2011 IL App (2d) 100125
Ill. App. Ct.2011Background
- Plaintiffs are multiple labor unions and funds seeking the amount of unpaid fringe benefit contributions under CBAs with KMC Masonry, alleging ERISA plans are funded and governed by CBAs.
- Nicholas & Associates served as general contractor for Cortland Elementary and DeKalb School District projects; KMC Masonry was the subcontractor performing masonry work.
- CBAs required KMC to contribute to the funds; plaintiffs allege KMC breached by failing to pay contributions.
- Kane plaintiffs sued in federal court (ERISA §1145) resulting in a $279,725 default judgment against KMC for unpaid contributions and related amounts.
- State circuit courts in DeKalb and Kane counties dismissed plaintiffs’ mechanic’s lien claims as preempted by ERISA; appeals were consolidated and remanded for proceedings consistent with this opinion.
- Court holds ERISA does not preempt the Mechanics Lien Act and reverses the dismissals, remanding for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does ERISA preempt the Mechanics Lien Act? | ERISA does not preempt; Mechanics Lien Act is general state law not designed to regulate ERISA plans. | ERISA preemption applies; lien enforcement conflicts with ERISA remedies. | ERISA does not preempt the Mechanics Lien Act. |
Key Cases Cited
- Travelers Insurance Co. v. Blue Shield of California, 514 U.S. 645 (Supreme Court 1995) (established limits on 'relate to' preemption; use ERISA objectives as guide to scope)
- Ingersoll-Rand Co. v. McClendon, 498 U.S. 133 (Supreme Court 1990) (discussed preemption framework and traditional state regulation concerns)
- De Buono v. NYSA-ILA Medical & Clinical Services Fund, 520 U.S. 806 (Supreme Court 1997) (illustrated alternative enforcement mechanism analysis for ERISA preemption)
- McHugh v. Construction Employers, Inc., 230 Ill. App. 3d 939 (Ill. App. 1st Dist. 1992) (early Illinois preemption ruling later limited by Travelers' test)