El Paso Bldg. & Const. Tr. Coun. v. El Paso Chap. Assoc. Gen. Con.

• Decision Date: 14 June 1967
• Docket Number: No. 22908.,22908.
• Citation: 376 F.2d 797
• Parties: EL PASO BUILDING & CONSTRUCTION TRADES COUNCIL, Appellant, v. EL PASO CHAPTER ASSOCIATED GENERAL CONTRACTORS OF AMERICA, Appellee. EL PASO CHAPTER ASSOCIATED GENERAL CONTRACTORS OF AMERICA, Appellant, v. EL PASO BUILDING & CONSTRUCTION TRADES COUNCIL, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

376 F.2d 797 (1967)

EL PASO BUILDING & CONSTRUCTION TRADES COUNCIL, Appellant, v. EL PASO CHAPTER ASSOCIATED GENERAL CONTRACTORS OF AMERICA, Appellee.

EL PASO CHAPTER ASSOCIATED GENERAL CONTRACTORS OF AMERICA, Appellant, v. EL PASO BUILDING & CONSTRUCTION TRADES COUNCIL, Appellee.

No. 22908.

United States Court of Appeals Fifth Circuit.

May 9, 1967.

Rehearing Denied June 14, 1967.

Malcolm McGregor, El Paso, Tex., Ernest Guinn, El Paso, Tex., Guinn & Guinn, El Paso, Tex., of counsel, for appellant-appellee.

David R. Richards, Dallas, Tex., amicus curiae.

J. F. Hulse, El Paso, Tex., Scott, Hulse, Marshall & Feuille, El Paso, Tex., of counsel, for appellee and cross-appellant.

Before HUTCHESON, WISDOM and GODBOLD, Circuit Judges.

HUTCHESON, Circuit Judge.

This appeal is from a declaratory judgment of the district court which held invalid a restrictive subcontracting clause contained in a collective bargaining contract between two parties in the construction industry. We agree that the dispute is ripe for declaratory judgment but reverse, holding that the subcontracting clause is valid.

The Union¹ and the Contractors² entered into the collective bargaining contract on April 1, 1961. They now disagree on the meaning and validity of Clause F, one of the clauses in that contract. It is found under that portion of the contract entitled "Article I, Coverage", and reads:

That if the Contractor, parties hereto shall subcontract construction work * * *, the terms of said Agreement shall extend to and bind such construction subcontract work, and provision shall be made in such subcontract for the observance by said Subcontractor of the terms of this Agreement. * * * This clause shall not be binding on either party or become effective (1) until a court of competent jurisdiction shall have adjudicated the validity thereof, (2) unless all employees covered by this Agreement will be assigned or allowed to work only on projects on which the engaged Subcontractors require like conditions in all their subcontracts and by all their Contractors, and (3) unless competitive bids of bondable and reliable Subcontractors, who are prepared to accept these provisions in a subcontract are available prior to any proposal by the Contractor.

In effect the parties agreed that in the event a general contractor subcontracted construction work, the terms of the prime collective bargaining contract between Union and Contractors would apply to the subcontracted work. Further emphasizing this agreement is a requirement that a general contractor take it upon himself to include in any such subcontract a provision binding the subcontractor to the terms of the prime contract. However, the subcontracting agreement is not enforceable as to either party until certain conditions have been met. One is that a court of competent jurisdiction shall have adjudged that the agreement relating to subcontracting is valid. Pursuant to this particular condition precedent, the Contractors refused to be bound by the restrictive subcontracting agreement until its validity was judicially determined. Thereafter the Union petitioned the district court for a declaratory judgment,³ alleging the existence of a justiciable controversy and jurisdiction based on Sec. 301(a) of the Labor Management Relations Act, (LM RA), 29 U.S.C. Sec. 185(a).⁴ The Union stated that the wage scale of its members would be jeopardized if the Contractors failed to comply with the agreement and that work stoppage and picketing would result unless its rights under the agreement were declared by the district court. The Contractors interposed three main objections to the petition: first, that Sec. 301 does not give the district court jurisdiction to render a declaratory judgment; second, that there is no controversy appropriate for determination; third, that in any event the agreement is invalid. The district court sitting without a jury concluded that it had jurisdiction but declared that the agreement is void and unenforceable. The Union appeals.

Preliminarily we deal with the threshold question whether Sec. 301 provides jurisdiction for a declaratory judgment concerning rights under a collective bargaining agreement. The Declaratory Judgment Act, 28 U.S.C. Secs. 2201, 2202, operates procedurally and merely enlarges the range of remedies available in cases over which the federal court already has jurisdiction. Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671, 70 S.Ct. 876, 94 L.Ed. 1194 (1950); Tennessee Coal, Iron & R. R. v. Muscoda Local 123, 137 F.2d 176, 179 (5th Cir. 1943), aff'd, 321 U.S. 590, 64 S.Ct. 698, 88 L.Ed. 949, 152 A.L.R. 1014 (1944); Gully v. Interstate Natural Gas Co., 82 F.2d 145, 149 (5th Cir.), cert. denied, 298 U.S. 688, 56 S.Ct. 958, 80 L.Ed. 1407 (1936). Thus jurisdiction depends on Sec. 301(a) which authorizes "suits for violation of contracts between an employer and a labor organization * * *." The Contractors contend that this section does not apply with respect to a declaratory judgment wherein there is not alleged any violation of a contract. But ever since Textile Workers Union v. Lincoln Mills of Ala., 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957), it has been generally accepted that the scope of Sec. 301 is not restricted to suits for damages or specific enforcement. In that case the Supreme Court cited with approval legislative history, relating to language which is the substantial equivalent of the present Sec. 301, which expressly says that parties to a collective bargaining contract will be able to secure under Sec. 301 declarations of their rights under a contract by means of the declaratory judgment procedure.⁵ We therefore conclude that the district court had jurisdiction over the declaratory judgment petition even in the absence of allegations of violations of the contract. See Allied Oil Workers Union v. Ethyl Corp., 341 F.2d 47, 49 (5th Cir. 1965); Black-Clawson, Inc. v. International Ass'n of Machinists, 313 F.2d 179, 181 (2d Cir. 1962).⁶

The next question is whether there is an "actual controversy" within 28 U.S.C. Sec. 2201. Although it is difficult to fashion a precise test for determining in every case whether the requisite controversy exists, Maryland Cas. Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273, 61 S.Ct. 510, 85 L.Ed. 826 (1941); Byers v. Byers, 254 F.2d 205, 209-210 (5th Cir. 1958), and the propriety of declaratory relief in a particular case therefore will depend to some extent upon a judicial sense of its fitness, it is safe to say that the dispute must have taken on final shape so that the court can see what legal issues it is deciding, the effect of the decision on the adversaries, and a useful purpose to be achieved in deciding them. Public Serv. Comm'n. of Utah v. Wycoff Co., Inc., 344 U.S. 237, 243-244, 73 S.Ct. 236, 97 L.Ed. 291 (1952). See Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 240-241, 57 S.Ct. 461, 81 L.Ed. 617, 108 A.L.R. 1000 (1952). Keeping these guidelines and objectives in mind, we turn to the alleged controversy at hand.

The Contractors contend that the dispute is not ripe for determination because not every condition in Clause F, such as that concerning competitive bids of bondable subcontractors, has been met; and since the agreement is not presently binding or enforceable, it is argued that declaratory relief is premature. We think this argument employs a distorted interpretation of Clause F read as a whole. As we read Clause F, it is not necessary that the two other conditions be met before the issue of validity is passed upon. To the contrary, it appears from the face of the clause that the parties contemplated, and indeed intended, that a declaration upholding the agreement's validity would be the first step taken towards the agreement's application and enforceability. This conclusion is buttressed by the fact that the vitality of the agreement turns on the very declaration now sought. If the agreement is declared invalid and unenforceable, then the other conditions obviously become irrelevant. On the other hand, if the agreement is declared valid, the other conditions assume significance.

Our view of the instant case is similar to that taken in International Longshoremen's Ass'n v. Seatrain Lines, Inc., 326 F.2d 916 (2d Cir. 1964). In order to resolve a dispute arising during collective bargaining, the union and employer entered into an agreement akin to the one under consideration; they stipulated that certain funds of money would be put in escrow pending a determination by a federal court of the...