Opinion
Civil No. 03-5495 ADM/AJB
May 20, 2004
Gregg J. Cavanagh, Maple Grove, MN, for Third-Party Plaintiff
Richard A. Miller, and Brendan D. Cummins, Miller O'Brien, Minneapolis, MN, for Third-Party Defendant
MEMORANDUM OPINION AND ORDER
I. INTRODUCTION
Third-Party Defendant Sprinkler Fitters Local 417s ("Local 417") Motion to Dismiss [Docket No. 14] was argued before the undersigned United States District Judge on April 6, 2004. Local 417 argues that res judicata bars Third-Party Plaintiff Total Fire Protection, Inc.'s ("Total") claims because the same allegations have already been dismissed with prejudice. See Order of 12/26/02 [Civil No. 02-930 Docket No. 19]. For the reasons explained below, Local 417's Motion is granted and Total's Third-Party Complaint [Docket No. 4] is dismissed with prejudice.
II. BACKGROUND
Total is a South Dakota-based corporation that employs sprinkler fitters to perform residential, commercial and industrial fire protection work in Minnesota and several other states. Third-Party Compl. ¶ 3. Local 417, an unincorporated labor union, represents both journeyman and apprentice sprinkler fitters in collective bargaining agreements with fire protection contractors. Id. ¶ 4.
Beginning in the late 1990's, Anoka-Hennepin Independent School District No. 11 ("Anoka-Hennepin") developed a plan to build and remodel several schools. Id. ¶ 6. To secure labor for the project, Anoka-Hennepin entered into a project labor agreement (" PLA") with the Minneapolis Building and Construction Trades Council. The PLA binds any contractor working on an Anoka-Hennepin project to its provisions, and establishes the terms and conditions of employment for workers on covered projects. Id. Under the PLA, unions such as Local 417 refer workers to contractors in accordance with the union's hiring hall practices. Id. ¶¶ 15, 17; see also PLA Art. III § 2 and Schedule A. The PLA also requires contractors to pay fringe benefits to certain benefit funds on behalf of employees, and outlines a grievance and arbitration process for resolving any disputes relating to its interpretation or implementation. Third-Party Compl. ¶ 9; see also PLA Art. V § 2, Art. IX §§ 1-4.
In adjudicating Local 417's Motion to Dismiss, the Court will consider relevant provisions of the PLA because the agreement is "necessarily embraced by the pleadings." Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999); Third-Party Compl. ¶¶ 6-10, 17: see also Jenisio v. Ozark Airlines, Inc., 187 F.3d 970, 972 n. 3 (8th Cir. 1999) (holding that the court could properly review a collective bargaining agreement referenced in but not attached to the complaint). A plaintiff "cannot defeat a motion to dismiss by choosing not to attach [pertinent documents] to the complaint." Silver v. HR Block, Inc., 105 F.3d 394, 397 (8th Cir. 1997). Further, "[s]ome materials that are part of the public record or do not contradict the complaint may be considered by a court in deciding a Rule 12(b)(6) motion to dismiss."Missouri ex rel. Nixon v. Coeur D'Alene Tribe, 164 F.3d 1102, 1107 (8th Cir. 1999). Consequently, in reviewing the present Motion the Court will also consider Judge Paul A. Magnuson's Order of 12/26/02, Total's Notice of Appeal concerning the 12/26/02 Order, the Eighth Circuit's Judgment dismissing the appeal as untimely, and Total's Third-Party Complaint from Civil Case No. 02-930. See Exs. in Support of Mot. to Dismiss [Docket No. 16].
After receiving a solicitation from Anoka-Hennepin in the Fall of 2000, Total bid on a project to complete fire protection work at an elementary school in Anoka County. Third-Party Compl. ¶¶ 7-8. Total was awarded the contract, but claims that it did not receive any information about the PLA in the solicitation and did not know that the PLA existed.Id. ¶ 8. Total subsequently discovered that the PLA applied to Anoka-Hennepin projects and reviewed the PLA's terms, including the provision mandating fringe benefits contributions. Id. ¶ 9. Total decided that the PLA did not require payment to the Plaintiff fringe benefits plans if Total used its own sprinkler fitters and made contributions to existing plans on their behalf. Id. ¶ 10. However, Local 417 contended that Total had to contribute to the Plaintiff benefit plans regardless of whether Total employed its own workers or hired sprinkler fitters through Local 417. Id.
Total asserts that it was economically unfeasible for it to use its own employees, but still make payments to the Plaintiff benefit plans. Id. ¶ 12. Therefore, on March 1, 2001, Total met with representatives of Local 417 to discuss this problem and to clarify Total's obligations under the PLA. Id. ¶ 13. Total claims that Local 417 verbally agreed to provide Total with union sprinkler fitters for Anoka-Hennepin projects at this meeting, thus resolving Total's PLA-related concerns. Id.
According to Total, Local 417 later confirmed the agreement in writing. Id. This written confirmation, referenced in paragraph 13 of Total's current Third-Party Complaint ("Second Third-Party Complaint"), consists of a letter dated March 1, 2001, and signed by Richard A. Miller, Local 417's attorney. The letter states that Local 417 "will . . . make a diligent, good-faith effort to provide qualified personnel," but that Local 417 "emphasized during the meeting that this is not a guarantee." See Letter from Miller to Talle of 3/1/01 at 2 (Exs. in Support of Mot. to Dismiss, Ex. 5). Total then submitted bids on and was awarded contracts for two additional Anoka-Hennepin projects. Third-Party Compl. ¶ 14.
Total first requested Local 417 to provide sprinkler fitters starting in May 2001, and renewed its request several times thereafter. Id. ¶¶ 15-16. Because Local 417 refused these requests, Total used its own employees on the Anoka-Hennepin projects and contributed to fringe benefits funds on their behalf. Id. ¶ 17. However, Total did not pay into the Plaintiff fringe benefits plans. Id.
On April 30, 2002, the Plaintiff fringe benefits plans sued Total and demanded that Total contribute to their funds. Id. ¶ 18. Total then filed a Third-Party Complaint ("Original Third-Party Complaint") against Local 417 and sought indemnification for any losses that resulted from the principal lawsuit. See Original Third-Party Compl. [Civil No. 02-930 Docket No. 4]. In an Order dated December 26, 2002, Judge Paul A. Magnuson dismissed Total's Original Third-Party Complaint with prejudice, concluding that the court lacked subject matter jurisdiction.See Order of 12/26/02 at 10. Specifically, Judge Magnuson held that Total's misrepresentation claims were preempted by the National Labor Relations Act ("NLRA"), and that consequently the NRL Board had jurisdiction over the claims. Id. at 6-8. Judge Magnuson dismissed Total's breach of contract and promissory estoppel claims because Total had not exhausted the exclusive arbitration remedy outlined in the PLA. Id. at 9. Total did not appeal Judge Maguson's Order until February 19, 2004. See Not. of Appeal [Civil No. 02-930 Docket No. 31]. On May 4, 2004, the Eighth Circuit dismissed the appeal as untimely. Order of 5/04/04 [Eighth Circuit Case No. 04-1524 Docket No. 10].
In September 2003, Total and the Plaintiff fringe benefits plans stipulated to dismissing the original First-Party Complaint and agreed that Plaintiffs could re-file their claims to cure a pleading defect.See Stipulation of Dismissal [Civil No. 02-930 Docket No. 29]. The Plaintiff benefit plans filed a new Complaint ("Second First-Party Complaint") on October 8, 2003, which initiated the present litigation.See Compl. [Docket No. 1]. In response, Total filed the Second Third-Party Complaint on November 6, 2003, largely alleging identical claims to those in its Original Third-Party Complaint. Local 417 now moves to dismiss Total's Second Third-Party Complaint on res judicata grounds.
III. DISCUSSION
Local 417 moves to dismiss under Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. Rule 12(b)(1) authorizes dismissal for lack of subject matter jurisdiction. Rule 12(b)(6) provides that a party may move to dismiss for failure to state a claim upon which relief can be granted. In considering a motion to dismiss, courts must construe the pleadings in the light most favorable to the nonmoving party and view the facts alleged in the complaint as true. Hamm v. Groose, 15 F.3d 110, 112 (8th Cir. 1994); Ossman v. Diana Corp., 825 F. Supp. 870, 879-80 (D. Minn. 1993). Courts should resolve any ambiguities concerning the sufficiency of the claims in favor of the nonmoving party, and dismiss claims "only if it is clear that no relief can be granted under any set of facts that could be proved consistent with the allegations." Frey v. City of Herculaneum, 44 F.3d 667, 671 (8th Cir. 1995) (citations omitted); see Hafley v. Lohman, 90 F.3d 264, 266 (8th Cir. 1996); Ossman, 825 F. Supp. at 880.
Local 417 bases its Motion to Dismiss on the doctrine of res judicata. Res judicata provides that "a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action." Federated Dep't Stores v. Moitie, 452 U.S. 394, 398 (1981); Oglala Sioux Tribe v. Homestake Mining Co., 722 F.2d 1407, 1409 (8th Cir. 1981). Res judicata requires three elements: (1) identical parties in both lawsuits; (2) identical claims or causes of action; (3) a final judgment on the merits in the prior action. See Kulinski v. Medtronic Bio-Medicus, Inc., 112 F.3d 368, 372 (8th Cir. 1997). The theory applies to judgments on jurisdictional issues, as well as those on the merits of the actual claims. Oglala Sioux, 722 F.2d at 1411. Accordingly, "[d]ismissal of a suit for lack of federal subject matter jurisdiction precludes relitigation of the same issue of subject matter jurisdiction in a second federal suit on the same claim." Id. A second action on the same claim is barred unless the jurisdictional defect is overcome. Id.; see also McCarney v. Ford Motor Co., 657 F.2d 230, 233 (8th Cir. 1981).
Res judicata bars Total's current claims based on the elements outlined above. Total admits that element one is met in this case because Total and Local 417 were parties in both actions. Additionally, Total now concedes that the Eighth Circuit's Order dismissing Total's appeal as untimely renders Judge Magnuson's Order final. See Order of 5/04/04; Total's Mem. in Opp. at 11, 15. Thus, the dismissal of Total's Original Third-Party Complaint meets element three as well.
The parties dispute whether Total has alleged identical causes of action in its Second Third-Party Complaint. The relevant inquiry is whether Total now asserts claims that cure the jurisdictional failure from the first lawsuit. Oglala Sioux, 722 F.2d at 1411-12. Total argues that the Second Third-Party Complaint sets forth new theories for relief, including claims for fraudulent concealment, rescission, and violation of § 301 of the Labor Management Relations Act ("LMRA"). See Compl. ¶¶ 32-50. However, none of these claims restores subject matter jurisdiction in the District Court. The fraudulent concealment claim, based on Local 417's actions during the March 1, 2001 meeting with Total, simply restates the allegations in Total's misrepresentation claims, which Judge Magnuson held were preempted by the NLRA. Id. ¶¶ 32-38. As stated in Judge Magnuson's Order, the NLR Board has subject matter jurisdiction of such claims. See Order of 12/26/02 at 6-8. Consequently, the fraudulent concealment claim does not create subject matter jurisdiction.
Total's rescission claim fares no better. Citing § 301 of the LMRA, Total seeks to rescind the contract it formed with Local 417 during the March 1, 2001 meeting. See 29 U.S.C. § 185; Compl. ¶¶ 39-45. However, the rescission claim does not provide subject matter jurisdiction because rescission is merely a remedy for breach of contract or fraudulent inducement to contract, and not the basis for a separate claim. See Anders v. Dakota Land Dev. Co., 289 N.W.2d 161, 163 (Minn. 1980) (listing rescission as one remedy for a party induced to enter a contract by fraudulent misrepresentation); Johnny's, Inc. v. Njaka, 450 N.W.2d 166, 168 (1990); see also Specialized Tours. Inc. v. Hagen, 392 N.W.2d 520, 543 (Minn. 1986) (describing rescission as a remedy in a contractual dispute). Therefore, the rescission claim does not solve the lack of jurisdiction problem from Total's Original Third-Party Complaint.
Finally, Total's § 301 claim under the LMRA also fails to provide jurisdiction. Section 301 creates federal jurisdiction for breach of contract in disputes between labor organizations and employers. See 29 U.S.C. § 185. Total's current § 301 claim is simply a federal version of its state law breach of contract claim from its Original Third-Party Complaint. See Third-Party Compl. ¶¶ 46-50; Original Third-Party Compl. ¶¶ 32-36. Judge Magnuson has already dismissed Total's state law breach of contract claim because Total failed to exhaust the arbitration procedures outlined in the PLA. See Order of 12/26/02 at 9. Because Total faces the same exhaustion requirement here with its § 301 claim, asserting it now does not establish subject matter jurisdiction, as Total has not pursued arbitration. See Carpenters Fringe Benefits Funds v. McKenzie Eng'g, 217 F.3d 578, 585-86 (8th Cir. 2000) (barring judicial resolution of § 301 claims because union did not first exhaust arbitral remedies outlined in the parties' collective bargaining agreement).
Dressing the original claims in new clothing does not change their underlying nature. Total's Second Third-Party Complaint does not contain any additional claims from its Original Third-Party Complaint, and the current claims are subject to the same jurisdictional defects which caused Judge Magnuson to dismiss the action in 2002. Therefore, res judicata bars adjudication of this matter, and Total's Second Third-Party Complaint is dismissed with prejudice.
IV. CONCLUSION
Based on the foregoing, and all the files, records and proceedings herein, IT IS HEREBY ORDERED that:
1. Third-Party Defendant's Motion to Dismiss [Docket No. 14] is GRANTED and
2. Third-Party Plaintiff's Complaint [Docket No. 4] is DISMISSED WITH PREJUDICE.