Carino v. Stefan, 03-3679.

Citation376 F.3d 156
Decision Date19 July 2004
Docket NumberNo. 03-3679.,03-3679.
PartiesGisela CARINO, Appellant v. Marc STEFAN, Esq; Butsavage & Associates, LLC.
CourtUnited States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Appeal from the United States District Court for the District of New Jersey, Joseph H. Rodriguez, J Winston C. Extavour, Haddonfield, NJ, for Appellant.

James Katz, Jennings Sigmond, Cherry Hill, NJ, for Appellees.

Before SCIRICA, Chief Judge, RENDELL and ALARCON,* Circuit Judges.

OPINION OF THE COURT

RENDELL, Circuit Judge.

Gisela Carino brought suit against attorney Marc Stefan and Stefan's employer, Bustavage & Associates, for legal malpractice in representing her in connection with a labor grievance proceeding against her employer. The District Court granted a motion to dismiss on the basis that the attorneys were immune from liability under 29 U.S.C. § 185(b), Section 301(b) of the Labor Management Relations Act ("LMRA"). We agree with the District Court and with those courts of appeals who have spoken on this issue, and will affirm.

I.

Carino, a New Jersey resident, was employed as an insurance agent with Prudential Insurance Company of America from 1989 to 1998. During this time period, she was a member of the United Food and Commercial Workers International Union, which had entered into a collective bargaining agreement with Prudential.

Prudential terminated Carino's employment in October 1998, because it believed that she had engaged in professional misconduct by selling insurance policies to individuals in poor health and naming disinterested parties as the beneficiaries of the policies, and the company referred the charges against Carino to the Federal Bureau of Investigation ("FBI").1

Following the procedures established by the collective bargaining agreement, the Union filed a grievance on Carino's behalf, contesting her termination. Dissatisfied with the review of the grievance, the Union exercised its right to take the matter to arbitration.2 The Union retained Butsavage & Associates ("Butsavage"), a Washington, D.C. law firm, to represent Carino at the arbitration hearing, which was to be held July 27-29, 2001, at the Sheraton Convention Center in Atlantic City, New Jersey. The firm appointed Marc Stefan, Esquire, to appear on her behalf.

Carino alleges that the following events occurred two days prior to her hearing. Stefan telephoned her and asked her to meet him at the Radisson Hotel in Mt. Laurel, New Jersey. At this meeting, Stefan advised her that the venue for the arbitration meeting had been changed to the Radisson Hotel. Furthermore, he indicated that Prudential and FBI investigators were at the hotel interviewing witnesses who would testify against her regarding her alleged misconduct, that they were prepared to take her to jail, and that she would need $100,000.00 to get out of jail.

Stefan then asked what Carino hoped to get out of the arbitration hearing. Carino replied that she wanted her employment record cleared of Prudential's false charges; the FBI investigation closed; a promise that Prudential would not sue her for attorney's fees; and her pension reinstated. Stefan claimed "that would be no problem and that he could work that out with Prudential." Carino agreed she would withdraw the grievance in return for Prudential's acceptance of her conditions.

Stefan then suggested they go downstairs to the bar and wait for the arbitrating judge. After an hour of waiting, he told Carino that they could leave and "call it a mutual agreement." He presented her with various forms, including a two-page document entitled "Grievance Release," and asked her to sign them. He did not explain what the forms were or why she had to sign them. After she signed them, Stefan said he would meet with Prudential and obtain its agreement to what she wanted without any problem.

Thereafter, Carino realized that the documents she had signed made no reference to Prudential's concessions in return for her withdrawal and release. She contacted Stefan and his firm to complain, but heard no reply. In fact, she never heard from them again.

Carino argues that Stefan deceived her into settling her grievance in return for various promises which were never kept. She claims that, as a result of Stefan's alleged misconduct, she lost her opportunity to arbitrate her claims, her employment record remains blemished and her pension was never restored.

Carino filed a four count complaint in the Superior Court of New Jersey against Stefan and Butsavage alleging: (1) legal malpractice against Stefan; (2) intentional misrepresentation against Stefan; (3) breach of attorney's fiduciary duty against Stefan; and (4) liability under the doctrine of respondeat superior against Butsavage. Defendants removed the action to federal court based on diversity jurisdiction and, alternatively, based on federal jurisdiction under § 301 of the LMRA. The defendants then moved to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim. The District Court granted this motion, and Carino filed a timely Notice of Appeal.

II.

Our review of a district court's dismissal of a complaint under Rule 12(b)(6) for failure to state a claim is plenary, and we apply the same standard as the district court. Oatway v. Am. Int'l Group, Inc., 325 F.3d 184, 187 (3d Cir.2003). In deciding a motion to dismiss, we must accept all well-pleaded allegations in the complaint as true, and view them in the light most favorable to the plaintiff. Id. We may grant such a motion only where "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957).

III.

This appeal presents a question of first impression for our Court, namely, whether an attorney hired by a union to perform services on behalf of a union member in connection with an arbitration hearing conducted pursuant to a collective bargaining agreement is immune from suit for malpractice by that member. We conclude that the LMRA bars such a suit.

Section 301(b) of the LMRA provides, in part, that "[a]ny money judgment against a labor organization in a District Court of the United States shall be enforceable only against the organization as an entity and against its assets, and shall not be enforceable against any individual member or his assets." 29 U.S.C. § 185(b). Viewed narrowly, this language could be said to only exempt union members from personal liability for judgments against the union. However, the Supreme Court has given the statute a more expansive reading, stating that § 301(b) "evidences `a congressional intention that the union as an entity, like a corporation, should in the absence of an agreement be the sole recovery for injury inflicted by it.'" Atkinson v. Sinclair Refining Co., 370 U.S. 238, 249, 82 S.Ct. 1318, 8 L.Ed.2d 462 (1962) (quoting Lewis v. Benedict Coal Corp., 361 U.S. 459, 470, 80 S.Ct. 489, 4 L.Ed.2d 442 (1960)). Confronted by an action against a union and several of its officers in their individual capacities, the Court in Atkinson dismissed the count against the officers, stating that § 301 "cannot be evaded or truncated by the simple device of suing union agents or members, whether in contract or tort, or both, in a separate count or in a separate action for damages for violation of a collective bargaining contract for which damages the union itself is liable." Id. As a result, the law is clear that individual union officers are not personally liable to third parties for actions taken on behalf of the union in the collective bargaining process.

The Supreme Court thereafter extended the Atkinson rule in Complete Auto Transit, Inc. v. Reis, 451 U.S. 401, 101 S.Ct. 1836, 68 L.Ed.2d 248 (1981), holding that a damage claim may not be maintained against an individual union officer even if the individual's conduct was unauthorized by the union and was in violation of an existing bargaining agreement. Id. at 402, 101 S.Ct. 1836. The Court noted that "the legislative history of § 301 clearly reveals Congress' intent to shield individual employees from liability for damages arising from their breach of ... a collective bargaining agreement, whether or not the union participated in or authorized the illegality." Id. at 407, 101 S.Ct. 1836.

Our court has recognized that Atkinson provides individual union members and officers immunity from suit for union wrongs. See, e.g., Wilkes-Barre Pub. Co. v. Newspaper Guild of Wilkes-Barre, Local 120, 647 F.2d 372, 377 (3d Cir.1981); Republic Steel Corp. v. United Mine Workers of America, 570 F.2d 467, 478 (3d Cir.1978). And, "with monotonous regularity, [other courts of appeals have] cited Atkinson to foreclose state-law claims, however inventively cloaked, against individuals acting as union representatives within the ambit of the collective bargaining process." Montplaisir v. Leighton, 875 F.2d 1, 4 (1st Cir.1989); see also Morris v. Local 819, Int'l Bhd. of Teamsters, 169 F.3d 782, 784 (2d Cir.1999); Evangelista v. Inlandboatmen's Union of the Pacific, 777 F.2d 1390, 1400 (9th Cir.1985); Ramsey v. Signal Delivery Service, Inc., 631 F.2d 1210, 1212 (5th Cir.1980).

The only courts of appeals to have considered the specific question presented here, where attorneys acted on behalf of the union, have uniformly concluded that Atkinson prohibits claims made by a union member against attorneys employed by or retained by the union to represent the member in a labor dispute. See Waterman v. Transport Workers' Union Local 100, 176 F.3d 150 (2d Cir.1999); ("[U]nder Atkinson, a union's attorneys may not be sued by an individual union member for actions taken pursuant to a collective bargaining agreement."); Arnold v. Air Midwest, Inc., 100 F.3d 857, 862 (10th Cir.1996) ("[A]n attorney who performs services for and on behalf of a union may not be held...

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