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Marshall v. Anderson Excavating and Wrecking Co.

United States District Court, D. Nebraska

November 30, 2015

ROD MARSHALL, TRUSTEE, et al., Plaintiffs,
v.
ANDERSON EXCAVATING AND WRECKING CO., a/k/a ANDERSON EXCAVATING CO., Defendant.

MEMORANDUM AND ORDER

John M. Gerrard United States District Judge

This matter is before the Court on an Order to Show Cause as to why the Court should not stay this action pending arbitration. Filing 51. For the reasons stated below, the Court will not stay this action pending arbitration.

BACKGROUND

(a) Factual Background

The plaintiffs are the International Union of Operating Engineers, Local 571 ("the Union"); and the trustees ("the Trustees") of both the Contractors, Laborers, Teamsters and Engineers Health and Welfare Plan ("Welfare Plan") and the Contractors, Laborers, Teamsters and Engineers Pension Plan ("Pension Plan"). Filing 1 at ¶¶ 2-7. The two trusts were established by various construction labor unions and contractors to administer health benefits and a pension program for employees represented by the unions. Filing 1 at ¶ 4-5. Anderson Excavating is a Nebraska corporation. Filing 1 at ¶ 7.

According to the plaintiffs, in 2004, the Union and Anderson Excavating entered into a collective bargaining agreement (CBA). See, filing 1 at ¶ 8; filing 1-1 at 1. The plaintiffs allege that this CBA binds the parties to two separate trust agreements, which obligate Anderson Excavating to contribute to the Welfare Plan and Pension Plan, filing 1 at ¶ 8; submit to audits, filing 1 at ¶ 9; and deposit collateral for its payments to the Welfare Plan and Pension Plan, filing 1 at ¶ 13, 14. The plaintiffs allege that although Anderson Excavating has made some contributions to the Welfare Plan and Pension Plan, it has refused to allow the Trustees to audit its records, filing 1 at ¶ 9, and has not deposited collateral, filing 1 at ¶ 15.

The plaintiffs have sued Anderson Excavating under 29 U.S.C. § 185(a), 29 U.S.C. § 1132, and 29 U.S.C. § 1145 for specific performance of the CBA and the two trust agreements. Filing 1 at ¶ 1. The plaintiffs ask the Court to allow them to perform an audit of the defendant's records, to require the defendant to pay any amount still owing into the Welfare Plan and Pension Plan, to deposit collateral as security for the Welfare Plan and Pension Plan, and to pay the plaintiffs' costs and attorney fees. Filing 1 at ¶¶ 11, 16.

(b) Procedural Background

The plaintiffs filed their complaint on March 25, 2014. Filing 1. The defendant filed an answer on May 16, 2014, filing 10, after a motion for extension of time, filing 8. In that answer, the defendant raised the affirmative defense that the "Court lacks jurisdiction over this dispute pursuant to Section B of Article XII of the Collective Bargaining Agreement." Filing 10 at 3. Section B of Article XII is an arbitration provision. Filing 1-1 at 14. However, the defendant did not move to stay proceedings or to compel arbitration at that time. In the months following, the parties had two Rule 26(f) planning meetings, filings 13 and 32, attended scheduling conferences with the Magistrate Judge, filings 33 and 47, made initial disclosures, filing 17, and designated experts, filing 23. On January 29, 2015, the defendant filed an amended answer to the complaint, which restated its affirmative defense as to the arbitration provision. Filing 37 at 3. But the defendant still did not move to compel arbitration and stay the proceedings.

Afterward, the parties engaged in extensive discovery: the defendant served interrogatories, requests for production of documents, and requests for admissions on the plaintiffs, filing 39, and responded to the plaintiffs' interrogatories and requests for production of documents, filing 38. On June 11, 2015, shortly after the deadline for taking depositions had passed, filing 33, the defendant filed a "motion for partial summary judgment." Filing 40. The defendant asked the Court to grant summary judgment on the ground that the defendant was not a party to the two trust agreements, and that to the extent that CBA bound the defendant to the trust agreements, that CBA had expired. Filing 40 at 2. The defendant included a footnote indicating that it did not intend its motion to waive the "many additional defenses and theories that preclude recovery by the Plaintiffs, including but not limited to for the reason that the facts do not justify any relief." Filing 41 at 3. The Court denied summary judgment, finding as a matter of law that the CBA contained an evergreen clause. Filing 45 at 5.

The case was scheduled for trial on September 30, 2015. Filing 47. The parties proceeded to a pretrial conference with the Magistrate Judge on September 21, 2015. Filing 48 at 2. At this pretrial conference, "defense counsel explained defendant['s] theory regarding why this court lacks subject matter jurisdiction." Filing 48 at 1. The Magistrate Judge ordered the defendant to file a motion to dismiss for lack of subject matter jurisdiction by October 1, 2015, and continued the pretrial conference and trial. Filing 48 at 1-2.

On October 1, the defendant moved for judgment on the pleadings or in the alternative for dismissal, arguing that under the terms of the CBA, the plaintiffs were required to submit their dispute to arbitration, rather than filing suit. Filing 49 at ¶ 9. The defendant argued that, as a result, this Court has no subject-matter jurisdiction over the dispute, and requested that the Court either issue a judgment on the pleadings or dismiss the suit. Filing 49 at ¶ 1. The plaintiffs countered that the CBA required only the Union, and not the Trustees, to submit to arbitration, and that therefore the defendant's motion should be denied. Filing 50 at 3.

In its memorandum and order, the Court found that the CBA contained a mandatory arbitration provision binding the Union and the defendant. Filing 51 at 5. The Court concluded that this fact did not deprive the Court of subject-matter jurisdiction, but that instead it might require the Court to compel arbitration. Filing 51 at 5. The Court further found that this provision did not bind the Trustees; however, it ordered the parties to show cause as to why the Court should not stay the entire action pending arbitration between the Union and the ...


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