Laczay v. Ross Adhesives, a Div. of Conros Corp.
| Decision Date | 11 October 1988 |
| Docket Number | No. 87-1886,87-1886 |
| Parties | 129 L.R.R.M. (BNA) 2243, 109 Lab.Cas. P 10,673, 11 Fed.R.Serv.3d 1362 Julius LACZAY and Jolanda Laczay, Plaintiffs-Appellants, v. ROSS ADHESIVES, A DIVISION OF CONROS CORPORATION, et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Alan B. Posner (argued), Kelman, Loria, Downing, Schneider & Simpson, Detroit, Mich., for plaintiffs-appellants.
Dan W. Chandler (argued), John A. Entenman, Detroit, Mich., for defendants-appellees.
Before: LIVELY and JONES, Circuit Judges; and BROWN, Senior Circuit Judge.
This appeal requires us to determine the conditions under which a party may appeal from a stipulated judgment dismissing an action. As a general rule, neither party may appeal from an agreed judgment because it is not an involuntary adverse judgment. There is an exception, however, when the appellants' "solicitation of the formal dismissal was designed only to expedite review of [a prior] order which had in effect dismissed appellants' complaint." Raceways Properties, Inc. v. Emprise Corp., 613 F.2d 656, 657 (6th Cir.1980). In this case the plaintiffs contend that denial of their motion to remand the action after removal effectively dismissed it.
The plaintiff Julius Laczay filed suit in a Michigan court seeking damages and reinstatement to a position with Ross Adhesives, where he had worked for sixteen years before being terminated on August 15, 1986. In Count 1 of the complaint, Laczay charged the defendants with violating the age discrimination prohibitions of Michigan's Elliott-Larsen Civil Rights Act. In Count II the plaintiff alleged that the defendants misrepresented their intent to discontinue the Michigan operations where Laczay was employed, and fraudulently obtained a release from the plaintiff of claims against the defendants in exchange for $320. The plaintiff tendered back the payment and sought a declaration that the release was void. In Count III Jolanda Laczay sought damages for loss of consortium. Since Count III does not figure in this appeal, references to the plaintiff or Laczay will relate to Julius Laczay.
Before answering, the defendants filed a petition for removal of the action to the United States District Court for the Eastern District of Michigan. As the ground for removal the defendants asserted that the district court had original jurisdiction under Sec. 301 of the Labor Management Relations Act, 29 U.S.C. Sec. 185, because the release referred to in Count II was obtained pursuant to a termination agreement between the defendants and the union that represented the plaintiff. In their answer the defendants denied the operative allegations of the complaint and pled as affirmative defenses the plaintiff's failure to exhaust administrative remedies under the collective bargaining agreement between his union and employer, and the statute of limitations applicable to Sec. 301 actions.
The plaintiff filed a motion to remand, arguing that the complaint raised only state causes of action and issues that were not "inextricably intertwined" with consideration of the terms of the collective bargaining agreement. In extensive briefing the parties argued the difficult issue of when a claim by an employee against an employer is preempted by Sec. 301 because it implicates a labor contract. In Allis-Chalmbers Corp. v. Lueck, 471 U.S. 202, 213, 105 S.Ct. 1904, 1912, 85 L.Ed.2d 206 (1985), the Supreme Court stated that the analysis must focus on "whether evaluation of the claim is inextricably intertwined with consideration of the terms of the labor contract."
The district court denied the motion to remand, concluding that the gravamen of the complaint was that Laczay "was terminated pursuant to an invalid termination agreement between his union and his employer." Thus, in the court's view, the plaintiff's claims were " 'inextricably intertwined' with the terms of this agreement and the negotiating process that led to ... Laczay's execution of the release he is now challenging." The plaintiff filed a motion for reconsideration, citing a more recent Supreme Court decision, Caterpillar, Inc. v. Williams, --- U.S. ----, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987), but raising no new issues. The district court found Caterpillar inapplicable, and denied the motion.
The next docket entry of substance, after the order denying reconsideration, consists of a stipulation and order of dismissal with prejudice. These documents read as follows:
STIPULATION DISMISSING ACTION
Plaintiffs stipulate that they have not satified [sic] the prerequisites to the bringing of an action under Sec. 301 of the Labor Management Relations Act (). Plaintiffs therefore stipulate that this action may be dismissed with prejudice and without costs, it being Plaintiffs' position that Plaintiffs should be permitted to pursue state causes of action in the state court, but this Honorable court having ruled against Plaintiffs on that issue. Attached is the agreed Dismissal Order.
__________________________________ ___________________________________________
DAN W. CHANDLER
(P26533) ALAN B. POSNER (P27981)
Attorney for Defendants Attorney for Plaintiffs
* * *
DISMISSAL ORDER
At a session of said Court held on the 28 day of Aug., 1987:
* * *
Upon stipulation of the parties, it is ordered that the above captioned action
is dismissed with prejudice and that each party shall bear their own fees and
costs of action.
Robert DeMascio
-------------------------------------------
UNITED STATES DISTRICT JUDGE
It is undisputed that counsel for the plaintiff prepared the stipulation and forwarded it to counsel for the defendant, who added the last sentence, signed it, and returned it with the order of dismissal that he had prepared. Counsel for the plaintiff then forwarded both documents to the district court, where they were entered after the district judge signed the order. The plaintiff then appealed to this court, and the defendants raised the issue of his right to appeal in their brief.
The Supreme Court recognized an exception to the general rule that one who voluntarily dismisses his or her complaint has no right of appeal in United States v. Procter & Gamble Co., 356 U.S. 677, 78 S.Ct. 983, 2 L.Ed.2d 1077 (1958). In Procter & Gamble the government refused to comply with a trial court order directing it to turn over to the defendant in a civil antitrust action certain grand jury testimony taken in a related criminal investigation that had produced no indictments. In order to avoid risking a contempt citation, the government filed a motion for the district court to amend its order to provide that if production was not made the court would dismiss the complaint. The defendant did not oppose the motion and an amended order was entered. When the government did not produce the transcripts, the district court entered an order of dismissal.
On direct appeal from the district court, the Supreme Court held that the appeal could be maintained because the government "did not consent to a judgment against [it], but only that, if there was to be such a judgment, it should be final in form instead of interlocutory, so that [it] might come to this court without further delay." Id. at 681, 78 S.Ct. at 986, quoting Thomsen v. Cayser, 243 U.S. 66, 83, 37 S.Ct. 353, 358, 61 L.Ed. 597 (1917). The Court found that the United States had consistently opposed the request for grand jury materials, and "[w]hen the Government proposed dismissal for failure to obey, it had lost on the merits and was only seeking an expeditious review." Id. 356 U.S. at 680-81, 78 S.Ct. at 985-86.
At least one court has limited the application of Procter & Gamble to cases where the appellant faces the prospect of contempt. See Plasterers Local Union v. Wyland Enterprises, Inc., 819 F.2d 217, 218-19 (9th Cir.1987). However, this court has applied Procter & Gamble more broadly. In Raceway Properties, Inc. v. Emprise Corp., 613 F.2d 656 (6th Cir.1980), the district court entered an interlocutory order holding that the relevant market in a private antitrust case was different from that claimed by the plaintiffs. The plaintiffs advised the court that they were not prepared to proceed with evidence regarding the relevant market outlined by the court and that they believed the order effectively terminated the lawsuit. The plaintiffs then requested the court to enter a formal order of dismissal so they could challenge the relevant market ruling on appeal. The order was entered, and the defendant sought dismissal of the appeal on the ground that the order was not appealable. Citing Procter & Gamble, this court found the order of dismissal was appealable because the appellants' "solicitation of the formal dismissal was designed only to expedite review of an order which had in effect dismissed appellants' complaint." 613 F.2d at 657.
The court reached the same result in Bogorad v. Eli Lilly & Co., 768 F.2d 93 (6th Cir.1985). In that case the plaintiff sought dismissal in the district court because she concluded that a preliminary order in her product liability case foreclosed her only viable claim. The court granted her motion after offering to hear the case on another theory. In denying the defendant's motion to dismiss the appeal, this court relied on Procter & Gamble and Raceway Properties to find that the general rule against appealing voluntarily dismissed actions did not apply.
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