Local 144 Nursing Home Pension Fund v. Demisay,
508 U.S. 581 (1993)

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No. 91-610. Argued January 11, 1993-Decided June 14, 1993

For several years, respondent employers had made contributions to two trust funds (collectively, Greater Funds) on behalf of their employees. In 1984, however, the employers ended their participation in the Greater Funds and agreed, in collective-bargaining agreements with the relevant union, to establish a new set of trust funds (collectively, Southern Funds). To help finance the change between the funds, the employers and other respondents brought an action to compel petitioners, the Greater Funds and their trustees, to transfer to the Southern Funds that portion of the Greater Funds' reserves attributable to respondents' past contributions. Respondents asserted a right to relief under, inter alia, §302 of the Labor Management Relations Act, 1947, which prohibits payments from employers to union representatives, §§ 302(a) and (b), but affords an exception under § 302(c)(5) for payments to an employee trust fund if certain conditions are met, including that the trust fund be "established ... for the sole and exclusive benefit of the employees," and that the payments be "held in trust for the purpose of paying" employee benefits. Respondents' theory was that, unless the reserves attributable to the employers' past contributions were transferred, the Greater Funds would fail to meet § 302(c)(5)'s conditions and would thus suffer from a "structural defect" which could be remedied by the federal courts pursuant to the power conferred by § 302(e) to "restrain violations of this section." The District Court granted petitioners' motion for summary judgment, finding no such "structural defect" in the Greater Funds, but the Court of Appeals reversed and remanded for the District Court to shape an appropriate remedy.

Held: A federal court does not have authority under §302(e) to issue injunctions against a trust fund or its trustees requiring the trust funds to be administered in the manner described in § 302(c)(5). Section 302(e) provides district courts with jurisdiction "to restrain violations of this section," and a violation of § 302 occurs when payments prohibited by §§ 302(a) and (b) are made. The exception to violation set forth in § 302(c)(5) describes the character of the trust to which payments are allowed, leaving it originally to state trust law, and now to federal trust law under the Employee Retirement Income Security Act of 1974, to



determine when breaches of that trust have occurred and how they may be remedied. Language in Arroyo v. United States, 359 U. S. 419, 426427, and NLRB v. Amax Coal Co., 453 U. S. 322, 331, that is perhaps susceptible of a contrary reading is pure dicta. Pp. 587-593.

935 F.2d 528, reversed and remanded.

SCALIA, J., delivered the opinion of the Court, in which REHNQUIST, C. J., and O'CONNOR, KENNEDY, SOUTER, and THOMAS, JJ., joined. STEVENS, J., filed an opinion concurring in the judgment, in which WHITE and BLACKMUN, JJ., joined, post, p. 593.

Henry Rose argued the cause for petitioners. With him on the briefs was Linda E. Rosenzweig.

Ronald E. Richman argued the cause for respondents.

With him on the brief were Mark E. Brossman and Eileen M. Fields.*

JUSTICE SCALIA delivered the opinion of the Court.

This case presents the question whether a federal district court may issue an injunction pursuant to § 302 of the Labor Management Relations Act, 1947 (LMRA), 61 Stat. 157, as amended, 29 U. S. C. § 186 (1988 ed. and Supp. III), requiring the trustees of a multiemployer trust fund to transfer assets from that fund to a new multiemployer trust fund established by employers who broke away from the first fund.


Respondents include a group of employers that, until 1981, were members of a multiemployer bargaining association, the Greater New York Health Care Facilities Association, Inc. (Greater Employer Association). Two trust funds-the

*Briefs of amici curiae urging reversal were filed for the United States by Solicitor General Starr, Christopher J. Wright, Ronald J. Mann, Allen H. Feldman, Mark S. Flynn, Carol Connor Flowe, and Jeffrey B. Cohen; for the Central States, Southeast and Southwest Areas Health and Welfare and Pension Funds by Thomas C. Nyhan and Terence G. Craig; for the National Coordinating Committee for Multiemployer Plans by Gerald M. Feder and David R. Levin; and for the Western Conference of Teamsters Pension Trust Fund by Robert M. Westberg and Kirke M. Hasson.

Full Text of Opinion

Primary Holding

A federal court does not have authority under § 302(e) of Labor Management Relations Act to issue injunctions against a trust fund or its trustees requiring that fund be administered in accordance with §302(c)(5).

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