Carruthers Ready-Mix, Inc. v. Cement Masons Local Union No. 520

Decision Date19 February 1986
Docket NumberNo. 83-5465,READY-MI,INC,83-5465
Parties121 L.R.R.M. (BNA) 2298, 54 USLW 2349, 104 Lab.Cas. P 11,756 CARRUTHERS, Plaintiff-Appellee, v. CEMENT MASONS LOCAL UNION NO. 520, et al., Defendants-Appellants.
CourtU.S. Court of Appeals — Sixth Circuit

Tim Edwards, Gerber, Gerber & Agee, Deborah Godwin argued, Memphis, Tenn., for defendants-appellants.

Joe D. Pegram (Lead) argued, Oxford, Miss., Larry S. Bush, Law School, University, Miss., for plaintiff-appellee.

Before JONES and CONTIE, Circuit Judges; and EDWARDS, Senior Circuit Judge.

CONTIE, Circuit Judge.

Cement Masons Local Union No. 521 appeals an order of the district court denying its motion to dismiss several claims of plaintiff Carruthers Ready-Mix, Inc.'s complaint pursuant to 29 U.S.C. Sec. 187 in this interlocutory appeal pursuant to 28 U.S.C. Sec. 1292(b). The district court determined that 29 U.S.C. Sec. 160(b) supplied the proper limitation period via DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983), but applied a ten-year state limitation period, Tenn.Code Ann. Sec. 28-3-110, on the ground that the DelCostello rule should not be applied retroactively in Sec. 303 actions (29 U.S.C. Sec. 187). Finding neither 29 U.S.C. Sec. 160(b) nor the ten-year state period appropriate, we reverse.

I.

On April 22, 1980, Carruthers filed a complaint against Cement Masons. The complaint, filed pursuant to 29 U.S.C. Sec. 187, arose out of Carruthers' work as a subcontractor to provide ready-mix cement to general contractors on construction projects. Carruthers alleges that Cement Masons then engaged in strikes against the general contractors to discourage the general contractor from dealing with Carruthers. Thirteen counts (1, 2, 3, 4, 5, 6, 8, 10, 12, 14, 16, 18, 20), premised on the federal cause of action provided by 29 U.S.C. Sec. 187, alleged that Cement Masons' actions constituted unfair labor practices in violation of 29 U.S.C. Sec. 158(b)(4). Seven counts (7, 9, 11, 13, 15, 17, 19) alleged that the same actions constituted a violation of Tennessee statutory law, Tenn.Code Ann. Sec. 47-15-113 (now Sec. 47-50-109). Count 21 alleged, with respect to all the counts, tortious interference with business in violation of state common law. Of the thirteen federal claims, only count 20 was filed within six months of the acts alleged in the complaint. Six counts (10, 12, 14, 16, 18, 20) were filed within one year of the acts in question, and all counts were filed within two years of the alleged acts. As damages Carruthers sought lost profits and lost goodwill. On October 15, 1980, the district court dismissed the state law claims on the ground that they were preempted by federal law.

On March 1, 1982, Cement Masons filed a motion to dismiss which the district court denied on August 6, finding that Tenn.Code Ann. Sec. 28-3-110, a ten-year statute of limitations, applied. Another motion to dismiss was filed on October 8, 1982, and granted on February 24, 1983 with respect to all counts except count 20. The court applied the six-month limitation period provided by 29 U.S.C. Sec. 160(b) and found that "[t]he language of section 303 mandates application of the limitations placed on section 301 actions to section 303 actions." On March 2, 1983, plaintiff Carruthers moved for reconsideration, and, on April 8, 1983, the court reinstated the dismissed counts on the ground that, although the six-month limitation period applied to Sec. 303 actions, the limitation would not be applied retroactively. Therefore, all counts were timely under the ten-year period. On July 20, 1983, we granted the petition for permission to appeal. 28 U.S.C. Sec. 1292(b).

II.

"When Congress has not established a time limitation for a federal cause of action, the settled practice has been to adopt a local time limitation as federal law if it is not inconsistent with federal law or policy to do so." Wilson v. Garcia, --- U.S. ----, 105 S.Ct. 1938, 1942, 85 L.Ed.2d 254 (1985) (footnote omitted) (applying 42 U.S.C. Sec. 1988); United Automobile Workers v. Hoosier Cardinal Corp., 383 U.S. 696, 703-04, 86 S.Ct. 1107, 1111-12, 16 L.Ed.2d 192 (1966). See DelCostello, 462 U.S. at 158, 103 S.Ct. at 2287. "By adopting the statute governing an analogous cause of action under state law, federal law incorporates the State's judgment on the proper balance between the policies of repose and the substantive policies of enforcement embodied in the state cause of action." Wilson, 105 S.Ct. at 1945. In following this analysis, "we must characterize the essence of the claim in the pending case, and decide which state statute provides the most appropriate limiting principle." Wilson, 105 S.Ct. at 1943. "The characterization of ... [plaintiff's claim] for statute of limitations purposes is derived from the elements of the cause of action and Congress' purpose in providing it. These, of course, are matters of federal law." Id. at 1943-44; DelCostello, 462 U.S. at 159 n. 13, 103 S.Ct. at 2287 n. 13; United Parcel Service, Inc. v. Mitchell, 451 U.S. 56, 60-61, 101 S.Ct. 1559, 1562-63, 67 L.Ed.2d 732 (1981) (how an action is characterized "depends upon an examination of the nature of the federal claim and the federal policies involved."); Hoosier Cardinal Corp., 383 U.S. at 706, 86 S.Ct. at 1113. However, "there is no reason to reject the characterization that state law would impose unless that characterization is unreasonable or otherwise inconsistent with national labor policy." Id.; Headrick v. American District Telegraph Co., 526 F.Supp. 604, 606 (E.D.Tenn.1980). But this deference is "a matter of preference or comity--not obligation." Wilson, 105 S.Ct. at 1944 n. 22. Accordingly, we examine the cause of action created by section 303 and potentially analogous state law actions.

A.

29 U.S.C. Sec. 187 provides:

(a) It shall be unlawful, for the purpose of this section only, in an industry or activity affecting commerce, for any labor organization to engage in any activity or conduct defined as an unfair labor practice in section 158(b)(4) of this title.

(b) Whoever shall be injured in his business or property by reason or any violation of subsection (a) of this section may sue therefor in any district court of the United States subject to the limitations and provisions of section 185 of this title without respect to the amount in controversy, or in any other court having jurisdiction of the parties, and shall recover the damages by him sustained and the cost of the suit.

In this case, Carruthers alleges a violation of 29 U.S.C. Sec. 158(b)(4) which provides in pertinent part:

It shall be an unfair labor practice for a labor organization or its agents--

(i) to engage in, or to induce or encourage any individual employed by any person engaged in commerce or in an industry affecting commerce to engage in, a strike or a refusal in the course of his employment to use, manufacture, process transport, or otherwise handle or work on any goods, articles, materials, or commodities or to perform any services; or (ii) to threaten, coerce, or restrain any person engaged in commerce or in an industry affecting commerce, where in either case an object thereof is--

* * *

(B) forcing or requiring any person to cease using, selling, handling, transporting, or otherwise dealing in the products of any other producer, processor, or manufacturer, or to cease doing business with any other person.

Section 8(b)(4)

makes it unlawful for a union to pressure neutral employees or employers where "an object thereof" is to cause a person or enterprise to cease doing business with the primary employer with whom the union has a dispute.... Section 8(b)(4) is thus designed to balance the dual congressional objectives of "preserving the right of labor organizations to bring pressure to bear on offending employers in primary labor disputes and of shielding unoffending employers and others from pressures in controversies not their own." NLRB v. Denver Bldg. & Constr. Trades Council, 341 U.S. 675, 692, 71 S.Ct. 943, 953, 95 L.Ed. 1284.

Local Union No. 501, IBEW v. NLRB, 756 F.2d 888, 892 (D.C.Cir.1985). "[U]nion conduct violates section 8(b)(4) if any object of that activity is to exert improper influence on secondary or neutral parties.... The ultimate inquiry focuses on the intent of the union, not the effects of its actions." Id.; NLRB v. Local 58, IBEW, 638 F.2d 36, 37 (6th Cir.1981); Texas Distributors, Inc. v. Local Union No. 100, United Ass'n of Journeymen and Apprentices of the Plumbing and Pipefitting Industry, 598 F.2d 393, 398 (5th Cir.1979); NLRB v. Local 38, IBEW, 339 F.2d 197, 200 (6th Cir.1964); Ohio Valley Carpenters District Council, United Brotherhood of Carpenters and Joiners of America, AFL-CIO v. NLRB, 339 F.2d 142, 145 (6th Cir.1964). Accordingly, it is clear that union conduct violates Sec. 8(b)(4) and provides an action for damages under Sec. 303 when the union acts with the intent and object of causing a cessation of or interference with business between a neutral party and the primary employer.

Tennessee recognizes both a common law and statutory action based on unlawful inducement of breach of contract. Tenn.Code Ann. Sec. 47-50-109 (previously Sec. 47-15-113) provides in pertinent part:

It shall be unlawful for any person, by inducement, persuasion, misrepresentation, or other means, to induce or procure the breach or violation, refusal or failure to perform any lawful contract by any party thereto.

Whether by statute or common law, this action has seven elements.

1. There must be a legal contract.

2. The wrongdoer must have knowledge of the existence of the contract.

3. There must be an intention to induce its breach.

4. The wrongdoer must have acted maliciously.

5. There must be a breach of the contract.

6. The act complained of...

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