TEAMSTERS NATIONAL AUTOMOTIVE TRANSPORTERS INDUSTRY NEGOTIATING COMMITTEE, a labor organization, and Teamsters Local Union 745, Plaintiffs-Appellants,
v.
Dennis M. TROHA, Chairman and CEO of JHT Holdings, Incorporated, JHT Holdings, Incorporated, a Delaware corporation, and Active Transportation Company, a Kentucky limited liability company, Defendants-Appellees.
No. 02-3103.
United States Court of Appeals, Seventh Circuit.
Argued February 19, 2003.
Decided April 29, 2003.
Rehearing and Rehearing En Banc Denied May 28, 2003.
James F. Wallington (argued), Baptiste & Wilder, Washington, DC, for Plaintiffs-Appellants.
Jeffrey P. Clark (argued), Reinhart, Boerner, Van Deuren, Norris & Rieselbach, Milwaukee, WI, C. John Holmquist, Jr., Dickinson Wright, Bloomfield Hills, MI, for Defendants-Appellees.
Before FLAUM, Chief Judge, and COFFEY and KANNE, Circuit Judges.
FLAUM, Chief Judge.
The Teamsters Automobile Transporters Industry National Negotiating Committee and Teamsters Local Union 745 (collectively "the Teamsters") brought an action to enforce an arbitration subpoena agаinst JHT Holdings, Inc. ("JHT"), and its Chairman and CEO, Dennis Troha,1 neither of whom are signatories to the collective bargaining agreement that forms the basis of the underlying arbitration. The district court, concluding that it lacked subject matter jurisdiction, dismissed the action, and the Teamsters appeal. We are presented with the question of whether a federal cause of action exists to enforce an arbitration subpoena against parties who were not signatories to the collective bargaining agreement that forms the basis for the arbitration. Because we find that a cause of action to enforce the subpoena does exist under federal common lаw, the district court had federal question jurisdiction over this suit. We therefore reverse the judgment of the district court.
I. Background
Active Transportation Company and its subsidiary Active USA, Inc. (collectively "Active") operate a terminal in Garland, Texas. The Teamsters are the bargaining representatives for certain employees at Activе's Garland terminal. The Teamsters and Active are signatories to the National Master Automobile Transporters Agreement and the Work Preservation Agreement (collectively "the bargaining agreements"). The Teamsters allege that on September 29, 2001, Active breached these bargaining agreements. The breach allegedly оccurred when Active transferred work, previously performed at the terminal in Garland, to Auto Truck Transport Corporation ("Auto Truck"). According to the Teamsters this was an unauthorized transfer prohibited by the bargaining agreements. Pursuant to the rules set forth in the agreements, the Teamsters filed a grievance with a three-member Board оf Arbitration.
The grievance, as would be expected, was filed against Active, the signatory of the bargaining agreements. But there are other parties involved. It seems that Active and Auto Truck are more than just business partners. In fact they share the same majority owner, Mr. Troha. Mr. Troha is also the Chairmen and CEO of JHT, which the Teamsters clаim is a controlled affiliate of both Auto Truck and Active. Recognizing the involvement of these parties and seeking to resolve this dispute, the arbitration board issued a subpoena to Mr. Troha and JHT directing Mr. Troha to appear and testify as well as directing both Mr. Troha and JHT to produce numerous documents. Neither Mr. Troha nor JHT complied with the subpoena. On May 20, 2002, the Teamsters brought this action to enforce the subpoena. The district court concluded that it lacked subject matter jurisdiction because Mr. Troha and JHT were non-signatories to the underlying bargaining agreement. The district court dismissed the action, and the Teamsters appeal that ruling.
II. Discussion
Federal courts are courts of limited jurisdiction and may only exercise jurisdiction where it is specifically authorized by federal statute. Recognizing this principle, the Teamsters turn to § 301 of the Labor-Management Relations Act, 29 U.S.C. § 185, in an attempt to establish the authority for federal subject matter jurisdiction.2 Still it is not clear from the briefs whether the Teamsters are attempting to establish jurisdiction directly under § 301(a) of the Labor-Management Relations Act, which 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 Act, 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,
or indirectly under 28 U.S.C. § 1331, which provides that
[t]he district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States,
or under both.3 This ambiguity is somewhat excusable given thе fact that specific statutory grants of jurisdiction over federal causes of action are often largely superfluous given that the grant under § 1331 includes all civil actions where a federal law creates a federal cause of action. Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Trust For Southern Cal.,
We can dispense with the claim thаt jurisdiction exists under § 301 quickly. The § 301 grant of jurisdiction is extremely limited. The Supreme Court's holding in Textron emphasizes this narrowness. The plaintiffs in that suit sought a declaration that a contract was invalid. Relying on the specific statutory language of § 301, the Textron Court explained, "By its terms, this provision confers federal subject-matter jurisdiction only over `suits for violations of сontracts.'" Id. at 656,
The question of § 1331 jurisdiction is more challenging. The first question for us to address is whether the plaintiffs are asserting a federal cause of action. If the plaintiffs are asserting such a cause of action then § 1331 plainly creates jurisdiction because the suit would arise under federal law. This question is complicated because the Supreme Court has determined that § 301, beyond expressly authorizing the federal courts to hear suits brought for violations of collective bаrgaining agreements, also authorizes the federal courts to fashion a body of common law for the enforcement of the collective bargaining agreements over which they have jurisdiction. Textile Workers Union of Am. v. Lincoln Mills,
[T]he legislation does more than confer jurisdiction in the federal courts over labor organizations. It expresses a federal policy that federal courts should enforce these agreements on behalf of or against labor organizations and that industrial peace can be best obtained in only that way.
... And when the House debate narrowed to the question of whether § 301 was more than jurisdictional, it became abundantly clear that the purpose of the section was to provide the necessary legal remedies.
Lincoln Mills,
Viewed in this light, today's case is distinguishable from Loss. We held that the plaintiff in Loss failed to state a federаl claim not because the defendant was a third party, but because the tortious interference suit was not necessary to the purpose of enforcing the collective bargaining agreement between the signatories. Suits for enforcement of an arbitration subpoena, on the other hand, have a great impaсt on the arbitration process and are necessary to the purpose of enforcing the agreement to arbitrate. It is therefore appropriate to apply the reach of federal common law to ensure that such subpoenas do not go unenforced.
This conclusion finds support in § 7 of the Federal Arbitration Act (FAA), 9 U.S.C. § 7. Although the FAA does not apply in this case, the reasoning behind the act is instructive in fashioning federal common law. § 7 provides that in an arbitration covered by the FAA an arbitrator may issue a subpoena, and
if any person or persons so summoned to testify shall refuse or neglect to obey said summons, upon petition the Unitеd States district court for the district in which such arbitrators, or a majority of them, are sitting may compel the attendance of such person or persons before said arbitrator or arbitrators, or punish said person or persons for contempt in the same manner provided by law for securing the attendance of witnesses or thеir punishment for neglect or refusal to attend in the courts of the United States.
Id. The same principles underlying the Congressional decision to create an enforcement mechanism for arbitration subpoenas under the FAA apply to the arbitrations pursuant to collective bargaining agreements even when those arbitratiоns do not fall under the application of the FAA. See United Paperworkers Intern'l Union v. Misco, Inc.,
We therefore hold that federal common law under § 301 creates a cause of action by whiсh a party to a collective bargaining agreement that is otherwise covered by § 301 can enforce an arbitration subpoena against a non-signatory of the agreement. In turn, because the cause of action arises under federal common law, the district court had jurisdiction over the action under 28 U.S.C. § 1331.
III. Conclusion
For the reаsons stated above the district court's dismissal of this case is REVERSED and the case is REMANDED for further proceedings consistent with this opinion.
Notes:
Notes
Active Transportation Company, a signatory of the bargaining agreement, was also named as a defendant. At this point the dispute is whether the court has jurisdiction to enforce a subpoena against the non-signatories, and Active Transportation Company's role in this legal dispute is minimal and their brief generally adopts the arguments of Mr. Troha and JHT. Furthermore, it is not clear that Active Transportation Company is even a proper defendant. The Teamsters seek enforcement against Mr. Troha and JHT, and it is not apparent how the district court could have ordered relief from Active Transportation Company that could have redressed the Teamsters alleged injuryAccord Am. Fed'n of Television and Radio Artists v. WJBK-TV,
The Teamsters do not attemрt to establish diversity jurisdiction under 28 U.S.C. § 1332
The jurisdictional statement in the Teamsters' opening brief cites § 1331, however this is the only reference in the entire brief to that statute and the statute does not appear anywhere in their reply brief. Reference to § 1331 was equally sparse during oral arguments
This statement "must be read with caution" as federаl courts do not have jurisdiction over every single case that turns on the resolution of a federal questionSee Merrell Dow Pharm., Inc. v. Thompson,
Cases prior toTextron have read the § 301 grant more broadly, asserting that any suit that requires an interpretation of the collective bargaining agreement is de facto a suit "for violation" of the agreement. See, e.g., Brazinski v. Amoco Petroleum Additives Co.,