Appendix — Lewis v. Local 382, International Brotherhood of Electrical Workers
Supreme Court brief2000
Ask Donna
What actually matters in this document.
Text
vo 29 825 NOVI 51999
Urrilt UF THE CLERK
In 0) he
Supreme Court of the Chited States
MICHAEL O. LEWIS, As Personal Representative
of the Estate of N.G. Lewis, Deceased,
Petitioner,
LOCAL 382, INTERNATIONAL
BROTHERHOOD OF
ELECTRICAL WORKERS (AFL-CIO),
Respondent.
ON PETITION FOR WRIT OF CERTIORARI
TO THE SUPREME COURT OF
SOUTH CAROLINA
Appendix to Petition for Writ of Certiorari
Henry Hammer Scott Elliott
Counsel of Record ELLIOTT & ELLIOTT, P.A.
Howard Hammer Post Office Box 1960
HAMMER, HAMMER, Columbia, SC 29202
CARRIGG & POTTERFIELD (803) 771-0555
1634 Main Street, Suite 201
Post Office Box 1421
Columbia, SC 29202
(803) 799-8600
Counsel for Petitioner
THE LEX GROUP ¢ 1205 East Main Street @ Suite 2 East ¢ Richmond, VA 23219
(804) 644-4419 @ (800) 856-4419 # Fax: (804) 644-3256
—— nw
TABLE OF CONTENTS
Appendix to the Petition
Opinion,
The Supreme Court of South Carolina
COAMEOG Fly 12, UDP i isisccicsscisssicatscsdeccssssiosse App. |
Order,
The Supreme Court of South Carolina
Re: Granting Petition for Writ
entered April 9, 1998 ............ccccccccsccssccossecooees App. 11
Opinion,
Court of Appeals of South Carolina
entered October 14, 1996.00.00. cceccecceseeseeees App. 12
Order,
State of South Carolina County of Lexington
Court of Common Pleas
Re: Directing Entry of Judgment
entered April 14, 1995..............ccccccssscsscsoseeees App. 45
Order,
State of South Carolina County of Lexington
Court of Common Pleas
Re: Denying Defendants Post Trial Motions
entered April 13, 1995... cccecsscsceeceees App. 46
Order,
United States District Court for
The District of South Carolina Columbia Division
Re: Removal
entered August 9, 1989.............ccccccssssssosseees App. 50
App. i
Order,
The Supreme Court of South Carolina
Re: Denying Petition for Rehearing
entered August 17, 1999.............csscscssssssees
Order,
Court of Appeals of South Carolina
Re: Denying Petition for Rehearing
entered February 21, 1997 ...............s0000000
Order,
Court of Appeals of South Carolina
Re: Denying Suggestion for Rehearing En Banc
entered February 21, 1997 ............cssssseeseees
Petition for Rehearing,
Supreme Court of South Carolina
filed Sully 27, BDGD acsccccssncsanediannsinncnseasnscenes
Form of Verdict,
Court of Common Pleas
dined Jame 18, OOF ssccccscseessscatsendteanernes
Answer to Complaint,
United States District Court
Columbia Division of South Carolina
Gated June 2B. 1DGD <cccasisondencnatessntisnnatensciies
Motion to Remand,
United States District Court
Columbia Division of South Carolina
dated Seema 21, UDG sccrcisccccctsccssncsnssscamssness
App. ii
oa i i i i ae ae i!
Memorandum in Support of
Motion to Remand,
United States District Court
Columbia Division of South Carolina,
with attachment,
Ie POO 20, FIIs csssccocsesescecossisssaccceee App. 81
Attachment:
Opinion,
Walter W. Rody v. Midland Enterprises, Inc.
and Port Allen Marine Services, Inc.
entered May 6, 1966........................ App. 87
Petition for Removal,
United States District Court
Columbia Division of South Carolina
eh App. 91
Complaint,
Court of Common Pleas
County of Lexington
GOGOE ATL 1B, 1989... .occsscccecccccsceccesessssese App. 95
U.S. Constitution, Article VI... ceccccccccccececesescseee. App. 98
U.S. Constitution, Amendment X.........ccccccccsecccsesees. App. 98
Ne EE gece chcisssdondavasytacendeones soetenneessneeee App. 98
I A BM hp ycoa ss cencsdasenbancecnacoxssoavicannentasesunces App. 99
a sb awcicanivshobdonnvietsecedoceassiveasiovees App. 99
te oi acastssuansisdessdeorseadevanavenevenes App. 100
S.C. Code Ann. § 41-7-70) ..........cecccscssssscsscossesssseee, App. 100
S.C. Code Ann. § 41-7-80
S.C. Code Ann. § 41-7-90
eee eee eee eee eee eee eee eee eee ee eee eee)
eee eee eee eee eee ee eee eee ee eee eee eee ey
App. iv
THE STATE OF SOUTH CAROLINA
In The Supreme Court
Michael O. Lewis, As Personal Representative of the Estate
of N.G. Lewis, Deceased,
Petitioner,
Vv.
Local 382, International Brotherhood of Electrical Workers
(AFL-CIO), Davis Self, Larry Poole, Jerome Jenkins, Doris
M. Jones, Bill Davis, John C. Davis and Ronald Goodale,
Defendants,
Of Whom Local 382, International Brotherhood of Electrical
Workers (AFL-CIO) is,
Respondent
ON WRIT OF CERTIORARI TO THE
COURT OF APPEALS
Appeal From Lexington County
William P. Keesley, Circuit Court Judge
Opinion No. 24965
Heard December 15, 1998 - Filed July 12, 1999
ENTERED: JULY 12, 1999
AFFIRMED IN RESULT
Henry Hammer and Howard Hammer, of Hammer,
Hammer, Carrigg & Potterfield, of Columbia, and Scott
Elliott, of Elliott and Elliott, of Columbia, for petitioner.
Herbert Buhl, III, of Columbia, and Terry R. Yellig,
of Sherman, Dunn, Cohen, Leifer, & Yellig, of Washington,
App. |
D.C., for respondent.
WALLER, A.J.: We granted certiorari to review the
Court of Appeals’ opinion in Lewis v. Int'l Brotherhood of
Electrical Workers, 324 S.C. 412, 481 S.E.2d 135 (Ct. App.
1997). We affirm in result.
FACTS'
Lewis, an electrician,?> was a member of the
International Brotherhood of Electrical Workers (IBEW),
Local #382, for approximately 30 years. In 1987, his
membership in the union lapsed when he continued to work
for an employer which had been declared "in difficulty" by
the IBEW. In February, 1988, the IBEW informed Lewis he
was ineligible to receive retirement benefits from the IBEW
Pension Benefit Fund because he was no longer a member in
good standing.* Lewis brought this action seeking damages
for violation of the South Carolina Right-to-Work Act,
S.C.Code Ann. §§ 41-7-10 through -90 (Rev. 1986
Lewis vy. Int'l Brotherhood of Electrical Workers
& Supp. 1997).° The jury returned a verdict in favor of
Lewis against the union and awarded $82,560.00 in actual
The reader is directed to the Court of Appeals’ opinion for a
more complete recitation of the facts.
. Lewis died in 1990; his son Michael has been substituted as
plaintiff.
; IBEW's Constitution prohibits members from "[wlorking for
any ... company declared in difficulty" with the union. Art. VII, § 11.
: Article XII, Section 1(a)(1) of Union's constitution provides for
pension benefits to "A" members of the IBEW who are in "continuous
good standing with twenty (20) or more years immediately preceding his
application, who has attained the age of sixty-five (65) years."
5 He also filed a claim for outrage; the jury returned a verdict for
the defendants on this claim.
App. 2
damages and $25,000 in punitive damages. In a well
reasoned opinion, Judge Anderson, writing for a majority of
the Court of Appeals, held Lewis'claims were preempted by
federal law. We agree and, accordingly, affirm in result.°
ISSUES
l. Is the federal court's order remanding
to state court, preclusive on the preemption
issue?
+ Is Lewis’ claim preempted under 28
U.S.C. § 185 of the Labor Management
Relations Act (LMRA)?
3. Should the Court of Appeals have
addressed Lewis' claim under the South
Carolina Right-To-Work Act?
4. Is Lewis' claim preempted under §
514(a) of the Employee Retirement Income
Security Act (ERISA), 29 U.S.C.§ 1 144(a)?
1. PRECLUSION
We concur in the Court of Appeals'holding that the
federal court's order remanding to state court is not
preclusive on the issue of preemption.’
7 Except as otherwise noted herein, we agree with and adopt the
reasoning set forth in the Court of Appeals' opinion. Readers are referred
to that opinion for a more detailed and thorough discussion of the issues.
: Lewis initially filed this action in state court, and the matter was
removed to federal court by the IBEW.. In response to Lewis’ motion, the
district court remanded to state court, finding removal had been
improvident.
App. 3
As noted by the Court of Appeals, the Fourth Circuit has
specifically held a district court's findings incident to an
order of remand have no preclusive effect. Nutter v.
Monongahela, 4 F.3d 319 (4th Cir. 1993)(district court's
holding that ERISA and LMRA did not preempt not prevent
defendant from raising preemption as a defense in state
court).® Accordingly, the Court of Appeals properly held the
federal court's remand order was not preclusive. Accord
Nichols v. Amalgamated Clothing, 305 S.C. 323~ 408 S.E.2d
237 (1991)(addressing merits of preemption issue after
remand from federal court).
2. PREEMPTION UNDER LMRA
If a state-law cause of action does not exist
independently of a labor contract, it is pre-empted by Section
301 of the Labor Management Relations Act ( LMRA).
Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 105 S.Ct.
1904, 85 L.Ed.2d 206 (1985); Nash v. AT & T Nassau
Metals, 298 S.C. 428, 381 S.E.2d 206 (1989); Butts v. AVX
Corp., 292 S.C. 256, 355 S.E.2d 876 (Ct.App.1987). In Nash
v. AT & T Nassau Metals, 381 S.E.2d 206, 208, 298 S.C. 428
(1989), we stated:
: The rationale for holding a district court's remand order has no
preclusive effect on the issue of preemption is that such remand orders
are not subject to appellate review under 28 U.S.C. § 1447(d). Since
Nutter, the United States Supreme Court decided Quackenbush vy.
Allstate Ins. Co., 517 U.S. 706, 116 S.Ct. 1712,135 L.Ed. 2d 1 (1996) in
which it held a remand order which is not based upon either subject
matter jurisdiction or defects in the removal procedure (i.e., pursuant to
§1447(d)), is subject to appellate review such that it may be given
preclusive effect. (Quackenbush involved a remand based on abstention
principles). Here, it is impossible to determine for certain the basis of the
federal court's remand order as it merely states removal was improvident.
Accordingly, we decline to give it preclusive effect.
App. 4
This test is one of whether the state claim
exists independently of the collective
bargaining agreement or whether it is
"inextricably intertwined" with a
consideration of the terms of the agreement. If
the state claim does not exist independently of
the agreement, it is preempted by federal law.
The Court of Appeals found Lewis’ claim was
Substantially dependent upon an analysis of the IBEW
constitution because interpretation of the constitution was
essential to a determination of whether Lewis had any
property rights in the pension benefit fund. We agree.
Lewis' tort claim intrinsically relates to the nature of
the IBEW constitution. His complaint states that the IBEW,
"In violation of the Right-To-Work Act, attempted to
interfere with [Lewis'] exercise of his Right-To-Work and
did, thereby cause him to lose his pension benefits," and that
as a result Lewis "has suffered the loss of his pension
benefits." It is impossible to ascertain, without reference to
IBEW's constitution, whether the union acted properly in
denying Lewis his pension benefits. Accordingly, we concur
with the Court of Appeals’ analysis that resolution of the case
was "substantially dependent" upon the union's constitution
SO as to be preempted under the LMRA.?
9
We agree with the Court of Appeals that our holding in Nichols
v. Amalgamated Clothing and Textile Workers Union, AFL-CIO, CLC,
305 S.C. 323~ 408 S.E.2d 237 (1991) is not controlling. The United
States Supreme Court, in Wooddell vy. International Brotherhood of Elec.
Workers Local 71, 502 U.S. 931 112 S.Ct. 494~ 116 L.Ed.2d 419 (1991),
extended the preemption provision of the LRMA to union constitutions.
Nichols specifically held the employee's complaint was not preempted
because the circuit court needed only to focus upon ACTWU's
constitution, by-laws, and prior practices. Accordingly, to the extent
Nichols conflicts with Wooddell, it is overruled.
We likewise agree with the Court of Appeals’ analysis regarding
this Court's opinion in Kimbrell v. Jolog Sportswear, Inc., 239 S.C. 415~
123 S.E.2d 524 (1962), in which we held an action for wages under this
state's statutory law was not preempted by the NLRA. In Kimbreil, there
App. 5
Finally, Lewis relies on this Court's opinion in Layne
v. Int'l Brotherhood of Elec. Workers, 271 §.C. 3462 247
S.E.2d 346 (1978), in which we held, under similar facts, the
plaintiffs state law claim under the Right-To-Work Act was
not preempted by the Labor-Management Reporting and
Disclosure Act of 1959 (LMRDA), 29 U.S.C. s 411 et seq.
Layne dealt with Section 413 of the LMRDA which
specifically states, "Nothing contained in this subchapter ( 29
U.S.C. §§ 411- 415) shall limit the rights and remedies of
any member of a labor organization under any State or
Federal law or before any court or other tribunal, or under
the constitution and bylaws of any labor organization."
However, Section 413 of the LMRDA limits its application
to that subchapter of the LMRDA.'° Section 413 of the
LMRDA does not apply to Section 301 of the LMRA. To
hold otherwise would completely eviscerate the preemption
provisions of Section 301 of the LMRA.!!
was no conflict with federal jurisdiction and the National Labor Relations
Act afforded no remedy to plaintiffs for the wrongs done them. Here,
there is a conflict with federal jurisdiction, inasmuch as the Court would
be required to interpret the union's constitution. Moreover, in the present
case, counsel for the IBEW advised the Court at oral argument that Lewis
may file a claim for unfair labor practices with the National Labor
Relations Board, or may have a claim for unfair labor practices under
section 301 of the LMRA. Accordingly, unlike the plaintiff in Kimbrell,
Lewis is not without a remedy.
ss The subchapter of the LMRDA in question, § 411(a)(5) deals
with due process measures a union member must be afforded prior to
being disciplined. As we read Section 413, it was intended to permit
union members the procedural due process afforded by state law if it was
greater than that permitted by Section 411.
. Moreover, the issue of Section 301 preemption was not raised in
Layne. This Court will not generally raise issues sua sponte. Smith vy.
Phillips, 318 S.C. 453, 458 S.E2d 427 (1995)(but for very few
exceptional circumstances, appellate court will not sua sponte raise
issues).
App. 6
3. PREEMPTION UNDER ERISA
Finally, a majority of the Court of Appeals held
Lewis' claim was preempted by Section 514(a) of ERISA as
his claim for damages "related to" an employee benefit plan
within the scope of ERISA's preemption clause.’ It held the
resolution of Lewis' claim directly affected the pension fund
as it "potentially alters the criteria for receipt of benefits."
481 S.E.2d at 142. We agree.
Any and all State laws insofar as they relate to
employee benefit plans are preempted by ERISA. 29 U.S.C.
§ 1144(a); Duncan v. Provident Mut. Life Ins. Co. of
Philadelphia, 310 S.C. 4652 427 S.E.2d 657 (1993). This
Court has recognized that the pre-emptive effect of ERISA is
a broad one. Baker Hosp. v. Isaac, 301 S.C. 248, 391 S.E.2d
549 (1990). A state law "relates to" an ERISA-governed
employee benefit plan, "if it has a connection with or
reference to such a plan." Shaw v. Delta Air Lines, Inc., 463
U.S. 85, 90, 103 S.Ct. 2890, 2896, 77 L.Ed.2d 490 (1983).
Further, a state law "relates to" an ERISA plan if the rights
or restrictions it creates are predicated on the existence of
such a plan. Ingersoll-Rand Co. vy. McClendon, 498 U.S.
133, 111 S.Ct. 478, 112 L.Ed.2d474(1990). However, those
State actions which affect employee benefit plans in "too
tenuous, remote or peripheral a manner" do not relate to the
plan. Shaw v. Delta Air Lines, supra.
A state rule of law may be preempted even though it
has no direct nexus with ERISA plans if its effect is to
dictate or restrict the choices of ERISA plans with regard to
their benefits, structure, reporting and administration, or if
allowing states to have such rules wouid impair the ability of
a plan to function simultaneously in a number of states.
Keystone Chapter, Assoc. Builders v. Foley, 37 F.3d 945,
- There is no dispute but that Lewis'pension plan is an "employee
benefit plan" within the meaning of ERISA, 29 U.S.C.§§ 1002(2)(A)(I) &
1002(3).
App. 7
Pe a
955 (3d Cir. 1994), cert. denied, __. ; US.___ 1115 S.C.
1393, 131 L.Ed.2d 244 (1995).
Here, it is inescapable that Lewis’ claim is predicated
upon the existence of IBEW's plan, i.e., is premised on the
notion that the union's violation of the Right-To-Work Act
resulted in the loss of his pension. Accordingly, we affirm
the Court of Appeals'ruling.
In dissent, Judge Cureton points to a recent United
States Supreme Court opinion narrowing the scope of
ERISA preemption. New York State Conference of Blue
Cross & Blue Shield Plans v. Travelers Ins. Co., 514 US.
645, __, 115 S.Ct. 1671, 16771 131 L.Ed.2d 695 (1995). In
Travelers, the Court noted the listarting presumption that
Congress did not intend to supplant state law, 514 U.S. at
654, 115 S.Ct. at 1676, stating if "relate to" were taken to
extend to the furthest stretch of its indeterminacy, then for all
practical purposes pre-emption would never run its course,
for “really, universally, relations stop nowhere." The
Travelers court acknowledged, however, that "a state law
might produce such acute, albeit indirect, economic effects,
by intent or otherwise, as to force an ERISA plan to adopt a
certain scheme of substantive coverage or effectively restrict
its choice of insurers, and that such a state law might indeed
be pre-empted under Section 514. 514 U.S. at 668, 115 S.Ct.
at 1683 Even under the more narrow view of Travelers.
allowing Lewis' claim in this case would essentially render
the union liable for the benefits, notwithstanding its
constitutional provisions to the effect that only members in
good standing are entitled to benefits. As such, it would, by
indirect means, force the union to adopt a certain scheme of
substantive coverage contrary to its constitutional provisions.
Such a holding is contrary to Travelers.
Finally, the dissent cites several cases for the
proposition that ERISA does not preempt state claims where
employees merely seek lost pension benefits as a measure of
damages. See Pizlo v. Bethlehem Steel Corp ., 884 F.2d 116
(4th Cir.1989); Hospice of Metro Denver, Inc. v. Group
App. 8
Health Ins.. of Oklahoma, Inc., 944 F.2d 752 (10th
Cir.1991); Howard v. Indiana Michigan Power Co., 812
F.Supp. 135 (S.D.Ind. 1992); Schlenz v. United Airlines, Inc.,
678 F.Supp. 230 (N.D.Cal.1988). We are unpersuaded by
this authority. The dissent directly cites Pizlo for the
following proposition:
The claims here would not submit [the
employer] to "conflicting employer
obligations and variable standards of
recovery", "determine whether any benefits
are paid" nor "directly affect the
administration of benefits under the plan."
The claims do not bring into question whether
Plaintiffs are eligible for plan benefits, but
whether they were wrongfully terminated
from employment after an alleged oral
contract of employment for a term.
324 S.C. at 436,481 S.E.2d at 147. Here, Lewis' claim would
subject the IBEW to conflicting obligations (i.e., it is liable
under state law for the pension, but it is not liable under its
constitution for the pension), and would bring into question
whether or not Lewis was eligible for plan benefits.
Accordingly, we do not find Pizlo dispositive. Further, the
other case directly quoted by Judge Cureton, Hospice of
Metro Denver, Inc. v. Group Health Ins. of Oklahoma, Inc.,
944 F.2d 752 (10th Cir.1991), did not involve beneficiaries
of an ERISA plan. Moreover, Hospice is contrary to this
Court's recent opinion in Baker Hospital v. Isaac, 301 S.C.
248, 391 S.E.2d 549 (1990)(holding ERISA preempted a
hospital's contract, promissory estoppel, negligence, and
misrepresentation claims).
App. 9
4, RIGHT-TO-WORK ACT
The Court of Appeals held Lewis had failed to state a
cause of action as the conduct he complained of did not
constitute a violation of the Right-To-Work Act.” Given its
holding that Lewis' claim was preempted, it was unnecessary
for the Court of Appeals to address this issue. Accordingly,
we vacate the portion of the Court of Appeals’ opinion
holding Lewis failed to state a claim under the Right-To-
Work Act.
CONCLUSION
We concur with the majority opinion of the Court of Appeals
that Lewis' claims are preempted by both the LMRA and
ERISA, since he is essentially seeking to recover his pension
benefits, albeit under the guise of a Right-To Work claim.
Accordingly, we affirm, in result. However, to the extent the
Court of Appeals addressed the viability of Lewis' state law
claim, its opinion is vacated.
AFFIRMED IN RESULT. ®
FINNEY, C.J., TOAL, MOORE, and BURNETT, JJ.,
concur.
” We also granted certiorari to review the Court of Appeals’
unpublished opinion in this matter, Op. No. 96-UP-335 (S.C. Ct. App.
filed October 15,1996), concerning Lewis' entitlement to attorneys’ fees.
In light of our holding in this case, we affirm the Court of Appeals’
dismissal of that appeal as moot.
App. 10
icy hatin teenie sill
bi ato Mime
THE SUPREME COURT OF SOUTH CAROLINA
Michael O. Lewis, as Personal Representative of the Estate
of N.G. Lewis, Deceased,
Petitioner,
V.
Local 382, International Brotherhood of Electrical Workers
(AFL-CIO), Davis Self, Larry Poole, Jerome Jenkins, Doris
M. Jones, Bill Davis, John C. Davis and Ronald Goodale,
Defendants,
of whom Local 382, International Brotherhood of Electrical
Workers (AFL-CIO) is
Respondent.
ENTERED: APRIL 9, 1998
ORDER
We grant the petition for a writ of certiorari to review
the Court of Appeals’ decision in Lewis v. Local 382. Int’!
Brotherhood of Electrical Workers (AFL-CIO), Op. No. 96-
UP-335 (S.C. Ct. App. filed October 15, 1996). The parties
Shall proceed to serve and file the appendix and briefs as
provided by Rule 226(h), SCACR.
/s/ Ernest A. Finney, Jr. C.J.
/s/ Jean H. Toal A.J.
/s/James E. Moore A.J.
/s/ John H. Waller, Jr. A.J.
/s/ E. C. Burnett, II] A.J.
Columbia, South Carolina
April 9, 1998
App. 11
Michael O. LEWIS, as Personal Representative of the Estate
of N.G. Lewis, Deceased, Respondent,
V.
LOCAL 382, INTERNATIONAL BROTHERHOOD OF
ELECTRICAL WORKERS (AFL-CIO), Davis Self, Larry
Poole, Jerome Jenkins, Doris M. Jones, Bill Davis, John C.
Davis and Ronald Goodale, Defendants,
of whom Local 382, International Brotherhood of Electrical
Workers (AFL-CIO) is Appellant.
No. 2573.
Court of Appeals of South Carolina.
Heard Sept. 12, 1996.
Decided Oct. 14, 1996.
ENTERED: October 14, 1996
Herbert E. Buhl, III, Columbia; and Terry R. Yellig,
of Sherman, Dunn, Cohen, Leifer & Yellig, Washington,
D.C., for appellant.
Henry Hammer and Howard Hammer, both of
Hammer, Hammer, Carrigg & Potterfield; and Scott Elliott,
Columbia, for respondent.
ANDERSON, Judge:
This is an action for an alleged violation of the South
Carolina Right-to-Work Act.' The jury returned a verdict
against Local 382 of the International Brotherhood of
Electrical Workers (Local 382) in the amount of $82,560
' S.C. Code Ann. §§ 41-7-10 through -90 (Rev. 1986 & Supp.
1995).
App. 12
} actual damages and $25,000 punitive damages. A defense
4 verdict was returned in favor of the other defendants. The
: trial court denied Local 382's post-trial motions. The union
appeals. We reverse.
FACTS/PROCEDURAL BACKGROUND
In September of 1948, N.G. Lewis joined Local 382
and remained a member until 1986. When he was initiated
as a member of Local 382, Lewis signed an oath that he
would abide by all of the provisions of the IBEW
Constitution, its rules and laws, as well as those of Local
382. Article XXVII, Section 1, Subsection 17 of the IBEW
Constitution prohibits members from "(working for any ...
company declared in difficulty with a [Local Union] or the
I.B.E.W., in accordance with [the] Constitution."
In 1986, Lewis was employed by United Electric
Company (United) as a foreman when United refused to sign
a collective bargaining agreement with Local 382. Local 382
then petitioned the National Labor Relations Board to
conduct a representation election among the employees of
United to determine whether they wanted Local 382 to be
certified as their exclusive bargaining representative. A
majority of those United employees voted not to certify
Local 382 as their exclusive bargaining representative.
On April 11, 1986, Local 382's business manager,
Davis S. Self, wrote a letter to United employees, including
Lewis, who were members of Local 382. In the letter, Self
informed the members that United had been declared "in
difficulty". by the IBEW International President.
Furthermore, the letter advised each Local 382 member that
his membership in Local 382 could be in jeopardy if he
continued his employment with United. Lewis was a
member of the Executive Board of Local 382 at the time this
notice was sent.
In a memo dated July 23, 1986, Lewis, citing
personal and health reasons, resigned from the Executive
App. 13
Board of Local 382 effective July 25, 1986. Self sent Lewis
a letter inviting him to attend_the Union's Executive Board
meeting on September 12, 1986, at which time a complaint
concerning his employment by United would be discussed.
After November 1986, Lewis ceased paying his
union membership dues. As a result, Lewis was dropped as
a member of Local 382 and the IBEW after he failed to pay
his dues for six months, According to Article XXIII, Section
4 of the IBEW Constitution, "any member indebted to his
[Local Union] for six (6) months! full dues shall be dropped
from membership by the [Financial Secretary)..."
Furthermore, Article XXIII, Section 5 provides _ that
"[m]embers in arrears forfeit all rights and previous standing
in the I.B.E.W."
In December of 1986, Ronald Goodale, a Local 382
member, filed internal union charges against Lewis because
he continued to work for United in violation of Article
XXVII, Section 1, Subsection 17 of the IBEW Constitution.
On December 19, 1986, pursuant to Goodale's charges, Local
382's Recording Secretary notified Lewis a hearing before
the Union's trial board would be convened on January 9,
1987, at which time Lewis could answer the charges against
him. ‘:
At the hearing, Lewis admitted he was working for
United. He argued, however, he could not travel, due to a
medical condition, to Augusta, Georgia to work for a
contractor covered by the terms and conditions of a
collective bargaining agreement negotiated by the IBEW
Local Union in that area. The trial board agreed to delay,
until it received information about the medical condition of
Lewis, its decision whether Lewis had violated the IBEW
Constitution by continuing to work for United after it was
declared "in difficulty." On January 19, 1987, Dr. Richard
T. Alia wrote a letter advising that Lewis had been diagnosed
with ulcerative proctitis in 1982, but that as of May 15, 1984,
the last time Lewis was seen by Dr. Alia's late partner, the
proctitis was in remission.
App. 14
socstonssscaeesill
On February 13, 1987, the trial board again
considered the charges against Lewis in light of Dr. Alia's
letter. The trial board decided Lewis had violated the IBEW
Constitution by continuing to work for United after it was
declared "in difficulty."" The board further decided to fine
Lewis $2000.00, but indicated the fine would be suspended
if Lewis terminated his employment by United and sought
employment with a contractor who was a party to a
collective bargaining agreement with Local 382 or some
other IBEW Local Union.
In a letter dated February 16, 1987, the Local 382
Recording Secretary notified Lewis of the trial board's
disposition of the charges against him. The letter advised
Lewis the $2,000.00 fine would be suspended if he would
terminate his employment with United and accept
employment with a union contractor within 30 days. Self,
Local 382's business manager, told Lewis he could obtain
employment with a union contractor in Augusta, Georgia.
Lewis, who continued to work for United, never paid
the $2,000.00 fine, nor did he appeal the trial board's
decision to the IBEW Vice President who has jurisdiction
over Local 382. Additionally, Local 382 never took any
action to collect the fine.
In a February 8, 1988 letter, the IBEW informed
Lewis he was ineligible to receive retirement benefits from
the IBEW Pension Benefit Fund because he was no longer a
member in good standing.” Article XII, Section *138
2
The letter, which was signed by Jack F. Moore, an IBEW
Trustee, in relevant part provided:
Records in this office indicate that you were an "A"
member of the IBEW from September 1948 through
November 1986. When you did not tender any further
dues thereafter, you were dropped from membership
and, as you know, when a member of the IBEW is
dropped from membership, he immediately forfeits any
claim to IBEW pension or death benefits as a
consequence of his "A" membership in the IBEW.
App. 15
1(a)(1)of the IBEW Constitution sets forth the criteria for
receiving retirement benefits from the IBEW Pension Benefit
Fund. That section in pertinent part provides:
Sec. 1. An "A" member who retires from the
electrical trade after January 1, 1967, shall be
entitled to benefits in accordance with the
following rules as to eligibility:
(a)(1) Normal Pension. An "A" member of
the 1.B.E.W. in continuous good standing
with twenty (20) or more years immediately
preceding his application, who has attained
the age of sixty-five (65) years, shall receive
pension benefits computed on the basis of two
dollars ($2.00) per month for each full year of
such continuous "A" membership.
In May 1988, Lewis retired from United. He lost his
benefits and this suit followed.
On April 18, 1989, Lewis initiated this action seeking
damages for violation of the South Carolina Right-to-Work
Act, S.C.Code Ann. §§ 41-7-10 through -90 (Rev.1986 &
Supp.1995). Lewis alleged the defendants, acting
individually and as agents of the defendant Local 382,
interfered with his right to work, and caused him to lose his
pension benefits and to suffer other damages. Lewis further
claimed he paid dues and made contributions to the union
and its pension plan with the expectation of drawing a
pension when he retired.
On May 26, 1989, the defendants filed a petition for
removal in the United States District Court for the Columbia
Division of South Carolina. Thereafter, Lewis petitioned for
a remand to state court. On August 9, 1989, the federal court
remanded the case to state court "upon the ground that
removal was improvident."
App. 16
a
|
a
2
]
2
/
a
ak ne et
The defendants moved to dismiss this action on
several grounds: (1) the alleged violation of the Right-to-
Work Act was preempted by § 301 of the Labor
Management Relations Act (LMRA), 29 U.S.C. § 185; (2)
the alleged violation of the Right-to Work Act was
preempted by § 514(a) of the Employee Retirement Income
Security Act (ERISA), 29 U.S.C. § 1144(a); (3) the Right-
to-Work Act did not preclude Local 382 from enforcing its
membership rules against members who violated them; and
(4) the prior decision of Layne v. International Bhd of Elec.
Workers, 271 S.C. 346, 247 S.E.2d 346 (1978), was not
applicable. Although it did not rule on the defendants’
motion to dismiss prior to trial, the trial court [324 S.C. 419]
denied the motion when it was renewed as a motion for a
directed verdict at the conclusion of the presentation of
Lewis' case-in-chief.
The jury returned a verdict in favor of the plaintiff?
against Local 382 on the right-to-work claim, but not against
the individual defendants remaining in the case. Further, the
jury awarded Lewis $82,560.00 in actual damages and
$25,000 in punitive damages against Local 382. The jury
also returned verdicts on the claim of outrage’ in favor of
each of the defendants.
Local 382 immediately filed motions for judgment
notwithstanding the verdict; remittitur or, in the alternative,
for a partial new trial; and/or a reduction in the award of
actual and punitive damages. On April 13, 1995, the trial
court issued an order denying the defendants’ post-trial
motions, affirming the award of punitive damages, and
3
N.G. Lewis died on July 9, 1990. Thereafter, his son, Michael
O. Lewis, was appointed personal representative of Lewis's estate and
substituted as plaintiff in this action.
, Lewis also brought an action for outrage. However, there is no
appeal from the jury's verdict for the defendants on that issue.
App. 17
entering final judgment against Local 382 in the amount of
$82,560, plus court costs, and $25,000 in punitive damages.
ISSUES
I. Did the trial court err in failing to
dismiss the claim for violation of the South
Carolina Right-to-Work Act because it is
preempted by the Labor Management
Relations Act?
Il. Did the trial court err in failing to
dismiss the claim for violation of the South
Carolina Right-to-Work Act because it is
preempted by the Employee Retirement
Income Security Act?
II. Did the trial court err in failing to
dismiss the claim for violation of the South
Carolina Right-to-Work Act because the Act
does not preclude unions from enforcing
membership rules?
[V. Does the Court's prior decision of
Layne v. International Bhd. of Elec. Workers.
supra, apply to this action?
V. Did the trial court err in failing to
reduce the jury's award of actual and punitive
damages?
App. 18
LMRA* PREEMPTION
[1] Local 382 maintains the essence of Lewis's
claim is that the actions of the local union deprived him of
his property interest in pension benefits provided by the
IBEW Pension Benefit Fund. Since interpretation of the
IBEW Constitution is essential to a determination of whether
Lewis had a property interest in the pension benefits, the
union contends § 301 of the LMRA preempts his state law
claim.
Section 301 of the LMRA provides:
Suits for violation of contracts
between an employer 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...
29 U.S.C. § 185(a) (1978 & Supp.1996).
{2} In Local 174, Teamsters, Chauffeurs,
Warehousemen & Helpers v. Lucas Flour Co., 369 U.S. 95,
104, 82 S.Ct. 571, 577, 7 L.Ed.2d 593 (1962), the United
States Supreme Court explained that "in enacting § 301
Congress intended doctrines of federal labor law uniformly
to prevail over inconsistent local rules." The prospect that
“individual contract terms might have different meanings
under state and federal law would inevitably exert a
disruptive influence upon both the negotiation and
administration of collective agreements." Id. at 103, 82 S.Ct.
at 576-77. The preemptive effect of s 301 is necessary "in
5
The parties refer to the preemption as s 301 of the National
Labor Relations Act. In 1947, Congress enacted the Labor Management
Relations Act which encapsulated the old National Labor Relations Act
and added many sections.
App. 19
order to ensure uniform interpretation of collective-
bargaining agreements, and thus to promote the peaceable,
consistent resolution of labor-management disputes." Lingle
v. Norge Div. of Magic Chef.Inc., 486 U.S. 399, 404, 108
S.Ct. 1877, 1880, 100 L.Ed.2d 410 (1988).
[3.4] Ifa state law tort claim is founded on a duty
that is created by a collective bargaining agreement and
without existence independent of the agreement, then it is
preempted by § 301. See Allis-Chalmers Corp. v. Lueck,
471 U.S. 202, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985). "[A]
plaintiff covered by a collective-bargaining agreement is
permitted to assert legal rights independent of that
agreement, including state-law contract rights, so long as the
contract relied upon is not a_ collective-bargaining
agreement." Caterpillar, Inc. v. Williams, 482 U.S. 386, 396,
107 S.Ct. 2425, 2431, 96 L.Ed.2d 318 (1987) (emphasis in
original). In Lingle, supra, the Court stated:
[Section] 301 pre-emption merely ensures that
federal law will be the basis for interpreting
collective-bargaining agreements, and says
nothing about the substantive rights a State
may provide to workers when adjudication of
those rights does not depend upon the
interpretation of such agreements.
Lingle, 486 U.S. at 409, 108 S.Ct. at 1883.
In discussing whether a state law claim is preempted
by s 301 of the LMRA, our Supreme Court has adopted the
following standard:
The United States Supreme Court has
provided a test for determining whether a
state law claim is preempted by § 301 of the
LMRA. This test is one of whether the state
claim exists independently of the collective
bargaining agreement or whether it is
App. 20
ttt See
}
4
8 |
a
¥
"inextricably intertwined" with a
consideration of the terms of the agreement.
If the state claim does not exist independently
of the agreement, it is preempted by federal
law. In determining this issue, we look to
whether the tort claim intrinsically relates to
the nature and existence of the agreement.
Questions that relate to what the parties to a
labor agreement intended and what legal
consequences were intended to flow from the
contract must be resolved by reference to
federal law regardless of whether these
questions arise in the context of an action
alleging breach of contract or liability in tort.
Allis-Chalmers Corp. v. Lueck, 471 U.S. 202,
105 S.Ct. 1904, 85 L.Ed.2d 206 (1985).
When assessing whether a state law remedy is
"independent" of the collective bargaining
agreement, we must examine whether
resolution of the state claim requires
construction of the collective bargaining
agreement. Lingle v. Norge Division of
Magic Chef, 486 U.S. 399, 108 S.Ct. 1877,
100 L.Ed.2d 410 (1988). Whether a cause of
action is subject to preemption depends upon
the facts of the particular case and the
relationship of the alleged tort to the contract
must be determined on a case by case basis.
Allis-Chalmers v. Lueck, supra. Our Court of
Appeals has recognized this.
Nash v. AT & T Nassau Metals, 298 S.C. 428, 432,
381 S.E.2d 206, 208 (1989).
The United States Supreme Court has concluded that
§ 301 not only provides federal court jurisdiction over
disputes involving collective bargaining agreements, but also
authorizes the federal courts to fashion a body of federal law
App. 21
for the enforcement of such agreements. See Textile
Workers Union v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912,
1 L.Ed.2d 972 (1957). Accordingly, a preemption doctrine
under § 301 has developed which was summarized in Lingle,
supra:
[I]f the resolution of a state-law claim
depends upon the meaning of a collective-
bargaining agreement, the application of state
law (which might lead to inconsistent results
since there could be as many state-law
principles as there are States) is pre-empted
and federal labor-law principles--necessarily
uniform throughout the nation--must be
employed to resolve the dispute.
Lingle, 486 U.S. at 405-06, 108 S.Ct. at 1881.
More recently, the United States Supreme Court
extended the jurisdictional reach of § 301 to union
constitutions. In Wooddell v. International Bhd of Elec.
Workers, Local 71, et al., 502 U.S. 93, 112 S.Ct. 494, 116
L.Ed.2d 419 (1991), the Court held s 301 confers subject
matter jurisdiction upon the federal courts for suits by
individual union members against their union for alleged
breach of union constitutions. The Court further amplified
the issue and held:
In concluding that the employee's suit was
one provided for by § 301, we observed that
under a contrary holding there would be "
'[t]he possibility that individual contract terms
might have different meanings under state and
federal law [which] would inevitably exert a
disruptive influence upon both the negotiation
and administration of collective agreements.’ "
(citations omitted).
App. 22
2
Similar considerations bear on this
case. Congress expressly provided in §
301(a) for federal jurisdiction over contracts
between an employer and a labor organization
or between labor organizations. Collective-
bargaining agreements are the principal form
of contract between an employer and a labor
organization. Individual union members, who
are often the beneficiaries of provisions of
collective-bargaining agreements, may bring
suit on these contracts under § 301. Likewise,
union constitutions are an important form of
contract between labor organizations.
Members of a collective-bargaining unit are
often the beneficiaries of such interunion
contracts, and when they are, they likewise
may bring suit on these contracts under § 301.
(emphasis in original).
If they could not, unacceptable
consequences could ensue. There is no doubt
that IBEW could sue under § 301 to enforce
Local 71's contract with IBEW and there is no
doubt that such a suit would be governed by
federal law. If suit by an employee to enforce
an interunion contract is not authorized by s
301 and the employee is remitted to state
court and to state law, it is plain that the same
contract terms might be given different
meanings based solely on the identity of the
party. This would exert the disruptive
influence our cases have spoken of.
Wooddell, 502 U.S. at 101-02, 112 S.Ct. at 500.
Lewis relies on our Supreme Court's decision of
Nichols v. Amalgamated Clothing & Textile Workers Union,
305 S.C. 323, 408 S.E.2d 237 (1991), to support his position.
In that case, the Supreme Court held an action by an elected
App. 23
manager of a local labor union to compel payment of his
salary by the parent national labor union was not preempted
by the NLRA. The Court noted it needed to focus only on
the union's constitution, by-laws, anc prior practices to
determine whether the plaintiff was entitled to payment of
the wages he claimed were owed to him. However, since the
Court decided Nichols, the United States Supreme Court
issued the Wooddell opinion.
In light of Wooddell, Nichols is not precedential.
We conclude Lewis's claim under the South Carolina
Right-to-Work Act is substantially dependant upon an
analysis of the IBEW Constitution. Thus, it is preempted by
§ 301 of the LMRA. Reference to the IBEW Constitution is
necessary to determine whether Lewis had acquired a
property interest in pension benefits at the time of the alleged
wrongful acts by Local 382. Article XII, Section 1(a)(1) of
the IBEW Constitution sets forth the criteria for receiving
reurement benefits from the IBEW Pension Benefit Fund.
Accordingly, because interpretation of the IBEW
Constitution is essential to a determination of whether Lewis
had any property rights in the pension benefit fund, the state
law claim under the Right-to-Work Act is preempted by §
301.
ERISA PREEMPTION
[5] Local 382 also argues the Right-to-Work
claim of Lewis is preempted by § 514(a) of ERISA because
it "relates to" an employee benefit plan. The union avers its
alleged unlawful actions involved a benefit plan, i.e., Lewis's
right to receive a pension from the IBEW Pension Benefit
Fund. Accordingly, the union asserts preemption is
applicable because "[a]ssuming, without conceding, that Mr.
Lewis and other similarly situated former I.B.E.W. members
have a property interest in pension benefits provided by the
I.B.E.W. Pension Benefit Fund, I.B.E.W. Local Unions like
Local No. 382 would be subject to conflicting obligations,
App. 24
Soa. Ge oes eter Oae: a Sete 5 z
ATRL He wt ates te
Ls Ca ihe i
despite the express provisions in the .B.E.W. Constitution to
the contrary." Local 382 maintains § 514(a) of ERISA was
intended to preclude such conflicting obligations.
We sketch the background of this issue cognizant that
readers who hunger for more detail can find it in a myriad of
reported cases.
ERISA expressly provides for the preemption of "any
and all State laws insofar as they may now or hereafter relate
to any employee benefit plan....". 29 U.S.C. § 1144(a)
(1985). The "deliberately expansive" language of the
preemption clause was "designed to ‘establish pension plan
regulation as exclusively a federal concern.’ " Pilot Life Ins.
Co. v. Dedeaux, 481 U.S. 41, 46, 107 S.Ct. 1549, 1552, 95
L.Ed.2d 39 (1987) (quoting Alessi v. Raybestos-Manhattan,
Inc., 451 U.S. [324 S.C. 425] 504, 523, 101 S.Ct. 1895,
1906, 68 L.Ed.2d 402 (1981)). ERISA defines "employee
benefit plan" as "an employee welfare benefit plan or an
employee pension benefit plan or a plan which is both an
employee welfare benefit plan and an employee pension
benefit plan." 29 U.S.C. § 1002(3) (Supp.1996). ERISA
further defines "employee pension benefit plan" as:
any plan, fund, or program which was
heretofore or is hereafter established or
maintained by an employer or by an employee
organization, or by both, to the extent that by
its express terms or as a result of surrounding
circumstances such plan, fund, or program--
(i) provides retirement
income to employees,.... |
29 U.S.C. § 1002(2)(A)(i) (Supp.1996). Through enactment
of ERISA, Congress intended "to promote the interests of
employees and their beneficiaries in employee benefit
plans." Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90, 103
S.Ct. 2890, 2896, 77 L.Ed.2d 490 (1983). Congress also
intended to safeguard employers’ interests by " ‘eliminating
App. 25
the threat of conflicting and inconsistent State and local
regulation of employee benefit plans.'" Id. at 99, 103 S.Ct.
at 2901.
We have recognized that while Congress intended for
ERISA to preempt state laws insofar as they relate to airy
employee benefit plan, the preemption clause is not all
encompassing. In Medical Park OB/GYN v. Ragin, 321 S.C.
139, 467 S.E.2d 261 (Ct.App. 1996), we held:
In interpreting the scope of this preemptive
language, the United States Supreme Court
has held the phrase "relate to" should be given
its broad, common sense meaning such that a
state law "relates to" an employee benefit plan
within the meaning of § 1144(a) if it has a
“connection with or reference to" such a plan.
As such, a state law may be subject to
preemption under ERISA "even if the law is
not specifically designed to affect such plans,
or the effect is only indirect." (citations
omitted).
Id. at 143-44, 467 S.E.2d at 264 (state law claims of
negligent misrepresentation, breach of fiduciary duty, and
professional negligence do not "relate to" an ERISA plan
when the claims are asserted against parties who allegedly
advised plaintiff to adopt an ERISA plan and then
misrepresented and/or failed to competently advise regarding
the administration of the plan).
The IBEW Pension Benefit Fund is an "employee
benefit plan" within the meaning of § 3(3) of ERISA, 29
U.S.C. § 1002(3) (Supp.1996). Therefore, the only question
to be determined is whether Lewis's state law claim "relates
to" the IBEW Pension Benefit Fund.
A state law "relates to" an ERISA-governed
employee benefit plan, within the purview of ERISA's
preemption clause, "if it has a connection with or reference
App. 26
‘ ROPE yey Roe eer
alanine the ita
to such a plan." Shaw, 463 US. at 97, 103 S.Ct. at 2900.
Further, a state law "relates to" an ERISA plan if the rights
or restrictions it creates are predicated on the existence of
such a plan. See District of Columbia v. Greater
Washington Bd. of Trade, 506 U.S. 125, 113 S.Ct. 580, 121
L.Ed.2d 513 (1992); Ingersoll-Rand Co. y McClendon, 498
U.S. 133, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990). Thus, the
state law may be preempted even though it has no direct
nexus with an ERISA plan if its effect is to dictate or restrict
the choices of an ERISA plan with regard to its benefits,
structure, reporting, or administration.
Lewis seeks to recover as damages from the local
union the pension benefits he claims he would have been
entitled to but for the action of Local 382. The resolution of
this claim directly affects the pension fund as it potentially
alters the criteria for receipt of benefits. In this particular
case, we hold the state law claim "relates to" an employee
benefit plan within the scope of ERISA's preemption clause.
Accordingly, Lewis's state law claim under the Right-to-
Work Act is preempted.
LOCAL POLICY CONCERNS
Lewis contends his claim is not preempted by federal
law because the union's conduct in this case is of merely
peripheral concern to federal law and touches interests so
deeply rooted in local policy and responsibility that courts
should not assume that Congress intended to preempt the
application of state law. Our state Supreme Court addressed
this principle in Kimbrell v. Jolog Sportswear, Inc., 239 S.C.
415, 123 S.E.2d 524 (1962). In Kimbrell, the Court held an
action by employees against an employer and union to
recover damages for tortious withholding of wages was not
an action to regulate labor relations and was a matter in
which the state had a compelling state interest. Accordingly,
the claim was not preempted by federal labor law. However,
the Court noted "[t]he prosecution of the present action for
App. 27
damages causes no conflict with federal jurisdiction. The
National Labor Relations Act affords no remedy to plaintiffs
for the wrongs done them." Id. at 421, 123 S.E.2d at 527
(emphasis added).
In this case, there is a direct conflict between Lewis's
right-to-work claim and the LMRA and ERISA. Therefore,
Kimbrell does not support Lewis's contention that his claim
is excepted from federal preemption.
EFFECT OF REMAND
[6] Lewis argues the union is precluded from
raising the preemption issue in state court after remand from
the federal court. When Lewis filed his complaint in state
court, the union filed a petition for removal in the federal
district court asserting ERISA preempted the application of
the South Carolina Right-to-Work Act. Lewis filed a motion
to remand in the district court contending the action was not
brought under federal law, but solely under state law for a
cause of action arising out of the South Carolina Right-to-
Work Act. The federal court granted the motion of Lewis to
remand "upon the ground that removal was improvident."
In support of his argument, Lewis relies upon the
cases of Osteen v. Atlantic Coast Line R.R., 119 S.C. 438,
112 S.E. 352 (1922), and Howell v. Hartford Accident &
Indem. Co., et al., 160 S.C. 549, 159 S.E. 380 (1931). Those
cases state the proposition that a decision by a federal court
to remand a case to state court is not judicially reviewable.
However, that proposition does not answer the question of
whether the federal court order precludes a state court from
considering preemption arguments after remand.
In Nutter v. Monongahela Power Co., 4 F.3d 319 (4th
Cir.1993), the Fourth Circuit Court of Appeals held a district
court's findings in a remand order concerning complete
preemption under ERISA and LMRA did not have a
preclusive effect and any issues decided incident to remand
App. 28
could be relitigated in state court. The court further
enunciated:
Federal law determines the preclusive
effect of federal orders on a question of
federal law, regardless of whether the court
applying the federal judgment is state or
federal. The most significant factor in
determining the preclusive effect of a district
court's findings incident to remand is the
unavailability of appellate review under §
1447(d). "Under contemporary principles of
collateral estoppel," the unavailability of
appellate review "strongly militates against
giving" a judgment preclusive effect. While
the availability of appellate review is not
"always an essential predicate of estoppel,"
we do not believe the district court's
jurisdictional findings incident to remand
should preclude relitigation of the same issues
in state court. Accordingly, we hold that the
district court's _ jurisdictional findings
regarding complete preemption have no
preclusive effect. Under our holding, any
issues that the district court decided incident
to remand may be relitigated in state court.
(citations omitted).
ie MECN. Pin te Siac CLE 3 al WOE NRA
RING NE Rit
ee ne
1b aA RE i Np a his cab aD Sp ata ata ca tbnd neater
Nutter, 4 F.3d at 321-22.
We find Nutter dispositive of the procedural
argument of Lewis.
EFFICACY OF SOUTH CAROLINA
RIGHT-TO-WORK ACT
[7] Additionally, Local 382 asserts the South
Carolina Right-to-Work Act cannot be interpreted broadly
App. 29
enough to prohibit enforcement of its membership rule
against union members who continue to work for employers
determined to be "in difficulty."
South Carolina Code Ann. § 41-7-20 (Rev.1986 &
Supp.1995) provides:
Any agreement or combination
between any employer and any labor
organization whereby persons not members of
such labor organizations shall be denied the
right to work for such employer or whereby
such membership is made a condition of
employment, or of continuance’ of
employment by such employer, or whereby —
any such union or organization acquires an
employment monopoly in any enterprise, is
hereby declared to be against public policy,
unlawful and an illegal combination or
conspiracy.
South Carolina Code Ann. § 41-7-70 (Rev.1986 &
Supp.1995) provides in pertinent part as follows:
It shall be unlawful for any person,
acting alone or in concert with one or more
persons:
(1) By force, intimidation, violence or threats
thereof, or violent or insulting language,
directed against the person or property, or any
member of the family *144 of any person (a)
to interfere, or attempt to interfere, with such
person in the exercise of his right to work, to
pursue or engage in, any lawful vocation or
business activity, to enter or leave any place
of his employment, or to receive, ship or
deliver materials, goods or services not
App. 30
Perey el ne
Nibheawhinet! cot ictad kellie Lalas at
prohibited by law or (b) to compel or attempt
to compel any person to join, or support, or
refrain from joining or supporting any labor
organization.
The LMRA generally prohibits employers from
discriminating against employees based on their union
affiliation or activities, but § 8(a)(3) of the LMRA, 29 U.S.C.
§ 158(a)(3) (1973 & Supp.1996), expressly permits labor
unions and employers to agree that membership in the labor
union is a condition of employment, i.e., union security
agreements. However, § 14(b) of the LMRA, 29 U.S.C. §
164(b) (1978 & Supp.1996), provides that, while union
security agreements are permissible as a matter of federal
law:
[nJothing in this subchapter shall be construed
as authorizing the execution or application of
agreements requiring membership in a labor
organization as a condition of employment in
any State or Territory in which such execution
or application is prohibited by State or
Territorial law.
[8] As noted by our Supreme Court, "the evils to
which the legislative intent and the remedial purpose of the
statute were directed were: (1) union control of employment
on the one hand; and (2) employer boycott of, or insistence
upon, union labor on the other." Branham vy. Miller Elec.
Co., 237 S.C. 540, 546, 118 S.E.2d' 167, 170 (1961)
(company's freedom to hire and fire employee at its pleasure
is subject to the limitation that neither the hiring nor the
firing may be grounded or conditioned upon union
membership or nonmembership, referral or nonreferral,
approval or nonapproval).
Lewis's claim has nothing to do with compulsory
unionism, the focus of § 14(b) of the LMRA. This
App. 31
controversy is not about any agreement between Local 382
and an employer. Rather, it is about the union's ability to
enforce its internal rules against its members who joined
voluntarily, and who are free to resign at any time. See
Pattern Makers' League v. National Labor Relations Board,
473 U.S. 95, 105 S.Ct. 3064, 87 L.Ed.2d 68 (1985).
Since South Carolina is a right-to-work state and
employees cannot be compelled to join unions, an
employee's decision to join a union and abide by its rules is
voluntary. The union's purpose in requiring its members to
work only for employers with whom it has a collective
bargaining agreement is to be able to offer employers access
to skilled workers as the benefit of signing a contract.
However, even if the union obtains a contract, that
agreement does not give it control over the employment pool
because the union cannot compel employees working under
the contract to join as a condition of employment.
Therefore, Local 382's actions in this case did not violate the
Right-to-Work Act because Lewis's claim does not involve
compulsory unionism.
LAYNE v. INTERNATIONAL BROTHERHOOD OF
ELECTRICAL WORKERS, LOCAL 382
[9] In Layne yv. Internationci Bhd. of Elec.
Workers, Local 382, 271 S.C. 346, 247 S...2d 346 (1978),
the Supreme Court affirmed the trial court's denial of the
local union's demurrer to the complaint in a Right-to-Work
claim. Layne, a union member for over thirty-five years,
alleged he paid dues with the expectation of drawing a
pension upon his retirement. He further alleged the union
expelled him from membership because he was working on a
construction project with nonunion members. Layne averred
the union's action was a violation of the South Carolina
Right-to- Work Act and, as a result, he suffered damages " 'in
that he lost the benefit of monies paid to Defendants over
thirty-five years.’ " Id. at 348-49, 247 S.E.2d at 348. On
App. 32
Se
i
appeal, the union argued the complaint failed to state a cause
of action because the conduct complained of did not
constitute a violation of the Right-to-Work Act. The
Supreme Court disagreed and held:
[T]he attempt to coerce the plaintiff from
engaging in the particular employment by
means of threatening his expected retirement
benefits constitutes a tortious violation of the
Right to Work Act.
Applying [Section 41-7-70] to the
facts alleged in the complaint, it can
reasonably be said that the union's actions
constituted coercion and intimidation directed
against the plaintiff and his property which
was designed to effect compulsory support of
the union and accomplish union control of the
plaintiff's employment.
Layne, 271 S.C. at 350, 247 S.E.2d at 348.
Based upon the facts of this case, we conclude Layne
is distinguishable. Layne was decided on a demurrer and the
Court considered the factual allegations to be admitted. Id.
In that respect, the Court considered as admitted the fact that
Layne had a property interest in his expected pension
benefit.
In contrast to Layne, this case was tried on its facts
and the record is devoid of any evidence establishing that, at
the time he was disciplined, Lewis had any vested right to
future pension benefits from the IBEW. Rather, the evidence
demonstrated Lewis had a contract with the union which
would entitle him to pension benefits in the future if he
fulfilled certain conditions set forth in the IBEW
Constitution. The conditions could not be satisfied until the
App. 33
member became eligible to apply for the pension benefit.
Therefore, the benefit could not vest and the member would
not obtain any property right in the benefits. Because Lewis
did not satisfy the required conditions, he never acquired a
property interest in the IBEW Pension Benefit Fund. As a
result, we conclude there is no evidence of a "threat against
property" and the Layne case is not controlling.
CONCLUSION
Based upon the :oove analysis, we conclude Lewis's
action for an alleged violation of the South Carolina Right-
to-Work Act is preempted by both LMRA and ERISA. The
trial court erred in denying the union's trial and post-trial
motions. Accordingly, the decision of the trial court is
reversed and the case is remanded for a dismissal due to a
lack of subject matter jurisdiction.
REVERSED AND REMANDED. °
GOOLSBY, J., concurs.
CURETON, J., dissents in a separate opinion.
CURETON, Judge (dissenting):
I respectfully dissent from the majority's holding and
conclude that neither the LMRA nor ERISA preempts
Lewis's cause of action. I also would hold that Lewis's
allegations properly state a cause of action under South
Carolina's Right to Work Act, S.C.Code Ann. s 41-7-10 et.
seq. (1986).
: Due to our disposition of the preceding issues, we find it
unnecessary to consider the last issue stated by the union.
App. 34
I. LMRA PREEMPTION
Section 301 of the LMRA is the provision
authorizing actions based on contracts between employers,
unions, local unions, and employees. In order for an action
to fall within the purview of § 301, it must either be: (1) an
action for violations of a contract between an employer and a
labor organization which represents employees in an industry
affecting commerce, or (2) an action for violations of a
contract between such labor organizations. Wooddell y. Int'l
Bhd. of Elec. Workers, 502 U.S. 93, 98, 112 S.Ct. 494, 498,
116 L.Ed.2d 419 (1991). Admittedly, the reach of § 301
preemption is broad. Because of concern about onflicting
interpretations of labor-oriented contracts, § 301 preempts
state law claims if "the resolution of the state law claim
depends upon the meaning of a collective bargaining
agreement." Lingle v. Norge Div. of Magic Chef, Inc., 486
U.S. 399, 405-6, 108 S.Ct. 1877, 1881, 100 L.Ed.2d 410
(1988). See also Hayden v. Reickerd, 957 F.2d 1506 (9th
Cir.1992) (noting that preemption is appropriate only when
provisions of a § 301 contract must be interpreted). The
proper test for § 301 preemption asks:
. whether the [state-law cause of action]
confers nonnegotiable state-law rights on
employers or employees independent [324
S.C. 433] of any right established by contract,
Or, instead, whether evaluation of the [state
law] claim is inextricably intertwined with
consideration of the terms of’ the labor
contract. If the state tort law attempts to
define the meaning of the contract
relationship, that law is preempted.
Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 213, 105 S.Ct.
1904, 1912, 85 L.Ed.2d 206 (1985), cited in Nash v. AT & T
Nassau Metals, 298 S.C. 428, 381 S.E.2d 206 (1989).
App. 35
However, "not every dispute concerning employment, or
tangentially involving a provision of the collective
bargaining agreement, is pre-empted by § 301 or other
provisions of federal labor law." Lueck, 471 U.S. at 211, 105
S.Ct. at 1911. The United States Supreme Court also has
held that union constitutions are contracts between labor
organizations under § 301, so the above stated preemption
rules apply to interpretation of union constitutions as well as
interpretation of collective bargaining agreements. Cf.
Wooddell, 502 U.S. at 98-101, 112 S Ct. at 498-500 (holding
that a union member may sue a local union for violation of
the national union's constitution);' United Ass'n of
Jouneymen and Apprentices of the Plumbing and Pipefitting
Indus. v. Local 334, 452 U.S. 615, 101 S.Ct. 2546, 69
L.Ed.2d 280 (1981) (extending the jurisdictional reach of §
301 to union constitutions).
However, Lewis's claim that the local union's actions
violated the South Carolina Right to Work Act does not
present a case which falls under the admittedly broad
preemption doctrine pursuant to § 301. First, the right to
work statute cannot be superseded by agreement; the rights
created therein are non-negotiable and thus meet that portion
of the Lueck test. See S.C.Code Ann. § 41-7-10 et. seq.
(1986) (stating that violations of the statute are against the
public policy of South Carolina). Second, Lewis does not
allege any sort of claim that the local union violated the
IBEW constitution. Thus, Lewis's claim is not based directly
on rights created by the union constitution; instead, it is
based on rights created by South Carolina's right to work
law. Third, Lewis's claim does not depend on any sort of
interpretation of the union constitution. The record does not
reflect any dispute among the parties at trial as to the only
issues that could possibly involve interpretation of the
| agree with the majority that Wooddell would change the result
in Nichols v. Amalgamated Clothing and Textile Workers Union, 305
S.C. 323, 408 S.E.2d 237 (1991).
App. 36
ee
union's constitution: (1) whether United Electrical was
properly determined to be in difficulty, (2) whether Lewis
was fined and suspended in accordance with the union's rules
and constitution, and (3) whether Lewis eventually would
have been entitled to pension benefits but for his
membership lapse.” Thus, § 301 preemption is not
applicable.
The majority contends that § 301 preempts Lewis's
action because the union's constitution must be interpreted to
determine whether Lewis had a property interest in pension
benefits at the time of the union's alleged wrongful actions.
However, the pension benefits are only referred to in this
action as a measure of Lewis's damages, and it is undisputed
that Lewis, had he continued his membership of 38 years,
would have been entitled to benefits upon his retirement but
for the actions by the local union. Moreover, whether Lewis
had a property interest in the pension benefits is irrelevant to
the use of his expectancy in the benefits as a yardstick to
measure his damages. Lewis does not have to show a
property interest in the pension benefits in order to claim the
loss of them as the measure of damages.’ See Midgett v.
Sackett-Chicago, Inc., 105 Il.2d 143, 85 Ill.Dec. 475, 480,
>
+
There was testimony at trial about the proper procedure for
putting &@n employer "in difficulty" with the union. However, the record
reflects no conflicting testimony about whether the union properly put
Lewis's employer "in difficulty."
The majority distinguishes Layne v. International Bhd of Elec.
Workers, Local 382, 271 S.C. 346, 247 S.E.2d 346 (1978), because
Layne imvolved a demurrer which required the court to accept the
allegations in the pleadings as true. However, since I would hold that
Lewis did not need to prove his pension benefits had vested in order to
claim them as a measure of damages, I would further hold that Layne is
applicable and binding. In any event, the Layne opinion is unclear as to
whether Layne's benefits had vested, and the court referred to the
“plaintiff's expectancy of retirement benefits.” Id. at 350, 247 S.E.2d at
348 (emphasis added). Moreover, Lewis argues there are other elements
of the damages award, i.e. emotional distress, humiliation, etc.
App. 37
473 N.E.2d 1280, 1285 (1984), cert. denied, 474 U.S. 909,
106 S.Ct. 278, 88 L.Ed.2d 243 (1985) (holding that a
plaintiff may claim loss of unvested pension benefits as a
element of damages in a workers’ compensation retaliatory
discharge case). See also 22 Am.Jur.2d Damages § 115
(1988). In any event, mere reference to or consideration of
the terms of a union constitution is not the equivalent of
interpreting the meaning of the terms. Ramirez v. Fox
Television Station, Inc., 998 F.2d 743, 749 (9th Cir.1993)
(holding that the provisions relating to promotion in a
collective bargaining agreement did not require preemption
of an action based on discrimination in promotion). Thus,
Lewis's right to work action does not require an
interpretation of the terms of the union constitution. I would
hold that § 301 of the LMRA does not preempt Lewis's
claim. Cf. Baldwin v. Pirelli Armstrong Tire Corp., 927
F.Supp. 1046 (M.D.Tenn.1996) (holding that for purposes of
removal, § 301 does not completely preempt a retaliatory
discharge claim based on the Tennessee right to work
Statute).
I. ERISA PREEMPTION
I would also hold that ERISA does not preempt
Lewis's right to work claim. Congress expressly enacted a
provision which preempts any state cause of action which
"relate[s] to" an employee benefit plan, and the United States
Supreme Court has held that the "relate to" phrase should be
given a broad, common sense meaning as "connection with
or reference to." 29 U.S.C. § 1144(a); Pilot Life Ins. Co. v.
Dedeaux, 481 U.S. 41, 107 S.Ct. 1549, 95 L.Ed.2d 39
(1987). However, the United States Supreme Court recently
held that "relate to" cannot "extend to the furthest stretch of
its indeterminacy," and that a court should "look instead to
the objectives of the ERISA statute as a guide to the scope of
state law that Congress understood would survive." New
York State Conference of Blue Cross & Blue Shield Plans v.
App. 38
Travelers Ins. Co., 514 U.S. 645, 115 S.Ct. 1671, 1677, 131
L.Ed.2d 695 (1995), cited in Medical Park OB/GYN y.
Ragin, 321 S.C. 139, 467 S.E.2d 261 (Ct.App. 1996).
Congress intended ERISA to set the standards of conduct,
responsibilities, and obligations for plan fiduciaries. 29
U.S.C. § 1001(b). Congress further intended the preemption
Clause to "avoid a multiplicity of regulation in order to
permit the nationally uniform administration of employee
benefit plans." Travelers, 514 U.S. 645, ----, 115 S.Ct. at
1677-78.
In interpreting the ERISA preemption statute, a
number of courts have applied these standards to hold that
mere reference to pension benefits as a measure of damages
is not enough for a state cause of action to "relate to" the
employee benefit plan. In Pizlo v. Bethlehem Steel Corp.,
884 F.2d 116 (4th Cir.1989), employees sued their employer
for terminating then: after the employer allegedly
represented that it would not fire any employee before the
age necessary to avoid an early retirement penalty. The
Pizlo court held that ERISA did not preempt the employees'
claims for breach of contract, promissory estoppel, and
negligent misrepresentation. In doing so, the court stated:
The claims here would not submit [the
employer] _to "conflicting employer
obligations and variable standards of
recovery", "determine whether any benefits
are paid" nor "directly affect the
administration of benefits under the plan."
The claims do not bring into question whether
Plaintiffs are eligible for plan benefits, but
whether they were wrongfully terminated
from employment after an alleged oral
contract of employment for a term. In their
State law claims, the Plaintiffs seek from the
corporation compensatory damages for wages
and pension, health, life and disability
App. 39
benefits that they would have been entitled to
had the alleged contract to work until age 62
not been breached. If the Plaintiffs prevail,
the damages would be measured in part by the
lost pension benefits the Plaintiffs would have
received, but the pension trust itself would not
be liable and the administrators of the pension
plan would not be burdened in any way.
Pizlo, 884 F.2d at 120-21 (citations omitted). In Hospice of
Metro Denver, Inc. v. Group Health Ins. of Oklahoma, Inc.,
944 F.2d 752 (10th Cir.1991), a hospice sued an insurer on a
promissory estoppel theory because the insurer refused to
pay a claim after repeatedly assuring the hospice that
payment would be forthcoming. Similarly, the Hospice
court held that ERISA does not preempt the hospice's cause
of action. In doing so, the Hospice court stated:
Hospice has not alleged any conduct
on the part of [the insurer] which relates to the
administration of the plan, to the processing
of any covered claim, or which impinges on
any employee's ERISA rights... [MJerely
because [Hospice's] damages would be based
upon the amount of potential plan benefits
does not implicate the administration of the
plan, and is not consequential enough to
connect the [324 S.C. 437] action with, or
relate the action to, the plan. The payment of
the judgment would be a one time, lump-sum
amount and would not further burden the
plan, either financially or administrativelly....
An action brought by a health care provider to
recover promised payment from an insurance
carrier is distinct from an action brought by a
plan participant against the insurer seeking
recovery of benefits due under the terms of
App. 40
the insurance plan. Preemption in this case
would stretch the "connected with or related
to" standard too far. Therefore, we hold that
Hospice's action is not preempted by ERISA.
Hospice, 944 F.2d at 755-56 (emphasis added) (citations
omitted). Admittedly, Hospice does not involve suit by
former beneficiaries of a ERISA plan, but Pizlo does. Both
cases hold unequivocally that ERISA does not preempt state
causes of action merely because damages are measured by
lost benefits. See also Howard v. Indiana Michigan Power
Co., 812 F.Supp. 135 (S.D.Ind.1992) (finding no ERISA
preemption when the pension benefits relate to damages, not
liability); Schlenz v. United Airlines, Inc., 678 F.Supp. 230
(N.D.Cal.1988) (holding that ERISA does not preempt a
wrongful discharge claim because the damage award, which
is based partly on lost employee benefits, will be nothing
more than a one-time lump-sum payment triggered by
employer's conduct); Totton v. New York Life Ins. Co., 685
F.Supp. 27 (D.Conn.1987) (ruling that ERISA does not
preempt claim for breach of an employment contract even
though lost pension benefits are sought as damages, in part
because the plan will not pay the one-time lump-sum
judgment). Cf. Morstein v. National Ins. Serv., Inc., 93 F.3d
715 (11th Cir.1996) (en banc) (holding that ERISA does not
; In Baker Hospital v. Isaac, 301 S.C. 248, 391 S.E.2d 549
(1990), the South Carolina Supreme Court held that ERISA preempted a
hospital's —_ contract, promissory estoppel, negligence, and
misrepresentation claims. Like Hospice, the hospital sued after the
insurer promised that a patient was covered, and then the insurer refused
to pay. Id. However, Isaac 's finding of preemption was based on
stipulations by the parties at oral argument that ERISA preempted the
common-law causes of action. Id. Isaac also noted that it followed the
"clear majority rule." Id. In this case, however, the parties disputed
preemption. This case also occurs after the trend to narrow ERISA
preemption in Hospice, Travelers, and the other authorities cited.
Therefore, I do not think that Isaac changes the reasoning in this dissent.
App. 41
preempt a company president's suit against an insurance
agent for fraudulently and negligently inducing her to
purchase a replacement policy with a pre-existing condition
clause); Custer v. Sweeney, 89 F.3d 1156 (4th Cir.1996)
(holding that ERISA does not preempt a legal malpractice
claim against an attorney concerning his representation of an
employee benefit plan because the claim does not affect "the
structure, the administration, or the type of benefits provided
by the ERISA plan").°
In this case, Lewis's claim involves none of the
ERISA concerns, and his claim clearly falls within the
persuasive holdings in Pizlo, Hospice, and the myriad of
federal district court cases. Lewis's action does not raise the
potentiality of conflicting regulation of an ERISA plan.
Lewis does not attempt to subject the plan or its
: In Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 111 S.Ct.
478, 112 L.Ed.2d 474 (1990), the United States Supreme Court held that
ERISA preempted an employee's claim that, four months before his
benefits vested, his employer fired him with the express purpose to avoid
“contributing to or paying [employee] benefits." However, Ingersoll-
Rand is distinguishable from the present case. In Ingersoll-Rand, the
preempted claim was that the employer's principal reason for termination
was to prevent vesting of benefits. The Supreme Court held the claim
was preempted partly because an action pursuant to ERISA § 510 already
exists for "interfering with [the] attainment of any right ... under the
plan." /ngersoll-Rand, 498 U.S. at 142-43, 111 S.Ct. at 485. However,
Lewis does not allege that the union's activities were for the express
purpose of preventing him from claiming his benefits; thus, his action
does not fall within either the Ingersoll-Rand rule or ERISA § 510. See
Howard v. Indiana Michigan Power Co., 812 F.Supp. 135, 137-38
(S.D.Ind.1992); Tippett v. Old Kent Bank, 134 F.R.D. 159, 160-61
(W.D.Mich.1991) (both cases distinguishing Ingersoll-Rand on this
basis, in employee claims for lost pension benefits as damages). Unlike
Ingersoll-Rand, the court's inquiry in this case does not have to be
directed toward the plan as to whether the union had a legitimate or
pension-defeating motive. Finally, Ingersoll-Rand was decided before
the Supreme Court's narrowing of ERISA preemption in New York State
Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514
U.S. 645, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995). After Travelers, | do
not think the Supreme Court would extend Ingersoll-Rand to the present
situation.
App. 42
a ET
eee ane eee —
administrator to any liability, and he does not allege any
conduct "which relates to the administration of the plan, to
the processing of any covered claim, or which impinges on
[his] ERISA rights." Hospice, 944 F.2d at 755. He does not
claim that, pursuant to the plan, he is a beneficiary who was
unfairly prevented from claiming his benefits. Instead,
Lewis claims that Local 382 of the [324 S.C. 439] IBEW
unlawfully attempted to prevent him from working for
United Electrical, Inc., and that, merely as a result, Lewis
lost his membership and pension benefits. Lewis does not
deny that he is no longer a beneficiary under the terms of the
union's pension plan. Thus, there is a distinction between
one who claims as an actual beneficiary under an employee
benefit plan, and one who claims as a nonbeneficiary "whose
damages might be measured by the plan's formula."
Howard, 812 F.Supp. at 137. Moreover, these damages will
be paid by the local union in a one-time lump-sum payment,
and not by the plan in pension-style monthly installments.
For the foregoing reasons, I would hold that Lewis's right to
work claim is not preempted by ERISA.
lil. RIGHT TO WORK ACT
The majority holds that the right to work act cannot
be interpreted broadly enough to encompass Lewis's claim. |
disagree pursuant to the South Carolina Supreme Court's
precedent in Layne v. International Bhd of Elec. Workers,
Local 382, 271 S.C. 346, 247 S.E.2d 346 (1978). Layne
involved an extraordinarily similar factual situation in which
a former union member claimed he lost "the benefit of
monies paid [the union] over thirty-five years" because the
union expelled him for working on a job with non-union
members.° Layne clearly held that Layne stated a cause of
y The Layne court interpreted Layne's claim of damage as
"inferentially the loss of the expectancy of drawing retirement
benefits..." Layne, 271 S.C. at 349, 247 S.E.2d at 348.
App. 43
action pursuant to the right to work act. Id. Admittedly,
Layne held that the tortious violation was the "attempt to
coerce the plaintiff from engaging in the particular
employment by means of threatening his expected retirement
benefits.’ Id. at 350, 247 S.E.2d at 348. However, even if
Layne is read as suggested by the majority, and even if
Lewis did not have a vested interest in the pension benefits,
there was certainly "intimidation ... directed against [Lewis's]
person or property" in the union's actions and fine of $2,000
levied against him. S.C.Code Ann. § 41-7-70 (1986). In any
event, Layne does not hold that a threatening of vested
benefits is necessary in order for a plaintiff to state a right to
work tort; in fact, the court refers to Layne's "expectancy of
retirement benefits." Layne, 271 S.C. at 350, 247 S.E.2d at
348. Therefore, I would hold that Layne clearly supports
Lewis's cause of action pursuant to the right to work act.
IV. CONCLUSION
I would hold that neither the LMRA nor ERISA
preempts Lewis's claim. I would further hold that Lewis
stated a cause of action pursuant to the South Carolina Right
to Work Act. Thus, I would affirm the jury's verdict against
the local union.
: As noted before, termination of an employee or union member
for the express purpose of preventing the vesting of benefits might be
preempted under /ngersoll-Rand Co. v. McClendon, 498 U.S. 133, 111
S.Ct. 478, 112 L.Ed.2d 474 (1990). However, there is an obvious
difference between the Ingersoll-Rand -type situation of a primary
motive to terminate someone in order to prevent vesting, and the Layne-
type situation of attempting to use pension benefits as leverage in order
to achieve compliance with union rules or decisions. The former
situation involves an economic decision to avoid ultimately having to pay
benefits by firing shortly before vesting; however, in the latter situation
the union or employer ordinarily would not care if a compliant
beneficiary obtained his benefits. Therefore, even Layne 's statement of
that case's tort is not preempted.
App. 44
JUDGMENT ON TRIAL OR ORDER BY THE COURT
STATE OF SOUTH CAROLINA )
COUNTY OF LEXINGTON )
COURT OF COMMON PLEAS )
CASE NO. 91-CP 32-2734
Michael O. Lewis as Per Rep. of etc.
Plaintiffs,
VS.
ee Se Sete ne Boe ate x
Local 382 International Brotherhood of Electrical Workers
ET AL.
Defendants.
ENTERED: APRIL 14, 1995
IT IS ORDERED AND ADJUDGED:
(¥) | SEE ATTACHED ORDER
DATED AT LEXINGTON, SOUTH CAROLINA, THIS 14
DAY OF Apr, 1995.
/s/ Thomas H. Centerford/Mhf
CLERK OF COURT
THIS JUDGMENT WAS ENTERED ON THE 13 DAY OF
Apr, 1995. AND A COPY MAILED FIRST CLASS THIS
14 DAY OF Apr. 1995.
TO ATTORNEYS OF RECORD OR TO PARTIES (WHEN
APPEARING PRO SE) AS FOLLOWS:
/s/Scott Elliott /s/Terry R. Hellig
Attorney(s) for Plaintiff(s) | Attorney(s) for Defendant(s)
| LCF 583 Amended 2/22/95
| App. 45
IN THE COURT OF COMMON PLEAS
STATE OF SOUTH CAROLINA
COUNTY OF LEXINGTON
MICHAEL O. LEWIS, as Personal Representative of the
Estate of N.G. Lewis, Deceased,
Plaintiff,
-VS-
LOCAL 382, INTERNATIONAL BROTHERHOOD OF
ELECTRICAL WORKERS (AFL-CIO), DAVIS SELF,
LARRY POOLE, JEROME JENKINS, DORIS M. JONES,
BILL DAVIS, JOHN C. DAVIS, AND RONALD
GOODALE,
Defendants.
CASE NUMBER: 91-CP-32-2734
ORDER DENYING DEFENDANT’S POST-TRIAL
MOTIONS AND AFFIRMING THE AWARD OF
PUNITIVE DAMAGES
ENTERED: APRIL 13, 1995
FILED: APRIL 13, 1995
This case was brought under the South Carolina
Right to Work Law and an outrage claim. After being
remanded to state court by the Honorable Matthew J. Perry,
a jury awarded actual and punitive damages against Local
382 of the International Brotherhood of Electrical Workers
(IBEW) on the right-to-work claim. The defendants made
post-trial motions for JNOV, remittitur, new trial absolute,
new trial nisi, and reduction of the punitive damages.
These matters and the mandatory post-trial review of
punitive damages, have been under advisement for a very
App. 46
sd ittadina tte baie
extended period of time because of misunderstandings by the
court about the status of the matter, and deep concerns about
the legal issues involved and the conduct of the trial. While
many of those concerns still exist, the court denies the post-
trial motions and approves the punitive damage award.
This case involves complex issues regarding the
relationship of the Right to Work Law to federal preemption
requirements under the Labor Management Relations Act
(LMRA) and the Employee Retirement Income Security Act
(ERISA). It also involves questions about the impact of a
federal court’s order of remand in a case involving these
issues.
N.G. Lewis was a union worker for over thirty-eight
(38) years. In 1986, the majority of workers at his place of
employment voted that the IBEW would not be their
exclusive bargaining agent. The IBEW declared the
employer “in difficulty” and notified its members that their
union membership could be in jeopardy if they continued
working for that employer. Lewis continued to work for the
company, so another member filed charges against him. On
February 13, 1987, the union imposed a fine which would be
suspended if Lewis used the union’s referral procedures and
quit working for the company within thirty (30) days. Lewis
did not pay the fine, and his membership dues lapsed. He
was dropped as a member of the union for non-payment of
dues.
The IBEW Constitution provides that non-members
forfeit any pension or death benefits payable from the
Pension Benefit Fund. Lewis lost those benefits and this suit
followed.
The court has carefully reviewed the detailed
information submitted by the attorneys, including updates on
recent developments in the law. The parties and counsel
have been extremely patient and helpful to the court while it
has _ wrestled with these matters. After thorough
consideration, the court deems it sufficient to forego the
specificity reflected in the proposed orders submitted and
App. 47
simply deny the post-trial motions. The verdict is supported
by the evidence .
As for the punitive damage award, the court has
conducted a review of the factors under Gamble _v.
Stevenson, 305 S.C. 104, 406 S.E. 2d 350 (1991). The jury
awarded actual damages of Eighty-Two Thousand Five
Hundred Sixty & No/100 ($82,560.00) Dollars and punitive
damages of Twenty-Five Thousand & No/100 ($25,000.00)
Dollars against the IBEW. The jury found for the IBEW on
the outrage claim and found for the individual defendants on
both causes of action.
Gamble dictates that the court review the award of
punitive damages to evaluate it in light of the following
factors: the defendant’s degree of culpability, the duration of
the conduct, the defendant’s awareness or concealment, the
likelihood that the award will deter the defendant or others
from similar conduct, whether the award bears a reasonable
relationship to the harm, the defendant’s ability to pay, and
other appropriate factors.
The evidence indicated that the IBEW was a primary
actor, and that it acted with full knowledge of the potential
impact on the plaintiff. The conduct occurred over an
extended period of time and involved hearings, notifications,
correspondence, and implementation of policy which
demonstrated awareness by the union of its actions. There
was never any question about the IBEW’s knowledge of the
Right to Work Law.
The jury assessed considerable punitive damages,
much in the nature of a fine or penalty which should gain the
attention of the IBEW and others similarly situated, without
in any way strapping the financial resources of the union.
The court is aware of one prominently displayed newspaper
article published about the verdict in a major state
newspaper.
Since the suit was based on a denial of benefits, and
the jury apparently found that the IBEW improperly used
force to affect the work choice of a South Carolina citizen,
App. 48
peepee S75
|
:
R
5
the court finds a reasonable relationship to the harm. The
court notes that the punitive damages were far less than the
actual damages assessed.
Finally, as previously nected, the court has been very
concerned about the conduci «£ the trial. One concern was
the use of an “us versus them” closing argument, to which no
objection was raised. Obviously, those arguments and other
similar tactics based on regionalism or anti-unionism invite a
verdict which is the result of bias, prejudice, or whim, both
as to actual and punitive damages. After carefully reviewing
this case and the verdicts reached, the court is convinced that
the jury did not accept that invitation, but did its best to fairly
apply the law as charged.
The court denies the post-trial motions and
determines that the award of punitive damages is proper
within the parameters of Gamble and other case law.
Judgment shall be entered against the Local 382 of the
IBEW in the amounts awarded by the jury.
AND IT IS SO ORDERED.
/s/William P. Keesley
Judge, 1 1" Judicial Circuit
Edgefield, South Carolina
April 10, 1995
App. 49
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
COLUMBIA DIVISION
N. G. LEWIS,
Plaintiff,
-VS-
LOCAL No. 382, INTERNATIONAL BROTHERHOOD
OF ELECTRICAL WORKERS, (AFL-CIO), DAVIS SELF,
LARRY POOLE, JEROME JENKINS, DORIS M. JONES,
BILL DAVIS, JOHN C. DAVIS, and RONALD
GOODALE,
Defendants.
CIVIL ACTION NO. 3:89-1361-0
ENTERED: AUGUST 9, 1989
FILED: AUGUST 9, 1989
ORDER
This matter is before the Court upon the motion of
the defendants to set aside the entry of default which was
entered on June 26, 1989. Upon consideration of the motion,
the arguments thereon and for good cause, the motion is
hereby granted.
Also, the plaintiff seeks an order remanding the case
to the state court from which it was removed, upon the
ground that removal was improvident. The Court agrees.
Therefore, upon consideration of the matter and for good
cause shown, this case is hereby remanded to the Court of
Common Pleas for Lexington County, South Carolina.
IT IS SO ORDERED.
App. 50
nailed
/s/
Matthew J. Perry
UNITED STATES DISTRICT
JUDGE
Columbia, South Carolina,
August 9, 1989.
App. 51
THE SUPREME COURT OF SOUTH CAROLINA
DANIEL E. SHEAROUSE P.O.BOX 11330
CLERK OF COURT COLUMBIA, S.C. 29211
BRENDA F. SHEALY (803) 734-1080
DEPUTY CLERK
August 17, 1999
Henry Hammer, Esquire
Howard Hammer, Esquire
Hammer, Hammer, Carigg & Potterfield
P.O. Box 1421
Columbia, SC 29202
Scott A. Elliott, Esquire
Elliott & Elliott, PA
721 Clive Street
Columbia, SC 29205
Re: — Lewis, Michael O. v. Local 382
Dear Counsel:
The Court has issued the following Order on your Petition
for Rehearing in the above matter:
“Petition for Rehearing is denied.
/s/Ernest A. Finney, Jr. C.J.
/s/Jean H. Toal A.J.
/s/James E. Moore A.J.
/s/John H. Waller, Jr. A.J.
/s/E.C. Burnett, III A.J.
August 17, 1999.”
App. 52
The remittitur in this matter is today being forwarded to the
Clerk of Court for Lexington County.
App. 53
THE SOUTH CAROLINA COURT OF APPEALS
POST OFFICE BOX 11629
COLUMBIA, S.C. 29211
1015 SUMTER STREET
COLUMBIA, S.C. 29201
(803) 734-1890
KENNETH A. RICHSTAD
CLERK
IDA R. CARSON
DEPUTY CLERK
February 21, 1997
Henry Hammer, Esquire
Messrs, Hammer, Hammer, Carrigg & Potterfield
P.O. Box 1421
Columbia, South Carolina 29202
Re: Michael O. Lewis, etc. v. Local 382,
International Brotherhood of Electrical
Workers (AFL-CIO), et al. (Opinion 2573)
Dear Mr. Hammer:
Your Petition for Rehearing has been denied in the
following Order:
“Petition for Rehearing denied.
/s/C. Tolbert Goolsby, Jr., J.
/s/Ralph King Anderson, Jr., J.
I would grant.
/s/Jasper M. Cureton my 2
App. 54
— Frente cenaliSalee ehh
Columbia, South Carolina
February 21, 1997.”
The Remittitur will be held for a period of thirty days
until the time to Petition for Writ of Certiorari has expired,
after which it will be forwarded to the trial court.
Please notify this office, in writing, within ten (10)
days from the date of this letter, whether or not you want any
of the remaining Records on Appeal and briefs we may have
in this case. Also enclose a check payable to the S.C. Court
of Appeals, in the amount of $7.50, to cover mailing costs.
If we have not heard from you within ten (10) days, the
Record on Appeal and briefs will be destroyed.
Sincerely,
/s/
Kenneth A. Richstad
Clerk
KAR/jsc
cc: The Honorable Clyde N. Davis, Jr.
Herbert E. Buhl, III, Esquire
Terry R. Yellig, Esquire
Howard Hammer, Esquire
Scott Elliott, Esquire
App. 55
THE SOUTH CAROLINA COURT OF APPEALS
POST OFFICE BOX 11629
COLUMBIA, S.C. 29211
1015 SUMTER STREET
COLUMBIA, S.C. 29201
(803) 734-1890
KENNETH A. RICHSTAD
CLERK
IDA R. CARSON
DEPUTY CLERK
February 21, 1997
Henry Hammer, Esquire
Messrs, Hammer, Hammer, Carrigg & Potterfield
P.O. Box 1421
Columbia, South Carolina 29202
Re: Michael O. Lewis, etc. v. Local 382,
International Brotherhood of Electrical
Workers (AFL-CIO), et al. (Op. 2573)
Dear Mr. Hammer:
Your Suggestion for Rehearing en banc has been
denied in the following Order:
“En Banc Denied.
/s/William T Howell, C
ia
/s/Jasper M Cureron, J.
/s/C. Tolbert Goolsby, Jr., J.
J.
J
J
/s/Carol Connor
/s/Kaye Hearn,
/s/Ralph King Anderson, Jr.,
App. 56
/s/H. Samuel Stilwell, ss
/s/William L. Howard, J.
Judge Thomas E. Huff not participating.
Columbia, South Carolina
February 21, 1997.”
/s/Kenneth A. Richstad
Clerk
KAR/jsc
ce: Herbert E. Buhl, III, Esquire
Terry R. Yellig, Esquire
Howard Hammer, Esquire
Scott Elliott, Esquire
The Honorable Clyde N. Davis, Jr.
App. 57
THE STATE OF SOUTH CAROLINA
In The Supreme Court
Michael O. Lewis, As Personal Representative of the Estate
of N. G. Lewis, Deceased,
Petitioner,
V.
Local 382, International Brotherhood of electrical Workers
(AFL-CIO), Davis Self, Larry poole, Jerome Jenkins, Doris
M. Jones, Bill Davis, John C. Davis and Ronald Goodale,
Defendants,
Of Whom Local 382, International Brotherhood of Electrical
Workers (AFL-CIO) is,
Respondent.
PETITION FOR RE-HEARING
APPEAL FROM LEXINGTON COUNTY
William P. Keesley, Circuit Court Judge
Opinion No. 24965
Heard 12/15/98-Filed 07/12/99
SUMMARY OF REASONS FOR
GRANTING PETITION FOR REHEARING
This court, in affirming the majority opinion of the
Court of Appeals, reported in 324 S.C. 412, 481 S.C. 2d 135,
(Ct. App. 1997) overlooked or misapprehended that:
l. The U.S. District Judge at the hearing of the
Motion to Remand asserted jurisdiction of the case and
considered and decided on the merits the Union's Motion to
Set Aside the entry of default against it, the preemption
App. 58
issue, and in the exercise of his discretion remanded the
pendent state law issue of whether the Union violated the
Right to Work Act to the state court. Consequently, the
decision on the issue of preemption was reviewable on
appeal and thus preclusive as decided by the trial judge.
uackenbush v. Allstate Insurance Com any, 574 U.S. 716,
116 S.Ct. 1712 (1994); Carnegie-Mellon University v.
Cohill, 484 U.S. 343; 108 S.Ct. 614 (1988); Executive
Software North America Inc. v. U.S. District Court, 24 F 3d
1545, 1549, 1559 (1993).
r a The right and remedy granted to a Union
member under a state public interest statute enacted to
effectuate a legislative policy is non-negotiable and can not
be waived by contract or membership in a labor
organization. Brooklyn Sovinges Bank v. O'Neill, 324 U.S.
697, 65 S.Ct. 895, 902 (1945).
3. As acknowledged in the opinion of the U.S.
District Court and the Court of Appeals, and as expressed by
this Court, "This is an action for an alleged violation of the
South Carolina Right to Work Act," and as asserted by
Lewis' counsel in the Motion to Remand, supported by state
and federal decisions, to which the federal judge agreed "this
is not a suit to recover benefits under the terms of a plan or
to clarify Plaintiff's rights under the terms of the plan as
provided in 29 U.S. 1132(a)(1)."
4. Reference to a pension plan is only incidental
to Lewis' action under the South Carolina Right to Work Act,
is referred to merely as a measure of damages, and is too
tenuous, remote and peripheral to preempt state law touching
interests deeply rooted in local feeling and responsibility.
Lingle v. Norge Division of Magic Chef, Inc., 486 U.S. 399,
108 S.Ct. 1877, footnote 12 at 1885 (1998); Allis Chalmers
vy. Lueck, 471 U.S. 202, 105 S.Ct. 1904, 1912 (1995); Pizlo
v. Bethlemen Steel Corporation, 884 F.2d 116 (4th Cir.
1989).
3 § 301 does not grant to the parties to a
collective bargaining agreement, and by extension of 29
App. 59
U.S.C. 413 to a union and its members under a union
constitution and its by-laws, the right or liberty to contract
for what is illegal under state law, which would be
inconsistent with congressional intent to preempt state rules
that proscribe or establish rights and obligations of a labor
contract. Allis Chalmers v. Lueck, supra.
6. Layne _v. International Brotherhood of
Electrical Workers, Local 382, 271 S.C. 346, 247 S.E.2d 346
(1978), virtually identical to the facts herein holding that the
South Carolina Right to Work Act is not preempted under 29
U.S.C. 413, is not distinguishable from the instant case.
7. Congress itself has carved out exceptions to
preemption applicable here by enactment of 29 U.S.C. 413
and 28 U.S.C. 164. Vaca v. Sipes, 386 U.S. 171, 87 S.Ct.
903 (1967).
8. The U.S. Supreme Court has refused to hold
state remedies pre-empted where the activity regulated was
merely of a peripheral concern of the Labor Management
Relations Act or, as here, touched interests so deeply rooted
in local feeling and responsibility that in the absence of
compelling congressional direction, the court could not infer
that Congress has deprived the state of the power to act.
Vaca v. Sipes, supra.
9. In determining the preemption issue under
ERISA, the starting presumption is that Congress does not
intend to supplant State law and the burden of overcoming
this presumption is considerable, and further, the words
"relate to" should be viewed and interpreted in a narrow
sense and not in a broad sense. DeBuono v. N.Y.S.R.-ILA
Medical and Clinical Services, = US. _, 117 S.Ct.
1747 (1997).
10. Lewis' remedy under the South Carolina
Right to Work Act is in plain and unambiguous language,
without need of interpretation and in no way is substantially
or inextricably intertwined with the provisions of any labor
agreement, either under LMRA, LMRDA, ERISA, or the
union constitution or it by-laws.
App. 60
11. The sound syliogistic, logical and well
reasoned dissenting opinion of Judge Cureton clearly
demonstrates that in accordance with applicable federal and
State law principles, neither LMRA nor ERISA preempts
Lewis' cause of action. Lewis v. International Brotherhood
of Electrical Workers Local 382, 324 S.C. 412, 481 S.E. 2nd
135, 145-150 (Ct. App. 1996).
12. The issue relating to attorneys’ fees is still not
moot. It is expected to remain pending until the time for
applying to the U.S. Supreme Court for certiorari expires,
and if certiorari should be applied for, then continued
pending final disposition by the U.S. Supreme Court.
App. 61
THE STATE OF SOUTH CAROLINA
In The Supreme Court
Michael O. Lewis, As Personal Representative of the Estate
of N.G. Lewis, Deceased,
Petitioner,
¥,
Local 382, International Brotherhood of Electrical Workers
(AFL-CIO), Davis Self, Larry Poole, Jerome Jenkins, Doris
M. Jones, Bill Davis, John C. Davis and Ronald Goodale,
Defendants,
Of Whom Local 382, International Brotherhood of Electrical
Workers (AFL-CIO) is,
Respondent.
PETITION FOR RE-HEARING
APPEAL FROM LEXINGTON COUNTY
William P. Keesley, Circuit Court Judge
Opinion No. 24965
Heard 12/15/98-Filed 07/12/99
PETITION FOR REHEARING
The Petitioner, Michael O. Lewis, as Personal
Representative of the Estate of N.G. Lewis, deceased,
respectfully prays that this Court grant a rehearing of its
decision filed July 12, 1999, affirming in result the majority
opinion of the South Carolina Court of Appeals, reported in
324 S.C. 412, 481 S.E.2d 135 (Ct. App. 1997) on the
following grounds:
App. 62
I.
This Court affirmed the majority opinion of the Court
of Appeals holding that the federal court order of USS.
District Judge Perry is not preclusive on the issue of
preemption because “it is impossible to determine for certain
the basis of the federal court’s remand as it merely states
removal was improvident.” This Court noted that the
remand order did not specify as grounds for remand either
lack of jurisdiction or defects in the removal procedure. In
the absence of such specification, this Court overlooked or
misapprehended that the remand order was reviewable on
appeal, and therefore preclusive on the issue of preemption
in accordance with the authority of Quackenbush v. Allstate
Insurance Company, 574 U.S. 706, 116 S.Ct. 1712 (1994).
See Things Remembered, Inc. v. Petarca, 516 U.S.116, 116
S.Ct. 494, at 498 (1995) holding that the language to the
contrary in Nutter v. Monongahela Company, 4 F.3d.319 (4"
Cir. 1993) is dicta.
Moreover, reference to the motions hearing before
Judge Perry after the case was removed to federal court
eliminates any possibility that the remand order was issued
pursuant to 28 U.S.C. 1447 (c). After removal, Judge Perry
asserted subject matter jurisdiction to decide the issues
before him, to wit, (1) the motion of the Union to Set aside
an entry of default against the Union; (2) the issue of
whether Lewis’ action was preempted; and (3) Lewis’
motion to remand. After hearing extensive argument by
counsel for the respective parties, Judge Perry assumed
jurisdiction and thereafter granted the Union’s motion to set
aside the entry of default, agreed with and embraced Lewis’
argument that his action was not preempted, and finally,
exercising his discretion, remanded to the state court for trial
the pendent state law claim for violation of the South
Carolina Right to Work Act. Carnegie- Mellon University v.
Cohill, 484 U.S. 343, 108 S.Ct. 614 (1988); Executive
App. 63
Software North America, Inc. v. U.S. District Court, 24 F.3d
1545, 1549, 1554 (1993).
As heretofore stated, the remand order was thus
reviewable on appeal and preclusive on the issue of
preemption. Accordingly, the Union is precluded from once
again litigating the ruling of the Federal Court on the motion
to remand, the ruling of the Circuit Court on the post trial
motions and the judgment of the Circuit Court entered on the
findings of the jury, unchallenged on appeal, that the Union
violated by force, intimidation and threats the South Carolina
Right to Work Act in interfering or attempting to interfere
with the exercise of Lewis’ non-negotiable right to engage in
lawful employment.
This Court, in holding that Lewis’ claim was
preempted under LMRA, adopted the majority Court of
Appeals’ finding that Lewis’ claim was_ substantially
dependent upon an analysis of the Union constitution
because interpretation of the Constitution was essential to a
determination of whether Lewis had any property rights in
the pension benefit fund.
In holding that Lewis’ claim was preempted and in
adopting the majority Court of Appeal’s finding, this Court
overlooked or misapprehended that Lewis did not and could
not claim any benefits in a pension which had not vested,
and further overlooked that the findings of the Court of
Appeals were without evidentiary support, based solely on
the conclusory allegations of the Union.
The Court further overlooked or misapprehended that
Lewis did not bring this action for pension benefits nor did
he claim that the Union’s conduct was motivated to evade
the payment of pension benefits. Nor did he bring this
action against the pension fund, its trustees and
administrators which would have been required if he had
been seeking damages for pension benefits or claiming that
App. 64
the Union was motivated to evade a payment of his pension
benefits. As asserted by Lewis’ counsel on the motion to
remand, supported by decisions of state and federal courts
with which Judge Perry agreed, “this is not a suit to recover
benefits under the terms of a plan or to clarify Plaintiff's
rights under the term of a plan as provided by 29 U.S.C.
1132 (a) (1).”
There is no evidence that his claim would
substantially affect the pension fund or potentially alter the
criteria for receipt of benefits. His claim for damages was
for mental anguish, humiliation, emotional distress and other
emotional ills and for the loss of the value or costs of the
monies he paid to the Union over the years he was a member
for the expectancy of benefits. The benefits are referred to
only as a measure of Lewis’ damages as pointed out by
Judge Cureton in his dissent, Lewis v. International
Brotherhood of Electrical Workers Local 382, 324 S.C. 412,
481 S.E. 2"° 135, 145-150, in accordance with the authority
of Lingle v. Norge Division of Magic Chef, Inc., 486 U.S.
399, 108 S.Ct. 1877, footnote 12 at 1885 (1988) which reads:
A collective-bargaining agreement may, of
course, contain information such as rate of
pay and other economic benefits that might be
helpful in determining the damages to which a
worker prevailing in sate-law suit is entitled.
See Baldracchi v. Pratt & Whitney Aircraft
Div., United Technologies Corp., 814 F .2d, at
106. Although federal law would govern the
interpretation of the agreement to determine
the interpretation of a collective-bargaining
agreement and a separate state-law analysis
that does not turn on the agreement. In such a
case, federal law would govern the
interpretation of the agreement, but the
Separate state-law analysis would not be
thereby pre-empted. As we said in Allis
App. 65
Chalmers Corp. v. Lueck, 471U.S., at 211,
105 S.Ct., at 1911, “not every dispute...
tangentially involving a provision of a
collective-bargaining agreement, is pre-
empted by 301..."
Moreover, since the findings of fact that the Union
violated the S.C. Right to Work Act by the use of force,
intimidation and threats, as found by the jury, and as ruled
upon by the trial judge on the post trial motions are
unchallenged on appeal, this Court overlooked or
misapprehended the decision of the United States Supreme
Court in Allis Chalmers, Corp. v. Lueck, 471 U.S. 202, 105
S.Ct. 1904, 1912 (1995) holding:
[c]learly § 301 does not grant to the parties to
’ a collective bargaining agreement! the ability
to contract for what is illegal under state law.
In extending § 301 beyond suits for breach of
contract, it would be inconsistent with
Congressionai intent under that Section to
preempt state rules that proscribe conduct or
establish rights and obligations of a labor
contract.
The gravaman of Lewis’ action was not for the
Union’s attempt to evade payment of pension benefits, but
his action clearly was for violation of the South Carolina
Right to Work Act against the Union for interfering or
attempting to interfere by the use of force, intimidation or
threats with the exercise of Lewis’ right to engage in lawful
Constitutions and by-laws of a labor organization fall within the
same category as collective bargaining agreements by LMRDA 29
U.S.C. 411 et_seg., an Amendment to LMRA and Wooddell_v.
International Brotherhood of Electrical Workers, Local 71, 502 U.S. 93,
112 S.Ct. 494(1991).
App. 66
employment, a right totally independent of and in no way
inextricably intertwined with the provisions of a labor
agreement, or the Union Constitution, or its by-laws. His
action under the Right to Work Act, at best, is remote,
tenuous and of peripheral concern to ERISA, LMRA or to
any analysis of the Union Constitution or its by-laws. Allis
Chalmers, Corp. v. Lueck, 471 U.S. 202, 105 S.Ct. 1904,
1912 (1995); DeBuono vy. N.Y.S.R.-ILA Medical and
Clinical Services, __.U.S._, 117 S.Ct. 1747 ( 1997);
Lingle v. Norge Division of Magic Chef, Inc. 486 U.S. 399,
108 S.Ct. 1877 (1988).
This Court further overlooked or misapprehended
that as found by the U.S. District Judge and the trial judge,
and as expressed by the Court of Appeals and as also stated
in the opinion of this Court “Lewis brought this action
seeking damages for violation of the South Carolina Right to
Work Act, S.C. Code Ann. §§ 41-7-10 through 90 (Rev.
1986 & Supp 1997).”
III.
A. This Court, in seeking to distinguish Layne v.
Internationai Brotherhood of Electrical Workers, Local 382,
271 S.C. 346, 247 S.E.2d 346 (1978) as not applicable to
support Lewis’ claim, reasons that § 413 of LMRDA, (29
U.S.C.413), an exception to preemption carved out by
Congress, is limited to “the subchapter of LMRDA
§411(c)(S) which deals with due process measures a Union
member must be afforded prior to being disciplined.
In so reasoning, this Court overlooked or
misapprehended that the exception to preemption carved out
by Congress is not limited to any one portion of 29 U.S.C.
411 et seq., but rather applies in plain and unambiguous
language, without need of interpretation, to preserve
Petitioner’s rights and remedies afforded him under the
South Carolina Right to Work Act. Section 413 as
applicable here reads:
App. 67
Nothing contained in this subchapter shall
limit the rights and remedies of any member
of a labor organization under any State or
Federal law or before any court or other
tribunal or under the constitution and by-laws
of any labor organization.
B. This Court also reasons that Layne is not
applicable because to apply provisions of 29 U.S.C. 413 to
these facts would “completely eviscerate” the preemption
provisions of §301 of the L.M.R.A. In so reasoning, the
Court overlooked or misapprehended that the application of
§ 413 is limited to preserving those rights and remedies of
labor union members where, as here, such rights and
remedies are granted in the public interest to effectuate
legislative policy and are not negotiable.
c. This Court also reasons that Layne is not
applicable because the issue of § 301 preemption was not
raised in Layne. While this Court acknowledges that
Wooddell v. International Brotherhood of _ Electrical
Workers, Local 71, 502 U.S. 93, 112 S.Ct. 494 (1991)
extends the preemption provision of the LMRA (§ 301) to
actions between a Union member and his union, the Court
overlooked that § 413 is an amendment to and an extension
of § 301. The § 413 preemption issue was obviously raised
and addressed by the South Carolina Supreme Court in
deciding Layne, virtually identical to the action sub judice,
holding that the Right to Work Act was not preempted by
federal law, and nothing appears therein to the contrary.
D. This Court, in holding that Layne is not
applicable, overlooked or misapprehended the sound
syllogistic, logical and well reasoned dissenting opinion of
Judge Cureton in holding that “Layne clearly supports
Lewis’ cause of action pursuant to the Right to Work Act,”
also citing in support thereof the Fourth Circuit in Pizlo v.
Bethlehem Steel Corporation, 884 F 2d. 116 (4™ Circuit
1989) and other federal cases, as to which this Court states
App. 68
“We are not persuaded by this authority.” Apparently, this
Court overlooked or misapprehended the authority of the
United Supreme Court in Lingle, infra, referred to in this
Petition under II above.
IV.
This Court, in affirming the decision of the majority
Court of Appeals, adopted its holding that Lewis’ claim was
preempted by §514(a) of ERISA as his claim for damages
“related to” an employee benefit plan within the scope of
ERISA, and the resolution of Lewis’ claim directly affected
the pension fund as it directly alters the criteria for the
receipt of benefits, and, further, that it is inescapable that
Lewis’ claim is predicated upon the existence of IBEW
pension plan.
In so adopting the holding of the majority Court of
Appeals, this Court overlooked that the holding was without
evidentiary support in the record and was obviously based
upon the conclusory allegations of the Union.
As noted by Judge Cureton in his dissent, Lewis’
claim was not predicated upon the existence of the IBEW
pension plan. It was predicated upon the South Carolina
Right to Work Act for violation thereof by the conduct of the
Union interfering and attempting to interfere by the use of
force, intimidation and threats or violent or insulting
language directed against Lewis, his family or his property in
the exercise of Lewis’ non-negotiable right to engage in
lawful employment. There is nothing in the record showing
that Lewis’ claim would directly affect the administration of
benefits under the plan. The pension trust itself is not liable,
and neither the administrators of the plan nor the plan itself
would be liable or burdened in any way.
In holding that Lewis’ claim is preempted by ERISA,
this Court overlooked or misapprehended the rationale of the
recent decision of the United States Supreme Court in
DeBuono vy. N.Y.S.R.-ILA Medical and Clinical Services,
App. 69
__US._, 117 S.Ct. 1747 (1997). There, the United
States Supreme Court held that in determining whether the
preemption doctrine is applicable under ERISA, the words
“relate to” should be narrowly and not broadly interpreted
when considering the preemption doctrine in a field
traditionally occupied by the states -- the regulation of
health, welfare and safety. Clearly, there is nothing in the
South Carolina right to Work Act that is the type of state law
that Congress intended ERISA to supervise.
Moreover, this Court overlooked that in deciding the
preemption issue, the “starting presumption [is] that
Congress does not intend to supplant state law” and that the
burden of overcoming this presumption is considerable.
DeBuono v. NYSA-ILA Medical and Clinical Services, 117
S.Ct. 1747, 1752. Overlooking the rationale of DeBuono,
this Court relied instead on the South Carolina case of Baker
Hospital v. Isaac, 301 S.C. 248, 391 S.E.2d 549 (1996), an
action not involving a non-negotiable public interest right
which “recognized that the pre-emptive effect is a broad
one.” Thus, applying Baker contrary to DeBuono, this Court
interpreted the words “relate to” in a broad sense in reaching
its decision. Further, notwithstanding that the Court
recognized that “those State actions which affect employee
benefit plans in ‘too tenuous, remote or peripheral a
manner’” do not relate to the plan, this Court nevertheless
overlooked this principle in deciding that the preemption
doctrine was applicable here.
¥,
In affirming the decision of the Court of Appeals, this
Court in its opinion states that it was unnecessary for the
Court of Appeals to have addressed the issue of whether
Lewis had stated a cause of action as the conduct that Lewis
complained of did not constitute a violation of the Right to
Work Act.
App. 70
As heretofore contended, Lewis’ action was not
preempted. Not only did Lewis state a cause of action under
the Right to Work Act, but the jury also found that the
Respondent Union violated the Right to Work Act, a finding
unchallenged on appeal.
VI.
In affirming the majority decision of the Court of
Appeals, this Court overlooked or misapprehended, as stated
by Judge Cureton in his dissent, that “the right to work
Statute can not be superseded by agreement, the rights
therein are non-negotiable.” To the same effect see
Brooklyn Savings Bank v. O’Neill, 65 S.Ct. 895 (1945)
(holding that where a private right is granted in public
interest to effectuate legislative policy, waiver so involved
with public interest will not be allowed where it could thwart
public policy which it is designed to effectuate”)
VIL.
In affirming the majority decision of the Court of
Appeals this court apparently overlooked or misapprehended
that in conflict with federal law, it was granting the Union
the liberty of violating the South Carolina Right to Work Act
by the use of force, intimidation and threats to interfere and
attempt to interfere with the exercise of Lewis’ rights to
engage in lawful employment. Allis Chalmers, Corp. v.
Lueck, supra.
VIII.
In affirming the majority decision of the Court of
Appeals, this Court overlooked that the South Carolina Right
to Work Act is of compelling state concern, touching
interests so deeply rooted in local feeling and responsibility
that in the absence of compelling Congressional direction it
can not be inferred that Congress had deprived the States of
the Power to Act, Allis Chalmers, Corp. v. Lueck, supra and
Vaca v. Sipes, supra.
IX.
The majority decision of the Court of Appeals is in
direct conflict with the rationale and principles enunciated
by the United States Supreme Court in Vaca v. Sipes, 386
U.S. 171, 87 S.Ct. 903, 911, (1967) and the cases cited
therein, holding that:
[t]his pre-emption doctrine, however has
never been rigidly applied to cases where***
Congress itself has carved out exceptions to
the Board’s exclusive jurisdiction* **
**#*
filn addition to these congressional
exceptions, this Court has refused to hold
state remedies pre-empted “where the activity
. regulated was merely a peripheral concern of
the Labor Management Act. ***[or] touched
interests so deeply rooted in local feeling and
responsibility that in the absence of
compelling congressional direction, we could
not infer that Congress has deprived the States
of the power to act.
See 29 U.S.C. 413 and 29 U.S.C. 164 as evidence of
Congressional intent to carve out exceptions of preemption
of state laws touching interests deeply rooted local feeling
and responsibility.
App. 72
X.
In affirming the majority decision of the Court of
Appeals, this Court overlooked that federal law does not
preempt under § 301 of the Labor Management Relations
Act (LMRA), 29 U.S.C. 185, as amended by the Labor-
Management Reporting and Disclosure Act of 1959
(LMRDA), 29 U.S.C. 411, et seq., or under § 514 (a) of the
Employee Security Act (ERISA), 29 U.S.C. 1144 (a), state
remedies touching interests so deeply rooted in local feeling
and responsibility that it cannot be inferred that Congress has
deprived the States of the power to act. Vaca v. Sipes, supra.
DeBuono v. N.Y.S.R.-ILA Medical and Clinical Services,
supra, Lingle v. Norge Division of Magic Chef. Inc., supra,
Allis Chalmers, Corp. v. Lueck, supra; 29 U.S. C. 413; 29
U.S.C. 164.
XI.
This Court concluded that the issue with respect to an
award to Petitioner of attorney fees was now moot.
However, the issue relating to attorneys’ fees is still not
moot. It is expected to remain pending until the time for
appealing to the U.S. Supreme Court for certiorari expires,
and if certiorari should be applied for, then continued
pending final disposition by the U.S. Supreme Court.
Respectfully submitted,
HAMMER, HAMMER, CARRIGG
& POTTERFIELD
BY:
HENRY HAMMER
HOWARD HAMMER, P.A.
Post Office Box 1421
Columbia, South Carolina 29201
(803) 799-8600
ELLIOTT & ELLIOTT, P.A.
SCOTT ELLIOTT
721 Olive Street
Columbia, South Carolina 29205
(803) 771-0555
Dated: July 27, 1999
ATTORNEYS FOR PETITIONER
App. 74
IN THE COURT OF COMMON PLEAS
STATE OF SOUTH CAROLINA
COUNTY OF LEXINGTON
N.G. LEWIS, by P.R.
Plaintiff,
-VS-
LOCAL 382 of the IBEW, DAVIS SELF, DORIS M.
JONES, & RONALD GOODALE,
Defendants.
91-CP-32-2734R
FORM OF VERDICT
As To Defendant
Local 382 of the IBEW
I. RIGHT TO WORK
We find for the Defendant.
Foreperson
OR
We find for the Plaintiff dollars
actual damages.
Foreperson
OR
We find for the Plaintiff eighty two thousand five hundred
and sixty dollars plus court costs dollars actual damages and
twenty five thousand dollars punitive damages.
App. 75
/s/Pamela L. Phillips
Foreperson
6-18-93
Date
Lexington, South Carolina
App. 76
IN THE UNITED STATES DISTRICT COURT
COLUMBIA DIVISION OF SOUTH CAROLINA
N.G. LEWIS,
Plaintiff,
VS.
LOCAL UNION 382, INTERNATIONAL
BROTHERHOOD OF ELECTRICAL
WORKERS, AFL-CIO, etal.,
Defendants.
CASE NO. 3:89-1361-01
ANSWER
COMES NOW the defendants, and answers the
complaint of the plaintiff as follows:
l. Admitted upon information and belief
yA Admitted upon information and belief.
a Admitted upon information and belief.
4. It is admitted that plaintiff became a member
of Defendant Local Union in 1948 and that he remained a
member until 1986. Except as herein admitted, all
allegations contained in paragraph 4 of plaintiff's complaint
are denied.
J The allegations contained in Paragraph 5 of
the complaint are explicitly denied.
6. The allegations contained in Paragraph 6 of
the complaint are explicitly denied. |
7. The answers to the allegations contained in
Paragraph | through 6 of the complaint are realleged as if
fully set forth herein.
App. 77
8. The allegations contained in Paragraph 8 of
the complaint are explicitly denied.
9. The answers to the allegations contained in
Paragraphs | through 8 of the complaint are realleged as if
set forth herein.
10.‘ The allegations contained in Paragraph 10 of
the complaint are explicitly denied.
11.‘ The allegations contained in Paragraph 11 of
the complaint are explicitly denied.
AND FOR A FIRST FURTHER ANSWER AND
DEFENSE to plaintiffs complaint, defendants say and
allege:
12. This action has been brought beyond the
applicable Statute of Limitations.
AND FOR A SECOND FURTHER ANSWER AND
DEFENSE to plaintiff's complaint, defendants say and
allege:
13. The allegations in plaintiff's complaint fail to
state a claim upon which relief can be granted, and should
therefore be dismissed pursuant to Rule 12 of the Federal
Rules of Civil Procedure.
WHEREFORE, defendant respectfully pray the court
as follows:
:. That plaintiff recover nothing of defendant
and that this action be dismissed;
2. That the costs of this action, including a
reasonable attorney's fee, be taxed against plaintiff;
4. For such other and further relief as to the
Court may seem just and proper.
This the 28" day of June, 1989.
/s/LARRY L. EUBANKS
Attorney for the Defendants
Suite 300, BB&T Building
8 West Third Street
Winston-Salem, NC 27101
Telephone: (919) 723-0741
App. 78
IN THE UNITED STATES DISTRICT COURT
COLUMBIA DIVISION OF SOUTH CAROLINA
N. G. Lewis,
Plaintiff,
VS.
Local No. 382, International Brotherhood of Electrical
Workers (AFL-CIO, et al.,
Defendants.
Case No. 3:89-1361-01
MOTION TO REMAND
Plaintiff moves the Court for an Order remanding this
cause to the Court of Common Pleas for Lexington County,
South Carolina, on the ground that this action is brought, not
under federal law, but solely under state law on three causes
of action arising out of violation by Defendants of the South
Carolina Right to Work Act, resulting in termination of
union membership, for which the Plaintiff seeks damages for
mental anguish, humiliation, extreme emotional distress, loss
of future benefits and the costs of purchasing same, and thus
the case was improperly removed from the Court of
Common Pleas for Lexington County.
HOWARD HAMMER, P.A.
1019 Assembly Strect
Columbia, South Carolina 2920]
SCOTT ELLIOTT
Post Office Box 607
Columbia, South Carolina 29202
I.D. #705
App. 79
BY: /s/ Howard Hammer
HOWARD HAMMER, P.A.
I.D. #1695
Attorneys for Plaintiff
June 21, 1989
App. 80
IN THE UNITED STATES DISTRICT COURT
COLUMBIA DIVISION OF SOUTH CAROLINA
N. G. Lewis,
Plaintiff,
VS.
Local No. 382, International Brotherhood of Electrical
Workers (AFL-CIO), et al.,
Defendants.
Case No. 3:89-1361-0]
MEMORANDUM IN SUPPORT
OF MOTION TO REMAND
This matter is before the Court on Plaintiff's Motion
to Remand.
The Summons and Complaint in this action were
filed in the Court of Common Pleas for Lexington County
on April 24, 1989,
The Complaint alleges causes of action under the
Right to Work Act of South Carolina, 1976 Code Section 41-
7-10; that the Defendants wrongfully, willfully, wantonly
and by outrageous conduct conspired to violate the exercise
of Plaintiff's right to work, for which he seeks actual and
punitive damage, not against any pension plan, or its
administrator, but against the individual Defendants, for
mental anguish, humiliation, emotional’ distress, the loss of
future retirement benefits and the cost to purchase similar
benefits.
App. 81
ARGUMENT
THIS CASE SHOULD BE REMANDED
BECAUSE THE COMPLAINT STATES
CAUSES OF ACTION (VIOLATION OF
SOUTH CAROLINA RIGHT TO WORK
ACT, OUTRAGEOUS CONDUCT,
CONSPIRACY) NOT UNDER ANY
FEDERAL LAW, BUT RATHER SOLELY
UNDER STATE LAWS, — RIGHTS,
OBLIGATIONS AND DUTIES’ FOR
RESULTANT DAMAGES TO PLAINTIFF.
Defendants, in their Petition for Removal, claim that
this is a suit for benefits under the federal Employee
Retirement Income Security Act, (ERISA) 29 U.S.C. 1132,
1140, which preempts state law and thus permits removal to
the federal court. This is not so.
Contrary to the claim of Defendants, this is not a suit
to recover benefits under the terms of a plan or to clarify
Plaintiff's rights under the term of a plan as provided by 29
U.S.C. 1132 (a)(1). Reference to the Complaint clearly
shows that this action is brought under state law on three
causes of action (violation of South Carolina Right to Work
Act, 1976 Code Section 41-7-10 et seq., outrageous conduct,
conspiracy) for damages allegedly caused by the willful,
wanton and outrageous conduct of Defendants, who in
violation of the South Carolina Right to Work Act, conspired
to interfere with Plaintiff in the exercise of his right to work,
resulting in termination of Plaintiff's membership in the
union, and actual and punitive damages therefrom, consisting
of mental anguish, humiliation, loss of future benefits and
the cost of purchasing same, all in accordance with the
authority of Layne _v. Intern. Brotherhood of Electrical
Workers, 271 S.C. 346, 247 S.E. 2d 346 (1978).
In support of Plaintiff's Motion to Remand, we call to
the attention of the Court a similar case on point, Rody v.
App. 82
Midland Enterprise, Inc., 688 F. Supp. 129 (1988), copy of
opinion attached. There the District Judge, in an analogous
factual situation, rejected Defendant's contention that
Plaintiff's action was a claim under ERISA and in holding
that the case should be remanded, reasoned that the suit was
not preempted by ERISA because, as here, (1) the Complaint
does not allege a violation of ERISA, (2) the allegations of
the Complaint do not show that Defendants were motivated
for the purpose of interfering with Plaintiff's rights under the
plan; (3) the suit is not against the plan or its administrator,
(4) the Plaintiff does not claim benefits under the plan or
damages against the plan, but against the individual
Defendant, and (5) the relationship of the suit to ERISA, if
any, is too remote, tenuous and insubstantial to support
jurisdiction for removal.
The rationale of the District Judge in Rody, applies
with equal force to the facts in the present case. Here, as
there, the Complaint does not allege a violation of ERISA:
does not allege that Defendant's conduct was motivated for
the purpose of interfering with Plaintiff's rights under a plan,
as distinguished from interfering with the exercise of
Plaintiff's right to work under the Right to Work Act of
South Carolina; the suit is not against the plan or its
administrator; the Plaintiff does not claim benefits under the
plan or damages against the plan, but rather against the
individual Defendants; and relationship of the suit to the
plan, if any, is too remote, tenuous and insubstantial to
support jurisdiction for removal.
Also, compare Kimbrell v. Jolog Sportswear, Inc.,
239 S.C. 415, 123 S.E. 2d 524 (1962), in which the South
Carolina Supreme Court, relying on decisions of the United
States Supreme Court, pointed out that:
"State jurisdiction, however, has not been
preempted where the consequences of the
conduct involved were of compelling State
interest
App. 83
XXX
"The complaint is based upon an alleged
criminal and tortious violation of the rights of
the plaintiff for which the State law affords a
remedy for the recovery of both actual and
punitive damages. Where, as here, the
tortious conduct is of compelling state interest
affecting the public welfare and security of its
citizens, the state remedy is not excluded by
the National Labor Relations Act."
To the same effect is Gregory Electric Co. v.
Custodes Construction Co., (1970, D.C.S.C.) 312 F. Supp.
30, relating to the South Carolina Right to Work Act.
Where, as here, the state action is only of peripheral
concern, involves conduct in which the state has an
overriding interest and is deeply rooted in local concern, and
there is little risk that the state cause of action will interfere
with the effective administration of federal labor policies, the
state action is not preempted by the federal statute, Farmer v.
United Broth. of C & J of America, Local 25, 430 U.S. 290,
97 S. Ct. 1056 (1977); United Const. Workers, etc. v.
Laburnum Const. Corp., 347 U.S. 565, 74 S. Ct. 833 (1954).
In the alternative, should the Court determine that the
Defendants' removal action was proper, the matter should
still be remanded to state court in light of the facts that
Plaintiff filed suit in state court and that the crucial and
majority of issues necessary to determine the Defendants'
liability in the suit involve state law questions. 29 U.S.C.
1132(a) provides that:
(1) Except for actions under subsection
(a)(1)(B) of this section, the District Courts of
the United States shall have exclusive
jurisdiction of civil actions under this
subchapter brought by the secretary or by a
App. 84
Participant, jurisdiction and District Courts of
the United States shall have concurrent
jurisdiction of actions under ae USE.
1132(a)(1)(B)."
29 U.S.C. 1132(a)/ 1)(B) provides that
"A civil action may be brought -
(1) by a participant or beneficiary -
(B) to recover benefits due
to him under the terms of his
plan, to enforce his rights
under terms of the plan, or to
clarify his rights to future
benefits under the terms of the
plan;"
Thus, assuming, arguendo, that Plaintiffs suit is a
claim under applicable ERISA statutes, then his claim under
applicable ERISA statutes would appear to be a claim for
benefits under the plan. As such the Statutes provide for
concurrent state and federal jurisdiction and Plaintiff's action
is maintainable in state court. However, as set forth above,
Plaintiff's Complaint does not make a claim for benefits due
under the plan as none could be claimed under the plan
because his membership in the union was terminated prior to
his right to claim benefits under the plan.
CONCLUSION
For the foregoing reasons, in accordance with the
facts and the applicable law, it is respectfully submitted that
the cause should be remanded to the Court of Common Pleas
for Lexington County.
App. 85
Respectfully submitted,
HOWARD HAMMER, P.A.
1019 Assembly Street
Columbia, South Carolina 29201
SCOTT ELLIOTT
Post Office Box 607
Columbia, South Carolina 29202
1.D. #705
By: /s/_ Howard Hammer
HOWARD HAMMER, P.A.
[.D. #1695
Attorneys for Plaintiff
Walter W. RODY
Vv.
MIDLAND ENTERPRISES, INC. and
Port Allen Marine Services, Inc.
Civ. A. No. 88-151-A.
United States District Court,
M.D. Louisiana.
May 6, 1988.
ENTERED: MAY 6, 1988
Former employee brought suit against former
employer for wrongful discharge. After removal, former
employee moved to remand. The District Court, John V.
Parker, Chief Judge, held that claim was not a claim under
Employee Retirement Security Act as to which district court
would have had federal question jurisdiction, and could not
be removed.
Motion granted.
Removal of Cases
Former employee's claim against former employer
for wrongful discharge prior to fully vesting in retirement
plan was not a claim under the Employee Retirement Income
Security Act as to which federal district court would have
had federal question jurisdiction, and could not be removed.
28 U.S.C.A. § 1331; Employee Retirement Income Security
Act of 1974, §§ 502, 502(a), 510, 29 U.S.C.A. §§ 1132,
1132(a), 1140.
App. 87
John Dale Powers, Powers, Vaughn & Clegg, Baton
Rouge, La., for plaintiff.
Cornelius R. Hensel, S. Mark Klyza, Kullman,
Inman, Bee & Downing, New Orleans, La., for defendants.
RULING ON MOTION TO REMAND
JOHN V. PARKER, Chief Judge.
This matter is before the court on plaintiffs motion to
remand. Defendants have filed an opposition. There is no
need for oral argument.
On December 30, 1987, plaintiff Walter W. Rody
filed this action in the 19th Judicial District Court for the
parish of East Baton Rouge, Louisiana, against Midland
Enterprises, Inc. and Port Allen Marine Services, Inc., as his
former employers. Plaintiff alleges that he became the
Director of New Construction Marketing for Midland
Enterprises on October 27, 1986, at which time Midland
allegedly made a commitment to retain plaintiff until he
would be fully vested in Midland's retirement plan on August
16, 1988. Plaintiff was allegedly terminated on January 17,
1987 because of a "conflict of interest" (i.e. solicitation of
fleeting and mooring business on behalf of a corporation
formed by Rody). Plaintiff seeks damages for wrongful
discharge, including loss of salary and benefits.
On February 22, 1988, defendants Port Allen Marine
and Midland Enterprises, Inc. removed this action, alleging
they had been served on January 22 and 25, respectively.
Defendants allege that plaintiff's claim for wrongful
discharge prior to vesting in Midland's retirement plan
necessarily constitutes a claim under the Employee
Retirement Income Security Act (ERISA), 29 U.S.C.
Sections 1132, 1140. Consequently, it is alleged that this
court has jurisdiction pursuant to 28 U.S.C. Section 1331.
On March 28, 1988, plaintiff filed the motion to
remand presently before the court. Plaintiff argues that his
App. 88
claim does not constitute a claim under ERISA--that it is not
a suit for benefits but one for damages for wrongful
discharge.
In opposition to the motion to remand, defendants
argue that plaintiffs allegations amount to a violation of
Section 1140, which provides in pertinent part as follows:
"It shall be unlawful for any person to
discharge. .. a participant .. . for the purpose
of interfering with the attainment of any right
to which any such participant may become
entitled under the plan, this subchapter, or the
Welfare and Pension Plans Disclosure Act..."
Defendants further argue that plaintiffs claims fall
within the civil enforcement provision of ERISA, 29 U.S.C.
Section 1132(a) (empowering participants to sue for
recovery of benefits), and are therefore preempted by ERISA
and removable despite the fact that the preemption defense is
not disclosed on the facts of plaintiff's petition. Defendants
note that the Supreme Court recently excepted ERISA cases
from the well-pleaded complaint rule in Metropolitan Life
Ins. Co. v. Taylor, 481 U.S. --- 107 S.Ct. 1542, 95 L.Ed.2d
55 (1987). See Beers v. North American Van Lines, Inc.,
836 F.2d 910, 913 n. 3 (Sth Cir. 1988) (explaining the
limited nature of this exception to the well-pleaded
complaint rule).
Plaintiff correctly points out that defendants have
misconstructed the lawsuit. Contrary to the argument of the
defense, plaintiff has not alleged a violation of Section 1140
because the allegations relating to defendant's motivation in
terminating plaintiff relate to "conflict of interest". There are
no allegations which in any way indicate that plaintiff was
discharged to prevent his benefits vesting under the
retirement plan. Section 1140 clearly requires a "purpose of
interfering with" the participant's rights under the plan. Such
App. 89
improper motivation is not alleged here. See Morningstar v.
Meijer, Inc., 662 F.Supp. 555 (E.D.Mich.1987).
The court further agrees with plaintiff that this is not
a suit for benefits under a retirement plan. See Morningstar,
supra at 556-557. The only relationship that ERISA has to
this action relates to plaintiff's claim for damages resulting
from the loss of retirement benefits. Plaintiff does not claim
benefits; he claims that a breach of his contract has denied
him future benefits to which he would otherwise have
become entitled. His claim for damages, as plaintiff points
out, is not against the Plan, but against the employers who
allegedly breached the contract. As noted in Morningstar,
supra, damages will likely be measured by the cost to
plaintiff to purchase substantially similar benefits to those
lost by reason of the alleged breach. The court agrees with
the rationale expressed by Judge Churchill in Morningstar,
supra. This relationship is too remote, tenuous and
insubstantial to support jurisdiction for removal.
Accordingly, the court hereby grants plaintiff's
motion to remand and this action will be remanded to the
19th Judicial District for the Parish of East Baton Rouge,
Louisiana.
App. 90
IN THE UNITED STATES DISTRICT COURT
COLUMBIA DIVISION OF SOUTH CAROLINA
N. G. Lewis,
Plaintiff,
VS.
Local No. 382, International Brotherhood of Electrical
Workers (AFL-CIO), et al.,
Defendants.
PETITION FOR REMOVAL
TO THE JUDGES OF THE UNITED STATES
DISTRICT COURT FOR THE COLUMBIA DIVISION OF
SOUTH CAROLINA.
The defendants herein respectfully show:
l. On the 24th day of April, 1989, an action was
commenced against defendants in the Court of Common
Pleas in the State of South Carolina in and for the County of
Lexington, entitled N. G. Lewis. Plaintiff, against Local No.
381, International Brotherhood of Electrical Workers (AFL-
CIO), Davis Self, Larry Poole, Jerome Jenkins, Doris M.
Jones, Bill Davis, John C. Davis. and Ronald Goodale,
Defendants, Docket No. 89-CP-32-1054 by the service upon
defendants of a Summons and Complaint, copies of which
are annexed hereto. The defendants were served with notice
on May 1, 1989. No further proceedings have been had
therein.
pe The above-described action is a Civil Action
of which this Court has Original jurisdiction under the
provisions of Title 28, United States Code 1331, and is one
which may be removed to this Court by the defendants —
App. 91
therein, pursuant to the provisions of Title 28, United States
Code, Section 1441 in that:
The plaintiff was a member of the defendant Local
Union in 1948 and remained a member until 1986, during
which time the plaintiff paid dues out of which the Local set
aside a certain amount into the Local Union Pension Plan.
The plaintiff expected a pension therefrom upon his
retirement. The plaintiff worked for a non-union contractor
in violation of Union rules. Because of his actions and
knowing violation of Union rules, the Union, as a
disciplinary action, fined him. He refused to pay the fine or
further dues, and he therefore lost his membership. The
plaintiff alleges the defendants violated South Carolina's
Right to Work Act, S.C. Code #41-7-10, et seq. (1976) and
thereby brings this action in the Court of Common Pleas in
the County of Lexington, South Carolina on April 24, 1989.
This Petition for Removal is first based on the fact
that ERISA preempts the application of the South Carolina
Right to Work Law. Section 514(a) of ERISA states that,
except subject to express exceptions set forth in the statute:
the provisions of this Subchapter [I
‘Protection of Employee Benefit Rights,'] and
Subchapter III ['Plan Termination Insurance'}
shall supercede any and all State laws as they
may now or hereafter relate to any employee
benefit plan described in Section 1003(e) of
this Title and not exempt under Section
1003(b) of this Title.
29 U.S.C. §1144(a)
As an employee benefit plan “established [and]
maintained...by...[an] organization representing employees
engaged in commerce or in any industry or activity affecting
commerce", 29 U.S.C. §1003(a), the International
Brotherhood of Electrical Workers Pension Fund comes
within the ambit of the preemption section.
App. 92
29 U.S.C. §1144(a) preempts State laws "as they may
now or hereafter relate to" a benefit plan. The South
Carolina Right to Work Law does not, by its terms, deal with
or obviously "relate to" pension funds. However, Lewis'
purpose in invoking it in this case is to bar the Union from
using internal discipline to interfere with his pension rights.
This "indirect" relationship brings the Right to Work Law
under ERISA. The Supreme Court had made clear that the
term “relate[s] to" was intended by Congress to be broadly
read.
ERISA preempts the State Court action. Because the
instant case is under ERISA, a Federal question is present.
Nevertheless, the instant case also Satisfies the ERISA
exception for 28 U.S.C. §1331. In Metropolitan Life v.
Taylor, 55 USLW 4468 (April 6, 1987), the Court created an
exception to the general rule (the "well pleaded complaint"
rule which is that unless the complaint itself raised issues of
Federal law, a case is not removable to Federal Court under
28 U.S.C. §1331) for certain ERISA actions. To be
removable based on a defense brought under ERISA, the
case must satisfy two criteria: (1) the defense must assert that
the State claims under which the case was brought are
preempted by ERISA; and (2) the case must fall within the
scope of Section 502(a)(1)(B), the Civil enforcement
provision of the Act. Metropolitan Life, 55 USLW at 4469.
This case would clearly satisfy the criteria: F irst, the
defendants hereby assert ERISA preempts the State law
claim. Second, the case at bar falls within the scope of
Section 502(a)(1)(B). 501 (a)(1)(B) states that:
A Civil Action may be brought...
(1) by a participant or beneficiary...
(B) to recover
benefits due to him under the
terms of his plan, to enforce
App. 93
his rights under the terms of
the plan, or to clarify his rights
to future benefits under the
terms of the plan[.]
29 U.S.C. §1132(a)(1)(B)
Lewis is bringing this action as a wrongfully
disciplined member of the International Brotherhood of
Electrical Workers, purporting to be a "beneficiary" of the
pension plan. Lewis, in claiming internal discipline cannot
be used to interfere with his pension rights, is, in essence,
seeking to "enforce his rights under the terms of the Plan or
to clarify his rights to future benefits under the terms of the
Plan." Therefore, the instant case is a case that "could have
been brought" under Section 514(a)(1)(B), and again is
removable.
WHEREFORE, defendants pray that the above action
now pending against them in the Court of Common Pleas of
South Carolina in and for the County of Lexington, be
removed therefrom to this Court.
RESPECTFULLY SUBMITTED, this the 26th day
of May, 1989.
/s/ Larry L. Eubanks
LARRY L. EUBANKS
Attorney for the Defendants
Suite 300, BB&T Building
8 West Third Street
Winston-Salem, NC 27101
Telephone: (919) 723-0741
South Carolina Bar No. 1923
App. 94
IN THE COURT OF COMMON PLEAS
COUNTY OF LEXINGTON
N. G. Lewis,
Plaintiff,
VS.
Local No. 382, International Brotherhood of Electrical
Workers (AFL-CIO), Davis Self, Larry Poole, Jerome
Jenkins, Doris M. Jones, Bill Davis, John C. Davis and
Ronald Goodale,
Defendants.
COMPLAINT
Plaintiff above named complaining of Defendant's
alleges:
FOR A FIRST CAUSE OF ACTION
l. That Plaintiff is a resident and citizen of the
State of South Carolina, County of Richland.
2. That the Defendant, Local No. 382,
International Brotherhood of Electrical Workers (AFL-CIO),
is an unincorporated association Owning property and doing
business in the County of Lexington.
3. That on information and belief, the
Defendants, Davis Self, Larry Poole, Jerome Jenkins, Doris
M. Jones, Bill Davis and John C. Davis are residents and
citizens of the State of South Carolina, Counties of
Lexington and Richland.
4. That Plaintiff became a member of Defendant
local union in 1948 and remained a member until 1986, a
period of over thirty-five (35) years during which time he
paid dues and made contributions to said Defendant Local
Union and to said Defendant's Local Union Pension Plan
App. 95
with the expectation of drawing a pension upon his
retirement.
5. That on or about February 16, 1987 and for
some time prior thereto, the individual Defendants, acting
individually and as agents of the Defendant Local No. 382,
International Brotherhood of Electrical Workers Union,
jointly and severally, in violation of the South Carolina's
Right to Work Act, S.C. Code #47-7-10, et seq. (1976),
attempted to and did interfere with Plaintiff's exercise of his
right to work, and did, thereby cause him to lose his pension
benefits.
6. That as a result and consequence of the
aforementioned unlawful conduct of Defendants, jointly,
severally or individually, Plaintiff has suffered a loss of his
pension and has been otherwise damaged.
FOR A THE SECOND CAUSE OF ACTION
r That the Plaintiff repeats and reiterates herein
the allegations of paragraphs 1-6 as though incorporated
verbatim herein.
8. That the aforesaid actions of the Defendants
were reckless, willful, wanton, oppressive and constituted
extreme and outrageous conduct, as the result of which the
Plaintiff has suffered extreme emotional distress,
nervousness, worry, loss of sleep and other emotional ills, all
to his damage, and has been deprived of income and other
benefits he would have had.
FOR A THE THIRD CAUSE OF ACTION
9. That the Plaintiff repeats and reiterates herein
the allegations of paragraphs 1-8 as though incorporated
verbatim herein.
10. That the Defendants, in violation of South
Carolina's Right to Work Act, conspired jointly and
severally, in combination and with each other, by force,
App. 96
intimidation and threats, to deprive Plaintiff of the exercise
of his right to work under the aforesaid act, as a result of
which Plaintiff has suffered damages.
11. | That by reason of the premises aforesaid, and
as a direct result thereof, the Plaintiff has been and will be
deprived of the benefit of the monies paid to Defendant
Local Union over the years during which he was a member,
he has suffered and will suffer extreme distress, humiliation,
nervousness, loss of sleep and other emotional ills, and he
has been otherwise damaged.
WHEREFORE, Piaintiff prays for judgment against
the Defendants, jointly, severally and in the alternative, for
actual damages in the sum of Five Hundred Thousand
Dollars ($500,000.00) and punitive damages in such amount
as may be fair, just, adequate and appropriate, and for
attorney's fees together with the costs of this action.
HOWARD HAMMER, P.A.
1019 Assembly Street
Columbia, South Carolina 29201
SCOTT ELLIOTT
Post Office Box 607
Columbia, South Carolina 29202
BY: /s/ Howard Hammer
HOWARD HAMMER, P.A.
Attorneys for Plaintiff
April 18, 1989.
App. 97
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED
FEDERAL
U.S. Constitution, Article VI
This Constitution, and the Laws of the United
States which shall be made in Pursuance
thereof; and all Treaties made, or which shall
be made, under the Authority of the United
States, shall be the supreme Law of the Land;
and the Judges in every State shall be bound
thereby, any thing in the Constitution or Laws
of any State to the Contrary notwithstanding.
U.S. Constitution, Amendment X
The powers not delegated to the United States
by the Constitution, nor prohibited by it to the
States, are reserved to the States respectively,
or to the People.
Removal of Cases, 28 U.S.C. § 1447
28 U.S.C. § 1447 (c), as amended
A motion to remand the case on the basis of
any defect in removal procedure must be
made within 30 days after the filing of the
notice of removal under § 1446 (a). If at any
time before final judgment it appears that the
district court lacks subject matter jurisdiction,
the case shall be remanded. An _ order
remanding the case may require payment of
just costs and any actual expenses, including
attorney fees, incurred as a result of the
App. 98
removal. A certified copy of the order of
remand shall be mailed by the clerk to the
clerk of the State court. The State court may
thereupon proceed with such case.
28 U.S.C. § 1447 (d)
An order remanding a case to the State court
from which it was removed is not reviewable
on appeal or otherwise, except that an order
remanding a case to the State court from
which it was removed pursuant to section
1443 of this title shall be reviewable by
appeal or otherwise.
Labor Management Relations Act, as amended (LMRA), 29
U.S.C.
Labor
§ 185 (a)
Suits for violation of contracts between an
employer 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.
Management Reporting and Disclosure
(LMRDA), Subchapter II, 29 U.S.C. § 413
Nothing contained in this subchapter shall
limit the rights and remedies of any member
of a labor organization under any State or
Federal law or before any court or other
App. 99
Act
tribunal, or under the constitution and bylaws
of any labor organization.
Employee Retirement Income Security Act (ERISA), 29
U.S.C. § 1144 (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 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.
STATE
SOUTH CAROLINA RIGHT TO WORK ACT
S.C. Code Ann. § 41-7-70(1). Interference with right to
work, compelling labor organization membership, picketing,
and the like made unlawful.
It shall be unlawful for any person,
acting alone or in concert with one or more
persons:
(1) By force, intimidation, violence or
threats thereof, or violent or insulting
language, directed against the person
Or property, or any member of the
family of any person (a) to interfere,
or attempt to interfere, with such
person in the exercise of his right to
work, to pursue or engage in, any
lawful vocation or business activity, to
App. 100
enter or leave any place of his
employment, or to receive, ship or
i deliver materials, goods or services
: not prohibited by law or (b) to compel
or attempt to compel any person to
4 join, or support, or refrain from
joining or supporting any labor
; organization; or
S.C. Code Ann. § 41-7-80. Penalties.
Any employer, labor organization or other
person whomsoever who shall violate any
z provision of this chapter shall be guilty of a
misdemeanor, and, upon conviction thereof in
any court of competent jurisdiction, shall be
punished by imprisonment for not less than
ten nor more than thirty days or by a fine of
| not less than ten nor more than one thousand
dollars or by both in the discretion of the
court.
S.C. Code Ann. § 41-7-90. Remedy for violation of rights;
relief which court may grant.
Any person whose rights are adversely
affected by any contract, agreement,
assemblage or other act or thing done or
threatened to be done and declared to be
unlawful or prohibited by this chapter shall
have the right to apply to any court having
general equity jurisdiction for appropriate
relief. The court, in any such proceeding,
may grant and issue such restraining, and
| other, orders as may be appropriate, including
an injunction restraining and enjoining the
performance, continuance, maintenance or
App. 101
commission of any such contract, agreement,
assemblage, act or thing, and may determine
and award, as justice may require, any actual
damages, costs and attorneys’ fees which
have been sustained or incurred by any party
to the action, and, in the discretion of the
court or jury, punitive damages in addition to
the actual damages. The provisions of this
section are cumulative and are in addition to
all other remedies now or hereafter provided
by law.
App. 102
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.