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Swift Electrical Supply Co., Inc. v. Township of Lakewood

October 9, 2001

SWIFT ELECTRICAL SUPPLY COMPANY, INC., PLAINTIFF,
v.
THE TOWNSHIP OF LAKEWOOD, LAKEWOOD DEVELOPMENT CORP., EPIC GROUP, INC., EPIC MANAGEMENT INC., AND ABC CORPORATIONS 1-50 (FICTITIOUS NAMES BEING CORPORATIONS, PERSONS OR ENTITIES INTENDED), DEFENDANTS.
EPIC MANAGEMENT, INC., THIRD-PARTY PLAINTIFF, VS. LOCAL 400, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, AFL-CIO, LOCAL 400 IBEW EMPLOYEE BENEFIT FUNDS, ACE WIRE & CABLE CO., INC., MONARCH ELECTRIC CO., AND COOPER ELECTRIC SUPPLY CO., THIRD-PARTY DEFENDANTS.



The opinion of the court was delivered by: Cooper, District Judge.

FOR PUBLICATION

MEMORANDUM OPINION

This matter comes before the Court in response to its Order to Show Cause why the action should not be remanded to state court and on plaintiff's motion to remand. The action was removed to this Court from the Superior Court of New Jersey, Law Division, Ocean County on the basis of federal question jurisdiction. Although the face of the Complaint asserts only state law claims, defendants assert that necessary federal claims were omitted in violation of the well-pleaded complaint rule and that the state law claims are preempted by sections 502(a) and 515 of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1132(a), 1145, and section 310(a) of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185(a). For the reasons expressed below, the Order to Show Cause and plaintiff's motion will be granted.

BACKGROUND

The parties' dispute arises out of a public project to build a baseball stadium for the Township of Lakewood (the "Project"). (Notice of Removal filed 7-12-01 ("NOR") Ex. A: Compl. filed 5-31-01 ("Compl.") Ct. 1, ¶ 4.) Defendant Epic Management, Inc. worked as the general contractor on the Project for project owners the Township of Lakewood and Lakewood Development Corp. (Compl. Ct. 1, ¶¶ 4-5.) Plaintiff claims it furnished and delivered electrical supplies and materials to Adriana Electrical Contractors Corp. ("Adriana"), the electrical subcontractor working on the project, for which it was never paid. *fn1 (Id. Ct. 1, ¶¶ 6-7.)

Plaintiff filed a civil action against defendants in the Superior Court of New Jersey on May 31, 2001, asserting claims for payment to plaintiff out of the monies due and owing from defendants to Adriana pursuant to the New Jersey Municipal Mechanics' Lien Law ("NJMMLL"), N.J. Stat. Ann. 2A:44-125 et seq., the New Jersey Trust Fund Act, N.J. Stat. Ann. 2A:44-148, (Compl. Cts. 1-2), and for failure to issue joint checks to Adriana and plaintiff pursuant to a Joint Party Check Agreement, (Compl. Ct. 3). Defendants Epic Group, Inc. and Epic Management, Inc. (collectively "Defendants") removed the action to this Court on July 12, 2001, with the consent of the other named defendants. (See NOR.)

On July 26, 2001, the Court issued an Order to Show Cause why the action should not be remanded to state court for lack of federal jurisdiction. (Order to Show Cause filed 7-26-01.) Plaintiff filed a motion to remand the action to state court on the same grounds. (Pl.'s Mot. to Remand filed 7-27-01.) Defendants filed a Third Party Complaint on August 15, 2001, naming as third-party defendants Local 400 IBEW Employee Benefit Trust Funds (the "Funds"), Local 400 International Brotherhood of Electrical Workers, AFL-CIO ("Local 400"), Ace Wire and Cable Company, Inc., Monarch Electric Company, and Cooper Electric Supply Company, (Answer, Countercl. & Third Party Compl. filed 8-15-01.)

DISCUSSION

Defendants argue that this Court has original federal question jurisdiction over the action and that, had the Complaint been well-pleaded, federal claims would have appeared on its face. (Mem. in Opp. to Pl.'s Mot. for Remand & in Response to Order to Show Cause ("Def. Br.") at 9-10.) Specifically, defendants claim that a municipal mechanics' lien claim asserted by the Funds, whom defendants argue should have been named as a necessary party to the Complaint, *fn2 (1) is based upon the failure of Adriana to make benefit contributions under a collective bargaining agreement ("CBA"), and (2) constitutes a suit for collection of fringe benefit contributions. (Id. at 11-13.) Because the Funds are an employee benefit plan, defendants assert that sections 502(a) and 515 of ERISA, 29 U.S.C. §§ 1132(a), 1145, and section 301(a) of the LMRA, 29 U.S.C. § 185(a), completely preempt the NJMMLL claim and provide this Court with exclusive federal jurisdiction over the action. *fn3 (Id.)

Plaintiff argues that the Funds are not a necessary party to the action because they lack standing as claimants under the NJMMLL, the New Jersey Trust Fund Act, and the Bond Act, N.J. Stat. Ann. § 2A:44-143 et seq. (Mem. in Supp. of Pl.'s Motion for Remand ("Pl. Br.") at 5-9.) Specifically, plaintiff claims that the Funds do not qualify as a party entitled to payment within the meanings of these statutes and thus, their asserted liens are null and void. (Id.) The Funds, they argue, are barred from participating in the action and, thus, no federal claims exist. (Id.)

Local 400 and the Funds assert that the causes of action in the Complaint do not arise under federal law and that the doctrine of complete preemption does not apply to an action in which a labor organization or employee benefit plan seeks to enforce claims under the NJMMLL. (Response of Third-Party Defs. to Order to Show Cause ("Funds Br.") at 2-4.) They dispute plaintiff's contention that the Funds are not lien claimants within the meaning of the NJMMLL. (Id. at 4-5.)

I. Federal Jurisdiction and the Well-Pleaded Complaint Rule

An action filed in a state court may be removed to a federal district court only if the federal court has original jurisdiction over the action. 28 U.S.C. § 1441(a). A federal court has original jurisdiction over diversity and federal question jurisdiction cases. See 28 U.S.C. §§ 1331, 1332; Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). A district court has original federal question jurisdiction, the type of jurisdiction alleged in this case, over all civil actions "arising under" the Constitution, laws, or treaties of the United States. 28 U.S.C. § 1331.

Under the "well-pleaded complaint rule," a cause of action arises under federal law only if a federal question is presented on the face of the plaintiff's properly pleaded complaint. Franchise Tax Bd. of the State of Cal. v. Constr. Laborers Vacation Trust for So. Cal., 463 U.S. 1, 6, 9-12 (1983); Louisville & Nat'l R. Co. v. Mottley 211 U.S. 149 (1908); Dukes v. U.S. Healthcare, Inc., 57 F.3d 350, 353 (3d Cir. 1995). A federal defense to a state law cause of action is not sufficient justification for removal to federal court. Dukes, 57 F.3d at 353 (citing Gully v. First Nat'l Bank, 299 U.S. 109, 115-18 (1936)). A plaintiff may choose to forgo federal claims to avoid ...


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