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Merryman Excavation, Inc. v. International Union of Operating Engineers

April 25, 2007

MERRYMAN EXCAVATION, INC., PLAINTIFF,
v.
INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 150, AFL-CIO, ET AL., DEFENDANT.



The opinion of the court was delivered by: Judge Virginia M. Kendall

MEMORANDUM OPINION AND ORDER

Merryman Excavation, Inc. ("Merryman") sues: (i) International Union of Operating Engineers, Local 150, AFL-CIO ("Local 150"); (ii) The Mid-America Regional Bargaining Association, John Vignocchi, Tim Scully, and Joseph Benson (together the "MARBA Defendants"); and (iii) Charles August, Melinda Hensel, John Rabine, Ray Herron, Michael Kresge and Richard Dunlap (together the "Individual Union Defendants") pursuant to § 301 of the Labor Management Relations Act (the "LMRA"), Illinois common law civil conspiracy, and civil violation of the Racketeering Influenced Corrupt Organization Act ("RICO"), 18 U.S.C. § 1962. The MARBA Defendants and the Individual Union Defendants move via two separate motions to dismiss Counts VII, XII and XIII.*fn1 Local 150 also moves to dismiss the RICO charge, Count XIII. The three Motions are granted in part and denied in part. The Motions to Dismiss are denied as to Counts VII and XII, and granted without prejudice as to Count XIII.

Plaintiff's Allegations

At the motion to dismiss stage, all of the plaintiff's allegations are accepted as true. In 2000, Merryman and Local 150 entered into a Memorandum of Agreement that incorporated an existing collective bargaining agreement (the "CBA") between Local 150 and MARBA. The CBA provides a three-step procedure to resolve disputes between an employer and Local 150. In "Step One," the parties hold an informal conference concerning the grievance. If Step One does not resolve the dispute, the parties have seven days to reduce the grievance to writing and refer it for a "Step Two" conference between officials from Local 150 and officials from the employer. If Step Two does not resolve the dispute, the parties have fifteen days to submit the written grievance to the Joint Grievance Committee ("JGC") for resolution. The CBA's provision for the JGC states:

The union and [MARBA] have created a Joint Grievance Committee to resolve grievances under this agreement. This committee shall consist of an equal number of members representing Employers and the Union.

See Am. Cmplt. Ex. 13, Article XIII, Section 1, page 41. If the JGC enters an award against an employer, the CBA requires the employer to pay the aggrieved worker double rate for each hour that the aggrieved worker would have worked but for the employer's violation.

On August 2, 2006, the JGC held eight conferences for worker grievances, all involving Merryman, and awarded damages against Merryman for six of the eight grievances. The JGC on August 2, 2006 was comprised of either two or three representatives for Merryman and some or all of the six union members. Melinda Hensel, counsel for Local 150, attended all meetings of the JGC. Robert Hanlon, attorney representative for Merryman, voiced an objection at the August 2, 2006 meeting to the jurisdiction of the JGC. Merryman did not pay the grievance awards. On September 11, 2006, a member of Local 150 "threatened enforcement" of the six unpaid grievances awarded at the JGC on August 2.

On October 25, 2006, after Merryman had filed suit in this Court, a second JGC meeting occurred. Two members of Merryman and attorney Hanlon attended the JGC meeting. Hanlon again objected to the jurisdiction of the JGC. The JGC awarded damages against Merryman for three grievances. Merryman did not pay the additional grievance awards. On December 4, 2006, a member of Local 150 "threatened enforcement" of two of the three unpaid grievances awarded at the JGC meeting on October 25.

Merryman seeks a declaratory judgment that the nine monetary awards and two deadlocks reached by the JGC be declared void as impartial and outside the scope of the CBA. Merryman also alleges a claim of Illinois civil conspiracy against the MARBA Defendants and the Individual Union Defendants, and a civil RICO claim against all Defendants for mail fraud and extortion in furtherance of an illegal enterprise designed to cause Merryman harm.

Standard of Review

Defendants move to dismiss the claims under Federal Rule of Civil Procedure 12(b)(6). When considering a motion under Rule 12(b)(6), a court must take as true all facts alleged in the complaint and construe all reasonable inferences in favor of the plaintiff. See Murphy v. Walker, 51 F.3d 714, 717 (7th Cir. 1995). A Rule 12(b)(6) motion will not be granted "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claims which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102 (1957). The plaintiff need not allege all of the facts involved in the claim and can plead conclusions. Higgs v. Carter, 286 F.3d 437, 439 (7th Cir. 2002); see Sanjuan v. American Bd. of Psychiatry and Neurology, Inc., 40 F.3d 247, 251 (7th Cir. 1994) (stating that "[m]atching facts against legal elements comes later"). Any conclusions pleaded, however, must "provide the defendant with at least minimal notice of the claim." Kyle v. Morton High School, 144 F.3d 448, 455 (7th Cir. 1998); see Sanjuan, 40 F.3d at 251 ("One pleads a 'claim for relief' by briefly describing the events").

Counts XII and XIII - Arbitral Immunity

The MARBA Defendants and the Individual Union Defendants move in two groups to dismiss the entire Amended Complaint against them on grounds of arbitral immunity. The awards of joint grievance committees are reviewed with the same standards as those applied to arbitrations. See International Union of Operating Engineers, Local 150, AFL-CIO v. Pease Const., Inc., 541 F. Supp. 1334, 1336 (N.D. Ill. 1982). Although Merryman does not challenge the merits of the decision but rather the composition of the JGC, "arbitral immunity should be extended to cases where the authority of an arbitrator to resolve a dispute is challenged." Tamari v. Conrad, 552 F.2d 778, 780 (7th Cir. 1977). If a party feels that the composition of the arbitration committee was biased, or failed to conform with the terms of the underlying CBA, the appropriate method of redress is a suit to set the award aside. Id. at 781. Merryman has brought suit appropriately against Local 150 (via Counts I-XI) to set aside the awards for improper composition of the panels.

But even if the Individual Defendants are arbitrators, the Amended Complaint adequately pleads the presence of a substantial exception to the rule of arbitral immunity: instances in which the arbitrators adjudicated a dispute over which they lacked jurisdiction. See Mireles v. Waco, 502 U.S. 9, 12 (1991) (judicial immunity can be overcome in narrow exception in which judge acted in complete absence of jurisdiction). While a narrow exception, the allegations of this suit present an unusual set of facts: the same union, and the same CBA, have been the subject of a previous court ruling that unequal composition of the JGC committee members voids the JGC's jurisdiction over the dispute. See MJ Electric, Inc. v. Int'l Union of Operating Eng'rs, Local 150, 2003 WL 21640474 (N.D. Ill. 2003). Based on this prior ruling, Merryman alleges that the MARBA Defendants and the Individual Union Defendants knew that the MJ Electric decision defined the jurisdiction of the JGC under the same CBA and involving the same union; in spite of this awareness, the JGC continued to hold meetings in direct defiance of the previous court's decision. Taking Merryman's facts ...


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