Brown v. Local 58, Intern. Broth. of Elec. Workers, AFL-CIO

• Citation: 76 F.3d 762
• Decision Date: 26 February 1996
• Docket Number: No. 94-1558,AFL-CI,D,94-1558
• Parties: 151 L.R.R.M. (BNA) 2550, 34 Fed.R.Serv.3d 212 Richard W. BROWN, et al., Plaintiffs-Appellees, v. LOCAL 58, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS,efendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 762

76 F.3d 762

151 L.R.R.M. (BNA) 2550, 34 Fed.R.Serv.3d 212

Richard W. BROWN, et al., Plaintiffs-Appellees, v. LOCAL 58, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS AFL-CIO, Defendant-Appellant.

No. 94-1558.

United States Court of Appeals Sixth Circuit.

Argued Aug. 8, 1995.

Decided Feb. 26, 1996.

Barbara M. Harvey (argued and briefed), Detroit, MI, for plaintiffs-appellees.

Christopher P. Legghio (argued and briefed), Ronald C. Engler, Miller, Cohen, Martens, Ice & Geary, Southfield, MI, for defendant-appellant.

Before KENNEDY, WELLFORD, and SILER, Circuit Judges.

WELLFORD, Circuit Judge.

This appeal involves a request for attorneys' fees and costs incurred by members of an electrical union during litigation against their local. Though the union members voluntarily dismissed their action without prejudice, they sought an award of attorneys' fees and costs from the local on the grounds that they were prevailing parties. They contend that their lawsuit was a catalyst that caused the local to reform the procedures by which collective bargaining agreements are ratified. The union members also maintain that their lawsuit caused the local to reinsert a disputed contractual provision into the union's new contract. The district court granted the union members' original and supplemental requests for attorneys' fees and costs. For the reasons stated below, we REVERSE.

I. STATEMENT OF FACTS

Local 58 of the International Brotherhood of Electrical Workers (Local 58), is the exclusive bargaining agent for more than 2,500 electrical workers employed by the Detroit, Michigan Chapter of the National Electrical Contractors Association (NECA). Historically, the local unions affiliated with the International (IBEW) exercised total autonomy in the negotiation of collective bargaining agreements (CBA). In May of 1989, Local 58's bargaining committee reached tentative agreement with NECA on a three year contract. In the proposed CBA, the parties agreed to substitute a standard CIR ¹ clause for the modified CIR provision in the existing contract. A "standard" CIR clause allows either the union or management to unilaterally submit a labor dispute to binding arbitration, while a "modified" CIR provides for binding arbitration only when both parties jointly agree.

Several days before a scheduled vote on ratification of the new CBA, plaintiffs learned of the standard CIR clause in the proposed contract. They feared that, if NECA could unilaterally submit labor disputes to binding arbitration, a standard CIR clause would effectively deprive the union of the ability to strike and thereby diminish its leverage in the bargaining process. Plaintiffs sought to postpone the mailing of ballots until a special meeting of the membership could be called to debate the merits of the proposed CBA. The leadership of Local 58 resisted these efforts, however, and mailed out the ballots on schedule.

On June 13, 1989, plaintiffs filed suit in federal district court, seeking a temporary restraining order (TRO) to prevent Local 58 from tallying the ballots. Plaintiffs further claimed that Local 58 did not provide the membership a sufficient explanation of the new contract, specifically the proposed CIR clause, and that Local 58 failed to hold a "special call" meeting to discuss the new CBA. They based their claim for injunctive relief on the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA), 29 U.S.C. § 411(a)(1),(2). ² The district court refused to enjoin the counting of the ballots but agreed to enjoin enforcement of the new contract, pending a hearing on plaintiffs' claim for preliminary injunctive relief.

On June 28, 1989, the district court dissolved the TRO, denied preliminary injunctive relief, and allowed the 1989-1992 CBA to take effect. Plaintiffs moved for entry of final judgment under Federal Rule of Civil Procedure 58, arguing that the district court's order denied them the principal relief sought. The district court denied this motion. On July 18, 1989, at Local 58's first meeting following the lawsuit, the membership proposed an amendment to the union's by-laws, requiring a "special order of business meeting" to provide notice of changes in future contracts. One month later, the membership formally approved the amendment. ³

On May 10, 1990, the district court heard argument on the parties' cross-motions for summary judgment. The court then granted Local 58's motion, finding that the union adequately informed its membership about the contents of the proposed CBA. The court also rejected the claim that the bargaining committee violated its duty of fair representation. ⁴

On appeal, we affirmed, in part, and reversed in part. See 936 F.2d 251, 255 (6th Cir.1991). Though we agreed with the district court on the duty of fair representation claim, we reversed summary judgment as to plaintiffs' LMRDA claims. We noted that the record revealed disputed issues of material fact about which the district court made no specific findings. Id. On August 7, 1991, we remanded the LMRDA claims for trial.

The 1989-1992 CBA was scheduled to expire in June of 1992. Plaintiffs contacted the IBEW and indicated a willingness to dismiss their lawsuit against Local 58 if Local 58 agreed to include a modified CIR clause in the new contract that was then being negotiated with NECA. The IBEW agreed that the NECA would reinstate the modified clause in the new contract if Local 58 "insisted to impasse" during negotiations. The IBEW, however, did not have the authority to bind Local 58. As the parties prepared for trial and entered their respective pretrial orders, the district court postponed the date of trial in the hope of settling the case. Local 58 and NECA eventually agreed to reinsert a modified CIR clause into the new CBA and, on August 31, 1992, plaintiffs moved for voluntary dismissal pursuant to Federal Rule of Civil Procedure 41(a)(2). The district court granted this motion that day and the clerk entered the district court's order on September 1, 1992. On September 11, 1992, Local 58 filed a motion for entry of an alternative order, asking that the voluntary dismissal be entered with prejudice. The court denied the motion on October 30, 1992.

Though plaintiffs did not receive a judgment on the merits, they filed an application for attorneys' fees and costs on November 30, 1992, arguing that they were "prevailing parties" because their lawsuit was the catalyst that precipitated the union's adoption of the by-law amendment and the reversion to the modified CIR clause. The district court referred the application to a magistrate judge, who recommended that plaintiffs receive an award of attorneys' fees with respect to Local 58's adoption of the by-law amendment. However, because he found no evidence of a causal link between the lawsuit and the CIR clause in the 1992 agreement, the magistrate rejected their request for fees with respect to the modified CIR clause.

Both parties filed timely objections to the magistrate's report. The district court accepted the magistrate judge's recommendation with respect to the award of attorneys' fees for the by-law amendment. The court concluded, however, that there was also a causal link between the lawsuit and Local 58's advocacy of a modified CIR provision. Consequently, the court granted plaintiffs' request for fees and costs on April 6, 1994. On May 5, 1994, plaintiffs filed a supplemental application, seeking recovery of fees and expenses incurred litigating their status as "prevailing parties." The district court granted the supplemental application on June 8, 1994. This appeal followed.

II. DISCUSSION

Local 58 raises numerous objections on appeal. The first four pertain to this court's jurisdiction. The remaining issues relate to the merits of the fee award. We address each seriatim.

Part A--Jurisdiction

Local 58 contends that upon dismissal of the lawsuit, the district court lost jurisdiction to consider the application for attorneys' fees and costs. Local 58 suggests that a voluntary dismissal under Federal Rule of Civil Procedure 41(a) deprives a district court of jurisdiction over a subsequent request for attorneys' fees unless the court expressly reserves jurisdiction. Plaintiffs respond that a request for attorneys' fees is collateral to the underlying lawsuit and that final disposition on the merits does not affect the district court's authority to award fees and costs.

The Supreme Court has repeatedly held that "a request for attorney's fees ... raises legal issues collateral to the main cause of action." White v. New Hampshire Dep't of Employment Sec., 455 U.S. 445, 451, 102 S.Ct. 1162, 1166, 71 L.Ed.2d 325 (1982); see also Budinich v. Becton Dickinson & Co., 486 U.S. 196, 200, 108 S.Ct. 1717, 1720-21, 100 L.Ed.2d 178 (1988) ("[W]e think it indisputable that a claim for attorney's fees is not part of the merits of the action to which the fees pertain."). Local 58 relies upon decisions holding that a voluntary dismissal wrests jurisdiction from the district court and renders a subsequent request for attorneys' fees "a nullity." Santiago v. Victim Servs. Agency of the Metro. Assistance Corp., 753 F.2d 219, 221 (2d Cir.1985); Williams v. Ezell, 531 F.2d 1261, 1264 (5th Cir.1976).

The Supreme Court, however, recently made clear that it disapproved of the approach taken in Santiago. In Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 393-94, 110 S.Ct. 2447, 2454-55, 110 L.Ed.2d 359 (1990), the Court considered whether a plaintiff's voluntary dismissal under Rule 41(a)(1) divested the district court of jurisdiction to assess Rule 11 sanctions. The Court rejected the Second Circuit's reasoning, ⁵ holding that a district court retains jurisdiction to impose sanctions even after a plaintiff voluntarily dismisses its action under Rule 41(a). Id. at 394, 398, 110 S.Ct. at 2455, 2457. The Court reasoned that:

[l]ike the imposition of costs, attorney's fees, and contempt...