Westinghouse Electric Corp. v. United Elec. R. & M. Wkrs., Civ. A. 8850.

• Decision Date: 11 July 1951
• Docket Number: Civ. A. 8850.
• Citation: 99 F. Supp. 597
• Parties: WESTINGHOUSE ELECTRIC CORP. v. UNITED ELECTRICAL RADIO & MACHINE WORKERS OF AMERICA et al.
• Court: U.S. District Court — Western District of Pennsylvania

99 F. Supp. 597

WESTINGHOUSE ELECTRIC CORP. v. UNITED ELECTRICAL RADIO & MACHINE WORKERS OF AMERICA et al.

Civ. A. 8850.

District Court of the United States W. D. Pennsylvania.

July 11, 1951.

John C. Bane, Jr., and Donald B. Heard, of Reed, Smith, Shaw & McClay, Pittsburgh, Pa., for plaintiff.

Maurice Louik, of Harrison & Louik, Pittsburgh, Pa., David Scribner, and Arthur Kinoy, New York City, for defendants United Electrical Radio & Machine Workers of America et al.

Alfred Wilner, and Morris Zimmerman, of Wilner and Wilner, Pittsburgh, Pa., Benjamin C. Sigal, Gen. Counsel IUE-CIO, and Bertram Diamond, Washington, D.C., for defendant International Union of Electrical Radio & Machine Workers (CIO) et al.

MARSH, District Judge.

Westinghouse Electric Corporation, claiming to be a stakeholder of union dues in the amount of $270,403.25 which were collected from its employees at a number of widely separated plants located in seven states, brought an action of interpleader against United Electrical Radio and Machine Workers of America (herein called UE); International Union of Electrical Radio and Machine Workers (CIO) (herein called IUE-CIO); twenty-nine local unions affiliated with one or the other national union; and certain individual employees. All the unions are unincorporated associations and certain officers of each were made defendants as representatives of the members as a class. The aforesaid sum of money was paid into court and an order issued to restrain the prosecution or institution of any other action to determine title to the money.

After denying a motion to dismiss presented by IUE-CIO, 92 F.Supp. 841, this court ordered the unions to answer the complaint in interpleader and proposed to take testimony at a hearing "in order to determine the plaintiff's right to interplead." Accordingly, answers were filed by the claimant unions. UE in its answer claims Westinghouse owes to it and its locals $333,607.75. IUE-CIO on behalf of its Locals avers in its answer: "(T)hat the total amount of money in controversy is about $441,527.25," that during the period involved plaintiff paid to specified UE Locals (not defendants in this proceeding) the sum of $108,850.00, and "there is owing to the IUE-CIO Locals * * * the total sum of $332,677.25." Also, IUE-CIO reiterates its previous contention that this court does not have jurisdiction and that the venue is improperly laid. A conference to resolve the factual and legal status of the additional amounts claimed by the unions bore no fruit.

Plaintiff now moves to dismiss its action of interpleader without prejudice. This being a class action, court approval is required.¹ UE vigorously opposes dismissal. We are of the opinion that the motion should be granted under Federal Rules of Civil Procedure, rule 41(a) (2), 28 U.S.C.A.²

Plaintiff presents as its reasons for dismissal that further prosecution of the case in this court would involve heavy expense and inconvenience. Ordinarily, plaintiff's reasons for desiring dismissal of an action are immaterial: Ex parte Skinner & Eddy Corp., 1924, 265 U.S. 86, 93, 44 S.Ct. 446, 68 L.Ed. 912. There is, however, a marked distinction between this plaintiff in interpleader and the ordinary plaintiff litigant. In its complaint Westinghouse appears as a mere stakeholder and desires to be discharged from the impending litigation concerning the $270,403.25 paid into court. In their answers claimants seek to make Westinghouse an active litigant by asserting that additional money is in dispute. If the contention of the claimants prevails it will have the effect of converting the action from one of strict interpleader into one in the nature of interpleader. The latter will prevent the discharge of Westinghouse until the conclusion of the litigation, which gives promise of being protracted and expensive. The answers of the unions have changed the complexion of the interpleader action insofar as the plaintiff is concerned. As a result plaintiff will probably be required to prove the correctness of its accounting tabulations by books and witnesses from the various plants involved. If the hearing and trial are held in one court the prospect of considerable additional expense is obvious.

Plaintiff also views with justifiable apprehension the ultimate jurisdiction of this court after these heavy expenses have been incurred. Upon hearing, if it is found that the fund does not constitute the full amount in controversy, dismissal may follow because an essential jurisdictional requirement would be lacking. Edner v. Massachusetts Mut. Life Ins. Co. et al., 3 Cir., 1943, 138 F.2d 327. On the other hand, if plaintiff were granted permission to pay into court the additional amount in dispute, as stated, the corporation would remain in the case as an active claimant to part of the fund, thereby imperiling jurisdiction because of lack of diversity of citizenship between this Pennsylvania corporation and the other Pennsylvania claimants of the fund. See Boice v. Boice et al., 3 Cir., 1943, 135 F.2d 919.

As a litigant instead of a stakeholder plaintiff has sound economical reasons for now desiring to resort to the courts in proximity to the plants where the funds were collected, disbursement made, and the accounts kept. We are of the opinion in an interpleader action these reasons should be taken into consideration.

Primarily under Rule 41(a) (2) the court in its discretion must determine if legal prejudice or disadvantage would resuit to the defendants in interpleader from granting the dismissal. The prospect of further litigation over this money in other courts and the incidental annoyance thereof is not legal prejudice. Ex parte Skinner & Eddy Corp., supra; Jones v. Securities & Exchange Commission, 1936, 298 U.S. 1, 19, 56 S.Ct. 654, 80 L.Ed. 1015; Pullman's Palace Car Co. v. Central Transportation Co., 1898, 171 U.S. 138, 146, 18 S.Ct. 808, 43 L.Ed. 108; New York, C. & St. L. R. Co. v. Vardaman, 8 Cir., 1950, 181 F.2d 769; Home Owners' Loan Corporation v. Huffman, 8 Cir., 1943, 134 F.2d 314, 317.

The UE contends that it has filed a counterclaim for affirmative relief and Rule 41(a) (2) by its terms precludes a dismissal of the action. This contention is without merit. Interpleader actions involve two successive litigations. The first phase is between the plaintiff and the claimants as to whether the claimants shall interplead. After a hearing on the bill and answers the court may grant or deny the interpleader. The second phase follows a decree of interpleader and is between the adverse claimants to the fund on the merits after they have interpleaded their respective claims to the money...