Appendix — The 1975 Salaried Retirement Plan for Eligible Employees of Crucible, Inc., et al., v. David A. Nobers, et al

Supreme Court, U.S,

FILED

OCT 5 92

UF ide GLERK

No. A-

IN THE

Supreme Court of the United States

OcTOBER TERM 1992

THE 1975 SALARIED RETIREMENT PLAN

For ELIGIBLE EMPLOYEES

OF CRUCIBLE, INC., ET AL..

Petitioners,

Ws

Davip A. NOBERS. ET AL.

Respondents

APPENDIX TO PETITION For Writ OF CERTIORARI

To THE UNITED STATES CouRT OF APPEALS

For THE THIRD CIRCUIT

Of Counsel:

ANTHONY J. DIBUONO *WILLIAM H. PowDeERLy, III

COLTEC INDUSTRIES INC PAULA E. GANZ

430 Park Avenue JOAN C. ZANGRILLI

New York, New York 10022 Jones, Day, REAvis & POGUE

(212) 940-0574 500 Grant Street

Pittsburgh, PA 15219

(412) 394-7921

*Counsel of Record

INDEX TO APPENDIX

PAGE

Opinion of the United States Court of Appeals

for the Third Circuit in The 1975 Salaried

Retirement Plan for Eligible Employees of Crucible

Inc., et al., v. David A. Nobers, et al., No. 91-3426,

SE SE sik nC ONLY 4 ONG dew O Rd coed hea la

Order of the United States District Court for the

Western District of Pennsylvania in The 1975

Salaried Retirement Plan for Eligible Employees of

Crucible Inc., et al., v. David A. Nobers, et al.,

No. 90-80, (June 26, 1991) ....................... 23a

Order of the United States District Court for the

Western District of Pennsylvania in The 1975

Salaried Retirement Plan for Eligible Employees of

Crucible Inc., et al., v. David A. Nobers, et al.,

No. 90-80, (May 30, 1991) ....................... 24a

Order and Findings of Fact and Conclusions of Law

of the United States District Court for the Western

District of Pennsylvania in David A. Nobers, et al.,

v. Crucible Inc., et al., C.A. No. 82-1846, (December

10, 1982) (Nobers I) (Transcript of Hearing on

Motion to Dismiss, pp. 31-48) .................... 26a

Order and Opinion of the Superior Court of

Pennsylvania in David A. Nobers, et al., v. Crucible

Inc., et al., No. 1251 Pittsburgh 1987, (July 25, 1988)

RID e ueala sea dC dee aiden ies Gre kere bank 4la

Order and Opinion of the Court of Common Pleas for

the County of Beaver, Pennsylvania in David A.

Nobers, et al., v. Crucible Inc., et al., No. 843 of

1984, (August 7, 1987) (Nobers II) ............... 52a

la

Filed July 6, 1992

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 91-3426

THE 1975 SALARIED RETIREMENT PLAN FOR

ELIGIBLE EMPLOYEES OF CRUCIBLE, INC., an

ERISA plan; THE COLT INDUSTRIES

OPERATING CORPORATION SEVERANCE PLAN

FOR SALARIED, NONUNION EMPLOYEES, an

ERISA plan; THE RETIREMENT COMMITTEE OF

COLTEC INDUSTRIES, INC., as administrator of

The 1975 Salaried Retirement Plan for Eligible

Employees of Crucible, Inc. and The Colt

Industries Operating Corporation Severence Plan

for Salaried, Nonunion Employees; THE

PENSION PLAN FOR COLLECTIVELY

BARGAINED EMPLOYEES OF MIDLAND

OPERATIONS OF CRUCIBLE, INC., an ERISA

plan; THE SUPPLEMENTAL UNEMPLOYMENT

BENEFIT PLAN FOR COLLECTIVELY

BARGAINED EMPLOYEES OF MIDLAND

OPERATIONS OF CRUCIBLE, INC., an ERISA

plan; THE SEVERANCE ALLOWANCE PLAN FOR

THE COLLECTIVELY BARGAINED EMPLOYEES

OF MIDLAND OPERATIONS OF CRUCIBLE,

INC., an ERISA plan; and COLTEC

INDUSTRIES, INC., as administrator of The

Pension Plan for Collectively Bargained

Employees of Midland Operations of Crucible,

Inc., The Supplemental Unemployment Benefit

Plan for Collectively Bargained Employees of

2a

Midland Operations of Crucible, Inc., and The

Severance Allowance Plan for the Collectively

Bargained Employees of Midland Operations of

Crucible, Inc.

Appellants

v.

DAVID A. NOBERS:; ROBERT R.

CAMPBELL, JR.; GASPER P. PORTO: and

GARY T. WEEKLY ad

On Appeal from the United States District Court

for the Western District of Pennsylvania

(Dist. Ct. Civil No. 90-0080)

Argued December 13, 1991

Before: BECKER, GREENBERG, and ALITO,

Circuit Judges

(Filed: July 6, 1992)

WILLIAM H. POWDERLY, III (argued)

PAULA E. GANZ

JOAN C. ZANGRILLI

Jones, Day, Reavis & Pogue

500 Grant Street

Pittsburgh, PA 15219

Attorney for Appellants

GREGORY GLEASON (argued)

Hough & Gleason, P.C.

Two Gateway Center, Suite 1666

Pittsburgh, PA 15222

Attorney for Appellees

3a

OPINION OF THE COURT

BECKER, Circuit Judge.

This appeal requires us to construe the

Anti-Injunction Act, 28 U.S.C. § 2283 (1988), in

the context of the Employee Retirement and

Income Security Act (“ERISA”), 29 U.S.C.A.

§§ 1001-1462 (West 1985 & Supp. 1992). The

plaintiff-appellants, five plans for the benefit of

employees of Crucible, Inc., seek to enjoin the

appellees, four employees whom Crucible laid off,

from prosecuting a contract action against

Crucible and its parent company, Colt Industries,

Inc., in Pennsylvania state court. The district court

for the Western District of Pennsylvania denied the

requested injunction.

The pians allege that the state court suit will

interfere with the performance of their duties

under ERISA. Contending that the state court suit

“relates to” ERISA plans because the state court

will have to construe the plans in determining

liability, the plans submit that, under sections

502(e)(1) and 514(a) of ERISA, 29 U.S.C.

§§ 1132(e)(1), 1144(a) (1988), the state court

action is preempted and the case is subject to

exclusive federal jurisdiction.

Under the Anti-Injunction Act, a federal court

may grant injunctions to stay state court

proceedings only when “expressly authorized by an

Act of Congress, or where necessary in aid of its

jurisdiction, or to protect or effectuate its

judgments.” 28 U.S.C. § 2283 (1988). The plans

assert that their claim falls under all three

exceptions. They contend that section 502(a)(3) of

ERISA, 29 U.S.C. § 1132(a)(3), “expressly

authorize{s]” injunctions for violations of ERISA,

including violations of its supersedure provisions.

They also argue that an injunction is necessary in

aid of the federal court's (exclusive) jurisdiction,

and to protect the district court's judgment in

favor of Crucible and Colt in an earlier suit by the

employees. ;

Although we agree with the plans that the state

court suit is preempted and that the claim, if

brought under ERISA, would be_ subject to

exclusive federal jurisdiction, we conclude that the

plans’ request falls under none of the three

exceptions in the Anti-Injunction Act. We will

therefore affirm the judgment of the district court

denying the injunction,

I. FACTS AND PROCEDURAL HISTORY

The appeilees claim to represent a class of

former employees of Crucible’s Midland,

Pennsylvania steel plant who were promoted from

positions in Crucible’s collective bargaining unit

into salaried, non-union positions. Around 1980,

Crucible began to have economic troubles and

instituted cutbacks and layoffs. During this period,

some salaried employees were demoted back to

union positions, but the putative class members

were not demoted, and were eventually laid off in

1982 as salaried employees. The appellees contend

that they had a contractual right to be demoted

from managerial and supervisory positions back to

the bargaining unit and that if they had been

properly demoted, they would have received

substantially greater pension and related benefits

than those to which they are entitied as salaried

5a

employees. Protracted litigation has followed their

layoff.

The appellees first brought Civil Action No.

82-1846 in the district court for the Western

District of Pennsylvania against Crucible, Colt, the

steelworkers’ union, and the administrator of the

unicn’s pension plans. The appellees claimed that

the collective bargaining agreement required

Crucible to demote them and lay them off as union

employees rather than as salaried employees, and

that the union breached its duty of fair

representation by failing to file their grievance.

This suit (“"Nobers I) was a hybrid class action

based on section 301 of the Labor-Management

Relations Act (“LMRA”*), 29 U.S.C. § 185 (1988).

The district court certified the class pursuant to

Federal Rule of Civil Procedure (“FRCP”) 23, bui

granted summary judgment against the appellees

(plaintiffs there) on the ground that they had

neither an express nor an implied right under the

collective bargaining agreement to be terminated

as union employees.' This court affirmed without

opinion. Nobers I, 722 F.2d 733 (3d Cir. 1983).

Not fazed by their loss in federal court, in 1984

the appellees brought Action No. 843-1984 in the

Court of Common Pleas of Beaver County,

Pennsylvania. This class action suit (“Nobers IT’),

which is still pending, asserts claims against

Crucible and Colt for breach of and interference

with alleged express and implied contracts of

employment. The appellees allege a right to return

1. The court also granted summary judgment on the plaintiffs’

claim of general “violations and breaches of plaintiffs’ rights.~

The court dismissed their ERISA claims for failure to join the

proper defendants and to exhaust administrative remedies.

to the bargaining unit and to be terminated as

union employees’ rather than as __ salaried

employees. They seek damages equivalent to the

unemployment, pension, and insurance benefits

available to bargaining unit employees.

Crucible and Colt attempted to remove Nobers II

to federal district court, but the district court

remanded the case to state court on the grounds

that neither diversity jurisdiction nor ancillary

jurisdiction supported original federal jurisdiction.

Nobers v. Crucible, Inc., 602 F. Supp. 703 (W.D.

Pa. 1985). After remand, Colt and Crucible took

another tack to prevent the state court from acting

on Nobers II: they brought Civil Action No. 85-563

in federal court, seeking to enjoin Nobers II on the

ground that it was barred by the res judicata effect

of Nobers I. The district court denied relief on the

ground that the face of the Nobers II complaint

made no strong and unequivocal showing of

relitigation, as required by the case law under the

Anti-Injunction Act, 28 U.S.C. § 2283. This court

affirmed without opinion. Colt Industries v. Nobers,

787 F.2d 581 (3d Cir. 1986).

The Beaver County Court of Common Pleas

resumed its proceedings in Nobers II, and in 1987

dismissed the action upon the motion of Colt and

Crucible, holding that ERISA preempted the

appellees’ state law claims. On appeal, however,

the Pennsylvania Superior Court reversed, Nobers

v. Crucible, Inc., 376 Pa. Super. 156, 545 A.2d 367

(1988), basing its ruling on Shaw v. Westinghouse

Electric Corp., 276 Pa. Super. 220, 419 A.2d 175

(1980), and finding the association between the

Nobers II contractual allegations and the ERISA

plans to be “tangential at best,” 545 A.2d at 371.

7a

The Pennsylvania Supreme Court denied review.

522 Pa. 578, 559 A.2d 39 (1989).

After the Pennsylvania Supreme Court ruling,

Colt and Crucible returned to federal district court,

seeking to remove Nobers II based on intervening

United States Supreme Court decisions about the

scope of ERISA preemption. The district court

ruled, however, that this second attempt at

removal was untimely. Colt and Crucible petitioned

for mandamus from this court, but we denied the

petition. Crucible Inc. v. Zeigler, No. 90-3049 (3d

Cir. June 8, 1990). Nobers II is therefore still

pending in state trial court.

Finally, the Crucible employee benefit plans (but

not Crucible and Colt themselves) brought this

action in federal district court under ERISA

§ 502(a)(3), 29 U.S.C. § 1132(a)(3), seeking

declaratory guidance as to their obligations to the

appellees. The district court had jurisdiction under

ERISA § 502(e)(1), 29 U.S.C. § 1132(e)(1). In

addition to a declaratory judgment, the plans seek

to enjoin the defendant-appellees here (the

plaintiffs in Nobers I) from further prosecuting

Nobers II in state court. On May 30, 1991, the

district court denied injunctive relief, but allowed

discovery to proceed on the plans’ requests for

declaratory relief.

To ensure immediate appealability of the dental

of injunctive relief, the plans requested that the

district court enter a final judgment under FRCP

54(b) on that claim. On June 26, 1991, the district

court did so. We therefore have jurisdiction over

the plans’ appeal under 28 U.S.C. § 1291. Our

review is plenary. Carey v. Pennsylvania

Enterprises, 876 F.2d 333, 337 (3d Cir. 1987).

Il. AVAILABILITY OF AN INJUNCTION UNDER

THE ANTI-INJUNCTION ACT

The plans request that we reverse the district

court's judgment refusing to enjoin the appellees

from prosecuting Nobers II in Pennsylvania court.

Under the Anti-Injunction Act,

ja] court of the United States may not grant an

injunction to stay proceedings in a State court

except [1] as expressly authorized by Act of

Congress, or [2] where necessary in aid of its

jurisdiction, or [3] to protect or effectuate its

judgments.

28 U.S.C. § 2283. Although technically the plans

seek only to enjoin the appellees and not the state

court proceeding itself, the Anti-Injunction Act

cannot be evaded by such a formality. See, for

example, Atlantic Coast Line _ Railroad v.

Brotherhood of Locomotive Engineers, 398 U.S. 281,

287, 90 S. Ct. 1739, 1743 (1970). Moreover, the

three exceptions in the Anti-Injuncticn Act are

exclusive: an injunction against Nobers II is proper

only if it falls within one of them. See, for example,

Choo v. Exxon Corp., 486 U.S. 140, 146, 108 S.

Ct. 1684, 1689 (1988); Amalgamated Clothing

Workers of America v. Richman Brothers, 348 U.S.

511, 514-16, 75 S. Ct. 452, 454-55 (1955). We take

up the the exceptions in the order pressed by the

plans.

A. “Necessary in Aid of Its Jurisdiction”

The plans contend that the subject matter of

Nobers II is, under ERISA section 502(e)(1), 29

U.S.C. § 1132(e)(1), subject to exclusive federal

jurisdiction, and therefore the requested injunction

9a

falls under the second exception to the

Anti-Injunction Act because it is necessary in aid

of the district court's (exclusive) jurisdiction over

claims of this sort. We must first determine

whether federal courts have exclusive jurisdiction

over the claims in Nobers II; if so, we must then

determine whether, as the plans claim, that is

sufficient to invoke the “necessary in aid of its

jurisdiction” exception.

1. Preemption and Exclusive Federal Jurisdiction

The plans contend that Nobers II, although

nominally a contract action against Colt and

Crucible, “relates to,” and implicates construction

of, an ERISA plan. Section 514({a) of ERISA

provides (with exceptions not relevant here) that

subchapters II and III of ERISA (covering, among

other things, jurisdiction, administration,

enforcement, and plan_ termination insurance)

“shall supersede any and all State laws insofar as

they may now or hereafter relate to any

[ERISA-covered] employee benefit plan . . . .” 29

U.S.C. § 1144(a) (1988). Therefore, if Nobers II

“relates to” an ERISA plan, it is preempted even

if it states an otherwise valid state law claim.

In determining whether Nobers II “relates to” an

ERISA plan, we are guided by the Supreme Court's

recent decision in Ingersoll-Rand Corp. ov.

McClendon, 111 S. Ct. 47& (1990), which

reaffirmed the Court's expansive definition of

“relationship to” ERISA plans, and therefore also

confirmed the broad scope of ERISA preemption

established in earlier cases such as Pilot Life

Insurance Co. v. Dedeaux, 481 U.S. 41, 107 S. Ct.

‘549 (1987), and Metropolitan Life Insurance Co.

v. Taylor, 481 U.S. 58, 107 S. Ct. 1542 (1987). In

10a

Ingersoll-Rand, the plaintiff filed a wrongful

discharge action based on state law tort and

contract theories, alleging that his employer

terminated him out of a desire to avoid

contributing to the pension fund. The Supreme

Court unanimously held that the action was

preempted.

Six Justices concluded that because’ the

existence of an ERISA plan was a critical factor in

establishing liability, and because the trial court's

inquiry would be directed to the plan, the suit

“related to” an ERISA plan, and hence was

preempted. Id. at 433. In short, if there were no

plan, there would have been no cause of action.

Moreover, all nine Justices agreed on the narrower

ground that the suit was preempted because it

conflicted directly with an ERISA cause of action.

The Court observed that section 510 of ERISA, 29

U.S.C. § 1140 (1988), creates a cause of action for

interfering with the attainment of a right under an

ERISA plan, and the plaintiff could and should

have sued on that federal cause of action. 111 S.

Ct. at 485.

Ingersoll-Rand controis the preemption question

in this case. The plans are certainly correct that

the claim in Nobers II depends on the existence of

an ERISA plan. If an ERISA plan did not exist, the

appellees would never have brought Nobers II.

Furthermore, the trial court's inquiry in Nobers II

would be directed to ERISA plans, in that the

calculation of damages would involve construction

of ERISA plans, even though Colt and Crucible,

not the plans themselves, would not be liable for

the damages. The appellees place great emphasis

on the fact that Nobers II is a suit against an

employer, not ERISA plans or their administrators.

lla

But that defense is unavailing after Ingersoll-Rand,

which concluded that ERISA preempted a_ suit

against an employer.’

In sum, Nobers II “relates to” an ERISA plan and

is accordingly preempted by ERISA section 514(a),

29 U.S.C. § 1144{(a).* Moreover, although actions

under section 502(a)(1)(B) of ERISA, 29 U.S.C.

§ 1132(a)(1)(B), to recover benefits due under a

plan, to enforce rights under a plan, or to clarify

rights to future benefits under a plan, are subject

to concurrent state and federal jurisdiction, see

ERISA section 502(e)(1), 29 U.S.C. § 1132(e)(1),

Nobers II is not such an action. As a result, even

if Nobers II had been properly brought under

ERISA, federal jurisdiction over the appellees’

claim would have been exclusive. Id.

2. Availability of an Injunction

According to the plans, the district court should

have granted an injunction to protect its exclusive

2. The appellees also rely on Fort Halifax Packing Co. v.

Coyne, 481 U.S. 1, 107 S. Ct. 2211 (1987), but that case ts

easily distinguished. There the Supreme Court held that ERISA

did not preempt a Maine severance pay statute because it did

not “relate to” employee benefit plans (as opposed to employee

benefits in general). To be preempted, held the Court, a statute

must have some connection to an ERISA plan, and the Maine

statute did not establish or require an employer to maintain

a plan, nor did it threaten the underlying purposes of ERISA.

Here, in contrast, a plan most certainly exists, and the

appellees measure their damages in Nobers II by reference to

that plan.

3. Because of this conclusion, we need not also decide

whether Nobers II is preempted under the alternative rationale

in Ingersoll-Rand — that ERISA section 510, 29 U.S.C. § 1140,

provides the plaintiffs a cause of action that directly conflicts

with the state law claims asserted in the state court suit.

jurisdiction over this general subject matter. The

Supreme Court, however, has repeatedly held that

federal preemption, or even a statutory grant of

exclusive federal jurisdiction, does not, by itself,

provide federal courts with the power to enjoin

illegal state proceedings. In Choo, for example, the

Supreme Court reiterated its earlier holding that

a federal court does not have inherent power to

ignore the limitations of [28 U.S.C.] § 2283 and

to enjoin state proceedings merely because those

proceedings interfere with a protected federal

right or invade an area pre-empted by federal

law, even when the interference is unmistakably

clear.

486 U.S. at 149, 108 S. Ct. at 1691 (1988) (quoting

Atlantic Coast Line, 398 U.S. at 294, 90 S. Ct. at

1747).

In Amalgamated Clothing Workers, the Court

rejected outright the position pressed by the plans

here, when it ruled that the Anti-Injunction Act

“does not apply whenever the moving party in the

District Court alleges that the state court is ‘wholly

without jurisdiction over the subject matter,

having invaded a field pre-empted by Congress.”

348 U.S. at 515, 75 S. Ct. at 455.‘ See also Texas

4. The plans rely on Capital Service, Inc. v. NLRB, 347 U.S.

501, 74 S. Ct. 699 (1954), but in that case the Supreme Court

held that a federal injunction against enforcement of a state

court order was necessary in aid of the district court's

jurisdiction over the particular case before it (an action by the

NLRB to enjoin picketing pending the adjudication of an unfair

labor practice complaint). In dictum, the Court stated that

“where Congress, acting within its constitutional authority, has

vested a federal agency with exclusive jurisdiction over a

subject matter and the intrusion of a state would result in

the conflict of functions, the federal court may enjoin the state

13a

Employers’ Insurance Association v. Jackson, 862

F.2d 491, 498-99 (5th Cir. 1988) (en banc). In

essence, the “necessary in aid of its jurisdiction”

exception is narrow and applies only in aid of a

court's exclusive jurisdiction over a_ particular

case, not over a_e general class of cases.

Accordingly, the typical application of this

exception has been in removal cases (where a

district court must ensure its exclusive governance

of the particular litigation removed)® and in in rem

cases (where, under the traditional view, only one

court can entertain jurisdiction over a particular

proceeding.” Id. at 504, 74 S. Ct. at 702. That discussion was

preceded, however, with the qualification “[iJn absence of a

command of the Congress to the contrary,” and was followed

with a mention of just such a command, the Anti-Injunction

Act.

The plans also cite Bowles v. Willingham, 321 U.S. 503,

64 S. Ct. 641 (1944), which involved the predecessor of section

2283, but we believe that Bowles rested on the Court's

interpretation of section 205 of the Price Control Act as

creating an exception to the predecessor of section 2283. See

Porter v. Dicken, 328 U.S. 252, 255 & n.1, 66 S. Ct. 1094,

1096 & n.1 (1946). Bowles therefore has no application here.

Finally, the plans cite and essentially rely on the reasoning

of Chief Justice Warren in his dissent in Amalgamated

Clothing, which recited the legislative history behind the

Anti-Injunction Act and the case law under its predecessor,

including Bowles. Suffice it to say that we cannot follow the

dissenting views of three Justices when a majority of the Court

rejected them not only then, but consistently in succeeding

cases.

5. The removal cases may also fall under the “expressly

authorized” exception, because 28 U.S.C. § 1446(e) (1988)

provides that upon removal the “State court shall proceed no

further unless and until the case is remanded.” See Mitchum

v. Foster, 407 U.S. 225, 234-37, 92 S. Ct. 2151, 2158-59

(1972).

l4a

physical res). See Erwin Chemerinsky, [Federal

Jurisdiction § 11.2.3 at 563-65 (Little, Brown,

1989). See also Jennings v. Boenning & Co., 482

F.2d 1128, 1131-35 (3d Cir. 1973).

Under this exception to the Anti-Injunction Act,

then, the plans must show that an injunction of

Nobers II is necessary in aid of the district court's

jurisdiction over the very case before it: the plans’

declaratory judgment action. In Atlantic Coast Line,

the Court emphasized the word “necessary,” and

held that for the exception to apply, a state court

case must “so interfer[e] with a federal court's

consideration or disposition of a case as _ to

seriously impair the federal court's flexibility to

decide that case.” 398 U.S. at 295, 90 S. Ct. at

1747. In this case, Nobers II does not purport to

determine the plans’ obligations. The plans are not

even parties to Nobers II, so we find no reason to

conclude that an injunction of Nobers II is

necessary for the district court in aid of its

jurisdiction over this case.

In sum, the Pennsylvania court's assumption of

jurisdiction over Nobers II is in violation of ERISA’s

supersedure provisions, but an injunction does not

lie simply because of that fact. Instead, we must

assume that the state courts will faithfully follow

federal law. On that score, we note that the

preemption issue here was not definitively resolved

until Ingersoll-Rand, which was decided after the

Pennsylvania Superior Court had ruled that Nobers

II was not preempted. Perhaps the Pennsylvania

trial and intermediate appellate courts will now

reconsider their holding. If not, then the proper

avenue of redress is appeal through the state court

system, and ultimately, if necessary, to the United

15a

States Supreme Court. See Atlantic Coast Line, 398

U.S. at 287, 90 S. Ct. at 1743.

B. “Expressly Authorized by Act of Congress”

A federal court may enjoin a state proceeding if

“expressly authorized by Act of Congress.” 28

U.S.C. § 2283 (1988). That wording is deceptively

simple, however. The Supreme Court has

emphasized that the injunction-authorizing statute

need not expressly refer to the Anti-Injunction Act.

Amalgamated Clothing Workers, 348 U.S. at:516,

75 S. Ct. at 455 (“no prescribed formula is

required; an authorization need not expressly refer

to § 2283"). Moreover, the Court has also

unanimously held that “a federal law need not

expressly authorize an injunction of a state court

proceeding in order to qualify” under the

“expressly authorized” exception. Mitchum v.

Foster, 407 U.S. 225, 237, 92 S. Ct. 2151, 2159

(1972).° Instead, the test is more complex:

[I]t is clear that, in order to qualify as an

“expressly authorized” exception to the

anti-injunction statute, an Act of Congress must

have created a specific and uniquely federal right

or remedy, that could be frustrated if the federal

court were not empowered to enjoin a state

6. In Mitchum, all seven Justices taking part joined Justice

Stewart's opinion of the Court. Justices Powell and Rehnquist

took no part in the case. Chief Justice Burger and Justices

White and Blackmun concurred to emphasize that even when

the Anti-Injunction Act does not bar an injunction against a

state court proceeding, principles of equity, comity, and

federalism may independently weigh against an injunction, as

in Younger v. Harris, 401 U.S. 37, 91 S. Ct. 746 (1971), and

its progeny.

16a

proceeding. This is not to say that in order to

come within the exception an Act of Congress

must, on its face and in every one of its

provisions, be totally incompatible with the

prohibition of the anti-injunction statute. The

test, rather, is whether an Act of Congress,

clearly creating a federal right or remedy

enforceable in a federal court of equity, could be

given its intended scope only by the stay of a

state court proceeding.

Id. at 237-38, 92 S. Ct. 2159-60 (emphasis added;

footnote and citations omitted).

In Mitchum itself, the Supreme Court had no

trouble concluding that 42 U.S.C. § 1983 was an

“expressly authorized” exception allowing

injunctions of state courts, even though the

statute on its face merely authorized suits in

equity without specifying state courts as_ the

subjects. The Court detailed the legislative history

of section 1983, and found that the Civil Rights

Act of 1871 was clearly intended to enforce the

Fourteenth Amendment against’ state action,

including judicial action. 407 U.S. at 238-43, 92

S. Ct. at 2156-60. The Mitchum test, however, has

proven more difficult to apply to other statutes

that also authorize injunctions in general (not

specifically against state proceedings), but whose

legislative intent regarding injunctions of state

courts is less clear.

The only Supreme Court case on this point since

Mitchum is Vendo Co. v. Lektro-Vend Corp., 433

U.S. 623, 97 S. Ct. 2881 (1977), where the Court

split three ways over whether section 16 of the

Clayton Act, 15 U.S.C. § 26, “expressly authorized”

injunctions against state court proceedings that

themselves violate the antitrust laws. The lead

opinion by Justice Rehnquist, joined by Justices

Stewart and Powell, concluded that although an

antitrust action is a uniquely federal right or

remedy, the Clayton Act could be given its

intended scope without staying the state court

proceeding. Distinguishing Mitchum by noting the

lack of clear legislative history regarding the

Clayton Act, id. at 633-35, 97 S. Ct. at 2888-89,

and fearing that a broad reading would mean that

all federal statutes authorizing general injunctions

would be exceptions to the Anti-Injunction Act, id.

at 635-39, 97 S. Ct. at 2889-91, Justice Rehnquist

insisted that “the Act countenancing the federal

injunction must necessarily interact with, or focus

upon, a state judicial proceeding.” Id. at 640-41,

97 S. Ct. at 2892.

That view, however, did not command a majority

of the Court.’ Justice Stevens, dissenting with

Justices Brennan, White, and Marshall, believed

that where the state proceedings were themselves

an antitrust violation, they could be enjoined

because only in that way could the antitrust laws

be given their full scope. Id. at 656-58, 97 S. Ct.

at 2900-01. Justice Blackmun, joined by Chief

7. Justice Rehnquist's opinion ts frequently referred to as the

plurality opinion, but that is not technically correct. His

opinion garnered three votes, and two Justices concurred in

the result while disagreeing almost entirely with Justice

Rehnquist's rationale. In fact, as we shall explain, the views

of the two concurring Justices on the Anti-Injunction Act (as

opposed to the underlying question of antitrust law) were

closer to those of the four dissenting Justices. Justice

Rehnquist's views were therefore only a plurality of the

majority, not of the whole Court. We therefore refer to it as

the lead opinion.

18a

Justice Burger, appeared to agree with the

dissenters on that point (the concurrence its

somewhat ambiguous), but disagreed with them on

the underlying issue of antitrust law. Because the

concurring Justices believed that the = state

proceedings were not a _ pattern of baseless,

repetitive claims, they agreed with Justice

Rehnquist's conclusion that section 16 did not

authorize the injunction given in that particular

case. Id. at 643-45, 97 S. Ct. at 2893-94. Thus

although six Justices seemed to believe that the

Clayton Act authorizes injunctions of some state

court proceedings, a majority held that no

injunction was proper on those facts.

In this case, the plans contend that section

502(a)(3) of ERISA, 29 U.S.C. § 1132(a)(3) (1988),

“expressly authorizes” injunctions of state courts

violating section 502(e)(1) of ERISA, 29 U.S.C.

§ 1132(e)(1), the exclusive jurisdiction provision of

ERISA discussed above. Section 502(a)(3) of ERISA

provides that a participant, beneficiary, or

fiduciary may bring an action

(A) to enjoin any act or practice which violates

any provision of this subchapter or the terms of

the plan, or (B) to obtain other appropriate

equitable relief (i) to redress such violations or

(ii) to enforce any provisions of this subchapter

or the terms of the plan|.]

29 U.S.C. § 1132(a)(3). The plans argue that

because Nobers II violates the exclusive jurisdiction

provision in subsection (e)(1) of that same section,

subsection (a)(3) authorizes an injunction against

Nobers II.®

8. As an initial matter, the Fifth Circuit has questioned

19a

We do not write on a clean slate on this subject.

In United States Steel Corp. Plan for Employees

Insurance Benefits v. Musisko, 885 F.2d 1170 (3d

Cir. 1989), this court held that ERISA contained

no “express authorization” of an injunction of

preempted state proceedings. We noted _ that

nothing in the language of ERISA section 502(a)(3),

29 U.S.C. § 1132(a)(3), suggests that Congress

intended that injunctions be granted against state

tribunals exceeding their jurisdiction. We further

searched the legislative history for such an

indication and found none. Id. at 1177.

The plans’ suggest that Musisko is

distinguishable because there the underlying state

law claim was by a beneficiary to recover benefits

from a plan, and under section 502(e)(1) of ERISA,

29 U.S.C. § 1132(e)(1), federal jurisdiction over

such claims (if brought under ERISA’) is not

exclusive, but concurrent with state courts’. Such

a distinction of Musisko would be disingenuous.

In Musisko, we did mention that state courts have

concurrent jurisdiction over some ERISA claims,

885 F.2d at 1177, but our purpose there was to

distinguish Mitchum and point out that Congress

had no overarching distrust that state courts

would disregard ERISA, unlike Congress's

concerns about state court violations of section

whether a_ state court suit truly “violates” 29 U.S.C.

§ 1132(e)(1), as the verb is used in 29 U.S.C. § 1132(a){3). See

Total Plan Services v. Texas Retatlers Association, 925 F.2d

142, 144 (5th Cir. 1991). We will assume, however, that Nobers

II “violates” the supersedure and exclusive jurisdiction

provisions of ERISA.

9. The preemption and supersedure provision of ERISA section

514(a), 29 U.S.C. § 1144(a), still applies.

EE

1983. The fact of concurrent jurisdiction in that

particular case was irrelevant to the decision, as

is the fact of exclusive jurisdiction in this case.

See also Total Plan Services v. Texas Retailers

Association, 925 F.2d 142, 145 n.2 (5th Cir. 1991)

(following Musisko and_ rejecting arguments

identical to those raised by the plans here).

At all events, even if Musisko were not binding

precedent, we would conclude, under the standard

in Mitchum, that ERISA can be given its intended

scope without enjoining suits such as Nobers II.

Although Congress established exclusive federal

jurisdiction over some ERISA claims, the plans

offer no evidence that Congress so distrusted state

courts that it expected that state courts would fail

to comply in good faith with the supersedure and

exclusive jurisdiction provisions of ERISA.

Moreover, although at least four and perhaps six

Justices in Vendo may have concluded that in

order to fully enforce the Clayton Act, federal

courts needed to be able to restrain substantive

violations of that Act (including repetitive,

harassing state court lawsuits), Nobers II does not

force the plans to violate substantive ERISA law.

Even if Nobers II goes to trial and the appellees

prevail, Colt and Crucible, not the plans, will pay

the judgment. No assets of the plans will be

transferred, and Nobers II will have no binding

effect on the plans, so it will not prevent them

from complying with ERISA.

The plans ask us to follow General Motors Corp.

v. Buha, 623 F.2d 455 (6th Cir. 1980), which held

that ERISA expressly authorized an injunction

against a state court writ garnishing ERISA

benefits. In Musisko, we expressed reservations

about Buha, but felt it distinguishable. The Fifth

PT ———— Eee

2la

Circuit in Total Plan Services went even futher and

rejected Buha outright. We reaffirm our conclusion

in Musitsko that Buha is_ questionable but

distinguishable. Whereas in Buha the Sixth Circuit

concluded that the state writ would have made it

impossible for the plan fiduciary there to carry out

its duties under ERISA, we see no reason why the

appellees’ success in Nobers II will make it

impossible for these plans to comply with ERISA.

In sum, we hold that section 502(a)(3) of ERISA,

29 U.S.C. § 1132(a)(3), does not “expressly

authorize” injunctions of state court actions simply

because they are preempted by ERISA, even if the

state court claims are subject to exclusive federal

jurisdiction.

C. “To Protect or Effectuate Its Judgments”

Finally, the plans contend that an injunction ts

necessary to protect and effectuate the district

court's judgment in Nobers I, which, among other

things, rejected the appellees’ LMRA claims and

dismissed their ERISA claims for failure to join

proper parties and to exhaust administrative

remedies. The plans, however, were not parties in

Nobers I, and they have not explained why they

have standing to seek such an injunction under

this res-judicata-based exception to the

Anti-Injunction Act. At all events, Colt and

Crucible, which were parties to Nobers I, sought

an injunction on precisely this ground in 1985.

The district court denied the injunction, and this

court affirmed. Colt Industries v. Nobers, No.

85-563 (W.D. Pa. Aug. 12, 1985), affd, 787 F.2d

581 (3d Cir. 1986). We see no basis to reexamine

that question now, when the same claim has been

brought in a different guise.

—— ee eee

lil. CONCLUSION

Although ERISA preempts’ the _ appellees’

state-law claims in Nobers II, the appellant plans

are not entitled to an tnjunction against Nobers II

because none of the three exceptions to the

Anti-Injunction Act applies. The judgment of the

district court will therefore be affirmed.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

23a

IN THE

UNITED STATES DISTRICT COURT FOR THE

WESTERN DISTRICT OF PENNSYLVANIA

THE 1975 SALARIED RETIRE- )

MENT PLAN, et al.,

Plaintiffs,

v. Civil Action 90-80

DAVID A. Nobers, et al.,

Defendants.

ORDER OF COURT

AND Now, this 26th day of June 1991,

IT 1s ORDERED that judgment be and hereby is entered

on behalf of defendants and against plaintiffs with respect to

all equitable claims of plaintiffs for the reasons set forth in

the order of May 30, 1991. |

/s/ DONALD E. ZIEGLER

Donald E. Ziegler

United States District Judge

ce: Counsel of record.

24a

IN THE

UNITED STATES DISTRICT COURT FOR THE

WESTERN DISTRICT OF PENNSYLVANIA

THE 1975 SALARIED RETIRE- :

MENT PLAN, et al.,

Plaintiffs,

v. > Civil Action 90-80

DAVID A. NOBERS, et al..,

Defendants.

ORDER OF COURT

AND Now, this 30th day of May 1991, after consideration

of the submissions of the parties, the court finds as follows:

1. Plaintiffs filed an amended complaint in which they

seek declaratory and equitable relief. Specially, in Counts JI,

III, VI and VII, plaintiffs seek to enjoin ongoing state court

proceedings in the Court of Common Pleas of Beaver

County, Pennsylvania.

2. Plaintiffs have failed to establish irreparable harm

from the ongoing state court proceedings because any rele-

vant defenses can and should be raised within the context of

the breach of employment contract claims of defendants’

grounded on state law-

3. Plaintiffs have failed to establish likely success on the

merits with respect to the defenses based on federal law

because these arguments have been considered and rejected

by this court and the Court of Appeals.

4. Plaintiffs are not likely to succeed on the merits of

their claims of preemption.

5. Defendants’ proposed findings of fact and conclusions

of law are adopted as the findings and conclusions of the

court because they accurately reflect the posture of the

litigation, the conclusions of this and other courts, the impact

of this litigation on defendants’ claims in state court, and the

ee

25a

adequacy of a remedy of law to plaintiffs in the state court

proceedings.

6. Plaintiffs’ claims for equitable relief will be denied.

7. Plaintiffs’ request for an extended period of discovery

with regard to their claims for declaratory relief will be

granted.

It 1s THEREFORE ORDERED that plaintiffs’ claims and

request for equitable relief be and hereby are denied because

plaintiffs have failed to meet the test for equitable relief by a

preponderance of the evidence.

It 1s FURTHER ORDERED that plaintiffs’ request for

60 days of discovery relevant to the claims for declaratory

relief be and hereby is granted.

/s/ DONALD E. ZIEGLER

Donald E. Ziegler

United States District Judge

ce: Counsel of record.

26a

IN THE

UNITED STATES DISTRICT COURT FOR THE

WESTERN DISTRICT OF PENNSYLVANIA

DAVID A. NOBERS,

ROBERT R. CAMPBELL, JR.,

GASPAR P. PORTO, GARY T.

WEEKLEY, individually and

on behalf of themselves and

all others similarly situated,

Plaintiffs,

Vv.

CRUCIBLE INC.., a corporation,

COLT INDUSTRIES, INC., a

corporation,

UNITED STEELWORKERS OF

AMERICA, INTERNATIONAL

UNION, an unincorporated

association, UNITED

STEELWORKERS OF

AMERICA, LOCAL UNION

1212, an unincorporated associa-

tion, UNITED STEELWORKERS

OF AMERICA, LOCAL UNION

3177, an unincorporated associa-

tion, UNITED STEELWORKERS

OF AMERICA, LOCAL UNION

5047, an unincorporated associa-

tion, and MELLON BANK, N.A..,

a corporation,

Defendants.

)

Civil Action 82-1846

ORDER OF COURT

AND Now, this 10th day of December, 1982,

It 1s ORDERED that the motion of plaintiffs for leave to

file an amended complaint be and hereby is granted.

27a

IT is FURTHER ORDERED that the above civil action be

and hereby is certified as a class action pursuant to Rule

23(a) and (b)(1) and (2) of the Federal Rules of Civil

Procedure.

IT is FURTHER ORDERED that the class be and hereby is

composed of all non-union, salaried, supervisors or managers

who were former members on one of the bargaining units

represented by Local Unions 1212, 3177 and 5047, and United

Steelworkers of America, International Union, at the Midland

Plant of defendants, Crucible, Inc. and Colt Industries, Inc.

IT is FURTHER ORDERED that the motions of defendants

for summary judgment be and hereby are granted with

respect to Counts 1, 2, 3 and 5 of the original complaint, and

Counts 1, 2, 3, 5 and 6 of the amended complaint.

IT is FURTHER ORDERED that the motions of defendants

to dismiss Count 4 of the original complaint and amended

complaints be and hereby are granted.

f

\ /s/ DONALD E. ZIEGLER

te

Bi Donald E. Ziegler

United States District Judge

cc: Thomas H. M. Hough, Esq.

1200 Lawyers Building

Pittsburgh, PA 15219

Paul Whitehead, Esq.

Five Gateway Center

Pittsburgh, PA 15222

William H. Powderly, II, Esq.

P. O. Box 2009

Pittsburgh, PA 15230

28a

IN THE

SUPREME COURT OF THE UNITED STATES FOR THE

WESTERN DISTRICT OF PENNSYLVANIA

DAVID A. NOBERS, et al.,

Plaintiffs,

v. Civil Action

D_1 RAF

CRUCIBLE INC., et al., No. 82-1846

Defendants.

Transcript of hearing on Motion to Dismiss at Pittsburgh.

Pennsylvania, on Friday, December 11, 1982.

BEFORE: DONALD E. ZIEGLER, United States District Judge.

APPEARANCES:

Tuomas H.M. HoucuH and Grecory GLEASON, 1200 Law-

yers Building, Pittsburgh, Pennsylvania 15219, appearing in

behalf of the Plaintiffs.

WILLIAM H. PowpDeRrLy, III and Puitip A. MISCIMARRA,

Reed, Smith, Shaw and McClay, 747 Union Trust Building,

Pittsburgh, Pennsylvania 15219, appearing in behalf of De-

fendants Crucible Inc. and Colt Industries, Inc.

PAUL WHITEHEAD, United Steelworkers of America, Five

Gateway Center, Pittsburgh, Pennsylvania 15222, appearing

in behalf of the Defendant United Steelworkers of America.

Mr. WHITEHEAD: No, Your Honor.

THE Court: All right. We will take a ten minute recess.

(Recess taken. )

THE Court: All right. The following shall constitute

findings of facts and conclusions of law.

No. 1. Plaintiffs are all non-union individual employees

of Defendant Crucible Inc., who were formerly employed as

29a

supervisors or managers at a plant operated by Defendant at

Midland, Pennsylvania. Crucible is a subsidiary of Defendant

Colt Industries, Inc. On or about October 15, 1982, the plant

was permanently closed due to unfavorable economic condi-

tions, reduced product demand and foreign competition.

No. 2. Crucible is a party to three collective bargaining

agreements with Defendant United Steel Workers of America

International Union. Each collective bargaining agreement

involves a distinct local union representing different types of

employment at the Midland facility. Local Union 1212 is a

party to the basic agreement covering the production and

maintenance employees. Local Union 5047 is a party to the

melted products agreement covering hourly paid employees

in the production, maintenance and research section of the

melted products department. Local Union 3177 is a party to

the clerical agreement covering office workers of both a

clerical and technical nature.

No. 3. Crucible and the Local union Defendants have

entered into a pension agreement with [sic] provides bene-

fits for the employees covered by the three collective bar-

gaining agreements. Defendant Mellon Bank is the trustee of

this pension plan.

No. 4. On September 3, 1982, Plaintiffs filed this civil

action on their own behalf and on behalf of a class consisting

of non-union salaried supervisory and managerial employees

of Crucible who had been employed at one time in one of the

units covered by one of the collective bargaining agreements

and represented by the Defendant Locals 1212, 3177 and

5047.

No. 5. Plaintiffs allege that historically when supervisory

and managerial employees were laid off, Crucible returned

the employees to the appropriate bargaining unit from which

they were promoted. As a result, Plaintiffs assert that they are

now entitled to return to their former bargaining units as of

the date of their most recent layoffs which occurred prior to

the closing of the plant. The company has refused to return

these persons to their various bargaining units. This determi-

nation to lay off rather than demote has the effect of denying

these employees various benefits under the collective bar-

————

30a

gaining agreement and the pension agreement. Additionally,

the refusal of Locals 12:3, 3177 and 5047 to process griev-

ances on behalf of the supervisors and managers allegedly

constitutes a breach of their duty of fair representation.

No. 6. Crucible, Colt and the Union Defendants contend

that Plaintiffs are explicitly excluded from the collective

bargaining agreements since the agreements do not apply to

supervisory or managerial employees. Additionally, Defend-

ants contend that Plaintiffs have no vested right to return to

the bargaining unit as a result of the previous acts of the

company. These previous decisions according to the Defen-

dant, were discretionary acts by Crucible and thus no vested

rights were established. Accordingly, the company has no

duty to return Plaintiffs to the bargaining unit, and the Union

Defendants owe no duty of fair representation according to

the defense. Finally, Defendants Crucible and Colt aver that

even if some right was created by these previous decisions,

the instant situation is distinguishable due to the permanent

closing of the plant and the absence of collective bargaining

units to which these Plaintiffs could now return.

No. 7. Defendants Mellon Bank, Crucible and Colt also

deny that the benefits are owed either under the collective

bargaining agreement or the pension agreement since Plain-

tiffs are not covered by any of these agreements. Addition-

ally, even if Plaintiffs have a colorable claim to benefits under

the agreement, Plaintiffs have failed to exhaust their reme-

dies under each, which, in turn, deprives this Court of

jurisdiction.

No. 8. From May 31 through October 31, 1982, Plaintiffs

and the proposed class members received payments of sever-

ance benefits in excess of $865,000 from the Severance and

Termination Allowance for Non-Union Salaried Employees

Plan established by Crucible. This plan was established under

the Employment Retirement Income Security Act of 1974, 29

U.S.C. Section 1001, et seq.

No. 9. Jurisdiction of this Court is founded upon Section

301 of the Labor Management Relations Act of 1947, 29

U.S.C. Section 185; the Declaratory Judgment Act, 28 U.S.C.

3la

Section 2201; and the Employment Retirement Income Se-

curity Act of 1974.

No. 10. For the reasons that follow we hold that Plaintiffs

have no right to be returned to the appropriate bargaining

unit from which they were promoted. Consequently, the

‘ Union Defendants owe Plaintiff no duty of fair representa-

tion. Defendants’ motions for summary judgment will be

granted.

No. 11. The starting point of our analysis is Section 301 of

the Labor Management Relations Act. That section reads as

follows: “Suits for violation of contracts between an em-

ployer and a labor organization representing employees in an

industry affecting commerce as defined in this chapter, or ,

between any such labor organizations, may be brought in any

district court of the United States having jurisdiction of the

parties, without respect to the amount in controversy or

without regard to the citizenship of the parties.” The predi-

cate for jurisdiction under the act is a contract between an

employer and a labor organization. International Brotherhood

of Teamsters v. Western Pennsylvania Motor Carriers Associa-

tion, 660 F. 2d 76, 83 (3d Cir. 1981). Since the contracts

between Crucible Inc., and the Defendants are the only

bargaining agreements at issue, Plaintiffs’ rights, if any, must

arise from these agreements. Moreover, a breach of a sepa-

rate agreement between an employer and an employee can-

not provide a jurisdictional basis for relief under Section 301

because Congress has specifically used the term “Labor

Organization.” See, Local No. 1 v. International Brotherhood

of Teamsters, 614 F.2d 846, 849, N.3, (3d Cir. 1980).

No. 12. The sole issue to be resolved by this Court is

whether the collective bargaining agreements bestow upon

Plaintiffs the right to return to their original bargaining units

following their layoffs as supervisory or managerial employ-

ees. In our judgment, such a right must either be expressly

stated in the agreements, or at a minimum the agreements

must be worded in such a manner to permit on interpretation

of such a right.

No. 13. Plaintiffs concede that no express language is

contained in any of the collective bargaining agreements

32a

which authorizes a right to return to a bargaining unit. -

However, the basic agreement and the clerical agreement

contain a clause that Plaintiffs contend should be interpreted

in this regard. The clause reads as follows: “Local working

conditions in effect at the date of this Agreement shall

continue in effect (a) unless the reason or justification for

the condition changes or disappears or (b) unless the condi-

tion is modified by the parties. If the Union is not satisfied

with the Company’s reason or justification for modifying the

working condition, the dispute may be submitted to the

complaint and grievance procedure. In no case shall local

working conditions be effective to deprive any employee of

rights under this Agreement.” The Basic Agreement,

page 124; Clerical Agreement page 109. The Plaintiffs argue

that one of the local working conditions in effect on the date

of these agreements was Crucible’s practice of permitting

supervisors and managers to return to the bargaining unit at

the time of either a layoff or removal from supervisory duties.

We disagree.

No. 14. Although the term “local working conditions” is

not defined in either the Basic or Clerical Agreements, there

is no evidence that the parties intended the decision or act of

returning supervisors or managers to the bargaining unit to

be within this phrase. Rather, the words “local working

conditions” refer to items that promote the working environ-

ment for employees. For example, a) office space for clerical

employees; b) number and length of rest and coffee breaks;

c) length of lunch period; and, d) smoking activities while

working.

No. 15. Our conclusion is based on several factors: First,

the general meaning of the words “working conditions” in

the field of industrial relations refers to those types of items

articulated in finding No. 13. See Corning Glass Works v.

Brennan, 417 U.S. 188, 200-203 (1974). Although Corning

Glass involved an interpretation of the term “working condi-

tions” as used in the Equal Pay Act of 1963, the case provides

a broad overview of the meaning of “working conditions”

consistent with our conclusion here. Second, the three bar-

gaining agreements explicitly grant to management the dis-

33a

cretion to control the work force. This discretionary grant of

power set forth in the collective bargaining contract under-

mines plaintiffs’ argument that the phrase “local working

conditions” should somehow now be construed to accord

Plaintiffs some contractual basis to assert with regard to the

phrase “local working conditions.” The specific contract

language granting the company the discretionary control of

its work force is as follows: “The management of the works

and the direction of the working forces, including the right to

hire, suspend or discharge for proper cause, or transfer, and

the right to relieve employees from duty because of lack of

work, or for other legitimate reasons, is vested exclusively in

the Company, provided that this will not be used for pur-

poses of discrimination against any member of the Union.”

Also, the clause in the Clerical Agreement provides: “The

management of the office and the direction of the working

forces, including the right to hire, promote, demote, suspend

or discharge for proper cause, or transfer, and the right to

relieve employees from duty because of lack of work or for

other legitimate reasons, is vested exclusively in the Com-

pany, provided, however, that in the exercise of such func-

tions, the Company shall not alter any of the provisions of

this Agreement and shall not discriminate against any em-

ployee because of his membership in, or lawful activity on

behalf of, the Union.” There is no evidence of improper or

discriminatory activity for use of this power by Crucible, and

we find no vested right to be returned to the bargaining unit

as asserted by Plaintiff.

No. 16. Not only do Plaintiffs fail to point to express

language in the collective bargaining agreement to support

their contention that some vested right requiring the com-

pany to return laid off supervisory personnel to the bargain-

ing units, the definition of an employee for purposes of

bargaining unit membership establishes that Plaintiffs are

without the bargaining units. A “recognition clause” is extant

in all three agreements. Except for some insignificant word-

ing, the clauses are identical and they read as follows: “The

Company recognizes the Union as the exclusive collective

bargaining representative for the employees of the Company

34a

and for the purposes defined in Article 1.” Each agreement

then proceeds to define “employee” in a different manner

owing to the different types of employment covered by each

agreement. The basic agreement states that: “The term ‘em-

ployee’ as used in this Agreement, applies to all production

and maintenance employees of the Company employed in

and about the Company’s_ steel-manufacturing, steel-

fabricating and by-product coke plants, excluding foremen in

charge of any classes of labor, office clerical workers, guards,

or watchmen, confidential and salaried employees.” The

Clerical Agreement proceeds as follows: “The term ‘em-

ployee’ as used in this Agreement applies to employees of

recognized office departments for whom the Union has been

certified by the National Labor Relations Board as the exclu-

sive collective bargaining representative, excluding depart-

ment heads, assistant department heads, supervisors and

employees of such departments doing work of a confidential

nature and/or directly pertaining to management functions.”

The Melted Products Agreement reads: “The Union rep-

resents and this contract applies only to hourly paid employ-

ees in the Company’s production, maintenance and research

Sections in its Vacuum Melted Products Department. The

Union does not represent and this contract does not apply to:

(a) foremen in charge of any class of labor, office clerical

employees, guards or watchmen, salaried employees, and

employees who do work of a confidential nature and/or

which directly pertain to management functions, and (b>

management trainees hired by the Company for work not

covered by the contract but who may be assigned to work

covered by the contract during their prescribed training

period; provided, however, that these assignments shall not

result in the layoff of employees covered by this Agreement.”

We find that Plaintiffs as supervisory or management person-

nel are not employees within the definition of “employee” in

the collective bargaining agreements, and, accordingly, may

not claim benefits resulting from the agreements. In this

regard, as we understand Plaintiffs’ argument, they do not

dispute that they are without the bargaining units due to

their supervisory or managerial status from a purely defini-

35a

tional standpoint of “employee.” Rather, Plaintiffs contend

that although they were supervisors and managers before

their layoff, at the moment they were laid off they no longer

could exercise supervisory or managerial duties, and, thus,

they becarme employees within the bargaining units. We

disagree, because the layoff did not affect the status of the

employees, either prior to or following the layoff. Plaintiffs

were supervisors and managers at all times. Plaintiffs’ argu-

ment is analogous to an employee attempting to argue that if

an employee is laid oft he or she is no longer an employee,

and, thus, has no rights under the collective bargaining

agreement. Obviously, a layoff cannot affect the status of an

employee. See Wallick and Schwalm Company, 95 N.L.R.B.

1262 (1951). It follows that since Plaintiffs were supervisory

and managerial employees Crucible and Colt Industries have

no duty to arbitrate, nor do the Defendant Locals or the

International, any issue with these persons. See United Steel-

workers Local 1617 v. General Fireproof Company, 464 F.2d

726 (6th Cir. 1972) and General Telephone Company of Cali-

fornia v. Communications Workers of America, 402 F.2d 255

(9th Cir. 1968). It further follows that the Local Unions have

breached no duty of representation since they do not repre-

sent the Plaintiffs. Cooper v. General Motors Corporation, 651

F.2d 249 (5th Cir. 1981).

No. 17. The only sections of the agreement which grant

any rights to the supervisory or managerial personnel deal

with seniority. The seniority clauses of the Basic and Clerical

Agreements are practically identical. The distinctions are

irrelevant for the disposition of this matter at hand. The

clause reads as follows: “In the event that the employee

covered by this agreement is promoted following August 2,

1956, to a supervisory position not so covered, and is later

demoted to a classification covered by this Agreement, the

employee shall assume his seniority as accrued at the time of

his promotion plus credit for time spent in the supervisory

position up to two years following his promotion.” And then

there is a clause which deals with older employees. The

seniority clause in the Melted Products Agreement states: “In

the event an employee covered by this Agreement is tempo-

36a

rarily transferred to a position not covered by this Agree-

ment, he shall continue to accrue continuous service while

such transfer remains temporary. An employee assigned as a

temporary foreman on a weekly basis will not work overtime

in the bargaining unit during the week in which he is

assigned as a temporary foreman.” Here Plaintiffs aver that

Crucible and the United Steelworkers bargained over super-

visory rights: First, by preserving accumulated seniority of

bargaining unit members promoted to supervisor; second, by

permitting these supervisors to accumulate bargaining unit

seniority while serving as supervisors. As a result of this

bargaining, Plaintiffs contend that the Union now owes the

supervisors a duty of fair representation. We again disagree.

No. 18. The seniority clauses do not require the Com-

pany to demote rather than lay off. Rather, management has

the sole discretion concerning control of the work force.

Management alone can decide whether to demote or lay off

supervisory and managerial persons. The seniority clause

does not bind management to choose demotion over layoff or

vice versa. See United Steelworkers Local No. 1617 v. General

Fireproof Company, 464 F.2d 726 (6th Cir. 1972); Gannon v.

Baltd Anchor and Chain, 459 F. Supp. 457 (E.D. Pa.), aff'd

mem. 588 F.2d 820 (3d Cir. 1978). Consequently, the Unions

only have a duty of fair representation to supervisors once

they have been demoted. If management decides not to

demote, the Union owes no duty to supervisors since they are

not members of the collective bargaining unit. Cooper v.

General Motors Corporation, 651 F.2d 249 (5th Cir. 1981).

No. 19. Plaintiffs’ reliance upon United Steelworkers of

America v. Canron, Inc., 580 F.2d 77 (3d Cir. 1978), is mis-

placed. Plaintiffs contend that Canron holds that the question

of arbitrability of a dispute is not determined by the status of

the grievant but by the nature and duties of the obligations

of the parties under contract. Thus, the issue is not whether

Plaintiffs were supervisors or managers without the bargain-

ing unit, rather whether Crucible bargained with the Union

over rights and/or benefits. And in our judgment the facts in

Canron are distinguishable. In Canron the Plaintiffs were

retired employees claiming the employer under the collec-

————

37a

tive bargaining agreement agreed to provide health and life

insurance benefits for the retiree. Some of the retirees have

never worked for Canron, but had worked for a subsidiary

acquired by Canron. The collective bargaining agreement

provided grievance procedures for members employed by

the Company. Although the agreement delineated these ben-

efits for retirees, the Company argued that as to those

retirees who never worked for Canron, the grievance proce-

dures were inapposite. The Court of Appeals concluded that

the collective bargaining agreement was subject to an inter-

pretation that the retirees could utilize the grievance proce-

dure because the collective bargaining agreement was

ambiguous. The Court was unable to say, as a matter of law,

the grievance procedures excluded those retirees. Thus, arbi-

tration was granted as to his issue.

No. 20. Here, to the contrary, this Court can unequivo-

cally state that as a matter of law the supervisors and manag-

ers are not covered by the collective bargaining agreements.

The agreements are perfectly clear, to wit, unless the super-

visors are first demoted they have no rights. Ambiguity does

not exist under our facts, and, accordingly, Canron is not

controlling.

No. 21. For purposes of comprehensive appellate review,

we will address the past decisions of Crucible in returning

supervisors to the bargaining unit from a perspective other

than an interpretation of the collective bargaining agree-

ments. Although Plaintiffs in their complaint rely exclusively

upon the Local working conditions clause to establish this

right of return, it is possible to interpret the complaint as

stating that past incidents constituted a modification of the

collective bargaining agreement or agreements. The modifi-

cation can be analyzed from two different perspectives: First,

from the rights of the members in the bargaining unit; and,

second, the binding effect upon the company and the super-

visors resulting from modification by past action.

No. 22. If Plaintiffs were granted a vested right to return

to the bargaining units, this would involve a modification of

the collective bargaining agreements. Two portions of the

agreement would be modified: First, the management discre-

38a

tion clause would be affected because management would be

prohibited from controlling the work force. Of more signifi-

cance, the seniority clause would be altered because the

motion would be automatic. Ostensibly, the rights of the

members of the bargaining unit would be changed because a

supervisor would be automatically demoted which conceiva-

bly could displace a member in the bargaining unit from his

employment. Thus, the members have relinquished job se-

curity through no action of their own. Accordingly, a unilat-

eral modification of the collective bargaining agreement

would occur by management to the detriment of the mem-

bers which is impermissible. See N.L.R.B. v. Katz, 369 U.S. 736

(1962).

No. 23. Aside from the effect upon the members of the

bargaining units, a modification may alter the rights of man-

agement. Past practice will not create vested rights if the

actions contradict the express terms of the collective bargain-

ing agreements, Ford Motor Company, 19 LA 237, (1952)

(Shulman, Arb.). especially when the past action involves a

basic management function such as direction of the work

forces. LeBlond Machine Tool, Inc., 76 LA 827, (1981) (Kee-

nan, Arb.). Applying this analysis to the facts at hand, man-

agement had absolute discretionary rights as expressed by

the terms of the collective bargaining agreements. Accord-

ingly, the past incidents of returning supervisors to the

bargaining units did not create vested rights binding upon

management. As a result, summary judgment will be entered

for the Defendants on all claims except the claim posted

under ERISA.

No. 24. We also find that this Court has no jurisdiction

under ERISA because Plaintiffs have failed to sue the proper

Defendant and exhaust their remedies in pursuing the matter

against the pension plan. We will, therefore, enter a Rule

12(b) motion to dismiss the claim or claims of Plaintiffs

posted on the ERISA counts. In all other regards, a motion

for summary judgment will be entered.

Now, it seems to the Court that certification of the class

is appropriate. Rule 23 provides requisites to a class action:

One or more members of a class may sue or be sued as

39a

representative parties on behalf of all only if, one, the class is

so numerous that joinder of all members is impracticable,

which applies here; two, there are questions of law or fact

common to the class, which certainly applies here: three, the

claims or defenses of the representative parties are typical of

the claims of the class, which certainly applies here, and the

Court so finds; and, four, the representative parties will fairly

and adequately protect the interests of the class, which is

true in this case. The representatives have fairly and ade-

quately protected the interests of the class which we will

certify. Counsel for the Plaintiffs is competent to represent

this class. He is an experienced practitioner. The briefs and

papers of record were very precise, and, indeed, outstanding

on behalf of these claimants although he had a heavy burden

in light of the precedent throughout this republic. And we

find that the representative parties have fairly and adequately

protected the interests of the class so as to authorize certifi-

cation under Rule 23(a).

With regard to (b), an action may be maintained as a

class action if the prerequisites of (a) are satisfied, and, in

addition, one, the prosecution of the separate action by or

against individual members of the class would create a risk of

inconsistent or varying adjudication with respect to individ-

ual members of the class which would establish incompatible

standards of conduct for the party opposing the class, and we

find that that certainly is applicable here; or, (b), adjudica-

tions with respect to individual members of the class which

would, as a practical matter be dispositive of the interests of

the other members not parties to the adjudications or sub-

stantially impair or impede their ability to protect their

interests - again, we find this is established under the circum-

stances; and, two, the party opposing the class has acted or

refused to act on the grounds generally applicable to the class

thereby making appropriate final injunctive relief or corre-

sponding declaratory relief with respect to the class as a

whole. The Court also finds as a fact that that situation has

been established. Since we have certified this under a Rule

23(a) and (b) (1) and (2) class, there is no need that notifica-

40a

tion be given to the other members of the class in light of the

findings of this Court.

Now, the cases do indicate that the Court must be very

careful in defining the class. The class in this instance is the

non-union salaried employees of the Defendant Crucible

who were formerly employed as supervisors or managers at a

plant operated by Defendants in Midland, Pennsylvania, and

who had been employed at one time in one of the units

covered by one of the collective bargaining agreements and

represented by the Defendant Locals 1212, 3177 and 5047.

A written order will follow.

Now. have I failed to address any issue, and is the class

certification proper?

Mr. POWDERLY: Yes.

THE Court: All! right. Anything further?

Very good. Thank you.

(Whereupon, the proceedings were concluded. )

Certified true and correct transcript.

Colvin G. Vogel, Official Reporter

4la

SUPERIOR COURT OF PENNSYLVANIA

PITTSBURGH DISTRICT

DAVID A NOBERS,

ROBERT R. CAMPBELL, JR.

GASPER P. PORTO, AND

GARY T. WEEKLY,

INDIVIDUALLY AND ON

BEHALF OF THEMSELVES

AND ALL OTHER SIMILARLY

SITUATED.

Appellant

. Ws

CRUCIBLE, INC., A CORPORA-

TION AND COLT INDUSTRIES.

INC., A CORPORATION

‘

ORDER

No. 1251

Pittsburgh, 1987

AND Now, this 25th day of July, 1988, it is ordered as

follows:

___ Order affirmed.

___ Order reversed.

X Judgment Reversed. Jurisdiction is relinquished.

____ Judgment of Sentence affirmed.

____. Judgment of Sentence reversed.

____ Order vacated and lower court directed to proceed

in accordance with opinion filed herewith.

___. Order modified as set forth in opinion filed

herewith.

____. Costs to be taxed as provided by Chapter 27 of the

Pa.R.A.P.

ee

42a

___. Costs to be taxed as provided in opinion filed

herewith.

____. Appeal quashed.

By THE COURT

/s/ ELEANOR R. VALECKO

Deputy Prothonotary

43a

IN THE SUPERIOR COURT OF PENNSYLVANIA

DAVID A. NOBERS, ROBERT R.

CAMPBELL, JR., GASPER P.

PORTO, AND GARY T.

WEEKLY, INDIVIDUALLY AND

ON BEHALF OF THEMSELVES

AND ALL OTHERS SIMILARLY

SITUATED. No. 1251

Appellant Pittsburgh 1987

¥.

CRUCIBLE, INC., A CORPORA-

TION AND COLT INDUSTRIES,

INC., A CORPORATION,

Appellee

Appeal from the Judgment of the Court of

Common Pleas of Beaver County, Civil

at No. 843-1984.

BEFORE: TAMILIA, POPOvICH and HOFFMAN, JJ.

OPINION BY Popovic, J: Filed: July 25, 1988

This is an appeal from the judgment of the Court of

Common Pleas of Beaver County granting the preliminary

objections in the nature of a demurrer as to jurisdiction

against the appellants/plaintiffs (David A. Nobers, Robert R.

Campbell, Jr., Gasper P. Porto and Gary T. Weekly, individu-

ally, and on behalf of themselves and all other similarly

situated). We reverse.

Since review of the sustainment of preliminary objec-

tions in the nature of demurrer is sought, the well-pleaded

factual allegations set forth in the complaint are to be re-

garded as true. Irti v. Equibank. N.A., 318 Pa. Super. 268, 464

A.2d 1336 (1983). Further, if the facts as pleaded state a claim

for which relief may be granted under any theory of the law,

then there is sufficient doubt to require the preliminary

44a

objections in the nature of a demurrer to be rejected. Mazza-

gatti v. Everingham, 512 Pa. 266, 516 A.2d 672 (1986).

Viewed in this light, the record indicates that the plain-

tiffs filed a two-count complaint seeking “class action” certifi-

cation to recoup damages from the appellees/defendants

(Colt Industries, Inc. and its wholly owned subsidiary, Cruci-

ble. Inc., now incorporated as Colt Industries Operating

Corp.) for violation of an alleged oral agreement/implied

contract whereby the class of plaintiffs was “explicitly prom-

ised”, at the time of promotion from a collective bargaining

unit to a supervisory or managerial position, “a right to return

to the bargaining unit from which promoted at the time of

layoff or to be treated as a bargaining unit person on layoff

status.” (Paragraph 36)

Prior to the defendants ultimately closing all or part of

their plant in Midland, the plaintiffs were laid-off or dis-

charged as salaried employees instead of being returned to

the bargaining unit out of which they initially were promoted

or allowed to maintain laid-off status in the same unit. This,

the plaintiffs contended, resulted in their incurment (sic) of

damages “in the form of lost supplemental unemployment

benefits. ...lost immediate pension benefits ....lost pen-

sion benefits ... [and] lost insurance benefits.” (Paragraphs

43-46, 50-53)

Thereafter, the defendants filed a petition seeking to

remove the suit to the United States District Court for the

Western District of Pennsylvania on grounds of compliance

with 28 U.S.C. § 1332 and 1441 (Diversity of citizenship and

amount in controversy exceeded $10,000), as well as pendent

and ancillary jurisdiction, the latter of which referred to the

District Court’s prior ruling in favor of the defendants re-

garding the same subject matter in Nobers, et al. v. Crucible,

Inc., et al., Civil Action No. 82-1846 (W.D. Pa. 1982), affd

mem. 722 F.2d 733 (3rd Cir. 1983) warranting such a removal.

The plaintiffs responded by submitting a motion with the

same court seeking to remand the case to Common Pleas

Court. Therein, they claimed that the joint actions of the

defendants, which were inseparable and not discrete, ren-

dered removal under Section 1441 inappropriate. Further,

45a

because the prior federal suit involved additional parties not

presently named, was based on the Labor Management Rela-

tions Act (29 U.S.C. § 185) and was brought to enforce the

terms of a collective bargaining agreement, as compared to

an express or implied contract of employment, it was averred

that “[t]here was no factual nexus between the two cases to

which the principles of res judicata or collateral estoppel

appl [ied] such that the Court’s ancillary or pendent jurisdic-

tion m[ight] be the basis for removal of the[] proceedings.”

The District Court agreed and entered an order to that effect

on February 8, 1985.

Twenty days after the District Court remanded the suit

to Common Pleas Court, the defendants filed preliminary

objections in the nature of a demurrer contemporaneously

with presenting a complaint in federal court to enjoin the

plaintiffs’ state action.

In its complaint, the defendants stated that the unfavora-

ble outcome of the previous federal suit by the plaintiffs at

No. 82-1846, being premised upon the same allegations of

contractual breach, made the state suit nothing more than

“an attempt to evade judgment in Civil Action No. 82-1846”

by the plaintiffs. Additionally, the defendants asserted that

the plaintiffs’ claims seeking the recoupment of damages

“relate[d] to an[] employee benefit plan|[ |”, and, as a result,

were exclusively within the province of the Employee Retire-

ment Income Security Act' (ERISA) and not subject to

review in state court.

The plaintiffs filed an answer to the federal complaint in

which they alleged, inter alia, that the state action was

premised upon “a common law claim for breach of contract”

and not a violation of a collective bargaining agreement, as

had been the case in the earlier federal suit. Thus, res

judicata did not apply. Further, the plaintiffs went on to

contend, “because there [were] no federal claims in the

pending state court action”, notions of federal pre-emption

did not come into play since “[q]uestions of pre-emption are

determined by reference to the basis of liability not the scope

'29 U.S.C. § 1000 et seq.

46a

of the remedy.” The end result of the federal complaint was

its dismissal by court order dated August 12, 1985.

As for the content of its preliminary objections, the

defendants averred that “no employment relationship” ex-

isted between Colt Industries, Inc. and the plaintiffs. Thus, no

agreement, either oral or written, bound the two contractu-

ally. Also, because the plaintiffs’ prior federal suit covered

“virtually” the same subject matter, “|t]|he instant action

|was|... barred by the doctrine of res judicata.” (Defend-

ants’ Complaint, Paragraph 12)

In response, the plaintiffs denied the availability to the

defendants of res judicata or collateral estoppel as a defense

since the issue litigated in the earlier federal suit (scope of

collective bargaining agreement) was not identical to the

present suit. which, in contrast, sought relief under “common

law claims for breach of an express and/or implied contract

of employment.” (Plaintiffs’ Response to Defendants’ Prelim-

inary Objections, Paragraph 3)

Prior to argument, the defendants filed an amendment to

their preliminary objections contending that, by stipulation,

the parties had agreed that the plaintiffs’ suit against the

defendant Colt Industries was for tortious interference of the _

plaintiffs’) contract with Colt Industries Operating Corp..,

Colt’s subsidiary. As such, the tort allegedly committed by

Colt Industries, Inc. was “solely cognizable under Section 510

of... ERISA, 29 U.S.C. § 1140”, resulting, so believed the

defendants, in the state action being pre-empted by Section

514 of ERISA, 29 U.S.C. § 1144 and subject to dismissal.

Following argument, the Common Pleas Court issued an

order granting the defendants’ preliminary objections as to

jurisdiction and dismissed the action. This timely appeal

ensued.

The sole contention raised centers upon whether the

plaintiffs common law cause of action for breach of contract,

alleging the loss and seeking the reinstatement. of supplemen-

tal unemployment, pension and insurance benefits, is pre-

empted by ERISA so as to divest Common Pleas Court of

jurisdiction to hear the complaint.

47a

As noted most recently by a panel of this Court:

“|T]|he question whether a certain state action is pre-

empted by federal law is one of congressional intent.

‘“The purpose of Congress is the _ ultimate

touchstone.”’”

Engle v. West Penn Power Co., Pa. Super. ‘ 530

A.2d 913, 915 (1987) (Citation omitted).

. In light of the aforesaid, we observe that Congress

enacted ERISA to afford comprehensive federal protection of

the interests of participants in employee benefit plans. See 29

U.S.C. § 1001; Lukus v. Westinghouse Electric Corp., 276 Pa.

Super. 232, 419 A.2d 431 (1980) (allocatur refused, June 1,

1980). Instantly no one disputes that the defendants’ Supple-

mental Unemployment Benefit Plan, Pension Agreement and

Program Insurance Benefits fall under the label of either an

employee benefit plan, defined benefit plan or welfare bene-

fit plan, respectively. (See RR 22a, 40a and 87a) And, as such,

are subject to the provisions of ERISA. See 29 U.S.C. § 1003.

State regulation of the plans is therefore restricted by 29

U.S.C. § 1144, which provides:

(a) Except as provided in subsection (b) of this section,

the provisions of this subchapter and subchapter III of

this chapter shall supersede any and all State laws insofar

as they may now or hereafter relate to any employee

benefit plan. ...

° ° s

(c) For purposes of this section:

(1) The term “State law” includes all laws, decisions,

rules, regulations, or other State action having the effect

of law, of any State.

(2) The term “State” includes a State, and political

subdivisions thereof, or any agency or instrumentality of

either, which purports to regulate, directly or indirectly,

the terms and conditions of employee benefit plans

covered by this subchapter.

(Emphasis added)

48a

It is the position of the defendants and the court below

that the plaintiffs’ claim for damages. inasmuch as it seeks

satisfaction through the attainment of benefits provided for

under the various plans, “related to” employee benefit plans.

This, in turn, brings the plans within the ambit of ERISA’s

pre-emptive status, and, as a result, subjects the suit to

exclusive federal jurisdiction. (See Defendants’ Brief at 7:

Lower Court’s Opinion at 7) We find the contentions of the

defendants and court below to be disingenuous, and we do so

on the instructive case of Shaw v. Westinghouse Electric Corp.,

276 Pa. Super. 220, 419 A.2d 175 (1980) (reargument denied,

July 8, 1980).

In Shaw, the plaintiff filed a two-count complaint in

assumpsit, the first portion of which concerns us since it was

alleged therein that the plaintiffs employer breached its

contract with Shaw by not paying him promised salary in-

creases. It was further averred that, as a result of the breach,

Shaw sustained losses in (1) “retirement and disability bene-

fits” and (2) “pension benefits”.

Prior to completion of the trial, the employer filed a

motion to dismiss the action on the ground that ERISA

rendered the court without jurisdiction over the subject

matter of the complaint. With the denial of the motion, an

appeal was perfected to this Court. In the course of denying

the employer’s arguments with regard to the pre-emptive

effect of ERISA, we wrote:

Section 1144(a) explicitly states that the provisions of

ERISA supersede State laws only “insofar as they...

relate to any employee benefit plan.” The question for

disposition, therefore, is whether Shaw’s assumpsit ac-

tion against Westinghouse for disability and retirement

benefits may be said to “relate to” the disability benefits

and retirement pension plans established by Westing-

house for its employees. More precisely, the question is

whether Shaw’s assumpsit action constitutes an attempt

to regulate areas explicitly governed by the provisions of

ERISA, or whether: the action relates primarily to mat-

ters not governed by ERISA, and only indirectly affects

Westinghouse’s employee benefit plans in a way not in

e

Ped

49a

conflict with the purposes of [sic| ERISA is designed to

achieve. If the former is true, then the action may be

pre-empted by section 1144; but if the latter is true, the

action is not pre-empted. See Lukus v. Westinghouse

Electric Corp., supra (collecting cases); Commonwealth

ex rel. Magrini v. Magrini, 263 Pa. Super. 366, 398 A.2d

179 (1979).

oO o ° °

The present case...involve|s]...alleg[ations] that

Westinghouse established a plan providing fewer bene-

fits than the benefits Westinghouse promised him, Shaw

alleges that Westinghouse has paid him less salary and

fewer bonuses than it promised to pay, and that as a

result, he has received, and will continue to receive in

the future, fewer benefits under Westinghouse’s disabil-

ity benefits and retirement pension plans than he would

have received had he been properly paid by Westing-

house. Thus, in order for Shaw to recover on his claims,

the lower court will be required to determine what

Shaw’s benefits would have been under the plans had

Westinghouse paid him the promised salary increases

and bonuses. Additionally, the court may be required to

determine whether Shaw will have a future claim against

the disability benefits and retirement pension plans for

increased benefits based upon a judgment recovered

against Westinghouse on his salary and bonus claims.

Should the lower court find it necessary to address such

issues, then it might be argued that the lower court

would be making an adjudication “relating to” the plans.

We are, nevertheless, unable to conclude that the lower

court’s adjudication would violate section 1144 of

ERISA.

Initially, we note that section 1132(e)(1) of ERISA

grants state courts competent [sic] jurisdiction and fed-

eral district courts concurrent jurisdiction of an action

brought by a participant in an employee benefit plan to

recover benefits due to him under the terms of the plan,

or to enforce his rights under the terms of the plan, or to

clarify his rights to future benefits under the terms of the

50a

plan. Thus. Congress has explicitly given state courts the

power to adjudicate the very issues the lower court may

be required to reach in Shaw's suit agairst

Westinghouse.

...the nature of Shaw’s action and the limitation in

section 1144(a) of ERISA that only state laws that “re-

late to” employee benefit plans are superseded by the

Act. Shaw’s suit against Westinghouse relates solely to

Westinghouse’s liability for breach of an employment

contract. Admittedly, in determining Westinghouse’s lia-

bility. the lower court may have to make determinations

concerning Shaw’s present and future rights to benefits

under Westinghouse’s plans. and decide whether Shaw's

right to participate in the plans has been wrongfully

impaired by Westinghouse. Yet, these determinations

will affect only the rights and liabilities of the parties to

this action (i.e., Shaw and Westinghouse) towards each

other: specifically, unless Westinghouse and its em-

ployee benefits plans are privies or the plans perform

some act that estops them from questioning the lower

court's determinations at a later date, the determinations

of the lower court in this case will not conclude the

rights and liabilities of the plans and Shaw inter se. See

generally Safeguard Mutual Ins. Co. v. Williams, 463 Pa.

567, 574, 345 A.2d 664, 668 (1975): Albert v. Lehigh Coal

& Nav. Co., 431 Pa. 600, 613, 246 A.2d 840, 846 (1968):

Thompson v. Karastan Rug Mills, 228 Pa. Super. 260, 323

A.2d 341 (1974).

276 Pa. Super. at - , 419 A.2d at 179-180 (Footnote

omitted; emphasis in original).

At bar, as in Shaw, the plaintiffs’ suit relates solely to the

defendants’ liability for breach of an employment contract.

the existence of which is in dispute and, therefore, subject to

resolution by a fact-finder. More importantly, as pointed out

in Shaw, the plaintiffs’ rights to benefits and whether partici-

pation under the various plans have been wrongfully denied

“atfect|s] only the rights and liabilities of the parties to this

action”, and “the determinations of the lower court in this

5la

case will not conclude the rights and liabilities of the plans

and |the plaintiffs] inter se.” Id.

The association between the suit and the plans being

tangential at best, we fail to see how ERISA is any more than

incidentally involved, a factor which counsels against us

concluding that the plaintiffs’ claim is pre-empted by ERISA.

To the same effect see Welsh v. Northern Telecom, inc., 354

S.E.2d 746 (Ct. App. N.C. 1987); Golen v. Chamberlain Manu-

facturing Corp., 139 Ill.App.3d 53, 93 Ill.Dec. 677, 487 N.E.2d

121 (1985): and Shaver v. N.C. Monroe Construction Co., 306

S.E.2d 519 (Ct. App. N.C. 1983), and compare with B.F.

Tatterson v. Koppers Co., Inc., 312 Pa. Super. 326, 458 A.2d 983

(1983).

Since we conclude that Shaw controls the outcome of

this case and warrants a reversal of the lower court’s actions,

we see no need to engage in a dissertation of the law other

than what has already been stated on the subject under

review.

Accordingly, consistent with our findings this day, we

reverse the judgment of the court below. Jurisdiction is

relinquished.

Opinion filed - August 7, 1987 - Judge Joseph S. Walko

DAVID A. NOBERS, ROBERT R.

CAMPBELL JR., GASPER P.

PORTO and GARY T. WEEKLY.

individualiy and on behalf of

themselves and all others

similarly situated,

Plaintiffs No. 843 of 1984

¥.

CRUCIBLE INC.. a corporation

and COLT INDUSTRIES, INC., a

corporation,

Defendants

PRELIMINARY OBJECTIONS - ERISA -

PRE-EMPTION - LACK OF JURISDICTION

1. If the well-pleaded material, relevant facts and every

inference fairly deducible from those facts state a claim for

which relief may be granted under any theory of law, then

there is sufficient doubt to require the preliminary objection

in the nature of a demurrer must be rejected.

2. Section 502 of ERISA sets forth a comprehensive

enforcement scheme for civil actions which may be brought

by a participant or beneficiary. 29 U.S.C. § 1132.

3. A state law which “relate(s) to any employee benefit

plan” is pre-empted by ERISA, § 514(a),(b) (2) (A), 29 U.S.C.

§ 1144(a),(b) (2) (A).

4. The express pre-emption provisions of ERISA are

deliberately expansive and are designed to establish pension

plan regulation is exclusively a federal concern.

5. The phrase “relate to any employee benefit plan”

must be given its broad common sense meaning so that if a

state law has a connection with or reference to such a plan, it

is pre-empted.

53a

6. Plaintiffs’ Complaint seeks damages in the form of lost

supplemental unemployment benefits, lost immediate pen-

sion benefits, lost pension benefits in the event of a plant

closing and lost insurance benefits. Because Plaintiffs claim

for damages goes directly to the establishment of © benefit

plan, plaintiffs’ claim does “relate to an employee benefit

plan.” Therefore, as mandated by the ERISA provisions, this

Court is without jurisdiction.

Attorneys for Plaintiffs

Thomas H. M. Hough, Esquire

Gregory Gleason, Esquire

Attorneys for Defendants

William H. Powderly, III, Esquire

Peter D. Post, Esquire

Walter G. Bleil, Esquire

54a

COURT OF COMMON PLEAS FOR THE

COUNTY OF BEAVER

PENNSYLVANIA

Civil Division

DAVID A. NOBERS, ROBERT R. _ )

CAMPBELL, JR., GASPER P.

PORTO and GARY T. WEEKLY,

individually and on behalf of

themselves and all others

similarly situated,

Plaintiffs > No. 843 of 1984

¥.

CRUCIBLE INC., a corporation

and COLT INDUSTRIES, INC., a

corporation,

Defendants }

OPINION

WALKO, J. August 7, 1987

Presently before the Court are the Preliminary Objec-

tions filed by Defendants Crucible Inc. and Colt Industries,

Inc. (Colt) in which they argue that the allegations raised in

Plaintiffs’ Complaint are barred by the doctrine of res judi-

cata and that the Court lacks jurisdiction over the claim for

Defendant Colt’s tortious interference with the contractual

relationship between Defendant Colt Industries Operating

Corporation (CIOC) (formerly Crucible, Inc.) and Plaintiffs.

A preliminary objection in the nature of a demurrer

admits as true all well-pleaded material, relevant facts and

every inference fairly deducible from those facts. Only where

the Complaint clearly and without a doubt fails to state a

claim for which relief may be granted can a demurrer be

sustained. County of Allegheny v. Commonwealth, 507 Pa. 360,

372, 490 A.2d 402, 408 (1985). If the facts as pleaded state a

claim for which relief may be granted under any theory of

55a

law, then there is sufficient doubt to require the preliminary

objection in the nature of a demurrer to be rejected. Mazza-

gatti v. Everingham by Everingham, Pa. , 516

A.2d 672, 675 (1986).

It is under the above standard of review that we analyze

the facts, stipulated to by the parties, of the present case.

On June 25, 1984, Plaintiffs, supervisors of Crucible, filed

the instant Complaint alleging that at the time of their

supervisory promotion there was an oral and/or implied

contract containing a right, at the time of layoff, to return to

the bargaining unit from which they were promoted or to be

treated as a bargaining unit person in layoff status. Plaintiffs

claim that Defendants have breached this provision which

has resulted in the loss of immediate and future pension,

insurance, severance and other benefits. Plaintiffs also allege

that Colt instructed CIOC not to return Plaintiffs to their

bargaining unit status when the Midland plant closed on

October 31, 1982 so as to avoid the cost of benefits applicable

to bargaining unit employees.

To properly discuss the case sub judice, we must review

the previous litigation between the parties.

On September 3, 1982, Plaintiffs filed a Complaint in the

U.S. District Court for the Western District of Pennsylvania

against Colt Industries, Inc.; Crucible Inc., now Colt Indus-

tries Operating Corporation (CIOC); the United Steelwork-

ers of America, International Union; United Steelworkers of

America, Local Union 1212, 3177, 5047; and Mellon Bank,

N.A. Jurisdiction was premised on the Labor Management

Relations Act (LMRA), 29 U.S.C. § 185; Employee Retire-

ment Income Security Act (ERISA), 29 U.S.C. § 1001 et seq.;

and the Federal Declaratory Judgment Act, 28 U.S.C. § 2201.

On November 12, 1982, the United Steelworkers of

America and the affiliated local unions filed Motions to

Dismiss, or in the alternative, Motions for Summary Judg-

ment. On November 18, 1982, the same Motions were also

filed by Colt, CIOC and Mellon Bank.

In his Order dated December 10, 1982, Judge Ziegler

granted Plaintiffs leave to file an Amended Complaint, dis-

|

56a

missed the ERISA claim and granted Defendants’ Motion for

Summary Judgment on all other counts. Judge Ziegler also

certified the class of Plaintiffs consisting of all supervisory

and managerial employees of Crucible who had been em-

ployed in job classifications included in the collective bar-

gaining units represented by Defendants United

Steelworkers of America, Local Unions 1212, 3177 and 5047

and promoted to non-union eligible positions.

On September 21. 1983, the Court of Appeals for the

Third Circuit affirmed the judgment without Opinion, 722

F.2d 733 (3d Cir. 1983).

Having reviewed the previous Federal litigation between

the parties. we will now continue our discussion and exami-

nation of the pleadings filed in the present case.

In response to Plaintiffs’; Complaint, on July 26, 1984.

Colt and CIOC filed a Petition for Removal based on diver-

sity of citizenship and ancilliary jurisdiction over the State

Court Complaint because of the District Court's previous

ruling.

On September 19, 1954, Plaintiffs filed a Motion to

Remand to this Court. On February §, 1985, Judge Ziegler

granted Plaintiffs’ Motion to Remand. Nobers v. Crucible, Inc.,

602 F. Supp. 703 (W.D. Pa. 1985). Judge Ziegler noted that he

was at a loss to explain the failure of Plaintiffs to include the

oral and/or implied contract agreements as pendent claims in

the original Federal action. Nobers at 708-709.

On March 1, 1987, Defendants filed the present prelimi-

nary objections and on October 10, 1985, filed the amend-

ment to preliminary objections.

On March 11, 1985, Colt and CIOC filed an action in the

District Court pursuant to the All Writs Act requesting the

Court to enjoin the State Court proceeding brought against .

Colt and CIOC asserting that the pending state claims should :

have been alleged as pendent claims in the previous Federal

action and are now barred by res judicata.

On August 12, 1985, the District Court denied the re-

quest for injunctive relief and dismissed the Complaint. The

Court agreed with Defendants (Plaintiffs in the present

57a

action) that the pending common law contract claims are

separate and distinct from the previous claims which were

based on the collective bargaining agreement even though

they could have been appended to the earlier Federal action.

Judge Ziegler noted, that if the pendent state law claim had

been asserted after the December 10, 1982 Order, the Court

would have dismissed them without prejudice since judg-

ment was entered well in advance of trial.

On March 6, 1986 the Court of Appeals for the Third

Circuit affirmed and Defendants’ Petition for Rehearing was

denied.

It is Defendants’ contention that the Complaint fails to

state a claim upon which relief can be granted against

Defendant Colt because Plaintiffs’ Complaint does not allege

the existence of an employment contract or employment

relationship between Plaintiffs and Colt. Defendants’ amend-

ment to preliminary objections argues that the tort allegedly

committed by Colt is solely cognizable under § 510 of ERISA,

29U.S.C § 1140, therefore, it is pre-empted by §514 of

ERISA, 29 U.S.C. § 1144.

Defendants also contend that the allegations in the

instant Complaint are virtually identical to the allegations in

the previous Federal action and clearly were or could have

been litigated therein, therefore, the instant claim is barred

by res judicata. We do not believe that the doctrine of res

judicata applies. In his Memorandum Opinion, Judge Ziegler

declined to determine whether the Federal rules of res

judicata should bar the pending state action.

The question of jurisdiction however, is controlling and

we will now focus our discussion on that issue. In two recent

cases, the United States Supreme Court has examined

the pre-emptive force of ERISA §502(a), 29U.S.C.

§ 1132(a)(1)(A),(B) and §514(b)(2)(A),(B) 29 U.S.C.

§ 1144(a),(b) (2) (A),(B), Pilot Life Insurance Co. v. Dedeaux,

55 U.S.L.W. 4471 (U.S. April 6, 1987), Metropolitan Life

Insurance Co. v Taylor, 55 U.S.L.W. 4468 (U.S. April 7, 1987).

Both the language and the legislative history of the civil

enforcement provisions of ERISA, § 502, 29 U.S.C. § 1132

58a

clearly demonstrate that it is the exclusive vehicle for actions

by ERISA plan participants and beneficiaries asserting im-

proper proceeding of a claim for benefits.

The Section provides:

(a) Persons empowered to bring a civil action. A

civil action may be brought —

(1) by a participant or beneficiary —

(A) for the relief provided for in subsection

(c) of this section, or

(B) to recover benefits due to him under the

terms of his plan, to enforce his rights

under the terms of the plan, or to clarify

his rights to future benefits under the terms

of the plan:

(2) by the Secretary, or by a participant, benefici-

ary or fiduciary for appropriate relief under Section 1109

of this title; ...

The Supreme Court in Pilot Life Insurance Co., 55

U.S.L.W. at 4474 examined the enforcement scheme of

ERISA § 502 (a) and explained:

In sum, the detailed provisions of § 502(a) set forth

a comprehensive civil enforcement scheme that repre-

sents a careful balancing of the need for prompt and fair

claims settlement procedures against the public interest

in encouraging the formation of employee benefit

plans. ..

The deliberate care with which ERISA’s civil en-

forcement remedies were drafted and the balancing of

policies embodies in its choice of remedies argue

strongly for the conclusion that ERISA’s civil enforce-

ment remedies were intended to be exclusive.

Likewise, the legislative history also supports the exclu-

sivity intended for §502(a). The Conference Report on

ERISA which describes the civil enforcement provisions of

§ 502(a) states:

59a

“Under the conference agreement, civil actions may

be brought by a participant or beneficiary to recover

benefits due under the plan, to clarify rights to receive

future benefits under the plan, and for relief from breach

of fiduciary responsibility ... All such actions in Federal

or State courts are to be regarded as arising under the

laws of the United States in similar fashion to those

brought under section 301 of the Labor-Management

Relations Act of 1947.” H.R. Conf. Report No. 93-1280,

p. 327 (1974) (emphasis added) [sic].” Pilot Life Insur-

ance Co. at 4474, Metropolitan Life Insurance Co. at 4470.

If a state law relates to an employee benefit plan it is pre-

empted, § 514(a),(b) as set forth in 29 U.S.C. § 1144(a),(b)

reads as follows:

(a) Supersedure; effective date.

Except as provided in subsection (b). of this section,

the provisions of this subchapter and subchapter III of

this chapter shall supersede any and all State laws insofar

as they may now or hereafter relate to any employee

benefit plan described in section 1003(a) of this title and

not exempt under section 1003(b) of this title. This

section shall take effect on January 1, 1975.

(b) Censtruction and application.

(1) This section shall not apply with respect to any

cause of action which arose, or any act of omission which

occurred before January 1, 1975.

(2) (A) Except as provided in subparagraph (B),

nothing in this subchapter shall be construed to exempt

or relieve any person from any law of any State which

regulates insurance, banking, or securities.

(B) Neither an employee benefit plan described in

section 1003(a) of this title, which is not exempt under

section 1003(b) of this title (other than a plan estab-

lished primarily for the purpose of providing death bene-

fits), nor any trust established under such a plan, shall be

deemed to be an insurance company or other insurer,

bank, trust company, or investment company or to be

engaged in the business of insurance or banking for

60a

purposes of any law of any State purporting to regulate

insurance companies, insurance contracts, banks, trust

companies, or investment companies.

The Supreme Court noted that the express pre-emption

provisions of ERISA are deliberately expansive and are de-

signed to “establish pension plan regulation as exclusively a

federal concern.” Pilot Life Insurance Co. at 4472 quoting

Alessi v. Raybestos-Manhattan Inc., 451 U.S. 504, 523 (1981).

Construed as an expansive provision, the phrase “relate

to any employee benefit plan” must be given its broad

common sense meaning so that if a state law has a connection

with or reference to such a plan it is pre-empted. Pilot Life

Insurance Co. at 4472, Metropolitan Life Insurance Co. at 4470.

Guided by the above, we examine plaintiffs present

Complaint. In paragraph 43 Plaintiffs allege that “the breach

of this oral contract of employment has resulted in damages

to the named plaintiffs and all other similarly situated super-

visors and managers in the form of lost supplemental unem-

ployment benefits...” Paragraph 44 states a claim for

damages in the form of “lost immediate pension benefits. . .”’

and paragraph 45 states a claim for “lost pension benefits in

the event of a plant closing...” Paragraph 46 claims damages

for “lost insurance benefits.” The same damages are listed

under Count I Assumpsit-Express Contract and Count II

Assumpsit-Implied Contract.

Because Plaintiffs’ claim for damages goes directly to the

establishment of a benefit plan, Plaintiffs’ claim does “relate

to” an employee benefit plan, therefore, it is pre-empted by

ERISA and we are, therefore, without jurisdiction to enter-

tain the matters raised.

Although we are personally sympathetic to the issues

raised by Plaintiffs’, we must nonetheless follow the law as

cited above hence we enter the following Order:

tw.

6la

COURT OF COMMON PLEAS FOR THE

COUNTY OF BEAVER

PENNSYLVANIA

Civil Division

DAVID A. NOBERS, ROBERT R.

CAMPBELL, JR., GASPER P.

PORTO and GARY T. WEEKLY,

individually and on behalf of

themselves and all others

similarly situated,

Plaintiffs No. 843 of 1984

af

CRUCIBLE INC., a corporation

and COLT INDUSTRIES, INC., ;

corporation,

—

Defendants

ORDER

WALKO, J. August 7, 1987

AND Now this 7th day of August, 1987, after careful

review and consideration of the legal briefs and oral argu-

ments presented by counsel, it is hereby Ordered, Adjudged

and Decreed that the Preliminary Objections filed by De-

fendants Crucible Inc. and Colt Industries, Inc. are granted as

to jurisdiction.

By THE COURT

/s/ JOSEPH WALKO