ABF Freight Sys., Inc. v. Int'l Bhd. of Teamsters

• Decision Date: 01 August 2012
• Docket Number: No. 2:10CV02165 SWW.,2:10CV02165 SWW.
• Citation: 884 F.Supp.2d 795
• Parties: ABF FREIGHT SYSTEM, INC., Plaintiff v. INTERNATIONAL BROTHERHOOD OF TEAMSTERS, et al., Defendants.
• Court: U.S. District Court — Western District of Arkansas

884 F.Supp.2d 795

ABF FREIGHT SYSTEM, INC., Plaintiff

v.INTERNATIONAL BROTHERHOOD OF TEAMSTERS, et al., Defendants.

No. 2:10CV02165 SWW.

United States District Court,

W.D. Arkansas,

Fort Smith Division.

Aug. 1, 2012.

Michael G. Smith, Thomas S. Stone, Thomas S. Stone, Dover, Dixon, Horne, PLLC, Little Rock, AR, Robert Frederick Millman, Littler Mendelson PC, Los Angeles, CA, Karl G. Nelson, Gibson Dunn Crutcher LLP, Dallas, TX, Robert Charles Long, Littler Mendelson, Columbus, OH, Thomas G. Hungar, Gibson Dunn Crutcher LLP, Washington, DC, for Plaintiff.

Samuel Morris, Godwin, Morris, Laurenzi, Bloomfield, P.C., Memphis, TN, Melva Harmon, Melva Harmon Attorney at Law, Little Rock, AR, for Defendants.

MEMORANDUM AND ORDER

SUSAN WEBBER WRIGHT, District Judge.

Plaintiff ABF Freight System, Inc. (“ABF”) brings this action for violation of a collective bargaining agreement against YRC, Inc., New Penn Motor Express, Inc., and USF Holland, Inc. (collectively, “YRCW”)¹; the International Brotherhood of Teamsters (“IBT”), Teamsters Local Unions 373 and 878, and Teamsters National Freight Industry Negotiating Committee (“TNFINC”) (collectively, the “Union”); and Trucking Management, Inc. (“TMI”). Before the Court is the Union's motion to dismiss the amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) (docket entries # 109, # 110) and YRCW's motion to dismiss pursuant to Rule 12(b)(6) (docket entries # 111, # 112), which is joined by TMI. Also before the Court is a separate motion by TMI to dismiss ABF's first cause of action for lack of subject matter jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(1) (docket entries # 113, # 114). ABF has filed an omnibus response in opposition to Defendants' motions to dismiss (docket entry # 117), and Defendants have filed replies (docket entries entry # 127, # 128, # 129). After careful consideration, and for reasons that follow, Defendants' motions to dismiss pursuant to Rule 12(b)(6) are granted, and TMI's motion to dismiss pursuant to Rule 12(b)(1) is denied.

I. Background

The following facts are taken from the amended complaint (docket entry # 107) and documents attached to that pleading. ABF and YRCW are freight trucking companies with employees who are members of local unions affiliated with IBT. Defendant TNFINC is a bargaining agent for IBT local unions, and defendant TMI is a bargaining agent for trucking industry employers. Periodically, TNFINC and TMI negotiate the terms of a collective bargaining agreement known as the National Master Freight Agreement (“NMFA”), which has governed unionized freight operations in the United States since 1964.

In August 2007, ABF withdrew its authorization for TMI to bargain on its behalf with respect to the 2008–2013 NMFA, and it attempted to reach its own agreement with the Union by negotiating directly with TNFINC. On January 30, 2008, ABF entered an “Interim Agreement” with the Union, which provided that ABF would adhere to the wage, benefits and working condition terms set forth in the NMFA and that following ratification of the 2008–2013 NMFA, ABF would implement the new standards set forth in that agreement. The Interim Agreement provides that upon ratification of successor (2008–2013) NMFA, “this Interim Agreement shall terminate and [ABF] shall become a party and signatory to such successor [NMFA] and Supplements thereto in accordance with the provisions thereof.” Amend. Compl., Ex. B.

TMI and TNFINC negotiated the 2008–2013 NMFA, which provides that employers covered under the agreement include “individual Employers who become signator to this Agreement and Supplemental Agreements as hereinafter set forth.” Amend. Compl., ¶ 69. The 2008–2013 NMFA further provides that individual employers who become party to the agreement are members of the same multi-employer bargaining unit. Amend. Compl., ¶ 70.

In February 2008, ABF and YRCW employees voted to ratify the 2008–2013 NMFA, with the ballots of both groups aggregated to determine ratification. During the three years following ratification of the 2008–2013 NMFA, YRCW and the Union negotiated three amendments (the “Amendments”) to the collective bargaining agreement that reduced the pay and benefits of YRCW employees. IBT and TNFINC have asserted and continue to assert that the Amendments apply only to YRCW.

ABF and TNFINC negotiated and entered a separate compromise, entitled the ABF Freight System, Inc. Wage Reduction–Job Security Plan,² which included salary reductions for ABF employees. However, ABF employees voted against the plan. Subsequently, on November 1, 2010, ABF submitted a grievance pursuant to the national grievance procedure set forth under Article 8 of the NMFA. In its grievance, ABF charges that IBT granted substantial economic concessions to some, but not all, employers bound by the NMFA in direct contravention of the NMFA's industry standards for signatory employers-specifically, Article 6, Section 1, which requires employers to maintain work conditions at the highest standards in effect at the time of the signing of the agreement, and Article 6, Section 2(a), which prohibits employers from entering agreements with employees that conflict with the terms of the agreement. See Amend. Compl., Ex. A (ABF Grievance, ¶ 56).

ABF submitted its grievance to the National Grievance Committee (“NGC”), a joint committee composed of an equal number of employer and union representatives. However, ABF declares in that filing that by operation of the NGC Rules of Procedure, the committee is incapable of hearing the grievance. Paragraph 18 of ABF's grievance states: “Given the incapacity of any member of either the National Grievance Committee or the National Review Panel to hear this grievance, ABF is seeking court intervention to appoint an alternate neutral tribunal to replace the National Grievance Committee ... to hear and decide this grievance.” Amend. Compl., Ex. A, at 4.

At the same time ABF submitted its grievance to the National Grievance Committee, it filed this lawsuit under the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185(a),³ restating the allegations contained in its grievance but charging both the Union and YRCW with breach of the 2008–2013 NMFA. By way of relief, ABF asks the Court to appoint a neutral, alternative tribunal to hear its grievance. Alternatively, in the event that the Court declines to appoint a tribunal, or if a tribunal appointed by the Court fails to reach a final and binding decision, ABF seeks redress directly from the Court.

Defendants moved to dismiss the case for lack of subject matter jurisdiction, arguing that the Union entered a separate agreement with ABF, ABF did not become a signatory to the 2008–2013 NMFA entered by YRCW, and thus ABF lacked ABF lacked standing to enforce a contract to which it is not a party. The Court held an evidentiary hearing on Defendants' motions and dismissed the complaint for lack of subject matter jurisdiction.

ABF appealed, and the Eighth Circuit reversed. Noting that the LMRA provides a cause of action for violation of a contract between an employer and a labor organization, the Court of Appeals concluded that because the Union had agreed that ABF would become a party to the 2008–2013 NMFA, this Court has subject matter jurisdiction over ABF's claims against the Union under § 301. See ABF Freight System, Inc. v. International Broth. of Teamsters, 645 F.3d 954, 963 (8th Cir.2011). As for ABF's claims against YRCW, the Court of Appeals found that this Court has subject matter jurisdiction, at the least, under 28 U.S.C. § 1367(a).⁴

II. Defendants' Rule 12(b)(6) Motions to Dismiss for Failure to State a Claim upon which Relief can be Granted

After remand, ABF filed an amended complaint,⁵ and each defendant filed a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. The Union maintains that ABF fails to state a claim upon which relief can be granted “because there is no basis for the Court to either rewrite the parties' contract to create a substitute for the grievance committee, or to permit [ABF] to bypass the grievance procedure and rule directly on the underlying contract claim.” Docket entry # 110, at 10. Similarly, YRCW argues that ABF's request for appointment of an alternative grievance panel “runs headlong into binding precedent of the Supreme Court” and further asserts that the complaint must be dismissed for failure to exhaust the agreed-to grievance process. TMI joins YRCW's Rule 12(b)(6) motion.

In considering a motion to dismiss under Fed.R.Civ.P. 12(b)(6), all facts alleged in the complaint are assumed to be true. Doe v. Norwest Bank Minn., N.A., 107 F.3d 1297, 1303–04 (8th Cir.1997). The complaint should be reviewed in the light most favorable to the plaintiff, McMorrow v. Little, 109 F.3d 432, 434 (8th Cir.1997), and should not be dismissed if there are pled “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007). A complaint cannot, however, simply leave open the possibility that a plaintiff might later establish some set of undisclosed facts to support recovery. Id. at 1968. Rather, the facts set forth in the complaint must be sufficient to nudge the claims “across the line from the conceivable to plausible.” Id. at 1974.

A. First Cause of Action: ABF's Request for Appointment of Alternative Grievance Committee

Under the heading “First Cause of Action,” ABF asks the Court to appoint a panel “composed of disinterested and uninvolved third parties to hear and decide this grievance in order to effectuate the intent of the parties under the NMFA.” Amend. Compl., ¶ 107.

As stated in the amended complaint, the NMFA provides that all grievances or questions of interpretation arising under the NMFA “shall” be processed according to a national grievance procedure set forth under Article 8 of the...