LOCAL 1624, AFL-CIO v. VIRGINIA INTEN. TERMINALS

• Decision Date: 02 February 1996
• Docket Number: No. 2:95cv787.,2:95cv787.
• Citation: 914 F. Supp. 1335
• Parties: INTERNATIONAL LONGSHOREMEN'S ASSOCIATION, STEAMSHIP CLERKS LOCAL 1624, AFL-CIO, and International Longshoremen's Association, Container Maintenance Refrigeration Repair Employees Local 1970, AFL-CIO, Plaintiffs, v. VIRGINIA INTERNATIONAL TERMINALS, INC., Hampton Roads Shipping Association, Ceres Marine Terminals, Inc., Sea-Land Service, Inc., Edward L. Brown, and International Longshoremen's Association, Defendants.
• Court: U.S. District Court — Eastern District of Virginia

914 F. Supp. 1335

INTERNATIONAL LONGSHOREMEN'S ASSOCIATION, STEAMSHIP CLERKS LOCAL 1624, AFL-CIO, and International Longshoremen's Association, Container Maintenance Refrigeration Repair Employees Local 1970, AFL-CIO, Plaintiffs, v. VIRGINIA INTERNATIONAL TERMINALS, INC., Hampton Roads Shipping Association, Ceres Marine Terminals, Inc., Sea-Land Service, Inc., Edward L. Brown, and International Longshoremen's Association, Defendants.

No. 2:95cv787.

United States District Court, E.D. Virginia, Norfolk Division.

February 2, 1996.

Thomas F. Hennessy, III, SuAnne Leigh Hardee, Hardee & Hennessy, P.C., Chesapeake, VA, for Plaintiffs.

Thomas Michael Lucas, Mary Chapman Hamilton, Vandeventer, Black, Meredith & Martin, Norfolk, VA, for Defendants Virginia International Terminals, Inc., Hampton Roads Shipping Association, and Ceres Marine Terminals, Inc.

Larry W. Shelton, Goldblatt, Lipken & Cohn, P.C., Norfolk, VA, Thomas W. Gleason, Gleason & Matthews, New York City, for Defendant Edward L. Brown, Sr. and Defendant International Longshoremen's Association.

Thomas Michael Lucas, Mary Chapman Hamilton, Vandeventer, Black, Meredith & Martin, Norfolk, VA, Robert J. Attaway, Haight, Garner, Poor & Havens, New York City, for Defendant Sea-Land Service, Inc.

MEMORANDUM OPINION AND ORDER

REBECCA BEACH SMITH, District Judge.

This matter is before the court for resolution of defendant Edward L. Brown's motion to dismiss under Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure.

I. Factual and Procedural History

This case involves a labor dispute between plaintiffs, Local 1624 and Local 1970, and their employers, the international union and one international union official.¹ Among the various claims asserted between the parties, the two locals have sued defendant Edward L. Brown, an international union vice president, under § 501(a) of the Labor Management Reporting and Disclosure Act (LMRDA), 29 U.S.C. § 501(a). The locals assert that Brown breached the duty of fair representation imposed on him by the act, by systematically excluding them from internal union approval of a proposed contract change. The contract change, which affected the implementation of flex-time scheduling at marine terminals, was approved by the union's Wage Scale Committee under allegedly improper procedures orchestrated by Brown. When plaintiffs sought review of the contract change by the Contract Board, an arbitral body charged with resolving contract disputes, Brown allegedly misrepresented his support for their position, denying them a fair resolution of the dispute.

On August 22, 1995, defendant Brown moved to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6). As grounds therefor, Brown first alleged that Local 1624 and Local 1970 were not proper plaintiffs in an action arising under 29 U.S.C. § 501, because the statute is intended to create a cause of action only for individual union members and not the union itself.² In addition, Brown argued that even if the court finds § 501 does create a cause of action for the union, this action must be dismissed because plaintiffs have not fulfilled the prerequisites to suit established by § 501(b). Plaintiffs' first response, filed September 5, 1995, contends that § 501(a) does provide a cause of action for the union directly, and that jurisdiction is appropriate pursuant to 28 U.S.C. § 1337. In addition, plaintiffs argued that the preconditions applicable to suits by individual union members under § 501(b) do not apply to actions brought by the union, or in the alternative that the preconditions may be complied with now, without dismissing the action.

During November, before the court ruled on the motion, Brown's local counsel sought permission to withdraw from the case, and on November 14, 1995, the court allowed the substitution of new local counsel. Brown's new attorney adopted the prior motion and filed a supplemental brief on December 6, 1995. The new brief asserted the additional arguments that § 501(a) did not provide relief for the type of conduct alleged, and that Brown did not violate any duty owed to the plaintiffs because he was acting as an arbitrator rather than a union advocate, or representative. Plaintiffs, by counsel, responded to the supplemental brief on December 21, 1995. In addition to renewing earlier arguments, plaintiffs' new brief asserts that § 501(a) does prohibit the actions alleged, and that most of Brown's alleged misconduct concerned his role as a union representative, not as an arbitrator.

For the reasons articulated below, the court finds plaintiffs are properly before the court and have stated a claim, which if proven, would be sufficient to entitle them to the relief sought. Accordingly, defendant Brown's motion to dismiss is DENIED.

II. Standard of Review

Brown's motion presents two distinct arguments. The first, under Rule 12(b)(1), attacks the court's subject matter jurisdiction by challenging plaintiffs' standing under § 501. The second argument concedes standing and attacks the sufficiency of plaintiffs' allegations under the statute. The court's analysis of each requires a different standard of review.

With regard to Brown's 12(b)(1) motion challenging jurisdiction, the burden is on plaintiffs, as the party asserting jurisdiction to prove that federal jurisdiction is proper. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936); Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir.1982). A motion under Rule 12(b)(1) of the Federal Rules of Civil Procedure may attack subject matter jurisdiction in two different ways. First, a Rule 12(b)(1) motion may attack the complaint on its face, asserting simply that the complaint "fails to allege facts upon which subject matter jurisdiction can be based." Adams, 697 F.2d at 1219. If such is the case, "the facts alleged in the complaint are assumed to be true and the plaintiff, in effect, is afforded the same procedural protection as he would receive under a Rule 12(b)(6) consideration." Id.

On the other hand, a Rule 12(b)(1) motion may attack "the existence of subject matter jurisdiction in fact, quite apart from any pleadings." Mortensen v. First Fed. Sav. and Loan Ass'n, 549 F.2d 884, 891 (3d Cir.1977); see Adams, 697 F.2d at 1219. In this case, defendant Brown's 12(b)(1) motion falls into this latter category. His jurisdictional argument is based, in part, on the alleged failure of § 501 to create a cause of action for the unions themselves and, secondarily, on Brown's contention that any possible action conferred on plaintiffs has not ripened due to their failure to comply with statutory prerequisites. The facts tending to prove these allegations by Brown are unrelated to the allegations set forth in plaintiffs' complaint. Because the trial court's jurisdiction, "its very power to hear the case," Mortensen, 549 F.2d at 891, is at issue in such a 12(b)(1) motion, the trial court is free to weigh the evidence to determine the existence of its jurisdiction. Adams, 697 F.2d at 1219; Mortensen, 549 F.2d at 891. "In short, no presumptive truthfulness attaches to the plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims." Mortensen, 549 F.2d at 891.

Brown's 12(b)(6) motion, on the other hand, requires the court to accept the factual allegations in the complaint and construe them in the light most favorable to the plaintiffs as the non-moving party. E.g., Mylan Laboratories, Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir.1993), cert. denied, ___ U.S. ___, 114 S.Ct. 1307, 127 L.Ed.2d 658 (1994). The claim should not be dismissed for failure to state a claim unless it appears to a certainty that the plaintiff can prove no facts in support of the claims which would entitle the plaintiff to relief. Id.; see Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957). A court should not dismiss a complaint even if it appears on the face of the pleadings that the chance of "recovery is remote and unlikely." Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974). In ruling on a 12(b)(6) motion, the court can rely only upon the allegations in the complaint and those documents attached as exhibits or incorporated by reference. See Simons v. Montgomery County Police Officers, 762 F.2d 30, 31 (4th Cir.1985), cert. denied, 474 U.S. 1054, 106 S.Ct. 789, 88 L.Ed.2d 767 (1986).

III. Analysis

The court first addresses Brown's argument that plaintiffs are not proper plaintiffs under § 501(a), and then considers the motion to dismiss for failure to state a claim.

A. Unions Are Proper Plaintiffs Under Section 501(a)

Section 501(a) of the LMRDA provides, in relevant part:

The officers, agents, shop stewards, and other representatives of a labor organization occupy a position of trust in relation to such organization and its members as a group. It is therefore the duty of each such person ... to refrain from dealing with such organization as an adverse party in any matter connected with his duties and from holding or acquiring any pecuniary or personal interest which conflicts with the interests of such organization.

Plaintiffs claim Brown's actions violated the fiduciary duty outlined in § 501(a).

Section 501(b) then provides, in relevant part:

When any officer ... of any labor organization is alleged to have violated the duties alleged in subsection (a) of this section and the labor organization ... refuse(s) or fail(s) to sue or recover damages or secure an accounting or other appropriate relief within a reasonable time after being requested to do so by any member of the labor organization, such member may sue such officer ... in any district court of the United States .... No such proceeding shall be brought except upon leave of the court obtained upon verified application and for good cause

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