Ross v. International Broth. of Elec. Workers

• Citation: 634 F.2d 453
• Decision Date: 22 December 1980
• Docket Number: No. 77-3914,77-3914
• Parties: 106 L.R.R.M. (BNA) 2416, 90 Lab.Cas. P 12,489 Glynn ROSS and Nancy Ross, husband and wife, Plaintiff-Appellant, v. INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, a Labor Organization Organized Under the Laws of the United States of America; Raymond Duke, International Vice-President, and Thelma Duke, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 453

634 F.2d 453

106 L.R.R.M. (BNA) 2416, 90 Lab.Cas. P 12,489

Glynn ROSS and Nancy Ross, husband and wife, Plaintiff-Appellant, v. INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, a Labor Organization Organized Under the Laws of the United States of America; Raymond Duke, International Vice-President, and Thelma Duke, Defendants-Appellees.

No. 77-3914.

United States Court of Appeals Ninth Circuit.

Argued and Submitted March 13, 1980.

Decided Dec. 22, 1980.

R. Kelly Hocker, Tempe, Ariz., for plaintiff-appellant.

Mark I. Harrison, Phoenix, Ariz., for defendants-appellees.

Appeal from the United States District Court for the District of Arizona.

Before CHAMBERS and CHOY, Circuit Judges, and ZIRPOLI, ^* District Judge.

ZIRPOLI, Senior District Judge.

The factual background of this lawsuit is set forth in this court's opinion in Ross v. International Brotherhood of Electrical Workers, 513 F.2d 840 (9th Cir. 1975). It may briefly be restated here.

In 1972, appellant Glynn Ross was running for reelection to his post as financial secretary and business manager of Local 640 of the International Brotherhood of Electrical Workers ("IBEW"). He was opposed in the election by Mike Beck, the president of the local, who prior to the election charged him with certain improprieties concerning union funds and filed those charges with appellee Raymond Duke, vice-president of the IBEW, for hearing pursuant to the International's constitution. Duke hired an accounting firm to audit union financial records; the firm's report contained findings critical of Ross' use of the funds. Ross claims that the findings are untrue.

Ross alleged that Duke deliberately delayed hearing on the charges until the period for voting, in order to impair Ross' chances in the election. The election was held and Ross received more votes than any other candidate, though not a majority. A run-off election was necessary.

Ross further claimed that the officer who heard Beck's charges made recommendations favorable to Ross prior to the run-off election, but that Duke deliberately delayed taking action on the recommendations. Ross won the run-off election; Beck protested certain ballots. Duke ordered an investigation, upheld the protest (allegedly without a hearing for Ross), and on July 12, 1972, decreed a new election and ordered that Ross not be installed. Ross appealed the decree to the IBEW and at the same time unsuccessfully sought a stay of the new election, which he won. Before he did, he filed three lawsuits, including this one. ¹

Prior Litigation

The first of the three lawsuits was filed on July 17, 1972, in Arizona superior court ("the July action"), against Duke, the IBEW, Local 640, Beck, and unnamed Doe defendants. Ross alleged, inter alia, that in decreeing the new election and in ordering that Ross not be installed as financial secretary and business manager, Duke and the IBEW had unlawfully obstructed his rights to the office. The complaint sought only injunctive relief. On August 31, 1972, the superior court issued an "Amended Judgment" stating:

The court finds that the subject matter of plaintiff's complaint and the relief sought thereby fall within a field which has been preempted by Congress under Title 4 of the Labor Management Reporting and Disclosure Act.

Accordingly, the court finds that it has no jurisdiction over the subject matter of plaintiff's complaint.

Accordingly, it is ordered denying plaintiff's prayer for injunctive relief. (sic).

RA at 111.

Ross did not appeal that decision.

The second action is the one at bar. Ross filed the complaint on August 7, 1972, against Duke and the IBEW. Counts I, II and III of the complaint sought injunctive and declaratory relief; jurisdiction was based on provisions of the Labor Management Reporting and Disclosure Act ("LMRDA"). Count IV was a claim for damages against Duke alone. Ross therein alleged that Duke, "with malice and intent to injure" Ross, interfered with the latter's "advantageous financial relationships" with Local 640. ² Jurisdiction was based on diversity of citizenship between Ross and Duke.

The district court dismissed the action on September 25, 1972, finding that plaintiff had failed to exhaust remedies available under the LMRDA and that therefore the court lacked subject matter jurisdiction. Ross appealed the dismissal as to Count IV only. We reversed, rejecting Duke's argument that election-related state tort actions for damages were preempted by the LMRDA, ³ and noting that Count IV was properly based on diversity jurisdiction because it "involved only a dispute between (Ross) and Duke" and sought nothing from the IBEW, a non-diverse defendant, Ross v. International Brotherhood of Electrical Workers, supra, 513 F.2d at 843. ⁴

On remand, defendants again moved to dismiss the complaint and action, this time on the ground of res judicata. On September 7, 1977, the district court granted the motion and dismissed the action, holding that "the issues attempted to be presented here should have been raised" in Ross' third lawsuit, discussed next. The instant appeal followed.

The third action was filed in Arizona superior court a few days after the filing of the complaint in the case at bar. It sought damages from Duke and the accounting firm on a defamation theory; Ross claimed injury to his reputation from the release of the allegedly untrue audit report. The trial judge granted judgment n. o. v. to defendants on August 1, 1974, holding, inter alia, that the report was a conditionally privileged publication subject to the requirements of proof of "actual malice" set forth in Linn v. United Plant Guards of America, 383 U.S. 53, 86 S.Ct. 657, 15 L.Ed.2d 582 (1966), and that Ross' proof did not suffice to meet that requirement. The Arizona Court of Appeals agreed and affirmed on January 25, 1977, Ross v. Gallant, Farrow & Co., 116 Ariz. 298, 569 P.2d 240 (1977).

Ross makes four arguments on appeal. First, he contends that the court below erred in concluding that the defamation suit and the claim raised in Count IV of the instant complaint were based on the same "cause of action." Second, he argues that even if both suits were within the scope of a single cause of action, res judicata should not have been invoked in this case because he had no prior opportunity to make his Count IV claim in a court of competent jurisdiction. Third, he argues that the court below should have held Duke "judicially estopped" from raising res judicata as a defense. Finally, he claims that Duke waived any res judicata defense by failing to move to abate the defamation action on the ground that Ross was splitting a single cause of action.

Before addressing these arguments, we turn to a question concerning subject matter jurisdiction not raised by the parties.

I

Upon remand, the district court should have dismissed the IBEW and thereby perfected diversity jurisdiction, under Rule 21, Fed.R.Civ.P. Where a non-diverse defendant is not indispensable within the meaning of Rule 19(b), Fed.R.Civ.P., dismissal is appropriate, and may be accomplished on appeal by the court sua sponte. E. g., Fidelity & Cas. Co. v. Reserve Ins. Co., 596 F.2d 914, 918 (9th Cir. 1979); Anrig v. Ringsby United, 591 F.2d 485, 491 (9th Cir. 1978). See also Sams v. Beech Aircraft Corp., 625 F.2d 273, 278 (9th Cir. 1980). As we have noted, Ross seeks nothing from the IBEW in this case, nor is it contended that the IBEW would be prejudiced in any way by its absence from the action. ⁵

Accordingly, the IBEW should be and is now dismissed as a party to this suit.

II

The doctrine of res judicata operates to bar all grounds for recovery which could have been asserted, whether they were or not, in a prior suit between the same parties (or their privies) on the same cause of action, if the prior suit concluded in a final judgment on the merits rendered by a court of competent jurisdiction. ⁶ Lawlor v. National Screen Service, 349 U.S. 322, 329, 75 S.Ct. 865, 869, 99 L.Ed. 1122 (1955). In diversity cases, the preclusive effect of a prior state court judgment may be accorded no wider scope than that which the state itself would give to it, 28 U.S.C. section 1738, Porter v. Wilson, 419 F.2d 254 (9th Cir. 1969), cert. denied, 397 U.S. 1020, 90 S.Ct. 1260, 25 L.Ed.2d 531 (1970); Weekes v. Atlantic National Ins. Co., 370 F.2d 264, 268 (9th Cir. 1966), 1A Moore's Fed.Prac. P 0.311(2) at 3176-78 (2d ed. 1979); cf. Harris v. Jacobs, 9th Cir., 621 F.2d 341, 344 n.3. ⁷ Ross argues that the district court's application of res judicata was incorrect in two respects. He claims that the defamation suit and the "tortious interference" claim in the instant suit were based on different causes of action, and that even if the same cause of action was involved in both suits, the grounds for recovery in Count IV were not ones which "could have been asserted" in Arizona superior court.

Of the various tests commonly employed to determine whether a single "cause of action" is presented in two lawsuits, see Harris v. Jacobs, supra, 621 F.2d at 343, Arizona has chosen one which focuses on whether proof of the claims in the two cases depends upon the same evidentiary facts. Rousselle v. Jewett, 101 Ariz. 510, 421 P.2d 529, 532 (1966); Day v. Wiswall's Estate, 93 Ariz. 400, 381 P.2d 217 (1963); Wilson v. Bramblett, 91 Ariz. 284, 371 P.2d 1014, cert. denied, 371 U.S. 888, 83 S.Ct. 187, 9 L.Ed.2d 123 (1962); Pierpont v. Hydro Manufacturing Co., Inc., 22 Ariz.App. 252, 526 P.2d 776, 778 (1974); Windauer v. O'Connor, 13 Ariz.App. 442, 477 P.2d 561 (1970), vacated on other grounds, 107 Ariz. 267, 485 P.2d 1157 (1971). In the case at bar, there is an arguable overlap, but not an identity, between the facts alleged in support of the tortious interference claim and those essential to the defamation action. Duke's alleged interference with Ross' financial relationship with the Local rests on several factual bases, including Duke's ordering...