Winning Race to Courthouse Does Not Win ERISA Preemption

Bd. of Trustees of Cement Masons & Plasterers Health & Welfare Trust v. GBC Northwest, LLC, 2007 WL 1306545 (W.D. Wash. May 3, 2007), reconsid’n denied, 2007 WL 1521220 (W.D. Wash. May 22, 2007)

A split of authority exists between Washington state courts and federal courts regarding whether an employee benefit trust fund can use state lien laws to recover unpaid employee benefit contribution payments.  In 2000, the Washington Supreme Court held that ERISA preempted the state public works lien law.  Int’l Bd. of Elec. Workers v. Trig Elec. Contr. Co., 142 Wash.2d 431, 13 P.3d 622 (2000).  Two years later, however, Judge Coughenour of the U.S. District Court for the Western District of Washington noted that federal law, as determined by federal courts, governs questions of ERISA preemption, and that ERISA does not preempt Washington’s public works lien laws.  Ironworkers Dist. Council of the Pacific Northwest v. George Sollit Corp., M.A., 2002 WL 31545972 (W.D. Wash. Sept. 4, 2002).

In this more recent case, after the plaintiff trust fund filed its lien, but before it filed suit to foreclose its lien, the defendants filed a declaratory judgment action in state court seeking a ruling that ERISA preempted the lien claim.  Despite this, the trust fund filed its ERISA claim in federal court and sought supplemental jurisdiction over its state court lien foreclosure claim.  The trust fund’s hearing on summary judgment in federal court was heard first.  Judge Coughenour granted summary judgment in favor of the trust fund, notwithstanding the pending declaratory judgment action in state court.  It is unclear whether the outcome would have been different if defendants had been able to have their summary judgment hearing scheduled in state court first.