FACTS AND PROCEDURE
Plaintiffs Johnston Development Group, Inc. and Glassboro Development Co., Inc., are in the process of developing a residential subdivision known as "Hidden Creek." Plaintiffs employ contractors who in turn employ, for the most part, nonunion subcontractors.
In the fall of 1988, Carpenters Local 1578 began to picket the site at Hidden Creek. Plaintiffs filed unfair labor practice charges with the National Labor Relations Board (hereinafter the "NLRB" or "Board"). Plaintiffs claimed that the unions were engaging in illegal secondary labor activity in violation of sections 8(b)(4)(i) and 8(b)(4)(ii)(B) of the National Labor Relations Act, 29 U.S.C. § 158(b)(4)(i) and (ii)(B), as amended. The NLRB investigated plaintiffs' charges, and determined that the unions were engaging in unfair labor practices. The NLRB therefore filed an injunction action with this court pursuant to section 10(l) of the National Labor Relations Act, 29 U.S.C. § 160(l). The NLRB and the unions thereafter reached a settlement under which the union agreed to cease picketing the Hidden Creek development site.
On February 8, 1989, plaintiffs filed the complaint in the instant action, alleging violations of the Racketeer Influenced and Corrupt Organizations Act (hereinafter "RICO"), 18 U.S.C. § 1962, the Sherman Act, 15 U.S.C. § 1, section 303 of the Labor Management Relations Act, 29 U.S.C. § 187, and various pendent state tort claims. The complaint alleges that the unions' conduct exceeds mere picketing and includes extortion, violence, and threats of violence. The relief sought includes, in addition to monetary damages, a preliminary and permanent injunction.
Thereafter, members of the union, who were dressed in white decontamination suits with gas masks, began to distribute handbills at the entrance to development. The Hidden Creek site is located in Glassboro, New Jersey, less than one mile from the Lipari Landfill, which was, at the time, ranked first on the United States Environmental Protection Agency's Superfund cleanup list. The handbills had photographs and drawings in addition to hyperbolic, but not clearly false, language, and warned prospective home buyers of the dangers of living so close to a landfill. Except for a short statement that they were paid for by Carpenters Local 1578, the handbills made no reference the underlying labor dispute.
In response, plaintiffs amended the complaint to include the handbilling as an example of defendants' illegal activity. Plaintiffs also filed another unfair labor practice charge with the NLRB. In this instance, however, the NLRB declined to issue a complaint because it found, on the basis of Edward J. DeBartolo Corp. v. Florida Gulf Coast Building & Construction Trades Council and NLRB, 485 U.S. 568, 99 L. Ed. 2d 645, 108 S. Ct. 1392 (1988), in substance, that the peaceful handbilling was not prohibited by sections 8(b)(4)(i) and 8(b)(4)(ii) of the National Labor Relations Act.
Plaintiffs thereafter sought a preliminary injunction prohibiting the handbilling. This court refused to issue such an injunction because it found that the handbilling grew out of a labor dispute, and therefore the Norris-LaGuardia Act deprived the court of subject matter jurisdiction to issue an injunction. Johnston Development Group, Inc. v. Carpenters Local Union No. 1578, 712 F. Supp. 1174 (D.N.J. 1989).
After several conferences with this court, and after limited discovery failed to uncover the quantum of evidence this court felt was necessary to refer the matter to the United States Attorney,
plaintiffs presented the court with the first round of proposed consent decrees. Under the terms of those decrees, plaintiffs and various non-union defendants
were to be dismissed as defendants
from the case, provided they agreed not to refuse to deliver construction goods to the development site because of either an agreement with or pressure from the unions, and provided further that they disclose to plaintiffs any attempts by the unions or their "agents, members, employees or anyone acting in concert" with them to prevent the delivery of construction goods. Finally, the consent decrees provided for continuing jurisdiction and were cast in terms of a permanent injunction.
The unions strongly objected to the entry of the consent decrees on several grounds. First, the unions argued that the consent decrees were not in the public interest. The unions asserted that the decrees were the product of frivolous litigation that had no factual basis. The suit against the contractors and suppliers, the unions argued, was extortion by litigation; the non-union defendants are relatively small companies which cannot afford to pay the fees generated by the complex litigation of the type involved in this case. Thus, the unions argued, plaintiffs were able to force the concrete suppliers to agree to the consent decrees, the terms of which would otherwise have been unacceptable. The unions further argued that the consent decrees were impermissible restraints of trade in violation of the Sherman Act, and were in essence vertical restrains of trade in that the home developers would control their source of concrete supplies.
The second, and more serious, challenge to the consent decrees was jurisdictional. The unions claimed that the decrees adjudicated rights in the context of a labor dispute in violation of the Clayton Act.
The unions also characterized the decrees as regulations of conduct within the exclusive jurisdiction of the NLRB. The unions finally argued that the consent decrees were unconstitutional abridgements of free speech in that they would have a chilling effect on the lawful conduct of members of the unions.
Plaintiffs countered that the consent decrees were merely private agreements that had no impact on the protected conduct of the unions.
The court expressed concern that the consent decrees might be, in effect, injunctions, in that plaintiffs were unable to articulate why the consent decrees did not contemplate injunctions in the context of a labor dispute when that would, in all likelihood, be the relief sought in the event that the parties to the decrees did not comply with their terms. The court, however, never ruled on the consent decrees.
Thereafter, plaintiffs submitted the instant stipulations of dismissal, which superceded the consent decrees.
Plaintiffs assert the instant stipulations are voluntary dismissals pursuant to Fed. R. Civ. P. 41(a)(2) predicated on private settlement agreements. The unions claim that the stipulations are, in fact, the consent decrees with different titles. The unions stress the similarities between the provisions of the stipulations and the decrees submitted in August,
and argue that the function and purpose of the decrees is to enjoin certain parties conduct in the context of a labor dispute.
It is important to stress from the outset what this set of motions does not involve. Resolution of the instant motions does not involve injunctive relief under RICO, and makes no provision for private equitable relief in any event. Curley v. Cumberland Farms, Inc., 728 F. Supp. 1123, (D.N.J. 1989). Although injunctive relief is available to private parties under Clayton Act, the court need not rely on that authority. The only question now before the court is whether to give permission for plaintiffs to dismiss voluntarily certain defendants pursuant to Fed. R. Civ. P. 41(a)(2).
The "determination whether to grant a motion for voluntary dismissal rests within the discretion of the district court." Tyco Laboratories, Inc. v. Koppers Co., Inc., 627 F.2d 54, 56 (7th Cir. 1980) (per curiam). See also Hamilton v. Firestone Tire & Rubber Co., Inc., 679 F.2d 143, 145 (9th Cir. 1982).
Rule 41(a) provides: "except as provided in paragraph (1) of this subdivision, an action shall not be dismissed at the plaintiff's instance save upon order of the court and upon such terms and conditions as the court deems proper." As the Fourth Circuit has noted, "since Rule 41(a)(2) only applies when an answer or a motion for summary judgment has been filed by the defendants, the mere filing of an answer or a motion for summary judgment could not, without more, be a basis for refusing to dismiss without prejudice." Andes v. Versant Corp., 788 F.2d 1033, 1036 n.4 (4th Cir. 1986). Further, a motion for dismissal without prejudice "should not be denied absent substantial prejudice to the defendant." Andes, 788 F.2d at 1036 (citation omitted). See Hamilton, 679 F.2d at 145; 9 C. Wright & A. Miller, Federal Practice & Procedure § 2364 at p. 165 (1971).
The pending motions present issues slightly different than those presented by the standard motion for voluntary dismissal. Here, it is not the party to be dismissed that opposes the motion; other defendants object to the entry of the dismissals. These objections are directed not to the dismissals per se, but at the provision for court enforcement of the settlement agreements.
The stipulations at issue have at least two of the traditional indicia of consent decrees. First, each stipulation "looks like and is entered as a judgment . . . ." Local Number 93, International Assoc. of Firefighters v. City of Cleveland, 478 U.S. 501, 518, 92 L. Ed. 2d 405, 106 S. Ct. 3063 (1986). The stipulations are presented to the court pursuant to Fed. R. Civ. P. 41(a)(2), which requires a court order. This alone cannot be the basis for the unions' objections, for even if there were no provision for continuing jurisdiction, the court would still be required to "approve" the dismissals under the clear mandate of Fed. R. Civ. P. 41(a)(2).
The second and more important manner in which the stipulations resemble consent decrees is in the mechanism provided for their enforcement. As Judge Becker explained the distinction between a private settlement and a consent decree in McGoff v. Rapone, 78 F.R.D. 8 (E.D.Pa. 1978):
A consent decree is of course a continuing order, one having prospective effect. A party aggrieved by the other party's non-compliance may obtain an order to show cause why the noncomplying party should not be held in contempt, thereby placing on the party the burden of proving compliance or excuse from compliance. In contrast, when a settlement agreement made part of a stipulation to dismiss has been breached, the aggrieved party has the burden of persuading the court to reopen the matter "in the interest of justice" on a 60(b)(6) motion, as well as subsequently demonstrating that a breach of the settlement terms has occurred. A subsequent order must be obtained enjoining the adversary from noncompliance. Only then will the contempt remedy lie.
Id. at 24. City of Cleveland, 478 U.S. at 518.
It is not clear that the stipulations of dismissal in this case are, in fact, consent decrees. The stipulations allow for the parties to apply "to this Court at any time for such orders or directions, including injunctive relief, as may be necessary or appropriate for the construction or carrying out" of the stipulations. As the court understands the agreements, the terms provide that any party not complying with them could at that time become the subject of a court action including an injunction; the stipulations do not purport to impose injunctions at the present time. Nor is it necessary for the court to decide at this time what remedy will be implemented for future violations. To do so would be to render an advisory opinion about a matter not now involved in dispute, and therefore not a case or controversy. See Princeton University v. Schmid, 455 U.S. 100, 70 L. Ed. 2d 855, 102 S. Ct. 867 (1982) (per curiam).
The objections directed to the origins of the agreements are for the settling parties, and not the unions, to raise. The relationship of the parties to the stipulations, and the manner in which those agreements were reached, is not a matter which the unions have standing to challenge.
The settlement agreements do contemplate the use of this court's equitable jurisdiction, and the court is obligated to consider the claims of third parties that the settlements may harm them. Donovan v. Robbins, 752 F.2d 1170, 1176 (7th Cir. 1985). The court must be satisfied that the decree is reasonable. Id. at 1176-77.
Whether one characterizes the stipulations in the instant case as settlement agreements or consent decrees has virtually no legal or practical significance in and of itself, because, in most cases, a court is free to enforce with equitable decrees the terms of a private settlement. As Judge Becker has noted, a "considerable line of authority has recognized the justified reliance of parties in their settlement agreements by giving courts the power to reopen cases when such agreements have been breached." McGoff, 78 F.R.D. at 23. Judge Becker further observed:
Where the stipulation for dismissal contains conditions agreed to by the parties, such as settlement terms, a court may reinstate the case upon a rule 60(b) motion by either party for purposes of enforcing the settlement. . . .