## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N os. 11

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- 2185 I NTERNATI ONA L B R OT H E R H OO D O F T EAM STERS L OC AL U NI ON N O . 50, P la intif f-A pp ellee, v. K I EN S T RA P REC AST, LLC , D e f e ndan t/ Thir d Par ty Plai nt i f f

-Appe l l ant, v. I LLINI C ONC RE TE, I NC ., Thir d Par ty Def e ndan t

-Appe l l ant
.

A pp eal from the United S t ates Di strictC our t fo r the S outhernDi stricto f Illino is. No . 3:1 0-cv-00 69 5-GPM-SCW

— G . Patri ckMu rp hy, Judge
. A RG UE D D ECE MBE R 2, 2011

— D ECI DE D D ECE MBE R 13, 20122 N os. 11

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- 2185

The Ho nora bl e Gary Fe i ne rm an, ofthe Northe rnDis t ri c tof  I l l i noi s , s i t t i ng by des i gna t i on. Befo re R IPPLE a nd R OV NER, C ircu it Ju dg es , a nd F EI NE RMAN, D i s t r i ctJudg e .  F EI NE RMAN, D istrictJudg e . I ll ini C onc rete, I nc . , f orm al l y c ea se d do i ngb us i ne ss i n Oc tobe r 2 00 9 an d sol d cer tain ofi ts ass ets , i ncl ud i ng del i ver y t rucks , to K i enstr a Precas t, L LC
. A ccor ding to the com pla i nt fi l ed aga i nst Kie nstr a bythe I nter nati onalBro ther hood of T ea m st er s L oc al U n ion N o. 50 (“L oc al” )— w hi ch r eprese nt s co nc r et e m i xe r dr i ve r s an d o th er s empl o y ed byI l l i ni C onc rete an d then b y K ienstra

— K i enstr a pro ceeded to l ay offf ourt een e m plo yee s, decl i ned to m ake go od on I l l i ni Concret e’ s unfunded l i abi l i ty to i ts em plo yee s’ un ion pe ns ion fun d , sub con tracte d w or k to com p etitors to avo i d hiri ng ba ck the l ai d-o ffuni on e m plo yee s, an d refu se d to h ea r g r i e v an c es reg ar d in g t h e a ss et sa le and i ts effect on the em plo yee s. The co m pla i nt al l ege s that th e asset sal e was a ruse to al l ow I l l i ni Concre te to ev ade i ts o bl i g at i o ns unde r i ts co l l ec ti ve bar g aini ng a g r e e me n tw i th t h e Lo c a l( “ I l l i n iC B A” )
. T h e L o c a lc l a i ms that K i enstr a brea ched the I l l i ni CB A , and see ks a decl ar ati on that Kie nstr a i s I l lin i C oncr ete ’ s a l tereg o, that Ki en st r a thus i s bo und b y the I l l i ni C B A , a nd tha t th e CBA ob li gated K ienstra to bargai n o ve r t he displ acem ent o fthe l ai d-o ffuni on e m plo yee s. K i enstr a i m plead ed I l l i ni Concre te as a thi rd- party defen dan t, a nd ea chm o ve d to co m pela rbi tr at i o n, a r g ui ng that the Local ’ s cl ai m s ar e cove re d b y a n arbi tr ati on cl auseN os. 11

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- 2185 3 i n the I l l i niCBA. The di st r i ctc o urt deni ed th e m o ti o ns to com pel arbi tr ati on, hol ding that the quest i on wh et her Ki e n s t r a i s I l l i n iC o n c r e t e ’ s a l t e r e g o , a n d th us w hetherKienst ra i s bo und bythe I l l i ni CB A , does not f al lwithi n the sco pe ofthe I l l i ni CB A ’ s a rbi tr ati on cl ause. 20 11 W L 1 74 99 97( S
. D. I l l
. M ay6, 2 011 )
. Ki en st r a an d I l l i ni Concre te h ave tak en an i nter l ocuto ryappealo fthat rul i ng. The m er i ts cannot be r eached unl ess we have ap p ellate j uri sdi c t i o n. S e c t i o ns 1 2 9 1 a nd 1 2 9 2 ( a ) ( 1 ) o fT i t l e 2 8 do n o t p e r m it an i nt erlocuto ry ap p eal ofthe d istri ct cou rt’s denia lof Illini Concre te’ s a nd Kienst ra ’ s m oti ons to c om p el a rb itr at ion
. See She rwood v . M ar q ue t t eTr ans p. Co. , 587F .3 d 8 41 , 843 -45 (7t h C ir. 20 09 ); ID S L i f eIns . Co. v. SunA m er ica, Inc. , 1 0 3 F.3d 524, 530 (7th Cir. 1996); C ent
. States, Se
. & Sw. Areas Pension Fund v. Cent. Cart ageCo. , 8 4 F
. 3d 98 8, 99 0- 92 ( 7th Ci r . 1 99 6)
. Re co g ni zing thi s, Kienst ra a nd I l l i ni Concre te subm i t t hat appell ate j uri sdic ti on l i es und era provi si on o fthe Feder al A rbi tr ati on A c t (“ FA A ”) , 9 U
. S. C. § 1 6( a) ( 1) , thatper m i ts i nt er l o cut o r y a ppea l s o fd istr i ctc o ur t r ul i ng s th atg r an t ordeny m oti ons to com pel arbi tr ati on o r that sta y l i ti gat i on p en d in g a rb itr at ion
. See A rthur Ande rse n LL P v. Ca rl is le, 55 6 U .S. 62 4, 62 7-2 9 (2 00 9); Janiga v. Q ue s t arCapi t al Corp
. , 615 F.3d 73 5, 74 0 ( 7 t h C ir. 20 10 ); Fre nc h v
. Wac hovi a Bank, 574 F.3d 830 , 833 (7th C ir. 2009). Inits m er its br ief, th e L oc a l m ain ta in ed th at th is co ur t do es no t ha ve a ppel l at e j ur i sdi ct i o n be ca us e § 1 ofthe F AA, 9 U. S
. C. § 1 , e xe m pts fr o m t he F AA’ s s c o pe l aw sui ts i nvol vi ng anyc o nt r ac t o fe m pl oym en t. The4 N os. 11

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- 2185 Localaba nd oned thatbr oad con tenti on a t o ra lar gum ent, an d r i g ht l y s o . S ec ti o n 1 s ta te s th at“ no th i ng [i n the F AA ] s ha l la p p ly to c o nt r ac ts o fe m pl o y m en t o fs ea m en, rail road em p loyees, or any oth er class of w orkers engag ed i n f or ei gn o r i nter sta te com m er ce. ” 9 U .S.C. § 1. I n rej ecting the n oti on that § 1 exem pts all e m pl o y m en t c on tr ac ts from th e F A A , t h e Su p re m e C ou rtinCircui t C i tyS t o r e s , In c . v . A d a ms , 53 2 U.S
. 10 5 ( 2001 ) , hel d that

“ [ s ] e c t i o n 1 e x e mpt s fr o m th e F AA onlyco ntra cts of em plo ym ent o ftr anspor tat i on work er s. ” Id
. a t11 9 ( emphas i s adde d)
. By “ tr an spor tati o n wo r k er s, ” th e Suprem e Cour t m eant w orkers, l i ke the “ sea m en and ra il ro ad em plo yee s” express l y r efer enced i n § 1 , that are “act ua ll y enga ged i n th e m ovem en t of g o o d s i n inte rsta te com m er ce. ” C ir cuitCity, 53 2 U.S
. at11 2. So , i f the I l l i ni CB A i s a “co ntra ct of em plo ym ent of
. . . wor k er s en g ag ed i n . . . i nt er st ate com m er ce ” wi th i n the m ea n in g of § 1, th en § 16 (a)( 1) d oe s n otap p ly h er e, in whi chc as e we ha ve no a ppel late j ur i sdi ct i o n a nd m us t di smi ss th e appe al, j us t as we di d i n Cen t r al Car t age, 84 F. 3d at 993. T he Localdi d not chal l enge appell ate j uri sdic ti on o n that parti cul argr ound in eitheri ts bri ef orato ra la rg u m ent. Kienst ra and I l l i ni Concre te too k affi rm ative step s in their j oint rep ly brie f t o fend off such a chal l enge, ar gui ng tha t “ the o perat i ons ofI l l i ni pri or to the sale ofassets an d t h e o p e r a t ion of
. . . K ienstra subsequent to the s al e were re str i cted t o th re e co unti es i n So uthe r n I l l i no i s . ” R e pl y Br
. a t6
. F r o m t hi s p r e mi s e, they ar gued that “the em plo yee s affected by thi s ca use ofact ion w er e no t e ngage d i n the tr anspor tat i on o f g o od s i n int er st at e co m m er ce a nd do no t f al lwi th i n the narr ow excepti on f ound in [ § 1 o f ] the F A A
. ” Ib id
.N os. 11

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- 2185 5 A lth ou gh K ien st ra an d Il lin i C o n c r et e a rg u ed th at th eir wo r k e r s we r e n o tengag e d in the mo v e men to fg o o ds i n i nter sta te com m er ce a nd the Localdi d not s peak t o that parti cul ari ssue, “[ a] co urt ofap peal s has an obl i gat i on to e xa m i ne i ts j ur i sdi ct i o n s ua s p o nt e, e ve n i fthe parties fa i lto r ai se a j uri sdic ti onali ssue. ” Wi nge r t e rv. Che s t e rQ uar ry Co. , 18 5 F
. 3d 657, 66 0 ( 7th Ci r. 19 98) ( per curi am )
. In an o rderi ssu ed aft ero ra lar gum ent, w e quest i oned w hetherKienst ra and I l l i ni Concre te ha d t ruly m eant to sayi n thei r j oi nt r epl y b ri efthat thei r tr ucki ng em plo yee s’ act i vi ti es w er e s tr i ctl y l i m i ted to thre e co unties i n so uthern I l l i noi s. W e no ted that th o se thr ee c o unt i es ( S t. Cl ai r, M o nr o e, a nd Ra ndo l ph) ar e ina re gio n o fI l l in ois kn ow n as M et ro E as t, d ire c tly ac ro ss the M i ssi ssi pp iRi verfro m S t. Loui s, M i sso uri, an d i ts en virons. G iv en the n atu re of th e M etro Ea st eco nom y, we sai d, i t would be so m ew hat unusual i fthe tr ucker s di d not o ccasi onal l y c ar ryl oad s into M i ssour i
. A nd i f they did, we add ed, o ur a pp el l ate j uri sdic ti on like ly w ou ld fail. Con cl udi ngtha t th e r ec o r d as i t st o o d di d no t sh ed l i g ht o n tha t f ac tu alque st i o n, we or der ed a l i m i te d r emand for th e d istri c t c o u r t to de term ine w he th er the tru ckers e v e r c ar rie d load s in to M iss ou ri or o th er Sta te s o n be h alf of Illini C on c re te or K ien st ra . Th e d ist ric t c o u rth eld an ev i dent iar y hearing atwh i ch the Localcal l ed tw o tr ucker s who had car ri ed l oa d s forI l l i ni Concre te an d Ki en st r a. The di st r i ct co ur t i ss ue d an ord er findi ng that the t rucke rs m ade del i ver i es i nto M i sso urio n I l l i ni Concre te’ s be hal f, but m aking no fi nd i ng as to w hether the i nter sta te del i ver i es continued after6 N os. 11

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- 2185 K i enstr a t oo k o ver . ( The two tr ucker s t est i fi ed that they did notcar ryl oads into M i sso uriwh i l e e m plo yed b y K ien st ra , bu t t h e d ist ric t c ou rtap p ro p ria te ly d id not offeran o pini on a s t o w hetherthei r experi ence re fl ects the expe r i e nc e o fa l lo the r t r uc k e r s wh o c a r r i e d l o a ds for K ien st ra .) Aft erthe di st r i ctc o ur t en te r ed i ts o r der, we al l o wed the par t i e s t o f i l e s u p p l e me n t a l b r i e f s r e g a r di ng appe l l at e j ur i sdi ct i o n. The Lo ca l no w ta k es t he p ositi on th at w e lack a p p ell ate j urisd iction, w hile K ienstra an d Il lin i arg u e t h e c on tr ar y. W e a gr ee w ith th e L oc al. T h i s c a s e i s ma t e r i a l l y i n d i s t i n g ui s h ab l e fr o m Cen t r al Cart age . T h e p l a i n t i ffi n Cen t r al Car t age, a unio n pensi on fund , sued Centr alCart age , a com pany thatem plo yed the uni on’ s work er s, al l eging tha t Centr alCa rt age had bre ached i ts contr actual obl i gat i on t o pay em plo yer contr ibuti ons to the fund
. 84 F. 3d at 989. Cent ral C artage m oved to com p el arbi tration, the d istri ct cou rt d en ied th e m ot ion, an d C e n tr al C ar ta ge ap p ea led
. Ib id
. W e fi r sthe l d tha t 28 U. S
. C. § 1 29 1( a) d o es no t g r an t j uri sdic ti on o ve r an in te rloc u to ry a pp eal o fan or der r efusi ng to st ay ordi sm i ss dist ri ct c ourtpro ceedi ngs infav or of arb itr at ion
. Id
. at 990- 92. W e t h en h eld

— pr es ag i ngthe Supr eme Cou r t’ s r ul i ngi n C ir cuitCity that § 1 of the FAA excl ud es fro m the FA A ’ s co ver age onl y e m plo ym ent c ontr acts o ftransp or tat i on work er s, mea ni ngwo r k e r s e ng a g e d in the mo v e men to fg o o ds acr oss st ate l i nes

— that appell ate j uri sdic ti on di d not l i e unde r 9 U
. S
. C. § 1 6( a) ( 1)
. W e ex pl aine d o urho l di ng as f ol l ows:N os. 11

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- 2185 7 T h e a p p ella n t, C en tr al C ar ta ge , is p rim ar ily en ga ge d in l oca ltr ucki ng and oc casi onall y t ra nsport s ca rt age acr oss sta te l i nes. W e hol d that the work er s o fCentra l Carta ge (co ver ed i n the col l ecti ve bar gaini ng ag re em ent a t i ssue between Centra lCart age and the Pensi on Fund ) therefor e qual i fy a s “ tr anspor tat i on” w or ker s. Because the A rbi tr ati on Act does not apply to “tr ansp or ta tio n ” w or ke rs , see§ 1, C entr alCart age ’ s NM FA (th e c olle c tiv e b ar ga in in g ag re em en t) for its w or ke rs is n otco v e re d by th e A c t. T h u s t h e jur isd ict ion al p ro visi ons of§ 16 ofthe A ct a re n ot a p pli cabl e t o Central C ar ta ge ’s a p p ea l. 84 F. 3d at 993. The sam e r esul t obtain s h er e. A l though I l l i ni Concre te w as pri m ar i l y e ngage d i n oper ati ons w i thi n I l l i noi s, i ts tr ucker s o ccasi onal l y t ra nsport ed l oads in to M i ssour i
. Thi s m ean s th at the t rucke rs were i nter sta te tr ansport ati on work er s withi n the m eaning o f§ 1 o fthe FA A as i nter prete d by C ircuitCity, whi chi n tur n mea ns tha t th e I l l i ni CB A i s e xcl ud ed fro m the FA A ’ s co ver age . Because the I lliniCB A i s e xcl ud ed fro m the FA A ’ s co ver age , j uri sdic ti on ov erthi s a pp ealcannotl i e under § 1 6( a) ( 1) o f the F A A. And wi tho ut § 1 6 ( a ) ( 1 ) , we a r e l e ft wi tho ut a so ur ce o fa ppel l at e j uri sdi ct i o n. I l l i niCo nc r et e an d K ienstra offer four argu m en ts to su p p ort th e cont rary posi ti on, but none i s per suasi ve. F i r st, the y s ee kt o di st ingu ish Cen t r al Car t ageo n the g r o und tha t th e empl o yees in tha t ca se de l i ve r ed th e g o o d s o fth i r d p a r t i e s r a th e r th a n th e g o o d s o ft h e i r o wn empl o y er, w hil e I l l i niCo nc r et e’ s truck er s del i ve r ed I l l i ni8 N os. 11

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- 2185 Concret e’ s g oo ds. I l l i n i Concr ete and K i enstr a do not ex pl ain why th e di st i nc ti o n, whi chi s no wher e to b e f o und i n Ce n t r a l C a r t age or C ir cuitCity, s ho ul d m at te r . The dist i ncti on in f act does not m att er : a tr ucker i s a t ra nsport at i o n w o r k e r r e g a r d l e s s o fw h e th e r h e t r a n s p o r t s h i s e mpl o y er ’ s goods o r the g o o ds o fa thi r d pa r ty ; i fhe cr o ss es s ta te l i ne s he i s “a ctua l l y e ng ag ed i n the move m en t o fg o o ds i n i nt e r s t a t e c o mm er ce. ” C ir cuitCity, 53 2 U.S
. at 112. Se cond, I l l i ni Con c re te and K i enstr a s eekto di stingui sh C entra l C a rtag e on th e groun d that the em p loy er there was a pa r tyt o a n inte rs tateco l l ecti ve bar gaininga gr eem ent, m ea ni ngtha t i t cove red wor k er s i n mor e th ano ne S ta te , whi l e th e I l l i niCBA i s an intrastate CBA , co ve r i ng o nl y wor k er s i n I l l i no i s. Thatdi st i nc ti o n, t o o , i s i r r el ev an t to the § 1 an alysis, w hich f ocu ses on w he th er the w orkers em plo yed under a gi ven co nt ra ct a re o r ar e no t i nt er st at e tr an spo r ta ti o n wor k er s, no t o n whethe r the c on t r a c t c ov er s w or ke rs in m u ltip le St at es . In fac t, C ir cuit C ity m ak es cl ea r th at an i nt er st at e CBA co ve r i ng nontr an sp or ta tio n w or ke rs (in t h at ca se , sale s c ou n se lo r s ) wo ul d notinv ok e t h e § 1 ex c lu sio n . See 532 U.S
. at11 9. Thi r d, I ll i niCo nc r et e an d Ki en st r a po i nto uttha t th e nu m ber of int erstate de li veries m ad e by I ll ini C o n crete’s t r uc k e r s w a s a s ma l lp r o p o r t i o n o fth e i r t o t a lw o r k l o a d, the r em ai nd ero fwh i ch w as i ntra sta te . T h at i s t rue: ea cht r uck erwho te st i fi ed atthe he ar i nge st i m at ed th athe h ad m ad e 1 50 0 t o 1 75 0 d eliv er ies ea c h ye ar , of w h ich on ly a few do ze n wer e to M i ss o ur i
. B ut tha t do es no th i ng t o d i s t i n g u i s h th i s c a s e f r o m Cen t r al Car t age, w h ich h eldN os. 11

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- 2185 9 that § 1 appli ed w here the em plo yerwas “ prim arilye ng a g e d in l o c a lt r uc k i nga nd occasionallyt r a ns po r t[ e d] car tag e a cro ss sta te lin es. ” 8 4 F
. 3d at 993 ( em phases ad d ed ). C entra l C a rtag e w as cor re ct i n t h is r espect, as th e r e i s no b a s i s i n the t e xt o f § 1 f o r dr a wi ng a l i ne betw een w or ker s w ho do a l ot of int er state tr an sp or ta tio n w or k a n d th os e w h o c ro ss st at e lin es on ly ra re ly; b oth sor ts ofworke r ar e “ engag ed i n f or ei gn o r in te rs ta te co m m er c e.” Four th, I l l i ni Concre te and K i enstr a contend that § 1 does no t apply t o thi s ca se b ec au se the di st r i ctc o ur t di d no t fi nd th at tru c ke rs cr os se d th e Illino is-M iss ou ri st at e lin e w h ile w or ki ng f orKienst ra . Because I l l i ni C oncr ete em plo yee s engag ed i n i nter sta te tr ansporta tio n w or k, i t doe s no t m at te r whethe r Ki en st r a empl o yees di d s o a s wel l
. The Localbr ought thi s s uitto enf or ce the Illin iCB A ag ai nst K ien s t ra

— i ncl ud i ng to hol d K i enstr a r esponsibl e for unfunded l i abi l i ti es to the uni on pensi on fund thatacc rued w hi l e I l l i ni C oncr ete em plo yed the w or ker s

— an d K ienstra i s s eek in g to enf or ce the I l l i ni CB A ’ s a rbi tr ati on cl ause to re quir e that the Local ’ s cl ai m s be subm i tte d t o an arbi tr at o r . T h e h e a r to fth i s c a s e i s t h e I l l i n iCB A, wh i c h, a s s h o wn abov e, i s a contr act of em plo ym ent o fi nter sta te tr anspor tation w orkers bec au se th e w orkers m ad e interstat e d eli veri es for I l l i niCo nc r et e. Ki en st r a’ s ta k eo ve r a nd the cess ati on o fi nter sta te del i ver i es ( i ftheyi nd eed di d cease ) d id no t ch an g e th e na tu r e o fthe I l l i niCBA, a nd the na tu r e o fthe CBA suffi ce s unde r § 1 t o e xc l ude i t, a nd thus thi s ca se, fro m the FA A ’ s co ver age . Because the I l l i ni CB A i s pro perl y cl ass i fi ed und er § 1 o f the F AA a nd Cir cu i tCi ty as a co ntra ct o fem ploym ent o f10 N os. 11

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w or ker s e ngage d i n the m ov em ent o fgo ods i n i nter sta te co m m er ce , a nd the r e be i ngno b as i s f o r di st i nguish i ng Cen t r al Car t age, th is a p p ea l is d ism iss e d for lac k of a p p ell at e j ur i sdi ct i o n.

12- 13- 12