Opinion
Case No. 3:02 CV 7021
January 30, 2004
ORDER
This is a contract dispute between plaintiff International Brotherhood of Electrical Workers, Local 1654 ("union") and L.G. Philips Display Components Company ("Philips"). The union claims that Philips has breached a collective bargaining agreement signed in 2000 by failing to pay its employees according to the defined benefit pension plan lump sum calculations provided to the union during collective bargaining negotiations. Additionally, the union claims that Philips acted fraudulently during negotiations by failing to disclose that the information it had provided to the union was incorrect.
This court has jurisdiction pursuant to 28 U.S.C. § 1331. Pending is defendant Philips' motion for summary judgment on each of plaintiff s claims. For the reasons that follow, defendant's motion will be granted.
BACKGROUND
The plaintiff union represents the interests of approximately 1400 former employees of defendant. This case arises from a dispute over the terms of a collective bargaining agreement between plaintiff and defendant, which was effective from October 2, 2000, until September 28, 2003. The agreement was negotiated in light of defendant's announcement in early 2000 that it would close its Ottawa, Ohio manufacturing plant by the end of 2003 and move its operations to Mexico.Negotiations for the collective bargaining agreement at issue in this case were conducted from April 20, 2000, until September 28, 2000. Plaintiff claims that one of its main goals during the negotiations was to ensure that employees under the age of 54 would be able to collect their pensions in a lump sum on the termination of their employment. This was important to plaintiff because it alleges that the terms of the defined benefit pension plan defendant maintained for its employees normally required employees to wait until age 55, at the earliest, to collect their pension benefits.
Plaintiff alleges that, though defendant agreed to make such lump sum payments, it has failed to pay according to the parties' agreement. Essentially, plaintiff alleges that the amounts of the lump sum payments defendant proposes to make are much lower than those defendant obligated itself to make during the negotiations. Plaintiff claims that if defendant had disclosed the lower payments during the negotiations, plaintiff would not have agreed to the terms of the collective bargaining agreement. Plaintiff alleges a claim for breach of the collective bargaining agreement to recover the payments it alleges defendant's former employees are owed.
Plaintiff further alleges that defendant deliberately provided misleading information about the amounts of the lump sum payments to plaintiff's representatives during the negotiations. Plaintiff, accordingly, has alleged a fraud claim against defendant in addition to its breach of contract claim. Plaintiff alleges that both claims are federal claims under 29 U.S.C. § 185(a), the Labor Management Relations Act.
Defendant claims that the lump sum payments it proposes to make conform to the parties' written agreement and the written terms of the defined benefit pension plan, and that plaintiff simply failed to clarify its position on the amounts of the payments. Furthermore, defendant alleges that plaintiff's claims are preempted by the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq., and must, therefore, be dismissed.
STANDARD OF REVIEW
Summary judgement must be entered "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The moving party always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the record which demonstrate the absence of a genuine issue of material fact. Id. at 323. The burden then shifts to the nonmoving party who "must set forth specific facts showing that there is a genuine issue far trial."Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986) (quoting Fed.R.Civ.P. 56(e)).
Once the burden of production shifts, the party opposing summary judgment cannot rest on its pleadings or merely reassert its previous allegations. It is insufficient "simply [to] show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, Rule 56(e) "requires the nonmoving party to go beyond the [unverified] pleadings" and present some type of evidentiary material in support of its position. Celotex, 477 U.S. at 324.
In deciding the motion for summary judgment, the evidence of the non-moving party will be accepted as true, all doubts will be resolved against the moving party, all evidence will be construed in the light most favorable to the non-moving party, and all reasonable inferences will be drawn in the non-moving party's favor. Eastman Kodak Co. v. Technical Servs., Inc., 504 U.S. 451, 456 (1992). Summary judgment shall be rendered only if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c).
DISCUSSION
Defendant contends that plaintiff's claims are preempted by ERISA, and thus cannot be considered on their merits. For the reasons that follow, I agree.
ERISA is a comprehensive statutory scheme "designed to promote the interests of employees and their beneficiaries in employee benefit plans." Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90 (1983). ERISA supersedes "any and all State laws insofar as they . . . relate to any employee benefit plan. . . ." 29 U.S.C. § 1144(a). Courts have applied ERISA's preemption provision broadly to preempt state law claims in a variety of contexts, as long as the state claim "has connection with or reference to" an employee pension plan. Cromwell v. Equicor-Equitable HCA Corp., 944 F.2d 1272, 1275-76 (6th Cir. 1991) (citing Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 730, 732-33 (1985); Shaw, 463 U.S. at 103).
In the instant case, plaintiff maintains that its claims are asserted under the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, a federal statute, and are therefore not affected by ERISA's preemption of state laws. It is true that federal laws are not expressly preempted by § 1144(a) of ERISA. Courts have held, however, that ERISA preempts claims based on federal law when the substance of the federal claim being alleged is addressed by ERISA's statutory scheme. Only when there is a "gap" in ERISA's statutory scheme can federal common law be used to assert such a claim. See, e.g., United Steelworkers of America, AFL-CIO, CLC v. United Engineering, Inc., 52 F.3d 1386, 1391 (6th Cir. 1995) (explaining that ERISA governs claims against employers regarding pension plans unless there is a "gap" in ERISA's statutory structure; when there is a gap, courts have applied federal common law).
The Supreme Court, in City of Milwaukee v. Illinois, 451 U.S. 304 (1981), clarified the test to be applied when determining whether a federal statute displaces federal common law. The test is not the same test that is applied for state law preemption; the determinative question is whether Congress intended to "occupy the field." Id. at 324.
The question in the instant case, then, is whether plaintiff's claims are covered by ERISA's statutory scheme because Congress intended to "occupy the field" covered by plaintiff's claims. Plaintiff alleges, essentially, that defendant has failed properly to pay its employees under its defined benefit pension plan, as modified and agreed upon in the 2000-2003 collective bargaining agreement. Though plaintiff argues that its complaint alleges a breach of the collective bargaining agreement, the fact remains that the dispute is about defendant's obligations to its employees under the pension plan.
Through ERISA, Congress has directly addressed the means by which pension plans are created, amended, and administered. ERISA applies to the employee benefit plan at issue here. See 29 U.S.C. § 1051. Moreover, ERISA controls the parties' rights and obligations under the plan. ERISA governs the form and payment of benefits to employees, as well as temporary variances from certain vesting requirements. See 29 U.S.C. § 1056, 1057. ERISA provides a private right of action to a participant or beneficiary "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B). I find, therefore, that ERISA does apply to the pension plan at issue in the instant case and to plaintiff's claims arising from defendant's alleged violations of the terms of that pension plan.
The Sixth Circuit has held that claims arising under § 301 of the LMRA, 29 U.S.C. § 185(a), the statute on which plaintiff bases its claims, can be preempted by ERISA. United Engineering, 52 F.3d at 1393-94. Here, as in United Engineering, there is no support for the proposition that plaintiff's claims fall within a statutory gap left open by ERISA-i.e., where ERISA is either silent or ambiguous. See also Muse v. Int'l Business Machines Corp., 103 F.3d 490, 495 (6th Cir. 1996). ERISA clearly provides the statutory scheme for asserting claims against employers for failing to pay employees under the terms of their pension plan. Plaintiff's claims, therefore, are preempted by ERISA.
Thus, defendant's motion for summary judgment as to both of plaintiff s claims must be granted.
CONCLUSION
In light of the foregoing, it is hereby
ORDERED THAT defendant's motion for summary judgment be, and hereby is, granted.
So ordered.