Opinion
No. C-06-4961 MMC.
June 12, 2007
ORDER DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT; GRANTING DEFENDANT'S CROSS-MOTION FOR SUMMARY JUDGMENT (Docket Nos. 12, 20)
Before the Court are two motions, each filed April 20, 2007: (1) plaintiff Northwest Administrators, Inc.'s ("Northwest") motion for summary judgment, and (2) defendant San Bruno Garbage Co., Inc.'s ("San Bruno") cross-motion for summary judgment. San Bruno filed opposition to Northwest's motion, to which Northwest filed a reply. Northwest filed opposition to San Bruno's cross-motion, to which San Bruno filed a reply. The matter came on regularly for hearing on June 1, 2007. Michael Carroll appeared on behalf of Northwest and Michael Hoffman appeared on behalf of San Bruno. Having considered the papers filed in support of and in opposition to the motions, as well as the arguments of counsel at the June 1, 2007 hearing, the Court rules as follows.
BACKGROUND
In the instant action, brought pursuant to § 502 of the Employee Retirement Income Security Act of 1974 ("ERISA") and § 301 of the National Labor Relations Act ("NLRA"), Northwest contends San Bruno breached a collective bargaining agreement and certain Trust Agreements by failing to make the requisite contributions to the Western Conference of Teamsters Pension Trust Fund ("Fund") on behalf of San Bruno's employees. (See Compl. ¶ 1.) Northwest is the administrator of the Fund. (See id.) The sole issue raised in the instant motions is whether San Bruno is required, under the relevant agreements, to make contributions to the Fund on behalf of its employees who are members of the Sanitary Truck Drivers and Helpers Union Local 350 ("Local 350") while such employees are receiving workers' compensation payments.
ERISA § 502 provides, inter alia, that a fiduciary may bring suit to enforce an employer's obligation to make contributions to a fund. See 29 U.S.C. §§ 1132(g)(2), 1145. Section 301 of the NLRA provides that "[s]uits for violation of contracts between an employer and a labor organization . . . may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties." See 29 U.S.C. § 185. Recovery of delinquent fund contributions "is available under either statute." See Pierce County Hotel Employees and Restaurant Employees Health Trust v. Elks Lodge, B.P.O.E. No. 1450, 827 F.2d 1324, 1327 (9th Cir. 1987).
San Bruno and Local 350 are parties to a collective bargaining agreement ("CBA"). (See Sander Decl. ¶ 3 and Ex. 1.) The CBA pertinent to the instant action covers the period September 1, 2000 through August 31, 2005. (See id.) The CBA, as initially drafted, provided that San Bruno "shall contribute to the [Fund], on a straight-time hourly basis, starting with the first compensable hour to a maximum of 173 hours per employee each month[.]" (See id. Ex. 1 at 379.) The CBA further provided that "[f]orty (40) hours of work shall constitute the maximum straight time work week," excluding "the number of hours of work any employee may perform at overtime wage rates." (See id. at 380.) The CBA did not expressly address whether San Bruno must pay contributions to the Fund for injured employees who are receiving workers' compensation payments.
Rather than attaching exhibits to accompanying declarations, the parties have submitted a "common set of exhibits." (See Notice of Manual Filing.) Accordingly, the Court frequently will cite herein to exhibits without also citing to a declaration.
In a letter dated April 26, 2001, the Western Conference of Teamsters Pension Trust ("Trust") informed San Bruno and Local 350 that the CBA's "monthly maximum on pension contributions of 173 hours" was not acceptable to the Trust because some months include more than 173 hours of straight time. (See Ex. 2.) The Trust noted that, pursuant to its guidelines, a CBA will not be acceptable to the Trust if it contains: "Provisions that permit contributions on a basis that will produce a contribution less than all straight time hours worked by the employee, provided that for purpose of this rule paid vacation and paid holiday hours shall be included in straight time hours worked." (See id.) The Trust set forth therein three alternative examples of "sample language" that would amend the CBA to the Trust's satisfaction. (See id.) In July 2001, San Bruno and Local 350 entered into a Letter of Understanding, which amended the CBA by adopting the following language, which is the second of the three acceptable alternatives proposed by the Trust in its April 26, 2001 letter:
The Employer shall make contributions to the [Fund] on behalf of each member of the bargaining unit from the first compensable hour. Contributions shall be made on all straight-time hours worked to a monthly maximum of 184 hours per month.
Time paid for but not worked, such as holiday, vacation, and sick pay shall be considered as time worked for the purpose of this section.
(See id. at Ex. 3.) The amended CBA does not expressly address whether San Bruno must pay contributions to the Fund for injured employees who are receiving workers' compensation payments.
In 2005, Northwest conducted an audit of San Bruno's books and records for the period December 1, 2003 through October 31, 2004 and determined that San Bruno had underpaid its contributions to the Fund in several respects and, in particular, that San Bruno had failed to pay contributions on behalf of employees who were receiving workers' compensation payments. (See Calleros Decl. ¶¶ 3, 5-7 and Ex. 11.) In a letter to the Trust, dated April 20, 2005, San Bruno disputed the contention that the CBA requires contributions on behalf of employees who are receiving workers' compensation payments. (See Ex. 13.) In a letter dated April 20, 2006, Michael Sander, the Trust's Administrative Manager, denied San Bruno's "appeal" of the finding that San Bruno owed contributions for employees who were receiving workers' compensation payments. (See Ex. 15.) In a letter dated May 12, 2006, San Bruno appealed Sander's decision to the Board of Trustees of the Fund ("Board"). (See Ex. 16.) On May 31, 2006, the Board denied the appeal. (See Ex. 18 at 004.)
On August 16, 2006, Northwest filed the instant action.
LEGAL STANDARD
Rule 56 of the Federal Rules of Civil Procedure provides that summary judgment as to "all or any part" of a claim "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." See Fed.R.Civ.P. 56(b), (c). Material facts are those that may affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is "genuine" if the evidence is such that "a reasonable jury could return a verdict for the nonmoving party." See id. The Court may not weigh the evidence.See id. at 255. Rather, the nonmoving party's evidence must be believed and "all justifiable inferences must be drawn in [the nonmovant's] favor." See United Steelworkers of Am. v. Phelps Dodge Corp., 865 F.2d 1539, 1542 (9th Cir. 1989) (en banc) (citing Liberty Lobby, 477 U.S. at 255).
The moving party bears the initial responsibility of informing the district court of the basis for its motion and identifying those portions of the pleadings, depositions, interrogatory answers, admissions and affidavits, if any, that it contends demonstrate the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where the nonmoving party will bear the burden of proof at trial, the moving party's burden is discharged when it shows the court there is an absence of evidence to support the nonmoving party's case.See id. at 325.
Where the moving party "bears the burden of proof at trial, he must come forward with evidence which would entitle him to a directed verdict if the evidence went uncontroverted at trial."See Houghton v. South, 965 F.2d 1532, 1536 (9th Cir. 1992) (citations omitted); see also Fontenot v. Upjohn, 780 F.2d 1190, 1194 (5th Cir. 1986) (holding when plaintiff moves for summary judgment on an issue upon which he bears the burden of proof, "he must establish beyond peradventure all of the essential elements of the claim . . . to warrant judgment in his favor.") (emphasis in original).
A party opposing a properly supported motion for summary judgment "may not rest upon the mere allegations or denials of [that] party's pleading, but . . . must set forth specific facts showing that there is a genuine issue for trial." See Fed.R.Civ.P. 56(e); see also Liberty Lobby, 477 U.S. at 250. The opposing party need not show the issue will be resolved conclusively in its favor. See Liberty Lobby, 477 U.S. at 248-49. All that is necessary is submission of sufficient evidence to create a material factual dispute, thereby requiring a jury or judge to resolve the parties' differing versions at trial. See id.
DISCUSSION
A. Standard of Review
As an initial matter, the parties dispute the degree of deference, if any, the Court must give to the Trust's conclusion that the CBA requires San Bruno to make contributions on behalf of employees who are receiving workers' compensation payments.
In support of its argument that the Court should review the Trust's construction of the CBA for abuse of discretion, Northwest relies largely on cases in which ERISA benefits determinations were at issue. A court reviews a denial of benefits for abuse of discretion, however, only where "the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." See Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). Here, there is no analogous contractual language granting the Trust discretionary authority to construe the terms of the CBA. In particular, the CBA itself contains no language addressing the manner in which San Bruno and the Trust are to resolve a dispute between themselves with respect to San Bruno's obligations under the CBA to make contributions to the Fund.
Although Northwest relies on language from the Agreement and Declaration of Trust of the Fund ("Trust Agreement"), to which agreement San Bruno and Local 350 are parties, (see Exs. 4-5), such reliance is misplaced. For example, although Article V § 1(c) of the Trust Agreement grants the Trust "the power . . . to . . . [c]onstrue the provisions of [the Trust] Agreement . . . and the Pension Plan and the terms used therein," and further provides that "any construction adopted by the Trustees in good faith shall be binding upon the Unions, the Employers, the Employees, and their beneficiaries," (see Ex. 5 Art. V § 1(c) at 7), such language does not grant the Trust discretionary authority to construe the provisions of the CBA. Likewise, although the Trust Agreement authorizes the Trustees to "develop procedures to be followed by Employers in reporting contributions made on behalf of Employees," to "develop procedures for the establishment of credited service of Employees, including the means of affording Employees and Employers the opportunity to object thereto, and to establish such facts conclusively," and to "make determinations which shall be final and binding upon all parties as to the rights of any Employee and any beneficiary to benefits, including any rights any individual may have to request a hearing with respect to any such determination," (see id. Art. VII(a), (b), and (d) at 10), such language does not purport to grant the Trust discretion to interpret the language of the CBA.
Northwest's reliance on Clark v. Washington Teamsters Welfare Trust, 8 F.3d 1429 (9th Cir. 1993) and Board of Trustees of the Watsonville Frozen Food Welfare Trust Fund v. California Cooperative Creamery, 877 F.2d 1415 (9th Cir. 1989) likewise is misplaced. In Clark, the Ninth Circuit reviewed a trust's interpretation of a CBA for abuse of discretion because the trust agreement included the following provision: "Any questions arising in connection with the performance of the provisions of this Trust Agreement not hereto specifically provided for shall be left to the sole discretion of the Trustees." See id. The Ninth Circuit held the issue before it "pose[d] a question arising in connection with the performance of the provisions of the Trust, and questions of the interpretation of such language are not specifically provided for." See id. Here, however, there is no "catch-all" discretionary language in the Trust Agreement comparable to that at issue in Clark. In California Cooperative Creamery, the trust agreement and CBA at issue therein were treated differently with respect to deference. Although the Ninth Circuit reviewed the trust's construction of the trust agreement for abuse of discretion, see id. at 1420, it did not defer to the trust's construction of the CBA, see id. at 1425-27. Here, as noted, the issue is not one of construction of a trust agreement, but construction of a CBA.
As San Bruno observes, the Ninth Circuit, in ERISA actions, repeatedly has held construction of a CBA is a matter of law that is reviewed de novo, albeit without expressly stating that a trust's construction of a CBA is not entitled to deference. See,e.g., Santa Monica Culinary Welfare Fund v. Miramar Hotel Corp., 920 F.2d 1491, 1493 (9th Cir. 1990) (citing Operating Engineers Pension Trusts v. B E Backhoe, Inc., 911 F.2d 1347, 1351 (9th Cir. 1990)) ("We review de novo the construction of collective bargaining agreements"); Operating Engineers, 911 F.2d at 1351 (holding "district court's interpretation of a contractual provision is a question of law reviewed de novo"); Pierce County Hotel Employees and Restaurant Employees Health Trust v. Elks Lodge, B.P.O.E. No. 1450, 827 F.2d 1324, 1327 (9th Cir. 1987) (interpreting de novo CBA in ERISA collection action for unpaid contributions). As one district court has observed, "[w]hile it makes sense for an employer to grant broad authority to fund trustees to resolve disputes between its employees and the fund, it makes little sense for an employer to do the same when it comes to determining the employer's own liabilities to the fund[.]" See Roca v. Westbury Transport Inc., 19 F. Supp. 2d 44, 50 (E.D.N.Y. 1998). Because such discretion may permit a trust "to increase the size of contribution obligations of employers to levels greater than they or the union, the original parties to the bargaining agreement, had agreed to or contemplated[,] [o]nly an explicit provision in the CBA should permit such a result."See id. at 50.
Here, as there is no provision in the CBA or the Trust Agreement that grants Northwest discretionary authority to interpret the terms of the CBA, the Court will interpret the CBA de novo.
In light of this ruling, the Court does not reach San Bruno's contention that the Trust abused its discretion by conducing a biased review of San Bruno's arguments on appeal.
B. Construction of CBA
"To ascertain the meaning of [a] collective bargaining agreement, [courts] first examine its express written terms."Northwest Administrators, Inc. v. B.V. B.R., Inc., 813 F.2d 223, 225 (9th Cir. 1987). As noted, prior to the adoption of the Letter of Understanding, Article C § 4(b) of the CBA provided that San Bruno was required "to contribute to the [Fund], on a straight-time hourly basis, starting with the first compensable hour to a maximum of 173 hours per employee per month." (See Ex. 1 Art. C § 4(b).) The July 2001 Letter of Understanding between San Bruno and Local 350 amended that language to provide that "[c]ontributions shall be made on all straight-time hours worked to a monthly maximum of 184 hours per month," and that "[t]ime paid for but not worked, such as holiday, vacation and sick pay shall be considered as time worked[.]" (See Ex. 3.) The effect of the amendment was to change San Bruno's obligation with respect to the number of hours per month for which contributions were required; it did not change San Bruno's obligation with respect to the type of hours for which contributions were required. Nothing in the amendment itself or the letter in which it was proposed suggests otherwise, (see Ex. 2), and, at the June 1, 2007 hearing, Northwest agreed that the obligation under Article C § 4(b) with respect to the type of hours for which contributions are required remained unchanged by the Letter of Understanding.
As noted, both the CBA as initially drafted and the Letter of Understanding require the employer to make contributions to the Fund for each "compensable hour." (See Ex. 1 Art. C § 4(b); Ex. 3.) The Court finds the plain meaning of "compensable hour" is an hour for which the employee is paid by the employer, whether or not such employee is at work. Indeed, to the extent the Letter of Understanding seeks to clarify the term, it provides further support for such conclusion. As noted, the Letter of Understanding includes as examples of "compensable hours" "[t]ime paid for but not worked, such as holiday, vacation, and sick pay," (see Ex. 3), all of which the CBA expressly requires the employer to pay. (See Ex. 1 Art. D §§ 3-5.) There is no evidence that San Bruno is responsible for making workers' compensation payments to its employees.
The Court finds unpersuasive Northwest's contention that the first paragraph of Article C § 4 is relevant in interpreting the meaning of Article C § 4(b). Although the first paragraph of Article C § 4 describes the maximum length of time an employee who is receiving workers' compensation payments will continue to receive benefits "due him . . . under the [CBA]," (see Ex. 1 Art. C § 4), it does not purport to set forth or define those benefits in the first instance. (See Ex. 1 Art. C § 4 (providing, "If an employee is off work due to illness or injury or on state disability, any benefit, except health and welfare insurance, due him or her under the Agreement shall be paid for a maximum of six (6) months. . . . Any employee being paid under workers' compensation laws is not subject to these limitations. Benefits to employees being paid under workers' compensation laws shall terminate at the conclusion of the workers' compensation proceeding.") Consequently, such language permits no inference that San Bruno is required to make contributions to the Fund while an employee is receiving workers' compensation payments.
The Court thus finds time during which an employee receives workers' compensation payments does not qualify as "compensable hours" under the plain meaning of the CBA and Letter of Understanding. Accordingly, pursuant to the CBA and the Letter of Understanding, San Bruno has no obligation to make contributions to the Fund while an employee is receiving workers' compensation payments and is not being paid by San Bruno.
CONCLUSION
For the reasons set forth above, Northwest's motion for summary judgment is hereby DENIED, and San Bruno's cross-motion for summary judgment is hereby GRANTED.
The parties shall appear before the Court on July 6, 2007 at 10:30 a.m. for a further case management conference. No later than June 30, 2007, the parties shall file a joint case management statement setting forth any issues that remain to be resolved in the instant action, and a proposed briefing schedule and/or trial schedule.
This order terminates Docket Nos. 12 and 20.