each case must be decided upon its own facts and circumstances. Id. A court considering applying the doctrine must ask two questions: (1) whether the party's present position is inconsistent with a position formerly asserted; and (2) if so, whether the party asserted either or both of the inconsistent positions in bad faith (that is, with intent to play fast and loose with the courts). Id. (citing Ryan Operations G.P. v. Santiam-Midwest Lumber Co., 81 F.3d 355, 361 (3d Cir. 1996)).
Local 680's present position is inconsistent with the position it took previously in this Court when it fought against arbitrability of the bottling dispute. However, the Court declines to apply the doctrine of judicial estoppel to preclude Local 680 from arguing for arbitration now. The Court cannot find bad faith from these facts and notes that it is not unusual for parties at an early stage in litigation to assert conflicting defenses. Moreover, the federal policy favoring arbitrability is strong. Courts have found it controlling even in circumstances which may otherwise seem unfair. See Controlled Sanitation, 524 F.2d at 1328 (holding that union was not judicially estopped from arguing in favor of arbitration even when for three years it denied the existence of a contract requiring arbitration of an alleged violation of the no-strike clause).
Furthermore, the defendants repeated in the Consent Order that any issues arising out of the collective bargaining agreement should be submitted to arbitration. This Court has determined that the arbitration clause should be given the broad scope intended by the parties. Considering the facts and circumstances of this case, the Court cannot find that the defendants should be judicially estopped from claiming that the disputes should go to arbitration.
Fourth, Farmland correctly observes that arbitration is a matter of contract. Warrior & Gulf, 363 U.S. at 582. Relying upon the defendants' affirmative defense to Farmland's complaint,
Farmland characterizes the defendants as "third party strangers to its collective bargaining agreement" and thus argues that it is not required to arbitrate with them. See Steelworkers v. General Steel Indus., Inc., 499 F.2d 215, 217 (8th Cir. 1974).
Farmland's reliance on Steelworkers is misplaced. Whatever the defendants may have pleaded in their answer, the Court finds that the agreement is between Local 680 and Farmland. That employees of Tuscan or Clinton participated in the work stoppage or strike does not remove the obligation of Farmland and Local 680 to arbitrate the alleged violation of the no-strike clause. Farmland is required to arbitrate with the defendant union because Local 680 represents the employees of those other companies. There are no "third parties" to the collective bargaining agreement involved in this case.
Lastly, the Court rejects Farmland's assertion that it is not bound to arbitrate with defendants Tracy and Meyers in their official capacity. Courts, including the Third Circuit, have applied agency principles to require that claims against officers or employees of one of the contracting parties who were not signatories to the arbitration contract be submitted to arbitration. See Pritzker v. Merrill Lynch, Pierce, Fenner & Smith, 7 F.3d 1110, 1121-22 (3d Cir. 1993); see also Bleumer v. Parkway Ins. Co., 277 N.J. Super. 378, 411, 649 A.2d 913 (Law Div. 1994) (listing decisions in which claims against non-signatories were required to be submitted to arbitration).
In Pritzker, the court held that pension plan trustees were required to arbitrate their statutory ERISA claims with the consultant and sister corporation of the defendant broker firm even though they had never signed the arbitration agreement. Pritzker, 7 F.3d at 1122. There, as here, the agreement contained language which unmistakably evidenced the parties' intent to arbitrate all controversies which might arise between them and encompassed the claims at issue. Id. at 1114. The Pritzker court stated, "Because a principal is bound under the terms of a valid arbitration clause, its agents, employees, and representatives are also covered under the terms of such agreements." Id. at 1121. See also Arnold v. The Arnold Corp., 920 F.2d 1269, 1281-82 (6th Cir. 1990) (holding that plaintiff's federal securities law and RICO claims against non-signatory officers of the defendant and an independent broker dealer were arbitrable); Letizia v. Prudential Bache Securities, Inc., 802 F.2d 1185, 1188 (9th Cir. 1986) (holding that a broker's employees were entitled to invoke clause in the employer's brokerage agreement requiring arbitration of fraud and federal securities law violations). The Arnold opinion, which was approvingly cited by the Third Circuit in Pritzker, observed that if the rule were otherwise, a party could easily "avoid the practical consequences of an agreement to arbitrate by naming non-signatory parties as [defendants] in his complaint or signatory parties in their individual capacities only [and] the effect of the rule requiring arbitration would, in effect, be nullified." 920 F.2d at 1281 (quoting Arnold v. The Arnold Corp., 668 F. Supp. 625, 629 (N.D. Oh. 1987)).
There can be no doubt that Tracy and Meyers, respectively the president and secretary-treasurer of Local 680, are agents of the union. They have the power and authority to act on behalf of Local 680. Therefore, Farmland is bound to arbitrate with them.
The Court orders that the disputes over the alleged violations of the grievance and arbitration and no-strike clauses, and calculation of damages, if any, be submitted to arbitration under the terms of the collective bargaining agreement. Accordingly, Farmland's claim under section 301 is dismissed without prejudice. See Eberle Tanning Co. v. Food and Commercial Workers, 682 F.2d 430, 432 (3d Cir. 1982).
B. Whether Farmland Should Be Permitted to Amend its Complaint to Add Claims Against the individual Defendants.
A party wishing to amend a pleading must seek leave of the court to do so. Fed. R Civ. P. 15(a). Leave to amend a pleading "shall freely be granted when justice so requires." Fed. R. Civ. P. 15(a). This reflects a view that the moving party ought to be afforded an opportunity to test its claim on the merits, if the underlying facts and circumstances may be a proper subject for relief Foman v. Davis, 371 U.S. 178, 182, 9 L. Ed. 2d 222, 83 S. Ct. 227 (1962). Denial of a motion to amend is proper only when there is a finding of "undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of amendment." Id.
Farmland argues that Tracy's and Meyers's activities constituted an illegal interference with Farmland's business contracts with third parties in violation of the Civil Rights Act, 42 U.S.C. § 1985. It also charges violations of federal common law and state law prohibiting tortious interference with contracts. Lastly, it alleges that the defendants violated § 8(b)(4) of the LMRA, 29 U.S.C. § 158(b)(4), by engaging in activities that disrupted its business and seeks damages pursuant to § 303 of the LMRA, 29 U.S.C. § 187.
Defendants do not oppose Farmland's request for leave to amend by alleging undue delay, bad faith, or dilatory motive on Farmland's part. Nor do they argue that permitting Farmland to amend will prejudice them in any way.
However, the Court determines that Farmland's federal claims are futile and could not withstand a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). Accordingly, the Court, sua sponte, addresses these claims as a motion to dismiss and holds that the Court must deny Farmland's request to add claims under § 303 as well as claims under federal common law and § 1985 against defendants Meyers and Tracy. Because no federal claims remain, the Court lacks jurisdiction to hear Farmland's proposed state law claim.
1. Proposed claims under 42 U.S.C. § 1985 and federal common law.
Farmland asserts that "as a matter of federal common law, a union official or member may be individually liable for wanton and willful violations of section 8(b)(4) [of the LMRA]." Kerry Coal Co. v. United Mine Workers, 637 F.2d 957, 965 (1981), cert. denied 454 U.S. 823, 70 L. Ed. 2d 95, 102 S. Ct. 109 (1981). It also relies upon Kerry Coal for the proposition that a § 1985 claim for individual liability against union officers may be maintained when those persons engage in illegal secondary boycott activity against an employer with whom the employees they represent have no contract.
Farmland's interpretation of Third Circuit law is incorrect. It is established that when a union is liable for damages for an injury inflicted by it, its officers and members will not be liable for these damages. 29 U.S.C.A. § 185; Atkinson v. Sinclair Refining Co., 370 U.S. 238, 249, 8 L. Ed. 2d 462, 82 S. Ct. 1318 (1962).
In Atkinson, the Supreme Court stated that "this policy cannot be evaded or truncated by the simple device of suing union agents or members, whether in contract or tort, or both, in a separate count or in a separate action for damages for violation of a collective bargaining contract for which damages the union itself is liable." Id.
In Kerry Coal, the Third Circuit recognized, pursuant to Atkinson, that the individual union officers were immune from suit for money damages under sections 301 and 303. Kerry Coal, 637 F.2d at 965. However, other bases for jurisdiction against those defendants existed. Specifically, the court held that the plaintiffs could pursue claims against the individual defendants under 42 U.S.C. § 1985 as well as under the "federal common law" for "wanton and willful" violations of § 8(b)(4). Id.
That same year, the Third Circuit revisited this issue in Wilkes-Barre Publishing Co. v. Newspaper Guild of Wilkes-Barre, 647 F.2d 372, 377 (1981), cert. denied, 454 U.S. 1143, 71 L. Ed. 2d 295, 102 S. Ct. 1003 (1982), and limited the holding of Kerry Coal to permit suits for money damages against individual defendants only when the defendants do not have a contractual relationship with the plaintiffs. Id. Therefore, "where the individual member liability sought to be imposed grows out of activities on behalf of a union with which the plaintiff has a bargaining relationship ... the policies which the Atkinson Court identified in section 301(b) apply." Id. The Wilkes-Barre court concluded that § 301(b) must be held to preempt the state law claim for money damages for tortious interference with third party contracts and to preclude any similar federal law claim as well. Id. at 377-78.
The plaintiff has made a Herculean but ultimately unsuccessful effort to bring the facts of this case within the limited purview of Kerry Coal. Although non-Farmland employees participated in the picketing, those employees as well as Farmland's are all represented by Local 680. It is uncontroverted that Farmland has a collective bargaining agreement with Local 680.
Wilkes-Barre extends Atkinson immunity to the individual defendants, Meyers and Tracy, and precludes Farmland from asserting claims for money damages, whether under § 1985 or under federal common law for violations of § 8(b)(4). Thus, the Court finds as a matter of law that these proposed added claims fail to state a claim upon which relief can be granted. Accordingly, Farmland's motion for leave to amend is denied as to those claims.
2. Proposed claim under § 303 of the LMRA.
When determining the arbitrability of a statutory claim, a court must look at the following:
(1) Did the parties agree to arbitrate?
(2) What is the scope of any such agreement?
(3) If federal statutory claims are asserted, did Congress intend them to be non-arbitrable by precluding a waiver of a judicial forum?