Painters Dist. Council No. 2 v. Tiger Stripers

• Decision Date: 09 April 1984
• Docket Number: No. 83-2100C(1).,83-2100C(1).
• Citation: 582 F. Supp. 860
• Parties: PAINTERS DISTRICT COUNCIL NO. 2, et al., Plaintiffs, v. TIGER STRIPERS, INC., Defendant.
• Court: U.S. District Court — Eastern District of Missouri

582 F. Supp. 860

PAINTERS DISTRICT COUNCIL NO. 2, et al., Plaintiffs, v. TIGER STRIPERS, INC., Defendant.

No. 83-2100C(1).

United States District Court, E.D. Missouri, E.D.

April 9, 1984.

John A. Turcotte, Jr., St. Louis, Mo., for plaintiffs.

James M. Talent, St. Louis, Mo., for defendant.

MEMORANDUM

NANGLE, Chief Judge.

This case is now before this Court on defendant's motion to dismiss the claims of plaintiff Painters District Council No. 2 for lack of subject matter jurisdiction or, in the alternative, for failure to state a claim upon which relief can be granted. Defendant contends that plaintiff Painters District Council No. 2 (hereinafter "Painters") failed to exhaust mandatory contractual remedies.

Plaintiffs are Painters, a union representing employees of defendant, and the trustees of several trust funds. These trust funds are referred to, in plaintiffs' First Amended Complaint, as the Pension Trust, the Welfare Trust, the Vacation Trust, and the Apprenticeship Trust. Painters and defendant have been parties to collective bargaining contracts, including a contract that covered the period from January 2, 1980, to December 31, 1982, and a contract that is currently covering the period from January 27, 1983, to November 30, 1985. Plaintiffs' cause of action arises out of section 301 of the Labor Management Relations Act of 1947 (LMRA), 29 U.S.C. § 185, and section 515 of the Employee Retirement Income Security Act of 1974 (ERISA), as amended, 29 U.S.C. § 1145. Plaintiffs allege that defendant was and is obligated, under the aforesaid collective bargaining agreements, to make weekly reports on its employees, to contribute on a weekly basis to the aforesaid trusts, to remit union dues to Painters, and to pay employees covered by the collective bargaining agreements wages at the rate provided in said agreements. Plaintiffs further allege that defendant has not met said obligations and is therefore violating the collective bargaining agreements and § 515 of ERISA. Plaintiffs seek injunctive relief, liquidated damages, and an accounting to determine the amount of contributions that are due but unpaid.

Defendant moves to dismiss the claims of Painters on the ground that the complaint fails to allege exhaustion of contractual remedies. Defendant contends that the absence of this allegation deprives this Court of subject matter jurisdiction of Painter's breach of contract claim under § 301 or, in the alternative, that without an allegation that Painters exhausted the remedies contained in the collective bargaining agreements the complaint fails to state a claim upon which relief can be granted. Painters responds to defendant's motion with the following arguments: 1) the claim that Painters failed to exhaust contractual remedies is an affirmative defense and was waived by defendant's failure to include it in its answer; 2) if defendant's claim is properly assertable by way of a Rule 12(b) motion, then it was waived by defendant's failure to make said motion with or prior to filing its answer; 3) if defendant's claim was not waived, then it is without merit because the grievance procedure provided in the current contract is voluntary rather than mandatory; 4) even if the contractual remedies are mandatory, Painters is not required to exhaust said remedies because they only apply to "employees" and are not available to Painters; and 5) even if the contractual remedies are mandatory and are available to Painters, it would be inequitable to require Painters to exhaust said remedies because defendant will assert that Painters is time-barred by failing to utilize said remedies within the time specified in the contracts.

Preliminarily, it must be emphasized that defendant's motion is directed only at the claims of Painters. The Eighth Circuit, United States Court of Appeals, recently made it clear that pension plan trustees may sue an employer in federal court for breach of the collective bargaining contract and ERISA violations without first exhausting the contractual grievance procedures mandated by the collective bargaining agreement, where said trustees could not utilize said procedures. Robbins v. Prosser's Moving and Storage Co., 700 F.2d 433 (8th Cir. en banc), cert. granted, ___ U.S. ___, 104 S.Ct. 66, 78 L.Ed.2d 81 (1983). Accord, Trustees of Local 478 Trucking and Allied Industries Pension Fund v. Siemens Corp., 721 F.2d 451 (3d Cir.1983). Therefore, even though this Court grants defendant's motion, it does not affect the trustees' claims against defendant for contributions to their respective trusts.

The rule of law that defendant relies on is well-settled. A prerequisite to a federal court action under LMRA § 301 for breach of a collective bargaining contract is exhaustion of any mandatory contractual remedies, including arbitration. Clayton v. Automobile Workers, 451 U.S. 679, 686-89, 101 S.Ct. 2088, 2093-95, 68 L.Ed.2d 538 (1981); Republic Steel v. Maddox, 379 U.S. 650, 652-53, 85 S.Ct. 614, 616, 13 L.Ed.2d 580 (1965); Rainey v. Missouri Utilities Co., 596 F.2d 310 (8th Cir.1979); Mason v. Continental Group, Inc., 569 F.Supp. 1241 (N.D.Ala.1983); Bruce v. K-Mart Corp., 568 F.Supp. 378 (W.D.Ark.1983). This rule has its foundation in Congress' express approval of contract grievance procedures as the preferred method of settling disputes and in the belief that a contrary rule would threaten the viability of the agreed-upon procedures. Republic Steel, 379 U.S. at 652-53, 85 S.Ct. at 616. It also has its foundation in the federal labor policy favoring arbitration of labor disputes. Gateway Coal Co. v. United Mine Workers of America, 414 U.S. 368, 94 S.Ct. 629, 38 L.Ed.2d 583 (1974); United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960).

Initially, this Court must consider Painters' arguments that defendant waived the claim of failure to exhaust contractual remedies by defendant's failure to include said claim in defendant's answer or to raise it in a Rule 12(b) motion, Fed.R.Civ.P. 12(b), filed with or prior to defendant's answer. This Court rejects Painters' argument that failure to exhaust contractual remedies is merely an affirmative defense that is waived if not asserted in an answer. As stated, supra, exhaustion of mandatory contractual remedies is a prerequisite to the right of an employee, union, or employer to bring a federal court action under § 301 for breach of a collective bargaining contract. It is not clear whether the absence of this prerequisite should be characterized as a lack of subject matter jurisdiction or as a failure to state a claim upon which relief can be granted. It could be the former because § 301 is the basis of federal court jurisdiction in breach of labor contract cases. It could also be the latter because the claim does not lie unless this prerequisite is first satisfied. However, the proper nomenclature is not material to answering Painters' argument, as it is clear that failure to exhaust contractual remedies is not a mere affirmative defense. Moreover, defendant's failure to raise this in an earlier Rule 12(b) motion does not result in a waiver. Rule 12(h)(2) provides that the defense of failure to state a claim upon which relief can be granted can be made for the first time in a motion for judgment on the pleadings. Fed.R.Civ.P. 12(h)(2). This Court may properly construe defendant's motion as one for judgment on the pleadings. Fed.R.Civ.P. 12(c). Finally, Rule 12(h)(3) provides that a district court "shall dismiss the action" whenever it appears that subject matter jurisdiction is lacking. Fed.R.Civ.P. 12(h)(3). Accordingly, this Court may properly reach the merits of defendant's motion.

Painters argues that the contractual remedies provided in the current contract¹ are neither mandatory nor available to Painters. The contract provides, in pertinent part, as follows:

The Joint Board shall have the power to adjust and settle all disputes, including safety disputes, and grievances that may arise under the terms of this Agreement, to resolve and determine all conflicts between the parties concerning the interpretation of the provisions of this Agreement, and to make and promulgate such rules and regulations as may be deemed necessary to give force and effect to the intent, purpose and meaning of this Agreement. The Joint Board shall also have the power to demand of the parties hereto the production of all records deemed relevant by the Joint Trade Board to any case where an alleged violation of this Agreement is involved. With reference to the foregoing matters, the decisions, determinations, rulings and orders of a majority of the Joint Board shall be final and binding to the parties of this Agreement. Should any dispute or grievance arise under any of the terms of this Agreement, the aggrieved employee or employees must file the grievance in

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