USCA1 Opinion
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
_________________________
No. 94-2046
WILLIAM WILLIAMS, ETC., ET AL.,
Plaintiffs, Appellants,
v.
ASHLAND ENGINEERING CO., INC., ET AL.,
Defendants, Appellees.
__________________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Walter Jay Skinner, Senior U.S. District Judge] __________________________
__________________________
Before
Selya, Boudin and Stahl, Circuit Judges. ______________
__________________________
Robert O. Berger for appellants. ________________
Bradford R. Carver, with whom Edward F. Vena, Michael S. ___________________ _______________ __________
Levitz, and Vena, Truelove & Riley were on brief, for appellees. ______ ______________________
__________________________
January 31, 1995
__________________________
SELYA, Circuit Judge. We are reminded today that SELYA, Circuit Judge. ______________
malapropisms, despite their semantic shortcomings, often describe
the human condition with unerring accuracy. There are, for
example, certain situations that actually do evoke the sensation
of "d j vu all over again."1 We explain below why this appeal _______
falls into that category.
In McCoy v. Massachusetts Institute of Technology, 950 _____ _____________________________________
F.2d 13 (1st Cir. 1991), cert. denied, 112 S. Ct. 1939 (1992), _____ ______
the fiduciary of several union-sponsored employee benefit plans
brought suit to enforce a lien on real property owned by a
university. He alleged that an electrical contractor hired to
construct improvements to school buildings had employed union
members to do the work; that the contractor, heedless of its
obligations under a collective bargaining agreement, neglected to
defray the workers' employee benefit contributions; and that a
state statute, Mass. Gen. L. ch. 254, quoted in the margin,2
____________________
1This epigram is often attributed to Lawrence P. (Yogi)
Berra, a man as famous for mangling the English language as for
belting baseballs. Berra coined many aphorisms but not this
one. See Ralph Keyes, Nice Guys Finish Seventh; Phrases, ___ _____________________________________
Spurious Sayings and Familiar Misquotations 152 (1992) (noting _____________________________________________
that "although this is commonly cited as a `Berra-ism,' Yogi
Berra denies ever saying it"). The phrase's origin is unknown.
2The statute provides in relevant part:
A person to whom a debt is due for
personal labor performed in the erection,
alteration, repair or removal of a building
or structure upon land, by virtue of an
agreement with, or by consent of, the owner .
. . shall . . . have a lien upon such
building or structure . . . .
For purposes of this chapter, a person
2
authorized the fiduciary to collect unpaid contributions by
asserting a mechanic's lien against real property that had been
improved through the plan participants' labor. See McCoy, 950 ___ _____
F.2d at 15. We held that the Employment Retirement Income
Security Act of 1974 (ERISA), 29 U.S.C. 1001-1461 (1988), and
specifically, ERISA 514(a), 29 U.S.C. 1144(a) (commanding
that ERISA "shall supersede any and all State laws insofar as
they may now or hereafter relate to any employee benefit plan"),
preempted use of the Massachusetts mechanic's lien law to recoup
the unpaid contributions. See McCoy, 950 F.2d at 18-20. ___ _____
The case at bar is hauntingly reminiscent of McCoy, _____
and, thus, triggers the sense of d j vu. Appellants are the ________
trustees of certain funds (the Funds) maintained by Local 4 of
the International Union of Operating Engineers to fuel the
union's employee benefit plans. In 1991, members of Local 4,
then employed directly or indirectly by a subcontractor, Ashland
____________________
shall include any employee of any employer
and the trustee or trustees of any fund or
funds, established pursuant to section 302 of
the Taft Hartley Law (29 USC 186), providing
coverage or benefits to said person. The
trustee or trustees of any such fund or funds
shall have all the liens under this chapter
that any person has. The trustee or trustees
shall also have the right to enforce said
liens pursuant to this chapter.
Mass. Gen. L. ch. 254, 1 (1990). The statute also specifically
provides that "the trustee or trustees of a fund or funds,
described in section one, providing coverage or benefits to any
person performing labor under a written contract with a
contractor, or with a subcontractor of such contractor," may file
a lien notice, id. 4, and enforce the lien by a civil action ___
brought against the property owner, id. 5. ___
3
Engineering Company (Ashland), participated in ongoing
construction under the auspices of the Massachusetts Port
Authority (Massport). A collective bargaining agreement
obligated Ashland to contribute monies to the Funds commensurate
with the number of hours each union member toiled on the Massport
project.
In time, Ashland experienced financial problems, became
delinquent on contributions to the Funds, and abandoned the
Massport project. Noting that the general contractor, R.W.
Granger and Sons, Inc. (Granger), had posted a performance-and-
payment bond underwritten by United States Fidelity & Guaranty
Company (USF&G), the trustees sued Ashland, Granger, and USF&G in
an effort to extract the unpaid employer contributions.
The trustees' amended complaint contained three counts:
count 1 sought to collect payments due from Ashland, count 2
sought to collect these payments from USF&G by invoking the
Massachusetts statute under which the bond had been posted,3 and
____________________
3The bond statute provides in pertinent part that, when
state officials contract for construction of public buildings,
they
shall obtain security by bond . . . for
payment by the contractor and subcontractors
for labor performed or furnished and
materials used or employed therein . . . .
and for payment by such contractor and
subcontractors of any sums due trustees . . .
authorized to collect such payments from the
contractor or subcontractors, based upon the
labor performed or furnished as aforesaid,
for health and welfare plans, supplementary
unemployment benefit plans and other fringe
benefits which are payable in cash and
provided for in collective bargaining
4
count 3 sought to reach an asset of Ashland purportedly held by
Granger the bond and to apply the proceeds to Ashland's debt.
Ashland did not defend and, therefore, count 1 is no
longer velivolant. On June 1, 1993, the parties filed cross-
motions for summary judgment on the two remaining counts. The
district court granted the defendants' motions, concluding that
ERISA preempted the section 29 claim as it pertains to employee
benefit plans, and that Granger held none of Ashland's assets.
See Williams v. Ashland Eng'g Co., 863 F. Supp. 46 (D. Mass. ___ ________ _________________
1994). Following the entry of separate judgments, the trustees
appealed.
In this venue, the trustees agree that brevis ______
disposition is warranted the record reveals no genuine issues
of material fact but they contend that the lower court ruled in
favor of the wrong parties. Affording plenary review, see, e.g., ___ ____
Mesnick v. General Elec. Co., 950 F.2d 816, 822 (1st Cir. 1991), _______ _________________
cert. denied, 112 S. Ct. 2965 (1992); Garside v. Osco Drug, Inc., _____ ______ _______ _______________
895 F.2d 46, 48 (1st Cir. 1990), we affirm.4
The centerpiece of the trustees' appeal count 2 is
well within McCoy's precedential orbit. In McCoy, we _____ _____
acknowledged that Congress painted with a broad brush when it
____________________
agreements . . . .
Mass. Gen. L. ch. 149, 29 (1990).
4We eschew any independent discussion of count 3, inasmuch
as we discern no error in the district court's stated reasons for
granting summary judgment on that count. See Williams, 863 F. ___ ________
Supp. at 50.
5
added an express preemption clause to the ERISA canvas. We
described that clause as "sweeping" and "extensive in its scope."
McCoy, 950 F.2d at 16. We also noted that the Massachusetts lien _____
law at issue in McCoy referred specifically to the trustees of _____
employee benefit plans and purported to grant them certain
singular rights. In our view, these features rendered the law
especially vulnerable to preemption, for "[s]tate statutes which
expressly grant preferential benefits to ERISA plans cannot
withstand the preemptive force of ERISA 514(a)." Id. at 20; ___
accord Mackey v. Lanier Collection Agency & Serv., Inc., 486 U.S. ______ ______ ______________________________________
825, 829 (1988). Thus, McCoy made clear that, at a bare minimum, _____
state laws which "specifically refer to ERISA plans and grant
them special treatment" are preempted regardless of a state
legislature's good intentions or a particular law's consistency
with ERISA's overall goals. McCoy, 950 F.2d at 18 (quoting _____
Mackey, 486 U.S. at 829-30). ______
The statute before us today, Mass. Gen. L. ch. 149,
29, invites comparison with the statute we confronted in McCoy. _____
Section 29 requires, inter alia, that a general contractor _____ ____
working on a public project furnish bond to secure payment of
"any sums due trustees . . . for health and welfare plans." Such
plans come under the protective umbrella that ERISA spreads over
the workplace. See 29 U.S.C. 1002(1)(B), (3) (defining covered ___
employee welfare benefit plans); see also McCoy, 950 F.2d at 19- ___ ____ _____
20. Since the statute specifically refers to ERISA-regulated
employee benefit plans, and provides them with a special source
6
of recovery for unpaid employer contributions, McCoy governs. _____
Hence, the bond statute, as it applies to employee benefit plans,
is preempted.
Appellants balk at the characterization of their case
as McCoy redux. They loose an avalanche of arguments, but none _____
is persuasive. Only four of these arguments require comment.
First: Appellants launch a ferocious attack on McCoy, First: _____ _____
intimating that it is wrongly decided and, therefore, should be
limited to its facts. Statutes like the mechanic's lien law or
the bond law, they tell us, affect employee benefit plans in "too
tenuous, remote, or peripheral a manner," Shaw v. Delta Airlines, ____ _______________
Inc., 463 U.S. 85, 100 n.21 (1983), to warrant a conclusion that ____
the statutes "relate to" such plans. This attack is wide of the
mark.
First and foremost, we believe that our earlier opinion
was and is clearly correct (that it is, so to speak, the real
McCoy). And we perceive no rational basis on which to _____
distinguish between the mechanic's lien law and section 29 for
the purpose of gauging ERISA's preemptive reach.
Because the two statutes are quite plainly sisters
under the skin, there is also a prudential barrier that blocks
the path of appellants' attack. In a multi-panel circuit, newly
constituted panels are, for the most part, bound by prior panel
decisions closely on point. See, e.g., Jusino v. Zayas, 875 F.2d ___ ____ ______ _____
986, 993 (1st Cir. 1989); Lacy v. Gardino, 791 F.2d 980, 985 (1st ____ _______
Cir.), cert. denied, 479 U.S. 888 (1986). In this instance, we _____ ______
7
are bound by McCoy. _____
To be sure, there are two exceptions to this
manifestation of stare decisis principles. An existing panel _____ _______
decision may be undermined by controlling authority, subsequently
announced, such as an opinion of the Supreme Court, an en banc
opinion of the circuit court, or a statutory overruling. This
exception is inapposite, for nothing of the kind has transpired
here. The second exception pertains to those relatively rare
instances in which authority that postdates the original
decision, although not directly controlling, nevertheless offers
a sound reason for believing that the former panel, in light of
fresh developments, would change its collective mind. See ___
generally Colby v. J.C. Penney Co., 811 F.2d 1119, 1123 (7th Cir. _________ _____ _______________
1987) (discussing "complex relationship . . . between a court and
its own previous decisions").
Appellants try to wriggle through this loophole. They
suggest that a case recently decided by the Third Circuit casts a
new light on ERISA preemption by focussing on "whether the
existence of ERISA plans is necessary for the statute to be
meaningfully applied," Keystone Chapter, Etc. v. Foley, 37 F.3d ______________________ _____
945, 957 (3d Cir. 1994), and that this shifted focus renders
McCoy obsolete. However, appellants mischaracterize the holding _____
in Keystone. There, the court reviewed a state minimum wage ________
statute that did not refer explicitly to ERISA plans. After
finding that the statute failed to single out such plans for
special treatment, the court invoked the meaningfulness test to
8
determine whether the statute might be said to "relate to" ERISA
plans despite the absence of an express connection. See id. at ___ ___
954-57. Since section 29 does single out ERISA plans for special
swaddling, there is no need to consider the Keystone test in this ________
case.5
Second: Next, the trustees contend that section 29 is, Second: ______
in effect, a law regulating insurance and, therefore, is shielded
from preemption by ERISA 514(b)(2)(A), 29 U.S.C.
1144(b)(2)(A) (a savings clause that, inter alia, renders ERISA _____ ____
preemption inapplicable to "any law of any State which regulates
insurance"). This contention lacks force. In order to
"regulate[] insurance" within the purview of this exception, a
law must not merely have an impact on the insurance industry, or
on particular insurance products, but must be directed
specifically toward the business of insurance. See Pilot Life ____________ ___ __________
Ins. Co. v. Dedeaux, 481 U.S. 41, 50 (1987); Metropolitan Life _________ _______ _________________
Ins. Co. v. Massachusetts, 471 U.S. 724, 739-47 (1985). Section _________ _____________
29 does not satisfy this criterion for two reasons.
In the first place, although surety bonds often are
furnished by insurers, surety bonds are not insurance contracts,
see Mass. Gen. L. ch. 175, 107, and they are not subject to the ___
commonwealth's insurance laws. See Luso-Am. Credit Union v. ___ ______________________
Cumis Ins. Soc., Inc., 616 F. Supp. 846, 848 (D. Mass. 1985); ______________________
____________________
5Indeed, the Keystone court itself found McCoy to be good ________ _____
authority, citing it with approval in holding that ERISA
preempted a state administrative order that did specifically
single out ERISA-regulated plans for special treatment. See ___
Keystone, 37 F.3d at 955. ________
9
General Elec. Co. v. Lexington Contracting Corp., 292 N.E.2d 874, _________________ ___________________________
876 (Mass. 1973). In the second place, section 29 only requires
the posting of an acceptable bond, not necessarily the posting of
a bond underwritten by an insurance company. A cash bond or a
bond backed by, say, a letter of credit, surely would suffice.
In a real sense, then, section 29's impact on the insurance
industry is happenstance. Consequently, the statute cannot
plausibly be deemed to be directed toward, or to regulate, the
business of insurance.
Third: Appellants claim that, here, preemption is Third: _____
beside the point because the bonding company waived the defense
by failing to assert it in the pleadings. This claim prescinds
from USF&G's answer to the trustees' complaint an answer that
did not mention preemption in so many words, but, rather,
contained a general denial and raised, as an affirmative defense,
failure to state a claim upon which relief could be granted.6
On the facts of this case, however, appellants' claim is composed
of more bleat than wool.
Generally speaking, a party must set forth all
affirmative defenses in the pleadings, on pain of possible
forfeiture. See Fed. R. Civ. P. 8(c);7 see also Conjugal ___ ___ ____ ________
____________________
6USF&G also raised a second affirmative defense implicating
appellants' supposed noncompliance with conditions precedent to
recovery set forth in the bond. Given the posture of this
appeal, we need not discuss the second affirmative defense.
7Rule 8(c) requires parties, "[i]n pleading to a preceding
pleading," to "set forth affirmatively" various enumerated
defenses, as well as "any other matter constituting an avoidance
or affirmative defense." While preemption is not listed
10
Partnership v. Conjugal Partnership, 22 F.3d 391, 400 (1st Cir. ___________ ____________________
1994). Here, although USF&G's answer did not specifically
mention a preemption defense, it did contain a broader Rule
12(b)(6) defense that was capable of encompassing preemption.
Cf. McCoy, 950 F.2d at 22-23 (upholding preemption-based ___ _____
dismissal pursuant to Rule 12(b)(6)). The purpose of Rule 8(c)
is to give the court and the other parties fair warning that a
particular line of defense will be pursued. See, e.g., Blonder- ___ ____ ________
Tongue Labs., Inc. v. Univ. of Ill. Found., 402 U.S. 313, 350 __________________ _____________________
(1970); Knapp Shoes, Inc. v. Sylvania Shoe Mfg. Corp., 15 F.3d _________________ _________________________
1222, 1226 (1st Cir. 1994). Hence, a defendant who fails to
assert an affirmative defense at all, or who asserts it in a
largely uninformative way, acts at his peril. See, e.g., FDIC v. ___ ____ ____
Ramirez-Rivera, 869 F.2d 624, 626 (1st Cir. 1989). ______________
In determining whether general, non-specific language
in a defendant's answer, as was used here, suffices to preserve
an affirmative defense, an inquiring court must examine the
totality of the circumstances and make a practical, commonsense
assessment about whether Rule 8(c)'s core purpose to act as a
safeguard against surprise and unfair prejudice has been
vindicated. In this case, USF&G complied with the spirit, if not
the letter, of Rule 8(c). Well before the close of discovery
and six months prior to the filing of the cross-motions for
____________________
specifically in the enumeration, it is a "matter constituting an
avoidance," and, thus, ordinarily comes within the ambit of the
rule. See, e.g., Keenan v. Dow Chem. Co., 717 F. Supp. 799, 808- ___ ____ ______ _____________
09 (M.D. Fla. 1989).
11
summary judgment USF&G wrote to appellants and amplified its
position, asseverating that count 2 should be dismissed under
Rule 12(b)(6) because ERISA preempted section 29. In the papers
accompanying the cross-motions for summary judgment, both sides
briefed the preemption issue. Thus, no ambush occurred.
Where, as here, a plaintiff clearly anticipates that an
issue will be litigated, and is not unfairly prejudiced when the
defendant actually raises it, a mere failure to plead the defense
more particularly will not constitute a waiver. See Conjugal ___ ________
Partnership, 22 F.3d at 401; Lucas v. United States, 807 F.2d ___________ _____ ______________
414, 418 (5th Cir. 1986).
Fourth: Appellants' final attempt to resuscitate their Fourth: ______
claim against USF&G is hardly worth mentioning. It involves the
resupinate assertion that the Supremacy Clause of the Federal
Constitution, U.S. Const. art. VI, cl. 2, bars preemption of
section 29. This assertion is doubly flawed. For one thing, it
is new to the case, having been alluded to, but not developed
below, and accordingly, it is procedurally defaulted. See, e.g., ___ ____
McCoy, 950 F.2d at 22 ("It is hornbook law that theories not _____
raised squarely in the district court cannot be surfaced for the
first time on appeal."). For another thing, it takes a topsy-
turvy view of preemption. After all, when the Supremacy Clause
is implicated, federal law trumps state law, not vice versa. See ___
Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142 _____________________________________ ____
(1963).
We need go no further. The district court astutely
12
concluded that past is prologue, and looked to McCoy. See _____ ___
Williams, 863 F. Supp. at 48. We agree that McCoy controls. ________ _____
Hence, Mass. Gen. L. ch. 149, 29, as it applies to employee
welfare benefit plans, is preempted by ERISA 514(a). The
trustees' suit, therefore, fails.
Affirmed. Affirmed. ________
13