Nedd v. United Mine Workers of America
| Decision Date | 03 July 1974 |
| Parties | 95 L.R.R.M. (BNA) 2392, 81 Lab.Cas. P 13,224 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, Appellants, and Emmett Thomas, Mart F. Brennan, and John Jillson, Trustees of the Anthracite Health and Welfare Fund v. UNITED MINE WORKERS OF AMERICA, an unincorporated Trade Union Association, Emmett Thomas, Nicholas J. Haydock and John D. Jillson, Trustees of the Anthracite Health and Welfare Fund, Joseph Fauzio, Frank J. Galgay, (Added as Trustees of Anthracite Health and Welfare Fund, per D.C. order of |
| Court | U.S. Court of Appeals — Third Circuit |
Thomas M. Kittredge, Philadelphia, Pa., James S. Palermo, Hazleton, Pa., John R. McConnell, Morgan, Lewis & Bockius, Philadelphia, Pa., for appellants.
Thomas N. O'Neill, Jr., Carol A. Mager, Montgomery, McCracken, Walker & Rhoads, Philadelphia, Pa., Daniel B. Edelman, Yablonski, Both & Edelman, Washington, D. C., for United Mine Workers; Harrison Combs, United Mine Workers of America, Washington, D. C., of counsel.
Before FORMAN, GIBBONS and ROSENN, Circuit Judges.
This appeal concerns the right of pensioned coal miners to obtain relief for the failure of their pension fund trustees and their union to enforce anthracite coal mine operators' contractual obligations to pay a tonnage royalty to the Anthracite Health and Welfare Fund ("The Fund"). It has been litigated in the federal courts for fourteen years. There has been other, related litigation, seeking the same object: payment of earned sums for the benefit of the Fund's lawful cestuis. 1
The Fund was created by the terms of the Anthracite Wage Agreement of 1946, when anthracite production was at its modern peak. Its purpose was to provide miners with retirement pensions. A sharp and prolonged decline in the anthracite mining industry, the result of competition from other energy sources, resulted in reduced income to the fund. In addition to the decline in production substantial delinquencies also accrued. By 1962, 120 mine operators owed almost $12 million to the Fund.
The gravaman of the pensioners' complaint, whether predicated on federal or on state law, is that the Trustees and the Union favored the interests of working miners over those of retirees and therefore failed to take prudent action to collect delinquencies from mine operators, who provided job opportunities. The district court rejected the contention that any harm resulted to the Fund from its relationship with the Union, and held that neither the Union nor the Trustees are liable to the Fund on account of the delinquencies.
On March 11, 1963 the pensioners filed a diversity action against the United Mine Workers, which was dismissed for lack of complete diversity. 2 Since under § 301(b) of the National Labor Relations Act, 29 U.S.C. § 185(b), the Union is suable as an entity, the pensioners filed a new complaint alleging a breach of contract. On an appeal certified to this court pursuant to 28 U.S.C. § 1292(b) we held that nothing in the labor agreement between the Union and the coal operators obligated the Union to enforce the operators' promise to pay royalties to the Fund. Thus we concluded that the complaint, as then drafted, did not state a claim upon which relief could be granted under § 301(a) of the National Labor Relations Act. 3 Although we did not agree that the complaint stated a cause of action for breach of a labor agreement, we recognized that the allegations of failure to enforce the operators' promise might state a claim for a breach of the Union's equitable duty as a fiduciary to act in the interest of the pensioners and its employed members without unreasonable discrimination. 400 F.2d at 105. We remanded with instructions to allow plaintiffs a reasonable time to amend their complaint to state such a claim, and to join the Fund Trustees as necessary parties. We recognized that the district court would have jurisdiction over such a claim under 28 U.S.C. § 1337. 4 Nedd v. United Mine Workers, supra, 400 F.2d at 106. On remand, an amended complaint joined the Fund Trustees as defendants, and alleged jurisdiction under 28 U.S.C. § 1337 and under 29 U.S.C. §§ 157, 158(b), 159(a), 185, 186, 301 et seq. and 501. The amended complaint alleged violations of federal law, but also included a pendent state law claim for breach of fiduciary duty. Plaintiffs demanded a jury trial. By an order dated June 30, 1970 the district court struck this demand. After protracted discovery, a non jury trial was held in June of 1974. The district court's opinion was filed on April 13, 1976. 5 It concludes:
(t)he following are this Court's holdings in this case:
1. This Court does not have subject-matter jurisdiction of plaintiffs' claims;
2. However, assuming that there is jurisdiction,
A. the statute of limitations was tolled by the trustees' actions and does not bar this suit;
B. the trustees are not liable either for violation of Section 302 of the Labor Management Relations Act of 1947, 29 U.S.C. § 186, or for breach of the common law duty of undivided loyalty of a trustee;
C. although past trustees were guilty of a breach of a trustee's duty to enforce claims by virtue of their negligent handling of the problem of operator delinquencies, none of the trustees who are defendants in this case may be held liable for that breach;
D. the Union is not liable under any of the theories advanced by plaintiffs; and
E. if the Union is liable, it is entitled to have deducted from any recovery against it an amount equal to the total sum it has loaned the Fund since its inception.
In accordance with the above, judgment will be entered for the defendants.
While at first blush it would seem that the district court should have stopped after concluding it lacked subject matter jurisdiction, the actual holding appears to be a rejection of the federal claims as a matter of law after a full trial, and a rejection of the pendent state law claim on the merits as well. On appeal the pensioner plaintiffs advance several contentions. They contend that the court erred in rejecting all federal claims; that their federal claims were sufficiently substantial to support pendent jurisdiction over their state law claims; that the court erred in striking their demand for a jury trial; and that it erred in entering judgment for the defendants. The defendant Union and the defendant Fund Trustees urge that the federal claims are so insubstantial that the district court was correct in holding that it lacked subject matter jurisdiction, but that its findings that there were no breaches of fiduciary duties are not clearly erroneous and should be affirmed if there was jurisdiction.
I. FEDERAL QUESTION JURISDICTION
The amended complaint alleges three federal law theories: (1) failure to enforce a collective bargaining contract, a federal common law action implied from the jurisdictional grant over such claims in § 301 of the Labor Management Relations Act of 1947, 29 U.S.C. § 185(a); (2) breach of the federal common law duty of fair representation; and (3) breach of fiduciary duties implied from the prohibitions of § 302 of the Labor Management Relations Act of 1947, 29 U.S.C. § 186. The district court, after an extended analysis, concluded that none of these theories would support federal jurisdiction and that since there was no federal question jurisdiction, it could not exercise pendent jurisdiction. 6 We conclude that in the circumstances of this case federal law causes of action of sufficient substance to support federal question jurisdiction were pleaded. Moreover, we conclude that the court could properly, as ultimately it did, try the pendent state law cause of action.
The § 301 claim against the Union must be considered separately from that against the Trustees. Although our prior decision in Nedd v. United Mine Workers, supra discussed a § 301 claim against the Union, that opinion did not reach the issues presently before us. 7
The § 301 claim against the Trustees is based on a provision in the 1952 interim Agreement between the Union and the operators: The Trustees of the Fund shall use due diligence and all reasonable means to collect and prevent delinquent obligations to the Fund.
Plaintiffs' exhibits, Vol. A, p. 67. This provision was incorporated by reference in all subsequent Anthracite Wage Agreements. The district court points out that the trustees were not parties to the contract, and therefore undertook no duties under it. It urges, moreover, that the clause is merely a statement of the trustees' fiduciary duties, and does not render those duties contractual in nature. Granted these premises, the conclusion which the district court drew, that it lacked § 301 jurisdiction, does not follow.
The above quoted clause is a contractual recognition that the trustees have standing to sue to enforce the royalty provisions. 8 It is settled law that a suit by non-party trustees to enforce those provisions may be entertained in federal district court by virtue of § 301. 9 It is also settled law that employees, although not formally parties to a collective bargaining agreement, can bring a § 301 suit to enforce its terms. Smith v. Evening News Ass'n., 371 U.S. 195, 83 S.Ct. 267, 9 L.Ed.2d 246 (1962). Where the trustee may sue and wrongfully fails to do so, the beneficiary may sue the trustee as well as the party or parties the trustee failed to sue. 10 Thus, the complaint states a non-frivolous cause of action under 29 U.S.C. § 301, which provides for suits in federal court for violation of such contracts.
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