Acri v. INTERN. ASS'N OF MACH. & AEROSPACE WKRS.

• Decision Date: 05 September 1984
• Docket Number: No. C-82-0340 EFL.,C-82-0340 EFL.
• Citation: 595 F. Supp. 326
• Parties: George T. ACRI, et al., Plaintiffs, v. INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, et al., Defendants.
• Court: U.S. District Court — Northern District of California

595 F. Supp. 326

George T. ACRI, et al., Plaintiffs, v. INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, et al., Defendants.

No. C-82-0340 EFL.

United States District Court, N.D. California.

November 23, 1983.

On Motion To Amend September 5, 1984.

Dan Siegel, Siegel, Friedman & Dickstein, Oakland, Cal., for plaintiffs.

Barry S. Jellison, Davis, Cowell & Bowe, San Francisco, Cal., Burton F. Boltuch, Boltuch & Siegel, Oakland, Cal., for defendants.

MEMORANDUM OPINION

LYNCH, District Judge.

Plaintiffs, individual members of the International Association of Machinists and Aerospace Workers, originally filed this action on August 6, 1980, alleging breach of the duty of fair representation and breach of contract against the International and Local (collectively, "the Union") and American Can Company (the "Company"), their employer. The action was dismissed without prejudice as prematurely filed since resolution of the dispute through arbitration was pending; the stipulated dismissal provided that the statute of limitations was tolled as of August 6, 1980 to a date one year from the decision of the arbitrator, but not later than August 6, 1983. This action was refiled in this Court on January 14, 1982, within the time period stipulated to by the dismissal. The new complaint alleged only breach of the duty of fair representation against the Union.¹

Factual/Procedural Background

The 1974-1977 collective bargaining agreement between the Union and American Can Company contained the following provisions regarding severance pay:

7.0 If the Company (1) Closes the plant or a department or moves the plant or a department outside the present (meaning April 1, 1974) geographical jurisdiction of District # 115 and (2) the closing or moving results in the termination of employees, the Company shall pay severance pay to terminated employees as follows:

(a) Less than one (1) year of accredited service — no severance pay;

(b) Over 1 year of accredited service — One (1) full week's pay (forty (40) hours straight time at the classification rate of pay) for every year of such service.

....

Section 8 provides in part:

8. FINANCING

Trust Fund

8.0 In accordance with the Plan, the Company will establish a trust fund. The Company will establish this Fund with a bank or banks or a trust company or companies selected by the Company as trustee.

The Company's contributions will be made into the Fund, the assets of which will be held and invested and applied by the trustee in accordance with the Plan. Benefits will be payable only from such fund.

When the 1974-1977 contract expired, plaintiffs conducted a strike concerning terms of a new agreement. During the strike, negotiations for a new contract were held. Plaintiffs allege that Union representatives stated that the cap on severance pay arguably inherent in the Section 8 Trust Fund provisions quoted above had been removed, although at no time did the Company agree to such a change; that plaintiffs relied on the statements in agreeing to ratify the new contract and return to work from a strike which began May 1, 1977; that the Union continued falsely and deliberately to represent that such a change had been made in the severance pay provisions. When the plant closing was announced in February 1980, Union members were told that there were insufficient funds in the trust fund to pay severance pay at the full amount authorized by Section 7. Plaintiffs argue that they have been injured in relying on the misrepresentations to their detriment and that they are entitled to damages in the amount of the difference between what their severance pay would have been had the contract contained the terms stated in the Union's misrepresentation and what severance pay was actually paid by the Company.

Defendants filed a motion for summary judgment and to dismiss one plaintiff on September 9, 1983. Oral argument was heard on the motion on October 14, 1983. At that time, this Court granted the motion in part and took the remaining portions of the motion under submission. For the sake of clarity, this opinion will dispose of all parts of the motion.

The Statute of Limitations

Defendants argue that DelCostello v. Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983) must be applied retroactively to bar plaintiffs' action. This decision has been applied retroactively in several other circuits. See, e.g., Hand v. International Chemical Workers Union, 712 F.2d 1350 (11th Cir.1983); Metz v. Tootsie Roll Industries, Inc., 715 F.2d 299 (7th Cir.1983); and most recently and compellingly, Perez v. Dana Corporation, 718 F.2d 581 (3d Cir.1983). The Ninth Circuit, however, has not ruled on this matter. Assuming, arguendo, that the six-month statute of limitations established by DelCostello for a § 301 action based on a breach of a duty of fair representation case should be applied retroactively, this Court must nonetheless decide when the statute of limitations began to run for each of the individual plaintiffs.

If this Court were to view this action simply as a common law fraud action, then California law would apply and the statute of limitations would run "only after one had knowledge of facts sufficient to make a reasonably prudent person suspicious of fraud, thus putting him on inquiry." Hobart v. Hobart Estate Co., 26 Cal.2d 412, 437, 159 P.2d 958 (1945). See Garter-Bare Co. v. Munsingwear, Inc., 650 F.2d 975 (9th Cir.1980).

However, this matter is a misrepresentation action in the labor relations context. The alleged misrepresentation is also a breach of the duty of fair representation. In the ordinary labor relations matter, "the disposition of an employee's grievance becomes final at whatever stage of the grievance procedure the union and the employer resolve the grievance or terminate further consideration of it." McNaughton v. Dillingham Corp., 707 F.2d 1042, 1046 (9th Cir.1983). The arbitrator in the instant case did not render a decision until October 14, 1981. Furthermore, the Company and the Union moved to dismiss this action when originally filed as premature² because the arbitration was pending. Thus, this Court holds that whatever statute applied must run from the date of the arbitrator's decision. This action was refiled within six months of the arbitrator's decision. Defendants have not argued in favor of a statute shorter than six months. Thus, defendants' motion for summary judgment on the ground of the statute of limitations is denied.³

Rulings on Summary Judgment or Dismissal as Made at the Hearing

Without regard to the substantive issues supporting the remaining grounds for summary judgment, summary judgment is granted with respect to the following 12 plaintiffs for the reasons stated at the hearing on October 14, 1983. The Court notes both that plaintiffs' brief did not oppose granting of the motion with respect to these plaintiffs and that plaintiffs declined to argue against the motions at the hearing.

1. The eight plaintiffs who were not employed or members of the Union at the time the alleged misrepresentations were made: i.e., BREGANTE, CHENG, GUAY, HUGHES, LEE, MADISON, MARJAI and SACKLEY.

2. The three plaintiffs who resigned prior to the plant closing: i.e., HARRIS, MARKOVICH and WONG.

3. The one plaintiff who refused to comply with discovery orders: i.e., HALMOS.

Similarly, without regard to the remaining grounds for summary judgment, defendants' motion with respect to deceased plaintiffs FRYDMAN, KESSLER and STARK is denied on the ground of failure to comply with Fed.R.Civ.P. 25(a). Although dismissal appears to be mandatory under this Rule unless a motion to substitute a representative is made within 90 days of a suggestion of death on the record, the incidental mention of the deaths in answers to interrogatories does not appear to this Court to have started the 90-day period running. Federal Form 30 provides an example of the proper suggestion; the answers to interrogatories cited by defendants do not rise to the required level of formality. Furthermore, the suggestion was not served as required by the provisions of the Rule.

Proof of Misrepresentation and Proximate Cause

Defendants also move for summary judgment on the ground that plaintiffs cannot establish that defendants' alleged actions caused their injuries. Two major cases have been cited to this Court by both parties: Anderson v. United Paperworkers International Union, 641 F.2d 574 (8th Cir.1981) and Deboles v. TransWorld Airlines, Inc., 552 F.2d 1005 (3d Cir.), cert. denied, 434 U.S. 837, 98 S.Ct. 126, 54 L.Ed.2d 98 (1977). In Anderson, a union representative told employee union members that their severance pay was guaranteed by a special security fund, knowing no such fund existed. The members testified at trial that they relied on the representative's statements in ratifying the contract and would have gone on strike if they had known the truth. The Court of Appeals held that the district court erred in failing to grant judgment for defendants notwithstanding the jury verdict on the ground that "the evidence fails to demonstrate a causal link between Gear's misrepresentations and the plaintiffs' injuries." 641 F.2d at 578-79.

Similarly, in Deboles, following a court trial, the district court found liability for a union's misrepresentations regarding union efforts to secure seniority provisions without proof that the contract would not have been ratified had the members been told the whole truth. 552 F.2d at 1017. The Third Circuit reversed "because false statements may not create liability under the federal labor laws absent a showing of tangible injury proximately resulting from the falsehood." Id.

Defendants have urged that the instant case presents the same problem of lack of proof of a causal nexus between the alleged misrepresentation and plaintiffs' injuries. Plaintiffs' counsel conceded at oral argument that he could not prove that, absent the alleged...