English v. Local Union #46 (654 F.2d 473, 1981)

PER CURIAM.

This is an appeal from a final judgment denying plaintiff’s motion to disqualify defendants’ counsel and dismissing plaintiff’s complaint for failure to state a claim. We hold that the allegations of the complaint state a claim and that the magistrate and the district court acted too hastily in dismissing the action. Therefore we reverse the judgment of the district court and remand the case for further proceedings. On the other hand, we affirm the district court’s denial of plaintiff’s motion to disqualify defendants’ counsel.

Plaintiff, Forrest G. English, is a member of defendant Local Union No. 46, International Association of Bridge, Structural and Ornamental Iron Workers. Plaintiff brought this action against Local 46 and three of its officers, under 29 U.S.C. § 431(c) seeking access to the books and records of Local 46 as they relate to the LM-2 reports filed by the union with the Secretary of Labor. The complaint alleges that the Local has been a party to a series of collective bargaining agreements pursuant to which employers are required to make certain contributions to the Joint Apprenticeship Training Committee Fund (“Fund”). The complaint further alleges that the contributions are paid to the defendant Local. Plaintiff alleges that the Local has failed to report these receipts, which plaintiff estimates to be approximately $185,000, on the Local’s LM-2 reports. Plaintiff alleges that he requested defendants to permit him to examine the Local’s books and records pursuant to 29 U.S.C. § 431(c) and that his request was refused. The complaint seeks production of the Local’s records and an accounting of the alleged Fund.

Attached to plaintiff’s complaint are a series of collective bargaining agreements between Local No. 46 and the Central Illinois Builders of Associated General Contractors and other employers and A.G.C. of Illinois covering highway and heavy construction. These contracts all provide for contributions by the employer to various fringe benefit programs, including contributions to the Joint Apprenticeship Training Fund and to the Welfare and Pension Plans. Each contract provides:

The .. . contribution for Joint Apprenticeship Training Fund shall be paid monthly to the JATC Training Fund, c/o Iron Workers Local 46. Contributions to the Welfare Plan shall be payable monthly to the Iron Workers St. Louis District Council Welfare Plan and the contributions to the Pension Program shall be payable monthly to the Iron Workers St. Louis District Council Pension Fund, all these on forms provided by the Fund Office. The said Welfare Plan, Pension Plan and JATC Training Fund shall be administered in accordance with an agreement and declaration of trust administered jointly by an equal number of representatives of the EMPLOYERS and the UNION, which agreement and declaration of trust, together with any amendments thereto, shall conform to all requirements of law. A copy of said agreement and declaration of trust, together with any amendments thereto, shall be considered as part of this Agreement as though set forth here at length.

The collective bargaining agreement for the period May 1, 1977 through April 30, 1980 (Exhibit A-6 to plaintiff’s complaint) contains a section on enforcement of contributions due to the Iron Workers St. Louis District Council Pension and Welfare Plan. The excerpt of the contract appended to plaintiff’s complaint does not contain a comparable provision as far as the JATC Fund is concerned.

Also attached to plaintiff’s complaint is an example of the form which employers use in computing and reporting contributions to the various funds. It is entitled, “Bridge, Structural & Ornamental Iron Workers Local Union No. 46, JATC Fund Apprenticeship Training Program and Central Illinois Industry Advancement Fund.” On one line the employer is to compute and report the contribution to Local 46 JATC Fund at eight cents (8$) per hour. The employer is instructed, “Your check in this amount should be drawn payable to Local 46 JATC Fund and mailed to our [i. e. Local 46’s] office 2888 East Cook Street, Springfield, Illinois, by the 15th of the month following the month covered by this report.” Another line on this same form is to be used by the employer to report its contribution to the Central Illinois Builders Industry Advancement Fund at five cents (5