650 F.2d 1379 (6th Cir. 1981), 78-1185, Local Div. 1285, Amalgamated Transit Union, AFL/CIO/CLC v. Jackson Transit Authority

Docket Nº:78-1185.
Citation:650 F.2d 1379
Party Name:LOCAL DIVISION 1285, AMALGAMATED TRANSIT UNION, AFL/CIO/CLC, Plaintiff-Appellant, v. JACKSON TRANSIT AUTHORITY and the City of Jackson; William T. Coleman, Jr. and William J. Usery, in their official capacities, Defendants-Appellees.
Case Date:June 03, 1981
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit

Page 1379

650 F.2d 1379 (6th Cir. 1981)




JACKSON TRANSIT AUTHORITY and the City of Jackson; William

T. Coleman, Jr. and William J. Usery, in their

official capacities, Defendants-Appellees.

No. 78-1185.

United States Court of Appeals, Sixth Circuit

June 3, 1981

Argued June 5, 1980.

Page 1380

Linda R. Hirschman, Jacobs, Burns, Sugarman & Orlove, Chicago, Ill., Maurice Wexler, Heiskell, Donelson, Adams, Williams & Kirsch, Memphis, Tenn., for plaintiff-appellant.

W. J. Michael Cody, U. S. Atty., Robert M. Williams, Jr., Asst. U. S. Atty., Memphis, Tenn., Sidney Spragins, Spragins & Murchinson, Jackson, Tenn., Joseph S. Kaufman, Melnicove, Kaufman & Weiner, Baltimore, Md., for defendants-appellees.

Before MERRITT, KENNEDY and BOYCE F. MARTIN, Jr., Circuit Judges.

BOYCE F. MARTIN, Jr., Circuit Judge.

This appeal requires us to decide whether Section 13(c) of the Urban Mass Transportation Act, 49 U.S.C. § 1601 et seq., ("UMTA"), creates a private federal cause of action for employees of local transit authorities which have received federal funds under the Act. We must also determine whether either the Secretary of Labor or the Secretary of Transportation has a statutory duty to enforce the terms of a "labor protective arrangement" executed pursuant to Section 13(c) of the Act. 49 U.S.C. § 1609(c).

In 1966, the City of Jackson, Tennessee applied for a federal grant to facilitate conversion of a failing private bus company into a public transit authority. As a condition of federal funding, Section 13(c) requires grant recipients to make "arrangements" for the protection of their employees' interests:

It shall be a condition of any assistance under section 1602 of this title that fair and equitable arrangements are made, as determined by the Secretary of Labor, to protect the interests of employees affected by such assistance. Such protective arrangements shall include without being limited to, such provisions as may be necessary for (1) the preservation of rights, privileges, and benefits (including continuation of pension rights and benefits) under existing collective bargaining agreements or otherwise; (2) the continuation of collective bargaining rights; (3) the protection of individual employees against a worsening of their positions with respect to their employment; (4) assurances of employment to employees of acquired mass transportation systems and priority of reemployment of employees terminated or laid off; and (5) paid training or retraining programs. Such arrangements shall include provisions protecting individual employees against a

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worsening of their positions with respect to their employment which shall in no event provide benefits less than those established pursuant to section 5(2)(f) of this title. The contract for the granting of any such assistance shall specify the terms and conditions of the protective arrangements.

In order to qualify for a grant, Jackson Transit Authority entered into a "Section 13(c) agreement" with Local Division 1285, Amalgamated Transit Union, the collective bargaining agent for the transit employees. That agreement was duly submitted to the Secretary of Labor, who certified that it met the "fair and equitable" standard of Section 13(c). In accordance with Section 13(c)(5), the substance of this "arrangement" was incorporated in the grant contract between Jackson and the United States.

From 1966 until 1975, Jackson and the Union negotiated and honored a series of collective bargaining agreements. In 1975, however, Jackson allegedly repudiated its current collective bargaining contract and unilaterally reduced certain employee benefits. The Union, through its International president, sought determinations by the Secretaries of Labor and Transportation that Jackson had breached its obligation under Section 13(c) to continue collective bargaining. Both Secretaries refused to issue such a finding, whereupon the Union initiated this action.

In its complaint, the Union sought: 1) monetary and injunctive relief against Jackson; and 2) mandamus relief against the Secretaries. Jackson moved for dismissal on jurisdictional grounds; the Secretaries also moved for dismissal, or in the alternative, for summary judgment.

The District Court heard oral argument on the defendants' motions. On December 22, 1977, the court issued an order and memorandum opinion dismissing the complaint for lack of federal jurisdiction. That decision is reported at 447 F.Supp. 88.

On appeal, the Union argues that the court should have exercised jurisdiction over the controversy and inferred a private federal right of action against the transit authority from Section 13(c) of the Act. We agree. We reject, however, the Union's further claim for relief in the nature of mandamus against the Secretaries of Labor and Transportation.

I. The Complaint against Jackson.

  1. Federal Jurisdiction.

    The District Court dismissed the case for lack of federal jurisdiction. We disagree both with the court's analysis and its conclusion. The opinion below proceeds on the assumption that subject matter jurisdiction under 28 U.S.C. § 1331 is contingent upon the availability of a private federal remedy under Section 13(c). That approach is inconsistent with the analysis required by the Supreme Court in Bell v. Hood, 327 U.S. 678, 66 S.Ct. 773, 90 L.Ed. 939 (1946).

    Bell v. Hood emphasized the distinction between the threshold ascertainment of "arising under" jurisdiction and the question whether the plaintiff in a given case has stated a claim upon which relief can be granted:

    Jurisdiction, therefore, is not defeated ... by the possibility that the averments (of the complaint) might fail to state a cause of action upon which petitioners could actually recover. For it is well settled that the failure to state a proper cause of action calls for a judgment on the merits and not for a dismissal for want of jurisdiction. Whether the complaint states a cause of action upon which relief could be granted is a question of law and just as issues of fact it must be decided after and not before the court has assumed jurisdiction over the controversy. 327 U.S. at 682, 66 S.Ct. at 776.

    Our first determination, therefore, must be whether the Union's claim "arises under" the laws of the United States within the meaning of Section 1331. If it does, then federal jurisdiction obtains unless the claim is "immaterial," or "wholly insubstantial and frivolous," made "solely for the

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    purpose of obtaining jurisdiction," Id. at 682, 66 S.Ct. at 776. Section 1331 also requires a minimum amount in controversy of $10,000.00.

    It is axiomatic that for purposes of federal jurisdiction an "action" is defined in terms of the right asserted, not the remedy sought. Cohens v. Virginia, 6 Wheat. 264, 379, 55 L.Ed. 257 (1821). Furthermore, the federal right asserted must be an essential element of the plaintiff's cause of action. Gully v. First National Bank, 299 U.S. 109, 112, 57 S.Ct. 96, 97, 81 L.Ed. 70 (1936); Phillips Petroleum Co. v. Texaco, Inc., 415 U.S. 125, 127, 94 S.Ct. 1002, 1003, 39 L.Ed.2d 209 (1974).

    In the instant case, the Union contends that Jackson, by disavowing an existing collective bargaining contract and by taking subsequent unilateral actions, has jeopardized a right guaranteed to transit employees by a federal statute.

    Jackson, on the other hand, emphasizes the "private" nature of the Section 13(c) contract and advances the District Court's conclusion that the Union's complaint is "essentially a state breach of contract claim." In support of this position it cites McFaddin Express, Inc. v. Adley Corp., 346 F.2d 424 (1965), in which the Second Circuit declared itself without jurisdiction to enforce a temporary management contract between two regulated interstate carriers. The plaintiff in McFaddin brought an action in federal court for breach of that contract, relying for jurisdiction on an Interstate Commerce Commission order which "authorized" one carrier to manage the other for a period of six months. The court based its finding of no jurisdiction on: 1) the permissive rather than mandatory nature of the I.C.C. order; and 2) the absence of any "national interest" in the contract such that "federal principles (would) control the disposition of the case." However, we will demonstrate that neither ground of the McFaddin holding applies here.

    Jackson's assertion that the United States is not a party to the Section 13(c) agreement is correct but irrelevant; the decisive factor is that the agreement is so intertwined with the federal statutory scheme that the rights it secures cannot be dismissed as "merely private." Not only does the statute require applicants to execute labor protective arrangements, but it also specifies a number of provisions those arrangements must include. One such mandatory provision is a guarantee that transit employees will enjoy continued collective bargaining rights after their private employer becomes a public authority. Moreover, the relationship of the Section 13(c) agreement with the federal scheme does not end with the negotiations of an "arrangement" between two private parties. On the contrary, Section 13(c) specifically states that no federal funds will be made available until the Secretary of Labor certifies that the agreement is "fair and equitable." Furthermore, the terms of the Section 13(c) agreement must appear in the grant contract between the United States and the grant recipient.

    Thus, in contrast to the contract in McFaddin, the Section 13(c) agreement is a mandatory means of preserving rights created by a federal statute. That Congress chose a "private" arrangement as the vehicle for protecting transit employees does not negate the fundamentally "federal" character of the rights it perpetuates. Inasmuch as the...

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