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GAINEY v. BROTHERHOOD OF RY. & S.S. CLERKS

August 31, 1959

James A. GAINEY and J. L. Young, Individually and on behalf of others similarly affected
v.
BROTHERHOOD OF RAILWAY AND STEAMSHIP CLERKS, FREIGHT HANDLERS, EXPRESS AND STATION EMPLOYEES and The Pennsylvania Railroad Company



The opinion of the court was delivered by: LORD

The two named plaintiffs are employees of the Pennsylvania Railroad who assert wage claims against the carrier, and claims for damages and refund of dues against the union. The named defendant union will hereafter be called The Brotherhood; the defendant carrier will be spoken of as The Railroad; and references to The Act will signify the Railway Labor Act, 45 U.S.C.A. § 151 et seq.

Each defendant has moved to dismiss, raising a variety of defenses and objections to be discussed herein.

 The complaint, consisting of 20 paragraphs, an exhibit, and an amendment, was filed by plaintiffs in the form of a class bill on behalf of themselves and other persons similarly situated to recover about $ 1,750,000 back wages from the Railroad, a like amount as penalty against the Brotherhood, and an indeterminate sum for refund of dues paid to the latter.

 The bill alleges that the Brotherhood is the duly authorized bargaining agent of the clerical employees (including plaintiffs as 'tallymen') of the Railroad, so certified under the Act. A bargaining agreement between the Brotherhood, representing the employees, and the Railroad was executed in 1942, covering the entire Pennsylvania Railroad System.

 Under the terms of this agreement, tallymen at freight stations in the Central Region of the Railroad were paid on a straight hourly basis, whereas tallymen in the Eastern Region were paid on a tonnage rate, depending on the amount of freight handled. As a result, the Eastern Region tallymen (plaintiffs) received less take home pay per month than the Central Region men.

 In paragraphs I through VII, in which the foregoing facts appear, there are the following recitals, among others. The named plaintiffs are residents, respectively, of Camden, New Jersey and Philadelphia, Pennsylvania. The Brotherhood does business in Pennsylvania, maintains an office in Philadelphia, and is there represented by an authorized agent.

 In paragraph I this cause is said to be

 'a civil action arising under the Constitution and laws of the United States brought under the Railway Labor Act, 45 U.S.Code 151 et seq.'

 In paragraph V plaintiff says:

 'The jurisdiction and venue of this Court are established by precedents of the United States Supreme Court which hold that the (Federal) right not to be discriminated against is implied in the Railway Labor Act. (45 U.S.Code 152 et seq.)'

 The alleged class on whose behalf the suit is brought is those who are or were since August 1, 1950, the employees classified as Group I workers, i.e. clerks -- more specifically known as 'tallymen' in the Eastern Region of the Pennsylvania Railroad system. In that area (Altoona east to New York, Philadelphia, and Washington, D.C.) the asserted monthly wage disadvantage, by comparison to the Central Region employees, was approximately $ 25 per month (and later, due to general wage increases, $ 30 per month). In addition, the Central employees received sick leave benefits not available to the Eastern group.

 The crucial paragraph VIII reads:

 Recitals add that the Railroad later refused to effectuate the agreement, and that the Brotherhood failed to enforce it, or follow up the negotiations. An amendment states that the Railroad, moreover, in 1951 eliminated tonnage payments to the tallymen, in contravention of the Act as well as the 1942 collective bargaining agreement.

 After reciting the enforcement machinery which was at the disposal of the Brotherhood under the Act, the fact that the Brotherhood at all times enjoyed the benefit of competent counsel is pointed out. The next allegation, XIII, must speak for itself:

 'The only reason for failure of the Brotherhood to compel the Pennsylvania Railroad Company to abide by its agreement is that the Pennsylvania Railroad Company could control union officers at will. For all of the officers of the Pennsylvania Railroad System Board of Adjustment, Brotherhood of Railway and Steamship Clerks, Freight Handlers, Express and Station Employees were former officers of the Pennsylvania Railroad Company union which was disbanded by the carrier in 1937 when the Brotherhood obtained the collective bargaining rights for this craft on the Pennsylvania Railroad.'

 Paragraphs XIV and XV state that plaintiffs have no specific remedy under the Act, and

 '* * * no remedy within the Brotherhood since this complaint against the Pennsylvania Railroad Company has gone unheeded by all echelons of the Brotherhood since 1951.'

 After reciting the resultant economic hardship to plaintiffs, XVII says:

 'Though the carrier has a constitutional right to discriminate against employees when it agrees to remove that discrimination as a part of a collective bargain it cannot then attempt to abrogate that agreement and renew the discrimination to the pecuniary detriment of employees.'

 Paragraph XVIII alleges the wrongful discrimination, asserts third party beneficiary rights of the plaintiffs in the alleged agreement; and claims the right of plaintiffs to enforce the agreement against the Railroad and 'to sue the Brotherhood for breach of trust.' Paragraph XIX specifies actions which the Brotherhood might have taken by way of enforcement of the alleged agreement and concludes with the recital that the Brotherhood continues to ignore its duty.

 Damages are asserted, as result of defendants' wrongful acts, on behalf of 'a minimum of 600 persons on the Eastern Region' comprising the class, at $ 30 per month since 1950 -- amounting to $ 1,734,000 exclusive of interest. In addition to general equitable relief, they demand:

 '1. Mandatory injunction compelling defendant Pennsylvania Railroad Company to equalize the pay scale (as described);

 '2. Damages against the Pennsylvania Railroad for losses in earnings for a minimum of $ 1,734,000.

 '4. Punitive damages on item (2) supra against the defendant Brotherhood equal to the judgment assessed against the Pennsylvania Railroad Company for wanton breach of trust and violation of the duty owed to the plaintiffs as agents, and for violating their statutory duty.

 '5. An order compelling the defendant Brotherhood to return dues collected from plaintiffs for the period in question since defendant gave plaintiffs no quid pro quo for these union dues.'

 1. Jurisdiction over the Person; Insufficiency of Service of Process

 The Brotherhood protests that it is not doing business within the District of the United States District Court for the Eastern District of Pennsylvania, and is therefore not subject to the jurisdiction of the court.

 It also asserts insufficiency of service of process for the reason that service (at the Board of Adjustment office at 15th and Locust Streets in Philadelphia) was not made at an office at which the Brotherhood regularly conducts business or upon a representative authorized by the Brotherhood to accept service on its behalf. Defendant insists that the Brotherhood conducts no regular business from the office mentioned, that the Pennsylvania Railroad System Board of Adjustment, of which J. C. McGuigan is an officer, is autonomous and independent of the Brotherhood, and that the Brotherhood has therefore not been served. Farnsworth & Chambers Co., Inc. v. Sheet Metal Workers, D.C.N.Mex.1954, 125 F.Supp. 830; Isbrandtsen Co., Inc. v. National Marine Engineers' Beneficial Ass'n, D.C.S.D.N.Y.1949, 9 F.R.D. 541.

 The affidavits in the present motion present virtually the same facts that were before Judge Sporkin in 1957. McGovern v. Brotherhood of Railway Clerks, Court of Common of Common Pleas No. 2, Philadelphia County, September Term 1956, No. 3908 in Equity. After full consideration it was held that

 '* * * Service upon the local lodge was sufficient service upon the Brotherhood, Spica v. I.L.G.W.U., 1957, 388 Pa. 382, 130 A.2d 468; Tunstall v. Brotherhood of Locomotive F. and E., 4 Cir., 1956, 148 F.2d 403; Operative Plasterers' and Cement Finishers' (International) Association (of U.S. and Canada) v. Case, 1937, 68 App.D.C. 43, 93 F.2d 56 as was service upon McGuigan, who, as Assistant vice-General Chairman of the System Board constituted such an official for service of process as was contemplated by Pa.R.C.P. 2157 (12 P.S.Appendix). See Spica v. I.L.G.W.U., supra; Quinn v. Pershing, 1951, 367 Pa. 426 (80 A.2d 712); Underwood v. Maloney, D.C.E.D.Pa.1953, 14 F.R.D. 222; Claycraft v. United Mine Workers of America, 6 Cir., 1953, 204 F.2d 600.'

 This Court takes the same view of the service of process, and the interrelation of the System Board and the Brotherhood, and rules that jurisdiction of the person of the defendant Brotherhood was properly obtained.

 2. Is the Matter Res Adjudicata as to the Brotherhood?

 The Brotherhood claims that the matter presented by the Complaint is

 'res adjudicata, as to the Defendant Brotherhood, the matter having been fully litigated by the Court of Common Pleas No. 1 of Philadelphia County, December Term, 1953, No. 6298, affirmed (in part) on appeal by the Supreme Court of Pennsylvania at (348 Pa. 248) (1956) and certiorari denied by the Supreme Court of the United States (351 U.S. 985, 76 S. Ct. 1052, 100 L. Ed. 1498) wherein the claims respecting the questions raised in this case were dismissed.'

 Dissatisfaction as to the reallocation of work caused certain lodges of the Brotherhood to refuse to pay their per capita taxes to the Grand Lodge within the time prescribed by the latter's constitution and by laws. The Grand Lodge brought suit for forfeiture of the charters of those locals. The Supreme Court held that the lower court had erred in refusing to enforce the forfeiture, since it was expressly provided for by the contractual undertaking of the parties. Id., 384 Pa. 248, 268, 120 A.2d 523.

 The opinion and record in that cause enable one to appreciate the undercurrents present in the instant acrimonious dispute. The questions there involved differ from those at hand, however, and the decision is deemed not res adjudicata for present purposes.

 3. Laches and Statutes of Limitations

 Both defendants point out that the plaintiffs allege that an agreement was reached in 1950 but did not file their complaint until 1959. They cite the Pennsylvania 6 year statute of limitations (Act of March 27, 1713, 1 Sm.L. 76, 12 P.S. § 31) as applicable at least by analogy, and Pennsylvania decisions. E.g. Madera v. Monongahela Railway Co., 1947, 356 Pa. 460, 52 A.2d 329.

 The collective bargaining agreement, furthermore, provides limits of from 60 to 90 days on the submissions of claims. Railroad's Exhibit 1, Rule 7-B-1. They collect cases to the effect that time limits in contracts, including collective bargaining agreements, have frequently been enforced as reductions of the statutory period for bringing contract actions. Povey v. Midvale Company, 1954, ...


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