Stewart v. United States Steel Corp., Cause No. H 78-255.

• Decision Date: 17 July 1984
• Docket Number: Cause No. H 78-255.
• Citation: 594 F. Supp. 180
• Parties: Talmedge L. STEWART, Plaintiff, v. UNITED STATES STEEL CORPORATION, et al., Defendants.
• Court: U.S. District Court — Northern District of Indiana

594 F. Supp. 180

Talmedge L. STEWART, Plaintiff, v. UNITED STATES STEEL CORPORATION, et al., Defendants.

Cause No. H 78-255.

United States District Court, N.D. Indiana, Hammond Division.

July 17, 1984.

Janet Graney, U.S. Dept. of Labor, Chicago, Ill., William H. Berger, Dennis K. Kade, Washington, D.C., for plaintiff.

James T. Carney, Pittsburgh, Pa., Charles A. Myers, Hammond, Ind., for defendant U.S. Steel Corp.

Albert C. Hand, Highland, Ind., for defendant United Steelworkers of America, Local 1066.

ORDER

KANNE, District Judge.

An examination of the file in this case indicates that the following motions are pending:

1) Defendant United States Steel Corporation's Motion to Dismiss, or, in the Alternative, for Summary Judgment;

2) Plaintiff's Motion to Strike Defendant's "Complaint for Interpleader and Declaratory Relief in the Nature of a Cross-Claim";

3) Plaintiff's Motion for Partial Summary Judgment; and

4) Plaintiff's Motion to Strike the Defendant's Letter of February 3, 1981.

Before taking up the issues presented by each motion the court will briefly summarize the factual allegations of plaintiff's complaint which was filed on June 13, 1978.

Prior to being inducted into the military service in December of 1968, plaintiff had been employed by the defendant United States Steel Corporation (hereinafter U.S. Steel) as, initially, a millwright helper and, later, as a mechanical repairman. Upon his return from military service, in September of 1970, plaintiff applied to be, and was, reinstated by U.S. Steel. Plaintiff was rehired as a mechanical repairman, Job Class 10; the same position he had held prior to military duty. About a year after plaintiff's return, U.S. Steel and Local 1066 of the United Steel Workers of America agreed to upgrade millwright helpers and mechanical repairmen with 24 months "work experience" to the position of motor inspector and millwright. Because of the time plaintiff had spent serving in the armed forces he did not have the required 24 months "work experience" and was not promoted.¹ Plaintiff's complaint, brought pursuant to the Veterans Reemployment Rights Act, 38 U.S.C. § 2021 et seq., prays that the court enter a declaratory judgment establishing that his seniority as a millwright runs from September 19, 1971, and that he be awarded back pay and any other benefits to which he would have become entitled had he been promoted.

On August 11, 1978, defendant U.S. Steel filed a Motion for Leave to Join and Interplead Under FED.R.CIV.P. 22. U.S. Steel sought to join the additional defendants United Steelworkers of America and Local 1066 of that union. On August 14, 1978, the late Judge Phil M. McNagny granted U.S. Steel's motion and on August 18, 1978, the clerk of the court filed U.S. Steel's Complaint for Interpleader and Declaratory Relief in the Nature of a Cross-Claim by which U.S. Steel sought to have the international and local union included in any relief that might be awarded plaintiff.

On August 22, 1978, plaintiff filed a motion to strike U.S. Steel's contending that Rule 22 interpleader is not proper in this situation because U.S. Steel does not have a claim against the plaintiff. See: Grubbs v. General Electric Credit Corp., 405 U.S. 699, 705 n. 2, 92 S.Ct. 1344, 1349 n. 2, 31 L.Ed.2d 612 (1972).

In its motion to dismiss, which the court will treat as a motion for summary judgment pursuant to Rule 12(b),² U.S. Steel contends that plaintiff has failed to state a claim because 1) part of plaintiff's claim is subject to Indiana's six year statute of limitations for contracts not in writing, 2) part of plaintiff's claim is subject to laches, 3) it is not reasonably certain that the plaintiff would have become a millwright in September of 1971, had it not been for his military service, and 4) that U.S. Steel has fulfilled its obligations to the plaintiff under the Veterans Reemployment Rights Act.

U.S. Steel characterizes plaintiff's request for back pay as a claim for money damages. Thus, U.S. Steel argues, in that respect plaintiff's claim is subject to the Indiana statute of limitations for unwritten contracts. Plaintiff's response is twofold. First, plaintiff cites authority to the effect that an action brought under the Veterans Reemployment Rights Act is basically equitable in nature and that any back pay awarded is ancillary to any equitable relief granted plaintiff. See: Ufland v. Buffalo Courier Express, Inc., 394 F.Supp. 199 (W.D.N.Y.1974); Mowdy v. ADA Board of Education, 76 F.R.D. 436 (E.D.Okla.1977); Cox v. City of Kansas City, Missouri, 76 F.R.D. 459 (W.D.Mo.1977). Second, plaintiff points out that the Veterans Act has been amended to provide that "No state statute of limitations shall apply to any proceedings under this chapter." 38 U.S.C. § 2022. The plaintiff further points out that the amendment has been held, by a majority of the district courts which have considered the question, to apply retroactively to claims which arose prior to the date the amendment went into effect (December 3, 1974). Letson v. Liberty Mutual Insurance Company, 523 F.Supp. 1221, 1224-25 (N.D.Ga.1981), and cases cited therein.

The court's research has found two Third Circuit cases, Gruca v. United States Steel Corporation, 495 F.2d 1252 (3rd Cir.1974) and Churma v. United States Steel Corporation, 514 F.2d 589 (3rd Cir.1975), which support U.S. Steel's view of the nature of plaintiff's claim. In Gruca, 495 F.2d at 1256, the court concluded that a veteran filing suit under the Veterans Act could seek legal or equitable relief or both. The Third Circuit bases this conclusion on the language of the statute which provides that the court shall have the power to require an employer to comply with certain provisions of the act and "to compensate such person for any loss of wages or benefits suffered by reason of such employer's unlawful action." 38 U.S.C. § 2022.

Notwithstanding the conclusion reached by the Third Circuit, this court believes that the better view of the nature of a veteran's claim under the Act was stated by the district court in Ufland when it remarked:

Whether the veteran's claim is for reinstatement and back pay, restitution of seniority rights or wage rate adjustments does not alter the basically equitable nature of the rights asserted. The claim for back wages in this case is, therefore, a derivative of plaintiff's right of reinstatement and restoration to his former seniority, status and pay under the Act, rather than a claim at law for damages.

Ufland, 394 F.Supp. at 460.³

Furthermore, the court is in agreement with those courts which have held that the 1974 amendment applies retroactively to claims which arose prior to the effective date of the amendment.

For both of the above stated reasons the court finds that the defendant's motion for summary judgment on the grounds that plaintiff's action was not brought within the applicable state statute of limitations should be denied.

Defendant also moves for summary judgment on the grounds of laches. In order to support a defense of laches, there must be a showing of both a lack of diligence by the party against whom the defense is asserted and prejudice to the defending party. Costello v. United States, 365 U.S. 265, 282, 81 S.Ct. 534, 543, 5 L.Ed.2d 551 (1961). Here, defendant claims that plaintiff was not diligent because the present cause of action was not filed until June 13, 1978, a delay of over five years from February 10, 1973, the date the cause of action accrued.

However, upon examining the record, this court finds that plaintiff was diligent in pursuing this action. Plaintiff first complained to the Department of Labor on June 9, 1974. The Department of Labor investigated the plaintiff's claim and notified the defendant of the Department's ongoing investigation. Moreover, prior to complaining to the Department of Labor, plaintiff sought the assistance of his union grievanceman but was denied assistance because of an existing labor agreement.

Defendant also claims that records necessary to its management discretion defense were destroyed because of plaintiff's delay. However, defendant has not necessarily proven the suggested connection. Defendant merely alleges that the records were destroyed sometime during the period 1971-1978 without showing the reasons for or the circumstances surrounding their destruction. Moreover, defendant was notified by the Department of Labor of plaintiff's claim in June 1974, and should have made some effort to secure the records at that time. Therefore, for reasons this court is unwilling to attribute the loss of the records to plaintiff's delay in filing suit.

Based on the above, the court finds that the elements of a laches defense are not present. Accordingly, defendant's motion for summary judgment on the grounds of laches should be denied.

Defendant also moves for summary judgment arguing that it is not reasonably certain that plaintiff would have become a millwright in September of 1971 absent plaintiff's military service, and further that defendant has fulfilled its obligations to the plaintiff as required by the Veterans Act.

Case law in this area indicates that if a promotion is a seniority right the Veterans Act applies to accord the veteran the promotion. McKinney v. Missouri-Kansas-Texas Railroad Co., 357 U.S. 265, 272, 78 S.Ct. 1222, 1226, 2 L.Ed.2d 1305 (1958); Goggin v. Lincoln St. Louis, 702 F.2d 698, 701 (8th Cir.1983); Almond v. U.S. Steel Corp., 499...