Scott v. Local 863, International Brotherhood of Teamsters

OPINION OF THE COURT ADAMS, Circuit Judge. This is an appeal from the dismissal of a suit brought by 35 laid off employees against Local 863 of the International Brotherhood of Teamsters, Food Haulers, Inc., and Wakefern Food Corporation. The laid off employees charged Local 863 with a breach of the duty of fair representation and the companies with a breach of the collective bargaining agreement. The district court found the suit to be time barred, having been filed beyond the three-month statute of limitations contained in the New Jersey Arbitration and Award statute, N.J.S.A. 2A:24-7. Since the time of the district court’s ruling, however, the rule for determining which statute of limitations is applicable has been changed as a result of DelCostello v. Int’l Bhd. of Teamsters, — U.S. —, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983). In light of DelCostello, we vacate the district court’s dismissal of the suit and remand for further proceedings. I Between October 23 and October 30, 1981, Food Haulers, Inc., a subdivision of Wake-fern Food Corporation, laid off 28 employees who were members of Local 863; nine of these employees were subsequently rehired as a result of arbitration unrelated to the case at bar. [This initial group of nineteen employees will hereinafter be referred to as the “October Plaintiffs.”] On April 8, 1982, Food Haulers laid off 16 more employees, including the nine who had been reinstated as a result of the arbitration. [These sixteen employees will hereinafter be termed the “April plaintiffs.”] On February 5, 1982, three-and-a-half months after the initial layoffs, Local 863 advised counsel for the October plaintiffs that it did not intend to proceed to arbitration on their behalf. As is customary under the terms of a collective bargaining agreement, only the union or the company may process a grievance to arbitration; the employees, themselves, did not have a right to do so. On February 17, the attorney for the October plaintiffs replied that the employees would appeal the decision of Local 863 to the local, as well as to the regional joint council of Teamster locals and the union’s International. The joint council replied on February 22 that, since the dispute involved the interpretation and application of the local collective bargaining agreement, the matter was within the sole discretion of Local 863; the International did not respond. Local 863 granted the October plaintiffs’ one last appeal to its executive board on March 5, but then advised the employees’ attorney on April 7 that “Local 863, as it did in October 1981, has determined not to proceed to arbitration regarding your clients’ layoffs.” App. at 42. On April 8, 1982, the second group of sixteen employees was laid off. On May 14, a letter was sent by Local 863 declaring that these layoffs would also not be arbitrated. This lawsuit, covering all 35 laid off employees, was filed on October 8, 1982, under § 301 of the National Labor Relations Act, 29 U.S.C. § 185 (1976). II The principal question on this appeal is whether the district court erred in concluding that the suit was filed in an untimely fashion. The decision by the district judge regarding the applicable statute of limitations was based on the then controlling Supreme Court case, United Parcel Service v. Mitchell, 451 U.S. 56, 101 S.Ct. 1559, 67 L.Ed.2d 732 (1981). Under Mitchell, federal courts were directed to look to the most “appropriate” state statute in determining the time limitations on the filing of a § 301 suit: — 228 — Congress has not enacted a statute of limitations governing actions brought pursuant to § 301 of the LMRA. As this Court pointed out in Auto Workers v. Hoosier Cardinal Corp., 383 U.S. 696, 704-05 [86 S.Ct. 1107, 1112-13, 16 L.Ed.2d 192] (1966), “the timeliness of a § 301 suit ... is to be determined, as a matter of federal law, by reference to the appropriate state statute of limitations.” Our present task is to determine which limitations period is “the most appropriate one provided by state law.” Johnson v. Railway Express Agency, Inc., 421 U.S. 454, 462 [95 S.Ct. 1716, 1721, 44 L.Ed.2d 295] (1975). This depends upon an examination of the nature of the federal claim and the federal policies involved. See Hoosier Cardinal, supra, [383 U.S.] at 706-707 [86 S.Ct. at 1113-1114]. Id. at 60-62, 101 S.Ct. at 1562-1563 (footnote omitted). In Mitchell the Supreme Court relied upon a New York state statute governing appeals from arbitration to find a ninety-day limit for the filing of an action that would have the effect of overturning an arbitrator’s ruling. Mitchell recognized that state statutes of limitation would not necessarily fit “hand in glove,” id. at 64,101 S.Ct. at 1564, but should be applied nonetheless. Although the present case does not involve an arbitration award as such, the district court found that the issue presented was more closely akin to an appeal from an arbitration decision than to a general breach of contract claim. Consequently, it ruled that the New Jersey 90-day statute of limitations for appeals from arbitration under N.J.S.A. 2A:24-7 would be the most appropriate state statute rather than the state’s six-year “catch-all” statute of limitations, N.J.S.A. 2A:14-1. Subsequent to the district court’s ruling in the present case, the Supreme Court in DelCostello adopted a uniform federal statute of limitation for § 301 cases.1 Thus in light of DelCostello the governing statute of limitations for an action such as the one before us today is six months. We must now determine whether DelCostello should apply retroactively to the case at bar. As a general rule, federal courts should apply the law in effect at the time that cases are adjudicated. Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473, 486 n. 16, 101 S.Ct. 2870, 2879 n. 16, 69 L.Ed.2d 784 (1981). The primary consideration in this regard is whether retroactive application will promote or retard the policies that gave rise to the change in the decisional law. Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971). Viewed in light of the Supreme Court’s decision to apply a uniform national statute of limitations to § 301 claims, we find no obstacle to the retroactive application of DelCostello to the present case. As this Court held in Perez v. Dana Corporation, 718 F.2d 581 at 588 (3d Cir.1983), “the purpose of the DelCostello rule ... impel[s] retroactive application of that decision.” But see Ernst v. Indiana Bell, 717 F.2d 1036 (7th Cir.1983), aff’g Ernst v. Indiana Bell, 112 LRRM 2565 (S.D.Ind.1982), cert. filed, 52 U.S.L.W. 3445 (Oct. 26, 1983) (Seventh — 229 — Circuit affirmed district court reliance on Indiana’s 90-day statute of limitations despite intervening DelCostello ruling). Ill Under the DelCostello six-month statute of limitations the sixteen employees laid off on April 8,1982, clearly filed their suits in a timely fashion. The suit filed by the nineteen October plaintiffs, however, presents a more difficult issue. In order to determine whether the October plaintiffs timely filed their lawsuit, we must first ascertain when the statute of limitations began to run. If these employees were required to exhaust internal union appeals, this would be a relatively straightforward factual matter. The Supreme Court, however, has refused to require union members to exhaust all possible internal union remedies for a § 301 suit to go forward. Instead the Court has created a ease-by-case factual standard turning on the issue of when it becomes clear that further internal appeals would be futile. Clayton v. Automobile Workers, 451 U.S. 679, 689-93, 101 S.Ct. 2088, 2095-97, 68 L.Ed.2d 538 (1981). See also Goclowski v. Penn Central, 571 F.2d 747, 758 (3d Cir. 1978) (union members not foreclosed from judicial relief when officers announce no further internal remedies available); Santos v. Dist. Council, 619 F.2d 963, 969 (2d Cir.1980) (cause of action accrues when plaintiff first could have successfully maintained a suit based on that cause of action). One of the difficulties in the present case is establishing when the futility of further union appeals became apparent or should have become apparent to the October plaintiffs. We note that their suit was filed on October 8, 1982, almost one year after they were laid off. On February 5, 1982, the local union’s attorney stated unequivocally in a letter that “Local 863 does not see any basis for proceeding to arbitration.” App. at 33. The employees’ counsel sent a letter on February 17, which accepted the local’s letter as indicating “that the Union will take no action on behalf of my clients.” App. at 34. On February 22, the attorney for the joint council also informed the plaintiffs by letter that no action would be taken on their behalf. These letters would place the October layoffs outside the six-month statute of limitations by the time of the filing of the lawsuit. Only if the April 7 letter of local counsel reaffirming the refusal by Local 863 to proceed to arbitration is taken as the termination of the internal appeal procedure and if the statute of limitations is held to begin running when that letter was received by plaintiffs’ counsel (rather than the date of mailing) can this suit survive for the October plaintiffs under DelCostello.2 Because the district court dismissed the suit as time barred under the New Jersey three-month statute, these questions were not adjudicated. It would be inappropriate for an appellate court to attempt to resolve these factual matters in the first instance. IV Accordingly, this case will be remanded to the district court for further proceedings consistent with this opinion. Footnotes [1] Mitchell anticipated DelCostello in the following footnote: Amicus the American Federation of Labor and Congress of Industrial Organizations has filed a brief arguing that, in cases such as the present, courts should apply the 6-month limitations period found in § 10(b) of the National Labor Relations Act, 29 U.S.C. § 160(b). The AFL-CIO distinguishes the above-quoted language from Hoosier Cardinal on the ground that Hoosier Cardinal involved a § 301 action by a union against an employer, while actions brought by employees against both their union and employer pursuant to our decision in Vaca v. Sipes, 386 U.S. 171 [87 S.Ct. 903, 17 L.Ed.2d 842] (1967), and Hines v. Anchor Motor Freight, Inc., 424 U.S. 554 [96 S.Ct. 1048, 47 L.Ed.2d 231] (1976), are hybrid § 301 breach-of-duty actions, the union’s duty being implied from the NLRA. We decline to consider this argument since it was not raised by either of the parties here or below. See Bell v. Wolfish, 441 U.S. 520, 532, n. 13 [99 S.Ct. 1861, 1870, n. 13, 60 L.Ed.2d 447] (1979); Knetsch v. United States, 364 U.S. 361, 370 [81 S.Ct. 132, 137, 5 L.Ed.2d 128] (1960). Our grant of certiorari was to consider which state limitations period should be borrowed, not whether such borrowing was appropriate. 451 U.S. at 60 n. 2, 101 S.Ct. at 1562 n. 2. [2] Should the district court find that under the applicable rules the mailing date begins the running of the statute of limitations, this would preclude suit by the October plaintiffs regardless of when the futility of further internal union appeals is determined to have become apparent. Although we agree with Judge Becker that the determination of a standard by which to ascertain conclusively when the point of futility in internal union appeals is reached is a worthy task, we do not believe that this is a propitious occasion to make such a determination. Because the present case was dismissed as time barred, we are without a factual record and without benefit of district court input into the crafting of this legal standard. Moreover, this point has neither been briefed nor argued for this appeal. Under these circumstances we believe it is inappropriate at this time for us to define the precise criteria by which a district court is to determine when the point of futility is reached in internal union proceedings for purposes of tolling the statute of limitations.