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NIX v. SPECTOR FREIGHT SYS.

December 16, 1957

William A. NIX, Peter J. Barba, Joseph McCarthy, Clarence R. Wood, Jack Levine, James F. Smith, Joseph Piccolo, Peter Caggiano, Joseph Olivo, Frederick S. Cavagnaro, Abe Steinberg, Peter J. Dicembri, Kenneth McQueen, Girolemo Musso, Paul F. Skobbeko, John N. Stibekel, Alexander F. Skobbeko, Jack Lippy, Samuel H. Harbet, Lawrence Garafola, Alan C. Welle, Sr., Joseph Cavagnaro, Louis Weitz, David Stinson, Henry Bernstein, Joseph G. Gentilesco, Joseph Warner, James Treaster, George F. Conklin, Thomas R. Regan, Francis Edward Gilligan, Paul Zanowiak, Thaddeus Lewandowski, Vincent A. Esposito, Andrew James Murphy, John J. Zummo, Douglas W. Briggs, Andrew T. Esposito, George John Barret, Thomas J. McGovern, Stephen Lord, Joseph Zembryski, William G. Crooks and Carmine Zummo, Plaintiffs,
v.
SPECTOR FREIGHT SYSTEM, Inc., Defendant



The opinion of the court was delivered by: WORTENDYKE

This is an action by numerous individual employees who are residents of the States of New York and New Jersey against a Missouri corporation, doing business in New Jersey, and personally served here. Jurisdiction is claimed on the basis of diversity of citizenship and involvement of excess of jurisdictional amount (28 U.S.C. § 1332).

Plaintiffs allege that they are members in good standing of Local 478 International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, AFL-CIO (hereinafter referred to as 'Union'). Plaintiffs had been, prior to April 1, 1957, employees of Mid-States Freight Lines, Inc. (hereinafter referred to as 'Mid-States' under a Union contract effective September 1946 and for two years or more thereafter. Section 5 of this contract contained provisions respecting seniority, and a copy of that section of the contract is annexed to the complaint. There also existed a contract, identical in form, between the same Union and the defendant (hereinafter referred to as 'Spector'). Plaintiffs allege that in April 1957 Spector purchased Mid-States and merged the operations and personnel of the two corporate entities. Through this purchase and/or merger plaintiffs were transferred from operations which they had previously been performing for Mid-States and assigned to work at Spector's terminal. Plaintiffs charge that this consolidation of the two corporations caused Spector to become bound by the provisions of the contract between the Union and Mid-States for plaintiffs' benefit. Likewise assigned to operations of Spector at its terminal were Union employees who had worked for Spector prior to the alleged merger, but who, plaintiffs contend, had less seniority under their Union contract with Spector than had the plaintiffs under their Union contract with Mid-States. Plaintiffs charge that Spector, having become bound by the seniority provisions of Section 5 of the Union contract, failed and refused to compile a seniority list designating plaintiffs as senior to the former Spector employees, and that Spector permitted the Union to compile a seniority list which placed all of the former Spector employees in higher seniority than that of the plaintiffs. Plaintiffs charge that the Union was ruled by officers partial to the former Spector employees. The complaint further alleges that plaintiffs, by letter from their attorney, a copy of which is annexed to the complaint, demanded restoration of plaintiffs' seniority on pain of suit, and that thereafter Spector and the Union 'desiring to circumvent the legal and contractual rights of plaintiffs, and secretly agreeing to do so, conspired to present the matter to an alleged arbitration.' Annexed to the complaint is a copy of the award of the arbitrator by whom the matter was heard on July 10, 1957, with appearances before him of representatives for Spector and for the Union respectively. No representation (according to the complaint) was had in behalf of the plaintiffs, former Mid-States employees. Thus, the requirement for exhaustion of administrative remedies appears to have been met. Marchitto v. Central R. Co. of New Jersey, 1952, 9 N.J. 456, 88 A.2d 851.

 Spector has moved to dismiss the complaint pursuant to the provisions of Rule 12(b) of the Federal Rules of Civil Procedure, 28 U.S.C., upon the following grounds:

 (1) failure to state a claim upon which relief can be granted,

 (2) failure to join former Spector employees and the Union as indispensable parties, and

 (3) lack of jurisdiction in the Court over the subject matter of the action.

 There is jurisdiction upon diversity of citizenship with a sufficient prima facie showing of amount involved. Nord v. Griffin, 7 Cir., 1936, 86 F.2d 481, certiorari denied, 300 U.S. 673, 57 S. Ct. 612, 81 L. Ed. 879. Cf., Syres v. Oil Workers Int. Union, Local No. 23, 5 Cir., 1955, 223 F.2d 739, reversed per curiam, 350 U.S. 892, 76 S. Ct. 152, 100 L. Ed. 785, rehearing denied, 350 U.S. 943, 76 S. Ct. 299, 100 L. Ed. 822; Williams v. Yellow Cab Co., 3 Cir., 1952, 200 F.2d 302, certiorari denied sub nom. Dargan v. Yellow Cab Co., 346 U.S. 840, 74 S. Ct. 52, 98 L. Ed. 361. Anson v. Hiram Walker & Sons, 7 Cir., 1955, 222 F.2d 100, certiorari denied, 350 U.S. 840, 76 S. Ct. 79, 100 L. Ed. 749 is distinguishable because an unfair labor practice was there involved, thereby conferring primary administrative jurisdiction upon the National Labor Relations Board.

 Plaintiffs here assert jurisdiction in this Court of the subject matter of this action under the principles expressed in Independent Petroleum Workers of New Jersey v. Esso Standard Oil Company, 3 Cir., 1956, 235 F.2d 401. The Independent Petroleum case may be distinguishable from Anson in that the plaintiff in Independent Petroleum was a Union suing upon a collective bargaining agreement for specific performance of certain of its provisions. That case held that the breach of the agreement which gave rise to the cause of action was not an 'unfair labor practice' of which the National Labor Relations Board had primary administrative jurisdiction, and that Section 301 of the Taft-Hartley Act (29 U.S.C.A. § 185) confers jurisdiction on a Federal District Court to compel specific performance when there is a breach of a collective bargaining contract 'between an employer and a labor organization.'

 Defendant's asserted ground that plaintiffs have failed to join indispensable parties in this action seems well taken. A motion may be based upon such a ground under the same Rule (12(b)) which affords the other grounds for the present motion.

 In Metropolis Theatre Co. v. Barkhousen, 7 Cir., 1948, 170 F.2d 481, at page 484, certiorari denied, 336 U.S. 945, 69 S. Ct. 812, 93 L. Ed. 1101, the Court pointed out that:

 'The requirement for complete diversity cannot be brought about by a party failing to join, either with himself or on the opposite side, a party who is an indispensible party to the action, even though joining the absent party would result in a loss of jurisdiction by the federal court.'

 The same Court, in defining 'indispensible party' quoted, 170 F.2d at page 485, from Shields v. Barrow, 17 How. 129, 130, 139, 15 L. Ed. 158, as follows:

 "Persons who not only have an interest in the controversy, but an interest of such a nature that a final decree cannot be made without either affecting that interest, or leaving the controversy in such a condition that its final termination ...


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