PREMIER ELEC. CONST. v. INTERNATIONAL BROTH. OF ELECTRICAL WORKERS

• Citation: 627 F. Supp. 957
• Decision Date: 01 November 1985
• Docket Number: No. 80C4976.,80C4976.
• Parties: PREMIER ELECTRICAL CONSTRUCTION CO., Plaintiff, v. INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, et al., Defendants.
• Court: U.S. District Court — Northern District of Illinois

627 F. Supp. 957

PREMIER ELECTRICAL CONSTRUCTION CO., Plaintiff, v. INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, et al., Defendants.

No. 80C4976.

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

November 1, 1985.

Jonathan G. Bunge, Steven H. Adelman, Michael R. Flaher, Carol L. McCully, Keck Mahin & Cate, Chicago, Ill., Peter H. Gunst, Frank, Bernstein, Conaway & Goldman, Baltimore, Md., for plaintiff.

J. Robert Murphy, Aurora, Ill., for defendants Local Union No. 461.

Theophil C. Kammhol, Vedder, Price, Kauf & Kammholz, Arthur B. Smith, Jr., Marian C. Haney, Chicago, Ill., for defendants.

Edwin H. Benn, Asher, Goodstein, Pavalon, Gittler, Greenfield & Segall, Chicago, Ill., for Local No. 176.

MEMORANDUM OPINION AND ORDER

ANN C. WILLIAMS, District Judge.

This private antitrust action for damages and declaratory and injunctive relief is brought under Section 1 of the Sherman Antitrust Act, 15 U.S.C. Section 1. Presently before the court are various motions by plaintiff and defendants. An understanding of the contentions of the parties requires a review of the factual background of the case.

FACTUAL BACKGROUND

Plaintiff, Premier Electrical Construction Co. ("Premier"), performs electrical construction work and otherwise transacts business in the electrical construction industry. Premier employs electrical construction workers who are members of, and represented by, defendant International Brotherhood of Electrical Workers ("IBEW") and its affiliated local unions.

Defendant IBEW is an unincorporated labor organization whose local unions represent electrical workers throughout the United States. Defendant Charles H. Dillard was International President of IBEW at all times relevant to Premier's complaint.

Defendant National Electrical Contractors Association, Incorporated ("NECA") is a national employers' trade association whose members perform electrical construction work. NECA has numerous affiliated local chapters that have been assigned specific territories throughout the United States. NECA and its local chapters provide various services to its member employers and represent them in collective bargaining with IBEW and its local unions. Premier is not a member of NECA. Defendant Robert L. Higgins was, at all relevant times, Executive Vice President of NECA.

Defendants Local Union # 461 ("Local 461"), Local Union # 176 ("Local 176"), and Local Union # 701 ("Local 701") are all local unions, subordinate to IBEW, with their principal places of business in Illinois. The remaining defendants are the trustees of the National Electrical Industry Fund ("NEIF"), which is more fully described below.

Plaintiff's complaint is directed at Article Six of the 1976 National Agreement between NECA and IBEW. Article Six established the National Electrical Industry Fund, or NEIF, which is at the heart of Premier's antitrust allegations. The NEIF is an industry fund created primarily to cover NECA's cost of administering labor agreements with IBEW and its costs of rendering other services to the electrical contracting industry. Article Six requires that all construction agreements between IBEW unions and electrical contractors contain a clause by which the employer agrees to contribute 1% of the employer's gross payroll to the NEIF. This clause must be included in each agreement with an electrical contractor employer, even if the employer is not a member of NECA. Premier alleges that, in order to pay for NECA's services, prior to October 1976 NECA members paid dues to the association. Since these dues increased NECA members' cost of doing business, non-NECA members could offer lower bids on construction contracts. Premier claims that NECA sought to eliminate this competitive advantage, enjoyed by non-NECA employers, by creating the NEIF. Premier further contends that, by requiring a uniform 1% contribution to a fund to support NECA services, defendants entered into a combination and conspiracy in unreasonable restraint of trade in violation of Section 1 of the Sherman Act, 15 U.S.C. Section 1.

Plaintiff's present motion seeks to take advantage of the ruling of Judge Murray in National Construction Association, et al., v. National Electrical Contractors Association, et al., 498 F.Supp. 510 (D.Md.1980) (the "Maryland litigation"). The pertinent details of that litigation are as follows. On August 8, 1977, IBEW, NECA, and various officials and members of NECA were sued in the United States District Court for the District of Maryland in a nationwide class-action antitrust suit. At issue was the legality of Article Six of the National Agreement. The named plaintiffs were various electrical contractors as well as the National Contractors Association, an association similar in function to NECA. By definition, Premier was a member of the class.

On September 8, 1980, Judge Murray awarded summary judgment to the plaintiffs in the Maryland litigation. In his ruling, Judge Murray declared that Article Six was a price-fixing agreement that constituted a per se violation of Section 1 of the Sherman Act. He also certified a plaintiff class and enjoined the defendants from enforcing the NEIF provision of Article Six. The Fourth Circuit Court of Appeals upheld the district court's ruling. National Electrical Contractors Association v. National Contractors Association, 678 F.2d 492 (4th Cir.1982). Petitions for certiorari were filed with the Supreme Court in early 1983, but were later withdrawn subsequent to a settlement agreement among the parties. The settlement agreement was approved by Judge Murray on July 25, 1983, after notice to class members and a hearing.

On September 16, 1980, eight days after the entry of summary judgment in the Maryland litigation, Premier filed the present action in this court. Its complaint is virtually identical to that in the Maryland litigation, with the only substantive difference being that the local union defendants are not the same as in the Maryland case.

On October 2, 1980, Premier appeared, through counsel, in the Maryland litigation to announce its intention to consolidate its action with the Maryland action. However, no further steps toward consolidation were taken by Premier until February 3, 1982, when Judge Getzendanner of this court ordered the parties to show cause why the case should not be transferred to Maryland pursuant to 28 U.S.C. § 1407. Premier then petitioned the Panel on Multidistrict Litigation for pretrial consolidation of its case with the Maryland litigation, but transfer was denied.

Premier did not further participate in the Maryland litigation until March 31, 1983. At that time, Premier asked Judge Murray to suspend notification of the settlement to class members. Premier wanted the suspension so that a subclass could be carved out. This subclass would consist of electrical contractors who had been sued, threatened with suit, or subject to any other collection efforts by the defendants, and who thereby had incurred costs and expenses in connection with those collection efforts. Judge Murray, however, denied Premier's motion. Sometime after this, Premier opted out of the Maryland class and continued its individual litigation in this court.

PREMIER'S MOTION FOR PARTIAL SUMMARY JUDGMENT

Premier now seeks an order awarding it summary judgment on the issue of whether the Maryland defendants violated Section 1 of the Sherman Act.¹ Premier contends that the Maryland defendants should be collaterally estopped from relitigating the legal conclusions reached in the Maryland case.

The propriety of applying collateral estoppel to preclude a defendant from relitigating issues determined against it in prior litigation was first examined by the Supreme Court in Parkland Hosiery Co., Inc. v. Shore, 439 U.S. 322, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979). There the Court held that courts have discretion to apply collateral estoppel offensively, so long as it would be fair to the defendant and promote judicial economy. Id. 439 U.S. at 331, 99 S.Ct. at 652. In determining the question of fairness, a court should consider: (1) whether the "plaintiff could easily have joined the earlier action"; (2) whether the defendant could have foreseen a later use of offensive collateral estoppel and therefore had "every incentive to litigate the original action fully and vigorously"; (3) whether "the judgment relied upon as a basis for estoppel is itself inconsistent with one or more previous judgments in favor of the defendant"; and (4) whether "the second action affords the defendant procedural opportunities unavailable in the first action that could readily cause a different result." Parkland Hosiery, 439 U.S. at 330-332, 99 S.Ct. at 651-652.

The parties here do not quarrel over the last three considerations, but vigorously debate the first. Since this is so, and the last three considerations do appear to weigh in favor of estoppel, the court will address only the question whether Premier "could have easily joined" the Maryland litigation.

Premier argues that it could not have easily joined the Maryland action because the Maryland plaintiffs were not adequately representing its interests in respect to damages. One element of the damages it seeks in the present action is the costs it incurred in defending lawsuits brought by defendants to enforce Article Six. Premier states that the Maryland plaintiffs made a tactical decision not to pursue this kind of damage claim. Premier further states that it moved to intervene to protect its interest, along with the interest of others, in pursuing the collection costs claims, but its motion to intervene was denied.

IBEW responds that, as evidenced by statements made in Premier's motion to intervene in the Maryland action, Premier discovered as early as the Spring of 1982 that its interests were not being adequately represented. Premier does not deny that it made this discovery in the Spring of 1982. Nonetheless, Premier waited until March of 1983...