Court Opinion

ID: 6994312
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:30:29.151274+00
Date Added: 2024-06-11T16:09:42.773544
License: Public Domain

VAN GRAAFEILAND, Senior Circuit Judge,
dissenting:
I respectfully dissent.
First, Fairfield did not argue, before the district court or in its appellate briefs, that contributions to the Funds are illegal under § 302(a). It is well established that “a federal appellate court will generally not consider an issue not raised below,” absent manifest injustice. Hutton Constr. Co. v. County of Rockland, 52 F.3d 1191, 1193 (2nd Cir.1995). No such injustice has been shown in this case.
Second, the majority assumes that Fair-field was a party to the 669 Agreement. Fairfield’s primary point on appeal is that it was not a party. Assuming Fairfield was a party to the 669 Agreement, however, the Traveling Clause required Fairfield to hire 676 employees when working in Connecticut. The majority protects Fair-field from itself by ruling that the Traveling Clause is illegal. Clauses of this type appear to be quite common in the construction industry. See, e.g., Local Union No. 36, Sheet Metal Workers’ Int’l Assoc. v. Atlas Air Conditioning Co., 926 F.2d 770, 772 (8th Cir.1991); McKinstry Co. v. Sheet Metal Workers’ International, 859 F.2d 1382 (9th Cir.1988). The majority would disturb settled expectations throughout the industry by refusing to enforce the Traveling Clause.
Third, assuming Fairfield was a party to the 669 agreement, the requirements of § 302(c)(5) are met. As to the majority’s point (which was never argued by Fair-field) that an agreement may not incorporate by reference an agreement not then in existence, the facts render it inapposite. The 669 Agreement was entered into on April 8, 1994. On that date, the 676 Agreement that ran from August 1, 1992 through July 31, 1994 was still in force. The majority, then, holds that the Traveling Clause suddenly became unenforceable when the earlier 676 contract expired. This result is anomalous given that there were no significant changes in the contribution provisions of the 676 agreements. The majority also argues that contributions to the Funds would not be for the benefit of Fairfield’s employees. However, assuming Fairfield was a party to the 669 contract, the Traveling Clause required Fairfield to hire 676 members. It would be strange to allow Fairfield to escape its obligations by hiring non 676 workers and then claiming that contributions to the Funds would not be for the benefit of its employees. This rationale, which makes a fund’s right to collect from an employer contingent on the efforts of a union (e.g., whether the union has successfully required the employer to hire union members) also violates the purpose of § 515. Benson v. Brower’s Moving & Storage, Inc., 907 F.2d 310, 314 (2nd Cir.1990) (“Simply put, benefit plans must be able to rely on the contribution promises of employers because plans must pay out to beneficiaries whether or not employers live up to their obligations. For this reason, Congress placed employee benefit plans in *120a position superior to the original promis-ee, analogous to a holder in due course.”).
I would reverse the grant of summary judgment on the ground that Fairfield argued below and on appeal. Specifically, a jury should have determined, taking into account industry custom, including the fact that Fairfield did not participate in the 669 negotiations, whether Fairfield was a party to the 669 contract. The majority argues that this approach would accomplish little because, even if the jury found Fairfield was a party to the 669 Agreement, the legality of the payments under § 302 would remain at issue. I respectfully disagree. Fairfield’s failure to argue the § 302 issue below, or even in its appellate briefs, amounts to a forfeiture, and the jury would not have been required to consider § 302 at all.
The majority engages in two layers of protectionism. First, it addresses an argument that Fairfield’s attorneys were not creative enough to imagine below or on appeal. Second, it holds that a contractual provision entered into by a competent party is nevertheless illegal. I cannot join in this protectionism, and thus respectfully dissent.