Sacramento Valley Chapter v. INTERN. BRO. OF ELEC.

• Decision Date: 15 April 1986
• Docket Number: Civ. No. S-81-480 LKK.
• Citation: 632 F. Supp. 1403
• Court: U.S. District Court — Eastern District of California
• Parties: SACRAMENTO VALLEY CHAPTER OF the NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION (NECA) on behalf of itself, its members and contractors who have signed Letters of Assent or Given Powers of Attorneys to NECA, and all those similarly situated, Plaintiffs, v. INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS (IBEW) — International Office (I-O), and Local 340 of the IBEW, Defendants. INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL UNION 340, Counter-claimant, v. SACRAMENTO VALLEY CHAPTER OF the NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION (NECA); Cyril D. Conzatti, dba Arden Electric; Beard Corporation; Four Star Electric; Grason Electric Company; H & D Electric, Inc.; Rex Moore Electrical Co., Inc.; Myers Electric, Inc.; Harold E. Nutter, Inc.; Amos J. Walker, Inc.; Woodland Electric Co., Inc; and National Association of Independent Unions, Counter-defendants.

632 F. Supp. 1403

SACRAMENTO VALLEY CHAPTER OF the NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION (NECA) on behalf of itself, its members and contractors who have signed Letters of Assent or Given Powers of Attorneys to NECA, and all those similarly situated, Plaintiffs, v. INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS (IBEW) — International Office (I-O), and Local 340 of the IBEW, Defendants.

INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL UNION 340, Counter-claimant, v. SACRAMENTO VALLEY CHAPTER OF the NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION (NECA); Cyril D. Conzatti, dba Arden Electric; Beard Corporation; Four Star Electric; Grason Electric Company; H & D Electric, Inc.; Rex Moore Electrical Co., Inc.; Myers Electric, Inc.; Harold E. Nutter, Inc.; Amos J. Walker, Inc.; Woodland Electric Co., Inc; and National Association of Independent Unions, Counter-defendants.

Civ. No. S-81-480 LKK.

United States District Court, E.D. California.

April 15, 1986.

Mark R. Thierman, Thierman, Simpson & Cook, San Francisco, Cal., for plaintiff/counter-defendant Sacramento Valley Chapter of Nat. Elec. Contractors Ass'n (NECA).

Robert E. Jesinger, Wylie, Blunt, McBride & Jesinger, San Jose, Cal., for defendant/counter-claimant IBEW Local 340.

Peter Nussbaum, Neyhart, Anderson, Nussbaum, Reilly & Freitas, San Francisco, Cal., for defendant Intern. Broth. of Elec. Workers (IBEW).

Phillip Harris, O. Brandt Caudill, Jr., Maurer, Higginbotham & Harris, Costa Mesa, Cal., for counter-defendant Nat. Ass'n of Independent Unions.

MEMORANDUM AND ORDER

KARLTON, Chief Judge.

The Sacramento Valley Chapter of the National Electrical Contractors Association (NECA) and several of its employer members (employers) filed a five-count complaint under §§ 301 and 303 of the Labor Management Relations Act (LMRA), 29 U.S.C. §§ 185 and 187, seeking damages from the International Brotherhood of Electrical Workers (IBEW), and its Local 340. In response, Local 340 filed a five-count counterclaim against both the plaintiffs and a separate counter-defendant, the National Association of Independent Unions (NAIU). It alleged violation of §§ 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15 and 26, and seeks damages and injunctive relief for alleged violations of §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2.

This opinion considers the motion to dismiss the Local's counterclaim. The crossmotions for summary judgment relative to plaintiffs' complaint will be addressed in a separate opinion.

I THE ALLEGATIONS OF THE COUNTERCLAIM

The counterclaim alleges that since 1942 Local 340 and NECA have been parties to successive collective bargaining agreements ("CBA's") or master labor agreements ("MLA's"). Counterclaim at ¶ 8. At the end of February, 1981, Local 340 and NECA commenced negotiations relative to a new MLA to replace the one due to terminate at the end of March, 1981. ¶ 9. Prior to June, 1981, most journeymen and apprentice electricians in the Sacramento area were represented by Local 340 and the prevailing wage rate paid to electricians in the Sacramento area was the rate paid to Local 340 members pursuant to the existing MLA. ¶ 10.

A. First Claim (Conspiracy to Deprive Union Contractors and Union of Business)

Local 340 alleges that in September, 1981, NECA and its employer members entered into a conspiracy to fix wages and other benefits at levels below those paid by employers who had CBA's with Local 340 and below the market level. ¶ 11. As a result of this conspiracy, the percentage of the electrical construction industry work performed by contractors who had contracts with Local 340 was greatly reduced and Local 340 members lost jobs and benefits. ¶¶ 13-14. In attempting to monopolize the electrical contracting market, NECA and the employers "intended to directly reduce the income" of Local 340's members. Local 340 is suing not to recover lost profits to contractors, but only for lost wages and benefits to its members. ¶ 15.¹

B. Second Claim (Conspiracy to Interfere With Local 340's CBA)

Local 340's second claim is that NECA, the employers, and NAIU, as early as October, 1981, engaged in a combination or conspiracy to restrain interstate commerce by "coercing, threatening and restraining" individual electrical contractors and employers in the Sacramento area who were outside the NECA-NAIU bargaining unit and who were not bound to the NECA-NAIU contract from (1) entering into CBA's with Local 340, (2) employing electricians represented by Local 340, (3) providing wages, fringe benefits and conditions of employment other than those outlined in the NECA-NAIU agreement, and (4) entering into any CBA except the NECA-NAIU agreement. ¶ 16. As a result of this activity, Local 340 alleges it is and will be irreparably injured in its organizational and representational business activities. ¶ 17. Moreover, Local 340 alleges that this injury was a foreseeable consequence of the anti-trust violation purportedly alleged and was specifically intended by the counter-defendants. Id.

C. Third Claim (Conspiracy to Eliminate Local 340 as a Competitor in the Market for Labor Union Services)

Local 340's third claim is that counter-defendants have engaged in a conspiracy to eliminate Local 340 as a competitor in the market for labor union services and for CBA's in the Sacramento area by seeking to prevent Local 340 from representing or organizing the employees of the counter-defendant employers and other employers outside the NECA-NAIU bargaining unit. ¶ 18. As a result, Local 340 has been directly damaged in its loss of work opportunities, loss of revenues and dues, loss of union membership, loss of its share of CBA's, and a loss of bargaining and organizing opportunities in the Sacramento area. ¶ 19.

D. Fourth Claim (Conspiracy to Eliminate Non-NECA Contractors)

Local 340 alleges in the fourth claim that its members compete in the market for electrical construction in the Sacramento area. ¶ 20. By conspiring together to reduce the cost of labor, Local 340 alleges that NECA and the employers acted to drive non-NECA contractors from the electrical contracting industry in Sacramento and, as a result, the percentage of electrical construction work done by contractors who had contracts with Local 340 was greatly reduced. ¶¶ 22-23. Local 340 alleges that NECA and the employers intended to reduce the income of Local 340's members as well as the profit of those contractors who had contracted with Local 340. ¶ 25.

E. Fifth Claim (Conspiracy to Deprive Local 340's Members of Jobs)

The fifth claim alleges that Local 340's members compete in the market for electricians in Sacramento and that the above-described conspiracy deprived these members of jobs, reduced labor costs by preventing Local 340 from representing employees of the counter-defendant employers and resulted in lost jobs to members of Local 340, a result intended by all counter-defendants. ¶¶ 26-28.

II THE APPLICABLE STANDARDS

On a motion to dismiss under Fed.R. Civ.P. 12(b)(6), the allegations of the complaint must be accepted as true. Cruz v. Beto, 405 U.S. 319, 322, 92 S.Ct. 1079, 1081, 31 L.Ed.2d 263 (1972) (per curiam). The court is bound to give the plaintiffs the benefit of every reasonable inference to be drawn from the "well-pleaded" allegations of the complaint. Retail Clerks International Ass'n v. Schermerhorn, 373 U.S. 746, 753 n. 6, 83 S.Ct. 1461, 1465 n. 5, 10 L.Ed.2d 678 (1963). Thus, the plaintiffs need not necessarily plead a particular fact if that fact is a reasonable inference from facts properly alleged. See id. See also, Wheeldin v. Wheeler, 373 U.S. 647, 648, 83 S.Ct. 1441, 1443, 10 L.Ed.2d 605 (1963) (inferring fact from allegations of complaint). In general, the complaint is construed favorably to the pleader. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974).

So construed, the court may dismiss the complaint for failure to state a claim only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations. Hishon v. King & Spalding, 467 U.S. 69, 104 S.Ct. 2229, 2233, 81 L.Ed.2d 59 (1984), 81 L.Ed.2d 59, 65 (citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957)). In spite of the deference the court is bound to give to the plaintiffs' allegations, however, it is not proper for the court to assume that "the Union can prove facts which it has not alleged or that the defendants have violated the ... laws in ways that have not been alleged." Associated General Contractors v. California State Council of Carpenters, 459 U.S. 519, 526, 103 S.Ct. 897, 902, 74 L.Ed.2d 723 (1983).

III ANTITRUST STANDING

Counter-defendants NECA and the employers (hereinafter "NECA") argue that the first and third claims for relief must be dismissed because the Union lacks "antitrust standing." They also argue that the conduct alleged in all the counterclaims are protected by both the statutory and non-statutory exemption to the antitrust laws. Counter-defendant NAIU argues that all actions against it must be dismissed, first because the Union lacks "antitrust standing," and second, because it is entitled to the statutory and non-statutory labor law exemption. I turn first to the question of antitrust standing.

When Congress in § 303 of the LMRA, 29 U.S.C. § 187, provided that only employers could sue for tort-type injuries occasioned by unfair labor practices, it created a litigation nightmare for unions. Unions were forced to defend their conduct, without being able to counterclaim relative to the employer's conduct, no matter how egregious.² Such a litigation posture exposes only the union to substantial damages and, moreover, reduces the employer's incentive to settlement.³ In an effort to redress the litigation posture, unions have recently sought to find some ground upon which to cross-complain.⁴ Here, the Union seeks to cross-complain under antitrust...