Porter v. Atchison, Topeka and Santa Fe Ry. Co.

• Decision Date: 19 March 1991
• Docket Number: Civ. A. No. 4-90-416-A.
• Citation: 768 F. Supp. 571
• Parties: Judy M. PORTER, et al., Plaintiffs, v. The ATCHISON, TOPEKA and SANTA FE RAILWAY COMPANY, et al., Defendants.
• Court: U.S. District Court — Northern District of Texas

768 F. Supp. 571

Judy M. PORTER, et al., Plaintiffs, v. The ATCHISON, TOPEKA and SANTA FE RAILWAY COMPANY, et al., Defendants.

Civ. A. No. 4-90-416-A.

United States District Court, N.D. Texas, Fort Worth Division.

March 19, 1991.

Gregory James Schroedter, Charles Gregory Albert, Bell Boyd & Lloyd, Chicago, Ill., Roger J. Thomas, Jeffrey George Shorba, Patricia N. Harris, Bell Boyd & Lloyd, Washington, D.C., and Dennis Dean Gibson, Bell Boyd & Lloyd, Dallas, Tex., for plaintiffs.

Donald Edward Herrmann, Kelly Hart & Hallman, Fort Worth, Tex., George P. Parker, Jr., Matthews & Branscomb, San Antonio, Tex., and Mark A. Casciari and J. Stephen Poor, Seyfarth Shaw Fairweather & Geraldson, Chicago, Ill., for defendants.

MEMORANDUM OPINION AND ORDER

McBRYDE, District Judge.

Came on to be considered the motion of defendant, The Atchison, Topeka and Santa Fe Railway Company ("Santa Fe"),¹ to dismiss or, in the alternative, for summary judgment. Having considered the motion and all matters proper to be considered in connection therewith, including, with consent of the parties, evidence received and admissions made at the hearing on class certification held on March 7, 1991, the court has concluded that plaintiffs' claims should be dismissed for lack of subject matter jurisdiction.²

Background

On June 5, 1990, thirty-four named plaintiffs, "for and in behalf of themselves and all others similarly situated," filed this action against Santa Fe. Santa Fe is an interstate carrier subject to the Railway Labor Act, 45 U.S.C. § 151 et seq. ("RLA"). At all times relevant to this action, Santa Fe and labor unions that represent shop craft and laborer employees of Santa Fe, including plaintiffs when they were in the employ of Santa Fe, have been parties to a multi-employer, multi-union collective bargaining agreement known as the "1964 Shop Crafts Agreement" ("Agreement"). The Agreement provides, inter alia, for protective benefits for Santa Fe employees. Plaintiffs allege that the protective benefits part of the Agreement is subject to the Employment Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq.

Plaintiffs, as former employees of Santa Fe, claim that since at least June 5, 1986, they were displaced and deprived of employment in violation of the Agreement. Complaint, ¶¶ 14-24. Plaintiffs further contend that, as a result of an alleged scheme³ by Santa Fe to interfere with and deprive its employees of their rights to protective benefits granted by the Agreement, they have been deprived of benefits to which they are entitled under the Agreement. Id. Plaintiffs assert three theories. First, plaintiffs contend that they "have not been granted the protective benefits to which they are entitled under the Agreement and seek to recover those benefits under the authority of § 502 of ERISA, 29 U.S.C. § 1132." Id. at ¶¶ 28-30. Second, plaintiffs claim that "Santa Fe has breached its fiduciary duties" owed to them under § 404 of ERISA, 29 U.S.C. § 1104. Id. at ¶¶ 31-32. Third, plaintiffs maintain that "Santa Fe has unlawfully interfered with the protected right of the named plaintiffs and the class they seek to represent to attain the protective benefits to which they are entitled under the Agreement," in violation of § 510 of ERISA, 29 U.S.C. § 1140. Id. at ¶¶ 33-35. Though couched differently from each other, each of the theories is disclosed by the entire text of the pleading and the record of this action to be nothing other than a complaint that Santa Fe breached the protective benefits section of the Agreement.

In ruling on a motion to dismiss for lack of subject matter jurisdiction, the allegations of the complaint should be construed favorably to the pleader. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974). However, the court is not limited to a consideration of the allegations of the complaint in deciding whether subject matter jurisdiction exists. See Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir.1981).

Because of the dismissal, the court is ordering the class certification issues that were considered at the March 7, 1991, hearing are not reached for resolution.

The Railway Labor Act

The provisions of the RLA control the disposition the court is making of this action. Mandatory procedures for the resolution of labor disputes within its coverage are established by the RLA. Consolidated Rail Corp. v. Railway Labor Executives' Ass'n, 491 U.S. 299, 303-04, 109 S.Ct. 2477, 2479-81, 105 L.Ed.2d 250 (1989); Bonin v. American Airlines, Inc., 621 F.2d 635, 637 (5th Cir.1980). As the Fifth Circuit explained in Bonin, those labor disputes are of two kinds, delineated by the Supreme Court as "major" and "minor"⁴:

A major dispute concerns the formation of a collective bargaining agreement or the substantial alteration or amendment of an already existing collective bargaining agreement. A minor dispute, on the other hand, involves the interpretation of an existing labor management contract.

Bonin, 621 F.2d at 637. A minor dispute is subject to compulsory and binding arbitration⁵ before the National Railroad Adjustment Board,⁶ or before an adjustment board⁷ established by the employer and the unions representing the employees. Consolidated Rail, 491 U.S. at 303-04, 109 S.Ct. at 2479-81; Bonin, 621 F.2d at 637. Pursuant to § 3 Second of the RLA, Article VI § 1 of the Agreement established a "Shop Craft Board of Adjustment," known as "Special Board of Adjustment No. 570," and provides that the board "shall have exclusive authority to resolve disputes arising under the terms of Articles I ... of the Agreement." Motion to Dismiss, ¶ 11. Such boards have "exclusive primary jurisdiction." Pennsylvania R.R. v. Day, 360 U.S. 548, 552, 79 S.Ct. 1322, 1324-25, 3 L.Ed.2d 1422 (1959).⁸

Notwithstanding ERISA's express provision providing access to federal courts,⁹ ERISA was not intended to, nor did it, preempt the mandatory arbitration provisions of the RLA. Bonin, 621 F.2d at 638 (citing Air Line Pilots Ass'n v. Northwest Airlines, Inc., 444 F.Supp. 1138, 1141 (D.D.C.1978), aff'd in part, rev'd in part, 627 F.2d 272 (D.C.Cir.1980)); Beard v. Carrollton R.R., 893 F.2d 117, 123 (6th Cir. 1989); Air Line Pilots Ass'n v. Northwest Airlines, Inc., 627 F.2d 272, 275-76 (D.C.Cir.1980); De La Rosa Sanchez v. Eastern Airlines, Inc., 574 F.2d 29, 33 (1st Cir.1978). This conclusion is corroborated by the express language of ERISA stating that "nothing in this chapter shall be construed to alter, amend, modify, invalidate, impair, or supersede any law of the United States...." 29 U.S.C. § 1144(d).¹⁰ Among the laws in effect at the time of the previously mentioned ERISA enactment was the RLA. ERISA claims that turn on the availability of benefits under the collective bargaining agreement are claims that fall within the exclusive jurisdiction created pursuant to the RLA. Beard, 893 F.2d at 123; accord Bonin, 621 F.2d at 639.

In the instant case, the merit of all of plaintiffs' claims depends on the interpretation of the Agreement. Plaintiffs' entitlement, vel non, to protective benefits under the Agreement is determined by the provisions of Article I, §§ 2 and 3.¹¹ This determination involves a "minor dispute" and, therefore, the resolution is within the exclusive primary jurisdiction of the boards established under the RLA. The outcome of the entire case of plaintiffs turns on this determination.

Exhaustion of Administrative Remedies Under ERISA

If the court were to assume, arguendo, that plaintiffs' claims are not subject to the mandatory arbitration requirement of the RLA, the court would, nevertheless, choose not to exercise subject matter jurisdiction because of plaintiffs' failure to exhaust their administrative remedies. Although the text of ERISA does not expressly mention the exhaustion doctrine, it is well-established that federal courts have the authority to require exhaustion of remedies in suits arising under ERISA.¹² See Simmons v. Willcox, 911 F.2d 1077, 1081 (5th Cir.1990); Meza v. General Battery Corp., 908 F.2d 1262, 1279 (5th Cir.1990); Denton v. First National Bank of Waco, Texas, 765 F.2d 1295, 1301 (5th Cir.1985); Mason v. Continental Group, Inc., 763 F.2d 1219, 1226-27 (11th Cir.1985), cert. denied, 474 U.S. 1087, 106 S.Ct. 863, 88 L.Ed.2d 902 (1986); Kross v. Western Elec. Co., 701 F.2d 1238, 1244, 1246 (7th Cir. 1983); Amato v. Bernard, 618 F.2d 559, 566-68 (9th Cir.1980). Indeed, sound federal policy requires the application of the exhaustion requirement as to ERISA claims. Mason, 763 F.2d at 1227; Amato, 618 F.2d at 567. The decision as to whether to require a claimant to exhaust administrative remedies prior to bringing suit is a matter within the trial court's discretion. Kross, 701 F.2d at 1244. As stated by the Fifth Circuit:

The primary purposes of the exhaustion requirement are to: (1) uphold Congress' desire that ERISA trustees be responsible for their actions, not the federal courts; (2) provide a sufficiently clear record of administrative action if litigation should ensue; and (3) assure that any judicial review of fiduciary action (or inaction) is made under the arbitrary and capricious standard, not de novo.

Denton, 765 F.2d at 1300.

ERISA itself requires covered benefit plans to provide administrative remedies for individuals whose claims for benefits have been denied. See § 503 of ERISA, 29 U.S.C. § 1133. In the instant case, Article VI of the Agreement establishes a grievance and arbitration procedure for handling disputes that arise under Article I — Employee Protection. Furthermore, under Article VI § 9 of the Agreement, if a claim or grievance is denied, an employee or the union, on behalf of the employee, may appeal the denial to the Shop Craft Special Board of Adjustment. Motion to Dismiss, ¶¶ 13-14. In the case sub judice, it is undisputed that several of the named plaintiffs have grievances currently pending. Plaintiffs' Brief in Opposition to...