Thompson v. United Transp. Union

• Decision Date: 15 December 2008
• Docket Number: No. 08-CV-65-LRR.,08-CV-65-LRR.
• Parties: Alan E. THOMPSON, Darrell G. Hinrichsen, Keith P. Fogel, Wallace E. Alm and Donald D. Boe, Plaintiffs, v. UNITED TRANSPORTATION UNION, Defendant.
• Court: U.S. District Court — Northern District of Iowa

599 F.Supp.2d 1075

Alan E. THOMPSON, Darrell G. Hinrichsen, Keith P. Fogel, Wallace E. Alm and Donald D. Boe, Plaintiffs, v. UNITED TRANSPORTATION UNION, Defendant.

No. 08-CV-65-LRR.

United States District Court, N.D. Iowa, Cedar Rapids Division.

December 15, 2008.

Stephen J. Holtman, Kerry A. Finley, Simmons, Perrine, Albright & Ellwood, PLC, Cedar Rapids, IA, for Plaintiffs.

Carmen Rose Parcelli, Robert D. Coomber, Guerrieri, Edmond, Clayman & Bartos, PC, Washington, DC, Diane Kutzko, Mark A. Zaiger, Shuttleworth & Ingersoll, Cedar Rapids, IA, for Defendant.

ORDER

LINDA R. READE, Chief Judge.

                TABLE OF CONTENTS
                I. INTRODUCTION.............................................. 1077
                 II. PRIOR PROCEEDINGS ........................................ 1077
                III. JURISDICTION AND VENUE ................................... 1077
                     A. Subject-Matter Jurisdiction ........................... 1077
                     B. Venue ................................................. 1077
                 IV. STANDARD FOR SUMMARY JUDGMENT ............................ 1078
                  V. SUMMARY JUDGMENT FACTS ................................... 1078
                     A. Background Facts ...................................... 1078
                     B. "Time Claims" ......................................... 1079
                     C. Merger ................................................ 1079
                     D. Pro Rata Distribution Plan ............................ 1080
                     E. Review Panels ......................................... 1080
                

                F. Mistaken Beliefs Discovered ........................... 1080
                     G. New Plan .............................................. 1081
                     H. Distribution of the Settlement Fund ................... 1082
                     I. Plaintiff Thompson's Internal Union Appeal ............ 1082
                 VI. MOTION: PLAINTIFFS' DFR CLAIM ............................ 1083
                     A. Law ................................................... 1083
                     B. Analysis .............................................. 1085
                VII. CONCLUSION ............................................... 1087
                

I. INTRODUCTION

The matter before the court is Defendant United Transportation Union's Motion for Summary Judgment ("Motion") (docket no. 20).

II. PRIOR PROCEEDINGS

On October 10, 2008, Defendant filed the Motion.¹ On November 7, 2008, Plaintiffs Alan E. Thompson, Darrell G. Hinrichsen, Keith P. Fogel, Wallace E. Alm and Donald D. Boe filed a Resistance (docket no. 26). On November 17, 2008, Defendant filed a Reply (docket no. 29). Plaintiffs request oral argument in their Resistance, but the court finds oral argument is not appropriate. The Motion is fully submitted and ready for decision.

III. JURISDICTION AND VENUE

A. Subject-Matter Jurisdiction

The only remaining claim is Count III, Plaintiffs' "Breach of Duty of Federal Representation" claim ("DFR claim"). See Amended Petition at Law ("Amended Petition") (docket no. 1-3), at 130-144. The court has subject-matter jurisdiction over Plaintiffs' DFR claim pursuant to 28 U.S.C. § 1337(a). See, e.g., Hunt v. Mo. Pac. R.R., 729 F.2d 578, 580 (8th Cir.1984) (holding that § 1337(a) is the source of federal jurisdiction for duty of fair representation claims); Raus v. Bhd. of Ry. Carmen, 663 F.2d 791, 796 (8th Cir.1981) (same); see also Breininger v. Sheet Metal Workers Int'l Assoc. Local Union No. 6, 493 U.S. 67, 83, 110 S.Ct. 424, 107 L.Ed.2d 388 (1989) ("Federal courts have jurisdiction to hear fair representation suits. . . .").

B. Venue

The record discloses very little connection between this case and the Northern District of Iowa. All of the events in the Amended Petition occurred outside the Northern District of Iowa. Defendant is a labor union that is headquartered in the Northern District of Ohio. Plaintiffs were members and/or officers of one of Defendant's local unions in the Southern District of Iowa.² Plaintiff Donald D. Boe is a resident of the Northern District of Iowa.³ Because neither party questions whether venue is appropriate in the Northern District of Iowa, however, the court deems any challenge to venue to be waived. Fed. R.Civ.P. 12(h); see, e.g., Wabash Ry. Co. v. Bridal, 94 F.2d 117, 120 (8th Cir.1938) ("If [venue] is not seasonably asserted, it will be deemed to be waived.").

IV. STANDARD FOR SUMMARY JUDGMENT

Summary judgment is appropriate if the record shows "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). "An issue of fact is genuine when `a reasonable jury could return a verdict for the nonmoving party' on the question." Woods v. DaimlerChrysler Corp., 409 F.3d 984, 990 (8th Cir.2005) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). A fact is material when it "might affect the outcome of the suit under the governing law." Anderson, 477 U.S. at 248, 106 S.Ct. 2505. The court must view the record in the light most favorable to the nonmoving party and afford it all reasonable inferences. Baer Gallery, Inc. v. Citizen's Scholarship Found. of Am., 450 F.3d 816, 820 (8th Cir.2006) (citing Drake ex rel. Cotton v. Koss, 445 F.3d 1038, 1042 (8th Cir.2006)).

Procedurally, the moving party bears "the initial responsibility of informing the district court of the basis for its motion and identifying those portions of the record which show a lack of a genuine issue." Hartnagel v. Norman, 953 F.2d 394, 395 (8th Cir.1992) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). Once the moving party has successfully carried its burden under Rule 56(c), the nonmoving party has an affirmative burden to go beyond the pleadings and by depositions, affidavits, or otherwise, designate "specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e); see, e.g., Baum v. Helget Gas Prods., Inc., 440 F.3d 1019, 1022 (8th Cir.2006) ("Summary judgment is not appropriate if the non-moving party can set forth specific facts, by affidavit, deposition, or other evidence, showing a genuine issue for trial."). The nonmoving party must offer proof "such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248, 106 S.Ct. 2505. "`Evidence, not contentions, avoids summary judgment.'" Reasonover v. St. Louis County, Mo., 447 F.3d 569, 578 (8th Cir.2006) (quoting Mayer v. Nextel W. Corp., 318 F.3d 803, 809 (8th Cir.2003)).

V. SUMMARY JUDGMENT FACTS

The facts are largely undisputed. Many of Plaintiffs' responses to Defendant's Local Rule 56 individual statements of material fact consist of general denials without citation to or support in the record. Accordingly, the court deems those respective statements to be admitted. See LR 56.b. Viewing the evidence in the light most favorable to Plaintiffs and affording them all reasonable inferences, Baer Gallery, 450 F.3d at 820, the material facts are these:

A. Background Facts

Plaintiffs are all former employees of the now defunct Chicago and North Western Transportation Company f/k/a Chicago and North Western Railway a/k/a "the North Western" ("the CNW").⁴ Plaintiffs are also all current or former members of Defendant, an international labor organization. Plaintiffs were members of Defendant's Local 316 in Clinton, Iowa.

Pursuant to the Railway Labor Act ("RLA"), 45 U.S.C. § 151 et seq., Defendant served as the certified collective bargaining representative for certain crafts and classes of the CNW's employees. Defendant entered into numerous agreements under the RLA with the CNW concerning rates of pay, rules and working conditions.

B. "Time Claims"

Defendant protected the rights of the CNW's employees, in part, by pursuing "time claims." For example, if the CNW asked an employee to skip a required break, the employee could claim a penalty payment, commonly between four and eight hours of additional pay. Similarly, if the CNW asked an employee assigned to perform road service to perform yard service, the employee could claim an extra day of pay.

The CNW's employees routinely filed time claims. For example, Plaintiff Thompson testified: "Some days I may have written five or six claims in a single day," resulting in "[t]housands" of claims over his career. Def. App. at 141. Plaintiff Fogel also had "[t]housands" of claims. Id. at 88.

A backlog of time claims accumulated over time. In some cases, it took over two decades for the CNW and Defendant to resolve time claims. Eventually, the backlog grew to 28,000 time claims.

C. Merger

In 1995, the CNW merged into the Union Pacific Railroad ("the UP"). Defendant continued to serve as the collective bargaining representative for all UP employees who used to work for the CNW.

Immediately prior to the merger, Defendant and the UP negotiated a Merger Implementing Agreement ("MIA"). The MIA governed the manner in which then-existing labor agreements necessarily would change as a result of the merger of the operations of the CNW into the UP. While negotiating the MIA with Defendant, the UP became concerned about the backlog of time claims. The UP desired a fresh start with Defendant and the CNW employees.

In 1996, the UP and Defendant reached a series of written agreements (collectively, "1996 Settlement Agreement") after arms-length negotiations on a number of matters, including the time claims. The terms of the 1996 Settlement Agreement were as follows: (1) the UP agreed to pay Defendant a one-time, lump-sum payment of $9.8 million ("Settlement Fund") to settle the vast majority of backlogged time-claims; (2) Defendant agreed to determine the validity and amount of the time claims; (3) the UP agreed to write checks payable to the claimants as directed by the Union after the completion of the Union's claim-review process;⁵ (4) the UP agreed Defendant was entitled to earn interest on the Settlement Fund until the time of its distribution, even though railroads traditionally did not pay interest on time claims; (5) the UP agreed to permit members of Local 316 to continue...