Nedd v. Thomas, Civ. No. 8796.

• Decision Date: 30 June 1970
• Docket Number: Civ. No. 8796.
• Parties: Charles NEDD, Dominic Iero, Max Dynoski and Anthony Ganly, Members of the Pensioned Anthracite Coal Miners Protest Executive Committee, Suing on Behalf of Themselves and All Other Members of the Class of Pensioned Anthracite Coal Miners and Widows of Deceased Pensioned Anthracite Coal Miners, Plaintiffs, v. Emmett THOMAS, Nicholas J. Haydock and John D. Jillson, Trustees of the Anthracite Health and Welfare Fund, Defendants, and United Mine Workers of America, an unincorporated Trade Union Association, Defendant.
• Court: U.S. District Court — Middle District of Pennsylvania

316 F. Supp. 74

Charles NEDD, Dominic Iero, Max Dynoski and Anthony Ganly, Members of the Pensioned Anthracite Coal Miners Protest Executive Committee, Suing on Behalf of Themselves and All Other Members of the Class of Pensioned Anthracite Coal Miners and Widows of Deceased Pensioned Anthracite Coal Miners, Plaintiffs, v. Emmett THOMAS, Nicholas J. Haydock and John D. Jillson, Trustees of the Anthracite Health and Welfare Fund, Defendants and United Mine Workers of America, an unincorporated Trade Union Association, Defendant.

Civ. No. 8796.

United States District Court, M. D. Pennsylvania.

June 30, 1970.

James S. Palermo, Hazleton, Pa., Morgan, Lewis & Bockius, Philadelphia, Pa., for plaintiffs.

Charles A. Shea, Jr., A. Richard Caputo, Wilkes-Barre, Pa., for defendants, Thomas and others.

Charles A. Wolfe, Thomas N. O'Neill, Jr., Philadephia, Pa., James W. Scanlon, Scranton, Pa., Edward L. Carey, Washington, D. C., for defendant, United Mine Workers of America.

MEMORANDUM

NEALON, District Judge.

In their latest motion, defendants, United Mine Workers and Trustees of the Anthracite Health and Welfare Fund, have moved, pursuant to Fed.R. Civ.P. 39(a) (2), to strike the plaintiff Pensioned Miners' demand for a jury trial.

The Union's principal contention is that this lawsuit is essentially an equitable one unknown to the common law; likewise, the Trustees maintain that the cause of action attempted to be asserted against them is one that is traditionally equitable and advance the additional reason that no jury trial should be held since no statute specifically confers such a right. The Pensioned Miners argue, on the other hand, that they are entitled to a jury trial under the various federal labor statutes pleaded in their Amended Complaint and also for the reason that they are seeking a money judgment.

INTRODUCTION

The original complaint filed in this case alleged a breach of contract by the Union alone and predicated jurisdiction on Section 301 of the Labor-Management Relations Act of 1947, 29 U.S.C. § 185(a). The Court of Appeals held that this Court lacked jurisdiction under Section 301 but remanded with instructions to allow the Pensioned Miners time to amend their complaint under the analysis of the issues contained therein. Nedd v. UMWA, 400 F.2d 103 (3d Cir. 1968). In determining that no "breach of contract" sufficient to establish Section 301 jurisdiction was present, the Court stated that the conduct attributed to the Union "* * * may well constitute a breach of the Union's equitable duty as a fiduciary representative of employees to act in their interest, fairly and in good faith, and without unreasonable discrimination throughout the area in which it has been empowered to function." In explaining the considerations entering into its order to remand, the Court expressed itself as follows:

"The sum of all this is that the present complaint misconceives the legal character of the wrong charged, incorrectly identifies the statutory basis of federal jurisdiction and seeks relief to which the plaintiffs are not entitled as against the defendant. Yet, the complaint discloses what may be a federal wrong and, conceivably, a basis for equitable relief or damages. Under Vaca v. Sipes, supra, damages might be recoverable if, as a result of defendant's alleged failure to insist on operator contributions, it is no longer possible to collect delinquent payments in full from all operators."

Plaintiffs were also directed to join the Trustees as necessary parties.

In their Amended Complaint the Pensioned Miners charged the Union with breaching its fiduciary duties, its duties as a labor union and its duty of fair representation by negligently or willfully or maliciously failing to cause all sums due and owing from the operators to be duly and lawfully collected, managed and distributed, and also by knowingly and willfully participating in the breaches of fiduciary duties by the Trustees. Recovery against the Trustees is bottomed on averments that they negligently or willfully or maliciously failed to collect all sums lawfully due and owing to the Fund and to manage the Fund according to law. Judgment is sought against the Union and in favor of the Fund in such total amount as shall be found to have been lost to the Fund by reason of the Union's failure to perform its duties or by reason of its participation in the Trustees' breaches of fiduciary duty and against the Trustees for their failure to perform their duties properly.

SUIT AGAINST TRUSTEES

"The right to a jury trial in civil cases at common law is a basic and fundamental feature of our system of federal jurisprudence which is protected by the Seventh Amendment." Jacob v. City of New York, 315 U.S. 752, 62 S.Ct. 854, 86 L.Ed. 1166 (1942).¹ The Seventh Amendment preserves to litigants the right to jury trial in suits at common law "not merely suits, which the common law recognized among its old and settled proceedings, but suits in which legal rights were to be ascertained and determined, in contradistinction to those, where equitable rights alone were recognized, and equitable remedies were administered * * *" Parsons v. Bedford, Breedlove & Robeson, 3 Pet. 433, 446, 7 L.Ed. 732 (1830). The Constitutional question depends on the nature of the issue to be tried rather than the character of the overall action. Ross v. Bernhard, 396 U.S. 531, 90 S.Ct. 733, 24 L.Ed.2d 729 (1970).

Generally the remedies of a beneficiary against the Trustee are exclusively equitable. Local No. 92, International Ass'n of Bridge, Structural and Ornamental Iron Workers, AFL-CIO v. Norris, 383 F.2d 735 (5th Cir. 1967). Restatement of Trusts, Second, § 197, comment b (1959), reads:

"A trustee who fails to perform his duties as trustee is not liable to the beneficiary for breach of contract in the common-law actions of special assumpsit or covenant or in a similar action at law in States in which the common-law forms of action have been abolished. The creation of a trust is conceived of as a conveyance of the beneficial interest in the trust property rather than as a contract. Moreover, questions of the administration of trusts have always been regarded as of a kind which can adequately be dealt with in a suit in equity rather than in an action at law, where questions of fact would be determined by a jury and not by the court."

The...