Nitzsche v. Stein, Inc., No. 92-CV-995.

• Court: United States District Courts. 6th Circuit. United States District Court of Northern District of Ohio
• Writing for the Court: Keith L. Pryatel, Millisor & Nobil, Cleveland, Ohio, for defendant Stein, Inc
• Citation: 797 F. Supp. 595
• Parties: Dale L. NITZSCHE, Plaintiff, v. STEIN, INC., et al., Defendants.
• Docket Number: No. 92-CV-995.
• Decision Date: 31 August 1992

797 F. Supp. 595

Dale L. NITZSCHE, Plaintiff,
v.
STEIN, INC., et al., Defendants.

No. 92-CV-995.

United States District Court, N.D. Ohio, E.D.

August 31, 1992.

797 F. Supp. 596

Alan S. Belkin, Evelyn Dzurilla Moore, Shapiro, Turoff, Gisser & Belkin, Cleveland, Ohio, for plaintiff.

Keith L. Pryatel, Millisor & Nobil, Cleveland, Ohio, for defendant Stein, Inc.

William I. Fadel, Kathleen M. Sasala, Fadel & Beyer, Cleveland, Ohio, for defendant Local 18 Intern. Union of Operating Engineers.

ORDER

SAM H. BELL, District Judge.

Currently pending before the court in the above-captioned cause is a motion to strike portions of the complaint's prayer for relief filed by defendant Stein, Inc. (Stein) pursuant to Fed.R.Civ.P. 12(f). Plaintiff Dale L. Nitzsche has not opposed this request.

Plaintiff originally instituted this cause with the filing of a complaint on May 19, 1992 against Stein and defendant International Union of Operating Engineers, Local 18 (the Union). Plaintiff alleges breach of a collective bargaining agreement against Stein and breach of the duty of fair representation against the Union, in violation of Section 301(a) of the Labor Management Relations Act, 29 U.S.C. § 185(a). Specifically, plaintiff claims that Stein discharged him without just cause and that the Union perfunctorily dismissed his grievance prior to arbitration. In his prayer for relief, plaintiff seeks, inter alia, reinstatement, back pay, and benefits against Stein and the Union jointly and severally. Id. at ¶ (c). In addition, plaintiff requests compensatory and punitive damages, as follows:

Grant plaintiff judgment against Stein and Local 18, jointly and severally, in the amount of Two Hundred Fifty Thousand Dollars ($250,000.00) as compensatory damages, Five Hundred Thousand Dollars ($500,000.00) as punitive damages, and for the costs of this action including plaintiff's reasonable attorney fees.

Id. at ¶ (e).

In support of its motion to strike, Stein's argument is threefold. First, Stein contends that plaintiff's request for punitive damages must be stricken in its entirety because such damages are not available in § 301 suits as a matter of law. Second, Stein similarly maintains that any compensatory damages over and above monetary amounts representing back pay and benefits are also unavailable in such suits as a matter of law. Finally, Stein challenges plaintiff's attempt to hold it liable jointly and severally with the Union on the ground that such liability cannot be imposed in hybrid 301 suits as a matter of law. The court will address each of these arguments in turn.

A. Punitive Damages

Stein's first contention is that punitive damages are not available in § 301 suits as a matter of law. While this is clearly a correct proposition with regard to an employee's suit against his union, the same cannot conclusively be stated as to the employee's claim against his employer for breach of the collective bargaining agreement. The question currently posed is succinctly reflected in the following passage:

The United States Supreme Court has made it clear that punitive damages may not be awarded against a union for breaches of its duty of fair representation. International Brotherhood of Electrical Workers v. Foust, 442 U.S. 42, 99 S.Ct. 2121, 60 L.Ed.2d 698 (1979). However, with respect to whether punitive damages may be recovered against the employer in a § 301 claim, the law is not so clear. The Sixth Circuit has not addressed the question. District courts are in disagreement. Compare Brotherhood of Railway Carmen of United States v. Delpro Company, 579 F.Supp.

797 F. Supp. 597

1332 (D.C.Del.1984) (no punitive damages recoverable against employer under the Railway Labor Act) with Brown v. World Airways, Inc., 539 F.Supp. 179 (S.D.N.Y.1982) (allowing punitive damages under the Railway Labor Act against an employer).

Black v. Ryder/P.I.E. Nationwide, Inc., 730 F.Supp. 102, 106 (E.D.Tenn.1989), rev'd on other grounds 930 F.2d 505 (6th Cir. 1991).¹

Very little commentary on the question exists at the federal appellate level. A review of the case law reveals that the appellate courts have not discussed in depth the issue of whether punitive damages are available against an employer in a § 301 suit for breach of a collective bargaining agreement, consistently declining to set forth any hard and fast rule of law which might conclusively answer the question either in the affirmative or the negative. Only two appellate opinions which have answered the question in the negative with any degree of certainty: United Steelworkers of America, AFL-CIO-CLC v. Connors Steel Company, 855 F.2d 1499, 1510 (11th Cir.1988), cert. denied 489 U.S. 1096, 109 S.Ct. 1568, 103 L.Ed.2d 935 (1989), and Local 127, United Shoe Workers of America, AFL-CIO v. Brooks Shoe Manufacturing Company, 298 F.2d 277, 278 (3d Cir.1962) (en banc). Four other circuit courts have left open the possibility that an award of such damages might be appropriate under exceptional circumstances. See Merk v. Jewel Food Stores Division of Jewel Companies, Inc., 945 F.2d 889, 899 (7th Cir.1991), cert. denied ___ U.S. ___, 112 S.Ct. 1951, 118 L.Ed.2d 555 (1992) (punitive damages not available in "simple" breach of labor contract cases, i.e., those which are "uncomplicated by evidence of fraud or other tortious misconduct"); Hotel and Restaurant Employees and Bartenders International Union, AFL-CIO v. Michelson's Food Services, Inc., 545 F.2d 1248, 1254 (9th Cir. 1976) (punitive damages are "not usually" appropriate in breach of labor contract cases); Butler v. Local Union 823, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, 514 F.2d 442, 454 (8th Cir. 1975), cert. denied 423 U.S. 924, 96 S.Ct. 265, 46 L.Ed.2d 249 (1975) (more than a showing that the employer merely acquiesced in the union's desires would be needed in order to recover punitive damages against the employer); Holodnak v. Avco Corporation, Avco-Lycoming Division, Stratford Connecticut, 514 F.2d 285, 291 (2d Cir.1975), cert. denied 423 U.S. 892, 96 S.Ct. 188, 46 L.Ed.2d 123 (1975) (employee not entitled to punitive damages in § 301 suit against employer where employee made no showing that such an award would deter future violations by the employer).

With no specific guidance before us from any binding authority, this court chooses to follow the view that punitive damages are not available against an employer in a § 301 suit for breach of a collective bargaining agreement. The most persuasive reasoning located by this court stems from an opinion in the case Merk v. Jewel Food Stores, Division of Jewel Companies, Inc., 734 F.Supp. 330 (N.D.Ill.1990), rev'd on other grounds 945 F.2d 889 (7th Cir.1991), cert. denied ___ U.S. ___, 112 S.Ct. 1951, 118 L.Ed.2d 555 (1992). There, Judge Posner agreed with the employer's contention that punitive damages could not be recovered from it and advanced three convincing reasons for his holding:

The complaint seeks punitive damages for what the plaintiffs describe as Jewel's "outrageous" conduct in fabricating an oral reopener. I agree with Jewel, and with the majority of courts that have addressed the question, Annot., Award of Punitive Damages Under § 301 of

797 F. Supp. 598

Labor Management Relations Act, 71 A.L.R.Fed. 221 (1985), that punitive damages are not available in a section 301 suit. The Supreme Court has so held with regard to union defendants sued for breach of their duty of fair representation, International Brotherhood of Electrical Workers v. Foust, 442 U.S. 42, 99 S.Ct. 2121, 60 L.Ed.2d 698 (1979), and it would be unreasonable to distinguish between union and employer defendants in this regard, or between suits for breach of contract and suits for breach of the duty of fair representation:

a. When the Taft-Hartley Act was passed in 1947, punitive damages for breach of contract were virtually, perhaps completely, unknown. Section 301 of the Act does not create a complete remedial scheme. Essentially it just makes collective bargaining agreements actionable, and leaves the incidents of the 301 suits — statute of limitations, other defenses, third-party beneficiaries, parol evidence rule, and all the rest, including remedy — to be worked out by the courts in the exercise of their ill-defined but adequate power to make federal common law. In interpreting other statutes that create a federal right without specifying the details of remedy and procedure, notably 42 U.S.C. § 1983, a statute first passed in 1871, the Supreme Court has looked to the common law at the time of enactment. Smith v. Wade, 461 U.S. 30, 103 S.Ct. 1625, 75 L.Ed.2d 632 (1983). If that approach is taken here, it becomes evident that punitive damages are unavailable in section 301 suits.

b. Punitive damages are of course far more common in tort cases than in contract cases. Breach of the duty of fair representation is a form of breach of fiduciary duty, and is therefore a tort. Since punitive damages are not available for breach of the duty of fair representation (Foust), they surely are not available for a simple breach of contract.

c. Partly in explanation of Foust, partly related to the point just made, federal policy aims to promote

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