Appeal from the United States District Court for the Southern District of Indiana, Evansville Division. No. EV 00-103-C--Richard L. Young, Judge.
Before Posner, Evans, and Williams, Circuit Judges.
The opinion of the court was delivered by: Williams, Circuit Judge.
The plaintiffs sued their union, the United Mine Workers of America, under the Labor Management Relations Act (LMRA), 29 U.S.C. § 301, et seq., for breach of the duty of fair representation, promissory estoppel, and breach of contract arising out of a dispute over distribution of proceeds from a settlement with an employer. The district court granted summary judgment in favor of the union based on the plaintiffs' failure to exhaust internal union procedures before bringing suit. The plaintiffs appeal, arguing that the district court should have excused their failure to exhaust union procedures either because of the union's alleged hostility to the plaintiffs' claims or because exhausting union procedures would unduly delay their opportunity for a judicial hearing. We reject these arguments and affirm.
The United Mine Workers of America is the exclusive collective-bargaining representative for individuals employed in the coal industry throughout the United States and Canada. The union obtained a $1.3 million settlement from the Peabody Holding Company arising from hiring practices at a coal mining facility in Farmersburg, Indiana, which allegedly was contrary to an agreement between Peabody and the union granting preferential job opportunities to certain active and laid-off miners. The union initially decided to divide the settlement proceeds among the 78 members who would have been entitled to employment at the Farmersburg mine if the agreement had not been breached, but complaints from other members, coupled with mass layoffs in the coal industry in Indiana, caused the union to reconsider the fairness of that plan. The union then decided to spread the settlement proceeds among the 905 members that had employment or recall rights at the Farmersburg facility. As a result, the expected shares of the original 78 members slated to receive the settlement decreased from the more than $15,000 they initially expected to about $1,500. Unhappy with the new distribution, 61 of those 78 members sued the union.
The union moved to dismiss the complaint, arguing that the plaintiffs had not exhausted the union's internal grievance procedures. The court allowed the parties to submit additional documentation and treated the union's motion as one for summary judgment. It granted judgment in favor of the union, finding that the undisputed evidence showed that the plaintiffs had failed to initiate a proper appeal under the procedures required by the union's constitution and had not demonstrated any basis for excusing their failure to exhaust those procedures before filing suit. *fn1
In Clayton v. UAW, 451 U.S. 679, 685 (1981), the Supreme Court held that plaintiffs are ordinarily required to exhaust union appeals procedures before bringing suit against their union concerning internal union affairs. See Stevens v. Northwest Ind. Dist. Council, United Bhd. of Carpenters, 20 F.3d 720, 729 (7th Cir. 1994); Frandsen v. Bhd. of Ry., Airline, and S.S. Clerks, 782 F.2d 674, 679 (7th Cir. 1986). The Supreme Court recognized, however, that internal procedures may be lengthy and sometimes inadequate to address the employees' grievances, and held that, in the context of LMRA claims against the union, flexibility in imposing the exhaustion requirement is necessary. Clayton, 451 U.S. at 689; see Fulk v. United Transp. Union, 108 F.3d 113, 116-17 (7th Cir. 1997); Stevens, 20 F.3d at 731. Balancing the policy of providing a judicial forum to enforce the duty of fair representation against the competing policy of encouraging non-judicial resolution of labor disputes, see Frandsen, 782 F.3d at 679, the Court held that "courts have discretion to decide whether to require exhaustion of internal union procedures." Clayton, 451 U.S. at 689 (citing NLRB v. Marine Workers Local 22, 391 U.S. 418, 426 n.8 (1968)). This discretionary exhaustion requirement for intra-union disputes fosters " 'private resolution of disputes, responsible union self-regulation, union assistance in the interpretation of its governing document, [and] robust union processes,' while at the same time giving the district court the flexibility to allow a case to continue despite the plaintiff's failure to exhaust internal remedies." Fulk, 108 F.3d at 116-17 (quoting Stevens, 20 F.3d at 732).
In this case, the union's constitution requires that decisions and actions of the district executive boards or International Union officers be appealed to the International Executive Board (IEB), which must meet once every four months. The decision of that board may then be appealed to the International Convention, which meets once every four years. The district court concluded that because plaintiffs did not initiate the first-level appeal (to the IEB), they failed as a matter of law to exhaust the required union procedures. The plaintiffs do not dispute this point on appeal, but argue instead that the district court erred in declining to excuse their failure to exhaust.
The union argues that we should review the district court's decision regarding whether to excuse the plaintiffs' failure to exhaust remedies for abuse of discretion. We have never explicitly identified the applicable standard in this context, although it is clear from the cases that our review has generally been deferential. See Stevens, 20 F.3d at 733; Hammer v. UAW, 178 F.3d 856, 858 (7th Cir. 1999); accord Maddolone v. Local 17, United Bhd. of Carpenters, 152 F.3d 178, 182 (2d Cir. 1998). The plaintiffs suggest, however, that because we are reviewing the court's decision at summary judgment, we should review the decision de novo, and at least one case has hinted that the usual summary judgment standard applies when the question of exhaustion is presented in this context. See Sosbe v. Delco Elec. Div. of General Motors Corp., 830 F.2d 83, 85 (7th Cir. 1987).
The district court concluded that there were no disputed issues of fact material to the exhaustion requirement, a conclusion we review de novo. See, e.g., Farmer v. Brennan, 81 F.3d 1444, 1449 (7th Cir. 1996) ("[W]e review a district court's grant of summary judgment under Rule 56 de novo, to the extent the question is whether there were genuine disputes of material facts or whether the moving party should prevail as a matter of law."). But the district court's further conclusion that, given the undisputed facts, the plaintiffs' failure to follow union procedures should not be excused is an exercise of the court's discretion under Clayton, and deferential appellate review is necessary to preserve that discretion, even when exercised at the summary judgment stage. See Hot Wax, Inc. v. Turtle Wax, Inc., 191 F.3d 813, 819 (7th Cir. 1999) (when material facts are not in dispute, the district court's decision that laches bars the action is reviewed for abuse of discretion); Bradley v. Work, 154 F.3d 704, 708-09 (7th Cir. 1998) (evidentiary rulings are reviewed ...