Opinion ID: 1232908
Heading Depth: 2
Heading Rank: 3

Heading: Attorney Fees and Litigation Costs

Text: CRST finally argues the district court erred in awarding attorney fees and litigation costs because (1) the district court was required to award attorney fees and litigation costs, if at all, under 29 U.S.C. § 1132 instead of under Article III § 6 of the Trust Agreement, and (2) the Trust Agreement was a contract of adhesion.
CRST first claims the district court's award of attorney fees and litigation costs to Central States was erroneous because the district court did not use 29 U.S.C. § 1132(g)(1), and its corresponding five factor test, which CRST asserts preempted Article III § 6 of the Trust Agreement. Central States responds CRST failed to argue in the district court why 29 U.S.C. § 1132(g)(1) applies to this case, and has thus waived the argument. Although CRST did not memorialize the exact arguments it makes on appeal in its resistance to Central States's motion for attorney fees, CRST did argue the application of 29 U.S.C. § 1132(g)(1) and its five factor test in the district court. The district court's order recognized CRST's attempt to apply 29 U.S.C. § 1132(g)(1). CRST thus sufficiently raised the issue of the applicability of 29 U.S.C. § 1132(g)(1) in the district court. See Universal Title Ins. Co. v. United States, 942 F.2d 1311, 1314 (8th Cir.1991) (explaining whether an issue has been waived for appeal is not determined by a new argument raised on appeal, but instead whether the new argument raises a new issue on appeal). Further, whether Article III § 6 is preempted by ERISA is a purely legal question which does not require additional evidence or argument, and which we can review de novo for the first time on appeal. See Orr v. Wal-Mart Stores, Inc., 297 F.3d 720, 725 (8th Cir.2002); Sheehan, 372 F.3d at 966. Under the American Rule, a successful litigant is not entitled to attorney fees unless attorney fees are authorized by statute or allocated in an enforceable contract. See Travelers Cas. & Sur. Co. of Am. v. Pac. Gas & Elec. Co., 549 U.S. 443, 448, 127 S.Ct. 1199, 167 L.Ed.2d 178 (2007). Under 29 U.S.C. § 1132(g)(1), a district court may, in its discretion, award attorney fees [i]n any action under this subchapter ... by a participant, beneficiary, or fiduciary. 29 U.S.C. § 1144(a) provides, [ERISA subchapters I and III] shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan. CRST contends, under 29 U.S.C. § 1144(a), Article III § 6 of the Trust Agreement was preempted by 29 U.S.C. § 1132(g)(1). CRST also asserts 29 U.S.C. § 1132(g)(1) provides a specific remedy fashioned by Congress which could not be altered by the Trust Agreement in this case. We disagree. The language of 29 U.S.C. § 1132(g)(1) authorizes a district court to award attorney fees in an action brought by  a participant, beneficiary, or fiduciary.  (emphasis added). Based upon the plain language of the statute, 29 U.S.C. § 1132(g)(1) does not apply to employers, and does not preempt a contractual provision which allows attorney fees against an employer in litigation involving expulsion of the employer from a pension fund. Cf. 29 U.S.C. § 1132(g)(2)(D) (requiring an award of attorney fees to a pension plan in an action brought by the plan against an employer for delinquent payments). In this case, the district court awarded attorney fees against CRST, the employer. Article III § 6 authorized this award. The district court did not err in awarding attorney fees to Central States under the Trust Agreement. [5]
CRST also asks this court to render the attorney fees provision in Article III § 6 unenforceable as a contract of adhesion. CRST claims Article III § 6 is unilateral, one-sided and unenforceable because (1) CRST is not a party to the Trust Agreement; (2) CRST does not have a right to review or accept modifications or amendments to the Trust Agreement; (3) CRST does not know when Article III § 6 was adopted; (4) CRST did not have bargaining ability over Article III § 6; and (5) Article III § 6 deters employers and employee beneficiaries from bringing a lawful action under ERISA to challenge expulsion of an employer. CRST failed to raise this argument in the district court. Unlike CRST's preemption argument, this argument involves factual contentions which may be impacted by additional evidence or argument. See Universal Title, 942 F.2d at 1314-15. We will thus review CRST's argument for plain error and will reverse the district court only to prevent a miscarriage of justice. Cole v. Intern. Union, United Auto., Aerospace & Agric. Implement Workers of Am., 533 F.3d 932, 936 (8th Cir.2008) (citation omitted). Under Article XIV § 7, the Trust Agreement is governed and controlled by Illinois law. Under Illinois law, [a]n adhesion contract is generally a form agreement submitted to a party for acceptance without any opportunity to negotiate terms. Endsley v. City of Chicago, 319 Ill.App.3d 1009, 253 Ill.Dec. 585, 745 N.E.2d 708, 717 (2001) (citation omitted). [C]ontracts of adhesion are generally lawful, and mere disparity of bargaining power is not sufficient grounds to vitiate contractual obligations. Abbott v. Amoco Oil Co., 249 Ill.App.3d 774, 189 Ill.Dec. 88, 619 N.E.2d 789, 794-95 (1993) (internal marks and citations omitted). Article III § 6 of the Trust Agreement is not an unenforceable contract of adhesion. There is no evidence in the record that CRST had no bargaining power or no right to review or accept plan amendments or modifications. Five of the ten Trustees of Central States are selected by participating employers. Similarly, there is no evidence to suggest CRST did not voluntarily enter into the Participation Agreement or the collective bargaining agreement with Local 238, which established CRST's intent to be bound by the Trust Agreement's terms, rules, and regulations. There is also no evidence in the record that Article III § 6 has a deterrent effect. Article III § 6 does not apply to employee participants, and only allows Central States to recover attorney fees and litigation costs from an employer when Central States's expulsion remains effective by judgment or settlement. On this record, Article III § 6 is not an illegal adhesion contract, and the district court did not err in awarding Central States attorney fees and litigation costs.