Carpenters Health & Welfare Trust Fund for California v. Tri Capital Corp.

Opinion by Judge BRUNETTI; Dissent by Judge FERGUSON.

Appellants, ERISA benefit plans for members of the carpenters’ union, are owed money by a subcontractor for work performed on a building improvement project. They brought suit in state court against the construction lender for the project to recover the money under California’s “bonded stop notice” remedy. The construction lender and the general contractor on the project, both of which are appellees, removed to federal court and moved to dismiss for failure to state a claim. After the motion was granted, appellants filed a first amended complaint alleging additional federal and state law claims. Appellees again moved to dismiss for failure to state a claim, and the district court again granted the motion. Appellants appeal the dismissal, and we affirm.

I. Facts and Proceedings Below

Appellants (hereafter referred to as the “Trust Funds”) are five multiemployer employee benefit plans under the Employee Retirement Income Security Act of 1974 (“ERISA”), as defined in 29 U.S.C. § 1002 (37). In May 1972, Rodney Stark, doing business as Stark Construction, entered into a collective bargaining agreement with the United Brotherhood…

dissenting in part:

I dissent from Part V.A. of the majority opinion. Section 515 of ERISA, 29 U.S.C. § 1145 , was adopted expressly for the purpose of simplifying collection actions by plan trustees against delinquent employers. See Laborers Health and Welfare Trust Fund for Northern California v. Advanced Lightweight Concrete Co., Inc., 484 U.S. 539, 545-49 , 108 S.Ct. 830, 834-35 , 98 L.Ed.2d 936 (1988); see also Southern California Retail Clerks Union v. Bjorklund, 728 F.2d 1262, 1265 (9th Cir.1984). The majority defeats that purpose when it excludes from Section 515 liability those, such as Mark, who enter into express, written agreements to pay into employee trust funds.

The first mistake that the majority makes is to collapse the ERISA definition of employer with its analysis of who is obligated to pay into a multiemployer plan under Section 515. These discussions should proceed separately in order to give each section its intended meaning. See, e.g., Massachusetts Laborers’ Health and Welfare Fund v. Starrett Paving Corp., 845 F.2d 23, 24-26 (1st Cir.1988).

I. The ERISA Definition of Employer

ERISA defines an employer as “any person acting directly as an employer, or…