District No. 1, Pacific Coast District, Marine Engineers Beneficial Association, Afl-Cio v. American Maritime Officers ( 2014 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
DISTRICT NO. 1, PACIFIC COAST )
DISTRICT, MARINE ENGINEERS’ )
BENEFICIAL ASSOCIATION, AFL- )
CIO, )
)
Plaintiff, )
)
v. ) Civil Action No. 13-cv-1034 (KBJ)
)
AMERICAN MARITIME OFFICERS, )
et al., )
)
Defendants. )
)
MEMORANDUM OPINION
Plaintiff District No. 1, Pacific Coast District, Marine Engineers’ Beneficial
Association, AFL-CIO (“MEBA”) and Defendant American Maritime Officers
(“AMO”) are rival labor unions that represent maritime industry employees who are
stationed at ports throughout the United States and on oceangoing vessels. Both MEBA
and AMO are affiliated with the AFL-CIO; their dispute in the instant case arises out of
a collective bargaining relationship that MEBA had with a third party, gone bad.
Specifically, until 2011, MEBA had a long-standing collective bargaining
agreement with Liberty Maritime Corp. (“Liberty”), a shipping management company
that had employed MEBA-represented individuals aboard its tanker and bulk carrier
vessels for more than twenty years pursuant to successive labor contracts. That
relationship soured when labor negotiations between MEBA and Liberty that took place
in the fall of 2011 failed to produce a successor contract for the first time since 1988.
Liberty immediately entered into a new collective bargaining agreement with AMO;
indeed, according to MEBA, Liberty and AMO had secretly and improperly met and
bargained while the contract negotiations between Liberty and MEBA were still
underway, and it was this secret meeting that caused the ongoing successor-contract
negotiations to fail. To vindicate what MEBA contends was tortious conduct on AMO’s
part, MEBA filed the instant lawsuit against AMO in the Superior Court of the District
of Columbia, claiming intentional interference with a prospective business advantage
(Count I) and unjust enrichment (Count II). (See Compl. for Intentional Interference
with Prospective Bus. Advantage & Unjust Enrichment (“Compl.”), ECF No. 3-1, at 5-
19, ¶¶ 3, 37-43.) 1 AMO then removed the case to federal court (see Defs.’ Notice of
Removal, ECF No. 1, ¶¶ 7-9), contending that section 301 of the Labor Management
Relations Act (“LMRA”), 29 U.S.C. § 185, preempts MEBA’s common law claims
insofar as resolution of MEBA’s claims requires interpretation of certain labor
agreements under federal law (see Notice of Removal, ¶¶ 7-9).
Before this Court at present are two motions: (1) MEBA’s motion to remand this
matter to Superior Court (Pl.’s Mot. to Remand & Opp’n to Defs.’ Mot. to Dismiss
(“Pl.’s Mot.”), ECF No. 7), and (2) AMO’s motion to dismiss MEBA’s complaint
(Defs.’ Mot. to Dismiss (“Defs.’ Mot.”), ECF No. 4). With respect to remand, MEBA
maintains that there is no federal question jurisdiction—and, thus, that removal was
improper—because a state court could resolve MEBA’s common law claims without
analyzing or interpreting any labor contracts. (See Pl.’s Mem. in Supp. of Pl.’s Mot.
(“Pl.’s Br.”), ECF No. 7-1, at 1-3.) AMO responds that resolution of MEBA’s common
1
Page numbers throughout this Opinion refer to those assigned by the Court’s electronic filing system.
2
law claims requires interpreting both the AFL-CIO constitution and MEBA’s collective
bargaining agreement with Liberty in a manner that triggers section 301’s preemptive
effect and bestows federal question jurisdiction upon this Court. (See Notice of
Removal ¶ 9; Defs.’ Opp’n to Pl.’s Mot. (“Defs.’ Opp’n”), ECF No. 9, at 1-3.) In
addition, AMO maintains that MEBA’s complaint must be dismissed, first, because the
AFL-CIO constitution requires affiliates to engage in arbitration as the exclusive
method of resolving inter-union disputes, and second, because MEBA’s state law claims
lack federal labor law analogues. (Defs.’ Mem. in Supp. of Defs.’ Mot. (“Defs.’ Br.”),
ECF No. 4-1, at 1-2.)
After consideration of the parties’ briefs and the applicable law, this Court finds
that this case was properly removed to federal court under 28 U.S.C. § 1441 because
interpretation of the AFL-CIO constitution under federal labor law is required in order
to address MEBA’s common law claims. Furthermore, because MEBA has agreed to
binding arbitration as the exclusive method of resolving inter-union disputes under the
AFL-CIO constitution yet has failed to exhaust those procedures in this case, this Court
concludes that MEBA cannot maintain the instant lawsuit. Consequently, MEBA’s
motion to remand is DENIED, and AMO’s motion to dismiss MEBA’s complaint, as
converted to a motion for summary judgment herein, is GRANTED. A separate order
consistent with this memorandum opinion will follow.
I. BACKGROUND
A. Factual Background
MEBA and AMO are labor organizations that represent licensed deck and
engineering officers in the U.S. maritime industry. (See Compl. ¶¶ 1-2; Notice of
Removal ¶ 1.) Both unions are affiliated with the AFL-CIO. (Notice of Removal ¶ 1.)
3
According to the complaint, Liberty has traditionally used MEBA-represented
employees on its vessels pursuant to a series of collective bargaining agreements that
began with Liberty’s formation in 1988. (Compl. ¶ 7.) On August 25, 2010, MEBA
entered into a Memorandum of Understanding (“MOU”) with Liberty that extended the
existing collective bargaining agreement (“CBA”) for one year—until September 30,
2011—and that also provided for negotiations in the event that either party sought to
amend the CBA. (Id. ¶¶ 9-10.) In this regard, the MOU contained the following
statement:
In the event either the Company or the Union serves notice to amend the
Agreement, the terms of the Agreement in effect at that time of the notice
to amend shall continue in effect until mutual agreement on the proposed
amendments or an impasse has been reached.
(Id. ¶ 10.) MEBA alleges that it provided Liberty with timely notice of its desire to
amend the agreement on July 8, 2011, and that, thereafter, MEBA and Liberty began
negotiating the terms of a successor contract. (Id. ¶¶ 11-13.)
It is undisputed that the subsequent negotiations between MEBA and Liberty
focused on Liberty’s request that MEBA transition from a “defined benefit plan” to a
“defined contribution plan,” and also various other operational issues that the parties
referred to as the “20 points.” (Id. ¶¶ 15-16.) 2 MEBA alleges that, while it was
negotiating with Liberty over these terms, AMO’s National President Thomas Bethel
and Assistant Vice President Daniel Shea (referred to herein collectively with the union
2
“A defined-benefit plan, ‘as its name implies, is one where the employee, upon retirement, is entitled
to a fixed periodic payment.’” Beck v. PACE Int’l Union, 551 U.S. 96, 98 (quoting Commissioner v.
Keystone Consol. Indus., Inc., 508 U.S. 152, 154 (1993)). “A defined contribution plan[,]” by contrast,
“is one where employees and employers may contribute to the plan, and ‘the employer’s contribution is
fixed and the employee receives whatever level of benefits the amount contributed on his behalf will
provide.’” Hughes Aircraft Co. v. Jacobson, 525 U.S. 432, 439 (1999) (quoting Nachman Corp. v.
Pension Benefit Guaranty Corp., 446 U.S. 359, 364 n.5 (1980)) (internal quotation marks omitted).
4
as “AMO”)—who were aware of the ongoing negotiations—attended a secret meeting
with Liberty representatives. (Id. ¶ 17, 19.) According to the complaint, during that
meeting in August of 2011, Bethel and Shea made clear to Liberty that AMO would
readily accept the terms that Liberty was demanding of MEBA—that is, the defined
contribution plan and the 20 points. (Id. ¶¶ 20-21.) MEBA further alleges that AMO
and Liberty reached “an agreement in principal [sic]” at the close of the meeting to
enter into a new collective bargaining agreement together (id. ¶ 22), and that both AMO
and Liberty concealed their meeting and agreement from MEBA (id. ¶ 19 (“Neither
Liberty nor AMO disclosed to the MEBA that they were meeting and negotiating for a
CBA[.]”); id. ¶ 24 (“[T]he AMO defendants and Liberty acted to conceal their meeting
and agreement on a CBA.”)). Moreover, according to the complaint, although Liberty
resumed negotiations with MEBA after its meeting with AMO, Liberty thereafter
“refused to alter its bargaining position with MEBA,” and “took an ‘all or nothing’
approach that made it much more difficult for the parties to make progress in their
negotiations.” (Id. ¶ 26.)
Eventually, MEBA realized that Liberty was not budging “and that the parties
would not reach a successor agreement unless the Union reevaluated its position.” (Id.
¶ 28.) On September 28, 2011, with little time left to act before expiration of the
MOU’s September 30th extension period, MEBA purportedly informed Liberty that it
would agree to both a defined contribution plan and Liberty’s recent economic
proposals, and requested that MEBA and Liberty return to the bargaining table to
conclude negotiations on the 20 points and to finalize a successor agreement. (Id. ¶¶
29-30.) MEBA alleges that, in response, Liberty “stated that it was ‘too late’” (id.
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¶ 31), and then refused to negotiate further (id. ¶ 32). This refusal, according to
MEBA, was based on the fact that Liberty had already “called AMO to confirm their
agreement in principal [sic]” and had begun making plans for “AMO represented
personnel to take the place of MEBA represented personnel” aboard Liberty’s ships.
(Id. ¶ 33.) Consequently, MEBA alleges, when the clock struck midnight on October 1,
2011, AMO members began staffing Liberty’s vessels, leaving MEBA members high
and dry. (Id. ¶¶ 35-36.)
B. Procedural History
On June 12, 2013, MEBA filed the instant two-count complaint against AMO in
D.C. Superior Court. (See id. at 5; Notice of Removal ¶ 1.) Count I alleges that AMO
“intentionally interfered with” MEBA’s contractual relationship with Liberty when it
wrongfully induced Liberty to “breach its labor contract with MEBA” and to “end good
faith bargaining between Liberty and MEBA” through improper “conduct,
communications and contact” with Liberty, “including its August, 2011 meeting[.]”
(Compl. ¶ 39.) Count II alleges that AMO has been unjustly enriched by “financial
payments and other benefits” from Liberty because, absent AMO’s interference, MEBA
would have received those benefits. (Id. ¶ 42.) Accordingly, MEBA’s complaint—
which sounds in tort law—seeks compensatory and punitive damages against AMO.
(Id. at 18, ¶ 5.) 3
AMO removed this action to federal court on July 8, 2013, pursuant to 28 U.S.C.
§ 1441, arguing that, under section 301 of the LMRA, this Court has federal question
3
MEBA also filed a separate lawsuit against Liberty in federal court to compel arbitration of certain
grievances arising from the failed negotiations. That case, too, was before this Court. See Dist. No. 1,
Pacific Coast Dist., Marine Eng’rs’ Beneficial Ass’n v. Liberty Mar. Corp., No. 11-1795, 2014 WL
4851874 at *1 (D.D.C. Sept. 30, 2014).
6
jurisdiction over MEBA’s asserted state common law claims. (See Notice of Removal
at 1-2 & ¶¶ 7-9.) One week later, on July 15, 2013, AMO moved to dismiss the
complaint in its entirety pursuant to Federal Rules of Civil Procedure 12(b)(1) and
12(b)(6). (See Defs.’ Mot. at 1.) Specifically, AMO argues that because both parties
are AFL-CIO affiliates, the AFL-CIO constitution requires that AMO and MEBA
resolve the instant dispute in a mandatory arbitration procedure, not in federal or state
court. (See Defs.’ Br. at 14-17.) AMO also contends that the complaint fails to state a
claim upon which relief can be granted because section 301 completely preempts
MEBA’s state law action and there are no federal labor law analogues to MEBA’s
particular state law claims. (See id. at 1, 11-13.)
Meanwhile, MEBA filed a motion to remand this case back to D.C. Superior
Court. (See Pl.’s Mot.) MEBA insists that section 301 does not preempt its state law
claims because neither count of MEBA’s complaint requires interpretation or analysis
of any labor agreements under federal law. (Pl.’s Br. at 1-2, 11-20.) Consequently,
according to MEBA, this Court lacks jurisdiction and must send the instant case back to
Superior Court. (Id. at 2-3.)
II. PLAINTIFF’S MOTION TO REMAND
Before this Court can address AMO’s dismissal arguments, it must first consider
whether federal question jurisdiction exists in this case under LMRA section 301—in
which case this matter was properly removed—or whether the instant case must be
remanded back to Superior Court for lack of subject matter jurisdiction. See, e.g.,
Busby v. Capital One, N.A., 932 F. Supp. 2d 114, 126 (D.D.C. 2013) (addressing
plaintiff’s motion to remand for lack of subject matter jurisdiction before considering
defendant’s motion to dismiss for failure to state a claim); Greene v. Am. Fed’n of
7
Gov’t Emps., No. 05-0408, 2005 WL 3275903, at *1 & n.1 (D.D.C. Sept. 7, 2005)
(addressing plaintiff’s motion to remand for lack of subject matter jurisdiction before
considering defendant’s motion to dismiss for lack of subject matter jurisdiction (citing
Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 411 (11th Cir. 1999)). For the
reasons that follow, this Court concludes that section 301 completely preempts MEBA’s
state law claims under the circumstances presented here and, thus, that removal was
proper.
A. Applicable Legal Standard
A defendant may remove a state court action to federal court only if the action
could have been filed in federal court in the first instance. 28 U.S.C. § 1441(a); see
also Wash. Consulting Grp., Inc. v. Raytheon Technical Servs. Co., 760 F. Supp. 2d 94,
99 (D.D.C. 2011) (citing Wexler v. United Air Lines, Inc., 496 F. Supp. 2d 150, 152
(D.D.C. 2007)). “Courts must strictly construe removal statutes, resolving any
ambiguities regarding the existence of removal jurisdiction in favor of remand.” Busby,
932 F. Supp. 2d at 127. Where, as here, a plaintiff moves to remand its action back to
state court, “[t]he removing party bears the burden of showing that federal subject
matter jurisdiction exists.” Wexler, 496 F. Supp. 2d at 152 (citation omitted).
There are several bases for original subject matter jurisdiction in federal courts,
including federal question jurisdiction under section 1331 of title 28 of the U.S. code,
which grants federal district courts jurisdiction over “all civil actions arising under the
Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. “The presence
or absence of federal-question jurisdiction is governed by the ‘well-pleaded complaint
rule,’ which provides that federal jurisdiction exists only when a federal question is
presented on the face of the plaintiff’s properly pleaded complaint.” Caterpillar, Inc. v.
8
Williams, 482 U.S. 386, 392 (1987). When a plaintiff’s cause of action lies in state law,
“the court must determine whether the adjudication of those state law claims requires
resolution of a substantial question of a federal law, because the mere presence of a
federal issue in a state cause of action does not automatically confer federal-question
jurisdiction.” Harding-Wright v. Dist. of Columbia Water & Sewer Auth., 350 F. Supp.
2d 102, 104-105 (D.D.C. 2005) (internal quotation marks and citations omitted).
Ordinarily, “a case may not be removed to federal court on the basis of a federal
defense, including the defense of pre-emption, even if the defense is anticipated in the
plaintiff’s complaint, and even if both parties concede that the federal defense is the
only question truly at issue.” Caterpillar, 482 U.S. at 393 (emphasis in original) (citing
Franchise Tax Bd. v. Constr. Laborers Vacation Trust for S. Cal., 463 U.S. 1, 12
(1983)).
However, there is a caveat to the well-pleaded complaint rule with respect to an
anticipated preemption defense: the Supreme Court has recognized that “‘when a
federal statute wholly displaces the state-law cause of action through complete pre-
emption,’ the state claim can be removed.” Aetna Health Inc. v. Davila, 542 U.S. 200,
207 (2004) (quoting Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 8 (2003)). In other
words, “Congress may so completely pre-empt a particular area that any civil complaint
raising this select group of claims is necessarily federal in character.” Metro. Life Ins.
Co. v. Taylor, 481 U.S. 58, 63-64 (1987). “Under this principle, the preemptive force
of a statute can be so ‘extraordinary’ that it ‘converts an ordinary state common-law
complaint into one stating a federal claim for purposes of the well-pleaded complaint
rule.’” Heintzman v. Amalgamated Transit Union Int’l, 825 F. Supp. 2d 161, 166
9
(D.D.C. 2011) (quoting Metro. Life Ins. Co., 481 U.S. at 65); see also Beneficial Nat’l
Bank, 539 U.S. at 8 (“When the federal statute completely pre-empts the state-law cause
of action, a claim which comes within the scope of that cause of action, even if pleaded
in terms of state law, is in reality based on federal law.”).
B. Removal Was Proper Because Section 301 Completely Preempts
MEBA’s State Law Claims
The jurisdictional issue in the instant case turns on the reach of federal labor
law, and in particular, the preemptive effect of section 301 of the LMRA. That statute
grants federal courts jurisdiction over lawsuits alleging labor contract violations, and
specifically provides that
[s]uits for violation of contracts between an employer and a labor
organization representing employees in an industry affecting commerce as
defined in this chapter, or between any such labor organizations, may be
brought in any district court of the United States having jurisdiction of the
parties, without respect to the amount in controversy or without regard to
the citizenship of the parties.
29 U.S.C. § 185(a). The Supreme Court has acknowledged that section 301 “not only
provides federal-court jurisdiction over controversies involving collective-bargaining
agreements, but also ‘authorizes federal courts to fashion a body of federal law for the
enforcement of these collective bargaining agreements.’” Lingle v. Norge Div. of
Magic Chef, Inc., 486 U.S. 399, 403 (1988) (quoting Textile Workers Union v. Lincoln
Mills, 353 U.S. 448, 451 (1957)); see also Lincoln Mills, 353 U.S. at 456 (“[T]he
substantive law to apply in suits under s[ection] 301(a) is federal law, which the courts
must fashion from the policy of our national labor laws.”). Moreover, the Supreme
Court has held that “the preemptive force of § 301 is so powerful as to displace entirely
any state cause of action ‘for violation of contracts between an employer and a labor
organization.’” Franchise Tax Bd., 463 U.S. at 23. This means that, for the purpose of
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the well-pleaded complaint rule, section 301 is one of the rare federal statutes that
“completely preempt[s] state law.” Heintzman, 825 F. Supp. 2d at 166 (citing Metro.
Life Ins. Co., 481 U.S. at 64).
As relevant here, section 301’s preemptive effect extends to state law claims if
resolution of those claims “requires the interpretation of a collective-bargaining
agreement[,]” Lingle, 486 U.S. at 413, or “is substantially dependent upon analysis of
the terms of [a labor] agreement[,]” Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 220
(1985). Furthermore, courts have recognized that international “[u]nion constitutions
are ‘contracts’ within the meaning of section 301(a)[.]” Laborers’ Int’l Union v. Nat’l
Post Office Mail Handlers, Watchmen, Messengers & Group Leaders Div., 880 F.2d
1388, 1395 (D.C. Cir. 1989) (citing United Ass’n of Journeymen & Apprentices of the
Plumbing & Pipefitting Indus. v. Local 334, 452 U.S. 615 (1981)); see also Wooddell v.
Int’l Bhd. of Elec. Workers, Local 71, 502 U.S. 93, 98-100 (1991); Heintzman, 825 F.
Supp. 2d at 166. Thus, whether or not this Court has subject matter jurisdiction over
MEBA’s common law claims such that AMO was entitled to remove MEBA’s action
depends on whether resolving MEBA’s claims requires interpreting or relying upon any
labor agreement, including the AFL-CIO constitution.
MEBA’s motion to remand argues that the two state common law claims that
MEBA has brought in this action “do not require the Court to interpret a collective
bargaining agreement” and “are independent of any rights arising under a labor
contract”; therefore, “this Court does not have jurisdiction to adjudicate these claims.”
(Pl.’s Mot. at 1, 2.) 4 AMO responds that, at the very least, MEBA’s state law claims
4
For example, MEBA steadfastly maintains that its first cause of action is a claim for tortious
interference with a prospective business advantage and not a claim for tortious interference with a
11
trigger the complete preemptive effect of section 301 due to the fact that MEBA has
chosen to file a lawsuit with respect to this dispute rather than proceed to arbitration.
In this regard, AMO points to the AFL-CIO constitution, and argues, first, that MEBA
has agreed to arbitrate (and not to litigate) the instant dispute under the express terms of
that charter, and second, that any court’s resolution of this argument would necessarily
require consideration and interpretation of the AFL-CIO constitution such that the
preemptive effect of section 301 is triggered. (See Defs.’ Opp’n at 14-16; see also id.
at 14 (“[T]he existence of a mandatory and exclusive dispute-resolution procedure in
the AFL-CIO Constitution is not merely a defense; it is an independent basis for § 301
preemption.”).) Put another way, according to AMO, however successful MEBA may
have been in crafting a complaint that itself raises only state law causes of action,
MEBA has not—and cannot—avoid having a court determine the extent of MEBA’s
obligations under Article XX of the AFL-CIO constitution, which governs disputes
between AFL-CIO affiliates and appears to require mandatory arbitration as “the sole
and exclusive method for settlement and determination” of disputes such as the one
between the parties here. (Id. at 15.)
This Court agrees. As explained above, it is well established that any state law
claim or defense that requires interpretation of federal labor contracts—including
international union constitutions—implicates the preemptive effect of section 301 of the
LMRA. Thus, so long as consideration of MEBA’s complaint or any of AMO’s
contractual relationship, which would necessarily require interpretation of the CBA between MEBA and
Liberty. (See Pl.’s Reply Mem. in Supp. of Pl.’s Mot., ECF No. 11, at 2 (“AMO defendants repeatedly
(and wrongly) assert that MEBA’s intentional interference with prospective business advantage claim
must be viewed instead as an intentional interference with contract claim—a cause of action that
(unlike the claims brought by MEBA) requires a finding of breach of contract and, therefore, requires
interpretation of a labor contract.”).)
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defenses would require interpretation of the text of the union’s constitution, this Court
has subject matter jurisdiction over MEBA’s claims. Moreover, federal labor policy
supports finding preemption in order to ensure “that the purposes animating § 301” will
not be frustrated “by parties’ efforts to renege on their arbitration promises by
‘relabeling’ as tort suits actions simply alleging breaches of duties assumed in [federal
labor contracts.]” Lividas v. Bradshaw, 512 U.S. 107, 122-123 (1994); cf. Allis-
Chalmers Corp., 471 U.S. at 219 (“A [preemption] rule that permitted an individual to
sidestep available grievance procedures would cause arbitration to lose most of its
effectiveness[.]” (citing Republic Steel Corp. v. Maddox, 379 U.S. 650, 653 (1965))).
Under the circumstances presented here and notwithstanding the fact that MEBA’s
complaint directly raises only state law tort claims, this action clearly presents the
substantial threshold question of whether MEBA is entitled to file suit against AMO in
a court of law (state or federal) at all, or, alternatively, whether “both MEBA and AMO
bound themselves” to arbitrate inter-union disputes “by affiliating with the AFL-CIO.”
(Defs.’ Opp’n at 15.) And because answering that question necessarily would require a
court to consult and interpret the text of the AFL-CIO’s constitution, this Court finds
that section 301’s complete preemptive effect is triggered. See, e.g., Heintzman, 825 F.
Supp. 2d at 166-168 (denying motion to remand where plaintiff’s state law claims
required interpretation of international union constitution).
MEBA’s arguments to the contrary are unconvincing. First, MEBA explains that
the well-pleaded complaint rule prevents AMO from relying on a preemption defense to
establish federal question jurisdiction. (Pl.’s Br. at 19; see also id. at 1-2 (“[A]
defendant cannot transform a state law action into one arising under federal law merely
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by asserting a defense that seeks to raise a federal question.”).) MEBA is correct that
“even an ‘obvious’ pre-emption defense does not, in most cases, create removal
jurisdiction.” Metro. Life Ins. Co., 481 U.S. at 66. But this is not “most cases[.]” Id.As explained above, to the extent that MEBA’s state law claims require, or depend
upon, interpretation of a labor contract, this case falls under a rare exception to the
well-pleaded complaint rule because “[s]ection 301 of the LMRA is one of the few
federal statutes that the Supreme Court has found to completely preempt state law”
under those circumstances. Heintzman, 825 F. Supp. 2d at 166 (citing id. at 64).
Moreover, given that the AFL-CIO constitution is a labor contract that contains a
mandatory arbitration provision, this Court concludes that resolution of MEBA’s state
law claims necessarily depends upon interpreting that contract to decide whether or not
MEBA is required to arbitrate its claims—an issue that the Court addresses below. (See
infra section III.B.)
MEBA also argues that AMO’s reliance on the AFL-CIO constitution’s internal
dispute resolution provision is “disingenuous” because, according to MEBA, AMO
“conveniently ignored” these same constitutional provisions when it previously litigated
a similar action against MEBA in Ohio. (Pl.’s Br. at 20.) Apparently, in an unrelated
(but parallel) dispute, AMO sued MEBA in Ohio state court for alleged unjust
enrichment and tortious interference with AMO’s contractual relationship with Interlake
Steamship Co. See Am. Mar. Officers v. Marine Eng’rs Beneficial Ass’n, Dist. I, 2006
WL 2474969 at *1 (N.D. Ohio Aug. 25, 2006), appeal dismissed, 503 F.3d 532 (6th Cir.
2007). That case involved an ironic reversal of the parties’ current litigating positions:
MEBA had removed the case to federal court on the grounds of section 301
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preemption—specifically, that resolution of AMO’s state law claims required
interpreting AMO’s CBA with Interlake—and AMO argued that removal was improper.
Id. 5 Ultimately, the United States District Court for the Northern District of Ohio found
that resolution of AMO’s state law claims did not require interpretation of AMO’s CBA
with Interlake, and accordingly, the court granted AMO’s motion to remand the case to
state court. Id. at *1-3.
Now, MEBA argues that AMO should not be heard here to invoke Article XX of
the AFL-CIO constitution to prevent remand in the instant case, given that AMO filed
suit against MEBA and successfully argued for remand in the Ohio case. (Pl.’s Br. at
20.) But this Court finds that MEBA’s argument is not well founded for one very
simple reason (a reason that AMO points out and MEBA does not contest): “AMO was
not affiliated with the AFL-CIO during the relevant time period” for the Ohio case, and
thus “could not have invoked Article XX to resolve that dispute” even if it had wanted
to. (Defs.’ Opp’n at 16-17 n.7 (emphasis added).) Consequently, MEBA has failed to
undercut AMO’s arguments for removal with respect to the AFL-CIO constitution, and
this Court finds that AMO has met its burden of demonstrating removal jurisdiction. 6
III. DEFENDANTS’ MOTION TO DISMISS
Satisfied that removal jurisdiction exists, this Court now turns to AMO’s motion
to dismiss MEBA’s complaint. AMO argues, inter alia, that this Court should dismiss
the instant action because the AFL-CIO constitution requires MEBA to engage in
5
Neither party appears to have mentioned the AFL-CIO constitution in that case. See id.
6
Because this Court concludes that resolution of MEBA’s state law claims substantially depends upon
interpreting the AFL-CIO constitution, it need not consider AMO’s alternative argument that resolution
of MEBA’s claims would also require analysis of MEBA’s CBA with Liberty. (See, e.g., Defs.’ Opp’n
at 6 (“Because the interference MEBA has alleged is with an existing labor contract, MEBA cannot
avoid the conclusion that evaluating this claim will necessitate interpreting that contract regardless of
how it styled the cause of action.”).)
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arbitration as the exclusive method of resolving the instant dispute. (See Defs.’ Br. at
15-17.) In response, MEBA urges this Court to allow the instant lawsuit to move
forward because other avenues of relief are either inadequate or unavailable. (See Pl.’s
Br. at 25-26.) Because this Court finds that (1) MEBA agreed to abide by the AFL-CIO
constitution and thereby consented to follow alternative dispute resolution procedures
to resolve disputes with other AFL-CIO affiliates, and (2) there is nothing unfair about
requiring MEBA to follow the agreed-to dispute resolution process under the
circumstances presented here, it concludes that AMO’s motion to dismiss, as converted
to a motion for summary judgment herein, must be granted. 7
A. Applicable Legal Standards
Although AMO frames its argument regarding the AFL-CIO constitution as a
motion to dismiss for lack of subject matter jurisdiction under Federal Rule of Civil
Procedure 12(b)(1) (see Defs.’ Br. at 14-17), AMO’s core contention appears to be that
MEBA agreed to arbitrate this dispute and has not done so—i.e., that MEBA has failed
to exhaust the agreed upon arbitration procedures that the AFL-CIO constitution
requires. (See id. at 17 (“MEBA’s Complaint is nothing but an attempted end-run
around . . . the AFL-CIO’s dispute resolution procedures.”); see also id. at 16 (“These
dispute resolution procedures are enforceable. It is well settled that federal labor law
favors enforcement of labor contracts, including union constitutions, providing for
nonjudicial settlement of disputes, and the AFL-CIO Constitution is no exception.”).)
Courts in this jurisdiction “have treated a motion premised on the plaintiff’s failure to
exhaust a collectively bargained-for grievance-arbitration process as a motion to
7
Because this Court finds that MEBA’s failure to exhaust the agreed upon arbitration procedures is
dispositive, it does not address AMO’s additional argument that MEBA’s state law claims lack federal
labor law analogues. (See Defs.’ Br. at 11-14.)
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dismiss for failure to state a claim under Rule 12(b)(6) or for summary judgment under
Rule 56.” Am. Postal Workers Union v. USPS, No. 13-1694, 2014 WL 4203103 at *4
(D.D.C. Aug. 26, 2014) (citing Noble v. USPS, 537 F. Supp. 2d 210, 218-219 (D.D.C.
2008)); see also id. at *4 n.1 (explaining that while “there is some support for”
analyzing a motion to dismiss for failure to exhaust arbitration provisions under Rule
12(b)(1), “treating the motion as one under Rule 12(b)(6) and Rule 56 is more
consistent with prior [federal labor] case law”). Consequently, the governing standards
for both motions to dismiss and motions for summary judgment are relevant to the
matter at hand.
1. Legal Standard For A Motion To Dismiss Under Rule 12(b)(6)
In deciding whether to dismiss a complaint for failure to state a claim under Rule
12(b)(6), a “court must treat the complaint’s factual allegations—including mixed
questions of law and fact—as true and draw all reasonable inferences therefrom in the
plaintiff’s favor.” Epps v. U.S. Capitol Police Bd., 719 F. Supp. 2d 7, 13 (D.D.C. 2010)
(citing Holy Land Found. for Relief & Dev. v. Ashcroft, 333 F.3d 156, 165 (D.C. Cir.
2003)). Generally, a court deciding a Rule 12(b)(6) motion does not consider matters
beyond the pleadings. Ward v. D.C. Dep’t of Youth Rehab. Servs., 768 F. Supp. 2d 117,
119-120 (D.D.C. 2011). This means that the court may consider “the facts alleged in
the complaint, documents attached as exhibits or incorporated by reference in the
complaint, or documents upon which the plaintiff’s complaint necessarily relies even if
the document is produced not by the plaintiff in the complaint but by the defendant in a
motion to dismiss[.]” Id. at 119 (internal quotation marks and citation omitted). For
example, a plaintiff’s complaint “necessarily relies” on a document when the complaint
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“quote[s] from and discuss[es a document] extensively.” W. Wood Preservers Inst. v.
McHugh, 292 F.R.D. 145, 149 (D.D.C. 2013) (citation omitted).
2. Conversion To A Motion For Summary Judgment
If a court considers materials outside of the pleadings, i.e. materials that the
complaint neither incorporates nor necessarily relies upon, then the court must convert
the motion to dismiss into one for summary judgment. Kim v. United States, 632 F.3d
713, 719 (D.C. Cir. 2011) (citing Fed. R. Civ. P. 12(d) (“If, on a motion under 12(b)(6)
or 12(c), matters outside the pleadings are presented to and not excluded by the court,
the motion must be treated as one for summary judgment under Rule 56.”)). District
courts have considerable discretion when deciding whether or not to so convert a
motion to dismiss. See Flynn v. Tiede-Zoeller, Inc., 412 F. Supp. 2d 46, 50 (D.D.C.
2006). In exercising this discretion, “the reviewing court must assure itself that
summary judgment treatment would be fair to both parties[.]” Tele-Commc’ns of Key
West, Inc. v. United States, 757 F.2d 1330, 1334 (D.C. Cir. 1985). Accordingly, the
court must either “provide the parties with notice and an opportunity to present
evidence in support of their respective positions[,]” Kim, 632 F.3d at 719 (citation
omitted), or otherwise ensure that the parties “have had a reasonable opportunity to
contest the matters outside of the pleadings such that they are not taken by surprise[,]”
Bowe-Connor v. Shinseki, 845 F. Supp. 2d 77, 86 (D.D.C. 2012) (citation omitted).
In the instant case, the complaint does not contain any attachments; however,
both parties have attached outside documents to their briefs regarding AMO’s pending
motion to dismiss. AMO’s submissions include: (1) an arbitration determination in a
prior matter between AMO and MEBA (ECF No. 4-2); and (2) the text of two articles of
the AFL-CIO constitution (ECF Nos. 4-3 (Art. XX), 4-4 (Art. I)). MEBA, too, has
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submitted outside documents in conjunction with its opposition to AMO’s motion to
dismiss, including sanctions letters that the AFL-CIO issued against MEBA (ECF No.
7-3). MEBA’s complaint does not mention, much less discuss or describe, the AFL-
CIO constitution, the prior arbitration determination, or the sanctions letters, and these
are not materials upon which the complaint “necessarily relies”; therefore,
consideration of these additional materials implicates the conversion rule. This Court
now finds that conversion to a motion for summary judgment is appropriate because a
fair assessment of AMO’s exhaustion argument and MEBA’s opposition requires
consideration of these additional materials, and because the parties have had a full and
fair opportunity to contest these materials in their briefing with respect to both AMO’s
motion to dismiss and MEBA’s motion to remand. See, e.g., Pintro v. Wheeler, No. 13-
0231, 2014 WL 1315976 at *3-4 (D.D.C. Apr. 2, 2014) (converting motion to dismiss
into motion for summary judgment where defendant “repeatedly acknowledge[d] its
reliance on materials outside of the pleadings” and plaintiff “attach[ed] several
exhibits” to its response, thereby “demonstrat[ing] that [plaintiff] had adequate notice
and was given an opportunity to present relevant evidence”); Estate of Rudder v.
Vilsack, 10 F. Supp. 3d 190, 196 (D.D.C. 2014) (converting motion to dismiss into
motion for summary judgment where both parties “had sufficient opportunity to present
material evidence beyond the pleadings and contest the discrete, dispositive facts and
issues involved in th[e] case”).
3. Legal Standard For A Motion For Summary Judgment
Under Rule 56
Under Rule 56, a court may grant a motion for summary judgment only if “there
is no genuine dispute as to any material fact and the movant is entitled to judgment as a
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matter of law.” Fed. R. Civ. P. 56(a). The court’s role in deciding a summary
judgment motion is not to “determine the truth of the matter, but instead [to] decide
only whether there is a genuine issue for trial.” Barnett v. PA Consulting Grp., Inc.,
715 F.3d 354, 358 (D.C. Cir. 2013) (internal quotation marks and citation omitted). “A
fact is material if it ‘might affect the outcome of the suit under the governing law,’ and
a dispute about a material fact is genuine ‘if the evidence is such that a reasonable jury
could return a verdict for the nonmoving party.’” Steele v. Schafer, 535 F.3d 689, 692
(D.C. Cir. 2008) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).
In determining whether there is a genuine dispute about material facts, a court
must view the evidence in the light most favorable to the non-moving party and draw all
reasonable inferences in that party’s favor. See, e.g., Grosdidier v. Broad. Bd. of
Governors, Chairman, 709 F.3d 19, 23-24 (D.C. Cir. 2013); see also Wiley v.
Glassman, 511 F.3d 151, 155 (D.C. Cir. 2007). The moving party may successfully
support its motion by identifying those portions of the record that it believes
demonstrate the absence of a genuine dispute of material fact. Fed. R. Civ. P. 56(c)(1).
The non-moving party, for its part, must show more than “[t]he mere existence of a
scintilla of evidence in support of” its position; rather, “there must be evidence on
which the jury could reasonably find for the [non-moving party].” Anderson, 477 U.S.
at 252. Further, the non-moving party “may not rest upon mere allegations or denials of
his pleading but must present affirmative evidence showing a genuine issue for trial.”
Laningham v. U.S. Navy, 813 F.2d 1236, 1241 (D.C. Cir. 1987) (internal quotation
marks and citation omitted).
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B. There is No Genuine Dispute That MEBA Failed To Exhaust The
AFL-CIO Constitution’s Mandatory Dispute Resolution Procedures
It is well settled that federal courts have the authority to enforce labor contracts
under section 301, including agreements to arbitrate. See Lincoln Mills, 353 U.S. at
455. In the instant case, AMO asks this Court to find that the terms of the AFL-CIO
constitution require affiliates, like MEBA and AMO, to resolve inter-union disputes
through the dispute resolution procedures set forth in Article XX, and not in state or
federal court, and that MEBA cannot maintain the instant action without first
exhausting those procedures, if at all. (See Defs.’ Br. at 15-17.) When considering
labor contracts such as the union constitution at issue in this case, “[t]he interests in
interpretive uniformity and predictability that require that labor-contract disputes be
resolved by reference to federal law also require that the meaning given a contract
phrase or term be subject to uniform federal interpretation.” Allis-Chalmers Corp., 471
U.S. at 211. Accordingly, “questions relating to what the parties to a labor agreement
agreed . . . must be resolved by reference to uniform federal law, whether such
questions arise in the context of a suit for breach of contract or in a suit alleging
liability in tort.” Id.; see also Lingle, 486 U.S. at 403-404; Lincoln Mills, 353 U.S. at
456.
Here, Article XX of the AFL-CIO constitution provides that “[e]ach affiliate
shall respect the established collective bargaining relationship of every other affiliate”
(Art. XX of the AFL-CIO constitution (“Art. XX”), Ex. B to Defs.’ Br., ECF No. 4-3,
§ 2), and that “[n]o affiliate shall by agreement or collusion with any employer or by
the exercise of economic pressure seek to obtain work for its members as to which an
established work relationship exists with any other affiliate, except with the consent of
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such affiliate” (id. § 3(a)). Moreover, and most significantly for present purposes, in
the event of a dispute between affiliates regarding these provisions, Article XX
establishes dispute resolution procedures including mediation, and, if necessary, a
hearing before an “Impartial Umpire[.]” (Id. § 9.) Furthermore, Article XX specifies
that “[t]he provisions of this Article with respect to the settlement and determination of
disputes of the nature described in this Article shall constitute the sole and exclusive
method for settlement and determination of such dispute” (id. § 20 (emphasis added)),
and that “[n]o affiliate shall resort to court or other legal proceedings to settle or
determine any [such] disputes” (id.). The parties here do not appear to dispute the
meaning of Article XX; rather, they disagree as to whether that provision should be
held to apply to MEBA’s claims in the instant case.
Where a labor agreement contains “exclusive remedies” for violations, the
Supreme Court has held that complaining parties “must at least attempt to exhaust
exclusive grievance and arbitration procedures” before bringing suit in federal court.
Vaca v. Sipes, 386 U.S. 171, 184-185 (1967) (citing Republic Steel Corp., 379 U.S. at
650); cf. Bush v. Clark Constr. & Concrete Corp., 267 F. Supp. 2d 43, 46-47 (D.D.C.
2003) (federal policy encouraging private rather than judicial resolution of labor
disputes “requires that employees attempt to use the grievance procedures previously
agreed upon by the employer and union before resorting to any other form of redress”).
There are, however, circumstances under which complainants in labor disputes “may
obtain judicial review . . . despite [their] failure to secure relief through the contractual
remedial procedures.” Vaca, 386 U.S. at 185. One such circumstance is where a
defendant’s conduct “amounts to a repudiation of those contractual procedures” and
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thereby estops the defendant from insisting on exhaustion. Id. Another is where an
“employee-plaintiff has been prevented from exhausting his contractual remedies by the
union’s wrongful refusal to process the grievance.” Id.Neither exception applies here. Indeed, even if this Court were to read MEBA’s
accusation that AMO omitted all reference to Article XX’s arbitration provisions in the
Ohio case (Pl.’s Br. at 20) as an allegation that AMO’s conduct in that case repudiated
Article XX with respect to the instant dispute, that argument fails for the same reasons
explained above—namely, AMO claims (and MEBA does not contest) that AMO was
not affiliated with the AFL-CIO at the time of the Ohio case and, therefore, Article XX
was inapplicable. Thus, this Court sees no legal basis for MEBA’s insistence that it did
not need to exhaust Article XX’s dispute resolution procedures before proceeding to
federal court.
Undaunted, MEBA invokes equitable considerations, asserting that, if exhaustion
(i.e., the enforcement of Article XX’s arbitration procedures) is required prior to filing
suit, MEBA will effectively be without a remedy (Pl.’s Br. at 25) because “MEBA is
presently under internal sanctions that prevent the Union from seeking relief under the
AFL-CIO Constitution” (id. at 19-20). It appears that these sanctions arose in the
context of a prior Article XX dispute resolution proceeding—one in which AMO
alleged that MEBA improperly took actions to replace AMO as representative of certain
maritime officers and an impartial umpire ruled against MEBA. (See Decision of
Impartial Umpire, In re Seafarers Int’l Union & Nat’l Marine Eng’rs Benevolent Ass’n,
Case No. 06-3 (Nov. 16, 2006), Ex. A to Defs.’ Br., ECF No. 4-2, at 3, 6-8.) When
MEBA refused “to disclaim and cease representation of the bargaining unit at issue”
23
even after its internal appeals were denied, the AFL-CIO apparently notified MEBA
that “until such non-compliance is remedied or excused . . . [MEBA] shall not be
entitled to file any complaint or appear in a complaining capacity in any proceeding
under” Article XX. (Letter from John J. Sweeney, AFL-CIO President, to Ronald
Davis, MEBA President (May 3, 2007) (“Sanctions Letter”), Ex. 2 to Pl.’s Br., ECF No.
7-3, at 2.)
MEBA now contends that these sanctions effectively foreclose relief under
Article XX’s dispute resolution procedures in the instant case and thus that this Court
should allow the instant lawsuit to move forward (see Pl.’s Br. at 25 (arguing that,
otherwise, “the Union will be left without a viable avenue for legal relief against the
AMO Defendants”)), but this preclusion argument is wholly unconvincing. First of all,
the AFL-CIO imposed the relevant sanctions on MEBA in May of 2007 (see Sanctions
Letter at 2), and in the more than seven years that have passed since that time, it
appears that MEBA has done little either to remedy the sanctions or, if MEBA felt that
the sanctions were unjustified, to contest them. (See, e.g., Art. XX, § 17 (“Any affiliate
that has been found to be in non-compliance and that has been deprived of its rights
under this Article may apply for restoration of such rights”). This means that the
supposed unavailability of Article XX proceedings in the instant case is largely an
impediment of MEBA’s own making, and in any event, it is an impediment that MEBA
clearly has the power to remove. (See id.; see also Sanctions Letter at 2.)
Furthermore, even if this Court takes MEBA at its word that it currently cannot
arbitrate under Article XX, MEBA has not proceeded to demonstrate that, under federal
law, such impossibility relieves MEBA of its agreement not to “resort to court or other
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legal proceedings to settle or determine” inter-union disputes with other AFL-CIO
affiliates. (Art. XX, § 20.) Cf. W.R. Grace & Co. v. Local Union 759, 461 U.S. 757,
767 n.10 (1983) (“[I]t is far from clear that the [impossibility] defense is available to [a
party] whose own actions created the condition of impossibility.” (citation omitted)); 30
Williston on Contracts § 77:1 (4th ed. as updated May 2014) (“If the adverse event [at
issue] is due to the fault of the obligor, the offending party cannot be heard to cry that
performance is impracticable.”).
Also, notably, to the extent that MEBA relies on the Sixth Circuit’s decision in
Dougherty v. Parsec, Inc., 872 F.2d 766 (6th Cir. 1989), to support its argument that
this Court should permit MEBA’s lawsuit to proceed (Pl.’s Br. at 24-25), that case has
no bearing on exhaustion of exclusive dispute resolution procedures. To the contrary,
the plaintiff in that case exhausted all applicable “contractual grievance and arbitration
procedure[s]” before filing suit in federal court. Dougherty, 872 F.2d at 767. MEBA is
correct that, in determining whether section 301 preempted the plaintiff’s claims under
Ohio law, the Dougherty court expressed concern about granting “what effectively
amounts to immunity” to “a third party who has allegedly interfered with a labor
contract[.]” Id. at 771 (internal quotation marks and citation omitted). But that concern
does not arise in the instant case for the reasons explained above—AMO’s conduct is
not immune from challenge insofar as it appears that MEBA could pursue Article XX
proceedings if it addressed the longstanding sanctions against it. 8
8
For this same reason, MEBA’s assertion that it cannot now file an unfair labor practice charge with
the National Labor Relations Board concerning the instant dispute (Pl.’s Br. at 25)—even if true—is
irrelevant. MEBA has not disputed that it has within its own power the ability to remedy the sanctions
and proceed to arbitration under Article XX. And even assuming arguendo that it is truly impossible
for MEBA to arbitrate, that impossibility arose as a result of what MEBA does not contest was its own
misconduct, and MEBA has not shown that its failure otherwise to comply with Article XX can be
excused under such circumstances.
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In sum, this Court finds that there is no genuine dispute regarding whether
MEBA was bound to arbitrate under the AFL-CIO constitution, nor is there any
question that MEBA failed to “attempt to exhaust” Article XX’s “exclusive . . .
arbitration procedures” with respect to AMO’s alleged wrongdoing here. Vaca, 386
U.S. at 184. Thus, federal labor policy bars MEBA from maintaining the instant action
in this Court and AMO is entitled to summary judgment as a matter of law.
IV. CONCLUSION
This Court concludes that resolution of MEBA’s claims substantially depends
upon interpretation of the AFL-CIO constitution, and thus section 301 preempts the tort
claims alleged in MEBA’s complaint, such that AMO’s removal of MEBA’s action to
federal court was proper. Moreover, this Court finds that MEBA did not reasonably
attempt to exhaust the AFL-CIO constitution’s arbitration procedures, as required by
federal law, and therefore cannot maintain the instant lawsuit. Consequently, Plaintiff’s
motion to remand is DENIED, and Defendants’ motion to dismiss, as converted to a
motion for summary judgment, is GRANTED.
DATE: December 5, 2014 Ketanji Brown Jackson
KETANJI BROWN JACKSON
United States District Judge
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