Court Opinion

ID: 2963082
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:06:13.635393+00
Date Added: 2024-06-11T11:42:38.104114
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USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                              _________________________          No. 94-2046                           WILLIAM WILLIAMS, ETC., ET AL.,                               Plaintiffs, Appellants,                                          v.                        ASHLAND ENGINEERING CO., INC., ET AL.,                                Defendants, Appellees.                              __________________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                [Hon. Walter Jay Skinner, Senior U.S. District Judge]
                                          __________________________                              __________________________                                        Before                       Selya, Boudin and Stahl, Circuit Judges.
                                                ______________                              __________________________               Robert O. Berger for appellants.
               ________________               Bradford  R. Carver,  with whom Edward  F. Vena,  Michael S.
               ___________________             _______________   __________          Levitz, and Vena, Truelove & Riley were on brief, for appellees.
          ______      ______________________                              __________________________                                   January 31, 1995                              __________________________

                    SELYA,  Circuit  Judge.   We  are  reminded today  that
                    SELYA,  Circuit  Judge.
                            ______________          malapropisms, despite their semantic shortcomings, often describe          the  human condition  with  unerring accuracy.    There are,  for          example, certain situations that  actually do evoke the sensation          of "d j  vu all over  again."1  We explain below why  this appeal
              _______          falls into that category.                    In McCoy  v. Massachusetts Institute of Technology, 950
                       _____     _____________________________________          F.2d 13  (1st Cir. 1991), cert.  denied, 112 S. Ct.  1939 (1992),
                                    _____  ______          the fiduciary  of several union-sponsored employee  benefit plans          brought  suit to  enforce a  lien  on real  property  owned by  a          university.   He alleged that  an electrical contractor  hired to          construct  improvements to  school  buildings had  employed union          members  to do  the work;  that the  contractor, heedless  of its          obligations under a collective bargaining agreement, neglected to          defray the  workers' employee  benefit contributions; and  that a          state  statute, Mass.  Gen. L.  ch. 254,  quoted in  the margin,2                              
          ____________________               1This  epigram is  often  attributed to  Lawrence P.  (Yogi)          Berra, a man as famous  for mangling the English language  as for          belting  baseballs.  Berra coined  many aphorisms    but not this          one.    See  Ralph  Keyes,  Nice  Guys  Finish  Seventh; Phrases,
                  ___                 _____________________________________          Spurious Sayings  and Familiar  Misquotations 152  (1992) (noting
          _____________________________________________          that  "although this  is commonly  cited as  a `Berra-ism,'  Yogi          Berra denies ever saying it").  The phrase's origin is unknown.               2The statute provides in relevant part:                         A  person  to whom  a  debt  is due  for                    personal  labor  performed  in the  erection,                    alteration, repair or  removal of a  building                    or  structure  upon  land,  by virtue  of  an                    agreement with, or by consent of, the owner .                    .  .  shall  . .  .  have  a  lien upon  such                    building or structure . . . .                         For purposes of  this chapter, a  person                                          2

          authorized  the  fiduciary  to collect  unpaid  contributions  by          asserting a mechanic's  lien against real property  that had been          improved through  the plan participants'  labor.  See  McCoy, 950
                                                            ___  _____          F.2d  at 15.    We held  that  the Employment  Retirement  Income          Security  Act of 1974 (ERISA), 29 U.S.C.    1001-1461 (1988), and          specifically,  ERISA    514(a), 29  U.S.C.    1144(a) (commanding          that ERISA "shall  supersede any  and all State  laws insofar  as          they  may now or hereafter relate to any employee benefit plan"),          preempted use of the Massachusetts  mechanic's lien law to recoup          the unpaid contributions.  See McCoy, 950 F.2d at 18-20.
                                     ___ _____                    The  case at  bar is  hauntingly reminiscent  of McCoy,
                                                                     _____          and,  thus, triggers the  sense of d j   vu.  Appellants  are the
                                             ________          trustees  of certain funds (the  Funds) maintained by  Local 4 of          the  International  Union  of  Operating Engineers  to  fuel  the          union's employee benefit  plans.   In 1991, members  of Local  4,          then employed directly or  indirectly by a subcontractor, Ashland                              
          ____________________                    shall  include any  employee of  any employer                    and the  trustee or  trustees of any  fund or                    funds, established pursuant to section 302 of                    the Taft Hartley Law  (29 USC 186), providing                    coverage or  benefits to  said  person.   The                    trustee or trustees of any such fund or funds                    shall have all the  liens under this  chapter                    that any person has.  The trustee or trustees                    shall  also have  the right  to enforce  said                    liens pursuant to this chapter.          Mass. Gen. L. ch. 254,   1 (1990).  The statute also specifically          provides  that "the  trustee  or trustees  of  a fund  or  funds,          described in section  one, providing coverage or  benefits to any          person  performing   labor  under  a  written   contract  with  a          contractor, or with a subcontractor of such contractor," may file          a lien notice,  id.   4, and  enforce the lien by  a civil action
                          ___          brought against the property owner, id.   5.
                                              ___                                          3

          Engineering   Company   (Ashland),   participated    in   ongoing          construction  under  the  auspices   of  the  Massachusetts  Port          Authority   (Massport).     A  collective   bargaining  agreement          obligated Ashland to contribute  monies to the Funds commensurate          with the number of hours each union member toiled on the Massport          project.                    In time, Ashland experienced financial problems, became          delinquent  on  contributions to  the  Funds,  and abandoned  the          Massport  project.   Noting  that  the  general contractor,  R.W.          Granger and  Sons, Inc. (Granger), had  posted a performance-and-          payment bond  underwritten by  United States Fidelity  & Guaranty          Company (USF&G), the trustees sued Ashland, Granger, and USF&G in          an effort to extract the unpaid employer contributions.                    The trustees' amended complaint contained three counts:          count  1 sought  to collect  payments due  from Ashland,  count 2          sought  to  collect these  payments  from USF&G  by  invoking the          Massachusetts  statute under which the bond had been posted,3 and                              
          ____________________               3The  bond statute  provides  in pertinent  part that,  when          state officials  contract for construction  of public  buildings,          they                    shall  obtain  security by  bond  .  . .  for                    payment by the contractor  and subcontractors                    for   labor   performed   or  furnished   and                    materials used  or employed  therein . .  . .                    and  for  payment   by  such  contractor  and                    subcontractors of any sums due trustees . . .                    authorized  to collect such payments from the                    contractor or subcontractors, based  upon the                    labor  performed  or furnished  as aforesaid,                    for health and  welfare plans,  supplementary                    unemployment benefit plans  and other  fringe                    benefits  which  are  payable  in   cash  and                    provided   for   in   collective   bargaining                                          4

          count 3 sought  to reach an asset of  Ashland purportedly held by          Granger   the bond   and to apply the proceeds to Ashland's debt.                    Ashland did  not defend and,  therefore, count 1  is no          longer velivolant.   On June  1, 1993, the  parties filed  cross-          motions  for summary judgment on  the two remaining  counts.  The          district court granted  the defendants' motions,  concluding that          ERISA preempted the section  29 claim as it pertains  to employee          benefit  plans, and that  Granger held none  of Ashland's assets.          See  Williams v.  Ashland Eng'g Co.,  863 F.  Supp. 46  (D. Mass.
          ___  ________     _________________          1994).   Following the entry of separate  judgments, the trustees          appealed.                    In  this   venue,  the  trustees   agree  that   brevis
                                                                     ______          disposition  is warranted   the  record reveals no genuine issues          of material fact   but they contend that the lower court ruled in          favor of the wrong parties.  Affording plenary review, see, e.g.,
                                                                 ___  ____          Mesnick v. General Elec. Co., 950  F.2d 816, 822 (1st Cir. 1991),
          _______    _________________          cert. denied, 112 S. Ct. 2965 (1992); Garside v. Osco Drug, Inc.,
          _____ ______                          _______    _______________          895 F.2d 46, 48 (1st Cir. 1990), we affirm.4                    The  centerpiece of the trustees' appeal   count 2   is          well   within  McCoy's   precedential  orbit.     In   McCoy,  we
                         _____                                   _____          acknowledged that  Congress painted with  a broad  brush when  it                              
          ____________________                    agreements . . . .          Mass. Gen. L. ch. 149,   29 (1990).               4We eschew  any independent discussion of  count 3, inasmuch          as we discern no error in the district court's stated reasons for          granting  summary judgment on that  count.  See  Williams, 863 F.
                                                      ___  ________          Supp. at 50.                                          5

          added  an  express preemption  clause to  the  ERISA canvas.   We          described that clause as "sweeping" and "extensive in its scope."          McCoy, 950 F.2d at 16.  We also noted that the Massachusetts lien
          _____          law  at issue in McCoy  referred specifically to  the trustees of
                           _____          employee  benefit  plans  and  purported to  grant  them  certain          singular  rights.  In our  view, these features  rendered the law          especially vulnerable  to preemption, for "[s]tate statutes which          expressly  grant  preferential  benefits to  ERISA  plans  cannot          withstand the preemptive  force of ERISA    514(a)."  Id.  at 20;
                                                                ___          accord Mackey v. Lanier Collection Agency & Serv., Inc., 486 U.S.
          ______ ______    ______________________________________          825, 829 (1988).  Thus, McCoy made clear that, at a bare minimum,
                                  _____          state laws  which "specifically refer  to ERISA  plans and  grant          them  special  treatment" are  preempted  regardless  of a  state          legislature's good intentions or  a particular law's  consistency          with  ERISA's  overall goals.   McCoy,  950  F.2d at  18 (quoting
                                          _____          Mackey, 486 U.S. at 829-30).
          ______                    The statute before us  today, Mass. Gen. L. ch.  149,            29, invites comparison  with the statute we  confronted in McCoy.
                                                                     _____          Section  29  requires,  inter  alia, that  a  general  contractor
                                  _____  ____          working on a  public project  furnish bond to  secure payment  of          "any sums due trustees . . . for health and welfare plans."  Such          plans come under  the protective umbrella that ERISA spreads over          the workplace.  See 29 U.S.C.   1002(1)(B), (3) (defining covered
                          ___          employee  welfare benefit plans); see also McCoy, 950 F.2d at 19-
                                            ___ ____ _____          20.   Since  the statute  specifically refers  to ERISA-regulated          employee benefit plans,  and provides them with a  special source                                          6

          of  recovery for  unpaid employer  contributions, McCoy  governs.
                                                            _____          Hence, the bond statute, as it applies to employee benefit plans,          is preempted.                    Appellants  balk at the  characterization of their case          as McCoy redux.   They loose an avalanche of  arguments, but none
             _____          is persuasive.  Only four of these arguments require comment.                    First:  Appellants launch  a ferocious attack on McCoy,
                    First:
                    _____                                            _____          intimating that it  is wrongly decided and, therefore,  should be          limited to  its facts.  Statutes like  the mechanic's lien law or          the bond law, they tell us, affect employee benefit plans in "too          tenuous, remote, or peripheral a manner," Shaw v. Delta Airlines,
                                                    ____    _______________          Inc., 463 U.S. 85, 100 n.21 (1983), to warrant a conclusion  that
          ____          the statutes "relate to" such plans.  This attack is  wide of the          mark.                    First and foremost, we believe that our earlier opinion          was   and is   clearly correct (that it is, so to speak, the real          McCoy).     And  we  perceive  no  rational  basis  on  which  to
          _____          distinguish between  the mechanic's lien  law and section  29 for          the purpose of gauging ERISA's preemptive reach.                    Because  the  two statutes  are  quite plainly  sisters          under  the skin, there is  also a prudential  barrier that blocks          the  path of appellants' attack.  In a multi-panel circuit, newly          constituted panels are, for  the most part, bound by  prior panel          decisions closely on point.  See, e.g., Jusino v. Zayas, 875 F.2d
                                       ___  ____  ______    _____          986, 993 (1st Cir. 1989); Lacy v. Gardino, 791 F.2d 980, 985 (1st
                                    ____    _______          Cir.), cert. denied, 479  U.S. 888 (1986).  In  this instance, we
                 _____ ______                                          7

          are bound by McCoy.
                       _____                    To  be   sure,  there   are  two  exceptions   to  this          manifestation  of stare  decisis principles.   An  existing panel
                            _____  _______          decision may be undermined by controlling authority, subsequently          announced, such  as an opinion of  the Supreme Court, an  en banc          opinion  of the circuit court,  or a statutory  overruling.  This          exception is inapposite, for  nothing of the kind  has transpired          here.   The second  exception pertains to  those relatively  rare          instances  in   which  authority  that  postdates   the  original          decision,  although not directly controlling, nevertheless offers          a sound reason for  believing that the former panel, in  light of          fresh  developments,  would  change  its collective  mind.    See
                                                                        ___          generally Colby v. J.C. Penney Co., 811 F.2d 1119, 1123 (7th Cir.
          _________ _____    _______________          1987) (discussing "complex relationship . . . between a court and          its own previous decisions").                    Appellants try to wriggle  through this loophole.  They          suggest that a case recently decided by the Third Circuit casts a          new  light  on ERISA  preemption  by  focussing on  "whether  the          existence  of  ERISA plans  is necessary  for  the statute  to be          meaningfully applied,"  Keystone Chapter, Etc. v.  Foley, 37 F.3d
                                  ______________________     _____          945,  957 (3d  Cir. 1994),  and that  this shifted  focus renders          McCoy obsolete.  However,  appellants mischaracterize the holding
          _____          in  Keystone.   There, the  court reviewed  a state  minimum wage
              ________          statute  that did  not refer  explicitly to  ERISA plans.   After          finding  that the  statute failed  to single  out such  plans for          special treatment,  the court invoked the  meaningfulness test to                                          8

          determine  whether the statute might be said to "relate to" ERISA          plans  despite the absence of an express  connection.  See id. at
                                                                 ___ ___          954-57.  Since section 29 does single out ERISA plans for special          swaddling, there is no need to consider the Keystone test in this
                                                      ________          case.5                    Second:  Next, the trustees contend that section 29 is,
                    Second:
                    ______          in effect, a law regulating insurance and, therefore, is shielded          from   preemption  by   ERISA      514(b)(2)(A),   29  U.S.C.              1144(b)(2)(A) (a  savings clause that, inter  alia, renders ERISA
                                                 _____  ____          preemption inapplicable to "any law of any State which  regulates          insurance").    This  contention  lacks   force.    In  order  to          "regulate[] insurance"  within the  purview of this  exception, a          law must not merely  have an impact on the insurance industry, or          on   particular  insurance   products,  but   must   be  directed          specifically toward  the business of  insurance.  See  Pilot Life
          ____________                                      ___  __________          Ins.  Co. v. Dedeaux, 481  U.S. 41, 50  (1987); Metropolitan Life
          _________    _______                            _________________          Ins.  Co. v. Massachusetts, 471 U.S. 724, 739-47 (1985).  Section
          _________    _____________          29 does not satisfy this criterion for two reasons.                    In  the first  place, although  surety bonds  often are          furnished by insurers, surety  bonds are not insurance contracts,          see Mass. Gen. L. ch. 175,   107, and they are not subject to the
          ___          commonwealth's  insurance laws.    See Luso-Am.  Credit Union  v.
                                             ___ ______________________          Cumis  Ins. Soc., Inc.,  616 F. Supp.  846, 848 (D.  Mass. 1985);
          ______________________                              
          ____________________               5Indeed, the  Keystone court itself  found McCoy to  be good
                             ________                     _____          authority,  citing  it  with   approval  in  holding  that  ERISA          preempted  a state  administrative  order  that did  specifically          single  out ERISA-regulated  plans  for special  treatment.   See
                                                                        ___          Keystone, 37 F.3d at 955.
          ________                                          9

          General Elec. Co. v. Lexington Contracting Corp., 292 N.E.2d 874,
          _________________    ___________________________          876 (Mass. 1973).   In the second place, section 29 only requires          the posting of an acceptable bond, not necessarily the posting of          a bond  underwritten by an insurance  company.  A cash  bond or a          bond  backed by, say, a  letter of credit,  surely would suffice.          In  a  real sense,  then, section  29's  impact on  the insurance          industry  is happenstance.    Consequently,  the  statute  cannot          plausibly  be deemed to be  directed toward, or  to regulate, the          business of insurance.                    Third:    Appellants claim  that,  here,  preemption is
                    Third:
                    _____          beside the point  because the bonding company  waived the defense          by failing to  assert it in the pleadings.   This claim prescinds          from USF&G's answer to  the trustees' complaint   an  answer that          did  not  mention  preemption  in  so  many words,  but,  rather,          contained a general denial and raised, as an affirmative defense,          failure to state  a claim  upon which relief  could be  granted.6          On the facts of this case, however, appellants' claim is composed          of more bleat than wool.                    Generally  speaking,   a  party  must   set  forth  all          affirmative  defenses  in  the  pleadings, on  pain  of  possible          forfeiture.    See  Fed. R.  Civ.  P.  8(c);7  see also  Conjugal
                         ___                             ___ ____  ________                              
          ____________________               6USF&G also raised a second affirmative defense  implicating          appellants'  supposed noncompliance with  conditions precedent to          recovery set  forth in  the  bond.   Given  the posture  of  this          appeal, we need not discuss the second affirmative defense.               7Rule 8(c)  requires parties, "[i]n pleading  to a preceding          pleading,"  to  "set   forth  affirmatively"  various  enumerated          defenses,  as well as "any other matter constituting an avoidance          or  affirmative  defense."     While  preemption  is  not  listed                                          10

          Partnership v.  Conjugal Partnership, 22 F.3d 391,  400 (1st Cir.
          ___________     ____________________          1994).    Here,  although  USF&G's answer  did  not  specifically          mention  a preemption  defense,  it did  contain  a broader  Rule          12(b)(6) defense  that  was capable  of encompassing  preemption.          Cf.  McCoy,   950  F.2d  at   22-23  (upholding  preemption-based
          ___  _____          dismissal pursuant to Rule  12(b)(6)).  The purpose of  Rule 8(c)          is to  give the court and  the other parties fair  warning that a          particular  line of defense will be pursued.  See, e.g., Blonder-
                                                        ___  ____  ________          Tongue Labs., Inc.  v. Univ. of  Ill. Found., 402  U.S. 313,  350
          __________________     _____________________          (1970);  Knapp Shoes, Inc. v.  Sylvania Shoe Mfg.  Corp., 15 F.3d
                   _________________     _________________________          1222, 1226 (1st  Cir. 1994).   Hence,  a defendant  who fails  to          assert an  affirmative defense  at all, or  who asserts  it in  a          largely uninformative way, acts at his peril.  See, e.g., FDIC v.
                                                         ___  ____  ____          Ramirez-Rivera, 869 F.2d 624, 626 (1st Cir. 1989).
          ______________                    In determining whether  general, non-specific  language          in a defendant's answer,  as was used here, suffices  to preserve          an  affirmative  defense, an  inquiring  court  must examine  the          totality of  the circumstances and make  a practical, commonsense          assessment about whether  Rule 8(c)'s core purpose   to  act as a          safeguard  against  surprise  and  unfair prejudice     has  been          vindicated.  In this case, USF&G complied with the spirit, if not          the  letter, of Rule 8(c).  Well  before the close of discovery            and  six  months prior  to the  filing  of the  cross-motions for                              
          ____________________          specifically in the enumeration, it is  a "matter constituting an          avoidance,"  and, thus, ordinarily comes within  the ambit of the          rule.  See, e.g., Keenan v. Dow Chem. Co., 717 F. Supp. 799, 808-
                 ___  ____  ______    _____________          09 (M.D. Fla. 1989).                                          11

          summary judgment    USF&G wrote to  appellants and amplified  its          position,  asseverating that  count 2  should be  dismissed under          Rule  12(b)(6) because ERISA preempted section 29.  In the papers          accompanying  the cross-motions for  summary judgment, both sides          briefed the preemption issue.  Thus, no ambush occurred.                    Where, as here, a plaintiff clearly anticipates that an          issue  will be litigated, and is not unfairly prejudiced when the          defendant actually raises it, a mere failure to plead the defense          more particularly  will not  constitute a  waiver.   See Conjugal
                                                               ___ ________          Partnership, 22 F.3d  at 401;  Lucas v. United  States, 807  F.2d
          ___________                    _____    ______________          414, 418 (5th Cir. 1986).                    Fourth:  Appellants' final attempt to resuscitate their
                    Fourth:
                    ______          claim  against USF&G is hardly worth mentioning.  It involves the          resupinate  assertion that  the Supremacy  Clause of  the Federal          Constitution, U.S.  Const. art.  VI, cl.  2,  bars preemption  of          section 29.  This assertion is doubly flawed.  For  one thing, it          is new  to the case,  having been alluded  to, but  not developed          below, and accordingly, it is procedurally defaulted.  See, e.g.,
                                                                 ___  ____          McCoy, 950  F.2d at  22 ("It  is hornbook  law that  theories not
          _____          raised  squarely in the district court cannot be surfaced for the          first time on  appeal.").  For another  thing, it takes  a topsy-          turvy view of preemption.   After all, when the  Supremacy Clause          is implicated, federal law trumps state law, not vice versa.  See
                                                                        ___          Florida  Lime & Avocado Growers, Inc. v.  Paul, 373 U.S. 132, 142
          _____________________________________     ____          (1963).                    We need  go no  further.  The  district court  astutely                                          12

          concluded  that past  is  prologue, and  looked  to McCoy.    See
                                                              _____     ___          Williams, 863  F. Supp.  at 48.   We  agree that McCoy  controls.
          ________                                         _____          Hence, Mass.  Gen. L. ch.  149,   29,  as it applies  to employee          welfare  benefit  plans, is  preempted by  ERISA    514(a).   The          trustees' suit, therefore, fails.          Affirmed.
          Affirmed.
          ________                                          13