Int'l Union v. Faye

• Decision Date: 15 July 2016
• Docket Number: No. 15-7084,15-7084
• Citation: 828 F.3d 969
• Parties: International Union, Security, Police and Fire Professionals of America, Appellant v. Assane Faye, Appellee
• Court: U.S. Court of Appeals — District of Columbia Circuit

828 F.3d 969

International Union, Security, Police and Fire Professionals of America, Appellant

v.Assane Faye, Appellee

No. 15-7084

United States Court of Appeals, District of Columbia Circuit.

Argued May 9, 2016

Decided July 15, 2016

James M. Moore argued the cause for appellant. On the briefs were Scott A. Brooks and Matthew J. Clark. Anton G. Hajjar, Washington, DC, entered an appearance.

Jonathan G. Axelrod, Washington, DC, was on the brief for amicus curiae District of Columbia Nurses Association in support of appellant.

Eden Brown Gaines, White Plains, MD, argued the cause and filed the brief for appellee.

Before: Tatel, Kavanaugh, and Millett, Circuit Judges.

Concurring opinion filed by Circuit Judge Tatel

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Concurring opinion filed by Circuit Judge Millett

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Dissenting opinion filed by Circuit Judge Kavanaugh

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Tatel

, Circuit Judge:

The Labor–Management Reporting and Disclosure Act sets out fiduciary duties that officers and other agents of unions owe the union that employs them. It also permits a union member to bring a lawsuit for breach of those duties in federal court “for the benefit of the labor organization,” but only after “the labor organization or its governing board or officers refuse or fail to sue or recover damages or secure an accounting or other appropriate relief within a reasonable time after being requested to do so.” 29 U.S.C. § 501(b)

. The statute does not, however, expressly give the union itself a cause of action for breach of fiduciary duty in federal court. In this case, we must decide whether the statute contains an implied cause of action for the union itself. Our decision on a closely related issue in Weaver v. United Mine Workers of America , 492 F.2d 580 (D.C. Cir. 1973) (per curiam), requires that we answer that question in the affirmative.

I.

Until September 24, 2009, Assane Faye was a nonmember employee of the International Union, Security, Police and Fire Professionals of America (the “Union”). The Union brought this suit alleging that while it employed him, Faye breached his fiduciary duties to the Union in a number of ways, including by encouraging union members to join a rival union. Specifically, the Union alleged that Faye breached his fiduciary duties under section 501 of the federal Labor–Management Reporting and Disclosure Act (LMRDA). The Union also asserted similar claims under state law, as well as a breach of contract claim under the Labor Management Relations Act (LMRA).

After several rounds of briefing, the district court concluded that the LMRDA provides a cause of action only to individual union members, not to the union itself, and that the LMRA provides no cause of action to a union seeking to sue a non-member employee. The district court concluded that because neither federal statute provided the Union with a cause of action, it lacked federal question jurisdiction over the case. And because no other ground for subject matter jurisdiction existed, the district court ruled that it had “no basis to exercise supplemental jurisdiction over plaintiff's state common law claims.” International Union, Security, Police & Fire Professionals of America v. Faye , 115 F.Supp.3d 40, 47 (D.D.C. 2015)

. The district court thus dismissed the Union's entire suit without prejudice for lack of subject matter jurisdiction.

The Union now appeals, contending that the LMRDA gives it a cause of action and that the district court thus also has supplemental jurisdiction over its state law claims. The Union offers no challenge to the district court's dismissal of its LMRA claim. Our review is de novo. See El Paso Natural Gas Co. v. United States , 750 F.3d 863, 874 (D.C. Cir. 2014)

(“We review de novo the District Court's dismissal of claims for want of subject matter jurisdiction under Rule 12(b)(1) or for failure to state a claim under Rule 12(b)(6).”).

II.

This case presents a single substantive issue: whether LMRDA section 501

provides a union with a federal cause of action against its agent for breach of a fiduciary duty owed to the union. This question has been reserved by the Supreme Court, see

Guidry v. Sheet Metal Workers National Pension Fund , 493 U.S. 365, 374 n.16, 110 S.Ct. 680, 107 L.Ed.2d 782 (1990), and is already the subject of a circuit split, compare Building Material & Dump Truck Drivers, Local 420 v. Traweek , 867 F.2d 500 (9th Cir. 1989)

(finding no implied cause of action), with

International Union of Operating Engineers, Local 150, AFL–CIO v. Ward , 563 F.3d 276 (7th Cir. 2009), and

International Union of Electronic, Electrical, Salaried, Machine & Furniture Workers, AFL–CIO v. Statham , 97 F.3d 1416 (11th Cir. 1996) (finding an implied cause of action).

Before proceeding to the merits, we pause to clarify the nature of our inquiry. As noted above, the district court concluded that it lacked subject matter jurisdiction because the LMRDA gives the Union no cause of action. Earlier decisions likewise tended to speak of the inquiry in jurisdictional terms. See, e.g. , Guidry , 493 U.S. at 374 n. 16, 110 S.Ct. 680

(speaking in jurisdictional terms in the course of reserving the issue); Traweek , 867 F.2d at 505 (treating the matter as jurisdictional).

The Supreme Court has recently made clear, however, that the question whether the plaintiff has a cause of action is distinct from the question whether a district court has subject matter jurisdiction. In Arbaugh v. Y&H Corp. , 546 U.S. 500, 510–16, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006)

, the Court held that the fact that the defendant did not employ the number of employees statutorily required to hold it liable under Title VII went to the merits, not jurisdiction. And in Lexmark International, Inc. v. Static Control Components, Inc. , ––– U.S. ––––, 134 S.Ct. 1377, 1388 n. 4, 188 L.Ed.2d 392 (2014) (quoting Verizon Maryland Inc. v. Public Service Commission of Maryland , 535 U.S. 635, 642–43, 122 S.Ct. 1753, 152 L.Ed.2d 871 (2002) ), the Court wrote that “ ‘the absence of a valid (as opposed to arguable) cause of action does not implicate subject-matter jurisdiction, i.e. , the court's statutory or constitutional power to adjudicate the case.’ ” Here, as in Lexmark, the plaintiff's claim is at least “arguable,” regardless of whether it is “valid.” Our inquiry thus goes to the merits, not jurisdiction, which exists under the general federal question jurisdiction statute, 28 U.S.C. § 1331. See

District of Columbia Nurses Ass'n v. Brown , No. 15–203, 153 F.Supp.3d 1, 1–2, 2016 WL 29252, at *1–2 (D.D.C. Jan. 4, 2016) (reaching the same result).

In determining whether an implied cause of action exists, “[t]he judicial task is to interpret the statute Congress has passed to determine whether it displays an intent to create not just a private right but also a private remedy. Statutory intent on this latter point is determinative.” Alexander v. Sandoval , 532 U.S. 275, 286, 121 S.Ct. 1511, 149 L.Ed.2d 517 (2001)

(internal citation omitted). Absent statutory intent to create a cause of action, none exists, and “courts may not create one, no matter how desirable that might be as a policy matter, or how compatible with the statute.” Id. at 286–87, 121 S.Ct. 1511.

Congress enacted the LMRDA in 1959 in response to various union corruption scandals and an associated congressional investigation. See 29 U.S.C. § 401(b)

(explaining that Congress had found “a number of instances of breach of trust, corruption, disregard of the rights of individual employees, and other failures to observe high standards of responsibility and ethical conduct”). The LMRDA provision at issue in this case contains two relevant subsections. The first, section 501(a), bears the title “Duties of officers; exculpatory provisions and resolutions void,” and provides as follows:

The officers, agents, shop stewards, and other representatives of a labor organization occupy positions of trust in relation to such organization and its members as a group. It is, therefore, the duty of each such person, taking into account the special problems and functions of a labor organization, to hold its money and property solely for the benefit of the organization and its members and to manage, invest, and expend the same in accordance with its constitution and bylaws and any resolutions of the governing bodies adopted thereunder, to refrain from dealing with such organization as an adverse party or in behalf of an adverse party in any matter connected with his duties and from holding or acquiring any pecuniary or personal interest which conflicts with the interests of such organization, and to account to the organization for any profit received by him in whatever capacity in connection with transactions conducted by him or under his direction on behalf of the organization. A general exculpatory provision in the constitution and bylaws of such a labor organization or a general exculpatory resolution of a governing body purporting to relieve any such person of liability for breach of the duties declared by this section shall be void as against public policy.

Id. § 501(a). The second, section 501(b)

, bears the title, “Violation of duties; action by member after refusal or failure by labor organization to commence proceedings; jurisdiction; leave of court; counsel fees and expenses,” and provides as follows:

When any officer, agent, shop steward, or representative of any labor organization is alleged to have violated the duties declared in subsection (a) of this section and the labor organization or its governing board or officers refuse or fail to sue or recover damages or secure an accounting or other appropriate relief within a reasonable time after being requested to do so by any member of the labor organization, such member may sue such officer, agent, shop steward, or representative in any district court of the United States or in any State court of competent jurisdiction to recover damages or secure an accounting or other appropriate relief for the benefit of the labor

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