Fort Wayne Community Schools v. EDUC. ASS'N

• Decision Date: 12 April 1990
• Docket Number: Civ. No. F 89-205.
• Citation: 735 F. Supp. 907
• Parties: FORT WAYNE COMMUNITY SCHOOLS, Plaintiff, v. FORT WAYNE EDUCATION ASSOCIATION; and United States Postal Service, Defendants.
• Court: U.S. District Court — Northern District of Indiana

735 F. Supp. 907

FORT WAYNE COMMUNITY SCHOOLS, Plaintiff, v. FORT WAYNE EDUCATION ASSOCIATION; and United States Postal Service, Defendants.

Civ. No. F 89-205.

United States District Court, N.D. Indiana, Fort Wayne Division.

April 12, 1990.

James Fenton, Barrett & McNagny, Fort Wayne, Ind., for plaintiff.

Richard J. Darko, Indianapolis, Ind., Lisa A. Olson, Dept. of Justice, Civil Div., Washington, D.C., and Tina Nommay, Asst. U.S. Atty., Fort Wayne, Ind., for defendants.

ORDER ON MOTIONS TO DISMISS AND TO ABSTAIN FROM EXERCISING JURISDICTION

ALLEN SHARP, Chief Judge.

I. Background

The plaintiff Fort Wayne Community Schools (School System) and defendant Fort Wayne Education Association (Teachers Union) are parties to a collective bargaining agreement. One provision of that agreement is at issue here; the pertinent provision requires the School System to carry certain Union correspondence to Fort Wayne teachers (who are Union members) through the School Corporation's in-house mail delivery system. For several years the School System dutifully complied with the agreement by picking up and delivering the Teachers' mail as required.

The Fort Wayne School System now finds itself in a legal quandary, however. A recent decision of the United States Supreme Court, Regents of the University of California v. Public Employment Relations Board (Regents), 485 U.S. 589, 108 S.Ct. 1404, 99 L.Ed.2d 664 (1988), calls into question the legality of the Schools' carriage of Union correspondence without the payment of postage. If the School System continues to fulfill its contractual duty to the Union, it may be in criminal violation of the federal statutes (interpreted in Regents) that grant a mail-carrying monopoly to the United States Postal Service.¹ By abstaining from its pickup and delivery obligations, however, the School may be in breach of its contract with the Teachers Union and thereby subject itself to civil damages under state law.

Upon learning of the Regents decision, the School System ceased its carriage of Union correspondence and notified the Teachers Union that the mail-carrying provision of their collective bargaining agreement might be invalid under the postal monopoly statutes. The Union responded by filing a grievance, alleging that the School's action violated their collective bargaining agreement. Ultimately the grievance was submitted to binding arbitration. The arbitrator's award directed the School to resume delivery of certain of the Union's interschool mail.

In response to the arbitrator's award, the School informed the Postal Service of the arbitrator's position. The Postal Service formally notified the School that delivery of Union letters under many of the circumstances stated in the award without the payment of postage would violate federal criminal law. In that event, warned the Postal Service, the School System, the Teachers Union, and all persons acting in their behalf would be subject to criminal penalties and the civil remedies provided by law and regulation.

Because the Teachers Union and the Postal Service assert diametrically opposed positions concerning the legality of the disputed mailings, the School faces the dilemma of incompatible legal obligations to the two sides. To protect itself from potential liability to either side, the School instituted this declaratory judgment action asking the court to declare the rights of all parties, and to determine which, if any, of the contested mailings the School System can lawfully carry.

Subsequently, the Teachers Union filed suit in state court seeking confirmation and enforcement of the arbitrator's award under Indiana law. The School counterclaimed and requested that the arbitrator's award be vacated or modified in a manner consistent with federal law. The Union objects to federal court review of the Schools' declaratory judgment action. The Union first argues that this court lacks subject matter jurisdiction and must dismiss the action pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure. In the alternative, the Union urges that, even if this court possesses jurisdiction, it should decline review under either the Burford or Colorado River abstention doctrines.

The Postal Service, also joined as a defendant in this action, has aligned itself procedurally with the School by opposing the Teachers Union's motions to dismiss and to abstain from exercising jurisdiction. The Postal Service has counterclaimed seeking declaratory relief that the School's delivery of Union correspondence through its interschool mail system without the payment of postage violates federal law, and requesting an injunction forbidding such delivery. The Postal Service also has filed a cross-claim against the Union, similarly seeking declaratory relief and an injunction concerning the Union's use of such internal mail systems without the payment of postage.

II. Procedural Issues

A. Subject Matter Jurisdiction

Defendant Teachers Union moves to dismiss this action pursuant to Rule 12(b)(1) for lack of subject matter jurisdiction. The Union argues that the School asserts no independent basis for jurisdiction against either defendant, and that, accordingly, the entire action must be dismissed. The Union insists that the suit between the School and the Postal Service lacks the constitutionally required case or controversy² because the two parties seek the same legal outcome, viz., a finding that delivery of Union correspondence without the payment of postage violates federal law. The Union's position is untenable. In so arguing, the Union asks this court to substitute semantic distinctions for substantive realities. Merely because the School and the Postal Service prefer to have the federal question resolved in the same fashion does not alter the parties' truly adversarial relationship. By threatening to prosecute the School for violation of the Postal Express Statutes, the Postal Service has made eminently clear its intention to seek legal recourse against the School if it complies with the arbitrator's award and resumes intra-union mail delivery. In light of this threat of litigation, the parties' mere confluence of desired result does not make the actual controversy between them any less real. The court thus finds that an actual controversy exists between the School and the Postal Service, one which invokes the jurisdiction of this court pursuant to sections 1331 and 1339 of Title 28.

Next, the Teachers Union argues that the only "federal question" presented in the School System's complaint to support jurisdiction against the Union is in reality a federal defense to the state law arbitration proceeding. Under the rigid doctrine of the well-pleaded complaint, the federal question must appear on the face of the School's complaint. See, e.g., Louisville & Nashville Railroad Co. v. Mottley, 211 U.S. 149, 29 S.Ct. 42, 53 L.Ed. 126 (1908). Mottley's rule that anticipation of a federal defense may not be used to invoke this court's general federal question jurisdiction also applies in the context of a declaratory judgment action. Skelly Oil Company v. Phillips Petroleum Company, 339 U.S. 667, 673-74, 70 S.Ct. 876, 879-80, 94 L.Ed. 1194 (1950). "Skelly Oil has come to stand for the proposition that `if, but for the availability of the declaratory judgment procedure, the federal claim would arise only as a defense to a state created action, jurisdiction is lacking'" (citations omitted). Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 16, 103 S.Ct. 2841, 2850, 77 L.Ed.2d 420 (1983). This rule follows from the language of the Declaratory Judgment Act,³ which merely "expands the remedies available in the district courts without expanding their jurisdiction." Duke Power Co. v. Carolina Environmental Study Group, Inc., 438 U.S. 59, 98, 98 S.Ct. 2620, 2643, 57 L.Ed.2d 595 (1978) (Rehnquist, J., concurring).

The School's claim against the Union appears to amount to a request that this court declare that federal law (the Postal Express Statutes) insulates the School from a nonfederal claim that the Union may have — an attempt to invoke the district court's jurisdiction which Mottley and Skelly do not sanction. In Franchise Tax Board, however, the Supreme Court "clarified" the rigid rule of Mottley by stating that a case also arises under federal law "where the vindication of a right under state law necessarily turns on some construction of federal law" (emphasis added). Franchise, 463 U.S. at 9, 103 S.Ct. at 2846. It is clear that this provision was not intended to empower lower federal courts with jurisdiction over every state cause of action in which a federal issue is presented. Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 813, 106 S.Ct. 3229, 3234, 92 L.Ed.2d 650 (1986). Indeed, this court is mindful of the Supreme Court's caveat in Merrell Dow that the quoted statement from Franchise "must be read with caution ... in light of that Court's conclusion that federal jurisdiction was lacking." Id. 478 U.S. at 809, 106 S.Ct. at 3232-33.

The Franchise case is to be distinguished from this proceeding, however. In Franchise, the Court found that the complaint presented "many reasons completely unrelated to the provisions and purposes of the federal statute why the plaintiff may or may not be entitled to the relief it seeks." Franchise, 463 U.S. at 26, 103 S.Ct. at 2855. Here, the only issue to be decided in the Union's state action against the School is the question whether federal law permits the carriage of correspondence without the payment of postage. The interpretation of the parties' collective bargaining agreement is not in dispute. Indeed, if this court upholds the legal position urged by the Postal Service, the state court action becomes moot since the agreement contains an expurgation clause that cleanses the document of provisions found contrary to state or federal law.⁴ Thus the federal question is not...