Bechtel Petroleum, Inc. v. Webster

• Decision Date: 18 July 1985
• Docket Number: No. C-82-6664 WHO.,C-82-6664 WHO.
• Parties: BECHTEL PETROLEUM, INC., formerly Bechtel Incorporated, Plaintiff, v. Thomas B. WEBSTER; Eric S. Schrank; Van A. Bulf; Peter S. Churgel; Delbert D. Hoke; Sam C. Bitetti; Phillip C. Aikele; Gary M. Braza; Ava K. Melkonian; Donald L. Earnhart; George C. McIntosh; Walter Voight; Arvid B. Rasmusson; Allan R. Kemp; Eugene E. Work; Peter E. House; Albert J. Cooper; George G. Pearce; Claude E. Carroll; Gary B. Deeter; Jack G. Brockman; Harell L. Broome; Robert A. Brokaw; Eric A. Mefley; Earl J. Bitzenburg; Earl M. Cox, Jr.; Robert Weaver; Samuel D. Jennings; Charles A. Yokiel; Edward Aigeltinger; Emory W. Carter; Stephen C. Garey; Richard D. Libkuman; Estate of Frank Butler; Edward G. Anderson; Allen B. Snyder; Robert Prevedello; George S. Allen, Defendants.
• Court: U.S. District Court — Northern District of California

636 F. Supp. 486

BECHTEL PETROLEUM, INC., formerly Bechtel Incorporated, Plaintiff, v. Thomas B. WEBSTER; Eric S. Schrank; Van A. Bulf; Peter S. Churgel; Delbert D. Hoke; Sam C. Bitetti; Phillip C. Aikele; Gary M. Braza; Ava K. Melkonian; Donald L. Earnhart; George C. McIntosh; Walter Voight; Arvid B. Rasmusson; Allan R. Kemp; Eugene E. Work; Peter E. House; Albert J. Cooper; George G. Pearce; Claude E. Carroll; Gary B. Deeter; Jack G. Brockman; Harell L. Broome; Robert A. Brokaw; Eric A. Mefley; Earl J. Bitzenburg; Earl M. Cox, Jr.; Robert Weaver; Samuel D. Jennings; Charles A. Yokiel; Edward Aigeltinger; Emory W. Carter; Stephen C. Garey; Richard D. Libkuman; Estate of Frank Butler; Edward G. Anderson; Allen B. Snyder; Robert Prevedello; George S. Allen, Defendants.

No. C-82-6664 WHO.

United States District Court, N.D. California.

October 11, 1984.

On Motion for Summary Judgment July 18, 1985.

COPYRIGHT MATERIAL OMITTED

Jesse B. Grove, Thomas R. Goin, John R. Foote, Thelen, Marrin, Johnson & Bridges, San Francisco, Cal., for plaintiff.

Edgar Paul Boyko, Fletcher W. Paddison, Miller, Boyko & Bell, San Diego, Cal., Charles E. Cole, Edward T. Noonan, Law Offices of Charles Cole, Fairbanks, Alaska, for defendants except Estate of Butler, Snyder, Prevedello and Allen.

Ronald W. Lorensen, Acting Atty. Gen., Thomas H. Robertson, Asst. Atty. Gen., State of Alaska, Dept. of Law, Juneau, Alaska, for intervenors.

OPINION AND ORDER

ORRICK, District Judge.

This decision holding that this Court will not abstain from considering vel non to exercise its jurisdiction to protect the decree entered in a companion case involving the same parties and the same issues merely adds more strands to the arcane web of federal and state litigation involving charges by governmental agencies and one thousand former employees of Bechtel Petroleum Co. ("Bechtel") that Bechtel, in the course of its construction of the Trans-Alaska Oil Pipeline Project, violated both state and federal wage and hour laws, namely, the Alaska Wage and Hour Act, Alaska Stat. 23.10.060 ("AWHA"), and the federal Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ("FLSA"). A detailed statement of prior federal and state actions is set forth as Appendix A to this opinion, but for present purposes a brief summary of both the relevant substantive law and facts of this case will suffice.

Whenever federal and state substantive laws reflect policy concerns as similar as those at stake here, striking an appropriate balance between the federal and state interests and providing reasonable procedures for parties to vindicate their federal and state claims can be a delicate matter indeed. It is essential that important federal and state substantive claims both be heard, while at the same time protecting the parties against duplicative litigation and unnecessary and endless jurisdictional disputes.

Prior litigation in this case has filled in some of the questions of the substantive overlap between the federal and state statutes. Although both of these statutes are intended for workers' protection, their provisions are not identical. For example, both FLSA and AWHA provide that failure to pay overtime for hours worked in excess of forty hours per week is a violation requiring compensation but, under the Alaska statute, work in excess of eight hours per day may provide independent justification for overtime pay. In addition, AWHA provides for liquidated damages (including amounts for interest and attorneys' fees), but § 217, the relevant provision of FLSA, makes no provision for liquidated damages, and liquidated damages were not at issue in the prior federal litigation here. Bechtel urged in state court that FLSA had preempted state law. Although an Alaska lower court agreed, that victory was short-lived. The Alaska Supreme Court held that FLSA did not preempt AWHA and that employers sued under both provisions could be protected from double exposure by allowing an offset against any state claim of liabilities under the federal statute. Webster v. Bechtel, Inc., 621 P.2d 890 (Alaska 1980).

The first action in this case was a state class action under AWHA. About a month after the state action was filed — and on the same day the class was certified — the United States Secretary of Labor ("the Secretary") brought FLSA claims in this Court on behalf of the same employees relating to the same period of employment. While appeal to the Alaska Supreme Court on the lower court's finding that the state claim had been preempted by federal law was pending, Bechtel and the Secretary entered into a consent decree, upon which this Court entered judgment. Marshall v. Bechtel, Inc., No. C-77-1777 WHO (Oct. 23, 1978). That judgment required Bechtel to pay certain employees an amount not to exceed $3,000,000 and to avoid future violations of FLSA. In the state class action plaintiffs continued to press their state claims under AWHA and on March 26, 1982, the Alaska trial court denied Bechtel's motion for partial summary judgment as well as Bechtel's claim that the Marshall consent decree was res judicata on the state claims. Webster v. Bechtel, Inc., No. 4FA-77-1358 Civ. (Alaska Super.Ct. Mar. 26, 1982).

This action was brought by Bechtel in December 1982 to enjoin further litigation in the Alaska state courts on behalf of the employee class. On April 19, 1983, a stipulation signed by all parties was filed, describing the schedule for filing procedural motions and stating that the plaintiff had no objection to intervention by the State of Alaska ("the State"). The State moved to intervene on May 19. Defendant employees subsequently filed this motion to dismiss. Although the motion purports to raise a variety of issues, the argument is essentially that this Court should abstain from exercising its jurisdiction under the doctrine created by Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), and its progeny.

Bechtel has filed a cross-motion for summary judgment claiming that the third exception to the Anti-Injunction Act, 28 U.S.C. § 2283, known as the relitigation exception, applies here because the Marshall judgment is res judicata as to certain claims raised in the state court by the employee class and that this Court should enjoin further state litigation. Defendants moved to strike Bechtel's cross-motion on the grounds that it is beyond the scope of the procedural motions described in the April 19 stipulation and that consideration of the abstention argument must precede consideration of the res judicata effect of the Marshall judgment. In accordance with the announced schedule, this Court shall now consider only defendants' abstention argument and plaintiff's injunction argument. In light of the findings reached here concerning these issues, the res judicata issue will be considered subsequently.

I

In certain narrowly prescribed circumstances, federal district courts decline to exercise the jurisdiction granted to them either by the Constitution or by statute. This extra-ordinary procedure is known as the "abstention doctrine." See generally C. Wright, State and Federal Courts, ch. 8 (4th Ed.1983). It has been characterized as a narrow exception to the "virtually unflagging obligation of the federal courts to exercise the jurisdiction given them." Colorado River Water Conservation District v. United States, 424 U.S. 800, 817, 96 S.Ct. 1236, 1246, 47 L.Ed.2d 483 (1976); Champion International Corp. v. Brown, 731 F.2d 1406 (9th Cir.1984).

Defendant employees argue that the abstention doctrine requires this Court to dismiss Bechtel's claim. Courts and commentators disagree about the characterization of the various strands of this doctrine. Compare Wright, supra, with Turf Paradise, Inc. v. Arizona Downs, 670 F.2d 813, 819-20 (9th Cir.1982). Here, however, the defendants have only argued that the doctrine referred to as Younger-Huffman abstention applies and it is to the explication of that doctrine that the Court now turns.

A

In Younger, the district court enjoined the District Attorney of Los Angeles County from prosecuting Harris under the California Criminal Syndicalism Act. Harris claimed that the Act violated his rights of free speech and press. The District Attorney petitioned for certiorari claiming that the action of the district court was prohibited by the Anti-Injunction Act.

The Supreme Court reversed, holding that the district court should have abstained. This finding was based first on principles of equitable restraint. Absent a finding of bad faith or harassment, a criminal defendant must establish that he would suffer "great and immediate" injury if not granted injunctive relief. Younger, supra, 401 U.S. at 46, 91 S.Ct. at 751. Second, the Court emphasized that these principles are reinforced by notions of comity and federalism which underlie the Anti-Injunction Act.

This rationale was extended to a civil nuisance proceeding in Huffman v. Pursue, Ltd., 420 U.S. 592, 95 S.Ct. 1200, 43 L.Ed.2d 482 (1975). The state court had entered judgment for the county, finding that appellee's predecessor had violated state nuisance laws by exhibiting obscene films. The judgment provided for the sale and seizure of property used in the theater's operation. Rather than appeal this decision in state court, appellee sought injunctive relief in federal district court under 42 U.S.C. § 1983, alleging that appellant's use of the nuisance statute was a deprivation of constitutional rights under color of state law. Appellants argued the Younger doctrine for the first time on appeal.

The Huffman Court held that abstention was required on three grounds. First, the principles of federalism discussed in Younger applied. Second, the Court held that a nuisance proceeding was more akin to a criminal prosecution than are most cases. The State was a party to the action which was "both in aid of and closely related to criminal statutes." Id. at 604, 95 S.Ct. at 1208. The...