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Rock Drilling v. Mason & Hanger Co.

December 6, 1954

ROCK DRILLING, BLASTING, ROADS, SEWERS, VIADUCTS, BRIDGES, FOUNDATIONS, EXCAVATIONS AND CONCRETE WORK ON ALL CONSTRUCTION, HOD CARRIERS', BUILDING AND COMMON LABORERS' LOCAL UNION NO. 17, PLAINTIFF-APPELLANT,
v.
MASON & HANGER COMPANY, INCORPORATED, DEFENDANT-APPELLEE. SAME V. WALSH CONSTRUCTION COMPANY, INCORPORATED, DEFENDANT-APPELLEE. SAME V. B. PERINI & SONS, INCORPORATED, DEFENDANT-APPELLEE. SAME V. GEORGE M. BREWSTER & SON, INCORPORATED, DEFENDANT-APPELLEE.



Author: Medina

Before CHASE, MEDINA and HINCKS, Circuit Judges.

MEDINA, C.J.: These are four companion actions in tort by a labor union to recover damages alleged to have been sustained severally by some hundreds of employees of each defendant by reason of diminution of wages and lack of proper working conditions, said to have been caused by the operation of a conspiracy between one James Bove and each of defendants pursuant to which certain bribes were paid by each defendant to Bove. References herein are to the record in the action against Mason & Hanger Company, Inc., as the opinion below was published under the title of that action.

The original complaints were dismissed by Judge Rifkind for lack of jurisdiction of subject matter and for failure to state a claim upon which relief could be granted. Amended complaints were dismissed by Judge Samuel H. Kaufman, who found that, "notwithstanding some changes in verbiage and some additions," the amended complaints suffered from the same infirmities as were apparent upon the face of the others. These appeals bring up for our consideration the sufficiency of both the original and the amended complaints.

The original complaint asserted jurisdiction "by virtue of the provisions of Section 301*fn1 of the Labor Management Relations Act of 1947" (the Taft-Hartley Act) and 28 U.S.C.A. ยง 1332, alleging diversity of citizenship (plaintiff and all its members being citizens of New York and defendant a West Virginia corporation), together with the usual conclusory statement that "the amount in controversy herein, exclusive of interest and costs, exceeds the sum or value of $3000."

The charge was that Bove was vice-president of International Hod Carriers', Building and Common Laborers' Union of America, the parent international of the plaintiff local union, that Bove dominated and controlled the plaintiff and represented plaintiff and its members in collective bargaining with employers. It is alleged that, between August 28, 1939, and August 22, 1944, upwards of 400 workmen, members of the plaintiff, worked for defendant in the performance of a contract, between defendant and the Board of Water Supply of the City of New York for the construction of part of the Delaware Aqueduct Project, which provided for lower rates of pay and more dangerous and deleterious working conditions than would have been the case but for "a fraudulent, wrongful and illegal conspiracy," formed in July, 1939, between Bove and defendant, in the operation and pursuant to the terms of which defendant paid Bove a bribe of $36,000 and Bove caused the workmen to agree and they "agreed to and did, during the aforesaid period of time, render labor and services for the defendant at the aforesaid lower rate of wages and more dangerous and deleterious working conditions," and sustained other loss, "all to the damage of the plaintiff as the representative of its said members" in the sum of $600,000, the conspiracy not having been discovered until March 8, 1945. The parties stipulated that the "plaintiff has brought this action in a representative capacity on behalf of its members who were employed by defendant," and that "the damages sought * * * are and are limited to the damages sustained by those members of the plaintiff who were employed by the defendant as aforesaid."

Thus on the face of the original complaint it is clear beyond cavil that the action sounded in tort and that plaintiff had aggregated some 400 separate individual claims for damages amounting in all of $600,000, but considerably less than $3,000 apiece.

The amended complaint asserts jurisdiction on the same basis as before, realleges the making of the contract with the Board of Water Supply, the conspiracy with and the payment of the $36,000 bribe to Bove, and the rendition of services by the workers for lower rates of pay and under more dangerous and deleterious working conditions, with a slightly different choice of words here and there. What is claimed to be significantly new is: (1) the inclusion of allegations that the International, through Bove, negotiated with defendant and executed a collective bargaining agreement fixing rates of pay and working conditions said to be lower and more dangerous and deleterious than would have been the case but for the conspiracy and the payment of the bribe, and that the collective bargaining agreement was executed "on behalf of the plaintiff and its members" and "the same was assigned by the International to the plaintiff"; (2) the inclusion of an allegation that defendant was "unjustly enriched" in the amount of the bribe of $36,000, and "the members of the plaintiff employed by the defendant as aforesaid were damaged at least in the said amount"; and (3) a prayer for relief "declaring and adjudging" that the collective bargaining agreement was made pursuant to the conspiracy and in consideration of the bribe, that "the members of the plaintiff" were demaged at least in the amount of $36,000, and "directing" that $36,000 be paid to plaintiff and that plaintiff hold the same "as trustee for its said members for distribution among them as their respective interests may ultimately appear." The parties again stipulated that the damages sought were limited to those sustained by the members of plaintiff who were employed by defendant in the performance of the contract with the Board of Water Supply.

Every event upon which plaintiff rests its claim for relief occurred prior to the passage of the Taft-Hartley Act in 1947.

Reversing the normal order, and doing so solely for the sake of clarity and to avoid repetition, we shall discuss last the question of jurisdiction over the subject matter of the action.

At the outset it is clear that at common law no cause of action whatever would have been vested in plaintiff as a matter of substantive law. See 3 Moore's Federal Practice (2d Ed.) pp. 1331-2. Nor did an unincorporated association such as plaintiff have any capacity to sue or be sued. Moffat Tunnel League v. United States, 289 U.S. 113, 118 (1933).There was no such separate entity known to common law procedure; and each and every member of the association was required to join or be joined as in the case of partners. Such is still the law in many state jurisdictions today, although it is quite common, as in New York, to find code or other statutory provisions permitting actions to be maintained by or against the president or treasurer or other officers of an unincorporated association.

In addition to the limited general terms of Rule 17(b) of the Federal Rules of Civil Procedure, on "Capacity to Sue and Be Sued," specific provisions are contained in Title III of the Taft-Hartley Act relative to "Suits by and against Labor Organizations." Section 301(a) serves the dual purpose of giving the United States District Courts jurisdiction to entertain and decide suits by labor unions "for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce, * * * without respect to the amount in controversy or without regard to the citizenship of the parties," and also, by necessary implication, constituted such labor unions the trustees of recoveries in such actions for the benefit of such of the employees as might be entitled to the proceeds thereof. This Section 301(a) has been held to have created "a new substantive liability," and not applicable to breaches of contract which antedated June 23, 1947, when the Taft-Hartley Act was enacted. Schatte v. International Alliance, Etc., 182 F.2d 158 (9th Cir. 1950), certiorari denied 340 U.S. 827 (1950), rehearing denied 340 U.S. 885 (1950); Studio Carpenters Local Union v. Loew's, Inc., 182 F.2d 168 (9th Cir. 1950), certiorari denied 340 U.S. 828, (1950), rehearing denied 340 U.S. 885 (1950).

The capacity provision, applicable generally to all suits by or against labor unions, is contained in Section 301(b), as follows:

"Any such labor organization may sue or be sued as an entity and in behalf of the employees whom it represents in the courts of the United States."

This is followed, in the same and subsequent subdivisions of Section 301, by certain limitations concerning the enforceability of the judgment, venue, service of process and allied procedural matters, all of which together comprise a harmonious ...


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