Calagaz v. Calhoon

• Decision Date: 10 October 1962
• Docket Number: No. 19293,19417.,19293
• Citation: 309 F.2d 248
• Parties: Peter CALAGAZ, on Behalf of Himself and All Other Members of Marine Engineers' Beneficial Association No. 14, AFL-CIO, Mobile, Alabama, Appellant, v. Jesse M. CALHOON and Julius Dembicki, Appellees. Peter CALAGAZ, on Behalf of Himself and All Other Members of Marine Engineers' Beneficial Association No. 14, AFL-CIO, Mobile, Alabama, Appellant, v. W. G. KELLOGG, Individually, as Agent, etc., et al., Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

309 F.2d 248 (1962)

Peter CALAGAZ, on Behalf of Himself and All Other Members of Marine Engineers' Beneficial Association No. 14, AFL-CIO, Mobile, Alabama, Appellant, v. Jesse M. CALHOON and Julius Dembicki, Appellees.

Peter CALAGAZ, on Behalf of Himself and All Other Members of Marine Engineers' Beneficial Association No. 14, AFL-CIO, Mobile, Alabama, Appellant, v. W. G. KELLOGG, Individually, as Agent, etc., et al., Appellees.

Nos. 19293, 19417.

United States Court of Appeals Fifth Circuit.

October 10, 1962.

COPYRIGHT MATERIAL OMITTED

Willis C. Darby, Jr., Mobile, Ala., for appellant.

Otto E. Simon, Mobile, Ala., Lee Pressman, New York City, for appellees.

Before CAMERON, WISDOM and GEWIN, Circuit Judges.

WISDOM, Circuit Judge.

These appeals¹ concern a class action by members of a local unincorporated association against the members of a national unincorporated association. Jurisdiction is asserted on the ground of diversity of citizenship. The district court dismissed the complaint for lack of jurisdiction and insufficiency of service of process. We reverse and remand.

The plaintiff, Peter Calagaz, filed a class action on behalf of himself and all other members of the Marine Engineers Beneficial Association No. 14 (Local No. 14), an unincorporated association having its sole office in Mobile, Alabama. He sued W. G. Kellogg, individually, as agent of the National Marine Engineers Beneficial Association, AFL-CIO (MEBA), an unincorporated association, as Executive Vice President of the National MEBA, and as representative of all other members of a class designated as the National MEBA. MEBA has its head offices in Washington, D. C. and New York City. Local No. 14 is, or was, a subordinate association of the Gulf Coast District of the National MEBA. In January 1961, after a national convention and referendum by mail, MEBA was reorganized by the substitution of three districts to replace five districts and subordinate associations. The complaint challenges the legality of the national convention, the validity of the referendum, the honesty of the ballot count, and a number of other acts all related to the reorganization. Calagaz complains that Kellogg and other officers and members of National MEBA conspired to destroy Local No. 14, arbitrarily and illegally, taking over its members and, importantly, the dues the local would otherwise receive, and other assets. The complaint states that the defendants pressured members of Local No. 14 to change their membership to District No. 1, instructed steamship companies not to accept members of Local No. 14 for employment, wrongfully induced former members of Local No. 14 to bring suit tying up the Local's assets, and operated an office in Mobile for the specific purpose of carrying out National's plan to destroy Local No. 14. The plaintiff asks for a declaratory judgment, and for an injunction.²

From the outset jurisdictional difficulties have plagued the plaintiff. Kellogg, National's Executive Vice President, opened an office in Mobile which he administered through Paul Story. Calagaz obtained service of process on Story as Kellogg's agent. Three days later Kellogg died. His death left the plaintiff suing a class, none of whose representatives was before the court. The plaintiff then amended his complaint to substitute as representatives of the defendant class J. M. Calhoon, Secretary-Treasurer of National, and Robert L. Merrick, a member of National and Secretary-Treasurer of Atlantic and Gulf Coast District No. 1. Later, he amended his complaint by adding E. N. Altman, President of MEBA, and certain other officers and members of National as class representatives. The defendants were served in accordance with the Alabama substituted service law.³

I.

The defendants' first contention is that the plaintiff fails to allege and show diversity of citizenship: in a diversity suit against an association the citizenship of the individual parties must be shown and must be wholly diverse from that of the opposing parties.

The dead hand of the common law still holds unincorporated associations in its grip. Doctrinally, an association has no legal existence as an entity separate from its members. It is still the law that an unincorporated association is not a jural person for purposes of diversity jurisdiction, even when it has the capacity to sue or be sued in the association name. Lowry v. International Brotherhood, Etc., 5 Cir., 1958, 259 F.2d 568; Hettenbaugh v. Airline Pilots Ass'n International, 5 Cir., 1951, 189 F.2d 319. If the doctrine were carried to its logical extreme, unincorporated associations would enjoy virtual immunity from suit in federal courts. To prevent a failure of justice, the courts recognize litigating capacity in an association when it sues or is sued in a class action under Rule 23(a). "We know of no practical reason why the procedure prescribed by Rule 23 (a) (1) should not be as fair and as effective in enabling unincorporated associations to sue or be sued as is the procedure — which prevails in many jurisdictions — of permitting them to sue or defend under their common names. Where such associations have the status of legal entities, the members who act for them in bringing or defending actions are in reality the representatives of the membership as a whole." Montgomery Ward & Co. v. Langer, 8 Cir., 1948, 168 F.2d 182, 187. Rule 17(b) is no obstacle to class actions. In Lowry v. International Brotherhood of Boilermakers, 5 Cir., 1958, 259 F.2d 568, 672-673, this Court quoted with approval Judge Parker's explanation of the interaction of Rule 17 (b) and 23(a):⁴

"And there is nothing in rule 17 (b) which limits the right to bring a class suit under rule 23(a) in proper cases. Rule 17(b) relates to capacity to sue or be sued; and it provides that, where a partnership or unincorporated association has no such capacity by the law of the state where the court is held, it may nevertheless sue or be sued in its common name for the purpose of enforcing for or against it a substantive right existing under the Constitution or laws of the United States. There is nothing in this that limits the right to bring the unincorporated association into court by means of a class suit in accordance with the prior practice; and the right to bring such class suit continues to be of great value when the right to sue the association in its common name is, for any reason, unavailable. Instances where it is not available are cases where jurisdiction based on diversity would be defeated by a suit by or against the association but not by a suit by or against representatives or where, as here, it is not possible for the plaintiff to serve process on the association within a convenient jurisdiction. * * * Together Rule 17(b) and 23(a) provide alternative methods of bringing unincorporated associations into court." Tunstall v. Brotherhood of Locomotive Firemen and Enginemen, 4 Cir., 1945, 148 F.2d 403, 405.

In a class action under Rule 23(a) diversity is determined by the citizenship only of the named representatives. Here, the representatives sought to be joined as party defendants are admittedly not citizens of Alabama, where Calagaz resides.

The defendants do not contest these general statements of the law; they say that the plaintiff named National as a party defendant. If it were sued as an entity, the suit would have to be dismissed for lack of jurisdiction. The plaintiff denies any intention of making National a party defendant. The case appears to us to be a typical class action. The complaint starts off by alleging that the reason for not joining all members of Local No. 14 as plaintiffs is that they number in excess of two hundred; and the reason for not joining all members of MEBA is that they number approximately forty. The complaint states that it is impracticable to bring them before the court; these men, of course, were marine engineers. Nowhere is MEBA expressly described as a defendant. The individuals are described as "representatives of all other members" of MEBA. The individual defendants are also referred to as "Agent" and "Vice-President", but these terms appear to be only descriptive and for the purpose of showing that the defendants are fair representatives of the class. In Lowry, on the other hand, the defendant union was sued as "de jure person and, without further description as to whether or not it was incorporated".

Courts have considerable latitude in handling class actions. In Lowry we said:

"It has even been held, where the unincorporated association was a party in its own name and also as a class and where the state did not allow suits against associations as such, that the entity will be disregarded under Rule 17(b) and the case will be treated as a class action. Tunstall v. Brotherhood of Locomotive Firemen and Enginemen, 4 Cir., 1945, 148 F.2d 403 Or, whether or not the state allows suits to be commenced in the entity name, the courts have allowed a dismissal of the entity in order to create diversity in a class action. Montgomery Ward & Co. v. Langer, 8 Cir., 1948, 168 F.2d 182, 187" 5 Cir., 259 F.2d 568, 573

Considering the pleadings and the record, we think that the suit should properly be regarded as an action against named individuals and as a class action.

II.

Rule 23(a) is a convenient procedural device that keeps a plaintiff from being disabled by the weight of numbers. It does not change jurisdictional requirements. Here, the court must still have in personam jurisdiction over the named individual representative of the class. The plaintiff relies upon two different theories, one supporting jurisdiction over Altman, the other supporting jurisdiction over certain officers of National: Calhoon, Dembicki, Rowell, Merrick and Rogers.

To support jurisdiction over Altman, the plaintiff argues that the death of Kellogg, the class representative, did not terminate the action; rather, once the defendants had been brought...