Seawell v. Miller Brewing Co., C-82-1224-G.

• Decision Date: 12 December 1983
• Docket Number: No. C-82-1224-G.,C-82-1224-G.
• Citation: 576 F. Supp. 424
• Court: U.S. District Court — Middle District of North Carolina
• Parties: Steven Charles SEAWELL, et al., Plaintiffs, v. MILLER BREWING COMPANY, et al., Defendants.

576 F. Supp. 424

Steven Charles SEAWELL, et al., Plaintiffs, v. MILLER BREWING COMPANY, et al., Defendants.

No. C-82-1224-G.

United States District Court, M.D. North Carolina, Greensboro Division.

December 12, 1983.

Stephen S. Schmidly, Greensboro, N.C., for plaintiffs.

Jonathan R. Harkavy, Greensboro, N.C., Robert H. Stropp, Jr., Birmingham, Ala., Martin N. Erwin, Greensboro, N.C., Irvin B. Nathan, John Kronstadt, Thomas Mengler, Washington, D.C., Warren H. Dunn, William Schmus, James Koester, Milwaukee, Wis., for defendants.

MEMORANDUM OPINION

ERWIN, District Judge.

This civil action is brought pursuant to the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961-1968. Plaintiffs Wesley Phillips and Steven Seawell contend that a delay in their hiring in 1977 and 1978 was occasioned by an allegedly collusive agreement between defendants Miller Brewing Company (Miller) and United Steelworkers of America (Steelworkers) under which Miller, in hiring workers for its Eden, North Carolina brewery, favored applicants who supported the Steelworkers Union over others. Plaintiffs contend that the diminished seniority resulting from the delay in their hiring caused them to be among those subsequently furloughed. Plaintiffs seek injunctive relief and $75,000,000 in treble damages under RICO, 18 U.S.C. § 1964(c), on behalf of themselves and a proposed class of allegedly similarly situated employees.

The complaint in this action was filed on December 3, 1982. Defendants have since moved on several grounds to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief may be granted or, in the alternative, for summary judgment pursuant to Fed.R. Civ.P. 56. For the reasons set out below, defendants' motions for summary judgment are granted, and the action is dismissed.

Background¹

In the fall of 1977, Miller began to hire personnel to operate its new brewery at Eden, North Carolina. Soon thereafter, two unions — the Steelworkers and the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (Teamsters) — opened competing organizational campaigns to be elected as the exclusive bargaining agent of the employees Miller was about to hire.

As a result of the representational election in May 1978, the Teamsters were selected as the exclusive bargaining agent of the Miller employees at the Eden plant. Thereafter, the Teamsters and Miller entered into a collective bargaining agreement effective September 1978. The contract established the basis for seniority for all covered employees at the Eden plant and provided that all grievances, including those relating to seniority and layoffs, would be subject to binding, mandatory arbitration.

Plaintiffs applied for positions at the Eden plant in October 1977 and were hired by Miller in December 1978. Their seniority was established at that time in accordance with the collective bargaining agreement negotiated by the Teamsters. In January 1979, plaintiffs were among those laid off on the basis of seniority. They were reinstated later that month. Thereafter, they were laid off and reinstated on a number of occasions. The most recent layoff was in July 1982.

In the complaint, plaintiffs charged that the delay in their hiring from October 1977 to December 1978 resulted from the alleged agreement between the Steelworkers and Miller under which Miller would give preferential consideration to applicants favored by the Steelworkers. Plaintiffs contend that the resulting delay in their employment reduced their seniority positions at the brewery, and that their reduced seniority contributed to their subsequent layoffs.

The complaint proceeds under Section 1964(c) of RICO. That section provides that:

Any person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney's fee.

18 U.S.C. § 1964(c). Plaintiffs rely on Subsection (c) of Section 1962 which makes it illegal for anyone employed by or associated with an enterprise engaged in interstate commerce to participate "in the conduct of its affairs through a pattern of racketeering activity."² A "pattern of racketeering activity" includes any two acts of "racketeering activity" within a ten-year period. See 18 U.S.C. § 1961(5). The predicate acts constituting "racketeering activity" encompass numerous state and federal crimes.

In the instant case, the plaintiffs contend the defendant entered into an illegal agreement whereby the defendant Miller allowed the defendant Steelworkers to select the employees it would hire in violation of the criminal kickback, bribery, and corruption provision of the Taft-Hartley Act, 29 U.S.C. § 186.³

Defendants have presented several arguments supporting their motions for summary judgment. First, they contend that plaintiffs' claims are barred by the pertinent statute of limitations because plaintiffs knew or should have known of their alleged injury more than three years before they filed suit. Second, defendants argue that this court lacks subject-matter jurisdiction over the claims because they essentially involve allegations of unfair labor practices — discriminatory hiring — which are within the exclusive jurisdiction of the National Labor Relations Board and which were considered and dismissed by the NLRB. Third, they contend that plaintiffs' claims, involving questions of seniority and layoffs, are subject to the mandatory, final, and binding grievance and arbitration procedure set forth in the collective bargaining agreement entered into by Miller and the plaintiffs' union. Fourth, they argue that plaintiffs' allegations do not make out a claim under 29 U.S.C. § 186 (the RICO "predicate" offense on which plaintiffs rely), which is intended to prevent the corruption of labor unions through bribes and kickbacks and which, defendants contend, has no bearing on the alleged unfair hiring practices that the complaint describes. Finally, defendants argue that plaintiffs' claims are materially deficient under the RICO statute in several respects, including that plaintiffs were not injured "by reason of" the alleged RICO violations; defendants contend that the causal connection between the alleged violation and the alleged injury was broken by the collective bargaining agreement, which was negotiated by plaintiffs' union subsequent to defendants' alleged misconduct, and which governed layoffs and seniority rights.

It is well settled that on a motion for summary judgment, the moving party has the burden of establishing the absence of any genuine issue of material fact. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970). In addition, the court, in assessing whether the movant has carried this burden, must view the facts alleged in the light most favorable to the opposing party. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962).

Upon careful consideration of the allegations in this case and of the evidence presented supporting and opposing defendants' motions for summary judgment, this court concludes that defendants' motions must be granted. First, defendants have presented uncontroverted evidence that plaintiffs at the very least should have known of their cause of action more than three years before December 1982, when they filed the present suit; their claim is therefore time-barred. Second, the uncontroverted facts demonstrate the absence of the requisite causal connection between the injuries complained of and the RICO violations alleged.

Statute of Limitations

The RICO statute does not contain a statute of limitations governing private civil actions. Instead, under established principles, a statutory period for the federal cause of action is determined by reference to the law of the forum state: the correct period is the one applicable to state claims most closely analogous to those created by RICO. See Board of Regents v. Tomanio, 446 U.S. 478, 483-84, 100 S.Ct. 1790, 1794-95, 64 L.Ed.2d 440 (1980); Johnson v. Davis, 582 F.2d 1316 (4th Cir.1978); Gilbert v. Bagley, Current Fed.Sec.L.Rep. (CCH) ¶ 99,483 (M.D.N.C. Sept. 17, 1983). It is therefore necessary to look to North Carolina law for the appropriate limitations period.

The relevant state statute is N.C.Gen. Stat. § 1-52(2), which provides a three-year period within which a party may bring claims "upon a liability created by statute, either state or federal." The question of when the plaintiffs' action accrued (and, therefore, when the three-year limitations period began to run) is a matter of federal, not state, law. See Rawlings v. Ray, 312 U.S. 96, 98, 61 S.Ct. 473, 474, 85 L.Ed. 605 (1941); Gilbert v. Bagley, supra. Federal law, moreover, determines accrual by the date when plaintiffs knew or should have known of the alleged injuries underlying their complaint. Cox v. Stanton, 529 F.2d 47, 50 (4th Cir.1975). Accordingly, the question for this court on defendants' motions for summary judgment is whether there is any genuine question that plaintiffs in fact knew or at least reasonably should have known of their injuries before December 3, 1979, three years before their complaint was filed.

Defendants have presented the following uncontested facts relating to the issue of plaintiffs' actual or constructive knowledge of their claims:

1. During the early months of 1978, while the rival organizational campaigns were being conducted at the Eden brewery by the Steelworkers and the Teamsters unions, the Teamsters filed several charges with the NLRB claiming that Miller, in order to assist the Steelworkers' organizational efforts, had discriminated in its hiring practices against applicants who were associated with the Teamsters.⁴ In one such complaint, for...