International Ladies' Garment Workers' Union v. Jay-Ann Co.

228 F.2d 632, 37 L.R.R.M. (BNA) 2323
CourtCourt of Appeals for the Fifth Circuit
DecidedJanuary 11, 1956
DocketNo. 15636
StatusPublished
Cited by10 cases

This text of 228 F.2d 632 (International Ladies' Garment Workers' Union v. Jay-Ann Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
International Ladies' Garment Workers' Union v. Jay-Ann Co., 228 F.2d 632, 37 L.R.R.M. (BNA) 2323 (5th Cir. 1956).

Opinions

HOLMES, Circuit Judge.

This appeal is from a judgment of dismissal of the suit, entered by the court below after considering the complaint, answer, evidence, and motion to dismiss. One of the grounds set forth in the motion to dismiss was that Section 301 of the Labor-Management Relations Act of 1947, 29 U.S.C.A. § 185, which is the sole asserted basis of jurisdiction, did not confer jurisdiction of the type of suit alleged by appellants.

The appellants are unincorporated labor organizations, representing employees in an industry affecting interstate and foreign commerce. The appellee is a Texas corporation, engaged in the business of manufacturing and distributing wearing apparel. A substantial portion of the garments which it manufactures is sold and distributed outside the state of Texas. Appellants and appellee have entered into various contracts covering wages and working conditions, which have been continuously in effect since 1947. It is for breaches of these contracts that this suit was filed; under them the appellee was to pay 1%, and later l1/4%> of their payrolls to a designated commission of five members to create a health and welfare fund for workers. The complaint alleged that the appellee had failed to make these payments, and that as a result thereof the employee whom appellants represent have been damaged in the sum of over four thousand dollars. The appellants prayed that the appellee be ordered to pay said •amount in damages to said commission for the benefit of the aforesaid health and welfare funds, be enjoined from withholding future payments, and for .general relief.

As appears from a reading of the complaint, the appellants did not :seek a money judgment in their favor against the appellee. If the money was due at all, it was payable to said commission, which was to collect and admin-ister the fund. The appellants claim the right to bring the suit under Rule 17(a) of the federal rules of civil procedure, 28 U.S.C. Federal jurisdiction is predicated solely upon section 301, supra. The contracts sued on were made in Texas and were to be performed there. If breached, they were breached in Texas; they are governed largely by the laws of Texas, but in some particulars they may be governed by federal statutes. There is much substantive labor law in the federal statutes regulating interstate and foreign commerce. Wherever the federal law applies it preempts the field, but elsewhere the local law prevails; there is no legal hiatus or no-man’s land under our dual form of state and national government; but there is no controversy here between the parties over any governing substantive federal law or laws on which the merits of this case depend.

Our decision of the jurisdictional point on this appeal is controlled by the ruling of the Supreme Court in Association of Westinghouse Salaried Employees v. Westinghouse Electric Corp., 348 U.S. 437, 75 S.Ct. 489, which held that the federal district court did not have jurisdiction of the suit. The opinion of Justice Frankfurter in that case was concurred in by Justices Burton and Minton; the other justices concurred specially, except Justices Black and Douglas who dissented and Justice Harlan who took no part in the decision. For present purposes, only that portion of the decision concurred in by the Chief Justice and Justice Clark is invoked; it held that neither the language nor legislative history of Section 301 was sufficient to indicate that Congress intended to authorize a union to enforce the personal rights of employees (for whom it had bargained) to receive compensation for services rendered their employer. The concurring opinion of Justice Reed assumed that the purpose of section 301 was to make unincorporated labor organizations suable and capable of suing as if they were corporations, with provisions for venue and service.

[634]*634Labor unions ..have always .been suable whether incorporated or not; but as a practical matter, if not incorporated; it was difficult to sue them. They had many members; in some of the states all of the members had to be served with process; and it was difficult to' know whom to serve. Section 301 makes them suable as if corporations, whether incorporated or not; it also abolished some jurisdictional requisites,'but it did not abolish the requisite of a normal federal question that has been in the statutes since .1887, which was par. 8, § 24, of the Judicial Code of March 3, 1911, and is now 28 U.S.C. § 1337. All the statutes- contain the classic words “arising under” any law regulating commerce .or “arising under” any act .of. Congress regulating commerce. It is the case.or controversy that must arise under the law regulating commerce. The crucial problem is the degree to which federal law.affects the decision of the controversy; in. the instant case federal law does not affect it at all on its merits. Gully v. First Nat. Bank,. 299 U.S. 109, 113, 57 S.Ct. 96, 81 L.Ed. 70; Association of Westinghouse Salaried Employees v. Westinghouse Elec. Corp., 348 U.S. 437, 75 S.Ct. 489.. If unincorporated labor associations were to sue and be sued as legal entities, the astute legislated thing to do was to abolish the jurisdictional ground of diversity of citizenship and the amount in controversy, thereby conforming section 301 to the general statute, 28 U.S.C. § 1337; and avoiding the opening of a Pandora’s box with reference to the legal fiction that corporations «are deemed citizens of the state of their incorporation. See “A Supreme Court Fiction” in three installments of the Harvard Law Review, Vol. 56, beginning at pp. 853, 1090, and 1225, respectively.

It is self-evident that if unincorporated labor organizations may sue or be sued as if corporations, such organizations stand in no better , or worse position, when suing or being - sued; than an incorporated labor organization similarly situated. Corporations under, the laws of any state are deemed citizens thereof for federal jurisdictiona.1 purposes; cor-, porations organized under the laws of the United States (except national banks, see 28 U.S.C. § 1348) are ordinarily not deemed citizens of any state; but formerly they were permitted to sue and, be sued in the federal court, since the suit was held to arise under the laws of the United States. This right was later restricted by a statute which provides that the district courts shall not have jurisdiction of any civil action by or. against any corporation upon the ground, that it was incorporated by or under an-act of Congress, with an exception npt pertinent here. 62 Stat. 934, 28 U.S.C. §' 1349.

Cases arising under the constitution, laws, and treaties of. the United States are customarily referred to as cases containing a federal question, which is the only ground of federal jurisdiction not abolished by Section 301 (a) of the -Act of June 23, 1947, 61 Stat. 156; 29 U.S.C.A. § 185.

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228 F.2d 632, 37 L.R.R.M. (BNA) 2323, Counsel Stack Legal Research, https://law.counselstack.com/opinion/international-ladies-garment-workers-union-v-jay-ann-co-ca5-1956.