Columbia Export Terminal, LLC v. ILWU-PMA Pension Fund

Background

Columbia Export Terminal, LLC (CET) sued the ILWU-PMA Pension Plan and ILWU-PMA Welfare Plan, collectively called the Plans, under the Employee Retirement Income Security Act of 1974 (ERISA). CET sought a declaration that it was entitled to a refund or restitution of alleged overpayments made because of a mistake of fact or law.

CET alleged that employees represented by the International Longshore and Warehouse Workers Union submitted time sheets overstating the hours they worked. According to CET, some employees split shifts but reported that both had worked full shifts, while others reported that absent employees had worked. CET claimed it was required under a collective bargaining agreement (CBA) to make contributions to the Plans based on actual hours worked, and that these practices caused excess contributions. The Plans denied CET’s reimbursement request, stating that CET needed an arbitration award or other binding authority interpreting the CBA before the Trustees could determine that the contributions were made by mistake.

Arguments and analysis

The Plans moved to dismiss on several grounds: that the claim was precluded by Section 301 of the Labor Management Relations Act (LMRA); that CET failed to state a claim under the Plan Agreements; that CET failed to exhaust required administrative remedies; and that CET’s settlement of related racketeering litigation waived claims concerning the same events.

The court rejected CET’s procedural objections to the motion. Although the Plans had not raised failure to state a claim in their earlier motion, the court concluded that considering the later motion would promote efficiency. The court also declined to treat the motion as one for summary judgment based on the materials submitted. It considered the settlement agreement only in deciding whether amendment would be futile.

The court held that CET’s ERISA claim was precluded by the LMRA insofar as resolving it required interpreting the CBA. CET’s claim depended on determining whether employees knowingly reported hours they had not worked and whether the CBA authorized or excused the reported hours. The court concluded that these issues were substantially dependent on interpretation of the CBA and therefore belonged in the CBA’s grievance process. The court distinguished claims involving independent ERISA rights, noting that CET had not asserted a similar independent fiduciary-duty claim.

Disposition

The court granted the Plans’ motion to dismiss, with leave to amend. It declined to conclude as a matter of law that the settlement agreement barred CET’s claims against the Plans, so it allowed CET to file an amended complaint by June 6, 2023, if it could do so in good faith and comply with Rule 11. The Plans were directed to answer or otherwise respond by June 27, 2023, and the court set an initial case-management conference for August 4, 2023.

Judge Jeffrey White signed the order.