Opposition Brief — Jones v. Caterpillar Inc.

Supreme @eurt, U.S.

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No. 93-358

| OCT — I 1893

Supreme Court of the United —

October Term, 1993

C. MICHAEL JONES, et al.,

Petitioners,

V.

CATERPILLAR INC.,

Respondent.

On Petition For A Writ Of Certiorari

To The Appellate Court Of Illinois, Fourth District

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

Michael A. Warner

(Counsel of Record)

John T. Murray

SEYFARTH, SHAW, FAIRWEATHER

& GERALDSON

55 East Monroe Street

Suite 4200

Chicago, Illinois 60603

(312) 346-8000

Theodorre R. Johnson

CATERPILLAR INC.

100 Northeast Adams Street

Peoria, Illinois 61629

(309) 675-4278

Attorneys for Respondent.

BEST AVAILABLE LE COPY ol

QUESTION RESTATED

Whether state law claims which are substantially

dependent upon the interpretation and application of

collective bargaining agreements are preempted by

Section 301 of the Labor-Management Relations Act

under Allis-Chalmers Corp. v. Lueck, 471 U.S. 202

(1985) and its progeny?

STATEMENT REQUIRED BY RULE 29.1

Caterpillar Inc. whose name was Caterpillar

Tractor Co. at the time the instant lawsuit was filed,

has no parent company. Its non-wholly-owned

subsidiaries and affiliates are: | Mitsubishi Caterpillar

Forklift America Inc.; Advanced Technology Services

Inc.; Rapidparts Inc.; Cyclean, Inc.; Innovative Steam

Technologies; RR-1 Limited Partnership; Bio-energy

Partners; Health Plan of Central Illinois Inc.; Peoria

Medical Research Corporation; Balderson Inc.; DUECO,

Inc.; Caterpillar Industrial Inc.; Material Handling

Associates, Inc.; Advanced Filtration Systems Inc.;

Energy Power Systems Australia Pty. Limited (Australia);

Gough & Gilmour Holdings Pty. Limited (Australia);

Girandole Pty. Limited (Australia); Matchparts N.V.

(Belgium); Caterpillar Finance France S.A.; EDC

European Excavator Design Center GmbH & Co. KG

(Germany); EDC European Excavator Design Center

Verwaltungs GmbH (Germany); Caterpillar Hungary

Component Manufacturing Company Ltd. (Hungary);

Tractor Engineers Limited (India); Hindustan Powerplus

Limited (India); P.T. Natra Raya (Indonesia); Mec-Track

S.r.L. (Italy); Shin Caterpillar Mitsubishi Ltd. (Japan);

Caterpillar MHI Marketing Ltd. (Japan); Itoh Tekkosho

Co., Ltd. (Japan); Hokuirku Caterpillar Mitsubishi

Construction Equipment Sales, Ltd. (Japan); Shizuoka

Caterpillar Mitsubishi Construction Equipment Sales, Ltd.

(Japan); K-Lea Kabushiki Kaisha (Japan); D.O.M. Ltd.

(Japan); Rental Sanwa Kabushiki Kaisha (Japan);

Turboservices SDN BHD (Malaysia); Méistubishi

Caterpillar Forklift Europe B.V. (Netherlands); Mitsubishi

Caterpillar Forklift Asia Pte. Ltd. (Singapore); and

Caterpillar Financial Services (U.K.) Limited.

- ill -

TABLE OF CONTENTS

Page(s)

QUESTION RESTATED

STATEMENT REQUIRED BY RULE 29.1

TABLE OF CONTENTS

TABLE OF AUTHORITIES

STATEMENT OF THE CASE

PROCEEDINGS BELOW

REASONS FOR DENYING THE WRIT

CONCLUSION

13

«Ws

TABLE OF AUTHORITIES

Cases Page(s)

Allis-Chalmers Corp. v. Lueck,

471 U.S. 202 (1985) ay ae Se

Berda v. CBS, Inc., 881 F.2d 20

(3d Cir.),cert. denied, 493 U.S.1062 (1990) 9, 10

Caterpillar Inc. v. Williams,

482 GS. 386 (1987) + 9 48

Franchise Tax Bd. v. Construction Laborers

Vacation Trust, 463 U.S. 1, 7

Lingle v. Norge Division of Magic Chef, Inc.,

486 U.S. 300 (1988) 7

z_v. Continental Can Co.,

el F.2d 147 (Sth Cir. 1992) 9-11

Metropolitan Life Ins. Co. v. Taylor,

481 US. 58, 64 (1987) 7

Ryherd v. General Cable Co.,

134 Il. 2d 418, 530 N.E.2d 431 (1988) 8

Schacht _v. Caterpillar _Inc., 213 Ill. App. 3d 169,

571 N.E.2d 115 3d Dist. 1991), Be. denied,

) >

141 Ill. 2d 560, 580 N.E.2d 134

cert. denied, 112 S. Ct. 1306 (1

Seefeldt_v. Millikin National Bank, Lag? 154 Ill.

App. i ; a 052, 1055

Smith v. Colgate-Palmolive Co. ,

943 F.2d 64 (7th Cir. 1991) 9

Teamsters _v. Lucas Flour Co.,

?

Textile Workers Union v. Lincoln Mills,

353 U.S. 448, 456 (1957) 7

United Steel me) v._ Rawson,

495 U.S. 362 (1990

White _v. National Steel Corp., 938 F.2d 474

(4th Cir.), cert. denied, 112 S. Ct. 454 (1991) 10

No. 93-358

IN THE

Supreme Court of the United States

October Term, 1993

C. MICHAEL JONES, et al.,

Petitioners,

V.

CATERPILLAR INC.,

Respondent.

On Petition For A Writ Of Certiorari

To The Appellate Court Of Mlinois, Fourth District

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

In this case, the Illinois Court of Appeals held

that the claims of current and former employees who

were covered by the terms of collective bargaining

agreements throughout their employment and who were

challenging their layoffs under the terms of those

agreements on the basis that the layoffs violated their

state contractual rights were preempted by Section 301

of the Labor-Management Relations Act of 1947

("LMRA"). This holding is simply a correct application

of the principles of Allis-Chalmers Corp. v. Lueck, 471

U.S. 202 (1985), and its progeny to the particular facts

of this case. It presents no issue that is appropriate for

review by this Court.

es

STATEMENT OF THE CASE

Petitioners were employed by Caterpillar Inc.

("Caterpillar") at various production plants in Illinois. As

production employees, Petitioners were all subject to col-

lective bargaining agreements negotiated by their selected

bargaining agents, in most cases the United Automobile

Workers (UAW) (Pet. for Cert. at 5; R. C1423-24, C3585-

86, C3839-40, C3946-47).' The collective bargaining agree-

ments established the basic terms and conditions of employ-

ment for covered employees, including the layoff and recall

terms.

At various times in their employment, Petitioners

moved into the apprentice classification. When Petitioners

entered that classification, however, they continued to be

covered by the collective bargaining agreements in effect at

their respective facilities. (Pet. for Cert. at 5; R. C1038,

C1050-51, C1054-55). As noted in the decision below,

"[w]hile serving as apprentices, [Petitioners] continued to hold

membership in the union and to pay union dues” (A-2-A3).’

‘Although most of Petitioners worked in facilities

represented by the UAW (R. C1423,-24, C3585-86, C3839-

40, C3946-47), a few of Petitioners were represented by other

unions (R. C3717-18). At all relevant times, however, all of

Petitioners were represented by one of these labor

organizations and each was covered by a collective

bargaining agreement negotiated on their behalf by their

particular labor organization.

*The undisputed record evidence amply supports this

finding. For example, in the Peoria area, Article | of the

UAW Local Supplement specifically provides that

“apprentices” (other than patternmakers) are included in the

bargaming unit defined by the National Labor Relations

Board (R. C4048). The apprentice job titles and the

applicable wage rates for apprentices at the Peoria facilities

5

Petitioners also concede this point: "That the plaintiffs in

the case at bar were union members and covered by a

collective bargaining agreement . . . Is not in dispute” (Pet.

for Cert. at 5).

In the early 1980's, Caterpillar began to experience a

sharp decline in its business and during the next several

years that erosion in business caused a series of layoffs at

virtually all of the Company's facilities (R. C3587, C3948).

In fact, these economic difficulties resulted in the closure of

4 number of facilities, such as Davenport, lowa, Milwaukee,

Wisconsin and San Leandro, California, among others. In

initially carrying out the layoff at the UAW plants,

Caterpillar followed the seniority-based reduction-in-force- ~

procedures set out in Articie 13 of the Central Agreement

and the related provisions of the Local Agreements

(R. C3588-90, C3718, C3842-43, C3948). The Patternmaker

layoffs were likewise carried out in accordance with the

seniority-based reduction-in-force procedures of the

Patternmakers contract (R. C3718). Pursuant to these

procedures, a large number of apprentices were removed

from their respective training programs (R. C3588).

The reductions of apprentices were the subject of

numerous grievances under the collective bargaining

agreements, including grievances by a number of Petitioners

are set out in the Peoria Area Supplementary Rate Schedule

in the Central Agreement (R. C3947, C4041-42). For

purposes of applying the senionty provisions of the

agreement, the apprenticeship program constitutes the Factory

Training Major Group under Article 5 (Seniority ) of the Local

Supplement (R. C3947-48, C4055-58). Similar provisions are

found in the Decatur and other UAW-Caterpillar local

supplements (e.g., R. C3587, C3600, C3605-09). Similarly,

the Pattermmakers-Caterpillar contract provides that the

Pattemmakers Union is "the sole bargaining agent for all

pattemmakers and patternmaker apprentices" (R. C3717-18,

C3798).

«#<

and were the subject of negotiations between Respondent and

the various local unions of the UAW (R. C3589, C3842-43,

C3948-49, C4087-4111). These grievances included

grievances by apprentices at East Peoria protesting the 1981

layoffs and downgrades. Although Caterpillar and the UAW

negotiated certain modifications to the methodology of

reducing apprentices in certain locations (such as East

Peoria), the continuing economic decline of the company

required a continued reduction in force throughout

Caterpillar's production facilities, including among the

apprentices (R. C3587, C3948). Petitioners were among that

group affected by the economic decline (R. C1061, C1354-

58). They were each laid-off or reduced in classification at

various times during the period between 1980 and 1985.

PROCEEDINGS BELOW

In 1986, the Petitioners filed a complaint in Illinois

state court challenging their layoffs or downgrades and their

consequent removals from the apprenticeship programs.

Petitioners claim that their layoffs constituted "terminations"

in violation of "Apprenticeship Agreements” ("AA") they

signed upon entry into the apprentice program. Petitioners

later amended their Complaint to add State-law tort claims

for misrepresentation. Following extensive pretrial

proceedings, Caterpillar moved for summary judgment in

December, 1991, based on the decision of the Illinois

Appellate Court in Schacht v. Caterpillar _Inc., 213 Ill. App.

3d 169, 571 N.E.2d 1215 (3d Dist. 1991), appeal denied,

141 Ill. 2d 560, 580 N.E.2d 134 (1991), cert. denied, 112

S. Ct. 1306 (1992), holding that the identical claims of a

class of Caterpillar apprentices were preempted by Section

301 of the Labor Management Relations Act, 29 U.S.C. §

185. The trial court granted Caterpillar's motion "on the

basis of the authority cited in the “ hacht decision." (A-16).

a

Petitioners appealed to the Illinois Appellate Court

for the Fourth District. After briefing and oral argument,

the appellate court upheld the entry of summary judgment

(A-1 - A-14). The appellate court noted that the petitioners

availed themselves of the benefits of the collective bargaining

agreements and that their employment remained at all times

subject to the collective bargaining agreements. Accordingly,

the court found that the apprenticeship agreements could not

be viewed in isolation and that the terms of the Plaintiffs’

employment would have to be extracted from both the

apprenticeship agreements and the collective bargaining

agreements. The appellate court held:

{I]n determining whether

plaintiffs’ termination from the

apprenticeship program was in violation

of the terms of the apprenticeship

agreement, the nature of the relationship

between the apprenticeship agreement

and the collective-bargaining agreement

must necessarily be examined. This

will require an interpretation of the

collective-bargaining agreement which is

governed by federal law and preempted

by section 301(a).

x* * ke *

As to the fraudulent

misrepresentation count, one of the

elements of fraudulent misrepresentation

is that the injured party justifiably

relied on the false statement. (Seefeldt

v. Millikin National Bank, (1987), 154

Ill. App. 3d 715, 719, 506 N.E.2d

1052, 1055.) In determining whether

reliance is reasonable, courts must look

to all the relevant circumstances

VX—

7: es

surrounding the alleged

misrepresentation. Seefeldt , 154 Ill.

App. 3d at 719, 506 N.E.2d at 1055.)

Since defendant alleges plaintiffs were

still covered by the collective-bargaining

agreement which contained a provision

for layoffs, it would seem necessary

that to properly review plaintiffs’ claims

the court would need to evaluate the

collective-bargaining agreement to

determine whether it was reasonable for

plaintiffs to believe that they could not

be terminated from the apprenticeship

program for economic reasons. ‘This

claim therefore is also preempted.

(A-10 - A-12). Qn this basis, the appellate court

affirmed the circuit court's entry of summary judgment

for Caterpillar. In the alternative, the court noted

that the claims would be preempted in any event

because the resolution of Caterpillar's defenses would

also require the interpretation of the collective

bargaining agreements. (A-11). Petitioners petitioned

for leave to appeal to the Illinois Supreme Court.

That Petition was denied. (A-15)

*It is uncontroverted that Petitioners did not meet the

prerequisites to suit under Section 301. For example,

Petitioners did not exhaust their contractual gmevance

remedies (as required under Clayton v. International Union,

UAW, 451 U.S. 679 (1981)) nor did they file their suit within

six months of the alleged breach (Del Costello v.

International Brotherhood of Teamsters, 462 US. 151

(1983)). Thus, treating this case as one brought under

Section 301, the lower courts properly granted summary

judgment in Caterpillar's favor

REASONS FOR DENYING THE WRIT

Section 301 of the Labor-Management Relations

Act, and the remedies available pursuant to that

section, provide the exclusive source of law for

claims, the resolution of which involves a collective

bargaining agreement. In Textile Workers Union v.

Lincoln Mills, 353 U.S. 448, 456 (1957), this Court

held that the Congress, through LMRA Section 301,

authorized federal courts to create a uniform body of

federal common law relating to collective bargaining

agreements "which the courts must fashion from the

policy of our national labor laws." As further

explained in Teamsters v. Lucas Flour Co., 369 U.S.

95, 103-04 (1962), "“[t]he possibility that individual

contract terms might have different meanings under

state and federal law would inevitably exert a

disruptive influence upon both the negotiation and

administration of collective agreements." In order to

effectuate this mandate, the Court has established

Section 301 as a uniquely broad source of federal

common law with a “preemptive force ... so powerful

as to displace entirely any state cause of action"

within its scope. Metropolitan Life Ins. Co. v.

Taylor, 481 U.S. 58, 64 (1987) (quoting Franchise

Tax Bd. v. Construction Laborers Vacation Trust, 463

U.S. 1, 23 (1983)). As a result of this strong

federal policy, this Court has made clear, in a long

line of cases, that Section 301 of the LMRA preempts

a state law claim that is "substantially dependent upon

analysis of the terms of an agreement made between

parties to a labor contract." Allis-Chalmers Corp. v.

Lueck, 471 U.S. 202, 220 (1985). See, e.g., United

Steel Workers v. Rawson, 495 U.S. 362 (1990);

Lingle v. Norge Division of Magic Chef, Inc., 486

U.S. 399 (1988): Caterpillar Inc. v. Williams, 482

CC

Ms

U.S. 386 (1987).

In Ryherd v. General Cable Co., 124 Ill. 2d

418, 530 N.E.2d 431 (1988), the Illinois Supreme

Court, following this standard, reaffirmed that,

regardless of how a plaintiff's claims are couched in

the complaint, Illinois courts will consider a state

claim to be preempted by Section 301 if "the validity

of the state claim is ‘inextricably intertwined with

consideration of the terms of the labor contract.'"

Ryherd, 530 N.E.2d at 434 (quoting Allis-Chalmers

Corp. v. Lueck, 471 U.S. 202 (1985)). Both the

trial court and the appellate court accepted and applied

this Court's established standard in this case. In

reviewing the particular facts of this case under that

standard, the lower courts concluded that the resolution

of the Petitioners’ claims would indeed require analysis

and interpretation of the terms of collective bargaining

agreements. Accordingly, the courts concluded that

Petitioners’ claims are preempted under Section 301.

Petitioners contend that the holding of the

Illinois Appellate Court creates a conflict with

decisions of other courts on the issue of whether

Section 301 can preempt a state contract claim based

on an agreement alleged to be separate and distinct

from the collective bargaining contract. None of the

cases cited by Petitioners, however, establish that there

is a conflict on the applicable legal principles.

Instead, these cases simply come to different

conclusions based upon their particular facts.

The basis for the purported conflict is

alternatively stated in the Petitioners’ submission, as

follows:

rr

This Court is again asked

to address the question of |

whether federal preemption, under

§ 301(a) of the Labor

Management Relations Act, can

be found to arise from defenses

raised in an employer's

pleadings, where the plaintiffs’

Claims are premised solely upon

State law. This question is

reflected in opposing views as to

the applicability of this Court's

opinion in Caterpillar Inc. v.

Williams, 482 U.S. 386, 107 S.

Ct. 2425, 96 L. Ed. 2d 318

(1987).

(Pet. for Cert. at 5).

In Williams, this Court held that the

question whether a claim is "completely preempted" by

Section 301 so as to permit removal of the case to

federal court based upon federal question jurisdiction

must be determined solely from the face of the

complaint and cannot depend upon the anticipated

defenses. Petitioners note that the decision below and

at least one other appellate court decision -- by the

Seventh Circuit -- have so limited the Wiiliams

holding. (Pet. for Cert. at 7-8, citing Smith v.

Colgate-Palmolive Co., 943 F.2d 764 (7th Cir. 1991)).

Petitioners also cite to three appellate court cases

purportedly holding that Williams applies not only to

the question of “complete preemption” for purposes of

removal, but also to preemption on the merits. (Pet.

for Cert. at 8, citing Berda v. CBS Inc., 881 F.2d

20 (3d Cir. 1989), cert. denied, 493 U.S. 1062

(1990); Lopez _v. Continental Can Co., 961 F.2d 147

-10-

(9th Cir. 1992); and White v. National Steel Corp.,

938 F.2d 474 (4th Cir.), cert. denied, 112 S. Ct. 454

(1991)). For a number of reasons, however,

Petitioners arguments raise no appropriate grounds for

a grant of certiorari in this case.

First, the result below does not depend upon

whether preemption can be found in the asserted

defenses to the claim. Although the appellate court

did hold that Respondent's defenses would require

interpretation of the collective bargaining agreement,

this was not the primary grounds upon which the

decision rested. Rather, the court held that an

interpretation of the collective bargaining agreement

would be required to resolve Petitioners’ claims for

breach of contract and misrepresentation irrespective of

Respondent's affirmative defenses. For example, the

court stated that proof of justifiable reliance -- an

essential element of Petitioners’ misrepresentation claim

-- would necessarily require an analysis of the

collective bargaining agreement as a part of the

surrounding circumstances.

Second, there is no conflict of law in the cases

cited by Petitioners. Rather, they simply involve the

application of the Allis-Chalmers rule that Section 301

preempts a state law claim which is “substantially

dependent upon the analysis of the terms of an

agreement made between parties to a labor contract"

to different facts. In the Fourth Circuit case cited by

Petitioners, White v. National Steel Corp., 938 F.2d

474 (4th Cir.), cert. denied, 112 S. Ct. 454 (1991),

the court held that an alleged individual agreement

made with regard to a management position which was

not subject to the collective bargaining agreement was

not, on its facts, sufficiently dependent upon the

analysis of the terms of a collective bargaining

agreement to meet the Allis-Chalmers standard.

Similarly, in the Third Circuit case cited by Plaintiffs,

Berda v. CBS, Inc., 881 F.2d 20 (3d Cir.), cert.

ON Se

me

denied, 493 U.S. 1062 (1990), the court held that the

Allis-Chalmers standard was not met with respect to

an individual contract based upon promises made

during the hiring interview and which had induced the

plaintiff to accept employment prior to the time that

he was subject to the collective bargaining agreement.

Finally, in the Ninth Circuit case, Lopez v.

Continental Can Co., 961 F.2d 147 (9th Cir. 1992).

the court simply held that a union employee's statutory

claim that her employer fraudulently concealed

information about a safety risk was not preempted by

Section 301.

In this case, the appellate court applied the

Same basic standard applied in each of the cases cited

by Petitioners. The uncontroverted facts showed that

the Plaintiffs were covered by the collective bargaining

agreement at the time they entered the apprentice

program, when the alleged individual agreements were

signed, and at all times thereafter. Moreover, as

found by the district court, there is nothing in either

the alleged individual agreements or the collective

bargaining agreement which excepts the employees in

the apprentice program from the downgrade, layoff

and recall provisions of the collective bargaining

agreement. Thus, the Illinois Appellate Court's

conclusion that "in determining whether plaintiffs’

termination from the apprenticeship program was in

violation of the terms of the apprenticeship agreement,

the nature of the relationship between the

apprenticeship agreement and the collective-bargaining

agreement must necessarily be examined” cannot be

contested on the facts and presents a different issue

than in White, where the promise pertained to a

non-unit position, Berda, where the plaintiff was not

subject to a collective bargaining contract at the time

the individual agreement was formed, and Lopez,

where the Plaintiff brought a Statutory claim. In

short, the purported conflict is simply an application

eo

of the same rule of law to a different set of facts

with a correspondingly different result. Such a

conflict does not require or justify Supreme Court

review.

Finally, Petitioners argument that this Court has

not determined whether a federal labor issue arising

out of a defense may preempt a state law claim is

simply wrong. In Allis-Chalmers Corp. v. Lueck,

471 U.S. 202 (1985), and other Supreme Court cases

cited by Petitioners themselves, this is precisely what

occurred. Numerous cases have arisen in the state

courts or in the federal courts by virtue of diversity

jurisdiction wherein this Court has uniformly

recognized that a state law claim may be preempted

when a defense requires interpretation of a coilective

bargaining agreement. Moreover, in Caterpillar Inc.

v. Williams, 482 U.S. 386 (1987), this Court

expressly recognized that, where a case is not

properly removed because a federal question does not

appear on the face of the complaint, preemption

defenses, including the Section 301 defense, "are

questions that must be addressed in the first instance

by the state court in which respondents filed their

claims.” Williams, 482 U.S. at 398, n.13. That is

precisely what occurred in this case.

Not one of the Circuit Court cases featured by

Petitioners holds that a federal defense may not

preempt a state law claim. At most, these cases

simply hold that, on the particular facts in the case,

the asserted defense is insufficient to invoke federal

preemption. Again, therefore, there is no dispute as

to the applicable legal principles and no conflict

requiring resolution by this Court.

In summary, this case involves nothing more

than a straightforward application of both long-standing

and recent precedents of this Court. There are no

conflicts which require resolution and the case meets

none of the other standards necessary to justify the

5 (aaa eae

ne

exercise of this Court's supervisory powers. The

Petition should be denied.

CONCLUSION

For the reasons stated, the Petition for Writ of

Certiorari should be denied.

Respectfully submitted,

CATERPILLAR INC.

Michael A. Warner

(Counsel of Record)

John T. Murray

SEYFARTH, SHAW, FAIRWEATHER

& GERALDSON

Suite 4200

55 East Monroe Street

Chicago, Illinois 60603

(312) 346-8000

Theodore R. Johnson

CATERPILLAR INC.

100 Northeast Adams Street

Peoria, Illinois 61629

(309) 675-4278