Local Division 519 v. LaCrosse Municipal Trans.

• Decision Date: 08 March 1978
• Docket Number: No. 77-C-292.,77-C-292.
• Citation: 445 F. Supp. 798
• Parties: LOCAL DIVISION 519, AMALGAMATED TRANSIT UNION, AFL-CIO, Plaintiff, v. The LaCROSSE MUNICIPAL TRANSIT UTILITY and the City of LaCrosse, Wisconsin, Defendants.
• Court: U.S. District Court — Western District of Wisconsin

445 F. Supp. 798

LOCAL DIVISION 519, AMALGAMATED TRANSIT UNION, AFL-CIO, Plaintiff, v. The LaCROSSE MUNICIPAL TRANSIT UTILITY and the City of LaCrosse, Wisconsin, Defendants.

No. 77-C-292.

United States District Court, W. D. Wisconsin.

January 27, 1978.

As Amended March 8, 1978.

COPYRIGHT MATERIAL OMITTED

Linda R. Hirshman, of Jacobs, Burns, Sugarman & Orlove, Chicago, Ill., for plaintiff.

Joseph S. Kaufman, D. Christopher Ohly, and Everett Hale of Melnicove, Kaufman & Wiener, P.A., Baltimore, Md., for defendants.

OPINION AND ORDER

JAMES E. DOYLE, District Judge.

This opinion and order are directed to a motion to dismiss for lack of subject matter jurisdiction.

On August 3, 1977, the plaintiff ("Local 519") filed a verified complaint alleging jurisdiction under 28 U.S.C. § 1331 and 49 U.S.C. § 1601 et seq., and a motion for a preliminary injunction ordering defendants (collectively referred to herein as "LaCrosse") to enter into arbitration of the terms of a new collective bargaining agreement. On August 23, 1977, defendants filed an answer to the complaint which, among other things, denied that jurisdiction is present.

On August 25, 1977, after submission of affidavits and briefs, this court held a hearing on Local 519's motion. Neither the question of federal subject matter jurisdiction nor that of the propriety of abstention was raised by defendants in opposition to the motion for a preliminary injunction. On August 31, I granted a preliminary injunction compelling LaCrosse to proceed to arbitration. On September 9, an appeal from that order was filed. On September 26, LaCrosse filed a motion in this court for a stay pending appeal. On September 30, Local 519 filed a motion for the issuance of an order to show cause and for a judgment of contempt against LaCrosse for failure to comply with the preliminary injunction.

It was not until October 12 that LaCrosse filed the motion to which this opinion and order are directed. The motion seeks an order dismissing the complaint for lack of subject matter jurisdiction. Alternatively, it seeks a determination that this court should abstain from exercising its jurisdiction. The motion purports to have been filed pursuant to Rules 12(b)(6) and 12(h) of the Federal Rules of Civil Procedure. On October 25, a hearing was held. At the conclusion of the hearing, I made the following rulings from the bench: construing the motion to dismiss as a double motion (1) to vacate the preliminary injunction on the ground that this court lacked jurisdiction to enter it and (2) to dismiss the complaint for lack of jurisdiction, I denied the motion to vacate the preliminary injunction and, because an appeal from the preliminary injunction had already been taken, I reserved a ruling on the motion to dismiss; I granted LaCrosse a 30-day stay of the preliminary injunction entered on August 31; and I denied Local 519's motion for an order to show cause why LaCrosse should not be held in contempt.

Meantime, in the court of appeals LaCrosse had moved for dismissal on jurisdictional grounds or, in the alternative, for remand to this district court for determination of the jurisdictional question, with the appeal from the preliminary injunction to be held in abeyance pending this court's ruling on the jurisdictional question. On October 27 the court of appeals denied these alternative motions by LaCrosse. Because certain motions were being presented to and acted upon by both the district court and court of appeals without sufficient time for one court surely to be aware of all proceedings in the other, uncertainty arose whether further action by this court was appropriate while the appeal from the preliminary injunction remained pending. By direction from the court of appeals dated November 16, 1977, it became clear that I was to proceed, as I do today, to decide LaCrosse's motion, filed October 12, for an order dismissing this action for lack of jurisdiction.

However, a degree of uncertainty persists in two respects. The first is whether I am to proceed presently to decide LaCrosse's alternative motion that I abstain from exercising jurisdiction, if jurisdiction is present; I do decide it below. The second source of uncertainty persists because in support of its assertion that the matter in controversy does not arise under the laws of the United States, within the meaning of 28 U.S.C. § 1331(a), LaCrosse relies entirely upon a contention which I consider to be non-jurisdictional in nature, namely, the contention that the statute in question neither expressly nor impliedly grants Local 519 the remedy sought here. Because able counsel for LaCrosse advance the contention with such confidence that it is jurisdictional in nature, and because able counsel for Local 519, while insisting that Congress implied the remedy, do not appear to deny that LaCrosse's contention is jurisdictional in nature, and because, whether jurisdictional in nature or not, the contention bears importantly upon whether the preliminary injunction was providently granted, I express my opinion on the contention hereinafter.

Whether "the matter in controversy . . . arises under the . . . laws . . . of the United States," within the meaning of § 1331(a), is to be determined by looking solely to the allegations of the complaint. Gully v. First Nat. Bank, 299 U.S. 109, 113, 57 S.Ct. 96, 81 L.Ed. 70 (1936). See Pan Am. Corp. v. Superior Court, 366 U.S. 656, 663, 81 S.Ct. 1303, 6 L.Ed.2d 584 (1961); Skelly Oil Co. v. Phillips Co., 339 U.S. 667, 672, 70 S.Ct. 876, 94 L.Ed. 1194 (1950). It is also to the complaint alone that one must look to determine whether the amount in controversy is sufficient, and, it appears, to determine whether abstention is appropriate and whether Congress has granted to Local 519 by implication the remedy sought. Therefore, the complaint as summarized below, taken as true, provides the sole factual basis for this opinion and order.

THE COMPLAINT

From about 1900 until 1974-1975, transit service in LaCrosse, Wisconsin, was provided by a private company. Approximately from the beginning of this period until its end, the employees of the private company were represented by plaintiff union, and they enjoyed the protection of collective bargaining agreements. From March 1973 to June 1975, these employees were parties to a specific collective bargaining agreement with the private company, which agreement covered wages, cost of living adjustments, vacation pay, sick leave allowance, health insurance, job security, seniority rights, and pension plan, and included the following provisions:

"SECTION 1—Method of Negotiation

"* * *

"The Company agrees to meet with duly accredited officers and committees of the Union upon all matters relative to wages, hours and working conditions, dealing first through the Superintendent or Operations Manager; then, in case of failure to reach agreement, the matter in dispute shall be taken up with the President of the Company or his accredited representative. In case no agreement is reached by the representative of the Company and the Union, the matter in dispute shall be submitted, at the request of either party, to a Board of Arbitration selected in the manner hereinafter specified, and the Company and the Union agree that the decision of such Board shall be final and binding on both parties.

"SECTION II—Method of Arbitration

"All differences relating to wages, hours or working conditions of men covered by this agreement which cannot be agreed upon by collective bargaining are to be submitted for decision to an Arbitration Board consisting of Three persons, one chosen by the Company, one chosen by the Union, and the two thus selected shall meet daily and select the third. In case of failure to agree on the third person after Ten days, such party shall be selected through a process of elimination, alternately, between the Company and the Union, from a list submitted by the Wisconsin Labor Relations Board. The Board so constituted shall meet within Three days and the decision rendered by this Board shall be binding upon both parties.

"Either party desiring to arbitrate any case must notify the other party in writing, and the failure of either party to appoint its own Arbitrator within Ten working days after receipt of same shall forfeit its case.

"Each party shall bear the expense of its own Arbitrator, and the expense of the third Arbitrator shall be borne equally by the parties hereto."

In the 1974-1975 acquisition of the private transit company by the City of LaCrosse through the LaCrosse Municipal Transit Utility, the employees of the company became employees of the municipal transit utility. Funds for the conversion of the private bus enterprise into a municipal transit operation were provided, in part, by a federal grant to LaCrosse under the Urban Mass Transportation Act of 1964 (the "UMTA"), as amended. 49 U.S.C. § 1601 et seq. Section 1609(c) of the Code (§ 13(c) of the Act, and hereinafter referred to as § 13(c))¹ requires that as a pre-requisite to federal aid, grant recipients make "fair and equitable arrangements . . . to protect the interests of employees affected by such assistance."

In fulfilment of its obligations under § 13(c) of the Act, LaCrosse entered into an agreement with Local 519 on April 5, 1974, referred to as the "13(c) Agreement," a copy of which is incorporated in the complaint. The 13(c) Agreement recognized Local 519 as the collective bargaining representative of the employees of the Transit Utility, and guaranteed that the Transit Utility would bargain collectively with Local 519 and would arbitrate labor disputes including the making or maintaining of collective bargaining agreements.² The 13(c) Agreement provided no procedure for enforcing these rights. The 13(c) Agreement was approved by the Secretary of Labor on May 1, 1974, and was explicitly incorporated into the capital grant contract negotiated between the City of LaCrosse...