Charles Dowd Box Company v. Courtney/Opinion of the Court

Section 301(a) of the Labor Management Relations Act of 1947 provides:

'(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.'

The sole question presented by this case is whether this federal statute operates to divest a state court of jurisdiction over a suit for violation of a contract between an employer and a labor organization.

The petitioner is an employer engaged in an industry affecting commerce as defined in the Labor Management Relations Act of 1947. The United Steelworkers of America, an international union, was the collective bargaining representative of the petitioner's production and maintenance employees, organized in Local 5158. A few weeks before the expiration of a collective bargaining agreement in 1957, negotiations were initiated between representatives of the union and of the petitioner with respect to proposals which the union had submitted for a new agreement. After a number of negotiating sessions, a 'Stipulation' was signed by representatives of each party, continuing in effect many provisions of the old agreement, but providing for wage increases and making other changes with respect to holidays and vacations. The terms of the 'Stipulation' were later embodied in a draft of a proposed new agreement. The petitioner originally announced to its employees that it would put into effect the wage changes and other provisions covered by the 'Stipulation' and draft agreement, but a few weeks later notified its employees of its intention to terminate these changes and return 'to the rates in effect as of May 18, 1957.' It was the petitioner's position that its bargaining representatives had acted without authority in negotiating the new agreement, and that the union had been so advised before any contract had actually been concluded.

The present action was then brought in the Superior Court of Massachusetts for Worcester County by the respondents, local union officers and a staff representative of the International Union. The complaint alleged that the plaintiffs 'fairly and adequately represent the interests of the entire membership' of the union and Local 5158, and asked for a judgment declaring that there existed a valid and binding collective bargaining agreement, for an order enjoining the company from terminating or violating it, and for an accounting and damages. Responding to the complaint, the petitioner interposed several defenses, among them the contention that, by reason of § 301(a) of the Labor Management Relations Act, the state court had no jurisdiction over the controversy. The trial court rejected this attack upon its jurisdiction, determined on the merits that the collective bargaining agreement was 'valid and binding on the parties thereto,' and entered a money judgment in conformity with the wage provisions of the agreement.

The Supreme Judicial Court of Massachusetts affirmed, 341 Mass. 337, 169 N.E.2d 885, expressly ruling that § 301(a) has not made the federal courts the exclusive arbiters of suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce. As Chief Justice Wilkins put it, 'We do not accept the contention that State courts are without jurisdiction. The statute does not so declare. The conferring of jurisdiction in actions at law upon the appropriate District Courts of the United States is not, in and of itself, a deprivation of an existing jurisdiction both at law and in equity in State courts. The case principally relied upon by the defendant, Textile Workers Union of America v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 923, 1 L.Ed.2d 972, does not so state. In the absence of a clear holding by the Supreme Court of the United States that Federal jurisdiction has been made exclusive, we shall not make what would be tantamount to an abdication of the hitherto undoubted jurisdiction of our own courts.' Certiorari was granted to consider the important question of federal law thus presented. 365 U.S. 809, 81 S.Ct. 699, 5 L.Ed.2d 690. We agree with the Supreme Judicial Court of Massachusetts that the courts of that Commonwealth had jurisdiction in this case, and we accordingly affirm the judgment before us.

It has not been argued, nor could it be, that § 301(a) speaks in terms of exclusivity of federal court jurisdiction over controversies within the statute's purview. On its face § 301(a) simply gives the federal district courts jurisdiction over suits for violation of certain specified types of contracts. The statute does not state nor even suggest that such jurisdiction shall be exclusive. It provides that suits of the kind described 'may' be brought in the federal district courts, not that they must be.

The petitioner points out, however, that this Court held in Textile Workers Union of America v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 923, 1 L.Ed.2d 972, that § 301(a) is more than jurisdictional-that it authorizes federal courts to fashion, from the policy of our national labor laws, a body of federal law for the enforcement of agreements within its ambit. The Court recognized in that case that 'state law, if compatible with the purpose of § 301, may be resorted to in order to find the rule that will best effectuate the federal policy,' but emphasized that '(a)ny state law applied * *  * will be absorbed as federal law *  *  * .' 353 U.S., at 457, 77 S.Ct. at 918.

It is argued that the rationale of Lincoln Mills would be frustrated if state courts were allowed to exercise concurrent jurisdiction over suits within the purview of § 301(a). The task of formulating federal common law in this area of labor management relations must be entrusted exclusively to the federal courts, it is said, because participation by the state courts would lead to a disharmony incompatible with the Lincoln Mills concept of an all-embracing body of federal law. Only the federal judiciary, the argument goes, possesses both the familiarity with federal labor legislation and the monolithic judicial system necessary for the proper achievement of the creative task envisioned by Lincoln Mills. An analogy is drawn to our decisions which have recognized the necessity of withdrawing from the state courts jurisdiction over controversies arguably subject to the jurisdiction of the National Labor Relations Board.

Whatever the merits of this argument as a matter of policy, we find nothing to indicate that Congress adopted such a policy in enacting § 301. The legislative history of the enactment nowhere suggests that, contrary to the clear import of the statutory language, Congress intended in enacting § 301(a) to deprive a party to a collective bargaining contract of the right to seek redress for its violation in an appropriate state tribunal.

We start with the premise that nothing in the concept of our federal system prevents state courts from enforcing rights created by federal law. Concurrent jurisdiction has been a common phenomenon in our judicial history, and exclusive federal court jurisdiction over cases arising under federal law has been the exception rather than the rule. This Court's approach to the question of whether Congress has ousted state courts of jurisdiction was enunciated by Mr. Justice Bradley in Claflin v. Houseman, 93 U.S. 130, 23 L.Ed. 833, and has remained unmodified through the years. 'The general question, whether State courts can exercise concurrent jurisdiction with the Federal courts in cases arising under the Constitution, laws, and treaties of the United States, has been elaborately discussed, both on the bench and in published treatises * *  * (and) the result of these discussions has, in our judgment, been *  *  * to affirm the jurisdiction, where it is not excluded by express provision, or by incompatibility in its exercise arising from the nature of the particular case.' 93 U.S., at 136. See Robb v. Connolly, 111 U.S. 624, 4 S.Ct. 544, 28 L.Ed. 542; Second Employers' Liability Cases, 223 U.S. 1, 56-59, 32 S.Ct. 169, 177-178, 56 L.Ed. 327; State of Missouri ex rel. St. Louis, B. & M.R. Co. v. Taylor, 266 U.S. 200, 45 S.Ct. 47, 69 L.Ed. 247; Garrett v. Moore-McCormack Co., 317 U.S. 239, 245, 63 S.Ct. 246, 250, 87 L.Ed. 239; Brown v. Gerdes, 321 U.S. 178, 188, 64 S.Ct. 487, 492, 88 L.Ed. 659 (concurring opinion). To hold that § 301(a) operates to deprive the state courts of a substantial segment of their established jurisdiction over contract actions would thus be to disregard this consistent history of hospitable acceptance of concurrent jurisdiction.

Such a construction of § 301(a) would also disregard the particularized history behind the enactment of that provision of the federal labor law. The legislative history makes clear that the basic purpose of § 301(a) was not to limit, but to expand, the availability of forums for the enforcement of contracts made by labor organizations. Moreover, there is explicit evidence that Congress expressly intended not to encroach upon the existing jurisdiction of the state courts.

The Labor Management Relations Act of 1947 represented a far-reaching and many-faceted legislative effort to promote the achievement of industrial peace through encouragement and refinement of the collective bargaining process. It was recognized from the outset that such an effort would be purposeless unless both parties to a collective bargaining agreement could have reasonable assurance that the contract they had negotiated would be honored. Section 301(a) reflects congressional recognition of the vital importance of assuring the enforceability of such agreements.

The direct antecedent of § 301 was § 10 of the Case bill, H.R. 4908, 79th Cong., 2d Sess., which was passed by both Houses of the Congress, but vetoed by the President in 1946. In conferring upon the federal district courts jurisdiction over suits upon contracts made by labor organizations, that section of the Case bill contained provisions substantially the same for present purposes as the provisions of § 301 at issue in this case.

In considering these provisions of the proposed legislation in 1946, Congress manifested its complete awareness of both the existence and the limitations of state court remedies for violation of collective agreements. A principal motive behind the creation of federal jurisdiction in this field was the belief that the courts of many States could provide only imperfect relief because of rules of local law which made suits against labor organizations difficult or impossible, by reason of their status as unincorporated associations. The discussion between the supporters and opponents of this provision of the Case bill centered primarily on the nature and availability of existing state remedies. As a result, both factions collected and presented comprehensive data respecting the laws of the various States as to the status of labor organizations as legal entities. See, e.g., S.Rep.No.1177, 79th Cong., 2d Sess., Minority Report, pp. 10-14; 92 Cong.Rec. 5412-5415.

The bill which the Senate originally passed the following year contained a provision making a breach of a collective bargaining agreement an unfair labor practice subject to the jurisdiction of the National Labor Relations Board, S. 1126, 80th Cong., 1st Sess., §§ 8(a)(6), 8(b)(5), as well as a provision conferring jurisdiction upon the federal courts over suits for violation of collective agreements. In conference, however, it was decided to make collective bargaining agreements enforceable only in the courts. 'Once parties have made a collective bargaining contract,' the conference report stated, 'the enforcement of that contract should be left to the usual processes of the law and not to the National Labor Relations Board.' H.R.Conf.Rep.No.510, 80th Cong., 1st Sess., p. 42.

The report which accompanied the bill passed by the House of Representatives in 1947 explicitly acknowledged that the proposed § 301 was a slightly recast version of § 10 of the Case bill. H.R.Rep.No.245, 80th Cong., 1st Sess., p. 45. The record of the congressional debates on § 301 of the 1947 Act reflects the same concern with the adequacy of the laws of the various States as had been expressed the previous year in the discussion of § 10 of the Case bill. The Minority Report in the House in 1947 again discussed the availability of relief, the alternative means of recovery, and the scope of remedy in suits against labor organizations under the laws of the various States. H.R.Rep.No.245, 80th Cong., 1st Sess., pp. 108-109. The Senate Report reproduced verbatim the detailed analysis of state procedural law which had been contained in the Senate Minority Report on the 1946 legislation. S.Rep.No.105, 80th Cong., 1st Sess., pp. 15-18.

The clear implication of the entire record of the congressional debates in both 1946 and 1947 is that the purpose of conferring jurisdiction upon the federal district courts was not to displace, but to supplement, the thoroughly considered jurisdiction of the courts of the various States over contracts made by labor organizations. There seems to have been explicit mention of the question only once-in the Senate debate over § 10 of the 1946 bill. A spokesman for the bill, Senator Ferguson, stated unequivocally that state court jurisdiction would not be ousted by enactment of the federal law:

'Mr. FERGUSON. Mr. President, there is nothing whatever in     the now-being-considered amendment which takes away from the      State courts all the present rights of the State courts to      adjudicate the rights between parties in relation to labor      agreements. The amendment merely says that the Federal courts     shall have jurisdiction. It does not attempt to take away the     jurisdiction of the State courts, and the mere fact that the      Senator and I disagree does not change the effect of the      amendment.

'Mr. MURRAY. But it authorizes the employers to bring suit in     the Federal courts, if they so desire.

'Mr. FERGUSON. That is correct. That is all it does. It takes     away no jurisdiction of the State courts.' 92 Cong.Rec. 5708.

Although the record of the 1947 debates contains no explicit statement of such precise relevance as Senator Ferguson's remarks in 1946, the entire tenor of the 1947 legislative history confirms that the purpose of § 301, like its counterpart in the Case bill, was to fill the gaps in the jurisdictional law of some of the States, not to abolish existing state court jurisdiction. For example, Senator Ball, one of the Floor Leaders for the bill, stated:

'(W)e give to employers the right to sue a union in     interstate commerce, in a Federal court, for violation of      contract. It does not go beyond that. As a matter of law, I     think they have that right, now, but because unions are      voluntary associations, the common law in a great many States      requires service on every member of the union, which is very      difficult; *  *  * .' 93 Cong.Rec. 5014.

This basic purpose of § 301 is epitomized in the Senate Report: 'It is apparent that until all jurisdictions, and particularly the Federal Government, authorize actions against labor unions as legal entities, there will not be the mutual responsibility necessary to vitalize collective-bargaining agreements.' S.Rep.No.105, 80th Cong., 1st Sess., p. 17. It is obvious that Congress did not intend this remedial measure to destroy the foundation upon which it was built.

This Court, in holding that the Labor Management Relations Act of 1947 operates to withdraw from the jurisdiction of the States controversies arguably subject to the jurisdiction of the National Labor Relations Board, has delineated the specific considerations which led to that conclusion:

'Congress did not merely lay down a substantive rule of law     to be enforced by any tribunal competent to apply law      generally to the parties. It went on to confide primary     interpretation and application of its rules to a specific and      specially constituted tribunal and prescribed a particular      procedure for investigation, complaint and notice, and      hearing and decision, including judicial relief pending a      final administrative order. Congress evidently considered     that centralized administration of specially designed      procedures was necessary to obtain uniform application of its      substantive rules and to avoid these diversities and      conflicts likely to result from a variety of local procedures      and attitudes toward labor controversies.' Garner v.      Teamsters, etc., Union, 346 U.S. 485, 490, 74 S.Ct. 161, 98     L.Ed. 228.

By contrast, Congress expressly rejected that policy with respect to violations of collective bargaining agreements by rejecting the proposal that such violations be made unfair labor practices. Instead, Congress deliberately chose to leave the enforcement of collective agreements 'to the usual processes of the law.' It is implicit in the choice Congress made that 'diversities and conflicts' may occur, no less among the courts of the eleven federal circuits, than among the courts of the several States, as there evolves in this field of labor management relations that body of federal common law of which Lincoln Mills spoke. But this not necessarily unhealthy prospect is no more than the usual consequence of the historic acceptance of concurrent state and federal jurisdiction over cases arising under federal law. To resolve and accommodate such diversities and conflicts is one of the traditional functions of this Court.

Affirmed.