Collins v. TRUSTEES OF LOCAL 478 TRUCKING & ALLIED

• Decision Date: 31 March 1980
• Docket Number: Civ. A. No. 79-52.
• Parties: Whittier COLLINS et al., Plaintiffs, v. TRUSTEES OF LOCAL 478 TRUCKING AND ALLIED INDUSTRIES PENSION FUND et al., Defendants.
• Court: U.S. District Court — District of New Jersey

487 F. Supp. 520

Whittier COLLINS et al., Plaintiffs, v. TRUSTEES OF LOCAL 478 TRUCKING AND ALLIED INDUSTRIES PENSION FUND et al., Defendants.

Civ. A. No. 79-52.

United States District Court, D. New Jersey.

March 31, 1980.

Hellring, Lindeman, Goldstein & Siegal, by Richard K. Coplon, Newark, N. J., for plaintiffs.

Craner & Nelson by John A. Craner, Mountainside, N. J. Morgan, Lewis & Bockius by James A. Matthews, Jr., and Kenneth A. Sprang, Philadelphia, Pa., for defendants.

OPINION

SAROKIN, District Judge.

Plaintiffs in this action are, with the exception of Helen Kerr, former members of Truck Drivers & Chauffeurs Union Local No. 478 ("Local No. 478") who retired from active employment on or before July 1, 1973, and who have been receiving pension benefits from defendant Local No. 478 Trucking and Allied Industries Pension Fund ("Pension Fund") since their retirement. Plaintiff, Helen Kerr, is the widow of a pensioner. Plaintiffs bring this action as a class action on behalf of themselves and all other persons similarly situated.

Defendant Pension Fund is a jointly administered, multi-employer Trust maintained pursuant to section 302 of the Labor Management Relations Act of 1947, 29 U.S.C. § 186, which was established to provide pension benefits for eligible participants working under the jurisdiction of Truck Drivers & Chauffeurs Union Local No. 478. The individual defendants are either current or former Trustees of the Pension Fund.

This action was commenced by the plaintiffs in January 1979. The complaint alleges that in November 1973, the Trustees unlawfully decided to increase the pension benefits of those retirees who retired after July 1, 1973, more than they increased the pension benefits of retirees who retired prior to July 1, 1973. Plaintiffs have asserted three bases of federal jurisdiction under 28 U.S.C. §§ 1331, 1337; 29 U.S.C. §§ 185, 186(a), (b); and 29 U.S.C. §§ 1001-1381.

Defendants have moved for summary judgment, alleging that first, there is no federal jurisdiction; second, there is no material fact in dispute; and third, plaintiffs have failed to state a claim upon which relief may be granted. Plaintiffs have cross-moved for class certification pursuant to Fed.R.Civ.P. 23(c)(1).

FACTUAL BACKGROUND

On January 1, 1957, pursuant to the direction of a Collective Bargaining Agreement executed between the Union and various employers in Essex and Union Counties, New Jersey, an Agreement and Declaration of Trust was adopted, creating a Trust Fund for the purposes of paying or providing for the payment of retirement benefits to eligible employees and their beneficiaries in accordance with the terms, provisions and conditions of the Rules and Regulations of the Pension Plan.

At the time the Pension Fund was established, the maximum monthly pension benefit payable to a retiree was set at $53.50. Throughout the following years the pension benefits increased for all retirees. In 1973, due to a number of factors alleged by the defendants, such as employer contributions, poor financial conditions, the need to fund an unfunded past service liability and the imminent passage of ERISA, the Trustees concluded that it was no longer prudent to attempt to increase the pension benefits of all retirees. Consequently, in November 1973, the Trustees authorized an increase in the pension benefits for employees retiring after July 1, 1973, to $455.00 per month, and an increase in the monthly pension benefit of persons who retired prior to July 1, 1973, to $399.00 per month. The defendants allege that financial pressures on the Pension Fund have increased in the years following the Trustees' action, which have resulted in unchanged pension benefits since 1973 to the time of commencement of this action.

FEDERAL JURISDICTION

Defendants contend that there is no federal jurisdiction in this action. On the basis of the pleadings, exhibits and affidavits submitted, the Court concludes that it does not have subject matter jurisdiction for the reasons hereinafter set forth.

Section 301 of the Labor-Management Relations Act ("LMRA") provides in pertinent part:

(a) Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.

29 U.S.C. § 185(a). Plaintiffs argue that the decision of the Trustees to increase pension benefits to certain retirees and not to others constitutes a breach of the collective bargaining agreement. Plaintiffs cannot cite any provision of the Collective Bargaining Agreement in effect in November 1973 which defendants have violated or breached.

In Leskiw v. Local 1470, Int'l Bhd. of Elec. Workers, AFL-CIO-CLC, 464 F.2d 721 (3d Cir.), cert. denied, 409 U.S. 1041, 93 S.Ct. 526, 34 L.Ed.2d 490 (1972) the Third Circuit held that where there is no allegation or involvement of violations of the collective bargaining agreement, subject matter jurisdiction is lacking under 29 U.S.C. § 185. Id. at 722. "`Congress .. in enacting this section expressly required a breach of labor contract as a prerequisite to jurisdiction by a Federal district court.'" Id. (citation omitted); see Adams v. Budd Co., 349 F.2d 368 (3d Cir. 1965); Palnau v. Detroit Edison Co., 301 F.2d 702 (6th Cir. 1962); accord, Austin v. Calhoon, 360 F.Supp. 515, 517 (S.D.N.Y.1973); Beam v. Int'l Organization of Masters, M., & P., 511 F.2d 975, 978-79 (2d Cir. 1974).

Plaintiffs rely upon Allied Chemical and Alkali Workers v. Pittsburgh Plate Glass Co., 404 U.S. 157, 92 S.Ct. 383, 30 L.Ed.2d 341 (1971) for the proposition that federal jurisdiction may be based on section 301 of the LMRA. Plaintiffs assert that the pensioners have a remedy under section 301 of the LMRA when benefits are unilaterally changed. The Supreme Court, in dicta, states "vested retirement rights may not be altered without the pensioner's consent ... The retiree, moreover, would have a federal remedy under § 301 of the Labor Management Relations Act for breach of contract if his benefits were unilaterally changed." Id. at 181 n. 20, 92 S.Ct. at 398. Said decision does not address the specific question of subject matter jurisdiction under section 301 where there has been no showing of a breach of contract. Furthermore, no vested retirement rights have been altered in the within action.

Moreover, the plaintiffs' reliance upon the Third Circuit decision in Nedd v. United Mine Workers of America, 556 F.2d 190 (3d Cir. 1977) is misplaced. The Nedd case involved the right of pensioned coal miners to obtain relief for the failure of the pension fund trustees and their unions to enforce a contractual obligation to pay royalties to the pension fund. The § 301 claim against the trustees was predicated upon a specific agreement. However, the Nedd case does discuss the desirability of applying a "federal common law" to a claim against trustees, but states in a footnote:

while we certainly do not hold that all breaches of fiduciary duty may be redressed in an action under § 301 of the Labor Management Relations Act, sound public policy compels the conclusion that § 301 supports a federal common law cause of action for tortious interference with a collective bargaining agreement by a pension fund trustee, in violation of his fiduciary duty to the pensioners.

Id. at 198 n. 13.

The foregoing does not seem to suggest an abolition of the § 301 test requiring a contractual violation as a threshold to application of federal common law to the acts of the Trustees. In the instant case the collective bargaining agreement does not impose and establish the fiduciary duties of the Trustees. This Court, therefore, finds there is no jurisdiction under section 301 in this matter.

Plaintiffs also allege jurisdiction under section 302 of the LMRA, 29 U.S.C. § 186(a) and (b)¹ which prohibits employers from making payments to unions and prohibits unions from receiving such payments. The Act does, however, permit employers to contribute to jointly administered pension funds. 29 U.S.C. § 186(c)(5). The federal district courts have jurisdiction over violations of this section.² 29 U.S.C. § 186(e). It is well-settled in this circuit that section 302 grants federal jurisdiction only over "structural violations" — acts which violate the statutory prohibition of section 302(c). Associated Contractors of Essex County, Inc. v. Laborers Int'l Union of No. America, 559 F.2d 222, 225 (3d Cir. 1977). Breach of fiduciary duties of trustees in the administration of a pension trust fund are not within the scope of federal jurisdiction granted by Congress under section 302 of the LMRA.

Some authorities suggest that section 302(e) vests the federal courts with broad, equity jurisdiction over the operation and administration of 302(c)(5) trusts. The majority position, however, to which this circuit subscribes, does not find in section 302 a grant of jurisdiction board sic enough to reach plaintiffs' non-statutory claims in the instant case.

Id. at 226 (citations omitted); see Bowers v. Moreno, 520 F.2d 843, 846 (1st Cir. 1975); Porter v. Teamsters Health, Welfare, and Life Insurance Funds of Philadelphia and Vicinity, 321 F.Supp. 101, 103 (E.D.Pa.1970). The plaintiffs have not alleged any "structural violation" of the Pension Trust Fund; rather they have alleged that the Trustees breached their fiduciary duties by increasing benefits to certain pensioners and not to others. Such claim does not fall within the "structural violation" concept necessary for jurisdiction under § 302.

Plaintiffs again rely upon the Third Circuit decision in Nedd v. United Mine Workers of America, supra. Said decision does not abolish "structural violations" as a threshold to the application of...