Gottschalk ex rel. National Labor Relations Board v. Piggly Wiggly Midwest, LLC

861 F. Supp. 2d 962, 193 L.R.R.M. (BNA) 2423, 2012 U.S. Dist. LEXIS 68836, 2012 WL 1805492
CourtDistrict Court, E.D. Wisconsin
DecidedMay 17, 2012
DocketCase No. 12-C-0152
StatusPublished
Cited by2 cases

This text of 861 F. Supp. 2d 962 (Gottschalk ex rel. National Labor Relations Board v. Piggly Wiggly Midwest, LLC) is published on Counsel Stack Legal Research, covering District Court, E.D. Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gottschalk ex rel. National Labor Relations Board v. Piggly Wiggly Midwest, LLC, 861 F. Supp. 2d 962, 193 L.R.R.M. (BNA) 2423, 2012 U.S. Dist. LEXIS 68836, 2012 WL 1805492 (E.D. Wis. 2012).

Opinion

DECISION AND ORDER DENYING DEFENDANT’S MOTION TO DISMISS AND GRANTING PLAINTIFF’S MOTION FOR PRELIMINARY INJUNCTION

C.N. CLEVERT, JR., Chief Judge.

This case came before the court on the verified petition of Irving E. Gottschalk, Regional Director of the Thirtieth Region of the National Labor Relations Board (Board) for preliminary injunction pursuant to Section 10© of the National Labor Relations Act, as amended [61 Stat. 149; 73 Stat. 544; 29 U.S.C. § 160©] (Act), pending the final disposition of the claims of unfair labor practices now before an administrative law judge. Respondent, Piggly Wiggly Midwest, LLC (“Piggly Wiggly”), responded with a motion to dismiss for lack of subject matter jurisdiction on the ground that petitioner lacks the statutorily required quorum of three members to authorize the filing of the matter before this court. The trial before the administrative law judge was held on February 22 and 23, 2012. Afterward, on March 7, 2012, this court conducted a hearing on petitioner’s motion for injunctive relief and respondent’s motion to dismiss. Now, after due consideration the court will deny the motion to dismiss and grant the preliminary injunction.

DEFENDANT’S MOTION TO DISMISS

As an initial matter, respondent filed a motion to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1). In considering a motion to dismiss under Rule 12(b)(1), the district court must accept the complaint’s well-pleaded factual allegations as true and draw all reasonable inferences from those allegations in the petitioner’s favor. Transit Exp., Inc. v. Ettinger, 246 F.3d 1018, 1023 (7th Cir.2001). The burden of proof is on the party asserting jurisdiction. United Phosphorus Ltd. v. Angus Chem. Co., 322 F.3d 942, 946 (7th Cir.2003).

Respondent asserts that this court lacks subject matter jurisdiction because the petitioner lacks the statutorily required quorum of three members necessary to authorize pursuit of relief in this proceeding. See 29 U.S.C. § 160©. The National Labor Relations Act established the National [964]*964Labor Relations Board consisting of five members appointed by the President with the consent of the Senate. Three members of the Board constitute a quorum. 29 U.S.C. § 153(a) and (b). On January 4, 2012, when the Board membership dropped to two, President Obama announced his intent to “recess appoint” three individuals to the Board under the Recess Appointments Clause, U.S. Const. Art. II, § cl. 3. According to respondent, the appointments are invalid because the President acted without the Senate’s consent and the lack of quorum means a lack of jurisdiction to act as a Board.

Regardless of whether the President’s recess appointments were valid, this motion can be resolved on statutory rather than constitutional grounds. The Board delegated to the General Counsel the authority to bring a 10(j) petition in November of 2011. Under that delegation, the Acting General Counsel authorized the action separately. Two district courts have rejected challenges that mirror the charge by respondent in this case. See Fernbach ex rel. N.L.R.B. v. 3815 9th Ave. Meat & Produce Corp., 2012 WL 992107 at *1 (S.D.N.Y. Mar. 15, 2012); Paulsen v. Renaissance Equity Holdings, LLC, 849 F.Supp.2d 335, 349-50, 2012 WL 1033339 at *14 (E.D.N.Y. Mar. 27, 2012).

Respondent argues that the delegation of Section 10(j) petition power to the Acting General Counsel is contrary to the intent and purpose of the statute. Sections 3 and 10 distinguish between powers reserved to the Board unless otherwise provided in the Act and duties that are assignable to the General Counsel. The Board’s longstanding practice permitted the General Counsel to file 10(j) petitions “only upon approval of the Board.” 15 Fed.Reg. at 6,924 (1950). Alternatively, any delegation made in November of 2011 was nullified when a third member’s term expired and the Board lost its quorum on January 3, 2012.

The majority of courts considering these arguments have concluded that district courts may entertain § 10(j) petitions approved by the General Counsel pursuant to the authority granted him by the Board in December 2007. Frankl v. HTH Corp., 650 F.3d 1334 (9th Cir.2011); Osthus v. Whitesell Corp., 639 F.3d 841 (8th Cir.2011); Overstreet v. El Paso Disposal, L.P., 625 F.3d 844, 851-52 (5th Cir.2010); Muffley v. Spartan Mining Co., 570 F.3d 534, 539-40 (4th Cir.2009). These courts have held that the Board’s valid delegation of 10(j) authority does not lapse when the Board loses its quorum. See Frankl, 650 F.3d at 1354; Osthus, 639 F.3d at 844; Overstreet, 625 F.3d at 853. Only one court has relied on corporate and agency principles to hold that the Board’s delegation of its authority to a three-member panel lapsed when the Board lost its quorum. Laurel Baye Healthcare of Lake Lanier v. N.L.R.B., 564 F.3d 469, 473 (D.C.Cir.2009). Respondent contends “the fact that the D.C. Circuit is thus far the only circuit to conclude the Board’s loss of a quorum terminates its prior delegations of authority does not by itself mean this conclusion is wrong.”

The United States Supreme Court ruled in New Process Steel LP v. N.L.R.B., — U.S. —, 130 S.Ct. 2635, 177 L.Ed.2d 162 (2010), that following a delegation of the Board’s powers to a three-member group, two members may not continue to exercise that delegated authority once the group’s (and the Board’s) membership falls to two. However, the United States Supreme Court in New Process Steel declined to address the specific issue at bar: “Our conclusion that the delegee group ceases to exist once there are no longer three Board members to constitute the group does not cast doubt on the prior delegations of au[965]*965thority to nongroup members, such as the regional directors of the general counsel. The latter implicates a separate decision that our decision does not address.” New Process Steel, 130 S.Ct. at 2642 n. 4.

Recently, the United States District Court for the Eastern District of New York commented on similar delegations of the Board’s power to authorize § 10(j) petitions to the General Counsel at various times that the Board anticipated losing its quorum. Paulsen, 849 F.Supp.2d at 344-45, 2012 WL 1033339, at *8. The first such delegation was in 1993; similar delegations occurred in 2001, 2002, 2007, and 2011. Id. In finding these delegations proper, the court reviewed the history of the TaftHartley Act and found clear congressional intent to allow the Board to delegate prosecutorial tasks — such as its 10(j) powers— to the General Counsel while keeping core adjudicative functions in the Board’s domain. Id., at 345-47, at *9-10.

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861 F. Supp. 2d 962, 193 L.R.R.M. (BNA) 2423, 2012 U.S. Dist. LEXIS 68836, 2012 WL 1805492, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gottschalk-ex-rel-national-labor-relations-board-v-piggly-wiggly-midwest-wied-2012.