Midwest Operating Eng'rs Welfare Fund v. Stone

175 F.Supp.3d 945

Midwest Operating Engineers Welfare Fund and Midwest Operating Engineers Pension Trust Fund, Plaintiffs,

v.Allied Stone, a division of RiverStone Group, Inc., an Illinois corporation, Defendant.

14-cv-8752

United States District Court, N.D. Illinois, Eastern Division.

Signed March 30, 2016

Dale D. Pierson, Charles R. Kiser, Robert A. Paszta, International Union of Operating

Engineers Local 150 Legal Dept., Countryside, IL, for Plaintiffs.

Andrew J. Martone, Matthew Blanton Robinson, Hesse Martone, P.C., St. Louis, MO, John Kenneth Kallman, Law Offices of John Kenneth Kallman, Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

John Z. Lee, United States District Judge

Plaintiffs Midwest Operating Engineers Welfare Fund and Midwest Operating Engineers Pension Trust Fund (the Funds) are employee benefit plans under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C § 1001 et seq. The Funds claim that Defendant Allied Stone violated § 1145 of that Act by failing to make contributions to the Funds as called for by a collective bargaining agreement. Allied contends that it was not required to make those contributions because Allied's employees had decertified the union that was a party to the collective bargaining agreement. But the Funds argue that Allied's obligation under the agreement to make contributions continued even after the union's decertification. The parties have filed cross motions for summary judgment.

Two cases nearly identical to this one—Midwest Operating Engineers Welfare Fund v. Cleveland Quarry , 40 F.Supp.3d 1033, 1034 (N.D.Ill.2014), and Midwest Operating Engineers v. Cordova Dredge , No. 15 C 4446, 147 F.Supp.3d 724, 2015 WL 7731868 (N.D.Ill. Dec. 1, 2015) —were recently decided in this district and are currently on appeal. The Funds were also the plaintiffs in those cases, and all three defendants (Allied, Cleveland Quarry, and Cordova Dredge) are quarries that are owned and operated by one company, RiverStone Group, Inc. Additionally, the same union represented the employees at each quarry, and each quarry's employees eventually decertified that union, though at different times. Finally, the collective bargaining agreements involved in those cases and this one are identical except that they cover different groups of employees during different time periods. These three cases also present precisely the same legal questions, and in both Cleveland Quarry and Cordova Dredge, judgment was entered in favor of the Funds.

The Seventh Circuit has consolidated Cleveland Quarry and Cordova Dredge on appeal. See Midwest Operating Engineers et al v. Cordova Dredge , No. 15-3861, Doc. 2 (7th Cir. Dec. 30, 2015). The appellate court has also stayed briefing in those cases until judgment has been entered in this case and the losing party has appealed, at which time all three cases will be consolidated. Id. at Doc. 6 (Feb. 19, 2016). As explained below, the Court agrees with the reasoning in Cleveland Quarry and Cordova Dredge ; thus, Defendant's motion for summary judgment is denied, and Plaintiffs' is granted.

I. Factual Background

Allied Stone, a division of RiverStone Group, Inc., operates a quarry in Milan, Illinois. Def.'s SOF ¶ 1. In 2010, Allied entered into a collective bargaining agreement with the International Union of Operating Engineers, Local 150, AFL-CIO (“Local 150”). The agreement was to be effective for five years, from May 3, 2010 until May 3, 2015. Id. ¶ 2. Articles 8 and 21 of the Agreement required Allied to make contributions to the Funds. Def.'s SOF ¶ 3. Article 8 reads in part:

It is understood and agreed that there shall be an insurance plan known as the Midwest Operating Engineers Welfare Fund, and the Employer shall make the following contributions for each hour for which an employee receives wages under the terms of this Agreement ...

Def.'s SOF, Ex. A, Collective Bargaining Agreement (CBA), at 12. Article 21 specifies:

It is understood and agreed that there shall be continued a Trusteed Pension Plan known as the Midwest Operating Engineers Pension Fund, and the Employer will contribute the sum of $4.40 per hour for each hour for which an employee receives wages under the terms of this Agreement to the Midwest Operating Engineers Pension Fund.

Id. at 24.

Allied made the agreed contributions to the Funds for more than four years. Def.'s SOF ¶ 3. Then, in August 2014, a majority of Allied's employees elected not to be represented by Local 150 anymore, and the following month the National Labor Relations Board found that the union, because it lacked majority support, would be decertified. Id. ¶¶ 11–12. Allied informed the Funds of the decertification by letter, and in the same letter asserted that Allied's obligation to continue making contributions had ceased. Id. at ¶ 13.

Allied made no contributions to the Funds for any work performed after September 4, 2014. Id. ¶ 14. In response, the Funds filed this action under 29 U.S.C. § 1145, demanding back payments and damages from September 2014 until May 3, 2015, the date the collective bargaining agreement was set to expire.

II. Legal Standard

Summary judgment is appropriate when the “movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The burden rests on the moving party to show that there are no genuine issues of material fact. Celotex Corp. v . Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). “To survive summary judgment, the nonmoving party must establish some general issue for trial such that a reasonable jury could return a verdict in her favor.” Gordon v. FedEx Freight, Inc. , 674 F.3d 769, 772–73 (7th Cir.2012). To determine this, a court should “limit its analysis of the facts on summary judgment to evidence that is properly identified and supported in the parties' statements.” Bordelon v. Chi. Sch. Reform Bd. of Trs. , 233 F.3d 524, 529 (7th Cir.2000).

II. Analysis

A. Preclusion

The Funds, invoking the doctrines of claim preclusion (res judicata ) and issue preclusion (collateral estoppel), first argue that Judge Shadur's opinion in Cleveland Quarry has preclusive effect in this case.¹ Pls.' Resp. Br./Mem. Supp. at 2–5. “The preclusive effect of a federal-court judgment is determined by federal common law.” Taylor v. Sturgell , 553 U.S. 880, 891, 128 S.Ct. 2161, 171 L.Ed.2d 155 (2008).

1. Claim Preclusion

Claim preclusion has three elements under federal law: “a final decision in the first suit; a dispute arising from the same transaction (identified by its operative facts); and the same litigants (directly or through privity of interest).” Czarniecki v. City of Chi. , 633 F.3d 545, 548 (7th Cir.2011). To satisfy the second element, the final judgment must be “based on the same cause of action,” as determined by the “same transaction test.”

Car Carriers, Inc. v. Ford Motor Co. , 789 F.2d 589, 593 (7th Cir.1986). A “cause of action” comprises “a single core of operative facts.” Id. at 593 (citations omitted). To determine the existence of this “single core,” the court analyzes “whether these claims are part of the same cause of action which spawned the earlier...claim.” Id. at 595. The party asserting claim preclusion carries the burden of establishing its elements. Taylor v. Sturgell , 553 U.S. 880, 907, 128 S.Ct. 2161, 171 L.Ed.2d 155 (2008).

As an initial matter, the Funds' attempt to invoke claim preclusion offensively is highly unusual. Claim preclusion is typically a defensive doctrine that bars a party from asserting claims that were brought or could have been brought in a previous case. Rivet v. Regions Bank of Louisiana , 522 U.S. 470, 476, 118 S.Ct. 921, 139 L.Ed.2d 912 (1998). Put differently, “[u]nder the doctrine of res judicata , a judgment on the merits in a prior suit bars a second suit involving the same parties or their privies based on the same cause of action.” Parkl a ne Hosiery Co., Inc. v. Shore , 439 U.S. 322, 326 n. 5, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979). Here, the doctrine of claim preclusion, if it were to apply, would prohibit the Funds from (re)litigating its claims against Allied in this case. It is safe to assume, however, that the Funds are not seeking such a result, but rather are invoking the more general formulation that “[u]nder res judiciata , a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action.” Alle n v. McCurry , 449 U.S. 90, 94, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980).

In any event, because the claims in this case are not based on the same operative facts that spawned the Funds' claims in Cleveland Quarry, the doctrine of claim preclusion does not apply here. The collective bargaining agreement at issue in Cleveland Quarry, though nearly identical to the agreement in this case, is nevertheless a separate agreement. The two agreements covered different employees at different quarries in different towns. Furthermore, Local 150 was decertified at Cleveland Quarry in September 2013, see Cleveland Quarry , 40 F.Supp.3d at 1034, but the union was not decertified at Allied until a full year later. And Allied stopped making contributions to the Funds on behalf of its employees well after Cleveland Quarry had stopped, meaning that the two claims under § 1145 arose at different times. Under these circumstances, the dispute in Cleveland Quarry can not be said to be based on the “same transaction” as the dispute in this case. See Cordova Dredge , No. 15 C 4446, 147 F.Supp.3d at 739–41, 2015 WL 7731868 at *10 (rejecting the Funds' claim preclusion argument); Chi. Reg'l Council of Carpenters v. Prate Installations, Inc. , No. 10 C 5431, 2011 WL 336248, at *5 (N.D.Ill. Jan. 31, 2011) (concluding that a claim based on one collective bargaining agreement was not precluded by an earlier claim based on another collective bargaining agreement); Clarke Const....