White Motor Corp. v. Malone, 78-1893

• Decision Date: 05 June 1979
• Docket Number: No. 78-1893,78-1893
• Citation: 599 F.2d 283
• Parties: 102 L.R.R.M. (BNA) 2832, 87 Lab.Cas. P 11,707, 1 Employee Benefits Ca 1683 WHITE MOTOR CORPORATION and White Farm Equipment Company, Appellees, v. E. I. MALONE, Commissioner of Labor and Industry for the State of Minnesota, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 283

599 F.2d 283

102 L.R.R.M. (BNA) 2832, 87 Lab.Cas. P 11,707,

1 Employee Benefits Ca 1683

WHITE MOTOR CORPORATION and White Farm Equipment Company, Appellees, v. E. I. MALONE, Commissioner of Labor and Industry for the State of Minnesota, Appellant.

No. 78-1893.

United States Court of Appeals Eighth Circuit.

Submitted May 15, 1979.

Decided June 5, 1979.

Richard B. Allyn, Sol. Gen., St. Paul, Minn. (argued), Warren R. Spannaus, Atty. Gen., Kent G. Harbison and Richard A. Lockridge, Sp. Asst. Attys. Gen., St. Paul, Minn., on brief, for appellant.

Frank C. Heath of Jones, Day, Reavis & Pogue, Cleveland, Ohio (argued), John L. Strauch, James A. Rydzel, Cleveland, Ohio, and Curtis L. Roy and Peter S. Hendrixson of Dorsey, Windhorst, Hannaford, Whitney & Halladay, Minneapolis, Minn., on brief, for appellees.

Ellen B. Kaplan, Gail L. Perlman and Anne M. Cohen, Law Student, of Kaplan & Perlman, Springfield, Mass., on brief, for amicus curiae, Greater Springfield Gray Panthers Corp.

Before BRIGHT, HENLEY and McMILLIAN, Circuit Judges.

HENLEY, Circuit Judge.

The defendant, E. I. Malone, Commissioner of Labor and Industry for the State of Minnesota, appeals from a summary judgment entered by the United States District Court for the District of Minnesota (The Honorable Donald D. Alsop, District Judge) holding that the Minnesota Private Pension Benefits Protection Act (hereinafter generally called the Act), 1974 Minn. Laws, c. 437, Minn.Stat.Ann. §§ 181B.01-.17, is unconstitutional, at least as applied to plaintiffs White Motor Corporation and its subsidiary White Farm Equipment Company.

The controversy arose after the Act became effective in 1974 and after the plaintiffs had announced the termination of a pension plan or pension plans for the benefit of Minnesota employees of White Farm Equipment Company. The Commissioner took the position that the Act should be applied to the plaintiffs, and that a large "funding charge" should be imposed upon them or at least upon the implement company for the purpose of protecting the vested pension rights of retirees and other employees of the implement company. ¹

On the strength of the decision of the Supreme Court in Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 98 S.Ct. 2716, 57 L.Ed.2d 727 (1978), the district court held that the Act as applied to the plaintiffs was violative of the contracts clause of the Constitution of the United States, ² and that plaintiffs were entitled to summary judgment on that basis. The ruling of the district court did not dispose of all of the issues in the case; however, as provided by Fed.R.Civ.P. 54(b), the district court ordered that judgment be entered immediately. That was done, and this appeal followed.

We affirm the judgment of the district court.

I.

From the plaintiffs' standpoint the controlling pleading in the case is plaintiffs' Amended Complaint. In that pleading the plaintiffs alleged that the Act, as applied to them, violated the supremacy clause of the Constitution, Article VI, Clause 2, in that the subject matter of the Act had been preempted by federal law, notably the National Labor Relations Act, 29 U.S.C. § 151 Et seq., that it violated the contracts clause that has been cited, that it violated the commerce clause, Article I, § 8, Clause 3, that it violated the due process and equal protection clauses of the fourteenth amendment to the Constitution, and that it also violated three provisions of the Constitution of Minnesota. Federal subject matter jurisdiction is not questioned and is established.

The Amended Complaint is drawn in eight counts. The first five counts allege, respectively, violations of separate federal constitutional provisions; the last three counts allege violations of the Minnesota Constitution. Count I is the preemption claim; Count II is the contracts clause claim. The other claims are not important at the moment. The Commissioner answered and denied that there was merit to any of the claims of the plaintiffs. Additionally, the Commissioner asked the district court to abstain from action in this case until the Act should be evaluated and construed by the Minnesota Supreme Court. ³

II.

It is now necessary to leave this case temporarily and go to a similar case that was filed in the district court shortly after this case was filed and which was also assigned to the docket of Judge Alsop. That case, which was docketed as D. Minn. No. 3-75 Civ. 178, was filed by a number of plaintiffs including Walter J. Fleck and his employer, Allied Structural Steel Company, against Warren Spannaus, Attorney General, and other defendants including Commissioner Malone. In that case, as in this one, the plaintiffs claimed that the Act violated the contracts clause, the commerce clause, and the equal protection and due process clauses of the Constitution, including the fourteenth amendment. It was also claimed, as here, that the subject matter of the Act had been preempted by federal legislation.

In the Fleck case, the plaintiffs sought injunctive relief on the basis of all of their constitutional claims. To the extent that an injunction was sought on the basis of the preemption claim, no statutory three judge court was required, but as to the other claims, as the law then stood, a three judge court had to be convened. See 28 U.S.C. § 2281, repealed by Act of August 12, 1976, P.L. 94-381, § 1, 90 Stat. 1119. The plaintiffs moved for summary judgment or, alternatively, for a preliminary injunction.

Sitting as a single judge, Judge Alsop refused to abstain and held that the preemption claim was without merit. As to the other claims he asked that a statutory court be convened. Fleck v. Spannaus, 412 F.Supp. 366 (D. Minn.1976). Such a court was convened and it consisted of Circuit Judge Heaney, Chief District Judge Devitt of Minnesota and Judge Alsop.

The three judge court held that there was no merit to any of the constitutional claims of the plaintiffs and dismissed the complaint. Fleck v. Spannaus, 449 F.Supp. 644 (D. Minn.1977). In an earlier decision, Fleck v. Spannaus, 421 F.Supp. 20 (D. Minn.1976), the three judge court had dismissed the individual claims of Fleck and others; that left the controversy essentially as one between Allied Structural Steel Company and the Commissioner and other state officials.

Allied sought and obtained review by the Supreme Court, and that Court held that, at least as applied to Allied, the Act violated the contracts clause. The decision of the district court was reversed. Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 98 S.Ct. 2716, 57 L.Ed.2d 727 (1978).

III.

Returning now to the case at bar, we observe at the outset that plaintiffs here, unlike those in Fleck, caused their pleadings to be so drawn as to avoid any necessity for the convening of a statutory court. Basically, they sought declaratory relief only, there being no prayer for a permanent injunction.

The case having come to issue plaintiffs moved for a summary judgment on the preemption claim only and alternatively for a preliminary injunction based solely on that claim. ⁴ Again refusing to abstain, the district judge rejected the preemption claim and denied the motion for summary judgment or for a preliminary injunction. White Motor Corp. v. Malone, 412 F.Supp. 372 (D. Minn.1976).

Since the order denied the motion for preliminary injunction, the district court's order was appealable, 28 U.S.C. § 1292(a), and the plaintiffs appealed. This court reversed the district court. White Motor Corp. v. Malone, 545 F.2d 599 (8th Cir. 1976). At the behest of the Commissioner, the Supreme Court granted review and reversed this court. Malone v. White Motor Corp., 435 U.S. 497, 98 S.Ct. 1185, 55 L.Ed.2d 443 (1978).

That decision was handed down on April 3, 1978, and the decision in Allied, supra, was handed down on June 28, 1978. Thereafter the plaintiffs moved for summary judgment based on the contracts clause, and their motion was granted. Due to the act of the district court in giving the Commissioner an appealable order under Rule 54(b), this appeal was taken. ⁵

IV.

Due to the obvious relation of this case to the Allied case, Supra, it has been necessary to state the procedural history of both cases in considerable detail. We now turn to the substantive facts of this case, many of which are not in serious dispute.

White Farm Equipment Company (hereinafter simply White) is a manufacturer of farm implements and for many years White and a predecessor corporation operated two manufacturing plants in Minnesota, one at Hopkins, and a smaller plant on Lake Street in Minneapolis. White's parent corporation, White Motor Corporation, is engaged in the manufacture and sale of the White line of motor trucks and parts therefor. Both of the corporations are engaged in commerce or in operations that substantially affect interstate commerce, and both are unquestionably "employers" within the meaning of the National Labor Relations Act.

Employees at White's two plants have been represented historically by local unions of the International Union of Automobile, Aerospace and Agricultural Implement Workers of America, commonly referred to as UAW.

Prior to 1972 White had maintained an employee pension plan that was funded by contributions from White. Under that plan White employees were entitled to retire on pensions upon reaching a certain age, and pension rights of an employee might vest prior to retirement if certain conditions were met. However, White had no personal obligations under the plan beyond the assets of the pension fund, and White had certain termination rights. It appears that the plan was adequately financed to meet current obligations as long as White maintained the fund and continued to make contributions, but that the plan would be inadequately financed if for any reason the plan should be terminated.

Through the years the pension plan was renewed periodically as was the collective...