Kelly v. Burlington Northern R. Co., 88-4121

• Decision Date: 21 February 1990
• Docket Number: No. 88-4121,88-4121
• Citation: 896 F.2d 1194
• Parties: 133 L.R.R.M. (BNA) 2717, 114 Lab.Cas. P 11,934 Dan L. KELLY, Moreland Neiman, et al., Plaintiffs-Appellants, v. BURLINGTON NORTHERN RAILROAD COMPANY, its agents and representatives; Brotherhood of Railway, Airline & Steamship Clerks, Freight Handlers, Express & Station Employees (BRAC), its agents & representatives, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1194

896 F.2d 1194

133 L.R.R.M. (BNA) 2717, 114 Lab.Cas. P 11,934

Dan L. KELLY, Moreland Neiman, et al., Plaintiffs-Appellants, v. BURLINGTON NORTHERN RAILROAD COMPANY, its agents and representatives; Brotherhood of Railway, Airline &amp Steamship Clerks, Freight Handlers, Express & Station Employees (BRAC), its agents & representatives, et al Defendants-Appellees.

No. 88-4121.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Oct. 5, 1989.

Decided Feb. 21, 1990.

Thomas J. Beers, Mark S. Connell, Connell & Beers, Missoula, Mont., for plaintiffs-appellants.

Charles C. Dearden, Murphy, Robinson, Heckathorn & Phillips, P.C., Kalispell, Mont., Thomas J. Knapp, Fort Worth, Tex., for defendant-appellee Burlington Northern R. Co.

Mitchell M. Kraus, Transportation-Communications International Union, Rockville, Md., for defendants-appellees.

Appeal from the United States District Court for the District of Montana.

Before HUG, FARRIS and REINHARDT, Circuit Judges.

REINHARDT, Circuit Judge:

Appellants brought this hybrid action under the Railway Labor Act ("RLA"), 45 U.S.C. Sec. 151 et seq. (1982) against their employer and their union, alleging that the employer breached a collective bargaining agreement and that the union breached its duty of fair representation. The district court applied the six-month statute of limitations found in Sec. 10(b) of the Labor Management Relations Act, 1947 ("LMRA"), 29 U.S.C. Sec. 160(b) (1982) ¹ and held that appellants' action was untimely, granting appellees' motion for summary judgment. Although we agree that the LMRA's six-month limitations period applies to hybrid actions under the RLA, we conclude that because appellants' cause of action accrued prior to our decision in International Ass'n of Machinists and Aerospace Workers, AFL-CIO v. Aloha Airlines, Inc., 790 F.2d 727 (9th Cir.), cert. denied, 479 U.S. 931, 107 S.Ct. 400, 93 L.Ed.2d 354 (1986), the district court erred in applying that limitations period here. Accordingly, we reverse the grant of summary judgment and remand.

I. Facts

Appellants were formerly employed by appellee Burlington Northern Railroad Company ("Burlington"), and worked at Burlington's tie treating plant in Paradise, Montana. Their employment was governed by a collective bargaining agreement between Burlington and their union, the Brotherhood of Railway, Airline and Steamship Clerks, Freight Handlers, Express and Station Employees ("BRAC"). Following a fire at the plant, Burlington closed the facility and terminated appellants' employment.

On January 25, 1984, appellants commenced an action in federal district court alleging breach of contract against Burlington and breach of the duty of fair representation against BRAC. The complaint alleged that Burlington closed the tie treating plant in violation of the collective bargaining agreement between Burlington and BRAC, and that BRAC breached its duty to appellants by allowing Burlington to close the plant and by not actively assisting appellants in keeping the plant open or otherwise protecting appellants' employment. Appellants also alleged a conspiracy between the two to deny their employment rights.

On August 27, 1984, Burlington filed a motion for judgment on the pleadings, or, in the alternative for summary judgment. BRAC subsequently moved to dismiss the action under rule 12(b)(6) of the Federal Rules of Civil Procedure, or, in the alternative, to stay the proceeding pending arbitration. Both defendants argued that: (1) the claim for breach of the collective bargaining agreement should be dismissed for failure to exhaust the grievance procedure specified in the agreement and (2) the claim for breach of the duty of fair representation against the union should be dismissed due to the lack of a factual basis for the charges of conspiracy or collusion between Burlington and BRAC.

On January 28, 1985, Judge Hatfield, treating defendants' motions as motions for judgment on the pleadings, granted the motions and dismissed the action. Prior to Judge Hatfield's order, Burlington and BRAC had agreed to take appellants' claims to arbitration, as called for in the collective bargaining agreement, and the parties had notified Judge Hatfield of this decision. While Judge Hatfield's order did not specify whether or not the dismissal of appellants' action was on the merits, it appears that, by dismissing, he intended to permit the contractual arbitration procedure to be implemented. However, the recorded judgment signed by the clerk of the court stated that the action was dismissed on the merits. Plaintiffs did not file an appeal.

Burlington and BRAC submitted the parties' dispute to an arbitration board known as the Special Board of Adjustment. The Board issued an award on August 1, 1985, concluding that the destruction of the plant allowed Burlington to suspend wage guarantees under the collective bargaining agreement, and that Burlington was not required to compensate the employees in accordance with the provisions of the agreement.

On January 28, 1986, a year after their original action had been dismissed, appellants filed a motion to permit their original complaint to be amended or to vacate the judgment. Appellants filed an amended complaint along with this motion. On April 24, 1986, Judge Hatfield denied appellants' motion, stating that the action had been dismissed in its entirety and that granting the relief requested by the appellants after their delay would amount to an abuse of discretion by the court. Judge Hatfield also stated that the "obvious" solution was for appellants to file a new suit.

Appellants followed Judge Hatfield's advice. On May 9, 1986, they commenced this action, renewing their claims against Burlington for breach of contract and BRAC for breach of the duty of fair representation and, in addition, alleging the tort of emotional distress against Burlington only. This complaint was almost identical to the amended complaint filed with the motion to amend on January 28, 1986. On October 7, 1986, appellees moved for summary judgment on the counts alleging breach of contract and breach of the duty of fair representation, asserting that these claims were untimely and were barred by res judicata. Judge Russell Smith granted appellees' motion, ruling that appellants' action was not brought within the applicable six-month statute of limitations. He did not address appellees' contention that the action was barred by res judicata. Appellants filed a timely appeal.

II. Analysis

There are two aspects to the issue presented by this appeal. First, we must determine the applicable statute of limitations for hybrid actions brought under the RLA in general. Second, we must decide whether, in view of the fact that the cause of action accrued before Aloha, it is appropriate to apply that limitations period in the case before us.

In DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983), the Supreme Court addressed the statute of limitations to be applied to a hybrid Sec. 301 breach of contract and breach of the duty of fair representation action under the LMRA, 29 U.S.C. Sec. 141 et seq. (1982). The Court departed from the usual practice of applying the most closely analogous state statute, instead adopting the six-month statute of limitations set out in Sec. 10(b) of the LMRA as the uniform federal limitations period for hybrid actions involving that Act. The Court concluded that Sec. 10(b), governing the bringing of unfair labor practice charges before the National Labor Relations Board, provided a closer analogy than state statutes for vacating an arbitration award or for malpractice, which were either too short "to provide an aggrieved employee with a satisfactory opportunity to vindicate his rights" or too long to promote "the relatively rapid final resolution of labor disputes favored by federal law." Id. at 166, 168. In contrast, Sec. 10(b) involved competing interests similar to those present in hybrid suits involving the LMRA, and the six-month limitations period in Sec. 10(b) of that Act struck the "proper balance between the national interests in stable bargaining relationships and finality of private settlements, and an employee's interest in setting aside what he views as an unjust settlement under the collective bargaining system." Id. at 152-53, 103 S.Ct. at 2284, (quoting United Parcel Service, Inc. v. Mitchell, 451 U.S. 56, 70-71, 101 S.Ct. 1559, 1567-68, 67 L.Ed.2d 732 (1981)) (Stewart, J., concurring in the judgment).

In International Ass'n of Machinists and Aerospace Workers, AFL-CIO v. Aloha Airlines, Inc., 790 F.2d 727 (9th Cir.), cert. denied, 479 U.S. 931, 107 S.Ct. 400, 93 L.Ed.2d 354 (1986), this circuit for the first time extended the rule of DelCostello to an action involving the RLA, rather than the LMRA. ² We concluded that the policies underlying the Court's analysis in DelCostello applied equally to actions involving the RLA, and therefore that RLA actions should also be subject to the uniform six-month limitations period found in Sec. 10(b) of the LMRA. Aloha involved an action against an employer for breach of a collective bargaining agreement and breach of the status quo provisions of the RLA rather than a hybrid Sec. 301/fair representation claim such as appellants'. Nevertheless, we agree with the district court that Aloha's extension of DelCostello and the six-month limitations period in Sec. 10(b) to actions arising under the RLA also governs hybrid suits brought under the RLA. ³

Our decision that Aloha applies to hybrid RLA cases does not resolve the more difficult question presented here--whether the six-month rule should apply when the cause of action accrued well before our announcement of the Aloha rule, and application of that rule would bar the filing of appellants' action without prior notice. In Aloha, we refused to apply our decision retroactively. We...