Associated General Contractors v. Otter Tail Power, Civ. No. A78-1009.

CourtUnited States District Courts. 8th Circuit. United States District Courts. 8th Circuit. District of South Dakota
Writing for the CourtBENSON
Citation457 F. Supp. 1207
PartiesASSOCIATED GENERAL CONTRACTORS OF NORTH DAKOTA, a non-profit corporation, Plaintiff, v. OTTER TAIL POWER COMPANY, a corporation, and Bechtel Corporation, a corporation, Defendants.
Docket NumberCiv. No. A78-1009.
Decision Date06 November 1978

457 F. Supp. 1207

ASSOCIATED GENERAL CONTRACTORS OF NORTH DAKOTA, a non-profit corporation, Plaintiff,
v.
OTTER TAIL POWER COMPANY, a corporation, and Bechtel Corporation, a corporation, Defendants.

Civ. No. A78-1009.

United States District Court, D. North Dakota, Southwestern Division.

September 19, 1978.

As Amended November 6, 1978.


457 F. Supp. 1208
COPYRIGHT MATERIAL OMITTED
457 F. Supp. 1209
COPYRIGHT MATERIAL OMITTED
457 F. Supp. 1210
COPYRIGHT MATERIAL OMITTED
457 F. Supp. 1211
John D. Kelly and Douglas R. Herman, Vogel, Brantner, Kelly, Knutson, Weir & Bye, Fargo, N. D., for plaintiff

J. Gerald Nilles, Nilles, Hansen, Selbo, Magill & Davies, Ltd., Fargo, N. D., for Bechtel.

William R. Pearce, Pearce, Anderson, Thames & Durick, Bismarck, N. D., for Otter Tail.

MEMORANDUM AND ORDER

BENSON, Chief Judge.

The above-entitled action was initiated in the District Court of Mercer County, North Dakota, and was subsequently removed to this court pursuant to 28 U.S.C. § 1441. The basis for removal was the diversity of citizenship of the parties. 28 U.S.C. § 1332. The matter is now before the court on defendant Bechtel Corporation's motion to dismiss, and for purposes of the motion the court assumes the factual allegations of the complaint to be true.

Plaintiff is a non-profit corporation organized and existing under the laws of North Dakota. It exists to encourage and promote fair competition, improvement in labor conditions and the elimination of unfair and unethical practices in the construction industry in North Dakota. Plaintiff's members are contractors engaged in building, highway, and heavy construction in North Dakota. Plaintiff's current active membership is 138 general contractors, over one-half of whom are parties to collective bargaining agreements relating to wages, fringe benefits and other terms and conditions of employment to be provided to their employees.

Defendant Otter Tail Power Company (Otter Tail) is a foreign corporation authorized to transact business in the State of North Dakota. Otter Tail is the co-owner, along with Montana-Dakota Utilities and Minn-Kota Power Cooperative, of the Coyote # 1 Fossil Fuel Power Plant, now being built in Mercer County, North Dakota. Otter Tail acts as the representative and agent of its co-owners in connection with the construction of the Coyote # 1 Power Plant.

Defendant Bechtel Power Corporation (Bechtel) is a foreign corporation authorized to transact business within the State of North Dakota. Bechtel acts as architect-engineer and general contractor for the Coyote # 1 Plant, pursuant to a contract with defendant Otter Tail.

In late 1977, Bechtel, on behalf of and with the full knowledge and consent of Otter Tail, entered into a written "Stabilization Agreement" with numerous labor unions, covering all construction work to be performed on the Coyote # 1 Power Plant. The Stabilization Agreement provides, inter alia, that the signatory labor unions are to be the sole and exclusive bargaining representatives for certain classes of manual employees on designated jobsites, that contractors performing construction work on the Coyote # 1 Power Plant use union registration facilities and referral systems in filling job vacancies, and that any subcontracting done by contractors be only to persons, firms or corporations whose employees are represented by a lawfully established, bona fide union and who are compensated under a collective bargaining agreement meeting minimum standards set out in the Stabilization Agreement. The agreement is now in effect.

457 F. Supp. 1212

Plaintiff Associated General Contractors (AGC) alleges in Counts 1 and 2 of its amended complaint that the Stabilization Agreement violates §§ 1 and 2 of the Sherman Anti-trust Act, 15 U.S.C. §§ 1 and 2.1 In Counts 3 and 4 of its amended complaint, plaintiff alleges the Stabilization Agreement violates the right to work and the freedom of employees to engage in or refrain from the process of collective bargaining guaranteed by North Dakota law. In Count 5 of its amended complaint, plaintiff alleges that the Stabilization Agreement constitutes direct economic intimidation designed to induce AGC's member contractors to alter their mode of business, contrary to North Dakota law. Plaintiff seeks a declaratory judgment under 28 U.S.C. § 2201 that the Stabilization Agreement is illegal, void and unenforceable because it violates the Sherman Act and the laws and public policies of the State of North Dakota. Plaintiff also prays that defendants be enjoined from subscribing, administering, honoring and enforcing the terms and conditions of the Stabilization Agreement.

Defendant Bechtel has moved to dismiss the complaint. Bechtel contends AGC has no standing under 15 U.S.C. § 26 to sue under the anti-trust laws, and that the state law claims are preempted by federal labor law, and are thus subject to the exclusive jurisdiction of the National Labor Relations Board.

I. The Anti-trust Claims

Plaintiff contends that Article II of the Stabilization Agreement forces AGC member contractors, both union and non-union, to recognize particular unions as the exclusive collective bargaining agents for their employees on the Coyote # 1 project to be eligible to work as a contractor on the project. This allegedly restrains trade and competition in the construction industry in violation of §§ 1 and 2 of the Sherman Anti-trust Act, 15 U.S.C. §§ 1 and 2. Article II of the Stabilization Agreement provides us follows:

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 employed by the Contractors signatory to this Agreement, on the specific jobs designated herein.

Plaintiff also contends that Article XIV of the Stabilization Agreement forces AGC member non-union contractors into collective bargaining relationships with particular unions in order to be eligible to work as subcontractors on the Coyote # 1 project. It is alleged that this also restrains trade and competition in the construction industry in violation of the Sherman Anti-trust Act. Article XIV of the Stabilization Agreement provides in part as follows:

The Contractor shall have the right to subcontract work, provided that any work which is subcontracted at the site of the construction, alteration, painting or repair of a building, structure or other work covered by this Agreement, shall be subcontracted only to persons, firms or corporations whose employees are represented by a lawfully established, bona fide Union and who are compensated under a collective bargaining agreement which provides for wages, hours and other economic conditions of employment not less than those provided for in this Agreement. This provision shall apply to and operate at only those jobsites covered by this agreement where the Contractor is employing some of its own employees, who are represented by the Unions, and only at such time on these jobsites when such employees are employed.
The employer shall be required to advise the Building and Construction Trades Department, AFL-CIO as soon as practicable but prior to start work by the Contractor or Subcontractor, of all contracts entered into. Violations of these provisions shall be subject to the grievance
457 F. Supp. 1213
and arbitration procedure established in this Agreement.

Jurisdiction to hear these claims is conferred on this court by 28 U.S.C. § 1337, which gives original jurisdiction to the district courts to hear cases arising under the anti-trust laws.

Plaintiff seeks an injunction under section 16 of the Clayton Act, 15 U.S.C. § 26, and a declaratory judgment that the Stabilization Agreement is illegal, void and unenforceable. 28 U.S.C. § 2201.

Defendant Bechtel has moved to dismiss the anti-trust claims on the ground that plaintiff AGC does not have standing to assert the claims of its member contractors under the anti-trust laws. AGC alleges no injury to itself in its complaint.

The courts will not take action in a controversy unless it is first determined that standing exists. Unless the plaintiff can show some cognizable injury, the court should not consider the merits of an action.2 Warth v. Seldin, 422 U.S. 490, 517-18, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975); Santos v. District Council of New York City and Vicinity of United Brotherhood of Carpenters and Joiners of America, AFL-CIO, 547 F.2d 197, 199 (2d Cir. 1977).

The Supreme Court, in Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970), created a two-part test for standing. Standing exists if "the plaintiff alleges that the challenged action has caused him injury in fact, economic or otherwise," 397 U.S. at 152, 90 S.Ct. at 829, and if "the interest sought to be protected by the complainant is arguably within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question." 397 U.S. at 153, 90 S.Ct. at 830. The two parts of the standing test are not stated in the alternative; unless both parts are satisfied, plaintiff does not have standing to sue. See In re Multidistrict Vehicle Air Pollution M. D. L. No. 31, State of California v. Automobile Manufacturers Association, Inc., 481 F.2d 122, 126 (9th Cir. 1973), cert. denied, 414 U.S. 1045, 94 S.Ct. 551, 38 L.Ed.2d 336 (1973), reh. denied, 414 U.S. 1148, 94 S.Ct. 905, 39 L.Ed.2d 104 (1974).

AGC in its complaint alleges no injury to itself. It asserts the rights of its member contractors and contends the Stabilization Agreement injures or threatens to injure them.

AGC does not satisfy the standing test of the Supreme Court enunciated in Data Processing, supra, because it has not alleged an injury to itself. An association has no standing to assert the rights of its members under the antitrust laws. Any right of action belongs to the...

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4 practice notes
  • International Union of United Ass'n of Journeymen and Apprentices of Plumbing and Pipefitting Industry of U.S. and Canada, Local Unions Nos. 141, 229, 681, and 706 v. N.L.R.B., No. 80-2393
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • April 16, 1982
    ...of "membership" adopted by the majority ignores these explicit holdings. See Associated General Contractors v. Otter Tail Power Co., 457 F.Supp. 1207, 1217 The majority therefore extends the scope of section 14(b) to an unprecedented degree. "Section 14(b) does not empower states to ban all......
  • MacKenzie v. LOCAL 624, INTERN. U., ETC., No. EC 78-217-S-O.
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Northern District of Mississippi
    • June 4, 1979
    ...in a federal district court under 28 U.S.C. § 1332 (diversity of citizenship). Associated General Contractors v. Otter Tail Power Co., 457 F.Supp. 1207, 1211 (D.N.D.1978), or under Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185, Oil Chemical and Atomic Workers, Internati......
  • Associated General Contractors of North Dakota v. Otter Tail Power Co., No. 78-1828
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • November 27, 1979
    ...but has asserted only alleged injuries to its members generally, it lacks standing to sue under § 16 of the Clayton Act, 15 U.S.C. § 26. 457 F.Supp. 1207 at 1214-15 (D.N.D. 1978) (emphasis by the District Court) (additional citations We agree with the result reached by the District Court. H......
  • Cone v. Nevada Service Employees Union, No. 29718.
    • United States
    • Nevada Supreme Court of Nevada
    • May 4, 2000
    ...involved do not fall within the purview of the National Labor Relations Act. See Associated Gen. Contractors v. Otter Tail Power Co., 457 F.Supp. 1207, 1216 (D.N.D.1978) (activities not listed in sections seven and eight of the National Labor Relations Act are within the jurisdiction of the......
4 cases
  • International Union of United Ass'n of Journeymen and Apprentices of Plumbing and Pipefitting Industry of U.S. and Canada, Local Unions Nos. 141, 229, 681, and 706 v. N.L.R.B., No. 80-2393
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • April 16, 1982
    ...of "membership" adopted by the majority ignores these explicit holdings. See Associated General Contractors v. Otter Tail Power Co., 457 F.Supp. 1207, 1217 The majority therefore extends the scope of section 14(b) to an unprecedented degree. "Section 14(b) does not empower states to ban all......
  • MacKenzie v. LOCAL 624, INTERN. U., ETC., No. EC 78-217-S-O.
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Northern District of Mississippi
    • June 4, 1979
    ...in a federal district court under 28 U.S.C. § 1332 (diversity of citizenship). Associated General Contractors v. Otter Tail Power Co., 457 F.Supp. 1207, 1211 (D.N.D.1978), or under Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185, Oil Chemical and Atomic Workers, Internati......
  • Associated General Contractors of North Dakota v. Otter Tail Power Co., No. 78-1828
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • November 27, 1979
    ...but has asserted only alleged injuries to its members generally, it lacks standing to sue under § 16 of the Clayton Act, 15 U.S.C. § 26. 457 F.Supp. 1207 at 1214-15 (D.N.D. 1978) (emphasis by the District Court) (additional citations We agree with the result reached by the District Court. H......
  • Cone v. Nevada Service Employees Union, No. 29718.
    • United States
    • Nevada Supreme Court of Nevada
    • May 4, 2000
    ...involved do not fall within the purview of the National Labor Relations Act. See Associated Gen. Contractors v. Otter Tail Power Co., 457 F.Supp. 1207, 1216 (D.N.D.1978) (activities not listed in sections seven and eight of the National Labor Relations Act are within the jurisdiction of the......

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