (1989 CBA).1

 Similarly, in September 2000,

Dick Corporation signed another Independent Agreement (2000

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Before the district court, the Company maintained that it was not

a party to the successor CBAs. See Flynn v. Dick Corp., 384 F. Supp.

2d 189, 194–96 (D.D.C. 2005). The district court, however, found

that the August 2002 CBA and the September 2002 CBA were valid

successor agreements binding Dick Corporation, see id., and the

Company does not challenge this conclusion on appeal, see Appellee’s

Br. at 10–43.

IA), this time with the local BAC affiliate in western

Massachusetts. See Independent Agreement Between Dick

Corporation and Bricklayers & Allied Craftworkers Local 1

Mass., reprinted in JA at 71–74. The 2000 IA bound the

Company to a CBA executed in 1992 (1992 CBA) and any

successor CBA. Eventually, the 1989 CBA referenced in the

1989 IA was succeeded by an August 2002 CBA (August 2002

CBA) with the local BAC affiliate in eastern Massachusetts,

while the 2000 CBA tied to the 2000 IA was succeeded by a

September 2002 CBA (September 2002 CBA).2

Both successor CBAs—the August 2002 CBA and the

September 2002 CBA—contain a “traveling contractor’s

clause,” which requires that a signatory employer with “any

work [covered by the CBA] to be performed outside of the

geographic area” of the CBA and “within the geographic area

covered by an Agreement with another affiliate of [the BAC] . . .

abide by the full terms and conditions of the Agreement in effect

in the job site area.” JA 195, § 10; see also JA 410, art. I-D.

Pursuant to both clauses, the IPF sued the Company for failure

to make employee contributions consistent with the terms of a

Florida CBA between the local BAC in the area of Dick

Corporation’s Florida projects and the local employers of BAC

members in that area. See Flynn v. Dick Corp., 384 F. Supp. 2d

189, 192 (D.D.C. 2005). The Fund claimed that the traveling

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With the parties’ consent, the district court had referred the case

to a magistrate judge, see Appellants’ Br. at 2 n.1, who authored the

order in this case, see Dick Corp., 384 F. Supp. 2d at 191.

contractor’s clauses bound Dick Corporation to the Florida CBA

and, accordingly, the Fund charged the Company with violating

the Florida CBA’s subcontracting clause, which prohibits

signatory employers from using non-union subcontractors for

work performed within the area covered by the Florida CBA.

See Pls.’ Mot. for Summ. J. at 13–14. Dick Corporation, the

Fund asserted, was “barred from evading this contribution

obligation through the use of non-union subcontractors.” Id.

Following discovery, the district court granted the

Company’s motion for summary judgment. See Dick Corp., 384

F. Supp. 2d at 203.3 The district court found that the plain

language of the September 2002 CBA’s traveling contractor’s

clause unambiguously bound Dick Corporation to any Florida

CBA (between local BAC affiliates and local employers of BAC

members) that was in existence in the area—and at the time—of

the Company’s projects. Id. at 196–99. The district court then

concluded that there was no valid CBA in existence in Florida

obligating Dick Corporation to pay employee benefits into the

Fund under a traveling contractor’s clause. Id. at 199–202. First,

the court determined that the document the Fund submitted as

the applicable Florida CBA did not constitute an enforceable

agreement because it lacked provisions covering wages and

contract duration. Id. at 200. Instead, the court said, the

document constituted only a standard form or draft agreement,

“completed and made enforceable only with the addition of an

addendum detailing benefit payments and contractual

ratification by real parties.” Id. “By design, therefore, the

Florida CBA [was] not an agreement in effect (namely, a legally

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The district court rejected the Company’s assertion that the IPF

was procedurally barred from filing suit based on the Florida CBA for

failure to exhaust the CBA’s required arbitration provision. See Dick

Corp., 384 F. Supp. 2d at 202. The court reasoned that the IPF could

not be bound by any arbitration clause because no enforceable CBA

existed in Florida at the time of the Company’s projects. Id.

binding agreement), but merely provide[d] a framework for

one.” Id.

In addition, the district court found that the LMRA

precluded the contributions the Fund sought. See id. at 200–02.

First, the skeletal nature of the agreement submitted by the Fund

failed to provide the “detailed basis” required for lawful

contributions from an employer to a trust fund under section

302(c)(5)(B) of the LMRA. See id. at 200–01; 29 U.S.C.

§ 186(c)(5)(B). The district court also held that the

contributions sought by the IPF were not for the “sole and

exclusive benefit” of Dick Corporation’s employees because the

Company’s Florida projects were performed entirely by the

“subcontractors’ ineligible non-union employees” and no Dick

Corporation employee was eligible to benefit from any

contributions based on the work of subcontractors on the Florida

projects. Dick Corp., 384 F. Supp. 2d at 201–02. Given the

IPF’s failure to establish that the requested contributions were

for the “sole and exclusive benefit” of the Company’s

employees, the district court found the contributions prohibited

by the LMRA. Id. at 202; 29 U.S.C. § 186(c)(5)(A).4

The IPF moved for reconsideration, challenging the district

court’s conclusion that there was no valid CBA in effect in

Florida and, in any event, not one that provided a “detailed

basis” for Fund contributions at the time of the Company’s

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Florida projects. See Pls.’ Mot. for Recons. The district court

ultimately agreed with the IPF that it had misconstrued

affidavits submitted by the Florida BAC and that the

affidavits—and the rate tables from CBA appendices the Fund

submitted with them—had in fact contained the required

“detailed basis” for Fund contributions along with evidence of

an enforceable Florida CBA. See Mem. Order on Mot. for

Recons., reprinted in JA at 664–65. The district court

“vacate[d]” its grant of summary judgment to Dick Corporation

to the extent it was based on the absence of either an enforceable

CBA or a detailed basis for benefit contributions under the

LMRA. See id. at 665. It nonetheless again granted summary

judgment to the Company because the requested contributions

were not for the “sole and exclusive benefit” of Dick

Corporation’s employees as required by the LMRA. See id. at

665–66. The IPF now appeals.

II.

We review the district court’s grant of summary judgment de

novo, see Nat’l Ass’n of Home Builders v. Norton, 415 F.3d 8,

13 (D.C. Cir. 2005), applying the same standards as the district

court and drawing all inferences from the evidence in favor of

the non-movant, see Shekoyan v. Sibley Int’l, 409 F.3d 414,

422–23 (D.C. Cir. 2005). We may affirm only if there is no

genuine issue as to any material fact and the moving party is

entitled to judgment as a matter of law. See Mylan Labs., Inc.

v. Thompson, 389 F.3d 1272, 1278–79 (D.C. Cir. 2004). We

review the district court’s ruling on a motion for reconsideration

pursuant to Rule 59(e) for abuse of discretion. See Messina v.

Krakower, 439 F.3d 755, 758–59 (D.C. Cir. 2006). We interpret

collective bargaining agreements under federal law, see, e.g.,

Walsh v. Schlecht, 429 U.S. 401, 406–07 (1977) (interpreting

CBA subcontractor’s clause under “federal law principles”), and

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“a question concerning the proper interpretation of the plain

language of a contract is a question of law” subject to our de

novo review, see Smith, Bucklin & Assocs., Inc. v. Sonntag, 83

F.3d 476, 479 (D.C. Cir. 1996).

The Fund’s claim to benefit contributions is based on section

515 of ERISA, which provides:

Every employer who is obligated to make contributions

to a multiemployer plan . . . under the terms of a

collectively bargained agreement shall, to the extent not

inconsistent with law, make such contributions in

accordance with the terms and conditions of such plan or

such agreement.

29 U.S.C. § 1145 (emphasis added). This provision solves the

problem created if an employer defaults on its obligation to fund

a multiemployer pension plan, thereby forcing other

participating employers to make larger contributions in order to

cover the default. See Flynn v. R.C. Tile, 353 F.3d 953, 958

(D.C. Cir. 2004). Under section 515, an employee benefit plan

is analogous to a holder in due course. See Benson v. Brower’s

Moving & Storage, Inc., 907 F.2d 310, 314 (2d Cir. 1990)

(Because “benefit plans must be able to rely on the contribution

promises of employers . . . Congress placed employee benefit

plans in a position . . . analogous to a holder in due course.”).

Indeed, defenses available to an employer attempting to avoid

contributing to a benefit plan are ordinarily limited to claims

that the agreement allegedly obligating the employer to pay

benefits is either invalid or does not apply to the employer. See

DeVito v. Hempstead China Shop, Inc., 38 F.3d 651, 653 (2d

Cir. 1994).

An agreement obligating an employer to contribute to a

pension fund is not valid to the extent that such contribution is

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“inconsistent with law.” See 29 U.S.C. § 1145. For example,

“[s]ection 302 of the LMRA generally forbids an employer from

contributing money to a labor organization.” Wash. Post v.

Wash.-Balt. Newspaper Guild, Local 35, 787 F.2d 604, 606

(D.C. Cir. 1986) (citing 29 U.S.C. § 186(a)). The general

prohibition is subject to nine limited exceptions, see 29 U.S.C.

§ 186(c), and, “[i]f any one of these exceptions applies, the

general prohibition of § 302 does not operate,” Wash. Post, 787

F.2d at 606.

A. Effect of Florida CBA

In general, an employer’s obligation to make benefit

contributions under section 515 of ERISA arises from a

collective bargaining agreement in the geographic area in which

the employer’s work is performed. Dick Corporation signed no

CBA in Florida, where the two relevant construction projects

were to be undertaken. The Company instead signed two

independent agreements—and, by their operation, two

CBAs—in Massachusetts. See JA 10–13, 71–74; Dick Corp.,

384 F. Supp. 2d at 194–96. Both successor CBAs contain a

traveling contractor’s clause, which, as noted earlier, requires

that a signatory employer with “any work [covered by the CBA]

to be performed outside of the geographic area” of the CBA and

“within the geographic area covered by an Agreement with

another affiliate of [the BAC] . . . abide by the full terms and

conditions of the Agreement in effect in the job site area.” JA

195.

The Fund reads the traveling contractor’s clause in the

August 2002 CBA to require the Company to contribute to the

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In contrast, the district court looked to the traveling contractor’s

clause in the September 2002 CBA to bind Dick Corporation. See

Dick Corp., 384 F. Supp. 2d at 196, 199. Indeed, the district court

suggested in dicta that the August 2002 CBA provision did not bind

the Company. See id. at 196–99 n.7. Both parties recognize,

however, that the September 2002 CBA clause was meant to be

identical to the August 2002 CBA clause. See Appellee’s Br. at 10;

Appellants’ Reply Br. at 13 & n.14. The wording of the two clauses

differs because of a scrivener’s error in the September 2002 CBA. See

id. In fact, the Fund admitted that “the uncorrected language of the

[September 2002 CBA] makes no sense.” Pls.’ Reply Mem. in

Support of Mot. for Summ. J. at 4 & n.5; see Appellants’ Reply Br. at

13. The record before us, then, leads us to conclude that the district

court erroneously found that the September—instead of the

August—2002 CBA bound the Company to the Florida CBA. See

Dick Corp., 384 F. Supp. 2d at 196, 199.

Fund in accordance with the Florida CBA. See Appellants’

Reply Br. at 13.5 The clause provides:

When the Employer has any work specified in . . . this

Agreement to be performed outside of the

geographic area covered by this Agreement and within

the geographic area covered by an Agreement with

another affiliate of [the BAC], the Employer agrees to

abide by the full terms and conditions of the Agreement

in effect in the job site area.

JA 195 (emphasis added). Two different district courts have

given conflicting interpretations to the “unambiguous” meaning

of identical traveling contractor’s clauses. Compare Flynn v.

Beeler Barney Assocs. Masonry Contractors, Inc., No. 02-1411,

2004 WL 3712630, at *6 (D.D.C. Aug. 10, 2004) (clause

unambiguously bound employer to “the terms of [the jobsite]

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The district court in Driscoll Masonry also noted that the local

union’s president agreed with the court’s narrow interpretation of the

clause. See Driscoll, 165 F. Supp. 2d at 511.

jurisdiction’s BAC collective bargaining agreement, even

though the employer never signed the agreement with that BAC

affiliate”), with Trs. of the Bricklayers & Allied Craftworkers,

Local 5 v. Charles T. Driscoll Masonry Restoration Co., 165 F.

Supp. 2d 502, 511 (S.D.N.Y. 2001) (holding that, on its face,

clause bound employer only to CBA employer in fact signed).6

We believe the clause is ambiguous. Indeed, as the Sixth

Circuit noted in construing a virtually identical clause, “the first

sentence of the BAC Traveling Contractor clause is susceptible

to more than one interpretation” because the “phrase ‘within the

area covered by an agreement with another affiliate of the

[BAC]’ could refer to an agreement between [the employer] and

the BAC affiliate, or it could refer to an agreement between any

employer and the BAC affiliate.” Trs. of the B.A.C. Local 32

Ins. Fund v. Ohio Ceiling & Partition Co., 48 Fed. App’x 188,

195 (6th Cir. Oct. 4, 2002) (emphasis added). Given the

ambiguity, we may consider the intent of the parties to interpret

the meaning of the August 2002 CBA’s traveling contractor’s

clause. See, e.g., United States v. Ins. Co. of N. Am., 131 F.3d

1037, 1042 (D.C. Cir. 1997).

Unlike the statements of the union president in Driscoll

Masonry—accepting a narrow interpretation of the clause—and

those of the company president in Ohio Ceiling—with a similar

narrow understanding of the clause, see Ohio Ceiling, 48 Fed.

App’x at 195–96—there is little extrinsic evidence of intent

here. A Massachusetts BAC official submitted an affidavit

regarding the reason the BAC inserts traveling contractor’s

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Although the interpretation of ambiguous contract language,

particularly if it requires consideration of extrinsic evidence, is a

question of fact, cf. Am. First Inv. Corp. v. Goland, 925 F.2d 1518,

1521–22 (D.C. Cir. 1991) (if contract terms ambiguous “the contract

cannot be interpreted as a matter of law and the case must be

remanded so that the fact-finder can determine the parties’ true

clauses into all collective bargaining agreements. See Decl. of

Ronald Marvin at 4–5, reprinted in JA at 287–88. His statement

reflects a broad understanding of the clause, binding signatory

employers to the CBAs of local BAC affiliates—even if the

employer does not sign the local CBA—in order to “prevent . . .

employers from operating non-union in foreign jurisdictions.”

Id. at 287.

Moreover, “it would make little sense to interpret the . . .

clause as only applying when the employer works in a

jurisdiction where that same employer has signed a separate

CBA with another BAC affiliate because, if the employer was

signatory to an agreement in the jobsite area, there would be no

need for a traveling contractors clause.” Beeler, 2004 WL

3712630 at *7 (emphasis in original). Indeed, a narrowly

construed traveling contractor’s clause would simply reimpose

the employer’s already existing contractual obligation. Such an

interpretation would render the traveling contractor’s clause

meaningless and, absent evidence of such intent, parties “ought

not be presumed to have included in their agreement a

meaningless provision.” Martinsville Nylon Employees Council

Corp. v. NLRB, 969 F.2d 1263, 1267 (D.C. Cir. 1992). As a

consequence, and absent evidence of any contrary intent, we

believe the August 2002 CBA’s traveling contractor’s clause

binds Dick Corporation to a CBA in force at a “foreign” jobsite

even if the Company is not a signatory thereto.7

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intent”), Dick Corporation submitted no counter-affidavit challenging

the Fund’s affidavits as required on summary judgment, see Fed. R.

Civ. P. 56(e) (“When a motion for summary judgment is made and

supported [by affidavits], an adverse party[,] . . . by affidavits . . . ,

must set forth specific facts showing that there is a genuine issue for

trial.”). We are therefore able to determine the meaning of the

traveling contractor’s clause contained in the August 2002 CBA. 

B. Effect of Section 302 of LMRA

The Florida CBA at issue requires an employer to contribute

pension and retirement benefit payments into the Fund for union

work performed within the territorial jurisdiction of the CBA.

JA 603. While the LMRA prohibits employer contributions to

a labor organization, section 302 provides an exception “with

respect to the payment . . . of any money . . . in satisfaction of a

judgment of any court or a decision or award of an arbitrator.”

29 U.S.C. § 186(c)(2). The IPF asserts that the benefit

contributions Dick Corporation owes pursuant to the Florida

CBA are lawful under this exception because the Company

breached the CBA by hiring non-union subcontractors on its

Florida projects. See Appellants’ Br. at 11; Pls.’ Mot. for

Summ. J. at 13–14. The Florida CBA provides:

The Employer agrees that neither he nor any of his

subcontractors on the jobsite, will contract or

subcontract work coming under the trade or territorial

jurisdiction of [the BAC], to be done at the site of

construction . . . except to a person, firm or corporation

bound to this agreement.

Pls.’ Mot. for Summ. J. at 13. Dick Corporation admitted that

it employed non-union subcontractors on its Florida projects.

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If, contrary to the Company’s position, we conclude that it is

subject to the Florida CBA by virtue of the traveling contractor’s

clause, the Company does not contest that its conduct breached the

Florida CBA. See Appellee’s Br. at 27–31 (challenging applicability

of section 302(c)(2) exception to damages from breach rather than fact

of breach).

See Decl. of Raymond Crothers at JA 152.8 As a result of the

Company’s breach, the Fund claims, it is entitled—pursuant to

the section 302(c)(2) exception—to the benefit contributions the

Company would have been required to pay absent the breach.

See Appellants’ Br. at 16.

In Washington Post v. Washington-Baltimore Newspaper

Guild, Local 35, 787 F.2d 604 (D.C. Cir. 1986), we upheld an

arbitrator’s award against a LMRA challenge, finding section

302(c)(2) exempted the award from section 302(a)’s general

prohibition. See id. at 606–07, 609. The arbitrator found that

The Washington Post breached a collective bargaining

agreement by failing to pay union dues from the salaries of

columnists—viewing the columnists as not covered by the

CBA—and ordered the newspaper to reimburse the union fund

for the dues not paid on account of the breach. See id. at 605.

On appeal, we concluded that the arbitrator’s order came within

the section 302(c)(2) exception. See id. at 606–07.

Dick Corporation, however, argues that Washington Post

and section 302(c)(2) of the LMRA are inapplicable because the

IPF has no underlying court judgment or arbitration award

establishing the Company’s breach of the Florida CBA, see

Appellee’s Br. at 27–29, relying on Jackson Purchase Rural

Elec. Coop. Ass’n v. Local Union 816, Int’l Bhd. of Elec.

Workers, 646 F.2d 264, 268 (6th Cir. 1981). In that case, the

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court refused to enforce the arbitration award because the only

alleged contractual breach—the breach upon which the

arbitrator relied—involved an otherwise illegal provision in the

collective bargaining agreement. See id. at 266, 267–68 (illegal

union dues “check-off” provision). The problem in Jackson

Purchase was not the lack of an underlying judgment; instead,

there was no breach of a valid, legally enforceable contractual

provision. Indeed, Washington Post distinguished Jackson

Purchase on this ground, recognizing that “[t]he opinion says

nothing about an arbitrator’s power to award a union the dues it

lost as a consequence of the employer’s breach of a valid

collective bargaining agreement.” Washington Post, 787 F.2d

at 608.

Section 302(c)(2) requires no more than “vigorous and

genuine litigation” and the court’s (or arbitrator’s) determination

of the merits of the alleged contractual breach. Id. at 607 (“The

Post will pay this money on the order of the arbitrator, after

vigorous and genuine litigation.”). From a practical standpoint,

Dick Corporation’s claim that an underlying judgment is

necessary to invoke section 302(c)(2) would be cumbersome and

duplicative, requiring two separate sets of litigation: an initial

determination of breach and a second enforcement proceeding.

Instead, once the court finds a valid contractual provision

breached, the “satisfaction of a judgment” language of section

302(c)(2) is met and the same court may award damages for the

violation. See Trs. of Int’l Bhd. of Teamsters Local 531 Sick &

Welfare Fund v. Marangi Bros., Inc., 289 F. Supp. 2d 455, 463

(S.D.N.Y. 2003) (“If defendants are found to have breached the

CBA, plaintiffs would be entitled to an award of damages

because Section 302(c)(2) specifically excludes the application

of § 302(a) . . . .”) (citing Washington Post, 787 F.2d at 607).

Here, the IPF alleges, and the Company concedes, that Dick

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Although the district court did not rule on the applicability of

section 302(c)(2), the IPF raised the issue of Dick Corporation’s

breach before the district court. See Pls.’ Mot. for Summ. J. at 13–14.

Because contractual breach is a legal question that was raised below

and also on appeal, see Appellants’ Br. at 11–16, we may, exercising

de novo review, reach the merits of the breach claim.

Corporation breached the Florida CBA by hiring non-union

subcontractors. See Pls.’ Mot. for Summ. J. at 13–14; Decl. of

Raymond Crothers at JA 152. The Fund is entitled to damages

resulting from the breach in the form of benefit contributions “in

a sum equal to that which they would have received if the

agreement between the defendant and the union had been fully

performed by all parties.” Trs. of the Teamsters Constr.

Workers Local 13, Health & Welfare Trust Fund for Colo. v.

Hawg N Action, Inc., 651 F.2d 1384, 1386–87 (10th Cir. 1981);

see also Chicago Painters & Decorators Pension, Health &

Welfare, and Deferred Sav. Plan Trust Funds v. Karr Bros.,

Inc., 755 F.2d 1285, 1290 (7th Cir. 1985) (breaching employer

“required . . . to pay . . . the amount that [employer] would have

been required to contribute to the trust funds if it had complied

with the collective bargaining agreements”).9

 

C. Effect of Arbitration Clause of Florida CBA

Next, Dick Corporation argues that the IPF may not bring

suit without first complying with the compulsory arbitration

provision contained in the Florida CBA. See Appellee’s Br. at

41. As the Supreme Court has recognized, however, the

“presumption of arbitrability is not a proper rule of construction

in determining whether arbitration agreements between the

union and the employer apply to disputes between trustees and

employers.” Schneider Moving & Storage Co. v. Robbins, 466

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U.S. 364, 372 (1984). Thus, “in the absence of an unambiguous

expression by the parties to the contrary, pension funds are not

required to exhaust collective bargaining agreement arbitration

procedures prior to filing an action for collection of delinquent

contributions to the pension fund.” Flynn v. Interior Finishes,

Inc., 425 F. Supp. 2d 38, 48 n.11 (D.D.C. 2006).

As both third-party beneficiaries of the Florida CBA’s trust

fund provisions and trustees of an employee-benefit fund, the

IPF is entitled to file suit for delinquent contributions free from

the CBA’s arbitration requirements. See, e.g., Schneider, 466

U.S. at 370–72 (finding compulsory arbitration inapplicable

where third-party beneficiaries invoking CBA provisions are

trustees of employee-benefit funds); Robbins v. Lynch, 836 F.2d

330, 333 (7th Cir. 1988) (“A pension or welfare trust is a thirdparty beneficiary of the collective bargaining agreement.”). To

the extent that Dick Corporation relies on Interior Finishes to

argue that the Fund is barred from filing suit absent exhaustion

because the trustees “ ‘are standing in the shoes of the

union,’ ”Appellee’s Br. at 41 (quoting Interior Finishes, 425 F.

Supp. 2d at 49), the Company misapprehends the holding. The

defendant employer in Interior Finishes did “not challenge the

[Fund’s] ability to seek, on its own behalf, unpaid contributions

to the Fund without exhausting . . . arbitral remedies.” Interior

Finishes, 425 F. Supp. 2d at 48 (emphasis in original). Indeed,

given the Supreme Court’s holding in Schneider, that argument

could not have prevailed. See id. at 48 n.11 (quoting Schneider,

466 U.S. at 372). Instead, in Interior Finishes the defendant

employer challenged the Fund’s ability to bring suit on behalf of

the BAC without first arbitrating such claims. Id. at 49.

Because union claims are not protected under Schneider, see 466

U.S. at 372, the district court in Interior Finishes dismissed the

claims made on behalf of the BAC for failure to exhaust arbitral

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remedies, 425 F. Supp. 2d at 50, but allowed the suit to continue

with regard to the claims made on behalf of the Fund itself, see

id. at 49–50.

In this case, the Fund brought suit on its own behalf to

collect unpaid contributions, see Appellants’ Br. at 3 & n.2, and

the district court properly rejected Dick Corporation’s

exhaustion defense, see Dick Corp., 384 F. Supp. 2d at 202. On

the other hand, to the extent the IPF sued to recover union dues,

those claims are outside Schneider’s holding and must be

dismissed.

D. Existence of Enforceable Florida CBA

Finally, Dick Corporation challenges the district court’s

determination that there is a genuine issue of material

fact—precluding summary judgment—whether an enforceable

Florida CBA existed at the time of its Florida construction

projects. The Company asserts that the district court erred in

relying on proffered evidence related to the Florida CBA in light

of the Fund’s alleged discovery violations. See Appellee’s Br.

at 14–26. Indeed, when the Company requested a copy of the

Florida CBA, including the CBA’s specific wage and

contribution rates, during discovery, see JA 267, the Fund

produced only a standard Florida CBA form (with blanks not

filled in), JA 267–68; 129–50, and Dick Corporation claims that

the Fund failed to provide the specific information needed to

establish the existence of an enforceable CBA until the

Company moved for summary judgment, see Appellee’s Br. at

16. Because of the Fund’s failure to produce, the Company

argues, the district court should have excluded any rate

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10Rule 37(c)(1) provides that “[a] party that without substantial

justification fails to disclose information required by Rule 26(a) or

26(e)(1), . . . is not, unless such failure is harmless, permitted to use as

evidence . . . on a motion any . . . information not so disclosed.”

11Absent an enforceable agreement, no contractual breach exists

to trigger section 302(c)(2)’s exception.

information under Federal Rule of Civil Procedure 37(c)(1).10

Instead the district court erroneously relied on the evidence and

thus, Dick Corporation asserts, erroneously found an

enforceable Florida CBA. Absent an enforceable contract, the

Company continues, the Fund’s contribution arguments fail for

lack of an obligation. See Appellee’s Br. at 14–18.11

In response, the Fund claims that it provided the “substantial

justification” for non-disclosure necessary to avoid Rule

37(c)(1). See Appellants’ Reply Br. at 20–21 n.27; Pls.’ SurReply to Def.’s Reply Br. in Supp. of Mot. for Summ. J. First,

the Fund argues that it did supply the requested wage and

contribution rates during discovery, thereby providing the

information needed to establish an enforceable CBA. See

Appellants’ Reply Br. at 21 n.27; Decl. of Seth Richardson,

reprinted in JA at 525. Second, the Fund showed that some of

the requested information was within the control of a Florida

BAC official. See Decl. of Robert Blanco at 1–2, reprinted in

JA at 474–75 (describing Florida BAC official’s providing

Florida CBA to Fund). Finally, before the district court, the

Fund explained “that the only reason why the documents at issue

were not gathered and produced earlier . . . was because Dick

Corporation chose to wait until its summary judgment motion to

argue for the very first time that the Florida [CBA] was illegal

and unenforceable because it did not contain the governing

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rates.” Pls.’ Sur-Reply to Def.’s Reply Br. in Supp. of Summ.

J. at 2 (emphasis in original).

In general, the district court enjoys wide discretion in

managing discovery, and, accordingly, “[w]e review the district

court’s discovery ruling[s] for abuse of discretion” only. See

Diamond Ventures, LLC v. Barreto, 452 F.3d 892, 898 (D.C.

Cir. 2006). This deference extends to the district court’s

imposition of discovery sanctions. See Jankins v. TDC Mgmt.

Corp., 21 F.3d 436, 445 (D.C. Cir. 1994); see also Fed. R. Civ.

P. 37(c)(1) (“In addition to or in lieu of [exclusion of evidence],

the court, on motion and after affording an opportunity to be

heard, may impose other appropriate sanctions.”). Here, the

district court used the challenged evidence to revise its summary

judgment order in response to the Fund’s Rule 59(e)

reconsideration motion. See JA 664–65. We also review a

district court’s decision to alter or amend a judgment under Rule

59(e) for abuse of discretion. See Messina, 439 F.3d at 758–59.

Both Dick Corporation and the Fund presented arguments to

the district court regarding discovery sanctions. Nevertheless,

the district court did not expressly decide the discovery dispute.

Instead, it simply used the challenged evidence in deciding on

reconsideration “that the Court erred when it found that

evidence of the detailed wage scales and contribution rates

necessary to complete the contract had not been submitted into

the record.” JA 665 (citing Decl. of Robert Blanco at JA

474–82). The district court therefore found that the existence of

an enforceable CBA in effect at the time of Dick Corporation’s

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12Despite the wage scale and contribution evidence, the district

court on reconsideration remained “unable to find on the basis of the

existing evidence that the Florida agreement was in fact ‘in effect’ in

the local jobsites.” Mem. Order on Mot. for Recons. at JA 665. In its

summary judgment order, the district court had “relied both on the

lack of any signed agreement in the record and on the apparent lack of

any evidence that the necessary . . . wage scales [and] contribution

rates . . . had been agreed to and incorporated into the template CBA

for any Florida jurisdiction.” Id. at 664 (footnote omitted). Because

its Rule 59(e) ruling was based on the record evidence regarding wage

scales and contribution rates, the only remaining basis for its summary

judgment grant was the lack of the parties’ signatures. While the

document provided by the Florida BAC affiliate did not contain

signatures, it referenced the Union Contractors and Subcontractors

Association as the employer party to the agreement. See JA 512, 514

(citing “[t]he attached ‘Industrial Agreement’ between

BRICKLAYERS AND ALLIED CRAFTSMEN, LOCAL #1,

FLORIDA, UNION CONTRACTORS, AND SUBCONTRACTORS

ASSOCIATION, INC.”). Further, Robert Blanco, the President of the

Florida BAC, stated that the wage and contribution rates in the

submitted material represented the “Memoranda of Agreement”

between the local BAC and employer groups when Dick Corporation’s

Florida projects were in progress. See Decl. of Robert Blanco at JA

476–79. Thus, the material the Fund submitted as well as Blanco’s

declaration identified the parties to the contested Florida CBA. Cf.

Henke v. U.S. Dep’t of Commerce, 83 F.3d 1445, 1450 (D.C. Cir.

1996) (“A contract has certain essential elements, to wit, competent

parties, lawful subject matter, legal consideration, mutuality of assent

and mutuality of obligation.”). Given this evidence regarding the

parties’ signatures, on remand the district court should revisit whether

the Florida CBA was in effect at the Company’s Florida jobsites.

Florida projects “presented a genuine issue of disputed material

fact sufficient to withstand summary judgment.” Id.

12

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Moreover, the district court did not “deliberate[ly]” reject

the proffered evidence in its initial summary judgment ruling as

a discovery sanction but simply overlooked the evidence

“[a]wash in [the] sea of unsigned and unlabeled agreements and

contracts” in the case. Id. at 665 n.4. While we owe deference

to the district court’s discovery decisions, we cannot defer to a

decision that has not been made and we therefore remand for the

district court to exercise its discretion in deciding the Rule

37(c)(1) matter. See EEOC v. Nat’l Children’s Ctr., Inc., 98

F.3d 1406, 1410–11 (D.C. Cir. 1996) (remanding for district

court to exercise discretion by “mak[ing] a finding as to whether

‘good cause’ exist[ed] for restricting the use of the depositions

in this case”).

To sum up, we reverse the district court’s holding that the

benefit contributions sought by the Fund are prohibited under

the LMRA because Dick Corporation’s breach of the Florida

CBA—to which the Company is bound by operation of the

August 2002 CBA’s traveling contractor’s clause—brings the

requested benefit contributions within the exception of section

302(c)(2) of the Labor Management Relations Act, 29 U.S.C.

§ 186(c)(2). While we agree with the district court that the

Fund’s claims are not subject to the Florida CBA’s arbitration

requirement, to the extent the Fund’s suit seeks to recover on

behalf of the BAC as well, such claim is subject to compulsory

arbitration and therefore must be dismissed. We remand to the

district court its Rule 59(e) ruling—finding evidence of an

enforceable Florida CBA—to consider the Company’s

outstanding Rule 37(c)(1) motion. Finally, we remand for

further proceedings consistent with this opinion the issues of the

applicability of the Florida collective bargaining agreement at

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the Company’s Florida jobsites and the appropriate award of

damages.

So ordered.

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