commenced on January 19, 1976, and ended on June 28, 1977. Lengthy testimony and complex statistical evidence was presented by both sides during the one hundred thirty-nine days of trial before Judge Higginbotham. On January 2, 1979, the Court released from impoundment its liability opinion dated November 30, 1978. Commonwealth of Pennsylvania v. Local Union 542, 469 F. Supp. 329 (E.D. Pa. 1978). The Court held that Local 542 and the JATC intentionally discriminated against minorities in violation of Title VII, 42 U.S.C. § 2000e et seq., and 42 U.S.C. § 1981. 469 F. Supp. at 394-401. The Court found, however, that "the plaintiffs have failed to prove on a preponderance of the evidence that the associations or contractors viewed simply as a class were actually aware of the union discrimination affecting the employment of minority persons throughout the operating engineer industry in Local 542's jurisdiction." 469 F. Supp. at 401. (Emphasis added). The Court stated: "Although plaintiffs have failed to show intent to discriminate by the employers as a class, and indeed have been unable to show knowledge or notice of discrimination by that class as a whole, plaintiffs have shown that the requisite relationship exists among employers, associations, and union to render applicable the theory of respondeat superior, thus making employers and associations liable injunctively for the discriminatory acts of the union." 469 F. Supp. at 412-413. As a result, the Court found that the contractor associations and contractors were injunctively liable to the plaintiff class because of their contractual relationship to and use of the hiring hall system under 42 U.S.C. § 1981. 469 F. Supp. at 401-402. On November 7, 1979, the Court released from impoundment its final Judgment and Decree dated August 8, 1979, which granted the plaintiff class specific injunctive relief under a five year program which included hour and wage percentage goals, requirements for training and upgrading, and other forms of equitable relief. Commonwealth of Pennsylvania v. Local Union 542, 502 F. Supp. 7 (E.D. Pa. 1979).
On May 19, 1981, the United States Court of Appeals affirmed the judgment of the district court both with respect to the appeals of Local 542 and the JATC, Commonwealth of Pennsylvania v. Local Union 542, 648 F.2d 922 (3d Cir. 1981), and the appeals of the contractor associations and contractors, Commonwealth of Pennsylvania v. Local Union 542, 648 F.2d 923 (3d Cir. 1981). On June 29, 1982, the United States Supreme Court reversed the judgment of the Court of Appeals insofar that injunctive liability was imposed pursuant to 42 U.S.C. § 1981 on the contractor associations and contractors in the absence of intentional discrimination and remanded for further proceedings consistent with its opinion. General Building Contractors Association v. Pennsylvania, 458 U.S. 375, 102 S. Ct. 3141, 3156, 73 L. Ed. 2d 835 (1982).
Plaintiffs now seek to amend their complaint. Plaintiffs seek to (1) add as named defendants forty contractor-employers; (2) assert individual claims of intentional discrimination in employment against named defendant Glasgow and the forty additional contractor-employers; and (3) assert individual claims of intentional racial discrimination against the named defendant contractor associations. A hearing was held on June 21, 1983. Plaintiffs' claims against Local 542 and the JATC for damages and back pay were settled for $1,500,000.00 under a Consent Decree approved by the Court on December 15, 1982. Commonwealth of Pennsylvania v. Local Union 542, 555 F. Supp. 1109 (E.D. Pa. 1982).
A. Res Judicata
The contractor associations and contractors contend that plaintiffs are barred by res judicata from amending their complaint and asserting individualized claims of intentional discrimination. The principle of res judicata provides:
When a court of competent jurisdiction has entered a final judgment on the merits of a cause of action, the parties to the suit and their privies are thereafter bound "not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible matter which might have been offered for that purpose."
Sea-Land Services, Inc. v. Gaudet, 414 U.S. 573, 578-579, 39 L. Ed. 2d 9, 94 S. Ct. 806 (1974). "Under res judicata, a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action." Allen v. McCurry, 449 U.S. 90, 94, 66 L. Ed. 2d 308, 101 S. Ct. 411 (1980). The principles of res judicata are based on the doctrine that "[a] party cannot escape the requirements of full faith and credit and res judicata by asserting its own failure to raise matters clearly within the scope of a prior proceeding." Kremer v. Chemical Construction Corp., 456 U.S. 461, 102 S. Ct. 1883, 1889, 72 L. Ed. 2d 262 n.4 (1982). The purpose of res judicata is to bar "repetitious suits involving the same cause of action. [The bar] rests upon considerations of economy of judicial time and public policy favoring the establishment of certainty in legal relations." Sea-Land Services, Inc. v. Gaudet, supra. Res judicata applies to claims that were actually litigated or claims that could have been reasonably litigated. Id.
In the present case, plaintiffs had a full and fair opportunity to assert individualized claims of intentional discrimination against the contractor associations and contractor-employers but chose to proceed on a class-wide theory of intentional discrimination and vicarious liability against them. Plaintiffs made an informed and deliberate tactical decision to proceed in this manner before, during, and after trial. This fact is readily evidenced by the allegations of plaintiffs' complaint, plaintiffs' motion for class certification, plaintiffs' proposed final pretrial order, counsel's statements during trial, plaintiffs' proposed findings of fact, and plaintiffs' memorandum on the binding effect of defendant class. Plaintiffs' theory against the contractor associations and contractor-employers was as follows: (1) the class of contractor associations and class of contractor-employers knew of the racial discrimination, acceded to it, and intentionally discriminated against plaintiffs, and (2) the class of contractor associations and class of contractor-employers were liable under principles of respondeat superior because of their contractual relationship to and use of the union hiring hall system. The Court rejected plaintiffs' first contention by finding that there was no class-wide intentional discrimination by defendant class of contractor associations or defendant class of contractor-employers. Commonwealth of Pennsylvania v. Local Union 542, supra, 469 F. Supp. at 401. This finding was not challenged by plaintiffs on appeal. See General Building Contractors Association v. Pennsylvania, supra, 102 S. Ct. at 3145. The Court, however, adopted plaintiffs' second theory and held that the contractor associations and contractor-employers were vicariously liable because of their contractual relationship to and use of the union hiring hall. Commonwealth of Pennsylvania v. Local Union 542, supra, 469 F. Supp. at 401-413. This finding was reversed on appeal by the United States Supreme Court. General Building Contractors Association v. Pennsylvania, supra. Defendants contend that plaintiffs have had their day in court -- actually one hundred and thirty-nine days in court -- and are now precluded from asserting an alternative theory for recovery, that of individualized liability. Defendants argue that the principles of res judicata protect both the named and unnamed members of defendant class.
To reopen the litigation after one and one-half years of trial and over eleven years of litigation is contrary to the sound policies behind the finality of judgments. Plaintiffs claimed intentional discrimination on a class-wide basis and lost. Plaintiffs' alternative theory for liability under respondeat superior was rejected by the Supreme Court. Plaintiffs are now precluded from asserting individualized claims of intentional discrimination because they chose not to assert such claims before, during, and after trial. The findings against plaintiffs with respect to defendant class are binding with respect to named and unnamed members of defendant class. Fed.R.Civ.P. 23(b)(2) and Notes of Advisory Committee (1966 Amendment). See also Kalodner v. Board of Education of Philadelphia School District, 558 F. Supp. 1124, 1126 (E.D. Pa. 1983). Since res judicata applies to claims that could have been litigated, plaintiffs' motion to amend must be denied.
B. Undue Delay and Unfair Prejudice
Rule 15(a) of the Federal Rules of Civil Procedure provides that leave to amend "shall be freely given when justice so requires." The grant or denial of a motion for leave to amend is within the sound discretion of the district court and will be reversed only for an abuse of discretion. Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 330, 28 L. Ed. 2d 77, 91 S. Ct. 795 (1971); Foman v. Davis, 371 U.S. 178, 182, 9 L. Ed. 2d 222, 83 S. Ct. 227 (1962); Heyl & Patterson International Inc. v. F.D. Rich Housing, 663 F.2d 419, 425 (3d Cir. 1981), cert. denied, 445 U.S. 1018, 102 S. Ct. 1714, 72 L. Ed. 2d 136 (1982). In Foman v. Davis, supra, the Supreme Court set forth the guidelines governing motions to amend under Rule 15(a) as follows:
Rule 15(a) declares that leave to amend "shall be freely given when justice so requires"; this mandate is to be heeded. See generally, 3 Moore, Federal Practice (2d ed. 1948), paras. 15.08, 15.10. If the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claim on the merits. In the absence of any apparent or declared reason -- such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc. -- the leave sought should, as the rules require, be "freely given." Of course, the grant or denial of an opportunity to amend is within the discretion of the District Court, but outright refusal to grant the leave without any justifying reason appearing for the denial is not an exercise of discretion; it is merely abuse of that discretion and inconsistent with the spirit of the Federal Rules.
371 U.S. at 182.
In the present case, plaintiffs now seek to advance individualized claims of intentional discrimination against the contractor associations and contractor-employers after having lost on class-wide claims of intentional discrimination both before the district court and the United States Supreme Court. On March 14, 1983, plaintiffs filed their present motion to amend. This is eleven years after the filing of the original complaint on November 8, 1971, and five years since the trial record was closed on June 28, 1977. Moreover, the case has been heard by both the United States Court of Appeals and the United States Supreme Court. Plaintiffs could have advanced individualized claims at trial but chose, instead, to proceed on a class-wide approach by seeking and obtaining class action certification of defendant classes and seeking and obtaining bifurcation into a liability stage ("Stage I") and damages stage ("Stage II") of the trial. Plaintiffs lost on the class-wide theory of intentional discrimination at the liability trial but prevailed on the vicarious liability theory until reversed by the United States Supreme Court. The liability trial ended on June 28, 1977. The damages trial has now been settled with respect to Local 542 and the JATC. Plaintiffs have unduly delayed in presenting their alternative individualized theories for liability. This delay has resulted in substantial prejudice to defendants. This case has been pending for eleven years. The contractor associations and contractor-employers defended against the class-wide theory at both the district court and appellate court levels. An individualized approach would now require new discovery and a new joinder of third-party defendants. Moreover, defendants have been prejudiced by the loss of essential witnesses and vital records with respect to the operation of their businesses. Plaintiffs made the tactical decision to present evidence of class-wide intentional discrimination and to argue the theory of vicarious liability. They are not entitled at this late date to retry the case on the theory of direct individual liability. The court's holding in Feeney v. Commonwealth of Massachusetts, 475 F. Supp. 109 (D. Mass. 1979) (three judge court), affirmed, 445 U.S. 901, 63 L. Ed. 2d 317, 100 S. Ct. 1075 (1980), is particularly instructive. There, plaintiffs sought to amend their complaint following an adverse decision by the Supreme Court. The district court denied plaintiffs' motion, stating that
at this very late stage, an interest in orderly litigation cautions against entertaining arguments not previously raised absent very compelling circumstances. . . . It would be unfair to defendants, after the latter have prevailed on the . . . theories originally presented, to allow plaintiff to test yet another theory and to continue on what would become a new law suit . . . the time has come to put this particular case to rest.