Associated General Contractors of North Dakota v. Otter Tail Power Co.

• Decision Date: 27 November 1979
• Docket Number: No. 78-1828,78-1828
• Citation: 611 F.2d 684
• Parties: 102 L.R.R.M. (BNA) 3022, 87 Lab.Cas. P 11,719, 1980-1 Trade Cases 63,036 ASSOCIATED GENERAL CONTRACTORS OF NORTH DAKOTA, a nonprofit corporation, Appellant, v. OTTER TAIL POWER COMPANY, a corporation, and Bechtel Corporation, a corporation, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 684

611 F.2d 684

102 L.R.R.M. (BNA) 3022, 87 Lab.Cas. P 11,719,

1980-1 Trade Cases 63,036

ASSOCIATED GENERAL CONTRACTORS OF NORTH DAKOTA, a nonprofit corporation, Appellant, v. OTTER TAIL POWER COMPANY, a corporation, and Bechtel Corporation, a corporation, Appellees.

No. 78-1828.

United States Court of Appeals Eighth Circuit.

Submitted April 18, 1979.

Decided Nov. 27, 1979.

John D. Kelly, Vogel, Brantner, Kelly, Knutson, Weir & Bye, Fargo, N. D., argued, for appellant; Douglas R. Herman, Fargo, N. D., on brief.

James P. Hargarten, San Francisco, Cal., argued, for appellee; Nilles, Hansen, Selbo, Magill & Davies, Fargo, N. D., Thelen, Marrin, Johnson & Bridges, San Francisco, Cal., on brief.

Before LAY, HEANEY and HENLEY, Circuit Judges.

HEANEY, Circuit Judge.

This is an appeal by the Associated General Contractors of North Dakota (AGC) from the dismissal of its complaint by the United States District Court for the District of North Dakota. The original complaint filed in state court alleged violations of various state labor laws, including the state right-to-work law. The amended complaint, filed after removal to federal court, ¹ additionally alleged a violation of federal antitrust laws. The District Court dismissed the complaint on the grounds that the AGC lacked standing, both on its own behalf and in a representational capacity for its members, to raise the antitrust claims and that the state labor law claims were preempted by federal law. We affirm.

The District Court considered the matter on a motion to dismiss the complaint. As matters outside the pleadings, namely depositions and affidavits, were considered by the District Court, we treat its action as one granting a motion for summary judgment. Fed.R.Civ.P. 12(b). We assume, as did the District Court, that the facts as stated in the plaintiff's affidavits and complaint are true.

The AGC of North Dakota is a nonprofit trade association. Its stated goals include the promotion of fair competition, the improvement of labor conditions and the elimination of unfair and unethical practices in the construction industry. Its active membership consists of 138 general contractors. Seventy-two of these contractors are parties to collective bargaining agreements. The AGC serves as the bargaining agent for many, if not all, of its union contractor members in their collective bargaining negotiations. Sixty-six member contractors do not recognize or bargain with any union.

Bechtel Power Corporation has undertaken to construct a large fossil fuel power plant in Mercer County, North Dakota, for the Otter Tail Power Company, Montana-Dakota Utilities and Minn-Kota Power Cooperative. The plant will generate power for distribution in interstate commerce. Bechtel, acting with the knowledge and consent of Otter Tail Power, the agent of the other two power companies, negotiated and executed a written Stabilization Agreement with the Building and Construction Trades Department of the AFL-CIO and several affiliated international unions. The stated purposes of the Stabilization Agreement, which covered all construction work to be performed on the power plant project, were to insure an adequate supply of skilled labor for the project and the continuation of work uninterrupted by labor disputes.

The Agreement provides, in part, that the signatory unions are to be the sole and exclusive bargaining representatives for certain classes of manual employees on designated job sites; that contractors working on the project shall, in filling craft-job vacancies, utilize and be bound by the registration facilities and referral systems established or authorized by each of the international unions, when such procedures are not in violation of federal law; and that the subcontractors employed on the project must be a party to a collective bargaining agreement with a lawfully established bona

fide union which provides for wages, hours and other economic conditions of employment meeting the minimum standards set out in the Stabilization Agreement. The AGC contends that the Stabilization Agreement is illegal and seeks to enjoin its enforcement.

I.

THE ANTITRUST CLAIMS.

In Count One of its complaint, the AGC alleges that Bechtel and Otter Tail, by executing and enforcing Article II of the Agreement (which recognizes signatory unions as the sole and exclusive bargaining agent for the manual employees working on the project) force the AGC member contractors, union and nonunion alike, who are willing, able and qualified to work on the project to recognize the particular unions as the exclusive bargaining agents for their employees on the project site in order to be eligible for the work. It further alleges that this conduct restrains trade and competition in the construction industry in violation of Sections 1 and 2 of the Sherman Antitrust Act, 15 U.S.C. §§ 1 and 2.

In Count Two of the complaint, the AGC alleges that Bechtel and Otter Tail, by executing and enforcing Article XIV of the Agreement (which provides that any work covered by the Agreement shall be contracted only to firms whose employees are represented by a lawfully established bona fide union and compensated under a collective bargaining agreement at not less than the minimum standards set out in the Stabilization Agreement) have forced and are forcing AGC member nonunion contractors into collective bargaining relationships with particular unions in order to be eligible for work as a subcontractor on the project. The AGC alleges that this conduct restrains trade and competition in violation of Sections 1 and 2 of the Sherman Antitrust Act, 15 U.S.C. §§ 1 and 2.

The initial issue presented is whether the AGC has standing to pursue the antitrust claims. The District Court denied standing on the grounds that (1) the AGC had not alleged injury to itself, and (2) an assertion of representational standing based on the allegation of injury to AGC members is not countenanced by Section 16 of the Clayton Act, 15 U.S.C. § 26. ²

The Supreme Court has invoked a two-part test to determine standing. Warth v. Seldin, 422 U.S. 490, 498-501, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). A court must ascertain, first, whether the plaintiff has met the constitutional requirement of presenting a "case or controversy" has he "suffered 'some threatened or actual injury resulting from the putatively illegal action . . . .' Linda R. S. v. Richard D., 410 U.S. 614, 617, 93 S.Ct. 1146, 35 L.Ed.2d 536 (1973)." Id. at 499, 95 S.Ct. at 2205. Second, the court must determine whether the "statutory provision on which the claim rests properly can be understood as granting persons in the plaintiff's position a right to judicial relief." Id. at 500, 95 S.Ct. at 2206.

Against this background, the AGC contends that it has standing both in its own right and as a representative of its members. Regarding its personal standing, the AGC contends that sufficient allegations of injury to itself exist in its assertions that the "AGC brings this action in its own behalf," and that "(u)nless enjoined, defendants will continue to * * * enforce the Agreement to the irreparable injury of AGC, its member contractors and the general public." These conclusory allegations are insufficient to make out a "case or controversy" because they simply fail to indicate any injury personal to the AGC. It is clear from the complaint and the affidavits that the AGC is not a contractor and does not seek work on this or any other project. Thus, it is not injured in its own right by operation of the Stabilization Agreement.

Count One

We turn next to AGC's claim of representational standing under Count One of its complaint. Count One alleges that AGC's member contractors, both union and nonunion alike, are harmed by the execution and enforcement of Article II of the Agreement. Article II, however, simply provides, "It is recognized by the parties that the Unions signatory hereto are the sole and exclusive bargaining representatives for the classifications of manual employees, included in Appendix "A" attached hereto (building tradesmen) employed by the Contractors signatory to this Agreement, on the specific jobsites designated herein." The only contractors to sign the Agreement were Bechtel and C. E. Lummus Company-Kaiser Engineers, Inc., neither of which is alleged to be a member of AGC. Article II by its terms thus applies only to the prime contractors and not to the AGC members seeking to subcontract work on the project. AGC members, therefore, would not have standing to complain of its execution and enforcement. A fortiori, the AGC has no standing to press that claim on behalf of its members.

Count Two

The more difficult question is whether the AGC has associational standing to represent the claims of its members under Count Two of its complaint. The AGC contends that at least some of its members have standing to sue individually and that, therefore, the AGC has standing to sue in a representational capacity. Bechtel, on the other hand, contends that associational standing is never appropriate in the context of private antitrust litigation and that it is particularly inappropriate in this case. The District Court agreed with Bechtel, noting:

(I)n United States v. Borden Co., 347 U.S. 514, 518, 74 S.Ct. 703, 706, 98 L.Ed. 903 (1954), the Supreme Court stated that "under § 16 of the Act, 15 U.S.C. § 26, a private plaintiff may obtain injunctive relief against such violations only on a showing of 'threatened loss or damage;' and this must be of a sort Personal to the plaintiff."

Cases granting standing to associations to assert the constitutional rights of their members are not relevant to our consideration here. In NAACP v. Alabama, 357 U.S. 449, 78 S.Ct. 1163, 2 L.Ed.2d 1488 (1958), the Supreme Court, in granting standing to an association to present the constitutional claims of its members, stated that to compel the individual members to present their constitutional claims...