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Landahl v. PPG Industries Inc.

October 23, 1984


Appeal from the United States District Court for the Eastern District of Wisconsin. No. 82-C-769 -- Terence E. Evans, Judge.

Author: Swygert

Before POSNER, Circuit Judge, SWYGERT, Senior Circuit Judge, and DUPREE, Senior District Judge.*fn1

SWYGERT, Senior Circuit Judge. The sole issue in this case is whether DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151, 103 S. Ct. 2281, 76 L. Ed. 2d 476 (1983), should be applied retroactively. In DelCostello, the Court held that the applicable statute of limitations in employment discharge cases involving alleged violations of section 301 of the Labor Management Relations Act of 1947 ("the Act"), 29 U.S.C. § 185, and a union's breach of the duty of fair representation, is the six-month period prescribed in section 10(b) of the Act, 29 U.S.C. § 160(b). For the reasons set forth below, we hold that DelCostello should be applied retroactively, and we affirm the district court's judgment that the plaintiff's claims are time barred.

Plaintiff Geoffrey E. Landahl was discharged by defendant PPG Industries, Inc. ("PPG") on February 17, 1981. Plaintiff, represented by defendant Brotherhood of Painters and Allied Trades, Local 579 ("the Union"), filed a grievance challenging the discharge on February 23, 1981. PPG denied the grievance and notified Landahl and the Union of the denial on March 2, 1981. Under the collective bargaining agreement, the Union and Landahl had five working days in which to notify PPG of their intention to appeal the denial to an arbitrator. There is no dispute in this case that neither the Union nor the plaintiff appealed the denial of the grievance nor presented PPG with a demand to arbitrate. Thus, Landahl's right to compel PPG to arbitrate his discharge expired on march 9, 1981.

Plaintiff retained counsel in July 1981. Landahl, through his attorney, was informed orally in July 1981, and by written notice on August 18, 1981, that the Union would not pursue his grievance further.

On May 25, 1982 plaintiff initiated this action more than fourteen months after his grievance was rejected by PPG and more than nine months after plaintiff had received written notification from the Union that it would not further process his grievance.*fn2

Plaintiff contends that in spite of the general rule that a federal court is to apply the law in effect at the time it adjudicates the claim, see Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473, 486 n.16, 69 L. Ed. 2d 784, 101 S. Ct. 2870 (1981), DelCostello should not be applied retroactively in the case at bar. Landahl argues that the three factors set forth in Chevron Oil Company v. Huson, 404 U.S. 97, 106-07, 30 L. Ed. 2d 296, 92 S. Ct. 349 (1971), used to determine if retroactive application is inappropriate have been met. In Chevron the Court stated:

In our cases dealing with the nonretroactivity question, we have generally considered three separate factors. First, the decision to be applied retroactively must establish a new principle of law either by overruling clear past precedent on which litigants may have relied, see, e.g., Hanover Shoe v. United Shoe Machinery Corp., supra, [392 U.S. 481] at 496, or by deciding an issue of first impression whose resolution was not clearly foreshadowed, see, e.g., Allen v. State Board of Elections, supra, [393 U.S. 544] at 572. Second, it has been stressed that "we must . . . weigh the merits and demerits in each case by looking to the prior history of the rule in question, its purpose and effect, and whether retrospective operation will further or retard its operation." Linkletter v. Walker, supra, [381 U.S. 618] at 629. Finally, we have weighed the inequity imposed by retroactive application, for "where a decision of this Court could produce substantial inequitable results if applied retroactively, there is ample basis in our case for avoiding the "injustice or hardship" by a holding of nonretroactivity." Cipriano v. City of Houma, supra, [395 U.S. 701] at 706.

Id. at 106-07.

With respect to the first factor, plaintiff argues that the result in DelCostello abruptly overruled prior decisions which clearly held that a federal court looks to state law to find the appropriate statute of limitations to be applied in these labor law disputes. See United Parcel Service, Inc. v. Mitchell, 451 U.S. 56, 67 L. Ed. 2d 732, 101 S. Ct. 1559 (1981); International Union v. Hoosier Cardinal Corp., 383 U.S. 696, 16 L. Ed. 2d 192, 86 S. Ct. 1107 (1966). Thus, DelCostello unforeseeably divested him of his right to rely on a six-year statute of limitations established by the Wisconsin Supreme Court almost twenty years ago. See Tully v. Fred Olson Motor Service Co., 27 Wis. 2d 476, 134 N.W.2d 393 (1965).

We do not agree. Neither Hoosier Cardinal nor Mitchell represent the kind of "clear past precedent" contemplated in Chevron. In Mitchell the Court expressly noted that the issue presented for review involved only the choice between two state statutes of limitations. It specifically stated that the issue of the applicability of the six-month limitations period found in section 10(b) of the Act was not being reviewed. 451 U.S. at 60 n.2. In Hoosier Cardinal the Court held that a state statute of limitations should be applied to a union's section 301 claim against an employer for accumulated vacation pay. It expressly reserved the question of which statute of limitations is to be applied in other section 301 claims such as those involving "consensual processes [i.e., arbitration] that federal labor law is chiefly designed to promote." 383 U.S. at 702, 705 n.7. Thus, neither case clearly established that in cases such as the one at bar, a court is automatically to apply a state statute of limitations.

In fact, it is clear that before DelCostello there was much confusion and conflict among the circuits regarding the appropriate statute of limitations to be applied in these types of claims. See Edwards v. Sea-Land Service, Inc., 720 F.2d 857, 862 (5th Cir. 1983). Thus, DelCostello represented a clarification of the law, not a "clean break" with past precedent. See Edwards, supra, 720 F.2d at 863.

While arguing that DelCostello unforeseeably overruled Hoosier Cardinal and Mitchell, plaintiff admits that DelCostello resolved the circuit conflict. Yet, he attempts to circumvent this admission by arguing that the conflict was at the national level; at the local level, Wisconsin lawyers consistently and justifiably relied on Tully. It is true that Tully, even though a state case, involved the interpretation of federal law, and, thus, Wisconsin lawyers could rely on it. See Amalgamated Ass'n of Street Employees v. Lockridge, 403 U.S. 274, 29 L. Ed. 2d 473, 91 S. Ct. 1909 (1971). Nonetheless, for several reasons we are not persuaded that such reliance was justified here. First, a local lawyer dealing with federal claims cannot simply ignore the significance of recent developments in the federal courts that would clearly warn him not to place undue reliance on a particular state case. Second, less than two months after the Supreme Court decided Mitchell and approximately three months after plaintiff's grievance was denied, this circuit, of which Wisconsin is a part, ruled that employee suits for breach of the collective bargaining agreement were governed by the 90-day state statute of limitations applicable to actions to vacate an arbitration award, not the six year limitations periods for actions based on contract. See Davidson v. Roadway Express, Inc., 650 F.2d 902 (7th Cir. 1981), cert. denied, 455 U.S. 947, 102 S. Ct. 1447, 71 L. Ed. 2d 661 (1982). Finally, the court in Tully expressed dissatisfaction with the six-year statute of limitations period it had chosen because it was "excessive and . . . not conducive to prompt disposition of labor disputes." 27 Wis.2d at 489, 134 N.W.2d at 399. thus, Tully itself put Wisconsin lawyers on notice that the result in Tully was unstable and likely to be overturned. Under these circumstances, we do not feel that plaintiff was justified in believing that he unequivocally had six years from the date on which his cause of action accrued to file these claims.

Furthermore, the result in DelCostello was foreshadowed by Mitchell, which was decided only two months after Landahl's grievance was denied. As noted above, the Mitchell majority specifically stated that it was not addressing the issue of whether the six-month limitations period in section 10(b) should apply. Id. at 60 n.2. Justice Stewart, in a concurring opinion, urged the Court to adopt that limitations period. Id. at 70-71. Justice Blackmun, in a separate concurring opinion, stated that he agreed with Justice Stewart's analysis, but that the Court should not adopt that position until the issue was squarely ...

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