ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA (D.C. Civil No. 71-0264)
Before Gibbons, Higginbotham and Sloviter, Circuit Judges.
The International Union of Wholesale and Department Store Union, AFL-CIO (the International) appeals for a second time from an order of the district court which holds it liable in contribution to The G. C. Murphy Company (Murphy) for violations of Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §§ 2000e-2000e-17 (Title VII). Murphy cross-appeals challenging the district court's calculations of the International's liability. We agree with the district court that Murphy has a right of contribution. We will affirm.
These appeals arise out of a class action brought in 1971 on behalf of all females employed by The G. C. Murphy Company from July 1965 to January 1971. The plaintiffs in that action named as defendants Murphy; the International; the Retail, Wholesale and Department Store Union, Local 940 (Local 940); and Teamster's Local 249 (Local 249), the successor collective-bargaining agent of Local 940. They alleged, inter alia, that Murphy and the unions had violated Title VII and the Equal Pay Act of 1963, 29 U.S.C. § 206, by agreeing to and maintaining a collective-bargaining agreement that provided for separate job classifications, pay scales, and seniority systems for male and female employees.
After the filing of answers, Murphy filed a cross-claim against the unions in which it asserted that the unions were solely liable for the discrimination complained of and that if Murphy was found liable, it had a right of contribution against the unions. Prior to trial a settlement was reached by Murphy and the plaintiff class. The settlement was approved by the district court. It provided for the payment of $548,000 in damages and $100,000 in attorneys' fees. The payment was to be made in three installments with six percent interest on the deferred payments; $100,000 of the $548,000 was allocated to the Equal Pay Act charge.
Murphy continued to press for contribution from the unions and eventually settled with Local 940 for $4,146, the total amount in Local 940's treasury. Trial proceeded on Murphy's claim against the International and Local 249. The district court concluded that Murphy and the defendant unions had violated Title VII and that they were equally liable for the discrimination and thus equally responsible for the financial loss of the plaintiffs. After dividing the damages, the court entered judgment against the International in the amount of $242,337. Glus v. G. C. Murphy Co., Civ. No. 71-264 (W.D.Pa. Apr. 29, 1976), reprinted in Joint Appendix at 124a-78a (hereinafter Glus I ).
The International appealed from that judgment asserting that the district court did not have jurisdiction over it under Title VII because the International had not been named in the complaint filed by the plaintiffs with the Equal Employment Opportunity Commission (EEOC). It also asserted that no right of contribution could be claimed for violations of Title VII or the Equal Pay Act. In the first appeal we held that Murphy had no right of contribution under the Equal Pay Act, Denicola v. G. C. Murphy Co., 562 F.2d 889 (3d Cir. 1977), but remanded for further proceedings on the issue of whether the district court had jurisdiction under Title VII. Glus v. G. C. Murphy Co., 562 F.2d 880 (3d Cir. 1977). On remand the district court found that the plaintiff had not named the International in the EEOC complaint but that the omission did not result in an absence of jurisdiction. Glus v. G. C. Murphy Co., Civ. No. 71-264 (W.D.Pa. Feb. 14, 1979), reprinted in Joint Appendix at 833a-40a (hereinafter Glus II ). The International appeals for a second time challenging the district court's conclusions on jurisdiction and challenging the district court's earlier decision on the right of contribution. Murphy cross-appeals arguing that the district court did not properly calculate the amount due under the right of contribution.
II. Title VII Jurisdiction
In the first appeal we enumerated four factors that should be considered in determining whether the district court had jurisdiction under Title VII. They were:
1) whether the role of the unnamed party could through reasonable effort by the complainant be ascertained at the time of the filing of the EEOC complaint; 2) whether, under the circumstances, the interests of a named (party) are so similar as the unnamed party's that for the purpose of obtaining voluntary conciliation and compliance it would be unnecessary to include the unnamed party in the EEOC proceedings; 3) whether its absence from the EEOC proceedings resulted in actual prejudice to the interests of the unnamed party; 4) whether the unnamed party has in some way represented to the complainant that its relationship with the complainant is to be through the named party.
562 F.2d at 888. This four-prong test is not a mechanical one; no single factor is decisive. Instead each factor should be evaluated in light of the statutory purposes of Title VII and the interests of both parties. The district court applied these factors and concluded that it had jurisdiction. We agree.
The interests of Local 940, which was named in the EEOC complaint, and the International are identical in all significant aspects, and thus the International was not harmed by its absence from the EEOC proceedings. Their liability arises from their participation in the same collective-bargaining agreements. The International was the sole union signatory to the collective-bargaining agreement for a portion of the period where discrimination was found to have taken place; later both the International and Local 940 signed the agreements. The International's representative was the chief union negotiator at many of the negotiation sessions. The International's interests were vigorously litigated by Local 940 at the EEOC proceedings. Local 940 stood firm in its denial of liability. Further, both the International and Local 940 were represented by the same attorney, Emil E. Narick, Esq., in the district court proceeding until Murphy filed its claim for contribution.
The plaintiffs' interests were not harmed by the International's absence in the EEOC process. If a settlement had been reached during the EEOC proceeding, complete relief could have been obtained from the defendants then present. We also note the finding of the district court that the close relationship between the International and Local 940 could have led the plaintiff to reasonably assume that the interests of both unions were to be represented by Local 940. Glus II, App., at 838a-39a. Finally, we agree with the district court that the conciliation process was not rendered less effective because of the absence of the International. The settlement agreement was not reached until the federal court action had begun, at which time the International was a party to the litigation.
We will therefore affirm the district court's decision on the jurisdictional issue.*fn1
III. Right to Contribution
In its cross-claim Murphy requested contribution for what it asserted was the International's share of the damages Murphy had paid in the settlement agreement. By its express terms Title VII does not provide for a right of contribution. Murphy asserts that nevertheless a right of contribution exists in the federal common law arising from Title VII. It is to this claim that we now turn.
At the outset we note our disagreement with the International and the dissent that no right of contribution exists in the federal common law because there is an "established rule that contribution would not be implied in the absence of a statutory provision." At 267. Initially most American courts held that there was no right of contribution under the common law, relying on the English decision Merryweather v. Nixan, 8 Term R. 186, 101 Eng.Rep. 1337 (K.B.1799). See, e. g., Union Stock Yards Co. v. Chicago, Burlington, & Quincy Railroad Co., 196 U.S. 217, 25 S. Ct. 226, 49 L. Ed. 453 (1905). This prohibition resulted from the belief that a wrongdoer should not be able to shift the responsibility of his actions to the shoulders of another. The rule prohibiting contribution has come into disrepute. It is now widely recognized that fundamental fairness demands a sharing of the liability. Without a right of contribution a wrongdoer may escape liability for his actions because of the happenstance of the plaintiff's choice of defendants. See Prosser, The Law of Torts, § 50 (4th ed. 1971). See also Sellers, Contribution in Antitrust Damage Actions, 24 Vill.L.Rev. 829, 855-63 (1979) (reviewing state law on contribution). The vast majority of the states have now rejected the prohibition either by statute, e. g., Del.Code tit. 10, §§ 6301-08; Pa.Cons.Stat.Ann. tit. 42 §§ 8323-27 (Purdon 1979), or by judicial action. E. g., Knell v. Feltman, 85 U.S. App. D.C. 22, 174 F.2d 662 (D.C. Cir. 1949); State Farm Auto Insurance Co. v. Continental Casualty Co., 264 Wis. 493, 59 N.W.2d 425 (1953).
The International argues that the prohibition still exists in federal law, relying on Halcyon Lines v. Haenn Ship Ceiling & Refitting Corp., 342 U.S. 282, 72 S. Ct. 277, 96 L. Ed. 318 (1952). Cf. Olson Farms, Inc. v. Safeway Stores, Inc., 1979 2 Trade Cases P 62,995 (10th Cir. 1979) (relying on Halcyon Lines to deny contribution under federal anti-trust laws). We do not agree. Halcyon Lines was an action for contribution arising under the admiralty jurisdiction of the federal courts. The Court found the claim inconsistent with the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C. §§ 901-944. It denied the claim and stated, "(I)n the absence of legislation, courts exercising a common-law jurisdiction have generally held that they cannot on their own initiative create an enforceable right of contribution as between joint tortfeasors." 342 U.S. at 285, 72 S. Ct. at 279. For a number of years this language was relied upon to deny claims for contributions brought under federal law. See, e. g., Goldlawr, Inc. v. Shubert, 276 F.2d 614, 616 n. 3 (3d Cir. 1960) (anti-trust law). However, in 1974 the Supreme Court held that its holding was not as far-reaching as the language suggests. In Cooper Stevedoring Co., Inc. v. Fritz Kopke, Inc., 417 U.S. 106, 111-13, 94 S. Ct. 2174, 2177-78, 40 L. Ed. 2d 694 (1974), the Court explained that it had denied contribution in Halcyon Lines only because under the facts of that case contribution was inconsistent with the Harbor Workers' Act. It stated:
(W)e think Halcyon stands for a more limited rule than the absolute bar against contribution . . . . On the facts of this case, then, no countervailing considerations detract from the well-established maritime rule allowing contribution between joint tortfeasors.
The Supreme Court has yet to review a contribution claim in a case outside of the admiralty context since Cooper Stevedoring. But a number of lower courts have read Cooper Stevedoring as supporting rights of contribution in federal common law claims. E. g.,, Professional Beauty Supply Inc. v. National Beauty Supply, Inc., 594 F.2d 1179 (8th Cir. 1979) (anti-trust law); Kohr v. Allegheny Airlines Inc., 504 F.2d 400 (7th Cir. 1974), cert. denied, 421 U.S. 978, 95 S. Ct. 1980, 44 L. Ed. 2d 470 (1975) (aviation law). But see Olson Farms, Inc. v. Safeway Stores, Inc. (denying right of contribution in anti-trust law). Thus, Cooper Stevedoring provides positive support for our conclusion that a federal common law right of contribution exists.
As we noted above, no right of contribution is expressly provided for in Title VII. This does not, however, end our inquiry. For this does not necessarily reflect a congressional intention to deny a right of contribution. Rather it reflects the probability that contribution, although of considerable importance, was not contemplated by the drafters of the legislation. We must therefore inquire into the interstices of Title VII to respond to Murphy's claim.
The responsibility of federal courts to define the body of federal common law which arises from the interstices of federal legislation has been established by a number of Supreme Court decisions. E. g., Illinois v. Milwaukee, 406 U.S. 91, 92 S. Ct. 1385, 31 L. Ed. 2d 712 (1972) (federal common law right of nuisance recognized and applied to the pollution of interstate waters); Textile Workers v. Lincoln Mills, 353 U.S. 448, 77 S. Ct. 912, 1 L. Ed. 2d 972 (1957) (federal labor law); Texas & Pacific Railway v. Rigsby, 241 U.S. 33, 36 S. Ct. 482, 60 L. Ed. 874 (1916) (Safety Appliance Act).
The scholarly debate about the power of the federal courts to recognize common law claims rages as does the debate on the source of that power and the extent to which it can be exercised. See, e. g., Ely, The Irrepressible Myth of Erie, 87 Harv.L.Rev. 693 (1974); Friendly, In Praise of Erie And the New Federal Common Law, 39 N.Y.U.L.Rev. 383 (1964); Bickel & Wellington, Legislative Purpose and the Judicial Process, 71 Harv.L.Rev. 1 (1957). Yet, in spite of the stridency of the debate, two principles firmly and resolutely emerge. First, there is a federal common law, Illinois v. Milwaukee, 406 U.S. at 98-102, 92 S. Ct. at 1390-1392. Second, in some circumstances federal common law causes of action arise from the interstices of congressional acts. See, e. g., Textile Workers v. Lincoln Mills. Common law actions arising from federal legislation have been recognized in a variety of circumstances, including instances when the common law establishes remedies and standards not set forth in the legislation, but necessary for the fulfillment of the legislative purpose, e. g., Illinois v. Milwaukee ; Textile Workers v. Lincoln Mills, and instances where the common law provides a cause of action for an individual who has been harmed by the violation of the federal statute. E. g., J. I. Case Co. v. Borak, 377 U.S. 426, 84 S. Ct. 1555, 12 L. Ed. 2d 423 (1964); Texas & Pacific Railway v. Rigsby. In our review of the literature and the case law we discern two types of cases which establish the framework for our determination of whether a common law right of contribution arises from the interstices of Title VII.
The first are cases in which the common law provides remedies or standards when legislation related to the petitioner's claim does not address the specific situation presented. These cases are illustrated by the seminal decision, Textile Workers Union v. Lincoln Mills. In Lincoln Mills the plaintiff union charged Lincoln Mills with violating a collective-bargaining agreement. The Supreme Court held that the standards for evaluating the claim were to be found in the federal common law. The Court reasoned that when Congress granted to the federal courts jurisdiction over controversies involving labor organizations in the Labor Management Relations Act, 29 U.S.C. §§ 141-187, it wanted those controversies to be resolved by a federal common law. The Court argued that a uniform federal law was necessary to achieve the purposes of the Act. Although it made no extensive analysis of the source of its power to fashion this body of common law, it noted, "it is not uncommon for federal courts to fashion federal law where federal rights are concerned." 353 U.S. at 457, 77 S. Ct. at 918. The exact contours of this body of common law was to be determined by a review of the applicable legislation.
The Labor Management Relations Act expressly furnishes some substantive law. It points out what the parties may or may not do in certain situations. Other problems will lie in the penumbra of express statutory mandates. Some will lack express statutory sanction but will be solved by looking at the policy of the legislation and fashioning a remedy that will effectuate that policy. The range of judicial inventiveness will be determined by the nature of the problem.
A similar analysis was used in Illinois v. Milwaukee. In that case the Supreme Court was presented with a common law nuisance action brought by the State of Illinois. Illinois brought the action against four cities of Wisconsin, the Sewerage Commission of the City of Milwaukee, and the Sewerage Commission of the County of Milwaukee in an attempt to abate the alleged pollution of Lake Michigan, a body of interstate water. The Court found that Congress had a strong interest in "the quality of the aquatic environment as it affects the conservation and safeguarding of fish and wildlife," 406 U.S. at 102, 92 S. Ct. at 1392, evidenced by legislation such as the Federal Water Pollution Control Act, 62 Stat. 1155, as amended (presently codified at 33 U.S.C. §§ 1251 et seq.) and the Fish and Wildlife Act of 1956, 70 Stat. 1119, 16 U.S.C. § 742a. Undaunted by the absence of an express cause of action in any of these acts covering Illinois' claim, the Court held that one existed in the federal common law. It stated:
The remedy sought by Illinois is not within the precise scope of remedies prescribed by Congress. Yet the remedies which Congress provides are not necessarily the only federal remedies available. "It is not uncommon for federal courts to fashion federal law where federal rights are concerned." Textile Workers v. Lincoln Mills, 353 U.S. 448, 457, (77 S. Ct. 912, 918, 1 L. Ed. 2d 972.)
Id. at 103, 92 S. Ct. at 1392. See also National Sea Clammers Association v. City of New York, 616 F.2d 1222, 1235 (3d Cir. 1980). (After considering the rationale of Illinois v. Milwaukee, this court concluded that there is a "federal common law of nuisance (which) may be enforced by private plaintiffs.")
The second group of cases are similar yet distinctive. They deal with the specific issue of whether a federal common law action may be brought by an individual who has been harmed by a violation of legislation designed to protect that individual. The earliest Supreme Court decision of that nature seems to be Texas & Pacific Railway v. Rigsby. The Rigsby Court held:
A disregard of the command of the statute is a wrongful act, and where it results in damage to one of the class for whose especial benefit the statute was enacted, the right to recover the damages from the party in ...