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### MAR 20 2014

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IN THE SUPREME COURT OF THE STATE OF WASHINGTON
W.G. CLARK. CONSTRUCTION CO., a ) Washington corporation, ) No. 88080-8 ) Respondent, ) EnBanc ) v. ) ) PACIFIC NORTHWESTREGIONAL ) COUNCIL OF CARPENTERS, a Local ) Union; CARPENTERS HEALTH & ) SECURITY TRUST OF WESTERN ) WASHINGTON; CARPENTERS ) RETIREMENT TRUST; CARPENTERS- ) EMPLOYERS VACATION TRUST; ) CARPENTERS-EMPLOYERS ) APPRENTICESHIP & TRAININGTRUST; ) and PARAMOUNT SCAFFOLD, INC., ) a Washington corporation, ) ) 

### MAR 20 

## 2014 Appellants. ) Filed ) OWENS, J.

-- TheEmployee Retirement Income SecurityAct of 1974 (ERISA) is a set offederal laws that regulates pension and welfareplans. Toprovide national uniformity inplan administration, ERISA preempts most state laws that "relate to" employee benefitplans. 29 U.S.C. § 1144(a). At issue in this case isWG. ClarkConstr. Co. v. Pac. Nw. Reg'! Council ofCarpenters No. 88080-8 whetherERISApreempts claims made under two Washington state laws designed to
ensure that workers onpublic projects are paid for their work: chapters 39.08 and 60.28 RCW. Whenwe previously addressed this issue in 1994 and 2000, weheld that ERISA preempted such claims. PugetSoundElec. Workers Health & Welfare Trust Fundv. Merit Co., 123 Wn.2d 565, 870 P.2d 960 (1994); Int'lBhd. ofElec. Workers, Local Union No. 46v. Trig Elec. Constr. Co., 142 Wn.2d 431, 13 P.3d 622 (2000). Since then, however, courts across the country (including federal courts here in the Ninth Circuit) have analyzed the United States Supreme Court's developing ERISApreemptionjurisprudence and come to a consensus that these types ofstate law claims are not preempted by ERISA because theyhave only a tenuous connection to ERISA plans. See, e.g., 

### S. Cal. IBEW-NECA Trust Funds v. StandardIndus. Elec. Co., 247 F.3d 920, 925-27 (9th Cir. 2001). As a result ofthis conflict between our rule and the rule followed by federal courts, the outcome ofthis type ofcase in Washington is entirely dependent onwhether the lawsuit is filed in federal or state court. This has led to blatant forum shopping and created inconsistent and unjust results for parties inWashington, as lamented byboththe superior courtjudge inthis
case and the federal district courtjudge in the parallel federal case. In light ofthe national shift in ERISA preemptionjurisprudence and the persuasive reasoning underlying that shift, we nowjoin courts across the country and hold that this type of state law is notpreemptedby ERISA.

2WG. ClarkConstr. Co. v. Pac. Nw. Reg'! Council ofCarpenters No. 88080-8 FACTS Thebasic facts ofthis case are largely undisputed. In 2010, the University of Washington contracted with W.G. Clark Construction Co. for a studenthousing constructionproject. W.G. Clark subcontracted certain scaffolding work onthe projectto Paramount Scaffold, Inc. Paramount entered into a collective bargaining agreement with the Pacific NorthwestRegional Council ofCarpenters (Union) to provide laborers for the scaffolding work. As is common in this type oflabor agreement, Paramount agreed to compensate the laborers for their work intwo ways: bypaying wages and by making contributions to certaintrusts that provide benefits to the laborers, their dependents, and their beneficiaries (collectivelythe Trusts). 1 InJune 2012, the Trusts and the Unionreported thatParamounthad failed to make $64,905.48 in required payments to the Trusts for workperformed bythe Union laborers. Later records indicate that Paramountwas insolvent. The Trusts and the Union issued a notice ofclaim on lien onthe student housing project pursuantto chapters 39.08 and 60.28 RCW (statutes designed to ensure that workers onpublic works projects are paid for their work, as discussed in more detail below). The lien
was served on Paramount, W.G. Clark, the University ofWashington, and the insurance company that issued the performance bond onthe project.

1The trusts in this case are the Carpenters Health & Security Trust ofWestern Washington, the Carpenters Retirement Trust, the Carpenters-Employers Vacation Trust, and the Carpenters-Employers Apprenticeship & Training Trust.
3WG. ClarkConstr. Co. v. Pac. Nw. Reg'! Council a/Carpenters No. 88080-8 W.O. Clark filed for declaratoryjudgment in King County Superior Court, requesting that the lien be released. W.O. Clark moved for summaryjudgment, arguing that ERISA preempted any claims the Trusts mighthave under chapters 39.08 and 60.28 RCW. Shortly thereafter, the Trusts filed a separate action in the United States District Court for the Western District ofWashington, seeking foreclosure on the lien and monetary damages. The King County Superior Courtjudge granted summaryjudgmentto W.O. Clark, ruling that our state precedent is clear that such state law claims are preempted byERISA. Thejudge acknowledged thatthe outcome wouldhave been different in federal court and lamented, "Ultimately, this is going to have to getresolved one way
or another
.... [F]rom my perspective, it's broken." Clerk's Papers at 465. In light ofthejudge's decision in the King County Superior Court case, United States District Court Judge Ricardo Martinez ruled thathe hadno choice butto dismiss the federal case. Nonetheless, hepointed outthe serious consequences ofthe existing conflict between the state and federal courts onthis issue: The situation is unfortunate, because diverging results in state and federal court inevitablyperpetuate the practice offorum shopping. As in the present case, Defendants acknowledge they filed a "preemptive declaratoryjudgment action" (Dkt. 

### #22, p. 5) in Superior Court in order to receive a favorable ruling. Such action constitutes blatant forum shopping, which is highly discouraged. Br. ofthe Appellant Carpenters Trusts, Ex. 1, at 7-8.

4WG. Clark Constr. Co. v. Pac. Nw. Reg'l Council a/Carpenters No. 88080-8 The Trusts appealed the King County Superior Court ruling to this court and
we granted direct review. ISSUE Should we adopt the reasoning ofthe federal courts and hold that under current United States Supreme Court precedent, ERISA does notpreemptthe Trusts' chapters 39.08 and 60.28 RCW claims? ANALYSIS ERISA is a set offederal laws thatregulates pension and welfare plans. Merit, 123 Wn.2d at 568. Congress passed ERISA in 1974 with two goals in mind: "to protect plan participants and beneficiaries from abuses and mismanagement in the administration ofemployee pension and benefit plans" and "to protect plan administrators from the 'burdenthat would be imposed by apatchwork scheme of regulation."' Haw. Laborers' Trust Funds 

### v. Maui PrinceHotel, 81 Haw. 487,493, 918 P.2d 1143 (1996) (quoting FortHalifax Packing Co. v. Coyne, 482 U.S. 1, 11-12, 107 S. Ct. 2211, 96 L. Ed. 2d 1 (1987)). The second goal was addressed through ERISA's preemption clause, whichprovides that ERISA "shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefitplan" covered under ERISA. 29 U.S.C. § 1144(a). At issue inthis case is whether ERISA preempts claims made under two Washington state laws: chapters 39.08 and 60.28 RCW. Under chapter 39.08 RCW, a

5WG. Clark Constr. Co. v. Pac. Nw. Reg'! Council ofCarpenters No. 88080-8 general contractor on a public works projectmust execute and deliver a bond to the public agency. RCW 39.08.010(1)(a). The bond ensures that "all laborers, mechanics, and subcontractors and material suppliers" onthe project are paid for their work. RCW 39.080.010(1)(a)(ii). Such individuals have a right ofaction against the bond ifthey are not paid for their work. RCW 39.08.010(1)(b). Chapter 60.28 RCW also provides protections for workers onpublic improvement contracts. Itrequires the public agency to retain a percentage ofthe money earned by the general contractor for the protection and payment ofclaims under the contract. RCW 60.28.011(1)(a). Any person performing labor or furnishing supplies under the public improvement contract has lien rights against the retained percentage. RCW 60.28.011(2). Notably, both statutes apply generally to any laborer, supplier, or subcontractor on a project, and neither makes any reference to ERISA plans. As described above, the workers onthis project did not receive the compensationthey were owed in the form ofpayments to the Trusts thatprovide the workers with various health and retirementbenefits, butthe superior courtruled that under this court's precedent inMerit and Trig Electric, the Trusts' claims under chapters 39.08 and 60.28 RCW are preempted by ERISA. The Trusts appeal that ruling, arguing that chapters 39.08 and 60.28 RCW are notpreemptedby ERISA under current federaljurisprudence and that Washington courts should adopt the reasoning ofthe federal courts. We agree. First, we agree withthe reasoning ofthe

6WG. Clark Constr. Co. v. Pac. Nw. Reg'l Council ofCarpenters No. 88080-8 federal courts, which have concluded that current United States Supreme Court case law requires that we begin our ERISA preemption analysis with apresumption that state law is notpreempted, and that laws ofgeneral applicability with only "atenuous, remote, or peripheral connectionwith ERISA plans" are not preempted. See Standard Indus., 247 F.3d at 927 (citing District of Columbia v. Greater Wash. Bd. ofTrade, 506 U.S. 125, 130 n.l, 113 S. Ct. 580, 121 L. Ed. 2d 513 (1992)). Second, we recognize the needto address the current conflict between state and federal courts in Washington, which has resulted inblatant forum shopping and created inconsistent and unjust results for parties in Washington. I. We Agree with theNational Consensus That These StateLawsAreNot PreemptedbyERISA under Current UnitedStates Supreme Court Case Law ERISA preemption is a matter offederal law. Mackey v. Lanier Collection Agency & Serv., Inc., 486 U.S. 825, 830, 108 S. Ct. 2182, 100 L. Ed. 2d 836 (1988). On matters offederal law, we are bound by the decisions ofthe United States Supreme Court. Home Ins. Co. ofN.Y v. N. Pac. Ry., 18 Wn.2d 798, 808, 140 P.2d 507 (1943). Decisions ofthe federal circuit courts are "entitledto great weight" but
are not binding. Id. InMerit, we cited four federal circuit court opinions to support
our interpretation ofUnited States Supreme Court case law onERISA preemption. See Merit, 123 Wn.2d at 572. Buttwo ofthese cases were later expressly overruled, and the other two involved statutes that-unlikethose at issue here-expressly

7W. G. Clark Constr. Co. v. Pac. Nw. Reg 'l Council of Carpenters No. 88080-8 referred to benefittrust funds. See StandardIndus., 247 F.3d at 929 (expressly overruling two ofthe cases cited inMerit); Merit, 123 Wn.2d at 572-73 (describing the statutes considered in two ofthe federal circuit cases as expressly referring to ERISA plans); Carpenters Local Union No. 26v. US. Fid. & Guar. Co., 215 F.3d 136, 142 (1st Cir. 2000) (describing the reasoning ofthe earlier First Circuit case as relying onthe fact that the statute "'expressly single[d] outERISA plans for special treatment"' (alteration in original) (quotingMcCoy v. Mass. Inst. of Tech., 950 F.2d 13, 19 (1st Cir. 1991))). Therefore, it is appropriate for us to consider current federal circuit court case law onERISA preemption in our analysis. Courts throughout the country-both state and federal-have reached a
consensus thatunder the United States Supreme Court's ruling inNew YorkState Conference of Blue Cross &Blue ShieldPlans v. Travelers Insurance Co., 514 U.S. 645, 115 S. Ct. 1671, 131 L. Ed. 2d 695 (1995), ERISA does notpreempt state lien statutes that are generally designed to ensure that workers are paid for their work and do not specifically target benefittrust funds. See generallyForsberg v. BovisLend Lease, Inc., 2008 UTApp 146,**~** 32 n.19, 184 P.3d 610 (reviewing the history ofthis issue and noting that althoughprior to Travelers, many courts had concluded that this type ofclaim was preempted by ERISA, "[t]he onlypost-Travelers case we have found that holds ERISA preempts a mechanics' lien statute ofgeneral application is [TrigElectric]."); Cent. Laborers'PensionFundv. Nicholas & Assocs., Inc., 2011 IL

8WG. Clark Constr. Co. v. Pac. Nw. Reg'! Council a/Carpenters No. 88080-8 

### App (2d) 100125,**~~** 

### 32-45, 956 N.E.2d 609,353 Ill. Dec. 747 (noting that Trig Electric 

### now represents the "minority view" on this issue and citing no other courts that currently adhere to its approach), certdenied, 

### 132 S. Ct. 2380 (2012). The Ninth Circuit Court ofAppeals' analysis in StandardIndustrial 

### is representative ofthese cases, and we find its reasoning persuasive. The court started with the presumption laid out bythe United States Supreme Court '"that Congress did not

### intend ERISA to preempt areas of"traditional state regulation" that are quite remote from the areas with which ERISA is expressly concerned."' StandardIndus., 

### 247 F.3d at 928-29 (quotingRutledge v. Seyfarth, Shaw, Fairweather & Geraldson, 

### 201 F.3d 1212, 1217 (9th Cir. 2000)). The court then turned to the test laid outby the United States Supreme Court: a state law "'relates to"' ERISA-and is thus preempted-ifit has a '"connection with'" or a "'reference to'" ERISA plans. !d. 

### at 925 (quoting Geweke Fordv. St. Joseph's OmniPreferred Care Inc., 

### 130 F.3d 1355, 1358 (9th Cir. 1997)). "A statute has an impermissible 'reference to' an employee benefit plan ifit acts immediately and exclusively upon the plans or ifthe plans are essential to the law's operation." !d. 

### (quotingEgelhoffv. Egelhoff, 

### 532 U.S. 141, 147, 121 S. Ct. 1322, 149 L. 

### Ed. 2d 264 (2001)). A statute has a '"connection with"' ERISA ifit "'implicates an area ofcore ERISA concern' andjeopardizes national uniformity in plan administration." !d. 

### (quoting Egelhoff, 

### 532 U.S. at 147).

9W G. Clark Constr. Co. v. Pac. Nw. Reg'l Council a,[Carpenters No. 88080-8 Applying this rule to a state law thatrequired public works projects to issue paymentbonds to ensure workers are paid for their labor, the court concludedthat the law had neither a "'connection with"' nor a '"referenceto"' ERISA plans. Id. at 925- 26 (quoting Geweke Ford, 130 F.3d at 1358). The court reasoned that such laws do notrequire the establishment ofa separate plan or impose any reporting, disclosure, funding, or vesting requirements for ERISA plans. 

### ld. at 925. The court also pointed outthat the statute functions irrespective ofany ERISA plans. 

### !d. at 926. Itis simply
a general law that ensures workers receive payment for their work onpublic projects and has no special applicability to ERISAplans. Ultimately, the court concludedthat "the effect ofthis state regulated relationship on ERISA's domain is too tenuous to precipitate preemptionunder ERISA." 

### ld. at 927. As described above, courts across the country have come to the same conclusion. This reasoning is sound and we now adopt it. These statutes are inplace to
ensure that workers onpublic projects are paid for their work. They apply generally to all workers onpublic projects, regardless ofthe type ofworkthey perform orhow they are paid. The laws have nothing to do with regulating howpensionplans operate and thus do not encroach onERISA's territory. 11. These State ClaimsAre outside ERISA 

### 's Scope and Thus AreNot AlternativeEnforcementMechanisms Generally, state statutes that provide plans and participants with alternative mechanisms for enforcing ERISA obligations are preempted. Ingersoll-Rand Co. v.
10WG. Clark Constr. Co. v. Pac. Nw. Reg'! Council a/Carpenters No. 88080-8 

### McClendon, 498 U.S. 133, 144, 111 S. Ct. 478, 112 L. Ed. 2d 474 (1990) (explaining that Congress intended for Section 502(a) ofERISA, 29 U.S.C. § 1132(a), to provide the "exclusive remedy for rights guaranteed under ERISA"). W.G. Clark argues that chapters 39.08 and 60.28 RCWprovide such alternative enforcement mechanisms, but this same argument has been raised across the country and rejected time after time because such statutes are not a mechanism for enforcing ERISA obligations. 

### See, e.g., BellemeadDev. Corp. v. NJ. State Council of Carpenters BenefitFunds, 11 F. Supp. 2d 500, 517 (D.N.J. 1998); 

### Maui Prince Hotel, 81 Haw. at 499-500; 

### Plumber'sLocal 458 Holiday Vacation Fundv. HowardImmel, Inc., 151 Wis. 2d 233, 238-39,445 N.W.2d 43 (1989). Inrejectingthis alternative mechanism argument, courts have relied onthe

### Mackey case, where the United States Supreme Court ruled that ERISA did not preempt garnishment ofERISA plan benefits,just as it does notpreempt "runof-the mill state-law claims such as unpaidrent, failure to pay creditors, or eventorts committed by an ERISA plan." 486 U.S. at 833. Ifplans are subjectto such run-ofthe-mill state-law claims, they should also be able to file such claims themselves. 

### See HowardImmel, 151 Wis. 2d at 238-39. This isjust such a general state law claim that allows the trust fund to recover amounts owed to it,justlike any other worker on a public project. More fundamentally, the argument that these statutes are alternative enforcement mechanisms fails because state lien claims that apply to third parties are

11WG. Clark Constr. Co. v. Pac. Nw. Reg'! Council ofCarpenters No. 88080-8 outside the scope ofERISA and thus not preempted. 

### See Bellemead, 11 F. Supp. 2d at 517. ERISA regulates the responsibilities ofemployers and those administering pensionplans with the goal of"protect[ing] planparticipants and beneficiaries from abuses and mismanagement in the administration ofemployee pension and benefit plans." 

### Maui PrinceHotel, 81 Haw. at 493. Here, W.G. Clark is not an employer or plan administrator and thus is not subject to ERISA obligations. W.G. Clark contends that since it has no obligations under ERISA, state law cannot impose any similar obligations. Butthe state laws at issue do not assign any ERISA-like obligations to W.G. Clark. The state law has nothing to do with the administration or management ofa pensionplan. It simply provides a mechanism to ensure that all workers on public projects are paid the amounts they are owed. Ensuring workers are paid for their work does not fall withinthe scope ofERISA. Because we hold that ERISA does not preemptthe Trusts' claims, we do not reach their argument that to hold otherwise would violate their due process and equal protection rights. 

### III. Stare Decisis Finally, we take this opportunity to clarify howwe apply the doctrine ofstare decisis when the United States Supreme Court provides additional guidance or clarifies the proper analytical approach for a federal issue. Generally, under stare decisis, we will not overturnpriorprecedent unless there has been "aclear showing

12WG. Clark Constr. Co. v. Pac. Nw. Reg'! Council ofCarpenters No. 88080-8 that an established rule is incorrect and hannful." In re Rights to Waters of Stranger Creek, 77 Wn.2d 649, 653, 466 P.2d 508 (1970). However, this court must have the flexibility to consider emergingUnited States Supreme Court case law when considering earlier decisions on federal issues. As the First Circuit thoughtfully remarked when considering this issue, stare decisis is neither a straightjacketnor an immutable rule; it leaves room for courts to balance their respect for precedent against insights gleaned from new developments, and to make informedjudgments as to whether earlier decisions retainpreclusive force. US. Fid. & Guar. Co., 215 F.3d at 142. The court observed that there are '"relatively rare'" occasions when a court should eschewpriorprecedent in deference to intervening authority. Id. at 141 (quoting Williams v. AshlandEng'g Co., 45 F.3d 588, 592 (1st Cir. 1995)). We agree. The doctrine ofstare decisis should notkeep this court from fully considering all United States Supreme Court guidance on federal issues, even whenthe newer cases have not directly overruled or superseded prior
cases. See id. at 141-42. Thus, we can reconsider ourprecedentnot only when it is has been shownto be incorrect and harmful but also whenthe legal underpinnings ofourprecedenthave changed or disappeared altogether. See UnitedStates v. Gaudin, 515 U.S. 506, 521, 115 S. Ct. 2310, 132 

### L. Ed. 2d 444 (1995) (declaring that stare decisis may yield when a precedent's "underpinnings [have been] eroded[] by subsequent decisions of [the] Court"); PlannedParenthoodofSe. Pa. v. Casey, 505 U.S. 833, 854-55, 112 S.

13WG. Clark Constr. Co. v. Pac. Nw. Reg'! Council a/Carpenters No. 88080-8 Ct. 2791, 120 

### L. Ed. 2d 674 (1992) (observing that review ofa precedent mightbe justified when "relatedprinciples oflaw have so far developed as to have left the old rule no more than a remnant ofabandoned doctrine"). CONCLUSION Merit was a reasonable interpretation ofUnited States Supreme Court precedent in 1994, butthe United States Supreme Court has since narrowed its ERISA preemption doctrine. Since the last time we consideredthe rule in Trig Electric, other jurisdictions, including theNinth Circuit Court ofAppeals, have consistentlyheld that these types ofstate claims are notpreempted byERISA. Not only is their reasoning persuasive, butthe existing split encourages litigants to engage in blatant and harmful forum shopping. We take this opportunityto update our approach to ERISA preemption in light ofthese developments. We reverse the trial court's summary judgmentruling and remand for further proceedings in accordance with this opinion.

14W G. Clark Constr. Co. v. Pac. Nw. Reg'l Council of Carpenters No. 88080-8

WE CONCUR:

15