The complaint of the plaintiff, which was filed herein on June 12, 1959, is in *811 two counts. In Count I the plaintiff seeks to recover damages in the amount of $150,000 from the defendants United Packinghouse Workers of America and Local Union No. 3 of the United Packinghouse Workers of America. The latter defendant will be referred to as Local Union No. 3. In Count II the plaintiff seeks to recover damages in the amount of $150,000 from the defendants to that count, who are designated as officers, agents, or stewards of Local Union No. 3. Liability is asserted against those defendants individually and as agents and representatives of Local Union No. 3. There were approximately one hundred and seventy persons named as defendants to Count II, of whom approximately sixty were personally served with summons. Local Union No. 3 is also listed among the defendants to Count II. It would seem that it is so listed for the purpose of identifying the class represented by the other defendants.
The plaintiff is a corporation organized and existing under the laws of the State of Delaware. Its principal place of business is in Chicago, Illinois. It is duly authorized to do business in the State of Iowa. It operates packing plants at a number of places in the United States including a plant at Cedar Rapids, Iowa, in this District. It is engaged in an industry affecting commerce. The defendants to Count I are unincorporated labor unions. The individual defendants to Count II are citizens and residents of the State of Iowa.
The plaintiff alleges that on November 30, 1956, it and the defendant unions entered into a written collective bargaining agreement which was still in effect at the time it filed its complaint herein. The plaintiff further alleges that the two unions were labor organizations representing the employees in an industry affecting commerce. It is the claim of the plaintiff that the said unions breached paragraph 126 of that agreement. That paragraph provides, in part:
“126. Should grievances arise between the Company and the Union or between the Company and the employees pertaining to matters involved in this agreement or incident to the employment relationship, there shall be no strike, stoppage, slowdown or suspension of work oa the part of the Union or its members or a lockout on the part of the Company on account of such grievance * *
In paragraphs 8 and 9 of Count I the plaintiff makes the following allegations in connection with its claim against the unions:
“8. That commencing on or about June 10, 1959, and to and including the present time the said Defendants herein, acting individually and as a member and representative of the class and membership of said Local Union and U.P. W.A., and in concert with the respective officers and agents of said unions, have violated and breached the said Agreement, Exhibit ‘A’ attached hereto, and in particular Section 11 thereof by causing, directing, influencing, assisting and persuading its members, employees of this Plaintiff, employed at its plant and place of business at Cedar Rapids, Linn County, Iowa, to refuse to work more than eight hours in any one day independent of the directions of the Plaintiff herein, its officers and representatives and the reasonable need therefor, and Plaintiff further alleges that said acts and conduct will continue in the future. Plaintiff further alleges that such acts and conduct and such conspiracy is being employed by said U.P.W.A. and its Local Unions representing employees of this Plaintiff at its plants located in Omaha, Nebraska, and Albert Lea, Minnesota.
“9. The said Defendant Unions, each of them knowingly and willfully, disregarded the terms and conditions of the said Agreement and their duties thereunder, through the acts of their officers and agents, by advising, persuading, directing and/or permitting such strikes, *812 work stoppages and slowdowns by causing and aiding the members of Defendants’ Local Union to participate in such strikes, work stoppages and slowdowns.”
In paragraphs 6 and 7 of Count II the plaintiff makes the following allegations as to the defendants to that count:
“6. That the said individual defendants herein acting in their individual capacities and as employees of Plaintiff and in their respective capacities as officers and representatives of said Local Union and as a member and representative of the class and membership of said Local Union, acting in concert and with the intent to hinder and prevent Plaintiff from carrying on its business at its Cedar Rapids, Iowa, plant in the usual and customary manner in which it had been conducted and carried on under the terms and conditions of said collective contract, Exhibit ‘A’, knowingly and willfully disregarded the terms and conditions of said Agreement and their duties thereunder, and acting as individuals and as officers and agents of said Local Union and said U.P. W.A. refused and caused other employees of plaintiff at its Cedar Rapids, Iowa, plant to refuse to work more than eight (8) hours in any one day, notwithstanding the needs and requirements of said plant for such work in the usual and ordinary course of its business and the terms and provisions of said collective agreement and particularly the provisions of paragraph 11 thereof.
“7. That the Plaintiff requested its employees at its Cedar Rapids, Iowa, plant and the officers and representatives of said Local Union and U.P.W.A. to cease such prohibited acts, but said Defendants herein, acting individually and as officers and representatives and in concert and in a wrongful conspiracy, refused so to do and encouraged, conspired and confederated to cause other employees of Plaintiff at its Cedar Rapids, Iowa, plant to likewise refuse so to do.”
In paragraph 11 of Count I the plaintiff makes the following allegations:
“11. As a direct result of the foregoing illegal acts and conduct of the Defendants in violation of the terms of said Agreement, the Plaintiff’s meat packing operations have been willfully interfered with whereby the Plaintiff has suffered, and will continue to suffer, great damage and injury due to the loss of production, sale and profit which it would have otherwise made, and has lost the goodwill of customers to whom it was unable to furnish product, and has otherwise been damaged all to its damage in the amount of One Hundred Fifty Thousand Dollars ($150,000.00).”
In paragraph 8 of Count II the plaintiff makes identical allegations concerning damages.
Jurisdiction as to Count I is based upon Section 185, Title 29 U.S.C.A., which is a part of the Labor Management Relations Act of 1947. The section referred to appeared as Section 301 of that Act. Because the courts more frequently refer to the section in question as Section 301, it will be so referred to herein. That section provides as follows:
“(a) Suits 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.
“(b) Any labor organization which represents employees in an industry affecting commerce as defined in this chapter and any employer whose activities affect commerce as defined in this chapter shall be bound by the acts of its *813 agents. 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. Any money judgment against a labor organization in a district court of the United States shall be enforceable only against the organization as an entity and against its assets, and shall not be enforceable against any individual member or his assets.
“(c) For the purposes of actions and proceedings by or against labor organizations in the district courts of the United States, district courts shall be deemed to have jurisdiction of a labor organization (1) in the district in which such organization maintains its principal office, or (2) in any district in which its duly authorized officers or agents are engaged in representing or acting for employee members.
“(d) The service of summons, subpena, or other legal process of any court of the United States upon an officer or agent of a labor organization, in his capacity as such, shall constitute service upon the labor organization.
“(e) For the purposes of this section, in determining whether any person is acting as an 'agent’ of another person so as to make such other person responsible for his acts, the question of whether the specific acts performed were actually authorized or subsequently ratified shall not be controlling.”
Count I sounds in contract. The plaintiff in Count I sets forth a violation of a collective bargaining agreement cognizable under Section 301(a). That count meets the jurisdictional and venue requirements of Section 301.
Jurisdiction as to Count II is based upon diversity of citizenship. In Count II the plaintiff sets forth a claim which sounds in tort. The tort claimed is that of inducing the defendant unions which were parties to the collective bargaining agreement to breach that agreement. Count II is not based upon any federal statute. In that count the plaintiff proceeds against the defendants under the common law of Iowa relating to the tort referred to and to unincorporated associations. The defendants to that count have, by a motion to dismiss, challenged the right of the plaintiff to so proceed. In this case there is presented the questions whether an employer who is a party to a collective bargaining agreement with a union may, in addition to proceeding against the union under Section 301 for a claimed breach of that agreement, also maintain an action against the union’s officers, agents and stewards individually and as a class for inducing the alleged breach. These questions involve the scope and effect of Section 301.
Consideration of the scope and effect of Section 301 has to start with the noted case of Textile Workers Union of America v. Lincoln Mills of Alabama, 1957,
“There has been considerable litigation involving § 301 and courts have construed it differently. There is one view that § 301(a) merely gives federal district courts jurisdiction in controversies that involve labor organizations in industries affecting commerce, without regard to diversity of citizenship or the amount in controversy.1 Under that view § 301(a) would not be the source of substantive law; * * *. Other courts * * * hold that § 301(a) is more than jurisdictional3 —-that it authorizes federal courts to fashion a body of federal law for the enforcement of these collective *814 bargaining agreements and includes within that federal law specific performance of promises to arbitrate grievances under collective bargaining agreements. * * * That is our construction of § 301(a), * *.”
In the majority opinion it is further stated (at page 456 of
“The question then is, what is the substantive law to be applied in suits under § 301(a) ? We conclude that the substantive law to apply in suits under § 301(a) is federal law, which the courts must fashion from the policy of our national labor laws. * * * >>
The importance of the decision gave rise to much law review consideration. Among the many law review writings discussing that decision are: Bickel and Wellington, Legislative Purpose and The Judicial Process: The Lincoln Mills Case, 71 Harvard Law Review 1 (1957); Pirsig, The Minnesota Uniform Arbitration Act and the Lincoln Mills Case, 42 Minnesota Law Review 333 (1958); Comment, 43 Iowa Law Review 660 (1958); Comment, 42 Minnesota Law Review 1163 (1958). In the Harvard Law Review article, supra, the authors, in discussing the scope and effect of the Lincoln Mills case, state (p. 22):
“What section 301 really demands of the federal courts, therefore, is not the application but the creation in case after ease, with the scant assistance of bits and pieces of statutory commands, of a law of labor contracts the chief source of which is to be the common law of commercial contracts. * * * ”
In the same article (p. 23 footnote) the authors point out that “At common law, the courts always have had difficulty with the collective-bargaining agreement.” In the Iowa Law Review Comment, supra, it is stated (p. 661): “Although section 301 does not expressly enact any code, or indeed a single provision of substantive law, it was read as a mandate to the courts to formulate a federal common law.7 ”
Since it has been authoritatively determined that Section 301 is substantive in character as to cases within its scope, whether a case within its scope is brought in a state or federal court is not of significance.
The defendants to Count II assert that the effect of Section 301 is to deny the plaintiff the right to proceed against them on the claim set forth in that count. That assertion necessitates a consideration of several phases of the law.
Count II has two aspects. The plaintiff declares against the defendants as representatives of the class of membership of the local union. It also declares against them as individuals. Rule 23(a) of the Federal Rules of Civil Procedure, 28 U.S.C.A., provides as follows:
“(a) Representation. If persons constituting a class are so numerous as to make it impracticable to bring them all before the court, such of them, one or more, as will fairly insure the adequate representation of all may, on behalf of all, sue or be sued, when the character of the right sought to be enforced for or against the class is
“(1) joint, or common, or secondary in the sense that the owner of a primary right refuses to enforce that right and a member of the class thereby becomes entitled to enforce it;
“(2) several, and the object of the action is the adjudication of claims which do or may affect specific property involved in the action; or
“(3) several, and there is a common question of law or fact affecting the several rights and a common relief is sought.”
Since subparagraph (1) is not applicable in the present case, it is apparent that only subparagraphs (2) and (3) could be pertinent. Rule 42 of the Iowa Rules of Civil Procedure, 58 I.C.A., is to the same effect.
*815 Rule 17(b) of the Federal Rules of Civil Procedure provides, in part:
“(b) Capacity to Sue or be Sued. The capacity of an individual, other than one acting in a representative capacity, to sue or be sued shall be determined by the law of his domicile. The capacity of a corporation to sue or be sued shall be determined by the law under which it was organized. In all other cases capacity to sue or be sued shall be determined by the law of the state in which the district court is held, except (1) that a partnership or other unincorporated association, which has no such capacity by the law of such state, may sue or be sued in its common name for the purpose of enforcing for or against it a substantive right existing under the Constitution or laws of the United States, * *
It is clear that under Rule 17(b), in an action where a substantive federal right as distinguished from a right arising under local state law is involved, the capacity of- an unincorporated association to sue or be sued will be governed by federal law; but where no federal right is involved the capacity of such an association to sue or be sued is governed by local law. Oskoian v. Canuel, 1 Cir., 1959,
The local union is an unincorporated association. The United States Supreme Court in Hecht v. Malley, 1924,
“It has been defined as a term ‘used throughout the United States to signify a body of persons united without a charter, but upon the methods and forms used by incorporated bodies for the prosecution of some common enterprise.’ 1 Abb. Law Dict. 101 (1879); 1 Bouv.Law Dict. (Rawle’s 3d Rev.) 269; 3 Am. & Eng.Enc.Law (2d ed.) 162; and Allen v. Stevens, App.Div.,54 N.Y.S. 8 , 23, in which this definition was cited with approval as being in accord with the common understanding. Other definitions are: ‘In the United States, as distinguished from a corporation, a body of persons organized, for the prosecution of some purpose, without a charter, but having the general form and mode of procedure of a corporation.’ Webst.New Internat.Dict. ‘[U. S.] An organized but unchartered body analogous to but distinguished from a corporation.’ Pract.Stand.Dict. And see Malley v. Bowditch, C.C.A.,259 Fed. 809 , 812; Chicago Title Co. v. Smietanka, (D.C.),275 Fed. 60 : also United Mine Workers v. Coronado Co.,259 U.S. 344 , 392, in which unincorporated labor unions were held to be ‘associations’ within the meaning of the Anti-Trust Law.”
Under the Iowa law where members contract in the name of an unincorporated association, they and all of the members who authorize, approve, consent, and ratify the contract are personally liable for the obligations of such contract. Lewis v. Tilton, 1884,
The case of United Packing House Workers of America v. Boynton, 1949,
“The record clearly shows that the members of Local 38 are so numerous that it is impractical to bring them all before the court. The right involved is several, as to the various members; the question involved is a common question of law and the relief asked was common to all. While no where in the petition or notices is it categorically stated that the action is of a representative or class nature, local 38; its officers, both individually and officially; and all other members of the local whose names are unknown to the plaintiff, are named as defendants. Service was made upon the named defendants, as officials of the organization, Local 38, as well as individuals. The organization being an unincorporated association, no purpose or reason appears for such inclusion of the officers, in their official capacity, except as they represent the group or organization. Under Rule 46, R.C. P., the trial court found the parties before it (the officials of Local 38) adequately represented the group. No member of the class appeared and in accordance with Rule 47, R. C.P., an attorney was appointed to represent it. In this finding we find no error. It was clearly a class action.”
From the Iowa decisions it seems that a plaintiff who wishes to have rights adjudicated or personal liability enforced in transactions involving an unincorporated association may proceed by a representative class action against the
*817
members as a whole, by an action against certain of the members individually, or by both means. The cases of Murray v. Walker, 1891,
Under the Iowa law Local Union No. 3, having contracted as an entity, would undoubtedly be treated as an entity in connection with the contract in question. Further, under the Iowa law, insofar as Count II would constitute a representative class action against the members of that local, any money judgment recovered therein would doubtless be ordered paid out of the funds of that local.
A substantial portion of the briefs and arguments is directed to the question as to the effect, if any, of Section 301 upon the claim asserted by the plaintiff in Count II. A consideration of that question requires the giving of attention to some other phases of the law.
The National Labor Relations Act, 29 U.S.C.A. § 151 et seq., does not exclude a tort action under state common law against a union. United Construction Workers v. Laburnum Const. Corp., 1954,
If injunctive relief were asked of this Court in connection with Count II, the provisions of the Norris-LaGuardia Act, Section 101, Title 29 U.S.C.A., could well present an obstacle. See Local 205, etc. v. General Electric Company, 1 Cir., 1956,
The fact that the claim of the plaintiff in Count II is asserted in a federal court is not of significance in the present case. It has heretofore been noted that the provisions of Section 301 constitute substantive federal law. Such being the situation, if the claim asserted by the plaintiff in Count II does impinge upon the provisions of that section, the result would be the same whether that claim was asserted in state court or in federal court.
Section 301 authorizes an action for damages against a union for breach of contract. Under that section an action may be maintained against a union for damages for breach of a no-strike provision in a collective bargaining agreement to which it was a party. E. g., United Electrical, Radio & Machine Workers v. Oliver Corp., 8 Cir., 1953,
Section 301 purports to be applicable only to actions for breach of contract and not to tort actions. In the case of Coleman v. Pokodner, 1957,
“It was apparent upon the argument of this motion that the plaintiffs were under the misapprehension that the Taft-Hartley Act, supra, created a cause of action against the defendant association as a legal entity and that a determination in such action would be binding on such entity. Such contention is untenable. A study of the section referred to clearly indicates that it is applicable only in actions for breach of contract and not in tort. Haspel v. Bonnaz, etc., Local 66, D.C.,112 F.Supp. 944 , affirmed 2 Cir.,216 F.2d 192 . Furthermore, the Taft-Hartley Act, supra, is not applicable to common law tort actions in the state courts (Schatte v. International Alliance of Theatrical Employees, etc., 9 Cir.,182 F.2d 158 ).”
The decisions of the United States Supreme Court heretofore cited hold that actions which involve traditional forms of tort claims having their origin in labor disputes are not necessarily or in general inhibited by the provisions of the National Labor Relations Act, and that they would be inhibited only if they conflicted with the provisions, objectives, and purposes of that Act. It is the contention of the defendants to Count II that the maintenance of the action which is the subject matter of that count does so conflict. That contention requires a consideration of the nature and elements of the action which the plaintiff seeks to maintain in Count II.
It was heretofore noted that the claim of the plaintiff in Count II sounds in tort, the claimed tort being the inducing of a breach of the collective bargaining
*819
agreement between the plaintiff and the unions. That interference with contract relations could constitute a tort was first definitely recognized in the well-known ease of Lumley v. Gye (1853), 2 El. & Bl. 216, 118 Eng.Rep. 749, 1 Eng.Rul. Cas. 707. The development and various aspects of the rule pronounced in that case are fully and well covered in Prosser, Torts (2d Ed. 1955). The author cites many cases and a large number of law review writings on the subject. The subject has been extensively annotated. See annotation to Sorenson v. Chevrolet Motor Company, 1927,
In Restatement, Torts, Section 766 (1939), it is stated:
“General Principle.
“Except as stated in Section 698, one who, without a privilege to do so, induces or otherwise purposely causes a third person not to
“(a) perform a contract with another, or “(b) * * *
is liable to the other for the harm caused thereby.”
Section 698 referred to relates to premarital relations.
The Iowa Supreme Court has long recognized that a wrongful interference with contractual relations is actionable. In the case of Kock v. Burgess, 1914,
“As to wrongful interference with contracts of personal employment, the rule is well settled that if dam-
ages result the wrongdoer is liable, and the injured person is not bound to his remedy for a breach of the contract. Hollenbeck v. Ristine,114 Iowa, 358 ,86 N.W. 377 ; Faunce v. Searles,122 Minn. 343 ,142 N.W. 816 . As to interference with contracts, not of employment, but based upon personal obligations, the rule which commends itself to us is:
“ ‘That when a party has entered into a contract with another to do or not to do a particular act or acts, he has as clear a right to its performance as he has to his property, either real or personal, and that knowingly to induce the other party to violate it is as distinct a wrong as it is to injure or destroy his property. It is not a sufficient answer to say that he had a remedy against the party who has broken the contract.’ Raymond v. Yarrington,96 Tex. 443 ,72 S.W. 580 ,73 S.W. 800 ,62 L.R.A. 962 ,97 Am.St.Rep. 914 .”
See also Shannon v. Gaar, 1942,
In Counts I and II the plaintiff alleges that the acts complained of were done pursuant to a conspiracy. Technically speaking, there is no civil action for conspiracy. Charles Rubenstein, Inc. v. Columbia Pictures Corp.,
*820
D.C.1957,
« * * * we may observe that a combination between two or more persons to cause a breach of contract is generally recognized as an unlawful conspiracy. The right to the benefits of a contract is a property right which cannot be destroyed without entitling the injured party to damages. * * *.
“Where, however, the parties are not liable severally for causing the breach of a contract, they are not liable jointly by reason of the allegation of conspiracy. * *
However, all persons who unite to induce a breach of contract are jointly and severally liable for the damage to the person injured thereby. Hornstein v. Pod-witz, 1930,
The question of damages under the two counts will next be considered. In each count the plaintiff seeks to recover $150,000, the amount of actual damages claimed to have been sustained by it because of the breach of the no-strike clause. It was heretofore noted that Count I sounds in contract and Count II sounds in tort. In an action against a union under Section 301 for damages caused by a breach of a no-
*821
strike provision in a contract, the measure of damages recoverable is the actual loss sustained by the plaintiff as a direct result of the breach. United Electrical, etc. Workers of America v. Oliver Corp., 8 Cir., 1953,
In a comment entitled, Damages Recoverable In An Action For Inducing Breach of Contract, 30 Columbia Law Review 232 (1930), it is stated (p. 232) (footnote numbers omitted) :
“There are three measures of damages available to a court in an action for wrongfully inducing a breach of contract. Some courts have indicated that a contract measure of damages should be used, that is to say that the plaintiff may recover the same amount of damages as if the action were being brought against the party who had been induced to breach the contract. Many courts have stated that the defendant in an action for wrongfully inducing a breach of contract is liable for all the damage caused, to the same extent as a person who has been guilty of an intentional invasion of another’s rights in more tangible property. Other courts, assuming an intermediate position, have stated that the defendant is subject to the same rules of damages as those ordinarily applicable in actions for the negligent invasion of another’s rights in tangible property.
“The importance of selecting one of these three possible measures of damages is shown by its effect on the answer to the following questions: How far will the defendant be held liable for the consequential damages which are the result of his wrongful act? Can the plaintiff recover damages for mental suffering caused by defendant’s tort? Should exemplary or punitive damages be awarded in this action? If the plaintiff is unable to prove that he has suffered any actual damage, will he be able to recover nominal damages? To what extent is the plaintiff placed under a duty or disability to mitigate or avoid the damaging consequences of the defendant’s act?”
In the same comment it is further stated (p. 236):
“The above discussion reveals the following differences among the three measures of damages as applied to a defendant’s liability for consequential damages: Under the contract measure, a defendant’s liability is limited to the contemplated damage; under the negligent measure, it is limited to the proximate damages; under the intentional measure, his liability is extended to include all the damages towards which his tort was a contributing cause. And it seems that some courts have limited the amount of plaintiff’s recovery to the ‘contemplated damages,’ other courts have allowed the plaintiff to recover all the ‘proximate damages,’ and some courts apparently have allowed the plaintiff to recover even further consequential damages which were neither ‘contemplated’ nor ‘proximate.’ ”
In the comment it is further stated (p. 233) that the courts which follow the contract measure of damages are applying the rule of Hadley v. Baxendale, 9 Exch. 341, 156 Eng.Reprint 145, 5 Eng. Rul.Cas. 502. The Minnesota Supreme Court follows Hadley v. Baxendale. Despatch Oven Company v. Rauenhorst, 1949,
Under the allegations of the plaintiff in its complaint herein, the measure of damages under Counts I and II are the same. The plaintiff asks the same actual damages in both counts. Thus, the question whether the plaintiff might recover damages under Count II different from and beyond those sought in Count I is not presented.
None of the rules of law so far considered would inhibit the plaintiff from maintaining an action against the defendants to Count II for inducement of breach of contract under the common law of Iowa. However, there is still to be considered another phase of the law relating to inducement of breach of contract.
Where a person who is a party to a contract breaches it, there is some logical difficulty in holding him liable in tort for having induced such breach. Regarding inducement of breach of contract the Restatement, Torts, Section 766 (1939), heretofore set out, declares that the wrong is that of inducing a third person not to perform a contract with another. In the case of Hope Basket Company v. Product Advancement Corp., 6 Cir., 1951,
“It is ordinarily held that the officers, directors, or employees of a corporation are not liable for its breach of contract on the theory that they induced such breach.”
It has been held that a servant who, while acting within the scope of his authority, procures or causes a breach of contract between his employer and a third person is not liable in tort to such third person for causing such breach. Said v. Butt [1920] 3 K.B. (Eng.), 497, 11 B.R.C. 317.
In the case of Hicks v. Haight, 1939,
“If the plaintiff is right in his contention, it seems to follow that whenever either a managing director or a board of directors, or a manager or other official of a company, causes or procures a breach by that company of its contract with a third person, each director or official will be liable to an action for damages, upon the principle of Lum-ley v. Gye * * * as for a tortious act. So, too, with the manager or other agent of a private firm, who does the like thing. * *
The Court stated that such exclusion of the doctrine would leave the directors of a corporation open to tort claims every time a corporation breached its contract.
In the case of Braden v. Perkins, 1940,
“It is well settled that a director or officer of a corporation may not be *823 field liable where his corporation has been allegedly induced by him to violate its contractual obligation. Greyhound Corporation v. Commercial Casualty Ins. Co.,259 App.Div. 317 ,19 N.Y.S.2d 239 . It would seem that the same principle applies with •equal force to a member of a partnership. The argument that the •conspiracy counts change the moving party’s position is not persuasive. * * * ”
In the case of Nathanson v. Brown & Williamson Tobacco Corp., 1947,
“Plaintiff pleads therein a conspiracy by employees of the defendant corporation to bring about certain corporate action, namely, the breach of plaintiff’s agreement with the defendant corporation. Since a corporation can act only by its employees and since whatever they do in relation to corporate business is corporate and not individual action, the conspiracy charge fails. * *
If the situation in the present case were reversed and the defendant unions were seeking recovery of their damages from the plaintiff corporation for a claimed breach of the contract in question and from its officers for having induced such breach, it seems clear that recovery could not be had from such officers for such inducement.
The question is then presented as to whether under either Section 301 or the common law, or both, the officers of the union who are the defendants to Count II may be proceeded against indirectly for inducing a breach of the contract in question.
It was heretofore noted, in connection with the consideration of the law relating to unincorporated associations, that all of the members of the association who approve or ratify a contract entered into in the name of the association become parties to such contract. In the case of McLean Distributing Co. v. Brewery & Beverage Drivers, etc., 1959,
“In dealing with a contract between an employer and a union, acting as an exclusive bargining (sic) agent for all employees of such employer, it is necessary to have in mind the nature of such agreement. To begin with, the union acts as the agent for the employees presently employed, and they are as much bound by the contract executed in their behalf by the union as if they had executed it themselves. * *
It would seem, therefore, that the defendants to Count II would in one sense be considered as being parties to the contract in question rather than as being third parties to it. However, the plaintiff is not proceeding against those defendants for breach of the contract but for inducing the breach thereof.
The last question to be considered is what effect, if any, the provisions of Section 301 may have upon the action for inducement of breach of contract set forth in Count II.
In the case of Association of Westinghouse Salaried Employees v. Westinghouse Electric Corp., 1955,
In the case of International Ladies’ Garment Workers’ Union v. Jay-Ann Company, 5 Cir., 1956,
*824 “Any money judgment against a labor organization in a district court of the United States shall be enforceable only against the organization as an entity and against its assets, and shall not be enforceable against any individual member or his assets.”
In an action under Section 301 it is proper to include the portion above set out in the instructions to the jury. United Electrical, etc. Workers of America v. Oliver Corp., 8 Cir., 1953,
“Section 301(b) of the Taft-Hart-ley Act provides that ‘any money judgment against a labor organization in a district court of the United States shall be enforceable only against the organization as an entity and against its assets, and shall not be enforceable against any individual member or his assets.’ At the least this evidences a congressional intention that the union as an entity, like a corporation, should in the absence of agreement be the sole source of recovery for injury inflicted by it. * * *»
In Count I of the complaint the plaintiff utilizes the provisions of Section 301 to maintain an action at law for damages for breach of contract against Local Union No. 3 as a lfegal entity analogous to a corporation. In Count II it in legal effect disregards the entity theory and proceeds against the defendants to that Count under equity class action procedure and the common law of Iowa relating to inducement of breach of contract.
It was heretofore noted that the officers of the plaintiff corporation would not be subject to liability for inducing a breach of the contract in question. It would seem that since the plaintiff is proceeding against Local Union No. 3 as a legal entity under the provisions of Section 301, its officers should be treated similarly. Further, the legislative history of Section 301 and the pronouncements of the United States Supreme Court lend support to the view that where a union as an entity is subject to liability for the damages occasioned by a breach of its collective bargaining agreement under Section 301, its officers should not be held to be individually liable for the inducement of such breach.
It should be specifically noted that the only tortious conduct charged as to the defendants to Count II is that as officers of Local Union No. 3 they induced the breach of the contract which is the subject matter of Count I. They are not charged with tortious conduct involving force, violence, fraud, or intimidation. Cases in which one or more of those features were present would not seem to be in point. The same would be true of cases in which the question here presented was not raised. It would seem that to allow the plaintiff to proceed against the defendants to Count II as attempted would impinge upon the provisions of Section 301.
It is the holding of the Court that the motion of the defendants to dismiss Count II should be sustained, and it is so. ordered.