759 F.3d 122
1st Cir.2014Background
- Quincy, MA enacted a Responsible Employer Ordinance requiring bidders on municipal public works to "engage in a bona fide apprentice training program" registered under Massachusetts law and to have at least one apprentice graduate within the prior 12 months.
- Merit Construction Alliance (with two member firms and an employee, David Ross) sued Quincy in federal court claiming ERISA preemption of the apprentice-training requirement; the City continued to enforce the requirement despite similar litigation in Fall River.
- The district court granted preliminary injunction and summary judgment for plaintiffs, enjoining enforcement of the apprentice-training requirement as preempted by ERISA; the City conceded the residency issue and litigation focused on preemption and fees.
- The district court awarded plaintiffs $81,007.85 in attorneys’ fees under ERISA’s fee-shifting statute, 29 U.S.C. § 1132(g)(1), and also relied in part on 42 U.S.C. § 1988; the City sought reconsideration and appealed.
- The First Circuit addressed (1) standing (raised for first time on appeal), holding the Alliance and its members had associational and individual standing, and (2) ERISA preemption and the scope of fee-shifting under § 1132(g)(1).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does ERISA § 1144(a) preempt Quincy's apprentice-training bidding requirement? | Ordinance forces employers to operate state-approved apprenticeship programs, which are ERISA-covered welfare benefit plans, so ERISA preempts it. | Local apprenticeship regulation is remote from ERISA's funding goals; non-ERISA compliance options exist so no preemption. | ERISA preempts the Ordinance: it mandates the structure and administration of apprentice programs, undermining ERISA's uniformity goal. |
| Do plaintiffs have Article III standing to litigate ERISA preemption? | Alliance and members are injured because they cannot bid without complying; associational standing applies. | City suggested an ERISA-plan nexus requirement for standing. | Alliance and members have standing; no ERISA-plan nexus is required for Article III standing. |
| Was the district court authorized to award attorneys’ fees under 29 U.S.C. § 1132(g)(1)? | Fees appropriate for prevailing plaintiffs in ERISA actions; at least Ross could be a qualifying "participant." | Plaintiffs (and Ross) are not participants/beneficiaries/fiduciaries of an ERISA plan related to the apprentice program; § 1132(g)(1) does not apply. | Reversed: district court erred to the extent it awarded fees under § 1132(g)(1) because no qualifying participant/beneficiary/fiduciary with nexus to the contested plan was shown. |
| May the fee award be sustained under 42 U.S.C. § 1988 for the residency claim and related work? | Interconnected litigation permits awarding fees under § 1988 for related work; City conceded $20,725 tied to residency claim. | District court failed to apportion; the full ERISA-based award was improper. | Remanded: district court should reconsider and, if appropriate, apportion and determine what additional fees (beyond the conceded $20,725) may be allowable under § 1988. |
Key Cases Cited
- Shaw v. Delta Air Lines, 463 U.S. 85 (Sup. Ct.) (ERISA preemption standard: "relate to" means connection with or reference to ERISA plans)
- De Buono v. NYSA-ILA Med. & Clinical Servs. Fund, 520 U.S. 806 (Sup. Ct.) (interpretive cautions about ERISA preemption language)
- N.Y. State Conf. of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645 (Sup. Ct.) (ERISA preemption goals and uniformity concerns)
- Cal. Div. of Labor Standards Enforcement v. Dillingham Constr., Inc., 519 U.S. 316 (Sup. Ct.) (distinguishing indirect economic influence from state mandates on apprenticeship programs)
- Fort Halifax Packing Co. v. Coyne, 482 U.S. 1 (Sup. Ct.) (state requirements that force plan creation/modification can trigger preemption)
- Ingersoll-Rand Co. v. McClendon, 498 U.S. 133 (Sup. Ct.) (ERISA’s uniformity purpose disfavours tailoring to each jurisdiction)
- Egelhoff v. Egelhoff ex rel. Breiner, 532 U.S. 141 (Sup. Ct.) (ability to opt out does not save a state law from ERISA preemption)
- Golden Gate Rest. Ass'n v. City & County of San Francisco, 546 F.3d 639 (9th Cir.) (distinguishing expenditure mandates that may be satisfied outside ERISA plans from direct mandates of plan formation)
- Simas v. Quaker Fabric Corp., 6 F.3d 849 (1st Cir.) (ERISA has multiple purposes including regulatory uniformity)