Laborers' Pension Fund v. W.R. Weis Company, Inc.
879 F.3d 760
| 7th Cir. | 2018Background
- W.R. Weis Co., a Chicago stonework contractor, historically employed bricklayers and Laborers and paid contributions to the Laborers’ multiemployer pension Fund under a collective-bargaining agreement.
- After a 2002 union merger, Weis began hiring marble setters and finishers (higher-skilled trades) and stopped employing Laborers by 2009; it ceased contributions to the Laborers’ Fund and formally terminated the Laborers’ CBA in 2012.
- The Fund assessed withdrawal liability under ERISA and the MPPAA (initially based on 2012, later adjusted to October 2009) and Weis paid the assessment under the “pay now, dispute later” rule but arbitrated liability, claiming a statutory exemption for building/construction employers (29 U.S.C. § 1383(b)).
- The arbitrator found Weis exempt under § 1383(b) and alternatively applied equitable estoppel; the district court confirmed the award after concluding the CBA was ambiguous and the arbitrator reasonably relied on the parties’ historical practice and audits showing the Fund had treated Weis as compliant.
- The district court denied Weis’s motion for attorney’s fees, finding the Fund’s position was substantially justified; both sides appealed.
Issues
| Issue | Fund (Plaintiff) Argument | Weis (Defendant) Argument | Held |
|---|---|---|---|
| Whether the arbitrator misinterpreted § 1383(b)(2)(B)(i) by requiring evidence that contributions were previously collected (a course-of-dealing requirement) | Statute requires that contributions were “previously required” (not tied to what plan actually collected); arbitrator erred by relying on collection history | Liability depends on whether the parties’ CBA required contributions for the work performed; arbitrator permissibly relied on course of dealing to resolve contractual ambiguity | Fund waived the statutory-interpretation challenge by not raising it in arbitration; arbitrator’s approach matched the statute as applied to the CBA and her factual findings survive clear-error review — affirmed |
| Whether arbitrator correctly construed the CBA and relied on historical practice (factfinding) | Argued CBA required contributions for covered work (but did not preserve a statutory argument at arbitration) | CBA ambiguous; historical practice and audits show Fund didn’t require contributions for the work once Weis shifted trades | Arbitrator reasonably resolved ambiguity by looking to course of dealing and audits; factual findings not clearly erroneous — affirmed |
| Whether equitable estoppel justified relief (alternative ground) | Challenged arbitrator’s estoppel ruling in district court | Weis asserted estoppel as independent basis for refund | District court did not award fees on this ground; appellate court did not need to reach estoppel merits in detail |
| Whether Weis is entitled to attorneys’ fees under ERISA §1451(e) after prevailing | Fund argued its position was substantially justified due to contract ambiguity and fact-intensive dispute | Weis sought fees as prevailing party because it confirmed arbitration award in court | District court did not abuse discretion: Fund’s position was substantially justified given ambiguous contract language and non-frivolous arguments — denial of fees affirmed |
Key Cases Cited
- Cent. States, Se. & Sw. Areas Pension Fund v. Midwest Motor Exp., Inc., 181 F.3d 799 (7th Cir. 1999) (standards for reviewing arbitrator’s factual findings, law–fact application, and legal conclusions)
- Aeroground, Inc. v. CenterPoint Props. Tr., 738 F.3d 810 (7th Cir. 2013) (arbitrator’s factual findings reviewed for clear error)
- Bhd. of Maint. of Way Emps. v. Atchison, Topeka & Santa Fe Ry. Co., 138 F.3d 635 (7th Cir. 1997) (permitting inquiry into parties’ practice, usage, and custom to resolve contract ambiguity)
- Bowers v. Andrew Weir Shipping, Ltd., 27 F.3d 800 (2d Cir. 1994) (argument not raised before arbitrator is waived)
- Dexia Crédit Local v. Rogan, 629 F.3d 612 (7th Cir. 2010) (arguments raised first in a reply brief are waived)
- Certco, Inc. v. Int’l Bhd. of Teamsters, Local Union No. 695, 722 F.3d 1097 (7th Cir. 2013) (presumption that prevailing party should recover fees when court is asked to overturn an arbitration award)
- Cont’l Can Co. v. Chi. Truck Drivers, Helpers & Warehouse Workers Union (Indep.) Pension Fund, 921 F.2d 126 (7th Cir. 1990) (ERISA fee-shifting: loser must show its position was substantially justified)
- Jackson Fin. Corp. v. Humana Ins. Co., 641 F.3d 860 (7th Cir. 2011) (definition of substantially justified: more than non-frivolous but less than meritorious)
- Cent. States, Se. & Sw. Areas Pension Fund v. Sherwin-Williams Co., 71 F.3d 1338 (7th Cir. 1995) (district court’s fee-award decision under ERISA reviewed for abuse of discretion)