Smith v. DCA Food Industries, Inc.

• Decision Date: 05 June 1967
• Docket Number: Civ. No. 18237.
• Citation: 269 F. Supp. 863
• Parties: Robert G. SMITH and Willie Pierson, Plaintiffs, as a class action on behalf of themselves and all other persons so situate, namely certain employees of the Cereal Division of DCA Food Industries, et al. v. DCA FOOD INDUSTRIES, INC., a New York Corporation qualified to do business in Maryland, and the International Union of District 50, the United Mine Workers of America, an unincorporated Association of the District of Columbia, and Local Union No. 13128, the International Union of District 50, United Mine Workers of America, an unincorporated affiliate of District 50, above, and National Bank of Washington, District of Columbia Corporation qualified to do business in Maryland, Defendants.
• Court: U.S. District Court — District of Maryland

269 F. Supp. 863

Robert G. SMITH and Willie Pierson, Plaintiffs, as a class action on behalf of themselves and all other persons so situate, namely certain employees of the Cereal Division of DCA Food Industries, et al. v. DCA FOOD INDUSTRIES, INC., a New York Corporation qualified to do business in Maryland, and the International Union of District 50, the United Mine Workers of America, an unincorporated Association of the District of Columbia, and Local Union No. 13128, the International Union of District 50, United Mine Workers of America, an unincorporated affiliate of District 50, above, and National Bank of Washington, District of Columbia Corporation qualified to do business in Maryland, Defendants.

Civ. No. 18237.

United States District Court D. Maryland.

June 5, 1967.

COPYRIGHT MATERIAL OMITTED

Bernard J. Sachs, Philip H. Goodman and Goodman, Meagher & Enoch, Baltimore, Md., for plaintiffs.

J. Cookman Boyd, Jr., Baltimore, Md., and Allen Haskel, New York City, for defendant, DCA Food Industries, Inc.

H. Morton Rosen, Jr., and Abraham Levin, Baltimore, Md., for defendants, The International Union of Dist. 50, The United Mine Workers of America and Local Union No. 13128, The International Union of Dist. 50, United Mine Workers of America.

Jo V. Morgan, Jr., and Charles J. Steele, Bethesda, Md., for defendant, National Bank of Washington.

FRANK A. KAUFMAN, District Judge.

Plaintiffs, employees of the Cereal Division of DCA Food Industries, Inc. (DCA),¹ a New York corporation qualified to do business in Maryland, brought this action on April 12, 1967,² seeking declaratory relief in connection with an alleged breach of the pension fund provisions of the collective bargaining undertakings between DCA, as the employer, and Local Union No. 13128 (the Local), a local union whose principal office is in Baltimore, Maryland, and which is an affiliate of The International Union of District 50, The United Mine Workers of America (the Union), an unincorporated association of the District of Columbia. DCA, the Local, the Union, and the National Bank of Washington (Trustee), a District of Columbia corporation qualified to do business in Maryland and the trustee under the pension fund, established by the collective bargaining agreement, are named and joined as the defendants in this case.³ The Union and the Local are the exclusive bargaining agent for the employees (including the plaintiffs herein) in DCA's Cereal Division. DCA has filed an answer to the complaint. All of the defendants, including DCA, have filed motions to dismiss. The disposition of those motions requires this Court to determine if plaintiffs' complaint states a cause of action under section 301 of the Taft-Hartley Act, 29 U.S.C.A. § 185 (a), and whether plaintiffs are entitled to the declaratory relief they seek.⁴

The pension fund was established pursuant to an agreement between DCA and the Union (represented by its Local) on July 15, 1953, following a protracted strike and collective bargaining for higher wages. The pension fund covered the employees of two of DCA's divisions, namely, its Cereal Division and its Mechanical Division, both of which are located at DCA's plant at Ellicott City, Maryland. The provisions relating to the fund were amended by DCA and the Union from time to time during the years since 1953 as a result of collective bargaining. Plaintiffs allege that the present aggregate market value of the fund is in excess of $475,000. On July 29, 1966, plaintiffs and all of the employees of the Cereal Division were advised that the Cereal Division would be closed during the first half of 1967 and that the employment of all of the plaintiffs would be terminated. This shutdown is now underway and is expected to be completed by mid-summer of this year. DCA's Mechanical Division at Ellicott City is presently continuing operations and plaintiffs state that that Division is not at this time affected by the shutdown of the Cereal Division. On October 31, 1966, DCA and the Union amended the pension fund provisions. The substance of this amendment is alleged to be that employees of the Cereal Division who had completed a certain number of years' service and who had at that time attained a certain age would be eligible for pension benefits upon attaining the age of 65 years, but that all other employees of the Cereal Division, including all of the plaintiffs herein, would lose all rights in and to the pension fund.⁵ Plaintiffs, among other contentions, claim that the amendment of October 31, 1966 frustrates the reasons and purposes which underlay the Union's original negotiation seeking to establish the pension fund; that the October 31, 1966 amendment discriminates against plaintiffs in favor of employees in the Mechanical Division as well as in favor of some older Cereal Division employees and arbitrarily, illegally and unfairly deprives plaintiffs of their rights in and to the fund; that DCA's contributions to the fund constitute part of plaintiffs' compensation from the time that the pension fund was set up and that the amendment deprives plaintiffs of that compensation. Plaintiffs pray this Court to declare the amendment of October 31, 1966 null and void, to declare plaintiffs' rights in and to the fund, and to grant other appropriate or supplementary equitable relief.

Plaintiffs have grounded their actions on section 301(a) of the Labor-Management Relations Act of 1947, 29 U.S.C.A. § 185(a)⁶ and the federal Declaratory Judgment Act, 28 U.S.C.A. § 2201.⁷ Both of those statutes raise jurisdictional questions. Section 301 is both jurisdictional and substantive. Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957). It creates an independent basis of jurisdiction by investing federal courts with the power to hear and determine "without respect to the amount in controversy or without regard to the citizenship of the parties" cases which fall within its ambit. In order to determine, therefore, whether an action may be premised upon section 301 and entertained in a federal court without regard to diversity or the amount in controversy, inquiry must be directed to the question of whether or not the cause of action stated in the complaint lies within "the area covered by the statute." See Local 174, Teamsters, Chauffeurs, Warehousemen etc. v. Lucas Flour Co., 369 U.S. 95, 103, 82 S.Ct. 571, 576, 7 L.Ed.2d 593 (1962). The Declaratory Judgment Act, on the other hand, does not create any independent ground for jurisdiction. Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671-672, 70 S.Ct. 876, 94 L.Ed. 1194 (1950). However, once an independent basis of jurisdiction, such as diversity or federal cause of action, has been established in a suit for declaratory relief, the further jurisdictional question then arises as to whether or not the suit presents "a case of actual controversy" within the meaning of the Declaratory Judgment Act. If no actual controversy is presented, the Court must then dismiss for want of jurisdiction since the judicial power of the United States depends on the existence of a case or controversy. U.S.Const. art. III, § 2. "For a matter to come within the jurisdiction of the court under the Declaratory Judgment Act, * * * it must involve an actual controversy between the parties before the court `admitting of specific relief through a decree of a conclusive character.'" Smith v. Blackwell, 115 F. 2d 186, 188 (4th Cir. 1940). Where such a controversy is not found to exist the action must be dismissed for want of jurisdiction even though, for example, diversity of citizenship (or as here, jurisdiction under section 301) exists between the parties.

Upon consideration of plaintiffs' complaint and the allegations therein, this Court holds that the instant complaint states a cause of action which is cognizable under both of the aforementioned statutes.

The question of whether or not section 301 permits an action to be brought by employees for an alleged breach by both union and employer of rights of such employees under a pension fund established by collective bargaining and resulting agreements between the employer of such employees and the union representing them does not appear previously to have arisen. It is, however, completely clear that individual employees may maintain suit under section 301 for breach of collective bargaining contracts between a union and an employer. Smith v. Evening News Ass'n, 371 U.S. 195, 83 S.Ct. 267, 9 L.Ed.2d 246 (1962). In addition, it appears perfectly clear that suits may be properly instituted under section 301 for violations of any contract between the employer and the union and that the word "contract" as it appears in section 301(a) encompasses the provisions of a pension fund established in accordance with and as required by the collective bargaining agreement. See Local 33 Intern. Hod Carriers Bldg. etc. v. Mason Tenders, 291 F.2d 496 (2d Cir. 1961); Burlesque Artists Ass'n v. American Guild, 187 F.Supp. 393 (S.D.N.Y.1958). Furthermore, individual employees may bring suit under section 301 against the union which represents them where the action is based upon an alleged violation by the union of its duty of fair representation. Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L. Ed.2d 842 (1967); Humphrey v. Moore, 375 U.S. 335, 84 S.Ct. 363, 11 L.Ed.2d 370 (1964). The fact that the alleged contract violation herein complained of may also constitute an unfair labor practice charge within the jurisdiction of the National Labor Relations Board does not adversely affect the jurisdiction of this Court under section 301. Vaca v. Sipes, supra, 386 U.S. at 183-87, 87 S.Ct. at 913-15; Humphrey v. Moore, supra, 375 U.S. at 344, 84 S.Ct. 363, 11 L.Ed.2d 370; Smith v. Evening News Ass'n, supra, 371 U.S. at 197-198, 83 S.Ct. 267, 9 L.Ed.2d 246.

The case which appears most clearly in point with regard to the issues herein relevant to section 301 is ...