John Hancock Mut. Life Ins. Co. v. UNITED O. & P. WKRS.

• Citation: 93 F. Supp. 296
• Decision Date: 09 September 1950
• Docket Number: C 496.,No. C 245,C 245
• Parties: JOHN HANCOCK MUT. LIFE INS. CO. v. UNITED OFFICE & PROFESSIONAL WORKERS OF AMERICA et al. STEPHENS et al. v. JOHN HANCOCK MUT. LIFE INS. CO. et al.
• Court: U.S. District Court — District of New Jersey

93 F. Supp. 296

JOHN HANCOCK MUT. LIFE INS. CO. v. UNITED OFFICE & PROFESSIONAL WORKERS OF AMERICA et al.

STEPHENS et al. v. JOHN HANCOCK MUT. LIFE INS. CO. et al.

Nos. C 245, C 496.

United States District Court D. New Jersey.

September 9, 1950.

McCarter, English & Studer, Newark, N. J., for John Hancock Mut. Life Ins. Co., Nicholas Conover English, of Newark, N. J., of counsel.

Morton Stavis, and Neuburger, Shapiro, Rabinowitz & Boudin, New York City, for United Office & Professional Workers of America, Leonard B. Boudin, New York City, of counsel.

George Pellettieri, of Trenton, N. J., for Richard Kirkham, and others, individual defendants in Case No. C 245.

Henry J. Bender, Jr., of Union City, N. J., for Victor Stephens and others, plaintiffs in Case No. C 496.

David E. Feller, of Washington, D. C., for Congress of Industrial Organizations, amicus curiae.

FORMAN, District Judge.

The first of the above named suits, in the form of an interpleader action, was brought by the John Hancock Mutual Life Insurance Company (hereinafter called Hancock), as plaintiff, originally, in the Superior Court of New Jersey, Chancery Division, Mercer County, against the United Office and Professional Workers of America (hereinafter called UOPWA), a labor union and 20 individual members of the UOPWA, employees of Hancock, as defendants. In the interest of brevity hereinafter this will be called the Hancock case. It was removed to this court on the petition of UOPWA, pursuant to Title 28 U.S.C.A. §§ 1441-1450¹ on March 30, 1950 upon the ground that it was a civil action of which this court has jurisdiction by virtue of §§ 301 and 302 of the Labor Management Relations Act, 1947,² 29 U.S.C.A. §§ 185, 186.

Both Hancock, the plaintiff and the individual defendants have moved, pursuant to 28 U.S.C.A. § 1447(c)³ to remand the action to the State court.

The second is a related suit to the above mentioned Hancock case. It was originally filed in the Superior Court of New Jersey, Chancery Division, Bergen County, by the plaintiffs, Victor Stephens and 12 other employees of Hancock, who make it a defendant in a class action on behalf of all employees of the defendant company who have signed dues deduction authorization cards for a determination that such checkoff authorizations are now invalid. This case hereinafter will be called the Stephens case. In conjunction therewith a temporary restraining order was obtained enjoining Hancock from deducting any monies as union dues or assessments out of the wages of industrial insurance agents employed by Hancock and from paying over to the UOPWA any such monies theretofore deducted. These restraints were embodied in a subsequent interlocutory injunction with the modification of permitting Hancock to collect such dues and hold them subject to the jurisdiction of the court.

Subsequent to the injunction an order was obtained by the defendant Hancock on May 24, 1950 adding the UOPWA and two of its officers, as defendants.

On June 6, 1950 the defendant UOPWA, pursuant to 28 U.S.C.A. §§ 1441-1450, filed its petition for removal of this action to this court.

Both defendant Hancock and the plaintiffs, pursuant to 28 U.S.C.A. § 1447(c) have moved to remand the case to the State court.

Both of the above cases are but two in a number of suits in this and other courts, involving the principal parties herein and other employees of Hancock, which arise from the expulsion of the UOPWA from the Congress of Industrial Organizations.

The Hancock Case.

The complaint in this case alleged that on July 1, 1949 Hancock entered into a bargaining contract with UOPWA, then affiliated with the Congress of Industrial Organizations; that pursuant to the contract a check-off system for the collection of union dues and other fees was in operation, limited to those employees of Hancock who signed irrevocable written authorizations for a period of one year permitting such deductions; and that the named individual defendants, employees of Hancock and members of UOPWA, notwithstanding having signed such irrevocable authorizations, notified Hancock that they were cancelling the said authorizations prior to the expiration of one year. Therefore, because of the notices of cancellation, the conflict with the contract, and the possibility of incurring ciminal penalties prescribed by Congress for deducting dues from employees' wages without their consents, Hancock sought to interplead the UOPWA and these employees and tendered to the court the sum involved, $50, representing the total of the union membership dues of the individual defendants for the month of March 1950.

Paragraph 11 of the complaint quoted portions of the LMRA, particularly § 186 (a), (c) and (d)⁴ and concluded: "By reason of the written notices which plaintiff received from the individual defendants expressing their desire to discontinue the deduction of Union dues from their wages, plaintiff is in doubt whether it may safely pay over the sum of $50.00 to the said U.O.P.W.A. on or before April 10, 1950, without incurring the penalties prescribed by Congress, or whether it should return the said sum to the individual defendants, $2.50 to each individual."

The Congress of Industrial Organizations (hereinafter called CIO) was admitted upon motion as an amicus curiae and the argument presented by it has been adopted by the individual defendants.

Both Hancock and the individual defendants in their motion to remand assert that this court lacks jurisdiction because the action does not arise, as the UOPWA contends, under the Constitution or the laws of the United States.

To sustain jurisdiction in this court, UOPWA, argued that the suit was founded on causes arising under 29 U.S.C.A. §§ 185, 186, even though not so expressed in the complaint, and that the basis which caused Hancock to seek interpleader in the State court was the fear of possible unlawfulness under the LMRA of the check-off payments. In turn, the failure of the company to make provision for dues deductions would be a violation of the collective bargaining agreement and consequently of § 185. Furthermore, it maintained that the complaint being barren of any assertion of right in the individual defendants except that derived from the Act, the assertion of the federal statute was necessary for Hancock to show some color for the several claims (in view of the small sum involved) requiring equitable protection against them. Therefore, since the injunctive relief sought by Hancock would, in effect, restrain a possible alleged violation of a federal statute, jurisdiction was maintainable in this court by the expressed provisions of § 186 (e).

The Stephens Case.

The complaint alleges that the plaintiffs are 13 industrial life insurance agents employed by Hancock and that they sue on behalf of themselves and as representatives of all agents employed by Hancock who have signed check-off cards; that such agents, numbering approximately 4,200, constitute a class so numerous as to make it impracticable to bring them all before the court and that the action is maintainable under Rule 3:23-1(a) of the Rules Governing the Courts of the State of New Jersey, which relates to class suits where the character of rights to be enforced is joint and common.

The facts precipitating this suit are alleged as follows:

On July 1, 1949 a collective bargaining contract was entered into by Hancock and the UOPWA, then affiliated with the CIO. At that time plaintiffs were members of the union and allege that they accepted membership in the UOPWA principally because of its affiliation with the CIO and did not desire to join an independent and unaffiliated union. Plaintiffs, along with 4,200 other agents, executed check-off cards authorizing the payment of their union dues to the UOPWA, and pursuant to the collective bargaining contract Hancock deducted from the wages of those employees their union dues in the sum of $2.50 per month per employee. Subsequently, the UOPWA was expelled from the CIO, effective March 1, 1950.

The plaintiffs further allege that they and other agents never intended to join an unaffiliated union nor did they ever authorize the appropriation of any portion of their compensation toward the activities of an independent labor organization unaffiliated with the CIO, their assignments reading "to the Secretary-Treasurer of the United Office and Professional Workers of America, CIO.", and that plaintiffs and other agents have signed resolutions or other notifications to Hancock withdrawing their authorizations to it to pay dues to the UOPWA.

It is the contention of the plaintiffs that the consideration for and condition precedent to the execution of the check-off authorizations by the plaintiffs and the other agents was the continued affiliation of UOPWA with the CIO, and that the expulsion of the UOPWA from the CIO has resulted in the failure of such consideration and a breach of such condition and that since March 1, 1950 Hancock had no legal and equitable right to continue dues deductions and transmit dues to UOPWA, unaffiliated.

The plaintiffs, in their prayer for relief, request that Hancock be permanently restrained from deducting and transmitting monies to UOPWA pursuant to the check-off authorizations and that this court decree, in effect, that such authorizations are now invalid.

In support of the motion to remand, both Hancock and the plaintiffs contend that this action does not arise under any federal law regulating commerce, specifically the LM RA, and that the only question involved is whether the check-off cars are presently valid, which question is a matter of contract law. Hancock also raises the additional ground that the failure of the UOPWA to join all the defendants, including itself, in the petition for removal necessitates that this action be remanded.

To sustain jurisdiction in this court, UOPWA adopts the same basic grounds submitted in the Hancock case, viz.; that the...