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The First Circuit ruled on Thursday that the International Longshoremen's Association (ILA) Local 1740 in San Juan, Puerto Rico, must pay nearly $1.7 million in unpaid pension contributions and attorney fees after inheriting debts from a merged local union. The decision affirms a lower court's ruling that Local 1740 is liable for the pension fund obligations of the now-defunct Local 1575, which had fallen into arrears.

Longshoremen $1.7M Unpaid Collect : Merger and Liability

Local 1575, which represented workers at Horizon Lines LLC, was over $1 million behind on pension contributions when the company shut down in 2015. To resolve job disputes, the ILA consolidated Local 1575 and two other locals into Local 1740. The pension fund subsequently sued, arguing that Local 1740 assumed responsibility for Local 1575’s debts under the terms of the merger agreement. A federal district court sided with the pension fund, awarding it nearly $1.7 million, which included the unpaid contributions, attorney fees, and costs.

Court Rebuffs Local 1740’s Arguments

Local 1740 appealed the decision, arguing that the merger was not officially approved by the larger ILA and, therefore, it should not be responsible for Local 1575’s liabilities. The First Circuit rejected this argument, ruling that the merger agreement was clear under Puerto Rico law and did not require ILA approval for it to take effect. The court also dismissed Local 1740's claim that the merger did not include pension obligations, affirming the lower court’s interpretation of the agreement.

Longshoremen $1.7M Unpaid Collect : Attorney Fees and Conclusion

The First Circuit upheld the lower court's calculation of attorney fees, which had been adjusted to account for differences between rates in San Francisco, where the pension fund's counsel is based, and San Juan. The ruling solidifies Local 1740's responsibility for the pension debts it inherited through the merger.