NO T R EC OM M EN DE D F OR F UL L- TEX T P UB LIC AT ION F ile Nam e: 10a0216n.06 No. 08-1966 UN ITED STA TES C OU RT OF AP P EA LS F OR THE SI XT H C IR CU IT
T R U S T E E S O F T H E P A IN T E R S U N IO N D E P O S IT FUN D, Plaintiff-Appellee ,

v. I NTERI OR/EXTERI OR SP ECI AL I ST COMP ANY, et al., De fe nd ants -A

pp e lla nts , v. PAI NTERS DI STRI CT COUNCI LNO. 22 OF THE I N T E RN A T I O NAL BROTH ERHOOD OF PAI NTERS AND AL L I ED TRADES (AF L -CI O), Def endant- Appellee
. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ON APP EAL F RO M T HE UN I TE D ST AT ES D I STR I CT CO UR T F OR THE EA STE RN DI STRI CT OF MI CHI GAN

B EF OR E: ME RRI TT , G I B B ON S, a nd RO GE RS, C ir c uit

Judg e s. ROGER S , C i rc u it J udg e. In this labor relations appeal, Interior/Exterior Specialists Co. (I ES), a Union painting contra ctor, a nd The L lamas Group ( TL G), a non-Union g ener al contra ctor, challeng e the district cour t’s decision that they

are alter e g os and there fore owe f ring e benef

its to a Union fund for

both firms’ p ai n t i n g work. I ES and TL G also cha lleng e the district cour t’s conclusion t hat federa l labor law pree mpts their t hird-par ty claims and counte rcla ims for defa mation and the district cour

t’s denial of I ES’s third-party claims for discr imination and restitution. The district court, howe ver, a

pplied the cor

rec t leg al standar d for determining alter eg o liability , and theNo. 08-1966

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- 2 - dis tr ic t c ourt ’s fa c tua l f

ind ing s f or a lte r eg o lia

bil ity are no t c le arl y

e rr on e ou s. I n a dd iti on , b e c a us e Union officia ls did not m ake the statements that alleg edly defa me I ES and TL G with actua l malice, I ES and TL G’s def

amation claims fa il
. T h e dis trict court a lso properly reje cted I ES’s claim of dis c ri min a tio n b a se d o n I ES’ s H isp anic ow ne rs hip and I ES’ s in de pe nd e nt r e sti tut ion c la im. I. I ES is a Hispanic-owne d painting contra ctor founded in 1997, with Mr. Rito J ulien L lamas as sole shar eholder , office r, and dire ctor. In 1998, I ES and Painters District Council No. 22 of the I nternational B rotherhood of Painters and Allied Trade s (the Union) conc l u d ed a collective barg aining ag ree ment (CBA ) t h at re q u i res I ES to pay a set fr inge benef

it amount to the Painters Union Deposit Fund ( the Fund) for e very hour that I E S painters wor k. I f I ES’s pay

ments are delinquent, I ES must pay

liquidated damag es. I ES of ficially terminated the CBA e ffe ctive May 31, 2004. TL G was f

ormed i n 1999 with Mrs. J ulie L lamas, Mr. L lamas’ wif e, as sole sha

reholde r, office r, and dire ctor. TL G i s a non-Union g ener al contractor that does design, buil ding, c oncre te, and masonry

work. Until May

21, 2004, TL G also di d painting w ork. In J uly and August 2003, after Union officia ls learne d that TL G painter s wer e doing a job that I ES w as supposed to per form, the Un ion pic ke te d T L G’ s w or

ks ite wi th s ig ns a c c us ingTL G o f p ayingun fa ir wa g e s. On Au gu s t2 1 , 2 0 0 3 , t h e U n i o nf i l e d a N at i o n al L ab o r R el at i o n s Bo ar d (N L R B) ch ar ge ag ainst I ES “d/b/a” TL G. The Union alleg ed that for six months, I ES and TL G had worked a s an i l l e g a l d o u

b l e - b r e a s t e d

o p e r a t i o nan d

f a i l e d t o p ay C B A

- r e qu i r e d

w a g e s an d

f r i n g e b e n e f

i t s . In No ve mbe r 20 03 , I ES em plo y e e s c omp la ine d th a t th e y we re no t r e c e ivi ngfr ing e be ne fi tNo. 08-1966

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- 3 - contributions, and the Union re quested a compre hensive a

udit of I ES. I n Fe bruar

y 2004, the Fund sued I ES for alleg ed CBA violations a nd failure to pa

y fring e benef

its, a nd soug ht a compre hensive audit of I ES’s books and re cords to dete rmine the amount owed. On Marc h 23, 2004, I ES notified the Union that I ES was terminatingthe CBA, effe ctive May 31, 2004. On May

21, 2004, the Union ag ree d to drop its NL RB ch ar g e if TL G ce ased pa inting wor k and I ES placed a

Union stewar d on tw o e xistin g pr oje c ts. Th e Un ion a lso a g re e d to re c omm e nd to the F un d th a t th e F un d’ s su it a g a ins t I ES b e dis mis se d w ith out pr e jud ic e . T he F un d d

ro pp e d th e laws uit
. O nSe p te mb e r

1 6 , 2 0 0 4 , a f

te r th e CB A te r

mi n a te d u n d e r I E S’ s n o ti c e an d

a f te r anI ES
e mpl oy e e c omp la ine d to the Unio n abo ut his ins ur anc e , T ommy Th oma s, the Un ion ’s B us ine ss Re pr e se ntativ e and

Di re c tor of Or g anizi ng , told the pr oje c t man a g e r o f I ES’ s Patr ic k H e nr y Mid dle School worksite that I ES was not pay ing f ring e bene fits. That day

I ES sent the Fund I ES’s J une and J uly 2004 pay

roll repor t, two chec ks totaling $56,000, and a letter explaining that these monies were “beingsubmitt ed in ac corda nce to our Ag ree ment dated May 21, 2004,” the date I ES, TL G, and the Union settled the NLR B c harg e, but that “these pay ments in no way

ref lect a de sire to continue a contra ct or to extend the contra ct as pe r our letter dated Marc h 23, 2004,” the date I ES purported to terminate the CB A. In Dec ember 2004, afte r another

employ ee c omplained to the Union about his insurance , Thomas told the projec t manag er at I ES’s Western Michig an University worksite that I ES w a s n ot p ayingfr ing e be ne fi ts. Th a t mo nth the Un ion

no tif ie d th e F un d th a t I ES h a d n ot p a id fr ing e be ne fi ts, and

the Un ion

re qu e ste d a

c omp re he ns ive a

ud it o f I ES.No. 08-1966

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Mr
. L la ma s , a s CB A g u ar an to r , is a ls o a d e f e n d an t in th e c a s e an d w a s f o u n d jo intly

and 1 se ve ra lly lia ble fo r de lin qu e nt fr ing e be ne fi ts and liq uid a te d dama g e s. He ra ise s n o s e pa rate c la ims
. - 4 - I n the pre sent suit, the Fund alleg es that TL G, as I ES’s alter eg o, is bound by the CBA a nd that defe ndants must pay delinquent fring e bene fits and liquidated damag es for all C BA -covered 1

w o rk p er fo rm ed o r su b co n t ra ct ed b y ei t h er fi rm b ef o re t h e C BA ’s t erm i n at i o n . I E S an d T LG impleaded the Union. I ES c laimed that the Union’s order ing of compre hensive audits constituted dis c ri min a tio n und e r 4 2 U .S. C. § 19 81 be c a us e the Un ion

ha d n ot o rd e re d a

ud its of no n- Hi sp anic
c omp anie s w ithsim il ar bus ine ss p ra c tic e s. I ES a sse rt e d d e fa matio n c la ims ba se d o n T ho ma s’ state me nts to t

he pr oje c t ma

na g e rs a t Patr ic k H e nr

y Mid dle Sc h o o l a

n d W e s t e r n M i c h i g an U niv e rs ity that I ES was not paying f

ring e bene fits. TL G asser ted a defa mation c laim ag ainst the Union based on the picketingof a TL G worksite in Jul y and August 2003. I ES also sought re stitut ion for overpa y ment of fr inge benef

its fo r p er i o ds following te rmination of the CBA . The district cour t denied c ross-motions for summary judgme nt as to these cla ims and held a four -day bench tr ial. At trial , M r . an d

M r s . L la ma s te s ti f ie d th at I E S a

n d T L G h a d s e p ar a te e qu ip me n t, office supplies, phone numbers, bank acc ounts, lines of cre dit, corporate re cords, a nd tax accounts. They also testified that the two fir ms had diffe rent business purposes

— I E S was lar g ely a painting firm focusingon public sector w ork, and TL G was a g ener al contractor focusing on private se ctor wor k. They also testified, howe ver, that I ES and TL G h ad at t imes loaned e ach othe r money , and had share d some projec ts, some employ ees, and an office buildi ng for which TL G paid I ES rent a nd a
mana g e me nt f

e e fo r se rvi ces in cludin g up ke e p a nd sn owre mov a l. I

n 2 00 3, TL G p a id I ES aNo. 08-1966

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- 5 - $1 06 ,2 54 mana g e me nt fe e and $7 1, 20 0 for e qu ipm e nt re nta l. Mr . L lama s tes tif ie d that T L G w ro te IE S t w e l v e c h e c k s t o t a l i n g o v e r $ 4 0 0 , 0 0 0 f

o r u n s p e c i f i e d r e a s o n s . T h o u g hM r s . Ll a m a s o w n e d T LG and Mr. L lamas owne d I ES, both Mr. and Mrs. L lamas ac knowledg ed havingsome authority over both firms’ financ es and rec eiving money from each firm until 2003. The F und’s auditor testified that numerous monetar

y transfe rs betwe en I ES and TL G wer e identified a s “a c c o u nts p a ya b le

- tr ade,” a term u s u al l y

i n d i ca t i n g an u n d o cu m en t edl o an re p ay m en to r as u

b co n t ra ct i n g p ay

m en t
. The a

uditor also testified that Mr. a

nd Mrs. L lamas appe are d on the pay roll of both I ES and TL G until 2003. I n co n nection with I ES’s discrimination claim, Nikitas Ba latzis , owner of a non- Union pa int ingc omp any , te sti fi e d th a t th e Un ion ha d sel do m c on ta c te d h im d ur inghis fi rs t te n y e ars in business, and that, afte r he hired Hispanic worke rs, contac t f rom the Union incre ased a nd he re ceive d a “ba rra g e” of p revailing wa g e complaints. Robert Ke nnedy , the Union’s business mana g er, acknow ledg ed that Mr. L lamas had p re v i ously notified the Union that other Union painting
c on tr a c tor s h a d r e late d n on -U nio n c omp anie s th a t g a ve the m a c omp e tit ive adv anta g e ov e r I ES. Other Union contra ctors testified that they had re lated non-U nion companies but the Union ha d not
or de re d c omp re he ns ive a

ud its of the ir c omp anie s. Th e se oth e r co ntr a c tor s als o tes tif ie d that, t o th e ir kn ow le dg e , U nio n e mpl oy e e s h a d n ot gri e ve d th e ir pa y me nt p ra c tic e s. Kenne dy testified that I ES had place d a Union stewar d at the Patrick H enry Middle School worksite, a pr oject I ES started af ter the CB A’s off

icial termination date . Kenne dy also testified that Un ion me mbe rs wo rk inga t th a t site c omp la ine d to the Un ion that I ES wa s n ot p ayingfr ing e be ne fi ts, and that whe n Kenne dy

approa ched Mr . L lamas about those c omplaints, Mr. L lamas stated that heNo. 08-1966

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- 6 - would pay the benefits when the projec t’s g ener al contractor pa id I ES. Kennedy testified that Mr. L lamas told him for the first ti me i n Dec ember 2004 that I ES would not remain a Union contra ctor and that Kenne dy had reque sted a compre hensive a udit of I ES then beca

use I ES’s decision had upse t h i m . T h o m as testified that he ha d believed in Septembe r 2004 that I ES would remain a U nion
c on tr a c tor

de sp ite I ES’ s o ff

ic ia l te rm inatio n of the CB A a nd fa ilure to s ig n a

no the r Unio n c on tr a c t. Kenne dy indicated that other

firms sent similar officia l termination notices but re m ained Union contra ctors af

ter further neg otiation. (This testimony , if acc urate , substantially aff ects many issues in this case . I t supports the Fund’s and the Union’s arg uments that a noti ce of CBA ter mination was g ener ally considere d a tec hnicality and not a true indication of the intention to g o non-Union.) I n c onne c tio n w ith I ES’ s re sti tut ion c la im, Mr . L lama s te sti fi e d th a t he pa id t he June and

July 20 04 fr ing e be ne fits b e c a us e the Un ion

ha d s hut do wn

the Patr ic k H e nr

y Mid dle Sc ho ol w or

ks ite in September 2004 a

nd he wanted t o enable his worke rs t o return to work and finish the proje ct. Mr. L lamas testified that he told Thomas in September 2004 that he fe lt these pay ments were extorti on. The F und’s auditor testified t hat the June and J uly 2004 fring e bene fit pay

ments could not be used to offset the a

mount that I ES would owe in this suit beca use I ES did not pay those benef its in error. By contra st, the auditor t estified that his estimate di d provide offset for ove rpay ments that occur

red when I ES errone ously

paid fring e bene fits for more hours than a pa rticular pa inter had w orked. Th e dis tr ic t c ourt fo un d that I ES and TL G we re a lte r e g os pa rt ia lly ba se d o n th e ir

op e ratio ns : I ES and TL G (1) ha

ve substantial undocumente d/i n ac curate inter-c ompany tr ans a c tio ns and

fi na nc ia l r e c or ds ; (2) Mr . L lama s c an s ig n c he c ks fo r T L G, and Ms. L lamas ca

n sign c hecks f

or I ES; (3) Mr. L lamas appe ars on the pa y roll of TL G and Ms. L lamas appe ars on the pa y roll of I ES; (4) Mr. L lamas has sometimes super visedNo. 08-1966

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- 7 - TL G projec ts; [and] (5) I ES takes care of m any of the bills and maintenanc e for the building for

an ar bitrary manag ement fe e . . . . The c ourt also found that I ES a nd TL G’s financ es wer e “per vasively interming l[ ed],” that I ES and TL G’ s o wn e rs hip and

mana g e me nt, tho ug h tec hn ic a lly dif fe re nt, we re “ no t as [dif

fe re nt] a s w ou ld usually be the c ase be tween two distinct compa nies,” a n d t h at their business purpose s were “g ener ally

separ ate” but no t “ m u tually exclusive.” The district cour t theref ore c oncluded that de fe nd ants we re joi ntl y and se ve ra lly lia ble fo r de lin qu e nt fr ing e be ne fi ts an d li qu idate d d a ma g e s. The fring e benefit contribution amount is based on (1) hours worke d by Union painters on both I ES and TL G pay

rolls while the CBA w as i n eff ect and (2) the hours worked by non-Union painters who
wo rk e d o nly

fo r T L G w hil e the CB A w a s in e ff e c t. The district cour

t found that I E S ’s § 1981 discrimination claim failed be cause the Union
wo uld have or de re d co mpr e he ns ive a ud its of I ES, re g ard le ss of I ES’ s Hisp anic ow ne rs hip , d ue to employ ee c omplaints about I ES’s failure to pay fring e b en ef

i t s . T he district cour

t found that the Union had not orde red c omprehe nsive audits of other f irms beca use their em p l o y ees did not complain about their w ag es and the Union does not ag g ressively enfor ce the CBA without employ ee
c omp la int s. Th e dis tr ic t c ourt c on c lud e d th a t I ES’ s d e fa matio n c laim s—bas ed on T ho ma s’ statements at P atrick H enry Middle School and Western Michig an Univer sity —and TL G’s defa mation cl ai m
—

b as ed on the Union’ s 2003 picketing —wer e pre empted by

fede ral labor

law beca use the c halleng ed stateme nts were not made with ac tual malice. The district court found that I ES was not entitled to restitution because it had not paid the J une and J uly 2004 fring e bene fits due to a mistake of f

act or law.No. 08-1966

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- 8 - II. Following a benc h trial, we r eview the district court’s c onclusions of law de novo and the d is tr ic t c o u rt’ s f

in d in g s o f f

a c t f o r c le ar error. Burzynck

i v. Cohen , 264 F.3d 611, 616 ( 6th Cir. 2 0 0 1 )
. B o t h l e g a l l y

an d f a c tu a l l y , t h e r e w a s s u f

f i c i e n t , a l b e i tl i m i t e d , e v i d e n c e t h a tIE S an d T LG
we re a lte r e g os , b e c a

us e th eir fi na

nc e s w e re sig nif

ic antl y int e rm ing le d a

nd the y sh are d s ome employ ees, ma

nag ers, a nd office space . “The alter e g o doctrine . . . pr event[s ] em p l o y ers f rom
e va din g ob lig a tio ns un de r the [Natio na l L a bo r R e latio ns ] Ac t me re ly by c ha ng ingor a lte ri ngthe ir
c or po rate fo rm . T he do c tr ine op e rate s to bin d a n e mpl oy e r t o a c oll e c tiv e ba rg a ini nga g re e me nt i f it is found t o be an alter eg o of a sig natory employ er.” Trs . o

f th e De tro it Ca rp e nte rs F rin geBe ne

fit Fu nd s v . I nd us . Co ntrac tin g, LLC , 5 81 F .3 d 3 13 , 3 17-18 ( 6th Cir . 2 00 9) (s e c on d in se rt ion in orig inal) (inter

nal quotation marks omitted) (c itation o mi tt e d )
. A lt e r

e g o li a bility attache s when “ two
e nte rp ri se s h ave su

bs tanti a lly

ide nti c a l ma

na g e me nt, bu sin e ss, purpos e , o pe ratio n, e qu ipm e nt, customers, super

visio n , and ownership. Id. at 318 (interna l quotation marks omitted) (citation omitted). Alter eg o liability may apply to a new, non- union entity t h at i s “mer ely a disg uised continuance of the old [union] employ er,” or t o a “double brea sted operation” consisting of “two or
mor e c oe xistin g e mpl oy e rs pe rf or min g the same wo rk

[that] are in f

a c t on e bu sin e ss, se pa

ra te d o nly in form.” Id. (interna l quotation marks omitted). First, the district cour

t d i d n o t ap p ly

an incor rec t leg al standar d for a lter eg o liability by balanc ing the rele vant fa ctors rather than de termining substantial identity separ ately for e ach f actor
. “[T] he alter

eg o analy sis should b e flexibl e” a nd require s “a w eig hing of all the re levant fa ctors,”No. 08-1966

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- 9 - NLRB v. Allcoast Trans

fer , 7 80 F .2 d 5 76 , 5 81 (6 th C ir . 1 98 6), so th at “no ind ivi du a l f a c tor is outcome dete rminative,” De tro it Ca rp e nte rs , 581 F.3d at 318. Recent a lter eg o decisions of this and other c ircuit s h av e ap p l ied a similar bala ncingtest. E.g. , id. a t 31 9; W ilson v. Int’l Bhd. of Teamsters, Chauffeurs, W arehouseme n & Helpers of Am. , 8 3 F .3 d 7 47 , 7 58 (6 th C ir . 1 99 6) ; Tra ffo rd Distrib. C tr. v. NLRB , 478 F.3d 172, 179-81 (3d Cir. 2007)
. There fore the district c ourt applied the
corr ect leg al standar d. Se c on d, the fa c tua l a sp e c t of the dis tr ic t c ourt ’s de te rm inatio n w a s n ot cle arl y e rr on e ou s. Th e re wa s su ff

ic ie nt e vid e nc e fo r t

he distri ct cou rt to f

ind that I ES a

nd TL G w e re su

bs tanti a lly identical. The district court found that the I ES and TL G’s oper ations weig hed hea vily in favor of imp os ing a lte r e g o l ia

bil ity be c a us e the c omp anie s’ fu

nd s w e re pe rv a siv e ly

int e rm ing le d d

ue to numerous undocume nted interc ompany transfe rs and other pa

y ments. This finding is supported by te sti mony that T L G w ro te I ES c he c ks fo r o ve r $ 40 0, 00 0 w ith out a do c ume nte d p ur

po se , T L G p a id I ES rent and a

manag ement f

e e f o r unspec ified ser

vices, a nd the re peate d monetary

transfe rs betwe en I ES and TL G may ind ic a te loa n or su bc on tr a c tin g pa

y me nts . T he dis tr ic t c ourt

fo un d th a t th e fi rm s’
m an age m en t , o wn er s h i p , an d b u s i n es s p u rp o s e w ei g h e d s l i g h t l y i nfa v o r o f i mp o s i n g al t er ego lia bil ity be c a us e the fi rm s’ mana g e me nt a nd ow ne rs hip ha d s ome ov e rl a p, and the fi rm s’ bu sin e ss purp os e s w e re se pa

rate but no t mutua lly e xclu siv e . T his fi nd ingis s up po rt e d b y Mr . a nd Mr s. L lamas’ t e s ti mo n y . B o th te s ti f ie d th a t I E S a

n d T L G s h ar e d

p r o je c ts , e mp lo y e e s , an d

anoffice building, and that b o t h Mr. and Mrs. L lamas had a uthority over the financ es of both entities. Mr. and Mrs. L lamas ea ch appe are d on the pay roll of the other ’s firm until 2003. Mrs. L lamas testifiedNo. 08-1966

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- 10 - that, until 2004, TL G’s wor k included painting . There fore , while we might have rea ched a diffe rent conclusion if weighing the evidence indepe ndently , the district court did not clea rly err when it found that, o n b a lanc e , I ES a

nd TL G w e re su

bs tanti a lly

ide nti c a l f

or a lte r e g o p ur

po se s. T h e N L R B s et t l em en tb et we en I E S , T L G, an d t h e U n i o nd o es n o tb ar

t h e F u n d ’s al t er

ego
c l a i m s b e c a

u s e t h o s e p art i e s d i d

n o ta g r e e t h a tIE S an d T LG w e r e n o t a l t e r e g o s o r t h a tIE S an d

T LG did not owe additional fring e bene fits. Moreov er , beca use the F und owes its benef iciarie s an ind e penden t o bl igat io n t o en for ce con tr ib ut io n req ui rem ent s, th e Un io n p rob abl y cou ldno t f

orec los e the Fund’ s ability

to file suit. See Food Employe rs Council, Inc. , 293 NL RB 333, 334 n.2 (1989)
. Th e re fo re , w e up ho ld t

he dis tr ic t c ourt ’s de te rm inatio n th a t I ES a nd TL G w e re a lte r e g os . III . The district cour

t also had suffic ient evidenc e to conclude that the Union did not violate 42 U.S.C. § 1981 when it or dere d compre hensive audits of I ES but not non- Hispanic Union contra ctors with closely

related non- Un i o n companies. The district court found that the Union would have
o rd er ed audits of I ES reg ardle ss of I ES’s Hispanic owne rship beca use I ES employ ees ha d complained a

bout I ES’s failure to pay

fring e bene fits a

nd that the Union did not order c omprehe nsive audits of other e ntities al leg edly eng ag ed in double bre asting beca use it rec eived no e mploy ee complaints about t hese entities. These findings are not clearly err oneous bec ause the y

are supported by the te sti mony

of Un ion of fi c ia ls a nd the oth e r Unio n c on tr a c tor s.No. 08-1966

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The district cour

t also conclude d that § 301 of the L MRA pree mpted I ES’s defamation 2 claims. Be cause these c laims fail under Linn , we do not conside r § 301 pre emption. - 11 - IV. I ES’s defamation claims fail bec ause Thomas did not make the challeng ed stateme nts—that I ES was delinquent in pay ing f ring e bene fits—with actual malice
. Wh e n a d e f

amati o n a c ti o n is b a s e d o n an u tt e r an c e th a t is r e late d to a labor

manag ement dispute and is made i n t h e context of that dispute . . . feder al law supplants state law with re spect to the de g ree of fa ult that a plaintiff must establish. Linn v. United Plant Guard W orkers of Ame rica , 383 U.S. 53, 64-65 (1966). U nder Linn , a plaintiff must prove, in a ddition to the elements set out by state law, that the de fe nd ant p ub lis he d th e state me nt i n q ue sti on wi th ‘ a c tua l ma lic e ’ as that te rm is de fi ne d in

New Y ork Times Co. v. Sullivan , 3 76 U. S. 2 54 , 2 79 -8 0 ( 19 64 ), and its p r o g e n y. Holbrook v. H

arman Auto., Inc. , 58 F.3d 222, 225 ( 6th Cir. 19 95). Unde r Sullivan , m ak i n g a statement with ac tual malice mea ns “with knowledg e that it wa s false or with rec kless disreg ard of whether it was false or not.” 376 U.S. at 280. The re cord supports the di strict court’s finding that Thomas di d not make either statement wi t h k n o wl edg e of or

rec kless disreg ard f

or its falsehood. Thoma s testified that he be lieved I ES would rene w its Union contrac t after further neg otiation. This belief was r easona ble bec ause othe r Union contra ctors who initially noticed an inten t t o withdraw f rom Union contra cts had re newe d t hose contra cts afte r neg otiation and beca use Mr. L lamas had indicated that I ES would remain a Un ion c ontr a c tor

by pla c inga Un ion ste wa rd on a ne w pr oje c t and a g re e ing to pa y fr ing e be ne fi ts ba se d on that pr oje c t a ft e r t he g e ne ra l c on tr a c tor

pa id I ES. Th e re fo re , th e I ES’ s d e fa matio n c la ims fa il. 2No. 08-1966

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- 12 - TL G’ s d e fa

matio n c la im a lso fa ils be c a us e the c ha lle ng e d s tate me nt— that T L G pay s unf

a ir wag es—wa s not made with actua l malice. The rec ord supports the district cour t’s finding that the Union had a r easona

ble belief that TL G’s wa g es we re lowe r than the U nion r ates beca use, when the statement wa s made, TL G still di d painting w ork that otherwise would have been done by I ES, and as the district cour

t noted, there was no re ason for TL G to do painting w ork unless it was pay ing low e r w a g e s th an I ES. V. I E S i s n o ten t i t l ed t o re s t i tu t i o nfo r i t s p o s t -C BA -t erm i n at i o nJ u n e a n d J u l y 2 0 0 4 fr i n ge benef it pay ments beca

use I ES did not m ake those p aym en t s b y m istake of f act or law. Section 4 0 3 (c ) of the E mploy ee Re tirement Income Sec urity Act (ERI SA), 29 U.S.C. § 1001 et seq. , pr ov ide s th a t “ the a sse ts o f a pla n shal l ne ve r i nure to t

he be ne fi t of

any e mpl oy e r” and

pe rm its ref unds of excess contribu t i o n s o n l y wh en made “by a mistake of f

act or law.” 29 U .S.C. § 1103(c) (2)( a)( ii). This c ourt has re cog nized a fede ral c ommon law restitution claim for re cover y of excess contributions, W

hitwort h Bros. Storage Co. v. Cent. States Se. &Sw. Areas Pension Fund , 794 F.2d 221, 236 (6th Cir. 1986), but has held that ERI SA “place s the deter mination as to whether a mistaken co ntribution was made in the ha nds of the bene fit plan administrator” a nd the administrator’s de cision “is conclusive unless arbitra ry or capr icious, not supported by substantial evidenc e, or er

roneous on a

question of law,” Teamster’s Local 348 Health &W elfare Fund v. Kohn Bev erage Co. , 749 F.2d 315, 321 ( 6th Cir. 1984).No. 08-1966

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- 13 - The common l aw ri gh t re co gn i z ed in W hit wor th is lim ited by

the ERI SA provisions permitting r efunds of

excess contributions only when there is a mi stake of fac t or law. In W hit wor th its e lf we no te d th a t “ Whitwo rt h’ s c la im i s . . . ex pres sl y lim ite d b y the te rm s o f E RI SA s e t out in section 403(c )(2) (A).” 794 F.2d at 236 n.24. The Ninth C i rc u i t h as re ad our law as so limited: “The re is nothing in [ W

hit wor th and similar] opini ons to indicate that such a ca use of a ction has substantive elements distinct from a se ction 403(c) (2)( A)(ii) [claim].” British Motor C ar Distribs., Ltd. v. S.F. Auto. Indus. W elfare Fund , 8 82 F .2 d 3 71 , 3 77 (9 th C ir . 1 98 9) . In o ur late r o pin ion

in W hitwort h II

we state d that “a pe nsion fu n d ’s ref usal to ref

und contributions paid by mistakeis arbitra ry unless rete ntion of the money is ne cessa ry to the financ ial soundness of the plan or justified by so me oth e r c omp e lli ng re a so n. ” 98 2 F .2 d 10 06 , 10 17 (6 th Cir . 1 99 3) (e mph a sis a dd e d) ; se e als o Great-W est Life & Annuity Ins. Co. v. Knudson , 5 34 U. S. 2 04 , 2 09 (2 00 2) (r uli ng on ano the r E RI SA provision and stating that courts have been “espe cially reluc tant to tamper with [the] enfor ceme nt scheme embodied in th e statute by extending re medies not specif ically authorized by

its tex t.”) (i nte rn a l qu otatio n ma

rk s o mitte d) (i ns e rt ion

in o ri g ina l) ; Chao v. Malkani , 45 2 F .3 d 29 0, 29 7 ( 4th C i r. 2 0 0 6 ) ( ap p l yi n g Knudson ’s textually restric tive rea soning to a

fede ral c ommon law restitution
c la im) . T he re fo re , I ES c ann ot r e c ov e r t he June a nd J ul y 20 04 fr ing e be ne fi t c on tr ibutio ns un le ss these pa y ments were made by

mistake of fa ct or law
. As the district court found, I ES did not m ake the se pay ments by mistake of fa ct or law
. I nstead, Mr. L lamas’s testimony indicates that he felt t hat allowing hi s worke rs t o return to wor k was
mor e imp or

tant t ha n c on te sti nghis re qu ir e me nt t o p ay the fu nd s. Th e re fo re , I ES i s n ot e nti tle d toNo. 08-1966

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- 14 - restitution because Mr. L lamas did not make these pay ments by a mistake of fac t or law. We nee d
no t r e ly on the dis tr ic t c ourt ’s a lte rn a tiv e ho ldi ngthat I ES i s p re c lud e d f ro m r e sti tut ion

be c a us e it did no t f ir st m ake a

fo rm a l r e qu e st f

or a re fu nd be fo re fi lin g a

re sti tut ion

c la im. VI . For the fore g oing r easons, the judg ment of the district cour t is affirmed.