Potts v. American Bottling Company, Inc. et al

Filing 43

Order and Decision granting Defendant Local No. 377's motion for summary judgment (Doc. # 29 ); Defendant ABC's motion for summary jugdment [Doc. # 28 ) is granted in part and denied in part, ABC has 14 days to show cause as to why the counterclaim should not be dismissed; Defendants' joint motion for sanctions (Doc. # 30 ) is denied without prejudice. Judge John R. Adams on 3/31/14. (K,C)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
ROBERT A. POTTS,
Plaintiff,
vs.
AMERICAN BOTTLING CO. et al.
Defendants

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CASE NO. 5:12CV2688
JUDGE JOHN R. ADAMS
ORDER AND DECISION

This matter is before the Court on both Defendants The American Bottling Company’s
(“ABC”) and Teamsters Local Union No. 377’s (the “Union” or “Local 377”) motions for
summary judgment against a hybrid section 301 claim filed by Plaintiff. Docs. 28 and 29. Also
before the Court is Defendant ABC’s motion for summary judgment on its counterclaim, Doc.
28, and the Defendants’ joint motion for sanctions. Doc. 30. Defendant Local 377’s motion for
summary judgment on Plaintiff’s complaint is granted because the complaint was not timely
filed. Doc. 29. Similarly, Defendant ABC’s motion for summary judgment on Plaintiff’s
complaint is GRANTED. However, Defendant ABC’s motion for summary judgment on its
counterclaim is DENIED without prejudice. Doc. 28. Defendants’ joint motion for sanctions is
hereby DENIED without prejudice. Doc. 30.
I.

FACTS AND PROCEDURAL HISTORY
ABC hired Plaintiff as a warehouseman for seasonal work on July 9, 2007. Doc. 29-1.

During his time at ABC, Plaintiff also belonged to Local 377. Id. After two other temporary
layoffs, Plaintiff was temporarily laid off again on September 18, 2009. Id.. As he was bound
by the collective bargaining agreements in place between ABC and the Union, Plaintiff faced the
potential loss of seniority rights if this layoff continued for more than one year. Id. Plaintiff,
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seeking reinstatement and back pay, filed grievance number 11823 (“grievance 11823”) on
August 30, 2010—for ABC assigning others to work while Plaintiff was laid off—and grievance
number 11824 (“grievance 11824”) for wrongful discharge and termination of seniority on
September 21, 2010.

Docs. 1-7 and 1-8.

He authorized Justin Averell, a Business

Representative for the Union 1, to represent him in these grievances. Docs. 1-7 and 1-8.
A meeting occurred on September 14, 2010 between Plaintiff, ABC, and the Union to
discuss grievance 11823. The parties did not reach a settlement at that time, and on September
30, 2010, ABC issued a written response denying grievance 11823 but offering to consider the
layoff permanent, which would have allowed Plaintiff to exercise his seniority bumping rights to
displace the least senior employee. The letter also indicated that the Union and ABC agreed to
hold grievance 11824 in abeyance until grievance 11823 was closed. Doc. 29-14.
After receiving this letter, Plaintiff asked Mr. Averell to withdraw grievance 11823 and
file a new grievance in its place. Doc. 23-12. As a result, the Union withdrew grievance 11823.
Doc. 28-8. Thereafter, ABC and the Union agreed to extend the deadline for Plaintiff to respond
to the September 30, 2010 offer as stated above, until October 22, 2010. On October 22, 2010,
Plaintiff filed an internal union charge against Mr. Averell alleging
“Justin Averell violated his oath of office by failing to perform his
duties as a Business Representative, failing to act solely in the
interest of this grievant, and refusing to protect my interest in all
dealings with the Employer by way of refusing to process my
grievance # 11824 and refusing to withdraw my defective
grievance # 11823 as promised in his correspondence dated
10/12/1010[.]”
Potts Depo. Ex. 47.
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Mr. Averell’s declaration explains that “as a Local 377 Business Representative, one of his duties was to
represent Local 377’s members with respect to the terms and conditions of their employment with
employers who are signatory to collective bargaining agreements with Local 377.” Doc. 28-12.

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On October 30, 2010, Plaintiff received a letter from the Union explaining to him that the
ABC has extended the deadline for him to return to work with his seniority until November 5,
2010. Plaintiff did not respond. ABC then extended the deadline again to November 19, 2010.
Plaintiff believed this offer to be unreasonable and therefore did not respond. Potts Depo. II 292293; 329-30.

As Plaintiff did not respond to ABC’s offer, ABC terminated him effective

December 1, 2010.
On January 26, 2011, the Union and ABC met to attempt to resolve grievance 11824,
which had previously been held in abeyance. ABC denied grievance 11824 on February 16,
2011. The Union advised Plaintiff that the company denied all of his grievances. Plaintiff was
advised that the Mr. Averell would recommend to the Union Executive Board to pursue
arbitration over the grievances.
On May 11, 2011, Plaintiff filed a charge against Local 377 with the National Labor
Relations Board (NLRB) asserting that “the Union terminated Potts membership and failed to
represent him.” Potts Depo, Ex. 55.
In the interim, on November 15, 2010, Plaintiff filed a lawsuit against ABC, concerning
his September 2009 layoff and an alleged violation of the Consolidated Omnibus Reconciliation
Act of 1982. Doc. 18. The Union was not a party to the litigation. The case was settled on
October 26, 2011, after the parties executed a Confidential Settlement Agreement in which
Plaintiff agreed to release all his claims against ABC except for grievances 11823 and 4956.
Doc. 18. Grievance 4956 is not at issue in the instant case. As part of this settlement, Plaintiff
also agreed not to file a lawsuit against ABC for any released claim and to pay ABC’s attorney’s
fees and defense costs if he did assert a released claim.

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In July of 2011, Plaintiff wrote to Mr. Averell requesting an update on grievance 11823.
He wrote again in December of 2011, again seeking information on grievance 11823. On January
1, 2012, new officers assumed Local 377 leadership. In 2012 Plaintiff appeared before the
Executive Board and discussed grievance numbers 11823 and 11824. He did not inform the
Board that he had previously withdrawn grievance number 11823 nor about his previously
settled lawsuit. Doc. 28, Ex. K, Cook Declaration Without this information, the Board did not
investigate the history of the grievances and directed legal counsel to draft an opinion letter
assessing the merits of Plaintiff’s grievances, including grievances 11823 and 11824.

Id.

Thereafter, in a letter dated May 1, 2012, the Board determined not to pursue the grievances to
arbitration. Id.
On October 26, 2012, Plaintiff filed this suit pursuant to section 301 of the Labor
Management Relations Act, asserting a claim for misrepresentation by the Union and asserting
claims against ABC based on grievances 11823 and 11824. Id. On March 1, 2013, ABC filed its
amended answer and counterclaim, asserting that Plaintiff breach the previously entered
settlement agreement by filing the instant lawsuit. Doc. 18. On May 28, 2013, ABC filed for
summary judgment on the complaint as well as on its counterclaim. Doc. 28. The Union filed
its motion for summary judgment on the complaint. Doc. 29. Thereafter, the Defendants jointly
filed a motion for sanctions. Doc. 30. Plaintiff responded and the matters are fully ripe before
this Court.
II.

LEGAL STANDARD
When seeking summary judgment, a party must demonstrate that no genuine issue of

material fact exists and that it is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). If
the moving party meets this burden, the non-moving party must then show that there is a genuine
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issue of material fact for trial. Bell v. Ohio State Univ., 351 F.3d 240, 253 (6th Cir. 2003).
When ruling on a motion for summary judgment, the Court must view the evidence in the light
most favorable to the non-moving party when deciding whether a genuine issue of material fact
exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. at 587-88, (1986).
III.

ANALYSIS
A.

§ 301 Claims

Plaintiff initiated this action under Section 301 of the Labor Management Relations Act
(29 U.S.C.A. § 185). The Supreme Court, in DelCostello v. International Brotherhood of
Teamsters, 462 U.S. 151 (1983), has applied the six-month statute of limitations provided by 29
U.S.C. § 160(b) to section 301 suits. In the instant case, the complaint was filed on October 26,
2012, so this action is timely only if it accrued within six months of the filing date, on or around
April 26, 2012.
Precedent has established the standards for accrual of a § 301 claim. Such a claim
accrues “when the claimant discovers, or in the exercise of reasonable diligence should have
discovered, the acts constituting the alleged violation.”

Adkins v. International Union of

Electrical, Radio & Machine Workers, 769 F.2d 330, 335 (6th Cir. 1985). Accrual is objectively
determined: “the asserted actual knowledge of the plaintiffs is not determinative if they did not
act as reasonable persons and, in effect, closed their eyes to evident and objective facts
concerning the accrual of their right to sue.” Chrysler Workers Ass’n v. Chrysler Corp., 834
F.2d 573, 579 (6th Cir. 1987). The hybrid § 301 claim “accrues against the company when it
accrues against the union.” Moore v. UAW Local 598, 33 Fed.Appx. 165, 167 (6th Cir. 2002).
Plaintiffs need not sue on the claim until they reasonably should know that the union has
abandoned their claim. Wilson v. Int’l Brotherhood of Teamsters, 83 F.3d 747, 757 (6th Cir.
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1996). “[T]here must be no set of facts occurring before [the accrual date] which would give rise
to the discovery of—or a duty to investigate—the acts giving rise to this cause of action.”
Dudich v. United Auto Workers Local Union No. 1250, 454 F.Supp.2d 668, 675 (N.D. Ohio
2006).
The Defendants argue that Plaintiff’s complaint is time barred because Plaintiff should
have known in 2011 and early 2012 that the Union’s actions would give rise to a hybrid § 301
claim. Doc. 29-1. The Defendants first point to internal union charges filed against his union
representative, Mr. Averell, on October 22, 2010. Id. Making reasonable inferences in favor of
the nonmoving party, by charging the representative for failing to perform his duties, Plaintiff
has not also alleged that the Union has failed in performing its own obligations. The two
assertions are distinct, and it is quite possible that Plaintiff believed the Union would continue to
handle the grievances on his behalf whatever disagreements he had with representative Averell.
Defendants next assert that the unfair labor practice charge filed with Region 8 of the
NLRB on May 11, 2011 against Local 377 provided Plaintiff with grounds to file a hybrid § 301
claim. Id. This assertion is well taken. Plaintiff specifically asserted “the Union terminated Potts
membership and failed to represent him.” Potts Depo, Ex. 55. As Plaintiff specifically asserted
that the Union has terminated membership and had failed to represent him, it necessarily follows
that he reasonably should have known and believed that the Union had abandoned his claim.
In order to maintain an argument that there remains genuine issue of material fact,
Plaintiff would be required to counter the assertion that the charge against the Union gave or
should have given him knowledge that the Union had behaved actionably. Plaintiff does not
make this argument. Plaintiff instead asserts that the May 1, 2012 letter from the Union was the
first indication that Union had abandoned his grievance. Doc. 34. Plaintiff’s own May 11, 2011
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charge against the Union belies this. A plaintiff cannot save a claim simply by writing a later
letter, such as Plaintiff’s July and December of 2011 letters that prompted the newly appointed
Union Board to write the May 1, 2012 letter. The continuance of correspondence with a Union
after the time a plaintiff should know of the acts giving rise to a cause of action is a courtesy, and
does not mark procrastination sufficient to toll the statute of limitations. Fox v. Parker Hannifin
Corp., 914 F.2d 795, 804 (6th Cir. 1990) (rejecting plaintiff’s assertion that a letter stating there
was nothing more a union could do for the plaintiff reset the accrual date for a hybrid section 301
claim). Again, the complaint in this case was filed on October 26, 2012. Therefore, for statute
of limitations purposes, the §301 claim must have accrued within the six months prior to the
complaint, April 26, 2012. Because the claim accrued on May 11, 2011, which falls well before
April 26, 2012, the current § 301 hybrid claim is not timely.
B.

ABC’s Counterclaim

On March 1, 2013, ABC filed an amended answer and counterclaim. ABC asserts this
Court has jurisdiction over its breach of contract counterclaim based on 28 U.S.C. §1332(a).
Specifically, ABC states that “Potts and ABC are citizens of different states and because the
amount in controversy exceeds $75,000, exclusive of interest and costs.”

Doc. 18 pg. 7.

Notably, ABC contends that the contract at issue is a settlement agreement between the parties in
which Potts agreed to not file a lawsuit against ABC asserting any claims that had been released
by the terms of the settlement agreement and that if he did so he would be liable for ABC’s
attorneys’ fees incurred in defending against such a suit. Doc. 18, pg. 9. ABC concludes that
“[a]s a direct and proximate result of Potts’s breach of the Settlement Agreement, ABC has been
damaged in an amount in excess of $75,000, which includes ABC’s attorneys’ fees in connection
with defending Case No. 5:12-cv-02688-JRA and bringing this counterclaim.” Doc. 18, pg. 9.
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The jurisdictional threshold is premised upon the idea that ABC would incur over
$75,000 in attorneys’ fees to defend this case. However, as early as its original answer, filed on
December 14, 2012, ABC argued the affirmative defense that “Plaintiff’s claims are barred to the
extent that he seeks to base claims on events occurring outside the applicable statute of
limitations.” Doc. 10, p. 6. Despite this contention, ABC did not file a motion to dismiss this
claim. The instant motion for summary judgment was filed on May 28, 2013, asserting in part
that the complaint should be dismissed under the applicable statute of limitations. On May 29,
2013, Defendants filed a joint motion for sanctions under Fed.R.Civ.P Rule 11, arguing in part
that Plaintiff and his counsel failed to comply with Rule 11 by filing and continuing to pursue
this case in spite of the statute of limitations. Thus, ABC is simultaneously asking this Court to
conclude that sanctions are appropriate for frivolously filing this suit, while also arguing that
they would incur at least $75,000 in attorneys’ fees to defend the suit.

It appears that these

positions are at odds with one another. As such, the Court orders ABC to show cause as to why
the counterclaim should not be dismissed for lack of jurisdiction within 14 days of the date of
this Order. In the interim, ABC’s motion for Summary Judgment on its counterclaim is denied
without prejudice. If the Court concludes that it has jurisdiction over the counterclaim, ABC
may refile its motion.
C.

ABC’s Motion for Sanctions

In Defendants’ motion for sanctions, they seek sanctions for maintaining the claims in
Plaintiff’s complaint. Specifically, they ask the Plaintiff’s claims be dismissed, that Defendants
be awarded reasonable attorneys’ fees, and any other relief the Court deems appropriate.
Accordingly, ABC seeks attorneys’ fees under both its counterclaim and its motion for sanctions.
As this Court could not appropriately award fees under both motions, ABC would be required to
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elect its remedy. In light of the Court’s show cause order on the jurisdictional basis of ABC’s
counterclaim, the Court dismisses the motion for sanctions without prejudice. Defendants may
choose to reassert the issue after the Court determines whether it has jurisdiction to continue with
the counterclaim.
IV.

CONCLUSION

Defendant Local 377 international Brotherhood of Teamsters motion for summary
judgment on Plaintiff’s complaint is hereby GRANTED. Doc. 29. Defendant ABC’s motion for
summary judgment is hereby GRANTED in part and DENIED without prejudice in part. Doc.
28. ABC shall show cause as to why its counterclaim should not be dismissed for lack of subject
matter jurisdiction within 14 days of the date of this Order. Defendants’ joint motion for
sanctions is hereby DENIED without prejudice. Doc. 30.
IT IS SO ORDERED.

DATE: 3/31/14

/s/ John R. Adams____________
Judge John R. Adams
UNITED STATES DISTRICT COURT

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