Appendix — Lewis v. Pavlovscak

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APPENDIX

IN THE UNITED STATES DISTRICT COURT FOR ‘THE

WESTERN DISTRICT OF PENNSYLVANIA

°C i . ;

Civil Action No. 16996

Joun Pavioyseak, Plaintiff

: Vv.

Joux L. Lewis, Cuaruis A. Owen, and Jostruine, Rocue,

as Trustees of the United Mike Workers of Ajnerica >

Welfare and Retirement Fund, Defendants

’

: | Opini | a

Joun W. Melivarxe, District Judge

The plaintiff filed this action to enforce payments of

_an alleged pension due him from defendants. Service was

made by delivering.a copy of the complaint to W. Phillips

Palmer, Assistant Administrator and person in charge

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of an office loeated at 605 Empire Building in Pittsburgh, .

Pennsylvania. The return of the United States Marshal

also indicates that this was the place of business of the

United Mine Workers of America Welfare and Retirement

Fund. It also appears that the plaintiff issued a writ of

foreign attachment and that was served upon the United

States Steel Corporation and the Pittsburgh Consolida-

tion Coal Company. ©The defendants thereafter, diled a

motion ‘to dismiss the complaint alleging improper service. _

of process, lack of jurisdiction and venue, and Inoeved

to quash return of, seryice of summons and. to quash the ,

writ. of foreign attachment. This matter caine on for

hearing and the counsel for the plaintiff advised the

Court that he was not seriously pressing the writ) of

foreign attachment feeling that the service on the defend

ants Was good and that he was interested in obtaining a

judgment against the defendants, rather than the garnishee,

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The ‘principal ground on which the defendants rely

is that service was not made in accordance with Rule

4, Federal Rules of Civil Procedure, 28 U.S.C.A., or pur-

suant to any rule or law of the United States or the Coin-

monwealth of Pennsylvania. They further take the position

that the jurisdiction and venue are lacking because this suit

_ directly involves the administration of a trust of movables,

- the situs of which is loc ated outside the C ommonwealth of

Pennsylvania.

From the facts as stipulated between the parties, it

appears that the United Mine Workers of America

Welfare and Retirement: Fund of 1950 ¢hereinafter te

ferred to as the Fund) was created by written instrument

known ax National Bituminous Coal Wage Agreement.

of 1950, between certain bituminous coal operators and

the United Mine Workers of America. The agreement

Sereated was executed in Washington, D. C., and the fund

was created on -March’ 5, 1950... Tt is: administered

hy three tPustees appointed by the parties to the agree-

nient. The trustees are: John L. Lewis, a citizen of

the State of Illinois; Josephine Roche, a citizen of the,

State of California; and Charles “A. Owen, recently

deceased, was a citizen of the State of Florida. The

trustees held meetings at the Fund’s offiee in. Wash-

ington, D. C. They held two emergency meetings in the

State of Florida. The principal assets of the Fund are

personal property. Numerous residents of the Common-

wealth of Pennsylvania receive pensions from the pension

fund and as of June 30, 1956, over 61,000 retired miners

were receiving pensions.’ Remittances from the operators

are made to the Fund's office in Washington, D.C. There

are numerous operators in Pennsylvania who make pay:

.ments into this fund. Between March 5,°1950, ‘and June,

30, 1956, over $832,000,000 has been paid ‘into the fund

by the operators and over $365,000,000 has been used for

the payinent of pensions: during that same period of time.

The Fund has 441 employees for administration of the fund:

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and there are 42 employees in two area medical locations

in Pennsybvania. Pie Fund has filed 62 suits in. this court |

“for failure of operators to ‘remit the royalty payments due.

It is obvious that Pennsylvania is-one of the ‘lead-

ing coal production states in the United States and nee-

essarily large amounts of royalties are earned, owed,

and regularly. collected) by the. Fund in Pennsylvania.

Auditors of the Fund-come into Pennsylvania to examine .

and audit’ the books of the operators. At. the time of

filing this suit, the defendants maintained a fisting in .

the Pittsburgh telephone directory under the name,

United Mine Workers of America Welfare and Retirement

Fund, Empire Building, Express 1-160, and it was in the

Empire Building where the United States Marshal served-

W. Phillips Palmer. The Fund frequently sends examiners

into Pennsylvania to examine books of operators. Tt ap-

pears-that after the Marshal served Mir. Palmer, notice of

this suit was immediately given to officials of the Fund

in Washington, D. C., by Mr. Palmer.

When monies are received in Washington, D. ©... they

vo into a. general account and ‘then on a_ basis’ of

statistical analysis the funds are Qlocated to the pension

fund. and to the administrative f¥nd or account. The

individual served, Mr. Palmer? is jaid ‘out of funds put

into the administrative account whith in turn comes out

of the general fund and the general funds are distributed

either to the pension fund or the‘ ad\ninistrative account.

It also appears that no accounting the Fund's activ-

. ities-has been filed in-any court of \the United’ States

or in any United States Court. ,

With these facts in mind; we, anust- now turn to

resolving the basie question of whether the defendants’

motion to dismiss is well taken or not. The plaintiff

maintains that there is good service of process under

the law of Pennsylvania. The defendant, on the other

hand, says that it is a trust and ‘only a trust and, that,

ta.

it can only be amenable to the laws of the District of

Columbia. Though it calls itself a trust, we are not

convineed that it is a trust in the strict sense of that

word. It does rely on some eases in other jurisdictions

that would so indieates See Van Horn ve Lewis, D.C. 1948;

“79 F. Supp. ol, 545: Cf. Hobbs ‘vy. Lewis, D. C. 1958, 159

F. Supp. 282. But the courts of Pennsylvania. have

recently held that this so-called trust is not a_ trust

in the. normal sense, but is rather an unineorporated

association. They were aware of the decisions holding that

jurisdiction in eases such as this rested solely in the Dis-

trict of Columbia. They as we are were. impressed by the

thought that .the convenience: of thousands of mintrs

throughout the land should be ‘considered. The decision

of this Court was withheld pending the Pennsyl¥ania

Court's decision. The parties to this pr eeeding were in

‘agreement tliat the al ania decision would have great

weight with this Court. The Superidr Court of Pennsyl-

vania made its decision in Stampolis v. Lewis, 1958, 186 Pa.

‘Super, 285, 142 A. 2d 348. Allocatur was refused by the

Supreme Court of Pennsylvania on August 19, 1958.-

Mr. Justice Stewart in a recent opinion in the United

States Court of Appeals for the Sixth Cireuit —be-

fore his elevation to the Supreme Court lends support to

this thinking when he indicated that while this fund: is in

some respects similar to charitable trusts, it is not a

true charitable trust. Le wis v, Benedict Coal Corp.. 6 Cir. |

1958, 259 F. 2d 346, 355.

This Court not only feels that the views expressed hy

the Superior.Court in the Stampolis case are controlling on

this Court as interpreting the law of Pennsylvania, but we

feel that it is a sound decision.- In that case, it. is obvious

that the Superior Court rejected the defendants’ argument.

that they are a trust.and found that’the defendants are an

unincorporated association under the Pennsylvania Rules

of Civil Proéedure. An association. means. an unineorpo-

rated association conducting any -business or any activity

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of any. nature whether for profit or otherwise under a com-

mon name, -Pa. Ri Civ. P. 2151, 12 P.S. Appendix. It. is

obvious that this Fund was engaging in business—that of

collecting royalties from operators and paying them out

ta miners eligible for them. It was operating ander the

name of the United Mine Workers of America Welfare and

Retirement Fund, It carried out many activities in Penn-

‘sylyania: Among others, it*brought numerous suits in the

Commonwealth of Pennsylvania; it sent its employees into

Pennsylvania to éxamine books of those against whom it

had claims; it maintained a listing in the* Pittsburgh tele.

phone directory ; and it collected large sums of money from

Pennsylvania.

Pennsvivania Rules of Civil Preeedure, Rule 2156,

provides that: . .. an action against-an association may .

he brought in and only-in a county where the association

regularly conducts business or any association activity

...°’. It.eertainly appears that many activities of the asso-

ciation were carried on in Allegheny Coiinty such as main-

taining a listing in the telephone directory ; and the primary

concern to the Fund, the collection of monies and the. exam-

ination of the books of operators. The process herein was

serves in accordance with Pennsylvania Rule of Civil Pro-

cedure 2157 for it was served on the person in charge of the

place where the association carried on activities; that. is,

it was served at the office where it was listed in the Pitts-

‘burgh telephone directory,

Ht as also. possible that this Fund, could be ‘an entity

similat to a corporation within the -meaning of Rule

2176 of the Pennsylvania ‘Rules of Civil Procedure.

‘* ‘corporation or similar entity’ includes any public,

qwdei publi or private corporation, insurance asso-

ciation or exchange, registered partnership, . partner:

ship association limited, joint stock company or asso-

-ciation, ‘Massachusetts trust’, or any other association

Oat. ts E

which is regarded as an entity distinet from the mem-

bers composing the association. .. .”’

See Rule 2176.

It is interesting that a note to this Rule indicates that

the phrase ‘corporation or similar entity’? includes all

associations and business entities which are regarded as

separate and distinet from. their members, and there was

no attempt to enumerate all the various classes of private

corporations falling within the, definition. ° ee

If the Fund is an entity, similar to a corporation,

service is proper if it is on a pérson for the-fime being

in charge of any office of the entity. It was) argued

whether this was an office of the entity, but in any event

service is permitted on an entity by sending the copy of

the complaint by registered mail direct to the Secretary

of the Commonwealth: and to the entity at its principal

place of business as the Court might direct. See Pennsyl-

vania Rule of Civil) Procedure 2180. Here’ it is ob-

vious that the defendant received speedy noticeoand that,

of course, is the main intention of Rule 2180.

‘The situation here is somewhat akin to -a class suit

and the criterion as to service in a class suit is:

whether the: service in) question constitutes “adequate

notice to the class sued to come in and, defend.

Malarney v. Upholsterers’ International Union, D.C. E.D.

| Dac 1947. 7 F.R.D. 403.

“Mr. Palmer, the individual served, testified that he was

an employee of the medical fund, but was not authorized to

accept the service in this case. However, it is interesting

to note that he is paid a salary from the same fund.as one

of the trustees of the Fund is paid. ;

Dr. Warren F. Draper testified that he was the executive

medical officer of the. United Mine Workers of Americ a

Welfare and Retirement Fund. This Fund, of course, is

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the deféndant in-this case. . He, from time to time, Visits

- the local offices, Pittsburgh being one of thei. His primary

duty is to supervise the nyedical work of the» ‘Fund and

Mr. Palmer was the assistant to Dr. Draper for this area.

The defendants have attempted to distinguish the medical

office from the pension fund, but this distinction seenis more

fanciful than real. The medical fund obviously operates

under the United Mine Workers of America Welfare-anc

Retirement Fund, and was created under” this Fund an

has no independent existence, Tf this be-true, then the

service uper Mr. Palmer would be good service upon the

Mund under noriial procedures: by serving a defendant in

the office of the defendant where it regularly carries on

— Claycratt.Co. v. United Mine W aaa of Amer-

oa, O Cir. » ba, M4 FL 2d 600.

Applying the rationale of Stam polis v. Lewis, supra, we

feel that under all the pertinent facts that-jurisdiction and

venue are not lacking in this Court, and our finding as the

nitimate fact after considering all the relevant testimony is

that the Fund is doing business in Pennsylvania and that. .

this would be the result in Pennsylvania within the-some-

what restrictive ruling of Lutz v. Foster dé Kester Co., Inc.,

1951, 367 Pa, 125 79 A. 2d 222, although this Court feels that

the rule of the Lutz case might be ‘relaxed if it were dgain

before the -Supremé Court of Pennsylvania in view of the

trend of the judicial decisions throughout the nation and

in the Supreme Court of the United States in’ reeent

vears, See also Partin v. Michaels Art Bronze Co.. 3 Cir.

202K. 2d S41. | 7

In addition to our thoughts that the defendants are nota

trust-in the normally accepted serise, we feel that they are a

new ereature created pursuant to the Labor-Management

Relations Act of 1947, 29 U.S.C.A. § 141. They were created

by federal daw and should be oblate to federal law:

there is ne reason to resort to the old and ancient theories

of trustlaw. The Fund is a creature of new federal legis-

lation and we must not stifle it.’ The beneficiaries, the

to them and certainly not. inconvenient to —

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thousands of hard working miners, who have labored vears

under the ground in ¢ reating: this Fund, must not be foreed

to go to Washington, D. C." but should and must. be able

to go to the federal court in thefr district in order to have

their rights and claims adjudicated in a tribunal convenient

ae

ON cae ,

We repeat that this is a new type of rela ionship that

only lately has been developed as a concept of: employer.

employee relationship. The Fund was ¢reated pursuant. to

Section 302 (¢) of the Labor-Management Relations Act,

1947, 29 ULS.C,A. S186(e). As Justice Douglas so aptly

pointed out:

“The Labor Management Relations Act expressly: Fur

nishes some substantive law. It points out what. the

parties may or may not do in certain situations. . Other

problems will lie in the pemimbra of express statutory

* * * sanction but will be solved by looking at the policy

-of the legislation and fashioning a remedy that will

effectuate that policy. The range of judicial inven

tiveness will be determined by the nature of the prob

‘lem. See Board 6f Commissioners of Jackson Counts

Vv. United States, 308 ULS. 343, 351, 60° S.Ct. 285. 84

L.Ed. 313. Federal interpretataon of the federal law

_ will govern, not state law. Ct. Jerome v. United States.

B18 US. 101, 104, 63°S8. Ct. 483, 87 Lo Bd. 640. “But |

state law, H compatible with the purpose of § 301, may

be resorted to in order to find the rule that will best

effectuate the federal poliey. See Board of Commis

stoners of Jackson County v. Cnited States, supra, 30s

U.S. at 351-352, 60.8. (toat pages JSs-280, Any state

law ‘appliéd, how@vers will be absorbed as federal law

LEE wpe and will not be an independent source of private

Tights."" Tyrtile Workers Union of America vy. Lincoln |

~ Mills, 353 UIS. 448, —. 77S. Ct. 912, 918, 1 L. Ed. 2d

972. |

Ace ording!y. defendants* motions te dismiss and. to quash

service should be denied.

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UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

"No. 12.835 23 ,

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Jousx A. Paviovscax, Appellee

Vv.

Jousx Lo Lewis, Hexry G. Scumior anp Joseenine Rocue,

as Trustees of THE Usxrrep Mink Workers or AMERICA

Werrake anp Retirement Funp, Appellants.

Arreat Feom rik Usrfep States Disriicr Covrr ror THE,

Westers Distrier of PENNSYLVANIA .

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Argued Jane 4, 1959

Refore: Chroomnrr i K ALODNER and Hastin, Coreuit Judaqes.

£5) ae —— ’

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Opinion of the Court

(Filed Septe mber 1s, 1959)

Hastie, Cirnenit dudae.

In this ease a retired coal miner seeks to ontablinh his

right tow pension to be paid by the © nited Mine, Workers

of America Welfare.and Retirement Fund, as established

hy an agreement between certain coal operators and the

. United. Mine Workers under sanction of Seetion 302. of .

the Lahor-Management Relations Act of 1947. 61 Sat.

157, 20 USC. A. $186 (e).. To this-end-he has sued ** John

L.. Lewis, Henry G. Schmidt and Jose ‘phine Roche, as Trus-

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tees of the U nited Mine® Workers of America Welfare and

“Retirement Fund’ in the District Court for the Western

District of Pennsylvania, the distriet within which the plain.

‘tiff resides. Diversity of citizenship is asserted as the

basis of federal jurisdiction.’ ae

The United. Mine Workers of , America Welfare jane

Retirement Fund, hereinafter called the Fund, has beet

ereated and functions to provide medical and pension bene

fit for retired miners. Ttis administered in the District

of Columbia pursuant to the constituting indenture by the

'Althongh mo party has raised any question concerning thé

existence of the Pequisite diversity, of ccitizenship here. it) se yas

dppropriate to point out that this case is different from Vndes

wood ¥. Maloney odd Cir, 195s, 256-8 2d 3834. There an individual

brought suit claiming te represent the members of a labor unien

an Unincorporated association: as a class. We riled that tovestab—

lish diversity jurisdiction plaintitf must show that all members

of the union were citizens af states other than those im whieh op,

posing parties resides

Nothing like that appears here The suit is against an organiza

hon ereated for special and de fined purposes by an indenture exe

an

ented: by the United Mine Workers: and certain. coal operators .

That organization is a body of three’ trustees’ vested ‘with full

authority amd responsibility. for carrying ont the terms of the:

indenture Pennsvivania treats this body of three as an unineor

porated asseciation for procedural purposes. Whether we would

sy characterize the group we neeept for the (purposes of this: case

thy Pennsylvania conception

Further distinguishing the (ntereoud ease. the union members

here do net pay inte the Fund or control its aedinistration. The

individual amion member may oor may net. according to future

clreuimstances, become legally entitied to benetits from the Fund

Thectrustees arenot agents of the union or of the operators, sinee

they are not responsible to these persons or required to do their

- bidding Thes funéetion independently with the indenture serving

as their charter and defining their responsibilities. Indeed, the

essence of théscheme seems to have been to set up.a body in fact and

in law separate aid distinet. from both the union and the mining

companies. Thus, it the re nidenee of the trustees satisfies diversity

requirements it seems bamaterial where the coal operators or the

members of the union which established the Fitnd reside

ood

Se ree! * eee id

Trustees named inthis case. Sums are paid into the Fund

periodically by mine operators. The Trustees cause. pen-

xions and other benefits, to be provided for miners found

to be eligible. The Trustees are ‘citizens of states other

than Pennsylvania and, as individuals, have not been found

within Pennsylvania. The corpus of the Fund consists of

mov ables with: situs in the District of € ‘olumbia.

Service of process Was upon an alleged agent of the

Fund in charge of an office maintained in the name of the

——Pand in- Pittsburgh. —A-motion—to-disiniss—the- complaint .

has raised the question of the suability of the Fund in the .

Western District of Perinsylvania as wells the sufficiency

of | process, The district court denied the motion, Qar-

lurseak & Lewis, D.C. 1958, 168-F. Supp..839. At the same

time, it sanctioped this interlocufory appeal, which has

heen perfected as provided by Section 1292 (b) of Title 28

United States Code, as amended by the Act of eptember 3,

1958, 72 Srav, 1770. .

What the plaintiff is attempting "here is to have juris-

diction exereised over the Fand@s a busjness organization

in the nature of an unincorporated association. Under

Rule “f (b) of the Federal Rules of Civil Procedure, 28

U.S, the district court Was obligated to determine the

waa of the Fund to be sued as a constituted business .

organization, by applying the law of the state in which the.

district court sat. In‘this endeavor thedistriet court turned —

to Stampoljs v. Lewis, 1958, 186 Pa. Super. 285, 142 A. 2d

348, alloeatur. refused, Pennsylvania Supreme Court, Au-

gust 19, 1958, certiorari denied 1959, 359 U.S. 907,79 8. Ct.

582, 3 L. Ed. 2d 572, and found that there the Superior

Court of Pennsylvania had considered the status of this

very Fund as a party litigant and had treated it as a busi-

_ ness unit suable in the same manner as an unincorporated

association under Pennsylvania law. True that case in-

volved a w rit of foreign attachment, while this one is an

attempted exercise of ordinary jurisdiction over the or-

payments owed to the Fund.

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ganizatjon directly, but for present purposes the important

thing is that the Stdmpolis decision is an authoritative

Pennsylvania ruling that Pennsylvania procedural law

treats this Fund, for purposes of suabilify and amena-

bility to process, like an ordinary unincorporated associa.

‘tion. It may be, as has been argued to us, that for certain

purposes of substantive law the Fund will be treated as a

trust, or perhaps as something else, but for present pur

poses | that is irrelevant. We are narrowly coneerned with

Pennsylvania procedure for handling suits against organ

ized groups conducting business activity in that state.

The Stampolis case goes further, It treats the actual ..

‘contacts: of the Fund with Pennsylvania, which are also"

hefore us now,.as sufficient to bring it within the reach of

the local courts. Here again the Pennsylvania view of

‘Pennsylvania law is conclusive, unless the reldtionship of

the Fund to the state is so slight and inconsequential that

its subjection to the jurisdiction’ of local courts offends dae

process of law.” ; Sait 2)

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The due process « Stion need not detain us tong.

The facts digabinedor athitrwine in evidence without dis

pute show. substantial activity of the Fund in Pennsylvania

and substantial direct impact of its activities upon the local

community. Mine operators in Pennsylvania continue to’

pay money into the Fumd while many retired miners in

Pennsylvania reeeive substantial benefits from it. In this

connection, employees of the Fund from time to time in...

spect hooks and records of operators in Pennsylvania in

determining the extent of obligations to the Fund. In

- addition, the Trustees on behalf of the Fund have filed

more than sixty suits in the. Western District of Pennsyl

vania against coal operators for allege failure to make

v

The Fund maintains in its own name two area medical

offices in Pennsylvania for the administration of its respon. -

sibility to provide medieal benefits to miners in the area,

Some forty-two persons, about ten per cent of the entire

ce a

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staff of the Fund, are employed in thexe Pennsylvania

« offices. In this case service of process was upon the officer

ein charge of the Pittshbuegh area nredical office.

The Supreme Court has accepted much less substan-

tial ‘local activity than we haye here in furtherance of an

out-of-state enterprise as sufficient | to make it reasonable

for the state to subject the entrepreneur to the jurisdiction

of its courts. McGee vr. International Life Ins, Co., 1957, 350

U.S, 220,78 S. Ct. 199, 2 L. Fd. 2d. 223; International Shoe

Co. State ef Washington, 1945, 326 U.S. 310, 66 S. Ct.

154, 90 L. Ed. 95. / Accordingly, we find no constitutjonal -

objection to the position taken by Pennsylvania that this

Fund may be sudd in Pennsylyania as an unincorporated .

association doing business: in that state,

Finally, the District Court inquired whether service on

the officer, in charge of the Pittsburgh office satisfied the pro-

-cedural requirements of Rule 2156 and Rule 2157 of the

Pennsylvania Rules. of Civil Procedure, 12. P.S. Appendix.

This inquiry. was appropriate since Rule 4.(d) (7) of the

Federal Rules of Civil Procedure authorizes service of

summons and complaint **in the manner preseribed by the

law of ‘the state in Which the service is made."’ On this

point the court belew said: ;

‘*Pennsylvania Rules of Civil Procedure, Rule 2156

provjdes that: *. . . an action against an association |

may be brought in and only in a county where the asso-

ciation regularly conducts business or any association

activity ...°. It certainly’ appears that many aetivi-

\

ties’ of the asyociation were carried on in Allegheny .

County such as maintaining a listing in the telephone

directory; and the primary concern to the Fund; the

collection of monies and-the éxamination of the books —

of operators. . The process herein was served’ in ac-

_ cordance with- Pennsylvania’ Rule of Civil Procedure

2157 for it was served on the person in charge of the”

plaee “where the association carried.-on activities ;

“168 FoSupp. at’ page S842.

Ida y ss

In. the light of what we ‘already have said abdat the

activities of the Fund, and particularly the operation of its’

”

area meslicail offices, in Pennsylvania and in the Pittsburgh -

‘area we are satisfied that the conclusion of the court belew

was correct. y Clayeraft Co. vr, United Mine Workers of

America, 6 Cir, 1953, 204 F.2d 600. . In. this connection

it is worth mentioning that, when process was served in this

case on August 9, 1957, Pennsylvania law recognized rather

slight . ‘activity within the state as sufficient ‘to. constitute

‘*doing business"? for purposes of the law regulating: serv

ice of process, Florio v. Powder-Power Tool Corp., 3 Cir.

1957, 248. F.2d 367. The subsequent reinstatement of the

more restrictive ‘solicitation plus’ doctrine under Act No.

870 of July 11, 1957, P.L. 711, $1, 15 P.S. § 2852-2 et seq.

did not hecome, effective until September 1, 1957, too late

to affect this case. Actually, we think the business activity

of the Fund within Pennsylvania was sufficient to, satisfy

the concept of doing business under the present Pennsyl -

vania law.” Certainly, it was mueh more than enough under

the Jaw in foree during August’ 1957 as we interpreted it in.’

2

the Florio ease. &

For these reasons the. interlocutory order from which

this appeal has been taken will be affirmed.

A True Copy:

Teste: -

~ Clerk of the United States Court of Appeals:

‘ for the Third Circnit,

‘we ’ -

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eeaes Leven a”

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UNITED STATES COURT OF*4PPEALS

FOR THE) THIRD CIRCUIT,

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. No.. 12'935

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iy Jous A. -AVLOVSCAK, Appellee

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Jous LL. Lewis, Hexry G. Scumipr axp Josepuine Rocue,

as TRUSTEES oF THE UNirep Mine Workers oF AMERICA

Wecrare axp Retintmest Funp, A ppellants.

Scupfeninios FOR REHEARING

. “st . ¥,

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Presenf: Goour ICH; Wel.aveduas. eed STALEY, Hastir

and Forman, Circuit Judges. .

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Opinion of the Court .

-— (Filed February 10, 1960)

Per (CURIAM:

Our decision on this appeal turned upon Pennsylvania

law as announced in Stampolis rv. Lewis, 1958, 186 Pa.

Super, 285, 142 A.2d 348. Now we are able to reexamine

Gur original. opinion in the new light which: the Supreme .

Court of Pennsylvamtia has cast upon the Stampolis ruling:

in Myhalyk v. Lewis, No. 149, March-Term, 1959, —~A. Ba

, decided on January 18, 1960.

Moye parti@ularly, our conclusion that-the United Mine _

Workers of America Welfare and Retirement Fund was

suable in. Pennsylvania and that. proper procedure had

eheen followed in serving process deper ded upon Pennsvl-

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vania law as announced in the Stompolis case. Now, in the

Myhalyk case, with this very Fund’ before it the Supreme

Court of Pennsylvania ‘has considered the Stampplis de-

n and has approved the Stampelis result, but has given

it an authoritative new rationale. Specifically, while Stam.

polis indicated that the’Trustees of the United Mine Work-

ers of America Welfare aud Retirement Fund were suable

in Pennsylvania as an unincorporates! association, the My-

-halyk case has now established that this enterprise is suable

in Pennsylvania, but as a ‘‘foreign corporation ar similar

entity’’ under: Rule 2176, Pennsylvania Rules of Civil Pro-

cedure, 12 P.S.: Appendix, p. 482. In addition, Rules 2170 |

and 2180 provide a procedure for the service of process

upon such an entity ina county where it regularly conluets

. business by: personally serving the pleading apen the

‘agent or person for the time being in charge of, * * * any

office or -usual place of business of the corporation or

similar entity’’. As our original opinion indicates, this

— procedure was followed here. It is valid under Rule 4

-(d)(7) of the Federal Rules of Civil Procedure, 28 US.C.A.

Actually, there is novessential difference between the pre

cedure preseribed by Pennsylwania Rules 2156 and 2157. for

serving aToreign unincorporated association and the proce

dure preseribed by Rules 2156 and 2157 for serving a for

eign ‘‘corporation or similar entity’’. - Thus, for present

: purposes it makes no difference that in approving the

Stampolis result the Supreme Court of Pennsylvania ha-

modified the Stampolis doetrizie with respect to th® proper

legal characterization of United Mine Workers of America

Welfare and Retirement Fund.” amet §

The petition.for rehearing will be denied,

A True Copy:

“Teste: ~ .

Clerk of the United States Court of Appeals

; for the Third Circuit. f

4 rae

; , lia

29.USC, Section 186 ©

Restrictions on payments to employee representatives;

exceptions; penalties; jurisdiction; effective date; ex-

ception of awe trust funds ; |

**(a) It shall be unlawful for any employer to pay or

deliver; or to agree to pay or deliver, any money or other

thing of value to any representative of any of his em-

ployees who are employed in an industry affecting com-

merece,

‘*(b) It shall be unlawful for any representative of any

employees who are employed in an industry. affecting com-

merce,to receive or accept, or to agree to receive or accept,

from. the employer of such employees any money or ather r.

thing of value,

**(e) The provisions of this section shall not be appli-

cable (1) with respect to any money or other thing of.

value payable by an, employer to any representative who

is An employee or former employee of such employer, as

compensation for, or by reason of, his services aS an em

ployee of -such employer; (2) with respect to the pay

ment or delivery of any money or other thing:of value

in satisfaction of a judgment of any court of a decision or

award of an arbitrator or impartial chairman or in com-

promise, adjustment, settlement or release of any claim,

complaint, grievance, or dispute in the absence of. fraud

’

or duress; (3) with respect to the syle or purchase of an-

article or commodity at the prevailing market price .in

the regular course of business; (4) with respect to money

deducted from the wages of employees in payment of mem-

bership dues in a labor organization: Provided, That the

euplover has reeeived from each employee, on whose ae-

count such deductions are made, a written assignment

which shall not be irrevocable for a period of more than

one-year, or beyond the termination: date of the appli-

cable collective agreement, whichever eveurs sooner; or (5)

ISa ,

’

‘with. respect to money or other thing of value paid tea

trust fund established by such representative, for the sole

and exclusive benefit of the employees of such employer,

and their families and dependents (or of such employees,

families, and dependents: jointly with’ the employees of -

other ‘employers making similar payments, and their

families ‘and dependents): Provided, That (A) such-pay-

ments are held in trust for the purpose of .paying, either

from principal or income or both, for the. benefit of em-

plovees, their families and dependents, for medical or

hospital’ care, pensions on retirement or, death of em: -

ployees, compensation for injuries or illness ‘resulting

from oceupational activity er insurance to provide any of

the foregoimg, or unemployment benefits or life insurance,

disability and sickness insurance, or accident insurance:

(B) the detailed basis on which such payments are to-be

made is specified {in a written agreement with the em

ployer, and employees and employers are equally repre-

sented in the administration ‘of such fund, together with

such neutral persons as the representatives of the enit

ployers and. the representatives of the employees may

agree upon and in the event the employer and employee

groups deadlock on the administration of such fund and

there are no neutral persons empowered to break such

deadlock, such agreement: provides that the two ¢roups

shall agree on an impartial umpire to decide such dispute,

or in event of their failure to agree within a reasonable

length of time, an impartial umpire to decide such dispute

shall, on petition of either group, be appointed by. the

distriet court of the- United States for the distriet: where

the trust fund has its principal office, and shall also con

tain provisions for an annual audit of the trust fund, a

statement of the results of which shall be available for in-

spection by interested persons at the principal office of

the trust fund and at sueh other places as may be desig

nated in such written agreement; and GC) such payments

as are intended to 'be used for the purpose of providing

19a

pensions or annuities for employees are made to a sepa-

rate trust which provides that the funds held therein can- |

not be used. for ‘any perpese other than paying such pen-

sions or annuities.’

. a *

2.

‘*(e) The district courts of the United States and the

United States courts of the Territories and possessions -

shall have jurisdiction, for cause shown, and subject to the

provisions of section 381 of Title 28-(relating to notice to

opposite party) to restrain violations of this seetion, with-

out regard to the provisions of section 17 of Title 15 and

section 52 of this title, and the provisions of sections 101-

110 and 113-115 of this title.’’