Akins v. United Steel Workers Of America

• Decision Date: 22 June 2010
• Docket Number: No. 31,637.,31,637.
• Parties: Jackie AKINS, Plaintiff-Respondent, v. UNITED STEEL WORKERS OF AMERICA, AFL-CIO, CLC, LOCAL 187, Defendant-Petitioner.
• Court: New Mexico Supreme Court

148 N.M. 442

237 P.3d 744

Jackie AKINS, Plaintiff-Respondent, v. UNITED STEEL WORKERS OF AMERICA, AFL-CIO, CLC, LOCAL 187, Defendant-Petitioner.

No. 31,637.

Supreme Court of New Mexico.

June 22, 2010.

Youtz & Valdez, P.C. Shane Youtz, Albuquerque, NM, Richard J. Brean, Pittsburgh, PA, for Petitioner.

Law Offices of W.T. Martin, Jr., P.A., Wilfred T. Martin, Jr., Lane T. Martin, Carlsbad, NM, for Respondent.

OPINION

BOSSON, Justice.

{1} In virtually all claims sounding in tort, our common law permits punitive damages where appropriate to punish outrageous conduct and to deter similar conduct in the future. Similarly, in New Mexico all labor unions owe a common-law duty of fair representation (also referred to herein as “DFR”) to their members and are subject to suit for breach of that duty. In the case at bar, we are asked to limit that liability by imposing a per se exclusion of punitive damages much as the U.S. Supreme Court has done for similar actions against federally regulated labor unions. We decline to do so, and instead underscore the important public policy served by punitive damages as part of our state common-law jurisprudence. Our ruling today expands upon and clarifies that of our Court of Appeals, affirming its holding that punitive damages should be available in DFR suits where the union's conduct is malicious, willful, reckless, wanton, fraudulent or in bad faith.

BACKGROUND

{2} Respondent Jackie Akins (Akins) worked for the City of Carlsbad (City) from 1992 until 2002. During this time, Akins was a dues-paying member of Petitioner United Steelworkers of America, AFL-CIO, Local 187 (the Union), which served as Akins' exclusive collective bargaining representative. Akins was the only African-American member of the Union.

{3} In 1999 Akins began working in the City's lube room, where he was responsible for changing oil on city vehicles, and similar duties. During his employment there, Akins' coworkers regularly spoke in Spanish, and his supervisor Carmen Vasquez gave him orders in Spanish, despite the fact that Akins did not speak Spanish. Akins was told he needed to learn. At trial, Akins testified that various coworkers, some of them with supervisory authority, used racial slurs in his presence. Specifically, Akins testified that the term “pinche miyate [sic],” which Akins understood to mean “fucking nigger” in Spanish, was uttered on two or three occasions when he was the only black person present. ¹ Akins' understanding of the meaning of the term was not refuted.

{4} Akins made repeated requests to Union officials to address the problem. When Akins complained to Union President Danny Armendariz, asking him to file a grievance, Armendariz told him he was the “wrong color” and that he needed to learn to speak Spanish. The Union refused to file a grievance for racial discrimination on Akins' behalf.

{5} Akins testified that because of the racially hostile environment at the lube room, he accepted an option to transfer to the solid waste department in April 2001, taking a pay cut in the process. Akins discontinued his employment with the City in July 2002, due to decreased but continuing racial discrimination.

{6} Subsequently, in March 2004, Akins filed suit against the Union and the City for two counts of breach of the Union's duty of fair representation, and one count each of intentional infliction of emotional distress and prima facie tort, based on the conduct described above. Akins reached an agreement with the City, and the City was dismissed with prejudice. Thereafter, the trial court dismissed the intentional infliction of emotional distress claim, one count of breach of the DFR, and the prima facie tort claims upon the Union's motion for summary judgment. In response to the one remaining DFR count, the Union argued that punitive damages were unavailable as a matter of lawfor duty of fair representation suits. Following the denial of its motion for summary judgment, the Union filed a motion in limine to preclude punitive damages, which the district court also denied.

{7} The case against the Union proceeded to trial on the sole remaining claim that the Union breached its duty of fair representation by failing to file a grievance on Akins' behalf for racial discrimination. The jury was instructed, consistent with our holding in Callahan v. N.M. Federation of Teachers-TVI, 2006-NMSC-010, 139 N.M. 201, 131 P.3d 51, on the required elements of the claim of breach of DFR, as follows:

To establish the claim of breach of the duty of the Union to fairly represent, [Akins] has the burden of proving each of the following contentions:

1. The existence of a contract, the Collective Bargaining Agreement, between the Union and the City of Carlsbad.

2. The breach of the terms of a Collective Bargaining Agreement by the City of Carlsbad.

3. [Akins] sought help from the Union to remedy the breach.

4. The Union failed or refused to provide [Akins] with representation related to the breach.

5. The Union's failure or refusal to pursue Jackie Akins' grievance was arbitrary and in bad faith.

The jury was also given the following standard New Mexico instruction on punitive damages:

If you find that the conduct of the Union was malicious, willful, reckless, wanton, fraudulent or in bad faith, then you may award punitive damages against it.... Punitive damages are awarded for the limited purpose of punishment and to deter others from the commission of like offenses. The law does not require you to award punitive damages, however, if you decide to award punitive damages, you must use sound reason in setting the amount of the damages. The amount of punitive damages must be based on reason and justice taking into account all the circumstances, including the nature of the wrong and such aggravating and mitigating circumstances as may be shown. The amount of an award of punitive damages must not reflect bias, prejudice, or sympathy toward any party. The amount awarded, if any, must be reasonable and not disproportionate to the circumstances.

UJI 13-1827 NMRA.

{8} The jury returned a verdict in Akins' favor, awarding him $1,661 in actual damages and $30,000 in punitive damages. Both Akins and the Union appealed. Akins appealed the trial court's decision not to put the intentional infliction of emotional distress claim before the jury. The Union appealed three issues: whether the trial court erred in (1) applying a four-year rather than six-month statute of limitations, (2) allowing the jury to consider punitive damages, and (3) failing to order remittitur of the punitive damages award.

{9} The Court of Appeals affirmed the trial court's rulings in their entirety. Regarding the issue of punitive damages, the Court of Appeals rejected the Union's request to adopt a per se ban on punitive damages in breach of DFR actions. Akins v. United Steelworkers of Am. Local 187, 2009-NMCA-051, ¶¶ 19-20, 146 N.M. 237, 208 P.3d 457. The Court followed by holding that the punitive damages award in this case was not excessive, and affirmed the trial court's decision not to order a remittitur. Id. ¶¶ 29-38.

{10} In its briefing to this Court the Union disputes several facts, but it does not raise any concrete legal argument against the jury's finding of liability. As such, this Opinion will focus exclusively on the sole question on certiorari: whether to adopt a per se ban on punitive damages in breach of DFR suits filed against labor unions, as a matter of state common law. This is a legal question which we review de novo.

DISCUSSION Foust is not controlling.

{11} As the exclusive representative of City employees under a collective bargaining agreement, the Union is responsible for prosecuting grievances on behalf of City employees. In New Mexico all unionsowe a common-law duty of fair representation to their members, but are given considerable discretion to decide whether and how to pursue a member's grievance, consistent with the best interests of the Union membership as a whole. See Callahan, 2006-NMSC-010, ¶¶ 9, 13, 139 N.M. 201, 131 P.3d 51. In Callahan, we limited the common-law cause of action for breach of the DFR to arbitrary, fraudulent or bad faith conduct on the part of the union; allegations of mere negligence by the union do not state a viable claim for relief. Id. ¶¶ 10, 11.

{12} To explain the policy justification for our ruling in Callahan, we cited the U.S. Supreme Court opinion of Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967), for its discussion of why the proper balance of interests in the collective bargaining arrangement requires limiting union members' access to the courts for DFR suits. Callahan, 2006-NMSC-010, ¶ 11, 139 N.M. 201, 131 P.3d 51. In following the liability standard for DFR actions set forth in Vaca, we observed that “requiring arbitrary, fraudulent or bad faith conduct to prove a breach of the duty of fair representation is consistent with U.S. Supreme Court precedent.” Callahan, 2006-NMSC-010, ¶ 11, 139 N.M. 201, 131 P.3d 51. The Union interprets this statement, and our adoption of the same rationale for a standard of liability as Vaca, to mean that “ Callahan mandates that state courts are to develop the state [DFR] consistent with United States Supreme Court precedent in general and with Vaca in particular.” But we have never professed slavish adherence to federal case law in developing our state common-law jurisprudence.

{13} The U.S. Supreme Court relied upon Vaca's holding in its subsequent opinion in International Brotherhood of Electrical Workers v. Foust, 442 U.S. 42, 99 S.Ct. 2121, 60 L.Ed.2d 698 (1979). Extending Vaca's rationale, the Supreme Court in Foust adopted a per se ban on punitive damages in federal breach of DFR actions. Foust, 442 U.S. at 49-50, 99 S.Ct. 2121. Before this Court, the bulk of the Union's case rests on the proposition that, since Callahan supposedly wedded the New Mexico DFR law to the federal common-law...