International Broth. of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO v. Local Lodge D354, AFL-CI

• Decision Date: 13 April 1990
• Docket Number: No. 89-2406,P,AFL-CI,89-2406
• Citation: 897 F.2d 1400
• Parties: 133 L.R.R.M. (BNA) 2857, 114 Lab.Cas. P 12,022, 16 Fed.R.Serv.3d 35 INTERNATIONAL BROTHERHOOD OF BOILERMAKERS, IRON SHIP BUILDERS, BLACKSMITHS, FORGERS AND HELPERS,laintiff-Appellee, v. LOCAL LODGE D354, et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1400

897 F.2d 1400

133 L.R.R.M. (BNA) 2857, 114 Lab.Cas. P 12,022,

16 Fed.R.Serv.3d 35

INTERNATIONAL BROTHERHOOD OF BOILERMAKERS, IRON SHIP BUILDERS, BLACKSMITHS, FORGERS AND HELPERS AFL-CIO, Plaintiff-Appellee, v. LOCAL LODGE D354, et al., Defendants-Appellants.

No. 89-2406.

United States Court of Appeals Seventh Circuit.

Argued Dec. 14, 1989.

Decided March 15, 1990.

Rehearing and Rehearing En Banc Denied April 13, 1990.

Rodney H. Grove, Grove & Brinkmeyer, Evansville, Ind., Robert L. Dameron, Michael J. Stapp, Blake & Uhlig, Kansas City, Kan., for International Broth. of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO.

Anne C. Thomas, Lacey, Terrell, Annakin, Heldt & Baugh, Evansville, Ind., for Local Lodge D354 of Cement, Lime, Gypsum and Allied Workers Div. of Intern. Broth. of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO.

Robert G. Rothstein, William Wallen, David W. Wolf, Meranze & Katz, Philadelphia, Pa., for Doyle Tolbert, Leon Brothers, and Joe Bratton.

Before CUMMINGS, FLAUM and MANION, Circuit Judges.

CUMMINGS, Circuit Judge.

This case involves the right to assets and allegedly delinquent payments retained by a local labor union that broke away from an international labor union. After finding that a defective allegation of jurisdiction may be amended to preserve the subject-matter jurisdiction of this suit, we affirm the district court's grant of summary judgment in favor of the international union on the basis of the contractual provisions at issue.

On August 10, 1987, plaintiff International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO ("the International"), sued its former Local Lodge D354 as well as the Local's president, recording secretary, and financial secretary. The International brought suit under Section 301(a) of the Taft-Hartley Act (Labor Management Relations Act, 29 U.S.C. Sec. 185(a)) to recover monthly per capita taxes, ¹ records, supplies, and properties it is allegedly entitled to recover from the former Local.

The International alleges that under the terms of the contracts at issue the Local cannot avoid turning over assets and remitting per capita taxes collected up to the time that the members of the Local voted in an election supervised by the National Labor Relations Board to decertify the International as their collective bargaining representative. The International sought per capita taxes amounting to $16,851.12, later increased to $18,958.08, covering nine months of allegedly delinquent per capita taxes. The assets sought include the Local's union hall, though the International's counsel said at oral argument that the value of that property is so slight that the International might not bother to take ownership if the International prevails in this appeal.

The Local Lodge responds that the International disingenuously ignores efforts that members of the Local made to dissociate from the International and to defect to a rival union, the International Workers of North America ("IWNA"), in advance of the formal NLRB certification election. The Local also suggests, without directly attacking the validity of the contract provisions at issue, that the International's position accords insufficient weight to the policy guaranteed by Section 7 of the Labor Management Relations Act of 1947 (29 U.S.C. Sec. 157) granting workers the right to be represented by a particular collective bargaining representative or not as they choose.

Jurisdiction

As the complaint was originally framed, the district judge may not have had jurisdiction to entertain the suit. The International sued an entity that is functus officio, that does not legally exist. Plaintiff has not pointed to a "winding up" provision in its Constitution or to any other authority to support the assertion that the Local continued to exist at the time this suit was filed. As discussed below, whatever the status of the Local before the NLRB decertified the International's affiliation with the workers, it was no longer uncertain when suit was filed, four months after the NLRB election. The election marked the demise of the International's "Local Lodge D354." The International also has sued three of the defunct Local's officers, but, as the magistrate found (R. 19 at 2), only in their official capacities. ² All of this raises some doubt as to the district court's jurisdiction since two opposing parties are minimally required to create a case or controversy. Though it is critical for obvious reasons that proper parties be named in lawsuits, the doubt in this case can be satisfactorily resolved.

The International should have named as defendants the present IWNA-affiliated Local and its president, recording secretary, and financial secretary. There is no problem with this amendment because it is uncontroverted that the Local, as an International and then as an IWNA local, represented the same workers, was managed by the same officials, and maintained the same collective bargaining status with the employer. Though subject-matter jurisdiction of course cannot be waived, it is noteworthy that the Local and its officers never questioned the district court's jurisdiction to determine this controversy until the panel raised the question at oral argument in this appeal. When, as here, the merits have already been decided and factual questions do not need to be resolved regarding prejudice to the correctly named defendant, it would be a meaningless gesture to remand so that the plaintiff could amend its pleading under Rule 15 of the Federal Rules of Civil Procedure. Instead the sensible course is for this Court to permit amendment under 28 U.S.C. Sec. 1653. ³ Stockman v. LaCroix, 790 F.2d 584, 587 (7th Cir.1986) (establishing complete diversity jurisdiction); Moore v. Coats Co., 270 F.2d 410, 412 (3d Cir.1959) (establishing statutory venue requirement). Therefore, we shall consider the complaint as amended to cover the present IWNA Local 354 and its president, recording secretary, and financial secretary as defendants. This is not contrary to Newman- Green, Inc. v. Alfonso-Larrain, --- U.S. ----, 109 S.Ct. 2218, 2222, 104 L.Ed.2d 893, or Field v. Volkswagenwerk AG, 626 F.2d 293, 305 (3d Cir.1980), for the amendment here represents the facts as they existed at the commencement of the suit and therefore accords even with Anderson v. Watt, 138 U.S. 694, 702-703, 11 S.Ct. 449, 451, 34 L.Ed. 1078 which was decided prior to the enactment of the predecessor to Section 1653. Therefore, we too reach the merits. ⁴

Merits

Background

1. The Merger Agreement.--A brief recital of the facts in the light most favorable to the Local begins in April 1984, when the Boilermakers' International union merged with, and subsumed as a division, the United Cement, Lime, Gypsum and Allied Workers International Union. The merged International is the plaintiff in this case. One local affiliate of the Cement Division was Local 354. The Merger Agreement between the International and the Cement Union did not address the method by which a subordinate unit might quit the newly merged International. The Merger Agreement did, however, contain two provisions relied upon heavily by the Local in this appeal. A third is cited by the International.

The first provision cited by the Local is the preamble, which addresses conflicts between the Merger Agreement and the International's Constitution:

The Constitution of the [International] will be the supreme law of the merged organization.

All provisions of this [Merger] Agreement are binding and those provisions which conflict with the above referred to Constitution will expire * * * on the convening date of the Twenty-Eighth Consolidated Convention. (defendants' Appendix "I" at 1, Preamble).

The Twenty-Eighth Consolidated Convention referred to in the preamble is not to be convened until 1991.

The second provision of the Merger Agreement cited by the Local is the "retain clause":

Jurisdiction of District and Local Lodges. Local Union Charters held by the current Local Unions in the [Cement Union] will have issued in their stead Boilermaker Charters carrying the present local numbers preceded by a capital D. Each Local Lodge will retain its Local Union treasury. (defendants' Appendix "I" at 2, Art. V, Sec. 3) (emphasis added).

The International calls attention to a third provision of the Merger Agreement, the "transfer clause":

Transfer and Title of Assets. On the effective date of the merger all property; real, personal, and mixed; and all rights, titles, and interest; either legal or equitable; and any monies, funds or property; tangible or intangible, of the [Cement Union] and affiliated District Councils shall, by virtue of the merger, be transferred to and vested in the merged organization in accordance with the Constitution. (id. at 8, Art. XXXIII, Sec. 3).

2. The Purported Disaffiliation and NLRB Election.--In August 1986 members of Local Lodge D354 lost faith in the newly merged International following an election for officers of the International. This prompted a series of meetings by Local members regarding a proposal to drop the Local's affiliation with the International. After extensive discussion, members of the Local held an internal vote on October 28, 1986, voting unanimously to "disaffiliate" from the International. The Local's position is that it ceased to exist as an affiliate of the International on that date. During this same period, the members voted by secret ballot to select the IWNA as their authorized collective bargaining agent. In November 1986, officers of the Local gave the employer, the Gold Bond Building Products Division of the National Gypsum Company in Shoals, Indiana, signed forms from most if not all of the members of the Local purportedly (1) revoking authorization to deduct per capita taxes for the benefit of the International, and (2) authorizing the employer...