International Union of Operting Engineers' Local #965 v. S. Crider Construction & Supply
Filing
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OPINION: The Court GRANTS in PART and DENIES in part Plaintiff's Motion for Default Judgment (d/e 8 ). The Court DIRECTS the Clerk to enter judgment against Defendant and in favor of Plaintiff directing arbitration of Plaintiff's grievanc e and awarding $441.00 in costs. Defendant is ORDERED to process Plaintiff's grievance and, further, to arbitrate and/or submit the grievance pursuant to the "Grievance and Arbitration" provision in the Standard Form Area Agreement. THIS CASE IS CLOSED. Entered by Judge Sue E. Myerscough on 6/11/2014. (MJ, ilcd)
E-FILED
Wednesday, 11 June, 2014 04:43:04 PM
Clerk, U.S. District Court, ILCD
IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF ILLINOIS
SPRINGFIELD DIVISION
INTERNATIONAL UNION OF
OPERATING ENGINEERS,
LOCAL # 965
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Plaintiff,
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v.
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S. CRIDER CONSTRUCTION &
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SUPPLY (an Illinois Corporation), )
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Defendant
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No. 13-3425
OPINION
SUE E. MYERSCOUGH, U.S. District Judge:
After Defendant S. Crider Construction & Supply was found in
default on April 1, 2014, Plaintiff filed a Motion for Default
Judgment (d/e 8), which is now before the Court. The Court
GRANTS the Motion in part because Defendant failed to answer or
otherwise plead to Plaintiff’s Petition to Compel Arbitration and
Plaintiff is entitled to costs. The Court DENIES the Motion in part
because Plaintiff is not entitled to attorney’s fees.
1. FACTUAL BACKGROUND
Plaintiff brought this action against Defendant under Section
301 of the Labor-Management Relations Act, 29 U.S.C. § 185. On
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or around June 12, 2012, Defendant, an Illinois corporation, and
Plaintiff, a labor organization, signed a Standard Form Area
Agreement. The Agreement contains a Grievance and Arbitration
Provision that states a party who has a grievance “shall have the
right to submit, in writing, the unresolved grievance to final and
binding arbitration . . . .” See Agreement, Article 7 § 3, Exhibit A,
d/e 1-1 at 10.
After Defendant allegedly failed to pay benefits and file benefit
forms as required under the Agreement, Plaintiff sought to submit a
grievance to arbitration. Upon receiving Plaintiff’s first request for
arbitration, Defendant sought and obtained an extension of time to
pay the amount in arrears. When one of these deadlines passed
without a payment, Plaintiff wrote to Defendant demanding that
Defendant submit the pending grievance to arbitration. Plaintiff’s
second letter demanding arbitration went unanswered, and Plaintiff
filed the Petition To Compel Arbitration in this Court (d/e 1). The
Petition sought an order from the Court compelling Defendant to
process the grievance and to arbitrate or submit the grievance
under the procedure established in the “Grievance and Arbitration”
provision of the Agreement. The Petition also sought attorney’s fees
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and costs incurred by Plaintiff in having to file and pursue the
Petition, and any other relief the Court found appropriate.
Although Defendant was personally served with a Summons
directing him to respond to the Petition within 21 days, Defendant
did not answer or otherwise plead to the allegations in the Petition.
See Summons, d/e 4. Therefore, on April 1, 2014 and pursuant to
Federal Rule of Civil Procedure 55(a), Magistrate Judge SchanzleHaskins entered an Order of Default (d/e 7).
II. ANALYSIS
Upon Defendant’s default, the well-pleaded facts relating to
liability in Plaintiff’s Petition are taken as true. See Dundee Cement
Co. v. Howard Pipe & Concrete Prods., Inc. 722 F.2d 1319, 1323
(7th Cir. 1983). The Court’s inquiry here is restricted to whether
the current dispute about payments and filing benefit forms should
be submitted to arbitration. In analyzing this claim, the Court will
not rule on the potential merits of the claim underlying Plaintiff’s
grievance. See AT & T Technologies, Inc. v. Communications
Workers, 475 U.S. 643, 651 (1986) (“[I]t is for the arbitrator to
determine the relative merits of the parties’ substantive
interpretations of the agreement”); see also United Steel, Paper &
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Forestry, Rubber, Mfg., Energy, Allied Indus. & Serv. Workers Int’l
Union v. TriMas Corp., 531 F.3d 531, 536 (7th Cir. 2008)(“If the
parties have in fact agreed to arbitrate their dispute, then they have
bargained for the arbitrator’s interpretation of their contract-not
ours.”). Rather, the Court will decide only on whether Plaintiff is
entitled to the relief sought in the Petition to Compel Arbitration.
See In re Catt, 368 F.3d 789, 793 (7th Cir. 2004). While the Court
finds that Plaintiff is entitled to the specific relief of compelling
arbitration of the grievance and costs, Plaintiff is not entitled to
attorney’s fees because Plaintiff has not shown Defendant asserted
a defense in bad faith.
1. Plaintiff has shown Default Judgment is appropriate.
The Court has jurisdiction over violations of contracts between
an employer and a labor organization under section 301 of the
LMRA, 29 U.S.C. § 185(a). And this Court has the power to enforce
the arbitration provision of the parties’ Agreement. See United
Steel, Paper & Forestry, 531 F.3d 531, 536 (7th Cir. 2008)
(“Whether a party has agreed to arbitrate a particular dispute is a
question for the courts to decide.”)
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A presumption of arbitrability exists when an agreement like
the present one contains an arbitration clause, and the Court will
issue an order to arbitrate if the clause can be read to cover the
asserted dispute. AT&T Tech., 475 U.S. at 650 (stating that the
presumption is “particularly applicable” when the clause is broad)
(internal citations omitted). Plaintiff’s Petition and the attached
exhibits demonstrate that the Plaintiff’s grievance about
Defendant’s failure to report hours and pay benefits falls within the
Agreement’s broad arbitration clause. Accordingly, Plaintiff is
entitled to the specific relief on the request to compel arbitration of
Plaintiff’s grievance. Whether Plaintiff is entitled to the additional
relief of attorney’s fees is a more complicated question.
2. Plaintiff is not entitled to attorney’s fees.
The Court will award attorney’s fees to Plaintiff under § 301 of
the LMRA only if Defendant’s defense was “frivolous, which our
cases define to mean brought in bad faith-brought to harass rather
than to win.” Local 232, Allied Indus. Workers of Am., AFL-CIO v.
Briggs & Stratton Corp., 837 F.2d 782, 789 (7th Cir. 1988) (quoting
Miller Brewing Co. v. Brewery Workers Local Union No. 9, 739 F.2d
1159 (7th Cir. 1984) and reaffirming the standard for awarding
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attorney’s fees under § 301). Plaintiff contends that Defendant’s
failure to respond to the Petition or argue why the grievance should
not be submitted to arbitration shows “bad faith” and demonstrates
that Defendant “was motivated to ‘harass rather than to win.’” See
Memorandum in Support of Motion for Default, d/e 9 at 5 (quoting
Local 881 United Food and Commercial Workers Union v. Food
Club of Ind., No. 11-161, 2011 WL 3501721, at *2 (N.D. IN. Aug.
10, 2011)).
The Court declines to infer anything about Defendant’s motive
from his silence either before or after Plaintiff filed the Petition to
Compel. Defendant’s inaction in responding to Plaintiff’s demands
for arbitration before the lawsuit is the reason Plaintiff’s filed the
Petition to Compel in this Court. Under the principle known as the
“American Rule,” “[e]ach litigant pays his own attorney’s fees, win or
lose, unless a statute or contract provides otherwise.” Marx v.
Gen. Revenue Corp., 133 S. Ct. 1166, 1175 (2013) (internal
citations omitted); see also Alyeska Pipeline Serv. Co. v. Wilderness
Soc’y, 421 U.S. 240, 247 (1975) (“In the United States, the
prevailing litigant is ordinarily not entitled to collect a reasonable
attorneys’ fee from the loser.”). The Supreme Court has
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additionally recognized the inherent power of the federal courts to
award attorney’s fees only in a discrete set of circumstances. See
Chambers v. NASCO, Inc., 501 U.S. 32, 45–46 (1991) (finding that a
court has inherent power to award attorney’s fees to a party whose
litigation efforts directly benefit others, to sanction the willful
disobedience of a court order, and to sanction a party who has
acted in bad faith, vexatiously, wantonly, or for oppressive reasons).
Plaintiff does not rely upon a fee-shifting provision in the
Agreement and the Court did not find one in the Agreement
attached to the Petition as Exhibit A. Furthermore, the Seventh
Circuit has clearly stated that attorney’s fees are awarded under
§ 301 only when an opponent’s defense is frivolous or brought in
bad faith. But Defendant here has not asserted any defense to
Plaintiff’s Petition, and the Court refuses to infer bad faith—a
specific type of conduct—from silence—the absence of conduct. So
while Plaintiff may decry the costs in attorney’s fees of haling
Plaintiff into federal court to enforce the arbitration provision,
under the American Rule, those costs are the costs of doing
business.
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Moreover, Plaintiff is not entitled to attorney’s fees for
Defendant’s failure to answer Plaintiff’s Petition. Defendant’s
inaction in responding to Plaintiff’s Petition is the reason this
Plaintiff is entitled to default judgment. Attorney’s fees are an
additional sanction that Defendant should bear only if his defense
is frivolous or asserted in bad faith. See, e.g., Local 232, 837 F.2d
at 789. Defendant’s failure to respond to the Petition—his silence—
is the same conduct exhibited by all defendants who have default
judgments against them. If Defendant’s failure to answer here
demonstrates “bad faith” and a “motive to harass,” then courts
entering default judgments should award attorney’s fees as a matter
of course. But that is contrary to the American Rule and not what
the Seventh Circuit intended when it limited an award of attorney’s
fees under § 301 of the LMRA “only if [the] opponent’s suit or
defense was frivolous . . . brought in bad faith-brought to harass
rather than to win.” Local 232, 837 F.2d at 789. Without
affirmative evidence of bad faith, the Court cannot determine
whether this defendant is harassing Plaintiff. Therefore, without
more, the Court will not “infer” a motive of bad faith from
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Defendant’s failure to respond to Plaintiff’s Petition and will not
award attorney’s fees.
The Court recognizes that two other district courts have
awarded attorney’s fees in cases similar to this one. Plaintiff relies
on a district court’s decision to award a plaintiff union attorney’s
fees in a case with the same facts as this one: the plaintiff union
filed a petition to compel arbitration after the defendant employer
failed to respond to the plaintiff’s repeated requests to arbitrate a
dispute, and the court granted the plaintiff’s motion for default
judgment after the defendant did not respond to plaintiff’s petition.
See Local 881 United Food and Commercial Workers Union v. Food
Club of Ind., No. 11-161, 2011 WL 3501721, at *2 (N.D. Ind. Aug.
10, 2011). In that case, the court “infer[red]” that the defendant’s
motive was to “harass rather than to win” because the defendant
had not responded to the plaintiff’s repeated demands for
arbitration before and after the plaintiff filed suit. That court did
not cite any authority to support the court’s finding of bad faith.
The court also failed to distinguish that defendant from other
defendants in default.
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A district court from the Northern District of Illinois similarly
“infer[red]” that a defendant employer’s “motive was to harass
rather than to win” when the defendant did not respond to the
plaintiff union’s four demands for arbitration after the plaintiff filed
a lawsuit asking the court to compel arbitration. See Int’l Bhd. of
Teamsters, Local Union No. 727, AFL-CIO v. Duchossois Indus.,
Inc., No. 92-8143, 1993 WL 41426, at *2 (N.D. Ill. Feb. 12, 1993)
(internal citations omitted). That case did not involve a default
judgment, but the court awarded attorney’s fees when granting the
plaintiff’s petition to compel arbitration under § 301 of the LMRA.
Id. Notably, the court found evidence of a motive to harass from the
defendant’s “belated concession” to submit a grievance to
arbitration only after the plaintiff filed the petition to compel. Id.
The court saw this concession as proof that the defendant had “no
basis . . . to deny its obligation to arbitrate the present dispute.” Id.
In the case here, none of Defendant’s actions could be considered
such a “concession” and harassment.
3. The Court will award costs.
Although Plaintiff is not entitled to attorney’s fees, the Court
will assess costs under Federal Rule of Civil Procedure 54(d). See
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FED. R. CIV. P. 54(d)(1)(“Unless a federal statute, these rules, or a
court order provides otherwise, costs—other than attorney’s fees—
should be allowed to the prevailing party.”). Local Rule 54.1(B)
requires Plaintiff to include Form AO-133 as a summary for the Bill
of Costs. Plaintiff did not file Form AO133, but did file an Affidavit
itemizing Plaintiff’s costs as Exhibit A to Plaintiff’s Motion for
Default Judgment. See Exhibit A, d/e 8-1. Plaintiff’s Affidavit lists
as costs only the U.S. District Court’s Filing Fee of $400 and the
Adams County Sheriff’s Department’s Service Fee of $41.00. Id. at
2. These are two of many items of allowable costs listed on the Bill
of Costs, Form AO-133. See Bill of Costs, Form AO-133, available
at
http://www.uscourts.gov/uscourts/FormsAndFees/Forms/AO133.
pdf. These costs are also permitted under 28 U.S.C. § 1920(1), the
statute governing taxation of costs. Additionally, Plaintiff’s Affidavit
itemizing costs was filed on April 14, 2014, giving Defendant more
than the 14 days’ notice required under Rule 54(d)(1). Therefore,
the Court will not require strict compliance with Local Rule 54.1(B)
in this instance and will accept the Affidavit listing these two costs
as a substitute for the Bill of Costs, Form AO-133. Counsel is
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encouraged to use Form AO-133 in future cases in the Central
District of Illinois.
The Court also notes that the Motion for Default Judgment did
not include a proposed order, as required by the Court’s Standing
Order, available at
http://www.ilcd.uscourts.gov/sites/ilcd/files/local_rules/Myerscou
gh_Default_Judgments.pdf.
III. CONCLUSION
The Court GRANTS in PART and DENIES in part Plaintiff’s
Motion for Default Judgment (d/e 8). The Court DIRECTS the
Clerk to enter judgment against Defendant and in favor of
Plaintiff directing arbitration of Plaintiff’s grievance and
awarding $441.00 in costs. Defendant is ORDERED to process
Plaintiff’s grievance and, further, to arbitrate and/or submit
the grievance pursuant to the “Grievance and Arbitration”
provision in the Standard Form Area Agreement. THIS CASE IS
CLOSED.
IT IS SO ORDERED.
ENTER: June 11, 2014
FOR THE COURT:
s/ Sue E. Myerscough
SUE E. MYERSCOUGH
UNITED STATES DISTRICT JUDGE
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