ERISA-Eighth Circuit Holds That Employer Was Precluded From Denying Liability To Pay Fringe-Benefit Contributions

In Twin City Pipe Trades Service Association, Inc. v. Wenner Quality Services, Inc., No.16-1791 (8th Cir. 2017), Twin City Pipe Trades Service Association, Inc. (the “Association”) is attempting to recover unpaid fringe-benefit contributions allegedly due under a collective bargaining agreement (the “CBA”). The district court granted summary judgment for the Association on the ground that Wenner Quality Services, Inc. (“Wenner”)  was precluded by a previous lawsuit from disputing liability for the contributions as an alter ego of a signatory of the CBA. The court then awarded damages and injunctive relief to the Association.

Upon reviewing the case, the Eighth Circuit Court of Appeals (the “Court”) said that it agreed with the district court that the Association was entitled to judgment on liability, since all of the elements required to apply issue preclusion are present here. No additional fairness considerations are raised that would preclude application of the doctrine in this circumstance.

However, the Court concluded that the district court erred in awarding certain damages to the Association, since those damages were not authorized by ERISA and that the award should be reduced accordingly. The Court also uphold the district court’s grant of injunctive relief. Accordingly, the Court affirmed the district court’s ruling in part and reversed the ruling in part.

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