Sheet Metal Air Rail and Transportation Workers Local Union 20 v. Van's Industrial Inc et al
OPINION AND ORDER: Court DENIES 24 Motion to Dismiss for Lack of standing. Signed by Judge Robert L Miller, Jr on 12/7/2015. (tc)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SHEET METAL, AIR, RAIL, AND
LOCAL UNION 20,
VAN’S INDUSTRIAL, INC., AND
INTERNATIONAL ASSOCIATION OF
ORNAMENTAL AND REINFORCING
IRON WORKERS, LOCAL UNION
CAUSE NO. 2:15-CV-044-RLM-JEM
OPINION and ORDER
Sheet Metal, Air, Rail Transportation Workers, Local Union 20 (“Local 20”)
brought this action asking the court to vacate an arbitration award and order a
rehearing based on the arbitrator’s undisclosed bias. The matter is before the
court on a motion by respondent Bridge, Structural, Ornamental and Reinforcing
Iron Workers, Local Union 395 (“Local 395”) to dismiss for lack of standing. (Doc.
Van’s Industrial, Inc.1 is an employer in the sheet metal industry, and
performs work as an outside contractor at the U.S. Steel facility in Gary, Indiana.
Although nominally a respondent in this case, Van’s Industrial has indicated that it
takes no position on the underlying dispute and will accept any orders the court issues.
(Doc. No. 4).
The work is covered by a National Maintenance Agreement,2 a collective
bargaining agreement between several large industrial contractors on the one
side and several international labor unions on the other. As relevant here, the
National Maintenance Agreement includes procedures for resolving disputes
when two unions doing work for an employer disagree about which of them
should get a particular work assignment. Disputes of that sort are referred to as
Local 20 is a local affiliate of the International Association of Sheet Metal,
Air, Rail and Transportation Workers (“International Sheet Metal”). Local 395 is
a local affiliate of the International Association of Bridge, Structural, Ornamental
and Reinforcing Iron Workers (“International Iron Workers”). Both of the
international unions are signatories to the National Maintenance Agreement; the
local affiliates are not signatories. In April 2014, Van’s Industrial assigned the
installation, removal, and repair of wear plates at the Gary facility to Local 20.
Local 395 contested the assignment and insisted that it should get the project
instead, invoking the National Maintenance Agreement’s jurisdictional dispute
mechanism. Pursuant to this mechanism, an Umpire was appointed and held
an arbitration hearing. The positions of Local 20 and Local 395 were represented
at the hearing by their respective international unions; the local affiliates didn’t
A copy of the National Maintenance Agreement is attached to Local 20’s motion to
vacate the arbitration award as Exhibit A. It is therefore part of the record before the
court on the instant motion to dismiss.
directly participate in the hearing. Before the hearing, the Umpire disclosed that
he had previously been a member of International Iron Workers, but the parties
consented to have him hear the case despite this connection. The Umpire
ultimately decided that the work in question should have gone to Local 395
instead of Local 20, and held that the wear plate assignment would be
Shortly after the arbitration hearing, Local 20 discovered documents
indicating that the Umpire’s personal interest in the case was more substantial
than Local 20 had originally believed; rather than being only a former member
of Local 395’s international union, he was still a current member of Local 395
itself. Local 20 then filed this case, asking the court to overturn the Umpire’s
decision under the Indiana statute providing that a court may vacate an
arbitration award when “there was evident partiality by an arbitrator appointed
as a neutral or corruption in any of the arbitrators or misconduct prejudicing
the rights of any party.” Ind. Code § 34-57-2-13.
Local 395 bases its motion on Federal Rule of Civil Procedure 12(b)(1),
which provides that a party may move to dismiss a case for lack of subject-matter
jurisdiction. A party’s standing to sue implicates the court’s subject matter
jurisdiction, so standing issues can be raised in a Rule 12(b)(1) motion. See
American Fed'n of Gov’t Employees, Local 2119 v. Choen, 171 F.3d 460, 465 (7th
Cir. 1999) (“Obviously, if a plaintiff cannot establish standing to sue, relief from
the court is not possible, and dismissal under 12(b)(1) is the appropriate
disposition.”). A plaintiff bears the burden of proving the required elements of
standing; when standing is called into question, the plaintiff must come forward
with “competent proof – that is a showing by a preponderance of the evidence –
that standing exists.” Lee v. City of Chicago, 330 F.3d 456, 468 (7th Cir. 2003).
When considering a motion to dismiss for lack of standing, the court may look
beyond the allegations of the complaint to other competent evidence that calls
the court’s jurisdiction into question. Bastuen v. AT & T Wireless Serv., Inc., 205
F.3d 983, 990 (7th Cir. 2000).
Two related doctrines have traditionally governed a plaintiff’s standing to
sue in federal court: constitutional standing, and a set of “prudential” standing
principles distinct from the constitutional requirements. As part of the “case or
controversy” requirement embodied in Article III of the United States
Constitution, a party must demonstrate constitutional standing to sue in federal
court by establishing: (1) an injury in fact; (2) “a causal connection between the
injury and the conduct complained of”; and (3) a likelihood that the injury will
be redressed by a favorable decision. Lujan v. Defenders of Wildlife, 504 U.S.
555, 560-561 (1992). “In addition to constitutional-standing requirements,
however, there are prudential limitations on a federal court's power to hear
cases” which are “not jurisdictional in the sense that Article III standing is.”
Rawoof v. Texor Petroleum Co., 521 F.3d 750, 756-757 (7th Cir. 2008). The
doctrine of prudential standing bars courts from hearing certain types of cases
even when the plaintiff satisfies the requirements of Article III standing. See
Edgewood Manor Apartment Homes, LLC v. RSUI Indem. Co., 733 F.3d 761, 771
(7th Cir. 2013).
Prudential standing doctrine is “not exhaustively defined” but includes
“the general prohibition on a litigant’s raising another person’s legal rights” in
addition to other limitations not implicated here. Lexmark Int’l, Inc. v. Static
Control Components, Inc., 134 S. Ct. 1377, 1386 (2014). To have prudential
standing to bring an action, therefore, a plaintiff “generally must assert his own
legal rights and interests and cannot assert the legal rights or interests of third
parties.” Dunnet Bay Const. Co. v. Borggren, 799 F.3d 676, 689 (7th Cir. 2015)
(internal quotations omitted); see also Edgewood Manor Apartment Homes, LLC
v. RSUI Indem. Co., 733 F.3d 761, 771 (7th Cir. 2013) (holding that a plaintiff
lacked prudential standing where the “relief sought ... [was] a ruling regarding
the rights of the parties to [an] insurance policy” yet the plaintiff was not a party
to the policy in question).
Local 20 easily satisfies the standard for Article III standing. The Umpire’s
decision resulted in Local 20 losing a work assignment to another union,
unquestionably a sufficient injury in fact for standing purposes. The conduct of
which Local 20 complains – the Umpire’s alleged undisclosed bias – plausibly
bears a causal connection to the injury, as a close relationship with Local 395
may well have influenced the Umpire’s decision. Finally, a favorable decision in
this suit would redress the injury by vacating the Umpire’s decision and giving
Local 20 another shot to arbitrate before an unbiased Umpire. Local 395 doesn’t
argue to the contrary; its arguments for dismissal don’t address the elements of
constitutional standing, but instead the principle of “prudential” standing
doctrine that requires a plaintiff be the real party in interest (rather than
attempting to litigate the rights of third parties). Specifically, Local 395 argues
that Local 20 doesn’t have standing to bring this suit because Local 20 isn’t a
signatory to the NMA and so is not a party to the challenged arbitration; only
Local 20’s international union affiliate, International Sheet Metal, signed the
collective bargaining agreement and was a party to the arbitration at issue.
Accordingly, Local 395 argues that only the international union can sue
regarding the conduct or outcome of the arbitration.
Local 395’s ability to challenge the court’s jurisdiction based solely on
prudential standing is a little murky in light of relatively recent developments in
the law. In Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct.
1377, 1386 (2014), the Supreme Court disapproved of the traditional prudential
standing category on the grounds that the term “prudential” implies that a
federal court can just choose not to decide a case – a proposition in tension with
the principle that “a federal court’s obligation to hear and decide cases within its
jurisdiction is virtually unflagging.” 134 S. Ct. at 1386 (internal quotation marks
omitted). Use of the term “prudential standing” to describe limitations on a
court’s jurisdiction not rooted in Article III is now disfavored. See United States
v. Funds in the Amount of $239,400, 795 F.3d 639, 645 (7th Cir. 2015)
(recognizing that Lexmark “cautioned that labels like ‘prudential standing’ and
‘statutory standing’ are misleading and should be avoided.”).
So the word “prudential” is now taboo in standing jurisprudence.
Lexmark‘s effect on the substance of the various requirements that make up
what was previously called prudential standing is less clear. Some courts have
expressed doubt as to whether prudential requirements such as the one relied
on by Local 395 survive the Supreme Court’s reasoning. See Freedom from
Religion Found., Inc. v. Lew, 773 F.3d 815, 822 n.5 (7th Cir. 2014) (“The doctrine
of prudential standing, we note, is somewhat unsettled after the Supreme Court’s
recent decision in Lexmark”); see also Duty Free Americas, Inc. v. Estee Lauder
Companies, Inc., 797 F.3d 1248, 1273 (11th Cir. 2015) (“The Supreme Court’s
recent decision in Lexmark … casts doubt on the future of prudential standing
doctrines such as antitrust standing.”); Kentucky v. U.S. ex rel. Hagel, 759 F.3d
588, 596 n.3 (6th Cir. 2014) (noting that “the Court has placed the continuing
vitality of the prudential aspects of standing…in doubt.”).
The Lexmark Court explicitly declined to address the prohibition on a
plaintiff litigating the rights of third parties, since that branch of prudential
standing doctrine wasn’t before it. See Lexmark, 134 S. Ct. at 1394 n. 3 (“This
case does not present any issue of third-party standing, and consideration of
that doctrine’s proper place in the standing firmament can await another day.”).
For this reason, at least two circuit courts have explicitly dismissed Lexmark’s
broad criticism of prudential standing doctrine as dicta and continue to enforce
“the prudential requirement that a party must assert its own rights.” Superior
MRI Servs., Inc. v. Alliance Healthcare Servs., Inc., 778 F.3d 502, 506 (5th Cir.
2015); see also Ray Charles Found. v. Robinson, 795 F.3d 1109, 1119 n.9 (9th
Cir. 2015) (concluding that “the third-party-standing doctrine continues to
remain in the realm of prudential standing” after Lexmark).
But dismissing a case on the grounds that the plaintiff isn’t the proper
party in interest – even though the injury and causation requirements of Article
III standing are satisfied – implicates the same concerns expressed in Lexmark
about federal courts derogating their duty to decide cases properly within their
jurisdiction. If it is improper for a federal court to refuse to hear a case over
which it has Article III jurisdiction simply for “prudential” judge-made reasons,
the requirement that a party assert only its own rights would seem no less
improper than any of the other prudential limitations courts have recognized.
See Standing-Civil Procedure-Lexmark International, Inc. v. Static Control
Components, Inc., 128 HARV. L. REV. 321, 330 (2014) (“While the Court’s opinion
[in Lexmark] left third-party standing – and, presumably, prudential standing’s
‘not exhaustively defined’ other pieces – for ‘another day,’ its philosophical
underpinnings are incompatible with prudential standing as a whole.”).
In light of this uncertainty, the court errs on the side of caution and
declines to dismiss this case due to prudential standing concerns. There is no
meaningful dispute that Local 20 has standing in the constitutional sense, so
dismissal for lack of subject matter jurisdiction under Rule 12(b)(1) is
inappropriate; unlike Article III standing, prudential doctrines such as the
requirement at issue here don’t implicate the court’s jurisdiction. See Dunnet
Bay Const. Co. v. Borggren, 799 F.3d 676, 689 (7th Cir. 2015) (“In contrast with
jurisdictional and may be disregarded in certain situations.”); Anton Realty, LLC
v. Guardian Brokers Ltd., Inc., No. 1:13-CV-01915-JMS, 2015 WL 4041517, at
*7 (S.D. Ind. July 1, 2015) (noting that a court “may bypass any prudential
standing concerns because prudential standing is not jurisdictional in the sense
that Article III standing is, and thus need not be addressed in every case.”)
(internal quotation marks omitted). Because Local 20 has clearly suffered an
injury and that injury is causally tied to the conduct complained of, this isn’t a
case where prudential concerns mandate dismissal of the suit entirely.
Accordingly, the court DENIES Local 395’s motion to dismiss for lack of
standing (Doc. No. 24).
ENTERED: December 7, 2015
/s/ Robert L. Miller, Jr.
United States District Court
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?