Source: http://openjurist.org/267/f3d/807/minnesota-chapter-of-associated-builders-and-contractors-inc-v-minnesota-department-of-public-safety
Timestamp: 2015-11-27 01:41:44
Document Index: 349291008

Matched Legal Cases: ['§ 1001', '§ 1291', '§ 1292', '§ 178', '§ 178', '§ 1001', '§ 514', '§ 1144', '§ 514']

267 F3d 807 Minnesota Chapter of Associated Builders and Contractors Inc v. Minnesota Department of Public Safety | OpenJurist
267 F. 3d 807 - Minnesota Chapter of Associated Builders and Contractors Inc v. Minnesota Department of Public Safety HomeFederal Reporter, Third Series267 F.3d
267 F3d 807 Minnesota Chapter of Associated Builders and Contractors Inc v. Minnesota Department of Public Safety 267 F.3d 807 (8th Cir. 2001)
MINNESOTA CHAPTER OF ASSOCIATED BUILDERS AND CONTRACTORS, INC., A MINNESOTA CORPORATION; NORTH CENTRAL CHAPTER OF THE AMERICAN FIRE SPRINKLER ASSOCIATION, AN UNINCORPORATED ASSOCIATION; ALLIED MECHANICAL SYSTEMS OF HUTCHINSON, INC., A MINNESOTA CORPORATION; EBERT & HINSON FIRE PROTECTION, INC., A MINNESOTA CORPORATION; AND GENERAL SPRINKLER CORPORATION, A SOUTH DAKOTA CORPORATION, PLAINTIFFS-APPELLEES,v.MINNESOTA DEPARTMENT OF PUBLIC SAFETY AND MICHAEL JORDAN, COMMISSIONER OF PUBLIC SAFETY, DEFENDANTS-APPELLEES,SPRINKLER FITTERS LOCAL 417, INTERVENOR-APPELLANT.BUILDING AND CONSTRUCTION TRADES DEPARTMENT, AFL-CIO, AMICUS CURIAE.
No. 00-3230
Submitted: May 17, 2001Filed: October 5, 2001
Appeal from the United States District Court for the District of MinnesotaBefore Morris Sheppard Arnold and Bye, Circuit Judges, and Gaitan,1 District Judge.
Gaitan, District Judge.
This case presents the issue of whether portions of the Minnesota Sprinkler Fitter statute and rules which require contractors to adopt approved apprenticeship programs is preempted by the Employee Retirement Income Security Act of 1974, 29 U.S.C. § § 1001, et seq. ("ERISA"). The district court held that the statute and rules were preempted and issued a permanent injunction preventing enforcement of the apprenticeship regulations. We exercise jurisdiction pursuant to 28 U.S.C. § 1291 and 28 U.S.C. § 1292(a)(1) and affirm.
In 1992, the Minnesota legislature passed the Sprinkler Fitter Licensing Law which comprehensively regulated the fire protection industry in Minnesota. See, 1992 Minnesota Laws, Chap. 508. The statute was codified as Minn.Stat.Chap. 299M. Section 299M.04 gave statutory authority to the Minnesota Department of Public Safety to promulgate rules governing Chap. 299M. One of the statutory provisions of the Sprinkler Fitter Licensing statute was the requirement that only licensed journeymen and registered apprentices could perform fire protection work. The law required apprentices to be actively enrolled in a registered apprenticeship program and registered with a federal or state agency that approved apprenticeship programs.
In 1994, the Minnesota Department of Public Safety issued rules putting into effect the statutory provisions of Minn.Stat.Chap. 229M. The rules defined "federal approval agency" as "the United States Department of Labor, Bureau of Apprenticeship and Training" and the "state approval agency" was defined as "the Department of Labor and Industry or a state agency in Minnesota or another state if the commissioner determines that the state agency approves training programs and monitors apprentice or trainee progress in a manner comparable to that done by the Department of Labor and Industry or by the United States Department of Labor, Bureau of Apprenticeship and Training." Minn.R. 7512.0100, subps. 7, 14.
The statute and rules require all Minnesota sprinkler contractors to maintain an apprenticeship program approved by the Minnesota Department of Labor and Industry and to register all of their apprentices in the approved apprenticeship program. Minn.R. 7512.0100, subps. 1,7,14; Minn. R.7512.0900, subp. 3; Minn.R. 7512.2100. Contractors without an approved program could not employ apprentices in the state.
To obtain an approved apprenticeship program, contractors had to meet a number of requirements: 1) the apprenticeship program had to be of the same duration as the majority of apprenticeship programs on file with the Department of Labor and Industry; Minn. Stat. § 178.06; Minn. R. 5200.0320, subp. 1; Minn.R. 5200.0390, subp. 1; 2) the apprentice wage structure had to be based on the prevailing wage for sprinkler fitters in the county in which the contractor was headquartered, Minn.R. 5200.0390, subp. 2; 3) contractors had to adopt the same graduated pay scale for apprentices as was found in the majority of apprenticeship programs on file with the Department of Labor and Industry, Minn.R. 5200.0320, subp. 10; Minn.R. 5200.0390, subp. 1; 4) apprenticeship programs had to provide for at least 144 hours of "related" or classroom instruction per year, Minn. Stat. § 178.07, Minn.R. 5200.0320, subp. 11; and 5) contractors had to register apprentices in accordance with the journeyman-apprentice ratios established by the Department of Labor and Industry2
In 1994, plaintiffs, the Minnesota Chapter of Associated Builders and Contractors ("ABC") and certain affiliated contractors, brought suit in the district court seeking to enjoin portions of the Minnesota statute and rules governing the apprenticeship programs. The parties stipulated to a temporary injunction barring enforcement of the statute and rules while the court determined the issues raised in the complaint. In early 1995, the parties filed cross motions for summary judgment and in March 1996, the district court issued an order finding that the statute and rules were preempted by ERISA and permanently enjoined the State Department of Public Safety from enforcing those provisions of the statute and rules. That order and permanent injunction were not appealed and remain in effect. The statute and rules have not been repealed or changed since the injunction was issued.
On February 1, 2000, Sprinkler Fitters Local 417, a labor organization representing journeyman and registered apprentice sprinkler fitters in the State of Minnesota, moved to intervene in the case and to have the injunction dissolved due to an intervening change in the law. The union claimed that the Supreme Court's decision in California Div. of Labor Standards Enforcement v. Dillingham Construction, N.A. Inc., 519 U.S. 316, 117 S.Ct. 832, 136 L.Ed.2d 791 (1997), made the injunction "inappropriate," in light of new criteria established by the Court for determining whether ERISA preempted state law. ABC opposed the motion. The district court granted the union's motion to intervene, but denied the motion to dissolve the injunction. The union filed the instant appeal.
The district court in its order denying the motion to dissolve the injunction noted that the Supreme Court in Dillingham recognized a distinction between laws which created incentives for the adoption of an approved apprenticeship plans or created indirect economic incentives, and those laws such as the Minnesota statute and rules, which required the adoption of an approved apprenticeship plans. The district court also found that the Supreme Court had not specifically overruled its earlier ERISA precedents, including those on which Boise Cascade Co. v. Peterson, 939 F.2d 632 (8th Cir. 1991), cert. denied, 505 U.S. 1213 (1992) were based. The district court thus found that Minnesota's statute and rules "related to" an ERISA plan under the "connection with" prong and were therefore preempted by ERISA.
The issue of whether the injunction issued by the district court has any continued legal basis is purely a question of law which we review de novo.
"ERISA, codified at 29 U.S.C. § 1001-1461 (1994) 'is a comprehensive statute that sets certain uniform standards and requirements for employee benefit plans.'" Wilson v. Zoellner, 114 F.3d 713, 715 (8th Cir. 1997), quoting, Arkansas Blue Cross & Blue Shield v. St. Mary's Hosp., Inc., 947 F.2d 1341, 1343 n.1 (8th Cir. 1991), cert. denied, 504 U.S. 957 (1992). "It was enacted in response to growing concerns about 'the mismanagement of funds accumulated to finance employee benefits and the failure to pay employees benefits from accumulated funds.'" Carpenters Local Union No. 26 v. U.S. Fidelity & Guar.Co., 215 F.3d 136, 139 (1st Cir. 2000), quoting, Massachusetts v. Morash, 490 U.S. 107, 115, 109 S.Ct. 1668, 104 L.Ed.2d 98 (1989).
"To meet the goals of a comprehensive and pervasive Federal interest and the interests of uniformity with respect to interstate plans, Congress included an express preemption clause in ERISA for the displacement of State action in the field of private employee benefit programs." Wilson, 114 F.3d at 715-16 (internal citations and quotations omitted). In New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995), the Court stated:
[w]e have found that in passing § 514(a), Congress intended 'to ensure that plans and plan sponsors would be subject to a uniform body of benefits law; the goal was to minimize the administrative and financial burden of complying with conflicting directives among States or between States and the Federal Government..., [and to prevent] the potential for conflict in substantive law... requiring the tailoring of plans and employer conduct to the peculiarities of the law of each jurisdiction.'
Id. at 656, citing, Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 142, 111 S.Ct. 478, 484, 112 L.Ed.2d 474 (1990).
ERISA's preemption clause states:
Except as provided in subsection (b) of this section, the provisions of this subchapter and subchapter III of this chapter shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in section 1003(a) of this title and not exempt under section 1003(b) of this title....
29 U.S.C. § 1144(a), § 514(a). "Thus, when state-law claims 'relate-to' ERISA plans, those claims are transmuted into ERISA claims." Carpenters Local Union No. 26, 215 F.3d at 139.
B. The Dillingham Decision.
Local 417 notes that the issue of whether ERISA preempts a particular state law has caused a great deal of confusion over the last twenty years. Local 417 argues that because the Supreme Court in Dillingham significantly changed the way in which preemption questions are analyzed, there is no longer any basis for the injunction and it should be dissolved.
In Carpenters Local Union No. 26, the Court explained:
As the language of section 1144(a) makes plain, the incidence of ERISA preemption turns on the parameters of the phrase "relate to." See California Div. of Labor Standards Enforcement v. Dillingham Constr., 519 U.S. 316, 324, 117 S.Ct. 832, 136 L.Ed.2d 791 (1997). That locution is not self-defining, and the Justices have been at least mildly schizophrenic in mapping its contours. The Court initially glossed the phrase by portraying the scope of ERISA preemption as "deliberately expansive." Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 46, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987). As time passed, it grew more guarded, emphasizing the "starting presumption that Congress does not intend to supplant state law," New York State Conf. of Blue Cross & Blue