Local 1330, United Steel Workers of America v. U.S. Steel Corp.

Decision Date25 July 1980
Docket NumberNos. 80-3217,80-3273 and 80-3366,s. 80-3217
Citation631 F.2d 1264
Parties105 L.R.R.M. (BNA) 2312, 89 Lab.Cas. P 12,220, 1980-2 Trade Cases 63,486 LOCAL 1330, UNITED STEEL WORKERS OF AMERICA, and Frank Georges, et al., Plaintiffs-Appellants. v. UNITED STATES STEEL CORPORATION, Defendant-Appellee.
CourtU.S. Court of Appeals — Sixth Circuit

Robert M. Clyde, Jr., Staughton Lynd and James B. Callen, James A. Denney, Youngstown, Ohio, Ramsey Clark, New York City, for plaintiffs-appellants.

Charles F. Clarke and Glenn M. Young, Squire, Sanders & Dempsey, Cleveland, Ohio, James T. Carney and S. G. Clark, Jr., Pittsburgh, Pa., for defendant-appellee.

Albert Strobel, Asst. County Prosecutor, Mahoning County, Ohio, Youngstown, Ohio, amicus curiae for County Commissioners of Mahoning County, Ohio.

Michael Ratner, Center for Constitutional Rights, Arthur Kinoy, New York City, amicus curiae for Center for Constitutional Rights.

Walter B. Connolly, Jr., Pepper, Hamilton & Scheetz, Washington, D. C., amicus curiae for Chamber of Commerce.

Before EDWARDS, Chief Judge, MERRITT, Circuit Judge, and PECK, Senior Circuit Judge.

EDWARDS, Chief Judge.

This appeal represents a cry for help from steelworkers and townspeople in the City of Youngstown, Ohio who are distressed by the prospective impact upon their lives and their city of the closing of two large steel mills. These two mills were built and have been operated by the United States Steel Corporation since the turn of the century. The Ohio Works began producing in 1901; the McDonald Works in 1918. The District Court which heard this cause of action found that as of the notice of closing, the two plants employed 3,500 employees.

The leading plaintiffs 1 are two labor organizations, Locals 1330 and 1307 of the United Steel Workers of America. This union has had a collective bargaining contract with the United States Steel Corporation for many years. These local unions represent production and maintenance employees at the Ohio and McDonald Works, respectively.

In the background of this litigation is the obsolescence of the two plants concerned, occasioned both by the age of the facilities and machinery involved and by the changes in technology and marketing in steelmaking in the years intervening since the early nineteen hundreds.

For all of the years United States Steel has been operating in Youngstown, it has been a dominant factor in the lives of its thousands of employees and their families, and in the life of the city itself. The contemplated abrupt departure of United States Steel from Youngstown will, of course, have direct impact on 3,500 workers and their families. It will doubtless mean a devastating blow to them, to the business community and to the City of Youngstown itself. While we cannot read the future of Youngstown from this record, what the record does indicate clearly is that we deal with an economic tragedy of major proportion to Youngstown and Ohio's Mahoning Valley. As the District Judge who heard this case put the matter:

Everything that has happened in the Mahoning Valley has been happening for many years because of steel. Schools have been built, roads have been built. Expansion that has taken place is because of steel. And to accommodate that industry, lives and destinies of the inhabitants of that community were based and planned on the basis of that institution: Steel.

In the face of this tragedy, the steel worker local unions, the Congressman from this district, and the Attorney General of Ohio have sued United States Steel Corporation, asking the federal courts to order the United States Steel Corporation to keep the two plants at issue in operation. Alternatively, if they could not legally prevail on that issue, they have sought intervention of the courts by injunction to require the United States Steel Corporation to sell the two plants to the plaintiffs under an as yet tentative plan of purchase and operation by a community corporation and to restrain the piecemeal sale or dismantling of the plants until such a proposal could be brought to fruition.

Defendant United States Steel Corporation answered plaintiffs' complaints, claiming that the plants were unprofitable and could not be made otherwise due to obsolescence and change in technology, markets, and transportation. The company also asserts an absolute right to make a business decision to discharge its former employees and abandon Youngstown. It states that there is no law in either the State of Ohio or the United States of America which provides either legal or equitable remedy for plaintiffs.

The District Judge, after originally restraining the corporation from ceasing operations as it had announced it would, and after advancing the case for prompt hearing, entered a formal opinion holding that the plants had become unprofitable and denying all relief. We believe the dispositive paragraphs of a lengthy opinion entered by the District Judge are the following:

This Court has spent many hours searching for a way to cut to the heart of the economic reality that obsolescence and market forces demand the close of the Mahoning Valley plants, and yet the lives of 3500 workers and their families and the supporting Youngstown community cannot be dismissed as inconsequential. United States Steel should not be permitted to leave the Youngstown area devastated after drawing from the lifeblood of the community for so many years.

Unfortunately, the mechanism to reach this ideal settlement, to recognize this new property right, is not now in existence in the code of laws of our nation.

This Court is mindful of the efforts taken by the workers to increase productivity, and has applauded these efforts in the preceding paragraphs. In view of the fact, however, that this Court has found that no contract or enforceable promise was entered into by the company and that, additionally, there is clear evidence to support the company's decision that the plants were not profitable, the various acts of forebearance taken by the plaintiffs do not give them the basis for relief against defendant.

Plaintiffs-appellants claim that certain of the District Judge's findings of fact are clearly erroneous, that he has misconstrued federal and state contract law, and that he failed to grant a hearing on their antitrust claims.

With this introduction, we turn to the legal issues presented by this appeal.

I. THE CAUSE OF ACTION

Plaintiffs assert jurisdiction in the federal courts, pursuant to Section 301 of the National Labor Relations Act, as amended, 29 U.S.C. § 185 (1976). 2 They also assert diversity jurisdiction, pursuant to 28 U.S.C. § 1332 (1976). By so doing they claim that this action is brought under the fundamental labor law of the country and under the laws of Ohio which federal courts follow when a cause of action between citizens of one state is brought against citizens of another state.

The primary issue in this case is a claim on the part of the steel worker plaintiffs that United States Steel made proposals to the plaintiffs and/or the membership of the plaintiffs to the general effect that if the workers at the two steel plants concerned put forth their best efforts in terms of productivity and thereby rendered the two plants "profitable," the plants would then not be closed. It is clear that this claimed contract does not rest upon any formal written document, either authorized or signed by the parties to this lawsuit.

Plaintiffs themselves recognize that they cannot rely upon any formal contract law. Nonetheless, in this section we shall discuss relationships between the parties which plaintiffs have not raised in order to place their issues in proper context.

As noted above, the steelworkers have a formal collective bargaining contract with the U.S. Steel Corporation. In this record there is no indication that there ever was any formal negotiation or amendment of that contract in relation to the issues of this case. Further, there is no indication in this record that the contract alleged in this complaint could be the subject for arbitration under Section 8(A)(2) of the Steelworkers Agreement of August 1, 1977:

The Board shall have jurisdiction and authority only to interpret, apply, or determine compliance with the provisions of this Agreement and such local working conditions as may hereafter be in effect in the plants of the Company, insofar as shall be necessary to the determination of grievances appealed to the Board. The Board shall not have jurisdiction or authority to add to, detract from, or alter in any way the provisions of this Agreement.

Nor is there any indication in this appellate record that the claimed contract ever was made a subject for arbitration under Section 7(A)(8), which provides:

If the officers of the Company and of the Union shall so agree in writing, any request or complaint not a proper matter of grievance and thus not appealable to the Board, or other matter not covered by the procedures of Section 6 Adjustment of Complaints and Grievances, may be referred to the Board for determination upon such terms as the parties may mutually agree.

The collective bargaining agreement applicable in this period also contains three sections which management asserts bear directly upon its claim of unilateral right to close any plant. These provisions are two rather general paragraphs on page 15 of the contract entitled "Management" which recite as follows:

SECTION 3 MANAGEMENT

The Company retains the exclusive rights to manage the business and plants and to direct the working forces. The Company, in the exercise of its rights, shall observe the provisions of this Agreement.

The rights to manage the business and plants and to direct the working forces include the right to hire, suspend or discharge for proper cause, or transfer and the right to relieve employees from duty because of lack of work or for other legitimate reasons....

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