:: Third Circuit Applies Arbaugh Test To Find Jurisdiction Under LMRA Section 301
At issue are two Collective Bargaining Agreements (”CBAs”) between Pittsburgh Mack and the International Union of Operating Engineers Local Union No. 66 (the “Union”). . . . The CBAs provided, inter alia, that Pittsburgh Mack would make specific contributions to the Operating Engineer Construction Industry and Miscellaneous Pension Fund (the “Fund”) — a multiemployer pension fund covered by ERISA and the MPPAA — and that the Union would hold Pittsburgh Mack harmless for liability to the Fund in excess of its specified contribution.
Pittsburgh Mack Sales & Serv. v. Int’l Union, Local Union No. 66, 2009 U.S. App. LEXIS 19989 (3d Cir. Pa. Sept. 4, 2009)
The Third Circuit found another context in which Arbaugh v. Y & H Corp., 546 U.S. 500 (2006) applied to relax the jurisdictional nexus of a federal claim with the elements of a cause of action. In this instance, the jurisdictional issue arose over the application of section 301 of the Labor Management Relations Act (”LMRA”), 29 U.S.C. § 185.
The arrangement at issue was an agreement by a union to indemnify an employer for the employer’s withdrawal liability to a pension plan under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001-1461 (”ERISA”), and the Multiemployer Pension Plan Amendments Act of 1980, 29 U.S.C. §§ 1381-1461 (”MPPAA”). The indemnification agreement was entered into to facilitate an asset sale by the employer to another entity.
After withdrawl from the plan, the fund notified the employer of its withdrawal liability.
The opinion addressed challenges by the union to the enforceability of the agreement on several grounds, including public policy and Article III standing issues.
The aspect of the opinion that pertains to Arbaugh arose as follows.
Pittsburgh Mack alleged that the District Court had jurisdiction pursuant to section 301 of the Labor Management Relations Act (”LMRA”), 29 U.S.C. § 185.
Section 301 provides that:
Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce . . . 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 employer and the union joined issue over whether the collective bargaining agreement had terminated and what effect that had on jurisdiction. The employer contended that there was jurisdiction under section 301 once a CBA has been terminated.
The Court stated:
It is unnecessary for us to resolve whether or not the CBAs were terminated, however, because despite the Union’s assertions to the contrary, the existence of a contract is not a jurisdictional element of a section 301 claim.
Although the Court had previously stated that ”a prerequisite for section 301 jurisdiction is a contract between the employer and labor organization” (International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, Local 249 v. W.Pa. Motor Carriers Ass’n, 660 F.2d 76, 83 (3d Cir. 1981)), “this is no longer the case”.
[I]n Arbaugh v. Y & H Corp., 546 U.S. 500 (2006) the Supreme Court addressed concerns that courts were conflating and confusing subject matter jurisdiction with the need to prove the essential elements of a claim for relief. Id. at 511. The Court adopted a “bright line” test to determine whether a statute (or a provision thereof) was jurisdictional or part of the merits. Id. at 515-16. The test, the Court in Arbaugh explained, is as follows:
If the Legislature clearly states that a threshold limitation on a statute’s scope shall count as jurisdictional, then courts and litigants will be duly instructed and will not be left to wrestle with the issue. But when Congress does not rank a statutory limitation on coverage as jurisdictional, courts should treat the restriction as nonjurisdictional in character.
Id. (citation and footnote omitted).
The Court found useful precedent in the Sixth Circuit opinion in Winnett v. Caterpillar, Inc., 553 F.3d 1000, 1006, 1007 (6th Cir. 2009), where The Sixth Circuit applied the Arbaugh test to the question of whether the existence of a union contract is a jurisdictional prerequisite under section 301.
The court in Winnett held that the existence of a union contract is not a jurisdictional prerequisite under section 301 because Congress did not “clearly state[]” that the existence of such a contract was a limit on subject matter jurisdiction. Id. at 1006. In so holding, the court in Winnett analyzed section 301, noting that the only time jurisdiction is mentioned in the statute is in the context of personal jurisdiction. Id.
The court observed that the statute actually “relaxes subject-matter jurisdiction by permitting federal courts to handle such cases without regard to the amount in controversy or the existence of diversity jurisdiction.” Id.
Finally, the court explained that because “[a]ll of the elements of a plaintiff’s prima facie case for the breach of a union contract appear in the same subsection,” a finding that the existence of a union contract had jurisdictional consequences would necessitate a finding that all of the other parts of the subsection were also jurisdictional in nature. Id. (emphasis in original). The court concluded that even if Arbaugh was not considered, such a finding would suggest that “Congress intended to create a cause of action that has no non-jurisdictional elements,” a result that the court was “reluctant” to reach. Id.
The Third Circuit adopted the reasoning of the Court of Appeals for the Sixth Circuit in Winnett and held that the existence of a union contract is not a jurisdictional requirem ent under section 301, stating:
Regardless of whether or not the CBAs were terminated, then, the District Court had jurisdiction under section 301. This Court has jurisdiction pursuant to 28 U.S.C. § 1291.
See also - :: Third Circuit Holds That Exhaustion of Administrative Remedies Does Not Constitute A Jurisdictional Issue; :: COBRA Requirements May Apply To Employers Having Less Than 20 Employees
