Taylor Milk Co. v. International Brotherhood of Teamsters ( 2003 )

Opinions of the United
2003 Decisions States Court of Appeals
for the Third Circuit
6-10-2003
Taylor Milk Co Inc v. Intl Brhd Teamsters
Precedential or Non-Precedential: Non-Precedential
Docket No. 02-3461
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NOT PRECEDENTIAL
THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 02-3461
___________
TAYLOR M ILK COMPANY, a Pennsylvania Corporation,
Appellant
v.
INTERNATIONAL BROTHERHOOD OF TEAM STERS, AFL-CIO, an
unincorporated association and labor organization;
INTERNATIONAL BROTHERHOOD OF TEAMSTERS, DAIRY CONFERENCE -
USA AND CANADA, an unincorporated association and labor
organization; SERVICE PERSONNEL AND EMPLOYEES OF THE DAIRY
INDUSTRY TEAMSTERS LOCAL UNION NO. 205, an unincorporated
association and labor organization
___________
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
(D.C. Civil No. 95-cv-01663)
District Judge: The Honorable D. Brooks Sm ith
___________
Submitted Under Third Circuit LAR 34.1(a)
May 23, 2003
BEFORE: SCIRICA, Chief Judge, SLOVITER, and NYGAARD, Circuit Judges.
(Filed June 10, 2003)
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OPINION OF THE COURT
___________
NYGAARD, Circuit Judge.
Taylor Milk Company appeals from an order of the District Court
determining that Taylor did not suffer cognizable damages from an illegal secondary
boycott orchestrated by the Appellees, International Brotherhood of Teamsters, et al. On
appeal, Taylor argues that the District Court erred in its interpretation of the collective
bargaining agreement and abused its discretion by failing to allow additional damage
evidence regarding the profitability of alternative plans. We have plenary review over the
District Court’s interpretation of the bargaining agreement and we review the
determination to prohibit reopening of the record for abuse of discretion. Finding no fault
with the decision of the District Court, we will affirm.
I.
The issue of damages has been before a panel of this court previously in
Taylor Milk Co. v. International Brotherhood of Teamsters, 248 F.3d 239 (3d Cir. 2001)
(Taylor I). In Taylor I, we addressed both the issue of IBT’s liability for the secondary
boycott and whether the District Court’s award of $50,000 in damages was correct. After
affirming the District Court’s determination that IBT was liable for damages resulting
from the secondary boycott, we turned to the proper determination of damages. In
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reversing the District Court, we noted that “[o]ur review of the record reveals that the
District Court did not commit clear error insofar as it found that TMC had failed to prove
the profitability of Plan B and Plan C.” Id. at 247. We were concerned, however, that the
District Court had erred in its evaluation of the profitability of Plan A by failing to
consider the viability of the Plan as it related to the collective bargaining agreement. In
remanding, we gave specific instructions to the District Court:
If, upon remand, the District Court determines that
TMC would not have prevailed at arbitration and
maintains its determination that Plans B and C would
not have been profitable, it is clear that TMC could
have suffered no damage from IBT's actions, as the
loss of TMC's right to purchase the Borden plant
would have placed it in no worse of an economic
position than if it had purchased the plant. In other
words, If TMC could not have profited from
purchasing the Borden plant, there can be no basis for
awarding TM C damages.
Id. at 249.
On remand, the District Court reaffirmed its previous decision as to Plans B
and C, and acknowledged the need to determine if the language of the collective
bargaining agreement prohibited the implementation of Plan A. Focusing on a no-
transfer clause in the collective bargaining agreement, the District Court found that Plan
A could not have been successfully implemented via arbitration. We agree. The no-
transfer clause in the bargaining agreement states:
No work or services presently performed or hereafter assigned
to the collective bargaining unit with the exceptions listed
above, will be subcontracted, transferred, leased or assigned,
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in whole or in any part to any other person, firm or
corporation or non-unit employees unless otherwise expressly
provided in this Agreem ent.
Article II, Section 6(a), at App. 70. As Plan A will transfer work done by Appellees to a
new facility, Taylor must avoid this provision to demonstrate a likelihood of success at
arbitration.
There are two possible exceptions built into the provision. First, Taylor
could avoid the no-transfer clause by showing that the product to be transferred was
found in “the exceptions listed” in the preceding paragraph. This option is unavailing,
however, because Plan A involved transferring fluid milk production and fluid milk is not
one of the enumerated exceptions in the preceding section.1 The second exception to the
no-transfer clause is when such action is “otherwise expressly provided” in the bargaining
agreement. The District Court correctly found that all the provisions identified by Taylor
failed in one material respect—none of the provisions “expressly provided” for the
transfer of fluid milk production. On appeal, Taylor cites a portion of section 6(d), which
provides that “[n]othing in this Section shall be interpreted as limiting the Employer’s
right to sell or merge its business or go out of business in while or in part.” Taylor now
argues that the “real intent of Plan A” was to effect a merger, which would satisfy the
1. The paragraph referenced by the no-transfer provision lists the following as the
only exceptions: “ orange juice, dips, sour cream, cottage cheese, yogur t, butter, oleo,
eggs, sterile products, nutrish and cultured products, novelties, ice cream mix, Weight
Watchers ice cream, and diet ice cr eam. ” Art. II, Sec. 6(a).
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“expressly provided” exception to the no-transfer clause. Taylor’s reliance on this
provision is misplaced. Plan A clearly contemplates the outright purchase of the Borden
facility, not a merger of operations with Borden. Expanding a business by purchase of a
new facility is not a “merger” contemplated by section 6(d). Thus, Taylor has failed to
identify a provision in the collective bargaining agreement that expressly provides
authorization to transfer production of fluid milk to the Borden facility and, therefore,
cannot demonstrate the profitability of Plan A.
Taylor also alleges that the District Court abused its discretion by failing to
reopen the record and admit additional expert testimony regarding the alternative plans.
This argument does not withstand scrutiny. In reaching its decision, the District Court
correctly applied the factors we enunciated in Rochez Brothers, Inc. v. Rhoades, 527 F.2d
891, 894 n.6 (3d Cir. 1975). We see no reason to disturb the substantial discretion
afforded to the District Court to reopen the record after a remand.
II.
For the foregoing reasons we will affirm the order of the District Court.
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_________________________
TO THE CLERK:
Please file the foregoing opinion.
/s/ Richard L. Nygaard
Circuit Judge
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