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BYGOTT v. LEASEWAY TRANSP. CORP.

June 10, 1986

BERNARD F. BYGOTT, JR., JOHN MAHALIS, JOHN O'TOOLE, GREGORY PATTON and JOSEPH SNYDER
v.
LEASEWAY TRANSPORTATION CORPORATION, TERMINAL PERSONNEL, INC., SIGNAL DELIVERY SERVICE, INC. and HIGHWAY TRUCK DRIVERS AND HELPERS LOCAL 107



The opinion of the court was delivered by: BECHTLE

 BECHTLE, J.

 Presently before the court are defendant Highway Truck Drivers and Helpers Local 107's ("Local 107" or the "union") motion for a continuance of the plaintiffs' motion to allow discovery; plaintiffs' motion for summary judgment on the issue of damages; plaintiffs' motion for court-ordered attorneys' fees; plaintiffs' motion for other attorneys' fees; Local 107's motion for sanctions; and plaintiffs' motion for sanctions. For the reasons stated herein, Local 107's motion for a continuance to allow discovery will be denied; plaintiffs' motion for summary judgment on the issue of damages will be granted in part and denied in part; plaintiffs' motion for court-ordered attorneys' fees will be granted in part and denied in part; plaintiffs' motion for other attorneys' fees will be granted in part and denied in part; Local 107's motion for sanctions will be denied; and plaintiffs' motion for sanctions will be granted.

 FACTS

 The facts in this case have been substantially chronicled by this court in a previous opinion. Bygott v. Leaseway Transportation Corp., 622 F. Supp. 774 (E.D. Pa. 1985). The court held there that a genuine issue of material fact existed and precluded summary judgment. The court believed that a dispute existed at that time with respect to whether the union fairly and adequately investigated a grievance signed and filed by Local 107 union members, and also as to whether Terminal Personnel, Inc. ("TPI") and Signal Delivery Service, Inc. ("Signal") were alter ego employers or were single employers. The terms "alter ego employer" and "single employer" are used here and in these proceedings as specially defined employer-employee relationships developed through a course of litigation and case law for purposes of resolving certain types of labor disputes. See 622 F. Supp. at 780 (cases cited therein). For purposes of this opinion, however, TPI, Signal, and Leaseway Transportation Corporation ("Leaseway") are simply referred to hereinafter as the "employers."

 The issues of liability and damages were bifurcated by the court before trial, and the liability issue was subsequently tried before a jury. Plaintiffs represented a class, certified by the court on September 23, 1985, pursuant to Rule 23(b)(2) of the Federal Rules of Civil Procedure. The class comprised the members of Local 107. *fn1" On November 6, 1985, the jury rendered its verdict finding that Local 107 breached its duty of fair representation and that Signal and TPI were not alter egos or single employers. See 622 F. Supp. at 782 n.11. Local 107 moved for judgment notwithstanding the verdict or, in the alternative, for a new trial, which motion was denied on December 11, 1985. On January 10, 1986, Local 107 appealed the Final Judgment and Order that followed the denial of the union's post-trial motions.

 Four days later, on January 14, 1986, plaintiffs launched the initial salvo of motions presently before the court. Plaintiffs seek attorneys' fees and litigation expenses under two theories. First, plaintiffs argue that they are entitled to summary judgment on the issue of damages, which damages include attorneys' fees and litigation expenses. Under this theory, plaintiffs contend that attorneys' fees and litigation expenses are an integral element of damages. Second, plaintiffs argue that they are entitled to attorneys' fees and costs under either the "common benefit" exception or the "bad faith" exception to the American Rule that requires parties to pay their own attorneys for fees incurred.

 Local 107 counter-salvoed on January 27, 1986, and argued that plaintiffs' motions were filed too late under Rule 59(e) of the Federal Rules of Civil Procedure ("Rule 59(e)"), that the union's January 10, 1986 appeal divested this court of jurisdiction to rule upon plaintiffs' motions, and that, on the merits, plaintiffs' motions should be denied. In addition to answering plaintiffs' motions, Local 107 moved for imposition of sanctions on plaintiffs under Rule 11 of the Federal Rules of Civil Procedure ("Rule 11"). The union argued that, because of Rule 59(e) and because this court is without jurisdiction to decide plaintiffs' motions, plaintiffs' motions are not warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and were imposed for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. See Rule 11. Local 107 also moved for a continuance to enable the union to make discovery into plaintiffs' calculation of attorneys' fees.

 On February 12, 1986, plaintiffs fired back a double-barreled reply to Local 107's opposition to plaintiffs' motions that included an answer to Local 107's motion for Rule 11 sanctions, and their own motion for Rule 11 sanctions asserting the same reasons that the union had used in its Rule 11 motion. See Rule 11.

 On March 13, 1986, plaintiffs filed a document headlined "Plaintiffs' Second Supplemental Memorandum of Law in Support of Plaintiffs' Motion for Summary Judgment for Damages and Motion for Attorneys' Fees and Litigation Expenses." In this document, plaintiffs set forth in detail their attorneys' fees and litigation costs and their legal arguments under Lindy Bros. Builders, Inc. of Philadelphia v. American Radiator & Standard Sanitary Corp., 540 F.2d 102 (3d Cir. 1976) ("Lindy II"); Lindy Bros. Builders, Inc. of Philadelphia v. American Radiator & Standard Sanitary Corp., 487 F.2d 161 (3d Cir. 1973) ("Lindy I"), and the progeny of those cases. This document will be treated as a motion for attorneys' fees, and will be considered together with the document filed by plaintiffs on January 14, 1986, which seeks a court Order that plaintiffs are entitled to attorneys' fees and litigation costs.

 On March 28, 1986, Local 107 filed a supplemental answer to plaintiffs' motion for summary judgment for damages and motion for attorneys' fees and litigation expenses. The union reiterated the arguments it made in its first brief and, not unexpectedly, raised some new ones. In particular, the union challenged plaintiffs' counsel's billing rates, calculation of hours spent on this case, and the application of a multiplier.

 DISCUSSION

 1. Preliminary Issues

 At the outset, the court must determine whether it has subject matter jurisdiction over plaintiffs' motions and, if the court finds that it has jurisdiction, whether plaintiffs' motions are precluded by the operation of Rule 59(e).

 (a) Subject Matter Jurisdiction

 Local 107 argues that when it filed a notice of appeal with the United States District Court on January 10, 1986, jurisdiction over this case was transferred from the district court to the United States Court of Appeals for the Third Circuit. Consequently, according to the union, this court is without jurisdiction to consider plaintiffs' motion for summary judgment for damages and motion for attorneys' fees and litigation expenses. In support of its position, the union cites United States v. Lafko, 520 ...


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