950 F.3d 510
8th Cir.2020Background
- Trustees of three employee benefit funds sued Charps Welding & Fabricating, its corporate affiliates (C&G Construction, Alpha Oil & Gas, Clearwater Energy), and owner Kenneth Charpentier under ERISA for unpaid contributions required by collective bargaining agreements (CBAs).
- Charps was a union signatory; the affiliates were non‑union. Charpentier founded and exercised broad control over all companies; they shared headquarters, some staff, intercompany loans, a common line of credit, and occasionally exchanged employees.
- Audit evidence indicated limited employee overlap: out of roughly 5,500 employees across the companies, only about 135 worked for one company while paid by another.
- The Trustees argued the affiliates were liable either because they were Charps’s alter egos, or were in a joint venture/joint enterprise with Charps, or because CBA language (e.g., work performed “under the name of another” or in “any combination”) independently required contributions.
- The district court granted summary judgment to defendants, awarded attorneys’ fees and costs to defendants; Trustees appealed. The Eighth Circuit affirmed on liability issues, reversed and remanded limited aspects of the costs award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Alter ego liability for affiliates’ work | Affiliates functioned as Charps’s alter egos (common control, shared resources, employee shifts) so affiliates are liable under CBAs | Affiliates were separate business entities used for legitimate business/market reasons, no anti‑union subterfuge | No genuine issue: Trustees failed to show affiliates were used as a subterfuge or displayed anti‑union motive; no alter ego liability |
| Joint venture | Companies operated as a joint venture (contribution, mutual control, profit sharing, contract) | Companies remained distinct; factors (mutual control, profit sharing) not met | No genuine issue: Trustees did not show mutual right of control or sharing of profits required for joint venture |
| Joint enterprise | Companies had a mutual understanding and equal right to control the common purpose | Companies lacked equal legal right to direct others; no uniform management/operations | No genuine issue: Trustees failed to show each defendant had equal right to control; joint enterprise not established |
| Contractual scope of CBAs (“any combination” / “under the name of another”) | CBA language binds work performed by affiliates and work performed under another company’s name | CBA binds Charps only when Charps itself performs work or where companies form a sufficiently close combination (e.g., alter ego/joint venture) | Held for defendants: Absent alter ego/joint venture/joint enterprise, CBA language does not reach separately constituted affiliates; Trustees failed to show Charps performed work “under the name of” an affiliate |
| Claim that Charps underpaid for its own employees | Audit establishes underreporting/underpayment by Charps for some employees/hours | Trustees failed to cite specific admissible record evidence to raise genuine dispute | Claim waived / dismissed: Trustees did not meet burden in opposition or on appeal—insufficient, non‑particularized citations to voluminous records |
| Motion to compel payroll spreadsheets | Trustees sought native spreadsheets for auditing | Defendants produced underlying documents and reports; spreadsheets would be duplicative/burdensome | District court did not abuse discretion in denying the motion to compel as duplicative |
| Attorneys’ fees and costs award | Trustees challenged scope/amount and taxation of certain costs | Defendants argued they achieved some degree of success and fees/costs were appropriate | Fee award affirmed as within discretion; costs award partly vacated and remanded to tax only items taxable under 28 U.S.C. §§ 1821 and 1920 (or recharacterize some non‑taxable items as fees if appropriate) |
Key Cases Cited
- Crest Tankers, Inc. v. Nat’l Mar. Union of Am., 796 F.2d 234 (8th Cir.) (alter ego inquiry in collective bargaining context)
- Greater Kansas City Laborers Pension Fund v. Superior Gen. Contractors, Inc., 104 F.3d 1050 (8th Cir.) (elements/factors for alter ego imputation)
- Trustees of the Graphic Commc’ns Int’l Union Upper Midwest Local 1M Health & Welfare Plan v. Bjorkedal, 516 F.3d 719 (8th Cir.) (analysis of joint venture/combination for CBA liability)
- Torgerson v. City of Rochester, 643 F.3d 1031 (8th Cir. en banc) (standard of review for summary judgment)
- CNH Indus. N.V. v. Reese, 138 S. Ct. 761 (Sup. Ct.) (use ordinary contract principles to interpret CBAs)
- M & G Polymers USA, LLC v. Tackett, 574 U.S. 427 (Sup. Ct.) (clear contractual language controls CBA interpretation)
- Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (Sup. Ct.) (ERISA fee award requires some degree of success on the merits)
- Hensley v. Eckerhart, 461 U.S. 424 (Sup. Ct.) (lodestar method and factors for reasonable attorneys’ fees)