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Home > Blog > Blog > Sixth Circuit: In ERISA Suit for Late Benefit Fund Contributions, Presence of a Live Contract Is Not Necessary for District Court’s Jurisdiction

Sixth Circuit: In ERISA Suit for Late Benefit Fund Contributions, Presence of a Live Contract Is Not Necessary for District Court’s Jurisdiction

In Operating Engineers’ Loc. 324 Fringe Benefit Funds v. Rieth-Riley Constr. Co., No. 21-1229, 2022 WL 3147929 (6th Cir. Aug. 8, 2022), Plaintiffs-Appellants are a group of employee benefit funds that sued Rieth-Riley Construction Company for late contributions under ERISA § 515 and LMRA § 301 based on the terms of an expired Collective Bargaining Agreement. The district court determined that it did not have jurisdiction because there was no live contract which bound the parties. The court dismissed the Funds’ claims, directed them to the NLRB, and dismissed their suit without prejudice. On appeal, the Sixth Circuit answered the following question:  Is “the presence of a live contract” an “essential jurisdictional fact” in a § 515 ERISA action?

The court found that the Supreme Court’s decision in Laborers Health & Welfare Tr. Fund for N. Cal. v. Advanced Lightweight Concrete Co., 484 U.S. 539, 549, 108 S.Ct. 830, 98 L.Ed.2d 936 (1988) mostly resolves the dispute. It stands for the proposition that “ERISA grants federal district courts jurisdiction to hear breach-of-contract claims, not unfair-labor-practice claims.” Advanced Lightweight did not hold that the source of an employer’s contribution obligation serves as a factual predicate for ERISA jurisdiction. If a plaintiff brings an ERISA claim for promised contractual contributions, a federal district court has jurisdiction to hear the suit as long as the plaintiff’s claim rests on good-faith assertions that independent live agreements bind the employer. Here, the Funds argued that Rieth-Riley failed to make its promised contractual contributions. While in the end the Funds’ claim may fail for the reason the district court gave (no live contract), that goes to the merits, not to the court’s jurisdiction to hear the dispute. The court reversed the district court’s dismissal of the Funds’ claim for lack of subject-matter jurisdiction and remanded for further proceedings.

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