Zemonick v. Consolidation Coal Co.

Decision Date22 May 1985
Docket NumberNo. 84-1353,84-1353
Parties119 L.R.R.M. (BNA) 2606, 121 L.R.R.M. (BNA) 2088, 103 Lab.Cas. P 11,492 Michael ZEMONICK, et al., Appellants, v. CONSOLIDATION COAL COMPANY, a corporation, et al., Appellees.
CourtU.S. Court of Appeals — Fourth Circuit

Robert M. Bastress, Morgantown, W.Va. (Barbara J. Fleischauer, Morgantown, W.Va., on brief), for appellants.

Robert M. Steptoe, Jr., Clarksburg, W.Va. (C. David Morrison, Clarksburg, W.Va., Michael J. Aloi, Manchin & Aloi, Fairmont, W.Va., on brief), for appellees.

Before HALL and ERVIN, Circuit Judges, and HAYNSWORTH, Senior Circuit Judge.

HAYNSWORTH, Senior Circuit Judge:

Plaintiffs, eleven former employees of Consolidation Coal Company, were discharged for allegedly instigating a wildcat strike. Each plaintiff took his discharge to arbitration, where the dismissals were upheld. In July 1981, approximately sixteen months after the discharges and thirteen months after the last of the arbitration decisions upholding the discharges, the plaintiffs commenced this action in a state court against the employer and the union. They asserted Vaca-Hines 1 hybrid claims, charging the employer with a breach of the collective bargaining agreement and the union with failure to discharge its duty of fair representation in the grievance and arbitration proceedings.

The employer removed the case to the United States District Court for the Northern District of West Virginia where the parties commenced extensive discovery and pretrial proceedings, culminating in cross motions for summary judgment. There was no suggestion that the commencement of the proceedings were untimely until July 11, 1983, after the decision of the Supreme Court of the United States in DelCostello v. Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983). In DelCostello, the Supreme Court held for the first time that such hybrid Sec. 301/DFR claims are subject to the six months period of limitations in Sec. 10(b) of the National Labor Relations Act 2 which governs the filing of charges of unfair labor practices with the National Labor Relations Board. Noting that this court, in Murray v. Branch Motor Express Co., 723 F.2d 1146 (4th Cir.1983), had held that DelCostello was to be applied retroactively, the district court dismissed this action as having been barred by the six months limitation period.

Because the circumstances of this case are quite different from those presented in Murray and because, with respect to these West Virginia plaintiffs, DelCostello represented an abrupt change from what appeared to have been settled law, we think DelCostello was improperly given retroactive effect in this case.

I.

Since there was no federal statute of limitations directly applicable to actions against an employer under Sec. 301(a) of the Labor Management Relations Act, 3 the Supreme Court held in United Auto Workers v. Hoosier Cardinal Corp., 383 U.S. 696, 86 S.Ct. 1107, 16 L.Ed.2d 192 (1966), that the court should borrow from state law the period of limitations most analogous to such an action. Accordingly, this court held in Kennedy v. Wheeling-Pittsburgh Steel Corp., 81 L.R.R.M. 2349, 69 CCH Labor Cases P 12,980 (4th Cir.1972), that the applicable period of limitations for hybrid actions such as this was supplied by West Virginia's statute limiting actions on oral contracts to five years. See also Howard v. Aluminum Workers International Union, 589 F.2d 771 (4th Cir.1978).

In the interim between the decisions of the Supreme Court in Hoosier Cardinal Corp. and DelCostello, there was another significant decision of that Court. United Parcel Service, Inc. v. Mitchell, 451 U.S. 56, 101 S.Ct. 1559, 67 L.Ed.2d 732 (1981). The United States District Court for the Eastern District of New York had held that Mitchell's claim was governed by New York's ninety day statute of limitations applicable to actions to overturn an arbitration award. The United States Court of Appeals for the Second Circuit had reversed, 624 F.2d 394 (1980). The Court of Appeals had held that the relevant statute was New York's six year statute applicable to actions on contracts. The employer, but not the union, sought and obtained a writ of certiorari, and the Supreme Court, agreeing with the district court, held that the action against the employer was barred by New York's ninety day limitation upon actions to set aside an arbitration award. Mr. Justice Stewart, in a separate concurrence, embraced the position of the AFL-CIO, as amicus curiae, that the controlling limitations period should be taken from Sec. 10(b) of the National Labor Relations Act, but the other members of the Court declined to consider that contention since it had not been advanced by either of the parties. Justice Stevens filed a separate opinion in which he emphasized the fact that the Court did not have before it the question of the applicable period of limitations to the claim against the union, and contended that the ninety day period for actions attacking an arbitration award should not be applied to the claim against the union.

So matters stood when this action was filed in West Virginia. Most of the states have very short periods of limitation, typically ninety days, for actions seeking to overturn an arbitration award, but West Virginia is one of the few states that has no statute specifically applicable to such actions. Thus, the holding of the Supreme Court in Mitchell had no relevance to the question of timeliness of the commencement of this action in West Virginia. A careful lawyer might have given some consideration to the straw in the wind to be found in Justice Stewart's concurring opinion in Mitchell and the declination of the other justices to consider the contention, but the controlling authority remained Hoosier Cardinal Corp. The applicable period of limitations was to be borrowed from state law, and, since West Virginia had no statute specifically applicable to suits to overturn arbitration awards, our earlier decision holding that the timeliness question was governed by West Virginia's five year statute for the commencement of an action on an oral contract was controlling.

II.

Nothing the Supreme Court did in DelCostello forecloses our consideration of the retroactive application of that decision, in the circumstances of this case, under the standards of Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971). In DelCostello, the Supreme Court applied the new rule to the plaintiffs in the two consolidated cases before it, but in neither case was there a potential problem with retroactive application under the Chevron standards.

DelCostello, himself, brought his action in the District Court of Maryland, and, under Mitchell, the district court properly held that the applicable limitations period was that contained in Maryland's thirty day statute for actions to vacate an arbitration award. 524 F.Supp. 721 (D.Md.1981). This court affirmed on the district court's opinion. 679 F.2d 879 (4th Cir.1982) (Mem.). Thus, the "retroactive" application of DelCostello 's new rule to DelCostello, himself, had the effect of increasing the limitations period, not decreasing it. Indeed, the Supreme Court remanded DelCostello's case for consideration of possible tolling so as to make the filing of the complaint timely under the new six months rule. DelCostello thus benefited from the retroactive application of the new rule, and in no sense was hurt by it.

Flowers, the plaintiff in the consolidated case decided with DelCostello, suffered a dismissal of his action in the Western District of New York. That court held that the relevant limitations period was the ninety day period provided by New York's statute for the commencement of actions to vacate an arbitration award. The Court of Appeals for the Second Circuit reversed, holding that the relevant period for both branches of the claim was New York's six year statute for the commencement of actions on contracts. 622 F.2d 573 (2d Cir.1980) (Mem). That decision, however, was vacated by the Supreme Court, which remanded the case to the Court of Appeals for reconsideration in the light of Mitchell. Upon reconsideration, that court held, as required by Mitchell, that the action against the employer was barred by the ninety day statute for actions to vacate arbitration awards but that the claim against the union was governed by New York's three year statute for the commencement of actions for malpractice. Flowers v. United States Steel Workers of America, 671 F.2d 87 (2d Cir.1982). The Supreme Court's application of the new six month rule to both branches of the claim thus enlarged the applicable period of limitations for the claim against the employer. It reduced the limitations period held to be applicable by the Court of Appeals for the Second Circuit, but enlarged the limitations period initially held to be applicable by the district court. In any event, from the outset, Flowers was aware of New York's ninety day limitation period for the commencement of an action to set aside an arbitration award, and was chargeable with knowledge that the ninety day period might be held to be the relevant one, just as the district court had held.

Neither DelCostello nor Flowers was in a position to claim that the decision in DelCostello, in application to him, would substantially and unfairly disadvantage him. No one would have perceived any retroactivity problem if, when the case first came before it, the Supreme Court had reversed the Court of Appeals for the Second Circuit in Flowers and held that the district court was correct initially in applying the ninety day period for actions to vacate arbitration awards.

Application of the new rule to the two cases before the Court simply does not suggest that, in other cases, application of the new rule, under quite different circumstances, might not appropriately call for consideration of a...

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