Rodriquez v. Bar-S Food Co.

• Decision Date: 01 June 1982
• Docket Number: Civ. A. No. 81-K-2153.
• Parties: Joseph V. RODRIQUEZ, Frank J. Martinez, Clarence A. Weigand, Susie Reyes, Audrey R. McConnell, and Eli Taylor, Plaintiffs, v. BAR-S FOOD COMPANY, Cudahy Company, and General Host Corporation, Defendants.
• Court: U.S. District Court — District of Colorado

539 F. Supp. 710

Joseph V. RODRIQUEZ, Frank J. Martinez, Clarence A. Weigand, Susie Reyes, Audrey R. McConnell, and Eli Taylor, Plaintiffs, v. BAR-S FOOD COMPANY, Cudahy Company, and General Host Corporation, Defendants.

Civ. A. No. 81-K-2153.

United States District Court, D. Colorado.

June 1, 1982.

COPYRIGHT MATERIAL OMITTED

Martin D. Buckley, Hornbein, MacDonald, Fattor & Buckley, Denver, Colo., for plaintiffs.

E. Lee Dale, Sherman & Howard, Denver, Colo., for Cudahy & General Host.

William G. Imig, Owen C. Rouse, Ireland, Stapleton & Pryor, Denver, Colo., and Warren C. Ogden, Josephine B. Vestal, Williams, Lanza, Kastner & Gibbs, Mercer Island, Wash., for Bar-S.

MEMORANDUM OPINION AND ORDER

KANE, District Judge.

This dispute arises from a collective bargaining agreement between the United Food and Commercial Workers International Union, AFL-CIO, of which the plaintiffs are members of Local P-85, and defendant Cudahy Company. The complaint, which was filed in Colorado state court, alleges that defendant General Host Corporation and its wholly-owned subsidiary, Cudahy, conspired improperly to interfere with the collective bargaining agreement of which the plaintiffs are third-party beneficiaries. The complaint alleges that Cudahy and General Host, in furtherance of this alleged conspiracy, incorporated defendant Bar-S Food Company in order to allow Cudahy to renege its agreement with the union and to allow Bar-S to take over Cudahy's Denver operations without any substantial changes other than replacing the plaintiffs by other, lower paid employees. The plaintiffs bring this action on behalf of themselves and all others similarly situated.¹ The defendants removed the case to this court. Subject-matter jurisdiction is based solely on diversity of citizenship, 28 U.S.C. section 1332.

There have been two other proceedings involving the present controversy. On August 22, 1981 the union filed a charge against Cudahy with the National Labor Relations Board, charging that the defendants were engaging in a scheme to repudiate the collective bargaining agreement, in violation of section 8(a)(1), (3) and (5) of the National Labor Relations Act, 29 U.S.C. section 158(a)(1), (3) and (5). On October 13, 1981 an acting regional director of the NLRB, after investigating the charge, refused to file a complaint. On administrative appeal, the NLRB Office of the General Counsel affirmed this decision on April 8, 1982. Both offices found that the transfer of operations from Cudahy to Bar-S was legitimate, and was not a violation of the National Labor Relations Act.²

On August 27, 1981 the union filed a complaint in this court against Cudahy, seeking a temporary restraining order and injunction barring the Cudahy to Bar-S transfer. After Bar-S intervened in the case, Judge Finesilver denied the motion for a temporary restraining order, and then, upon the plaintiff's request, dismissed the case, pursuant to F.R.Civ.P. 41(a)(1). United Food and Commercial Workers, Local P-85 v. Cudahy Co., Civil Action No. 81-F-1525 (D.Colo. Aug. 27, 1981 and Nov. 6, 1981).

The defendants all have moved to dismiss the present case. They argue that this court lacks subject-matter jurisdiction, because of the exclusive jurisdiction of the NLRB and because of the plaintiffs failure to exhaust contractual remedies, and that the complaint fails to state a claim. I grant the motion to dismiss for lack of subject-matter jurisdiction as applied to defendant Cudahy and deny it as to the other two defendants. I grant the motion to dismiss for failure to state a claim in part and deny it in part.

I. SUBJECT-MATTER JURISDICTION

A. EXCLUSIVE NLRB JURISDICTION

Because subject-matter jurisdiction in this case is based solely on diversity of citizenship, this court's jurisdiction is no greater than that of the state courts. See Guaranty Trust Co. v. York, 326 U.S. 99, 108-09, 65 S.Ct. 1464, 1469, 89 L.Ed. 2079 (1945). Accordingly, I must determine whether state courts would have jurisdiction to hear this case, or whether the controversy is one over which the National Labor Relations Board has exclusive jurisdiction.³

Ever since congress enacted the National Labor Relations Act in 1935 and amended it with the Labor Management Relations Act in 1947, the U. S. Supreme Court has grappled with the problem of state court jurisdiction in labor cases. As the court noted in Garner v. Teamsters, Local 776, 346 U.S. 485, 488, 74 S.Ct. 161, 98 L.Ed. 228 (1953):

The national Labor Management Relations Act, as we have pointed out, leaves much to the states, though Congress has refrained from telling us how much.

(footnote omitted.) In San Diego Building Trades Council v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959), the court stated general preemption rules, both for cases clearly subject to sections 7 and 8 of the National Labor Relations Act, 29 U.S.C. sections 157, 158, and for cases that might be covered by those statutes:

When it is clear or may fairly be assumed that the activities which a State purports to regulate are protected by section 7 of the National Labor Relations Act, or constitute an unfair labor practice under section 8, due regard for the federal enactment requires that state jurisdiction must yield....

At times it has not been clear whether the particular activity regulated by the States was governed by section 7 or section 8 or was, perhaps, outside both these sections. But courts are not primary tribunals to adjudicate such issues. It is essential to the administration of the Act that these determinations be left in the first instance to the National Labor Relations Board....

... When an activity is arguably subject to section 7 or section 8 of the Act, the States as well as the federal courts must defer to the exclusive competence of the National Labor Relations Board if the danger of state interference with national policy is to be averted.

Id. at 244-45, 79 S.Ct. at 779.

The governing consideration is that to allow the States to control activities that are potentially subject to federal regulation involves too great a danger of conflict with national labor policy.

Id. at 246, 79 S.Ct. at 780 (footnote omitted).

Even the States' salutary effort to redress private wrongs or grant compensation for past harm cannot be exerted to regulate activities that are potentially subject to the exclusive federal regulatory scheme.

Id. at 247, 79 S.Ct. at 780 (citation omitted).

Although the "arguably subject to" language of Garmon might infer a relatively broad scope of federal preemption, later Supreme Court cases have made it clear that the scope of preemption is actually somewhat narrower. In Farmer v. United Brotherhood of Carpenters, Local 25, 430 U.S. 290, 300-01, 97 S.Ct. 1056, 1063-64, 51 L.Ed.2d 338 (1977), the court summarized the case law on NLRB preemption:

... the cases reflect a balanced inquiry into such factors as the nature of the federal and state interests in regulation and the potential for interference with federal regulation.... our cases `demonstrate that the decision to pre-empt federal and state court jurisdiction over a given class of cases must depend upon the nature of the particular interests being asserted and the effect upon the administration of national labor policies of concurrent judicial and administrative remedies.'

(footnote and citation omitted.) One year later, in Sears, Roebuck & Co. v. San Diego County District Council of Carpenters, 436 U.S. 180, 197, 98 S.Ct. 1745, 1757, 56 L.Ed.2d 209 (1978), the court attempted to state a general rule on preemption in labor cases:

The critical inquiry, therefore, is not whether the State is enforcing a law relating specifically to labor relations or one of general applicability but whether the controversy presented to the state court is identical to ... or different from ... that which could have been, but was not, presented to the Labor Board. For it is only in the former situation that a state court's exercise of jurisdiction necessarily involves a risk of interference with the unfair labor practice jurisdiction of the Board which the arguably prohibited branch of the Garmon doctrine was designed to avoid.

(footnote omitted.)⁴

Although the latter quote attempts to state a general rule, it is often difficult to determine whether a particular controversy is identical to or different from one that could have been presented to the NLRB. It is thus necessary to examine the facts of past cases in order to delineate better the doctrine. For example, a state court may not hear a tort claim alleging that a union's peaceful picketing violates state law where the challenged activity is a labor practice within the scope of sections 7 and 8 of the National Labor Relations Act. San Diego Building Trades Council v. Garmon, 359 U.S. 236, 245-48, 79 S.Ct. 773, 779-81, 3 L.Ed.2d 775 (1959). On the other hand, a state court may hear a complaint seeking to enjoin a union's peaceful picketing if the dispute mainly involves the state's trespass laws and if the risk of interference with the federal scheme is small. Sears, Roebuck & Co. v. Carpenters, 436 U.S. at 190-208, 98 S.Ct. at 1754-63. Likewise, a state court may not hear a union member's claim that his union excluded him in violation of a union security clause, because of the deep involvement of federal labor law. Amalgamated Association of Street Coach Employees v. Lockridge, 403 U.S. 274, 291-97, 91 S.Ct. 1909, 1920-23, 29 L.Ed.2d 473 (1971). A state court may, however, hear a wrongful-exclusion case between a member and his union if the claim involves only state law. International Association of Machinists v. Gonzales, 356 U.S. 617, 78 S.Ct. 923, 2 L.Ed.2d 1018 (1958). The Supreme Court has also recognized the state courts may hear various tort claims that are traditionally matters of state law, where the risk of interference with the federal regulatory scheme is minimal. See, e.g., Linn v. United Plant...