Swanigan v. FCA U.S. LLC

• Decision Date: 12 September 2019
• Docket Number: No. 18-2303,18-2303
• Parties: Beverly L. SWANIGAN; Brian Lee Keller; Sheri Anolick, Plaintiffs-Appellants, v. FCA US LLC; International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

938 F.3d 779

Beverly L. SWANIGAN; Brian Lee Keller; Sheri Anolick, Plaintiffs-Appellants,
v.
FCA US LLC; International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, Defendants-Appellees.

No. 18-2303

United States Court of Appeals, Sixth Circuit.

Argued: August 8, 2019
Decided and Filed: September 12, 2019

ARGUED: Jeffrey M. Harris, CONSOVOY MCCARTHY PARK PLLC, Arlington, Virginia, for Appellants. Julia M. Jordan, SULLIVAN & CROMWELL LLP, Washington, D.C., for Appellee FCA. Abigail V. Carter, BREDHOFF & KAISER, PLLC, Washington, D.C., for Appellee UAW. ON BRIEF: Jeffrey M. Harris, Cameron T. Norris, CONSOVOY MCCARTHY PARK PLLC, Arlington, Virginia, Raymond J. Sterling, James Christian Baker, Brian J. Farrar, STERLING ATTORNEYS AT LAW, P.C., Bloomfield Hills, Michigan, for Appellants. Julia M. Jordan, SULLIVAN & CROMWELL LLP, Washington, D.C., Steven L. Holley, Jacob E. Cohen, SULLIVAN & CROMWELL LLP, New York, New York, Thomas W. Crammer, David O’Brien, MILLER, CANFIELD, PADDOCK & STONE, PLC, Troy, Michigan, for Appellee FCA. Abigail V. Carter, Elisabeth Oppenheimer, BREDHOFF & KAISER, PLLC, Washington, D.C., for Appellee UAW.

Before: COLE, Chief Judge; GRIFFIN and BUSH, Circuit Judges.

GRIFFIN, Circuit Judge.

938 F.3d 782

This case arises out of the infamous bribery scandal involving several officials of defendant Fiat Chrysler Automobiles (FCA US LLC, "FCA") and defendant International Union, United Automobile, Aerospace and Agricultural Implement Workers of America ("UAW"). On appeal, the central issue presented is whether plaintiffs’ Second Amended Complaint plausibly alleges a "hybrid" § 301 claim under the Labor-Management Relations Act ("LMRA"). Based upon the plain language of the complaint and plaintiffs’ counsel’s representations at the hearing on defendants’ motions to dismiss, the district court ruled that it did not, granted the motions to dismiss, and denied other relief. We agree and affirm.

I.

The UAW negotiates large-scale collective-bargaining agreements on behalf of its members with automotive manufacturers including FCA. According to the Second Amended Complaint, FCA officials bribed UAW officials with millions of dollars’ worth of gifts and money for the purpose of getting a more company-friendly collective-bargaining agreement. This scandal resulted in a number of federal convictions and indictments. Criminal investigations are ongoing.

In response to the bribery scheme, plaintiffs Beverly Swanigan, Brian Keller, and Sheri Anolick—three members of a potential class action—sued defendants, alleging violations of § 301 of the LMRA, 29 U.S.C. § 185. Later, plaintiffs were allowed to amend their complaint twice. The Second Amended Complaint is the subject of this appeal. It names individuals formerly employed by both FCA and UAW, and alleges that "FCA executives and FCA employees agree[d] to pay and deliver, and willfully paid and delivered, money and things of value to officers and employees of the UAW." The complaint also alleges that plaintiffs have been as yet unable to discover the complete extent of defendants’ collusive conduct because of the secrecy of the ongoing federal criminal investigations.

The complaint specifically refers to plaintiffs’ cause of action as a "hybrid § 301 claim" against FCA and UAW. Each of the three iterations of the complaint raises the same two counts: (I) violation of the LMRA and (II) breach of the duty of fair representation under the LMRA, both of which they must properly allege for a hybrid claim to pass muster. The first count alleges that "FCA colluded with UAW executives to take FCA-friendly positions during negotiations and collective bargaining"; "FCA’s unlawful conduct also violated the LMRA in that two or more persons conspired to pay money, give gifts and things of value, and make prohibited payments in violation of 29 USC 186"; and "[t]he prohibited payments and other conduct did impermissibly influence the collective bargaining process by allowing FCA to obtain company-friendly concessions from the UAW during the collective bargaining process." Plaintiffs allege that they were harmed by FCA’s conduct "by having the dues they have faithfully paid used for purposes other than good-faith bargaining and arm’s length negotiations." Furthermore, under this count, plaintiffs allege that their "dues have not been used for intended purposes," and that "[d]iscovery will likely reveal the extent to which FCA impermissibly interfered with the collective

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bargaining process, that FCA breached collectively bargained and other negotiated agreements, and the extent to which plaintiffs and other class members have been harmed by the collusion."

In the second count of the complaint, plaintiffs allege that "UAW has engaged in conduct that breached its duty of fair representation to its membership" by "willfully requesting, receiving, accepting, and agreeing to receive and accept money and things of value from persons acting in the interest of FCA to obtain company-friendly positions at the bargaining table." Plaintiffs also allege that UAW’s conduct resulted in egregious unfairness or reckless disregard for its members’ rights. The complaint requests a money judgment, including the value of all dues paid during the collusion period and money to compensate plaintiffs for their losses sustained as a result of the collusion-tainted bargaining.

Defendants FCA and UAW moved to dismiss plaintiffs’ complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), and their arguments in favor of dismissal were largely consistent. In large part, both argued that the complaint failed to state a claim for relief because their "hybrid claim" under § 301 requires evidence of the violation of a contract or collective-bargaining agreement and the complaint explicitly does not allege that defendants violated any provision in the collective-bargaining agreement. They also alleged that this complaint was really a disguised claim under § 302 of the LMRA, "which ‘does not create a private right of action,’ and ‘most assuredly’ does not create ‘a right to sue for money damages.’ " (Quoting Ohlendorf v. United Food & Comm. Workers Int’l Union, Local 876 , 883 F.3d 636, 639, 642 (6th Cir. 2018) ). Both also argued that plaintiffs failed to allege that they exhausted internal union remedies and grievance procedures established in the collective-bargaining agreement. Finally, UAW argued that plaintiffs’ complaint was untimely under the applicable statute of limitations and that their claims failed because they did not show any proximate cause between defendants’ alleged malfeasance and plaintiffs’ injuries.

The district court granted defendants’ motions to dismiss. The Honorable Gershwin A. Drain agreed with defendants that plaintiffs’ failure to allege that any specific provision of any collective-bargaining agreement was violated proved fatal to their hybrid claim. Second, the court held that plaintiffs’ complaint failed to sufficiently allege that they were legally excused from exhausting both union and contractual grievance procedures. Third, the court agreed with UAW’s argument that plaintiffs failed to allege specific injuries proximately caused by the alleged collusive conduct of FCA and UAW. Finally, Judge Drain denied plaintiffs’ cursory request to amend their complaint because it violated the court rules, provided no "explanation as to how [p]laintiffs will remedy their deficient allegations," and would be futile.

Plaintiffs timely appealed both the dismissal of their complaint and the denial of their motion to amend.

II.

First we address the district court’s dismissal of plaintiffs’ complaint for failure to plead a plausible case under § 301 because they failed to allege that FCA breached the collective-bargaining agreement. We review de novo a district court’s decision to dismiss a complaint under Rule 12(b)(6). In re Fifth Third Early Access Cash Advance Litig. , 925 F.3d 265, 275 (6th Cir. 2019).

A.

Section 301 of the LMRA gives federal courts jurisdiction to hear "[s]uits

938 F.3d 784

for violation of contracts between an employer and a labor organization representing employees." 29 U.S.C. § 185(a). It encompasses "suits by and against individual employees as well as between unions and employers." Hines v. Anchor Motor Freight, Inc. , 424 U.S. 554, 562, 96 S.Ct. 1048, 47 L.Ed.2d 231 (1976). Some such suits by employees are referred to as "hybrid claims" in which the employee or employees "must prove both (1) that the employer breached the collective bargaining agreement and (2) that the union breached its duty of fair representation." Garrish v. Int’l Union United Auto., Aerospace, & Agric. Implement Workers of Am. , 417 F.3d 590, 594 (6th Cir. 2005) (citation omitted). And if the employees cannot satisfy both prongs of that test, he "cannot succeed against any Defendant." Id . In other words, the two claims that make up a hybrid claim are "inextricably interdependent." DelCostello v. Int’l Bhd. of Teamsters , 462 U.S. 151, 164, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983).

Here, the district court dismissed plaintiffs’ claims for failure to allege that FCA breached the collective-bargaining agreement. The district court...