In the

United States Court of Appeals

For the Seventh Circuit

Nos. 11-2097, 11-2185

INTERNATIONAL BROTHERHOOD OF

TEAMSTERS LOCAL UNION NO. 50,

Plaintiff-Appellee,

v.

KIENSTRA PRECAST, LLC,

Defendant/Third Party 

Plaintiff-Appellant,

v.

ILLINI CONCRETE, INC.,

Third Party Defendant-Appellant.

Appeal from the United States District Court

for the Southern District of Illinois.

No. 3:10-cv-00695-GPM-SCW—G. Patrick Murphy, Judge.

ARGUED DECEMBER 2, 2011—DECIDED DECEMBER 13, 2012
2 Nos. 11-2097, 11-2185

 The Honorable Gary Feinerman, of the Northern District of 

Illinois, sitting by designation.

Before RIPPLE and ROVNER, Circuit Judges, and

FEINERMAN, District Judge.



FEINERMAN, District Judge. Illini Concrete, Inc., formally ceased doing business in October 2009 and

sold certain of its assets, including delivery trucks,

to Kienstra Precast, LLC. According to the complaint filed

against Kienstra by the International Brotherhood

of Teamsters Local Union No. 50 (“Local”)—which represents concrete mixer drivers and others employed by Illini

Concrete and then by Kienstra—Kienstra proceeded to

lay off fourteen employees, declined to make good on

Illini Concrete’s unfunded liability to its employees’

union pension fund, subcontracted work to competitors

to avoid hiring back the laid-off union employees,

and refused to hear grievances regarding the asset sale

and its effect on the employees. The complaint alleges

that the asset sale was a ruse to allow Illini Concrete

to evade its obligations under its collective bargaining

agreement with the Local (“Illini CBA”). The Local claims

that Kienstra breached the Illini CBA, and seeks a declaration that Kienstra is Illini Concrete’s alter ego, that

Kienstra thus is bound by the Illini CBA, and that the

CBA obligated Kienstra to bargain over the

displacement of the laid-off union employees.

Kienstra impleaded Illini Concrete as a third-party

defendant, and each moved to compel arbitration, arguing

that the Local’s claims are covered by an arbitration clause
Nos. 11-2097, 11-2185 3

in the Illini CBA. The district court denied the motions

to compel arbitration, holding that the question whether

Kienstra is Illini Concrete’s alter ego, and thus

whether Kienstra is bound by the Illini CBA, does not

fall within the scope of the Illini CBA’s arbitration clause.

2011 WL 1749997 (S.D. Ill. May 6, 2011). Kienstra and

Illini Concrete have taken an interlocutory appeal of that

ruling.

The merits cannot be reached unless we have appellate

jurisdiction. Sections 1291 and 1292(a)(1) of Title 28 do

not permit an interlocutory appeal of the district court’s

denial of Illini Concrete’s and Kienstra’s motions to

compel arbitration. See Sherwood v. Marquette Transp.

Co., 587 F.3d 841, 843-45 (7th Cir. 2009); IDS Life Ins. Co.

v. SunAmerica, Inc., 103 F.3d 524, 530 (7th Cir. 1996);

Cent. States, Se. & Sw. Areas Pension Fund v. Cent.

Cartage Co., 84 F.3d 988, 990-92 (7th Cir. 1996). Recognizing

this, Kienstra and Illini Concrete submit that

appellate jurisdiction lies under a provision of the Federal

Arbitration Act (“FAA”), 9 U.S.C. § 16(a)(1), that permits

interlocutory appeals of district court rulings that grant

or deny motions to compel arbitration or that stay litigation

pending arbitration. See Arthur Andersen LLP v. Carlisle,

556 U.S. 624, 627-29 (2009); Janiga v. Questar Capital

Corp., 615 F.3d 735, 740 (7th Cir. 2010); French v.

Wachovia Bank, 574 F.3d 830, 833 (7th Cir. 2009).

In its merits brief, the Local maintained that this

court does not have appellate jurisdiction because § 1 of the

FAA, 9 U.S.C. § 1, exempts from the FAA’s scope

lawsuits involving any contract of employment. The
4 Nos. 11-2097, 11-2185

Local abandoned that broad contention at oral argument,

and rightly so. Section 1 states that “nothing [in the

FAA] shall apply to contracts of employment of seamen,

railroad employees, or any other class of workers

engaged in foreign or interstate commerce.” 9 U.S.C. § 1.

In rejecting the notion that § 1 exempts all employment

contracts from the FAA, the Supreme Court in Circuit

City Stores, Inc. v. Adams, 532 U.S. 105 (2001), held that

“[s]ection 1 exempts from the FAA only contracts

of employment of transportation workers.” Id. at 119

(emphasis added). By “transportation workers,” the

Supreme Court meant workers, like the “seamen

and railroad employees” expressly referenced in § 1, that

are “actually engaged in the movement of goods in interstate commerce.” Circuit City, 532 U.S. at 112.

So, if the Illini CBA is a “contract of employment of . . .

workers engaged in . . . interstate commerce” within the

meaning of § 1, then § 16(a)(1) does not apply here, in

which case we have no appellate jurisdiction and

must dismiss the appeal, just as we did in Central Cartage,

84 F.3d at 993. The Local did not challenge appellate

jurisdiction on that particular ground in either its brief

or at oral argument. Kienstra and Illini Concrete took

affirmative steps in their joint reply brief to fend off

such a challenge, arguing that “the operations of Illini prior

to the sale of assets and the operation of . . . Kienstra

subsequent to the sale were restricted to three counties

in Southern Illinois.” Reply Br. at 6. From this premise,

they argued that “the employees affected by this cause

of action were not engaged in the transportation of

goods in interstate commerce and do not fall within the

narrow exception found in [§ 1 of] the FAA.” Ibid.
Nos. 11-2097, 11-2185 5

Although Kienstra and Illini Concrete argued that their

workers were not engaged in the movement of goods

in interstate commerce and the Local did not speak to

that particular issue, “[a] court of appeals has an obligation

to examine its jurisdiction sua sponte, even if the

parties fail to raise a jurisdictional issue.” Wingerter v.

Chester Quarry Co., 185 F.3d 657, 660 (7th Cir. 1998)

(per curiam). In an order issued after oral argument,

we questioned whether Kienstra and Illini Concrete

had truly meant to say in their joint reply brief that

their trucking employees’ activities were strictly limited

to three counties in southern Illinois. We noted that

those three counties (St. Clair, Monroe, and Randolph)

are in a region of Illinois known as Metro East, directly

across the Mississippi River from St. Louis, Missouri,

and its environs. Given the nature of the Metro

East economy, we said, it would be somewhat unusual

if the truckers did not occasionally carry loads into Missouri. And if they did, we added, our appellate jurisdiction

likely would fail.

Concluding that the record as it stood did not shed light

on that factual question, we ordered a limited remand

for the district court to determine whether the truckers

ever carried loads into Missouri or other States on behalf

of Illini Concrete or Kienstra. The district court held

an evidentiary hearing at which the Local called

two truckers who had carried loads for Illini Concrete

and Kienstra. The district court issued an order finding

that the truckers made deliveries into Missouri on

Illini Concrete’s behalf, but making no finding as

to whether the interstate deliveries continued after
6 Nos. 11-2097, 11-2185

Kienstra took over. (The two truckers testified that they

did not carry loads into Missouri while employed

by Kienstra, but the district court appropriately did

not offer an opinion as to whether their experience reflects

the experience of all other truckers who carried loads

for Kienstra.)

After the district court entered its order, we allowed the

parties to file supplemental briefs regarding

appellate jurisdiction. The Local now takes the

position that we lack appellate jurisdiction, while Kienstra

and Illini argue the contrary. We agree with the Local.

This case is materially indistinguishable from Central

Cartage. The plaintiff in Central Cartage, a union pension

fund, sued Central Cartage, a company that employed

the union’s workers, alleging that Central Cartage had

breached its contractual obligation to pay employer

contributions to the fund. 84 F.3d at 989. Central

Cartage moved to compel arbitration, the district court

denied the motion, and Central Cartage appealed. Ibid.

We first held that 28 U.S.C. § 1291(a) does not grant

jurisdiction over an interlocutory appeal of an

order refusing to stay or dismiss district court proceedings

in favor of arbitration. Id. at 990-92. We then

held—presaging the Supreme Court’s ruling in Circuit City

that § 1 of the FAA excludes from the FAA’s coverage

only employment contracts of transportation workers,

meaning workers engaged in the movement of goods

across state lines—that appellate jurisdiction did not

lie under 9 U.S.C. § 16(a)(1). We explained our holding

as follows:
Nos. 11-2097, 11-2185 7

The appellant, Central Cartage, is primarily engaged in

local trucking and occasionally transports cartage

across state lines. We hold that the workers of Central

Cartage (covered in the collective bargaining agreement at issue between Central Cartage and the Pension

Fund) therefore qualify as “transportation” workers.

Because the Arbitration Act does not apply to “transportation” workers, see § 1, Central Cartage’s NMFA

(the collective bargaining agreement) for its workers is

not covered by the Act. Thus the jurisdictional provisions of § 16 of the Act are not applicable to Central

Cartage’s appeal.

84 F.3d at 993.

The same result obtains here. Although Illini Concrete

was primarily engaged in operations within Illinois,

its truckers occasionally transported loads into Missouri. This means that the truckers were interstate transportation workers within the meaning of § 1 of the FAA as

interpreted by Circuit City, which in turn means that the

Illini CBA is excluded from the FAA’s coverage. Because

the Illini CBA is excluded from the FAA’s coverage,

jurisdiction over this appeal cannot lie under § 16(a)(1) of

the FAA. And without § 16(a)(1), we are left without a

source of appellate jurisdiction. Illini Concrete and

Kienstra offer four arguments to support the contrary

position, but none is persuasive.

First, they seek to distinguish Central Cartage on the

ground that the employees in that case delivered the

goods of third parties rather than the goods of their own

employer, while Illini Concrete’s truckers delivered Illini
8 Nos. 11-2097, 11-2185

Concrete’s goods. Illini Concrete and Kienstra do not

explain why the distinction, which is nowhere to be found

in Central Cartage or Circuit City, should matter. The

distinction in fact does not matter: a truckeris a transportation worker regardless of whether he transports his employer’s goods or the goods of a third party; if he

crosses state lines he is “actually engaged in the movement

of goods in interstate commerce.” Circuit City, 532 U.S. at

112.

Second, Illini Concrete and Kienstra seek to distinguish

Central Cartage on the ground that the employer there

was a party to an interstate collective bargaining agreement,

meaning that it covered workers in more than one

State, while the Illini CBA is an intrastate CBA, covering

only workers in Illinois. That distinction, too, is irrelevant

to the § 1 analysis, which focuses on whether the workers

employed under a given contract are or are not

interstate transportation workers, not on whether the

contract covers workers in multiple States. In fact, Circuit

City makes clear that an interstate CBA covering nontransportation workers (in that case, sales counselors) would not invoke the § 1 exclusion. See 532 U.S. at 119.

Third, Illini Concrete and Kienstra point out that the

number of interstate deliveries made by Illini Concrete’s

truckers was a small proportion of their total workload,

the remainder of which was intrastate. That is true:

each trucker who testified at the hearing estimated that he

had made 1500 to 1750 deliveries each year, of which only

a few dozen were to Missouri. But that does nothing

to distinguish this case from Central Cartage, which held
Nos. 11-2097, 11-2185 9

that § 1 applied where the employer was “primarily engaged in local trucking and occasionally transport[ed]

cartage across state lines.” 84 F.3d at 993 (emphases

added). Central Cartage was correct in this respect, as

there is no basis in the text of § 1 for drawing a line between workers who do a lot of inter state

transportation work and those who cross state lines only

rarely; both sorts of worker are “engaged in foreign or

interstate commerce.”

Fourth, Illini Concrete and Kienstra contend that § 1 does

not apply to this case because the district court did not find

that truckers crossed the Illinois-Missouri state line while

working for Kienstra. Because Illini Concrete employees

engaged in interstate transportation work, it does not

matter whether Kienstra employees did so as well. The

Local brought this suit to enforce the Illini CBA against

Kienstra—including to hold Kienstra responsible for

unfunded liabilities to the union pension fund that accrued

while Illini Concrete employed the workers —and Kienstra

is seeking to enforce the Illini CBA’s arbitration clause to

require that the Local’s claims be submitted to an arbitrator. The heart of this case is the Illini CBA, which, as shown

above, is a contract of employment of interstate transportation workers because the workers made interstate deliveries for Illini Concrete. Kienstra’s takeover and the

cessation of interstate deliveries (if they indeed did cease)

did not change the nature of the Illini CBA, and the

nature of the CBA suffices under § 1 to exclude it, and thus

this case, from the FAA’s coverage.

Because the Illini CBA is properly classified under § 1 of

the FAA and Circuit City as a contract of employment of
10 Nos. 11-2097, 11-2185

workers engaged in the movement of goods in interstate

commerce, and there being no basis for distinguishing

Central Cartage, this appeal is dismissed for lack of appellate jurisdiction.

12-13-12