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April 15, 2004.

T & J MEAT PACKING, INC., Plaintiff,

The opinion of the court was delivered by: JAMES ZAGEL, District Judge


Plaintiff T & J Meat Packing, Inc. (the "Company") brought this action on February 25, 2004, under § 301 of the Labor Management Relations Act (the "LMRA"), 29 U.S.C. § 185,*fn1 seeking relief under the Declaratory Judgment Act, as amended, 28 U.S.C. § 2201 and 2202. The Company seeks a declaration that no collective bargaining agreement ("CBA") was entered into on September 23, 2003 between it and Defendant Service Employees International Union, Local 1, AFL-CIO (the "Union" or "Local l"), the collective bargaining representative of the Company's production and maintenance employees.*fn2 On March 4, 2004, the Company moved to advance this case for a speedy hearing pursuant to Federal Rule of Civil Procedure 57. On March 9, however, the Union claimed that Textron Lycoming Reciprocating Engine Div. v. UAW, 523 U.S. 653 (1998), precludes me from exercising jurisdiction over this case. On March 10, 1 granted the Company's motion for a speedy hearing, finding that § 301 jurisdiction exists. On March 24, the NLRB moved to intervene in the case and to stay these proceedings on the grounds of: (1) the alleged questionability of jurisdiction in light of Textron and subsequently conflicting case authority, and (2) various prudential considerations. At the March 26 status hearing, I granted the NLRB status as an intervener, took the motion to stay under advisement until after the hearing, suggested that the Company might want to move for leave to amend its Complaint in light of the jurisdictional issues raised in the NLRB's motion, and commenced the hearing in this matter. Prior to the conclusion of this hearing on March 29, the Company moved for leave to file instanter its First Amended Complaint. On April 1, the NLRB withdrew its motion to stay.

In this decision, I resolve the Company's motion to file its amended complaint, and to the extent that the Union moved to dismiss this case for lack of jurisdiction on March 9, 1 hereby elaborate on my reasons for denying this motion. Thereafter, I issue my findings of fact and conclusions of law resulting from the hearing on March 26 and 29.

 The Company's Motion for Leave to File Instanter Its First Amended Complaint

  In the face of a motion to dismiss, the party against whom the motion is made is given an opportunity to respond in writing. My customary practice is to also give the party the opportunity to amend its complaint to correct any facial deficiencies. Fed.R.Civ.P. 15(a) (providing that leave to amend a pleading "shall be freely given when justice so requires."). In this case, however, I did not give the Company an opportunity to amend its Complaint when the Union first raised the concern that jurisdiction did not exist as the case had been pleaded. Rather, I summarily concluded that § 301 jurisdiction existed. The NLRB's pending motion to stay essentially asks that I reconsider this ruling. Were I to find that there is no subject matter jurisdiction, I would be forced to dismiss the Company's case. Therefore, I think it is only fair to give the Company the same opportunity customarily given to every other litigant in this court facing the possibility of dismissal. Accordingly, I grant the Company's motion for leave to file its Amended Complaint.

 The Union's Motion to Dismiss

  In Textron, the plaintiff union sued under § 301 claiming that the employer had fraudulently induced it to sign a CBA, and the Union sought a declaratory judgment that the agreement was voidable at its option. Id. at 654-55. The Union made no claim that either it or the employer had violated the terms of the agreement. Id. In finding that no subject matter jurisdiction existed, the Supreme Court determined that § 301 conferred jurisdiction only over "[s]uits for violations of contracts." Id. at 656-57. It concluded that since no one was alleging any breach of contract — and in fact that both parties appeared to be in compliance with the terms of the contract — there was no basis for subject matter jurisdiction. In the Court's view, the union was simply asking that an admitted contract be declared invalid. Id. at 658. However, the Court further observed: This does not mean that a federal court can never adjudicate the validity of a contract under § 301(a). That provision simply erects a gateway through which parties may pass into federal court; once they have entered, it does not restrict the legal landscape they may traverse. Thus if, in the course of deciding whether a plaintiff is entitled to relief for the defendant's alleged violation of a contract, the defendant interposes the affirmative defense that the contract was invalid, the court may, consistent with § 301(a), adjudicate that defense. . . . Similarly, a declaratory judgment plaintiff accused of violating a collective-bargaining agreement may ask a court to declare the agreement invalid. But in these cases, the federal court's power to adjudicate the contract's validity is ancillary to, and not independent of, its power to adjudicate "[s]uits for violation of contracts."

 Id. at 657-8 (quotation omitted and emphasis added).

  Under Textron, a party must allege a breach of contract for there to be subject matter jurisdiction. Indeed, this is the interpretation that the only case in this district addressing the issue has taken. In Chicago & KE. Ill. Dist. Council Carpenters v. GDCNI/CAWCC, No. 01 C 6097, 2002 WL 237972 (N.D. Ill. Feb. 19, 2002), the plaintiff union alleged that the employer agreed to the terms of a successor CBA while the employer denied that an agreement had been reached. Both the union and the employer had also filed unfair labor practice charges with the NLRB, and although the NLRB's Regional Office dismissed those charges, both parties appealed to the NLRB's General Counsel. Id. at *1. The district court dismissed the § 301 suit on the basis that the union had failed to assert a breach of contract:
Here, Plaintiff's complaint fails to allege a violation of a contract, i.e. the agreement, and instead merely asserts a claim for a declaratory judgment as to the formation and validity of the contract. . . . Under Textron, such a claim standing alone fails to establish federal subject matter jurisdiction and prevents this court from reviewing the complaint. . . . [I]n its response to the motion to dismiss, Plaintiff asserts in a single sentence "[i]n this lawsuit the Plaintiff is requesting that the Court adjudicate whether there is a valid contract between the parties and to find that the Defendant is violating the valid contract in not recognizing it and not adhering to the provisions found in it.". . . [E]ven if this court considered the amendatory statement Plaintiff included in its response, at best Plaintiff has still not alleged how Defendant violated the agreement and at worst Plaintiff has engaged in circular reasoning. Plaintiff attempts to add a claim of contract violation to the actual single issue of contract validity by redefining its complaint to request the court "find that the Defendant is violating that valid contract in not recognizing it." Plaintiff's circular definition of contract violation actually states the claim for contract formation and validity. Further, Plaintiff simply states Defendant "is violating that valid contact in . . . not adhering to the provisions found in it," and yet fails to cite any sections of the contract which were violated or to even suggest what action or inaction by Defendant was violating the agreement. Once again, only legitimate allegations of contract violation confer upon this court the subject matter jurisdiction to assess contract validity.
Id. at *4-5.

  At least one court outside this district also supports this interpretation of Textron. In American Standard, Inc. v. Glass, Molders, Pottery, Plastics & Allied Workers Int'l Union Local 7A, No. 3:03CV7023, 2003 WL 21478861 (N.D. Ohio Jun. 17, 2003), an employer brought a § 301 suit against a union claiming that the parties had reached agreement on the terms of a contract and that the union's repudiation of that agreement amounted to a breach. The union argued that a contract had not been formed. The same dispute was also the subject of an unfair labor practice case brought by the union before the NLRB. The district court dismissed the suit in reliance on Textron, and noted in particular that determination of the dispute would hinge on whether the parties' negotiations resulted in a binding contract, since the "employer is not claiming a specific breach of one or more terms of the . . . contract which both parties are implementing." Id. at *2. The court remarked that according to Textron, the NLRB has primary jurisdiction to resolve disputes such as this that involve review of the collective bargaining process. Id.

  On the other hand, some courts outside this district have interpreted Textron's construction of § 301 to extend jurisdiction when a breach of contract is implied, rather than alleged expressly. In Darigold, Inc. v. Teamsters, Local 524, No. CY-03-3099-EFS, 2003 WL 22295327 (E.D. Wash. Sept. 5, 2003), the employer sought a declaration that the parties' contract had not expired and that the contract therefore prohibited the union from engaging in its threatened strike activity against the employer. Citing Textron, the court concluded that since the threatened strike activity might result in a breach of the contract's no-strike clause, jurisdiction existed under § 301. Id. at *2. Similarly, in Bulkmatic Transp. Co. v. Int'l Bhd. of Teamsters, Chauffers, Warehousemen & Helpers & Union Local 407, 213 F. Supp.2d 946 (N.D. Ind. 2002), the employer sought a declaration under § 301 that the parties' area agreement covering employees in one of the employer's plants did not apply to employees at another plant. The union filed a counterclaim seeking an order confirming an arbitration award the union already had obtained against the employer. Relying on Textron, the district court concluded that jurisdiction existed because a finding that the employer refused to extend the contract terms to employees at the second plant would mean that the employer had violated the contract. Id. at 951.

  In the end, the standard set forth in Chicago Dist, Council Carpenters is what best governs here. According to that case, Textron requires that a party allege in its complaint that its adversary has violated a contact or that the party itself has been accused by its adversary of violating a contract. If management is the plaintiff seeking relief from a district court under § 301, a union need not counterclaim that management has breached a contract for there to be jurisdiction; it is sufficient for management to allege in its complaint that it has been accused by the union of breaching a contract. Finally, any party making such aforementioned allegations must allege with particularity the sections of a contract alleged to have been violated or the actions or inactions alleged to be taken in violation of a contract. Here, the Company's First Amended Complaint meets the standard set forth in Chicago Dist. Council Carpenters. The Complaint alleges:
The Union further maintains that the Company is presently in breach of that claimed agreement by having failed and refused to pay a bonus of $100.00 in the second week of December 2003 and by having fail [ed] and refus[ed] to implement an across the board salary increase effective January 1, 2004, as called for by that contract. The Union also maintains that the Company will be in further breach of the contract should it fail or refuse to implement the January 1, 2005 wage increase of $.10, or should it fail or refuse to pay $100.00 bonuses in the second week of December 2004 and December 2005 as called for by the claimed agreement.*fn3
Along with these allegations in the Complaint, it clear from testimony offered by Union officials that the failure of the Company to implement the bonus and wage increases allegedly agreed upon was the primary reason for the strike called in October 2003. For example, Charles Bridgemon, a Union official, was asked the following question and gave the following response:
Q: Why did the union strike?
A: Because the Company agreed to a contract and then refused to implement it.
This brief exchange illustrates that the heart of the underlying dispute here is that by refusing to recognize any agreement, the Company has not implemented the wage increases and bonuses that the putative agreement calls for and does not intend to do so, and that the Union regards such inaction as violations of the claimed agreement. In other words, the heart of the dispute here is the Company's failure to pay the allegedly agreed upon bonuses and raises — in other words, its breach. Therefore, subject matter jurisdiction exists, and my decision on March 9 dismissing the Company's motion to dismiss for lack of jurisdiction is correct.

  For the reasons above, the Company's Motion for Leave to File Instanter Its First Amended Complaint is GRANTED and the Union's ...

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