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. e du/thir dc ir c uit_2001/95Filed May 1, 2001

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

NOS. 00-1598 and 00-1616

TAYLOR MILK COMPANY, a Pennsylvania Corporation, Appellant in No. 00-1598

v.

INTERNATIONAL BROTHERHOOD OF TEAMSTERS, AFL-CIO, an unincorporated association and labor organization; INTERNATIONAL BROTHERHOOD OF
TEAMSTERS, DAIRY CONFERENCE - USA AND CANADA, an unincorporated association and labor organizatio n;
SERVICE PERSONNEL AND EMPLOYEES OF THE DAIRY INDUSTRY TEAMSTERS LOCAL UNION NO. 205, an unincorporated association and labor organization

TAYLOR MILK COMPANY, a Pennsylvania Corporation

v.

INTERNATIONAL BROTHERHOOD OF TEAMSTERS, AFL-CIO, an unincorporated association and labor organization; INTERNATIONAL BROTHERHOOD OF
TEAMSTERS, DAIRY CONFERENCE - USA AND CANADA, an unincorporated association and labor organizatio n;
SERVICE PERSONNEL AND EMPLOYEES OF THE DAIRY INDUSTRY TEAMSTERS LOCAL UNION NO. 205, an unincorporated association and labor organization

International Brotherhood of Teamsters, AFL- CIO; International Brotherhood of Teamsters, Dair y Conference-USA and Canada, Appellants in No. 00-1616On Appeal From the United States District Court

For the Western District of Pennsylvania (D.C. Civil Action No. 95-cv-01663) District Judge: Honorable D. Brooks Smith

Argued February 8, 2001

BEFORE: SCIRICA, MCKEE and STAPLETON, Circuit Judges

(Opinion Filed May 1, 2001)

David J. Armstrong Dickie, McCamey & Chilcote Two PPG Place, Suite 400 Pittsburgh, PA 15222

and John A. McCreary, Jr. (Argued) Babst, Calland, Clements & Zomnir Two Gateway Center, 8th Floor Pittsburgh, PA 15222 Attorneys for Appellant/Cross Appellee

Ernest B. Orsatti (Argued) Jubelirer, Pass & Intrieri
219 Fort Pitt Boulevard Pittsburgh, PA 15222 Attorney for Appellees/Cross Appellants

OPINION OF THE COURT

STAPLETON, Circuit Judge:

Taylor Milk Company ("TMC") brought suit against th e International Brotherhood of T eamsters ("IBT"), th e IBT Dairy Conference of the USA and Canada ("Dairy Conference"), and its own IBT Local Union No. 205 ( "Local 205") (collectively "IBT") for unfair labor practic es in

2violation of 29 U.S.C. S 187. TMC alleged that appe llees

violated the prohibition against secondary boycotts by coercing a neutral party into not doing business wi th TMC. The District Court found that the appellees had com mitted such unfair labor practices and awarded TMC damages in the amount of $50,000. TMC appeals this damage awar d as too low. IBT cross-appeals the District Court's den ial of summary judgment and determination of liability.

I.

TMC was located outside of Pittsburgh in Ambridge, Pennsylvania.1 In 1995, TMC was operating at a net loss caused by meeting the demands of a customer base th at exceeded the processing and delivery capacities of the Ambridge facility. During this same time, Bor den, Inc., the well-known national dairy company, had deter mined that it
would abandon the fluid milk business east of the Mississippi River. Borden operated afluid milk plan t in Youngstown, Ohio, which is about an hour's drive northwest of Ambridge. The Borden plant had an
insufficient customer base and was slated to be sol d.

In August of 1995, TMC entered into negotiations to purchase this plant from Borden. TMC paid Borden $50,000 in order to gain the exclusive right to pur chase the facility. Joseph Taylor, the pr esident of TMC, hop ed that by shifting production operations to Borden's Youngsto wn plant, TMC would be able to turn a profit. The Bord en Youngstown facility was generally a superior facili ty from an operational standpoint and the wages paid to the Youngstown production workers wer e significantly l ess than those paid to the workers in Ambridge. TMC planned to eliminate the Ambridge production jobs after acquir ing the Youngstown facility but to keep the Ambridge plant as a distribution facility.

The stipulated purchase price for the Y oungstown f acility was approximately $1,200,000. The finalization of t he agreement, however, was dependent upon TMC first obtaining bank financing for the deal. The bankfina ncing

___________________________________________________ ______________

1. TMC has now ceased operations.

3was in turn contingent upon the existence of a stab le, longterm collective bargaining agreement ("CBA") betwee n Borden and its labor force, which TMC would then as sume.

Toward its goal of forming such an agreement, TMC traveled to Youngstown to meet with the Bor den's Youngstown employees, represented by Teamsters Loca l 377 ("Local 377"), and Eben Byers, the union's busi ness agent. TMC proposed a new CBA with moderate increas es in wages and benefits. Local 377 seemed responsive to these proposals, though Byers noted that since Bord en was the employer of Local 377, any current agr eement n eeded to be negotiated with Borden rather than TMC. Byers understandably hoped that some agreement could be
worked out with TMC so that Local 377's members cou ld remain employed following Borden's sale of the Youn gstown facility.

On August 25, 1995, representatives fr om Local 205 and TMC met at a hotel. Local 205 was represented by it s principal officer, William Lickert. Local 205 had s omehow become aware of TMC's plans to shift pr oduction jo bs to Youngstown and terminate workers at Local 205. Loca l 205 had invited the Chairman of the Teamster's Dairy Conference, Fred Gregare, to the meeting in order t o negotiate in its interest and preserve the jobs of workers at
Local 205.

The facts of the meeting are in dispute, but it is clear that there were strong words exchanged. Joseph Tayl or began the meeting by announcing TMC's intentions to relocate production jobs. William Lickert responded by waving a copy of the union's CBA and stating that L ocal 205 had the contractual right to "follow its work" to the Youngstown facility.

Lickert asserted that a no-subcontracting clause in the CBA prevented TMC from implementing its plan to shi ft production to Youngstown. The CBA specified that "a ll dairy products . . . shall be manufactured, pr ocessed, p ackaged and/or handled by the Employer's employees .. . . N o work or services presently performed or hereafter assign ed to the collective bargaining unit . . . will be subcontrac ted . . . ." (emphasis added). TMC maintains that this pr ovisio n was

4not dispositive of the plan, since Local 205 would still

"handle" the products which were manufactured in Ambridge and an exception clause excluded ice cr ea m and some other products from the scope of this provisio n.

Discussions deteriorated further. Gregar e, chairma n of the Teamster's Dairy Conference, then stated that h e was "implementing Article 12, Section 2" of the T eamst er Constitution and "giving jurisdiction of the Bor de n Youngstown plant to Local 205." (The parties now ag ree that section 2 of Article 12 conferred no such auth ority.) Gregare instructed Borden to sell the plant to some one else.2 The meeting ended soon thereafter.

Gregare sent follow-up letters to Bor den's Local 3 77 stating that section 2 of Article 12 of the T eamst er's Constitution was being implemented. Gregar e furthe r stated that he was requesting in accordance with se ction 2 of Article 12 that prior approval be granted before Local 377 ratified any collective bargaining agr eement. Greg are then contacted Byers directly by telephone and told Byer s not to re-negotiate the Local 377-Borden contract but to l isten to any proposals and fax them to Gregar e. At trial, G regare admitted that he had no authority to requir e Byers to obtain his approval before re-negotiating a contrac t. The District Court found that Byers complied with this directive out of fear that Local 377 would be placed in trust eeship if Byers disobeyed Gregare's orders.

On September 1, Borden offered a CBA proposal to Lo cal 377 that Byers considered "ridiculous" but that wou ld have normally served as the basis for a counter -proposa l from Local 377. Per Gregare's instructions, Byers forwar ded the proposal to Gregare and did not r espond to the off er. Local 377 instead sent a letter to Gregare's superiors as king whether Gregare truly had authority to negotiate on behalf of Local 377 and requesting permission to proceed w ith negotiations. No response was received.

On September 15, Borden again met with Byers and

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2. At trial, Gregare denied invoking Article 12, Se ction 2, denied awarding jurisdiction to Local 205, and denied tell ing Borden to sell its plant to someone else. The trial court credited non e of these denials.

5informed Byers that Borden would have to close the plant.

Byers continued to follow Gregare's instructions no t to negotiate. Borden concluded that dealing with Byers was not effective and that Borden would have to deal wi th Gregare directly. On October 2, Bor den met with Gr egare on Gregare's home base in Wisconsin. Byers was pres ent for "a very short meeting," but was then excluded f rom negotiations, which were conducted only by Gr egare and Borden. When negotiations were finished, Gregare in formed Byers that a counter-proposal had been made, that t he counter-proposal had been rejected, and that the pl ant would close. Byers expressed a desire to continue negotiations but Gregare refused to negotiate furth er. Consequently, the deal between TMC and Borden fell through and the Youngstown plant was closed. All Lo cal 377 employees at the Youngstown facility wer e term inated.

TMC filed suit against IBT under the Labor Manageme nt Relations Act ("LMRA"), 29 U.S.C. S 187(a), seeking damages for an alleged violation of the secondary b oycott provisions codified at 29 U.S.C. S 158(b)(4). The D istrict Court bifurcated the damage and liability trials. T he trial
court found that the defendants were liable for vio lating 29 U.S.C. S 158(b)(4) and entered judgment for TMC in the amount of $50,000 plus prejudgment inter est. TMC a ppeals the damages verdict, alleging that it was entitled to a larger damages award. IBT cross-appeals the liability verd ict, asserting that 29 U.S.C. S 158(b)(4) was never viol ated.

The District Court had jurisdiction over this case pursuant to 29 U.S.C. S 187 and 28 U.S.C.S 1331. Ou r appellate jurisdiction is pursuant to 28 U.S.C.S 12 91. Factual findings of the District Court are r eviewe d for clear error. Sheet Metal Workers Local 19 v. 2300 Group, 949 F.2d 1274, 1278 (3d Cir. 1991). The District Court' s application of legal precepts is subject to plenary review. Holmes v. Millcreek Tp. Sch. Dist., 205 F .3d 583, 589 (3d Cir. 2000).

II.

1. Liability

Local 205 and IBT state that they did not violate 2 9 U.S.C. S 158(b)(4)(ii)(B), and that the District Co urt erred by

6concluding that they did so. That statute pr ovides , in

applicable part:

(b) Unfair labor practices by labor or ganiz ation. It shall be an unfair labor practice for a labo r organization or its agents--

(4) . . . . (ii) to threaten, coerce, or res train any person engaged in commerce or in an industry af fec ting commerce, where . . . an object ther eof is- -

. . . .

(B) forcing or requiring any person . .. to cease doing business with any other person, . . . Provid ed, That nothing contained in this clause (B) shall b e construed to make unlawful, where not otherwise unlawf ul, any primary strike or primary picketing;

29 U.S.C. S 158(b)(4).

We have summarized the purpose of the secondary boycott provision in our opinion in Limbach Co. v. Sheet Metal Workers Int'l Ass'n, 949 F.2d 1241, 1249-50 ( 3d Cir. 1991).

Section 8(b)(4)(ii) of the NLRA prohibiting secondary boycotts by unions essentially prohibits uni on conduct designed to force a primary employer (the em ployer with which the union has a dispute) to barga in with a union or to force a neutral employer (an emp loyer with which the union has no dispute) to cease doi ng business with the primary employer. The pr o scribed methods used to achieve the objectives inclu de threatening, coercing, or restraining the se condary employer. See, e.g., Soft Drink Workers Unio n Local 812 v. NLRB, 212 App. D.C. 10, 657 F.2d 1252 (D. C. Cir. 1980). Coercion can include economic pr essu re upon the neutral party. Allentown Racquetball & H ealth Club, Inc. v. Building and Constr. Trades Council of Lehigh and Northampton Counties, 525 F. Supp. 156 ( E.D. Pa. 1981). The purpose of the prohibition agains t secondary boycotts is to shield unoffending employers from pressures in disputes not their own, th ough preserving the rights of unions to bring pr essure to bear on offending employers in primary labor disputes.

7Anderson v. International Bhd. of Elec. W or kers, Local

No. 712, AFL-CIO, 422 F. Supp. 1379 (W .D. P a. 1976).

Id.

The District Court found that IBT violated this sec tion when Gregare, representing the interests of Local 2 05, usurped Local 377's place in negotiations to pr eve nt Borden from continuing negotiations with TMC. The District Court concluded that Borden was a neutral thir d party an d that Gregare's actions, in preventing negotiations betwe en Local 377 and Borden, forced Borden to cease doing busine ss with TMC. IBT argues that this was an err oneous de cision

for a number of reasons.

First, IBT suggests that because Local 377 was with in its rights in "following Gregare's advice" and deciding not to negotiate with Borden, there was no unlawful activi ty. This ignores the Limbach rule that we look to the intent ion of the parties in coercing neutral parties, not to the gen eral rights of parties to take particular actions. See id. , 94 9 F.2d at 1252-53 (stating that the exercise of legitimate ri ghts may be unlawful if exercised "for the purpose of applyi ng economic coercion to achieve a prohibited secondary objective"). IBT suggests that Gregar e was operati ng in the best interest of Local 377 in rejecting its offer, but this is contrary to the facts found by the District Court. The District Court found that Gregare was not operating in the interests of Local 377, but was instead inter ferin g in the negotiations between Local 377 and Borden towar ds the end of preventing Borden from continuing in its bus iness negotiations with TMC. This determination has adequ ate support in the record.

Second, IBT suggests that Gregare could not have ex erted
coercive economic influence on Borden because Borde n never intended to negotiate an agreement with Local 377. For the same reason, IBT suggests that it was not t he proximate cause of any damages, since Bor den would not have sold the facility to TMC. Again, there is no c lear error
in the District Court's determination that this was not the case. The District Court credited the testimony of Byers
that Borden's initial offer did not indicate an unw illingness to negotiate but instead constituted an initial"wis h-list"

8which, through the process of negotiation, could ha ve led to

more reasonable terms.

Third, IBT suggests that the District Court err ed by concluding that Borden was a neutral party because Borden was operating as the alter-ego of TMC. There fore, IBT argues, any coercive pressur e applied against Borden was legitimate, since it was directed against TMC, not Borden. The test of whether two employers constitut e a "single entity" under the secondary boycott pr ovis ions of the LMRA is based on: (1) common ownership; (2) com mon management; (3) centralized control of labor r elat ions; and (4) interrelationship of operations. Boich Mining C o. v. NLRB, 955 F.2d 431, 434 (6th Cir. 1992). The Distri ct Court did not err by concluding that Borden and TMC were not a "single entity" under this test.

Insofar as Local 205 is merely suggesting that it w as in
TMC's interest that Borden obtain a CBA with Local 377, it is also true that successful negotiations wer e in Borden's
interest as well. Just because the inter ests of TM C and Borden were aligned does not mean that Bor den and TMC were the same entity for the purposes of the LMRA's secondary boycott provisions. It is axiomatic that business relationships exist in those cases wher e such rela tionships operate to the mutual benefit of parties.

Fourth, IBT suggests that Borden was not "doing
business" with TMC because this was a case involvin g the sale of a single asset. This is relevant because if TMC and Borden were not doing business, it would be impossi ble for IBT to have coerced them to cease doing business in violation of 29 U.S.C. S 158(b)(4)(ii)(B). IBT cite s Amax Coal Co. v. NLRB, 614 F.2d 872, 885-86 (3d Cir . 1980), where
this Court stated:

The phrase "doing business" refers to a cont inuing business relationship which is capable of be ing discontinued by one employer in order to for ce another employer to accede to union demands. Thus, a s noted earlier, Section 8(e) was designed to pr ote ct neutral employers and their employees, not involved in a labor dispute, from being pressured to assist a un ion in a dispute with another employer.

9In Amax, a union sought to bind its primary employe r to a

commitment that any successor to the operation woul d abide by the terms of the current bar gaining agree ment. This Court held such proposed successorship arrange ments do not constitute interference in "doing business." The
Court also held in the alternative that "even if th e conveyance of a portion of Amax's coal mining opera tions . . . constituted `doing business' " the fact that the employees of both businesses were identical made th is a primary rather than secondary boycott. Id. at 886.

The District Court concluded that Amax did not appl y to this case because a trademark licensing provision i n the proposed contract of sale between Borden and TMC envisioned a continuing business relationship over several years. IBT challenges this conclusion. It str essed that it had no knowledge of the proposed trademark licensing agreement and that, therefore, it could not have ha d as its "object" the disruption of such a business r elatio nship. 29 U.S.C. S 158(b)(4)(ii). This point is well-taken. B ecause no finding was made below that IBT was aware of the trademark licensing provision, we cannot affirm the District
Court's decision on this basis.

We conclude, however, that the District Court's dec ision on this issue can be affirmed on the alter native g round that a continuing long-term negotiation over the purchas e of a new asset from a neutral party meets the "doing bus iness" requirements of 29 U.S.C. S 158(b)(4). As we stated in Limbach, the secondary boycott provisions are direc ted at preventing a union from leveraging a neutral third party's relationship with a primary employer in or der to f orce the primary employer to accede to the union's demands. Limbach, 949 F.2d 1249-50. This clearly happened in the present case. Gregare disrupted Bor den's negotiati ons with Local 377 with the objective of preventing TMC from negotiating to purchase the Borden facility. Gregar e's ultimate goal was to prevent TMC from cutting Local 205's production jobs at Ambridge.

Amax, upon which IBT relies, is not helpful here. I n Amax, no third party had yet appear ed on the scene

. Therefore, in Amax, no neutral party could be lever aged in order to aid the union in its primary dispute. Here a third

10party did exist and was indeed successfully leverag ed to

allow IBT to achieve its primary objective. Accor d ingly, we
will affirm the District Court's decision on the is sue of liability.

2. Damages

TMC alleges that it was damaged to the extent that it lost the benefit of purchasing the Youngstown facility. TMC claims that had it purchased the Borden facility an d cut production jobs at Ambridge, it would have made a p rofit from the resulting synergies. While the District Co urt characterized the exact calculations of Joseph T ay lor and TMC's expert witnesses as "rosy," it apparently acc epted that some profits would have been likely to r esult from this plan, dubbed "Plan A" by Taylor. Plan A, however, w as based on the premise that the CBA between Local 205 and TMC would be interpreted at arbitration to per mit milk production jobs to be moved to Youngstown.

Joseph Taylor testified that even if the CBA had be en interpreted in favor of Local 205, he would have st ill purchased the Youngstown facility. T aylor had two contingency plans based on this eventuality, and Jo seph Taylor testified some profits would have occurred u nder these two contingency plans (dubbed "Plan B" and "P lan C").

Damages here are claimed pursuant to 29 U.S.C. S 187(b). That statute states:

Whoever shall be injured in his business or pr operty by reason [of] any violation of subsection (a) may sue therefor in any district court of the United States subject to the limitations and provisions of [29 U.S.C. S 185] without respect to the amount in cont roversy, . . . and shall recover the damages by him s ustained
and the cost of the suit.

It is axiomatic that in the typical case "plaintiff bears the burden of proving every element of his case, includ ing damages." Rochez Bros. v. Rhoades, 527 F.2d 891, 89 4 (3d Cir. 1975). Violations of 29 U.S.C.S 158(b)(4)(ii) sound in tort, and are in the nature of inter ference with advantageous economic relations. Allied Int'l v. In ternational

11Longshoreman's Ass'n, 814 F.2d 32, 40 (1st Cir. 198 7). The

statute here, 29 U.S.C. S 187(b), r equires proof o f injury "by reason" of an unfair labor practice. These two word s must be read as requiring that TMC prove some causal nex us between IBT's activities and an injury TMC has suf fered.
Tresca Bros. Sand & Gravel v. T ruck Driver's Union , Local 170, 19 F.3d 63, 65 (1st Cir. 1994); Feather v. UMW & Dist. 2, 711 F.2d 530, 538 (3d Cir. 1983).

TMC points out, correctly, that if it has pr oven t hat some damage occurred, a District Court is per mitted to award an amount of damages that is "to some extent impr ecis e." Scully v. US Wats, Inc., 238 F.3d 497, 515 (3d Cir. 2001). All that is required is that sufficient facts be in troduced for a court to arrive at an intelligent estimate withou t speculation or conjecture. Id. "[T]he law does not command mathematical preciseness from the evidence in findi ng damages. . . ." Rochez, 527 F.2d at 895.

Although the District Court did characterize TMC's damages claim as speculative, TMC mistakenly attrib utes the District Court's uncertainty to an inability to fix a precise amount of damages. Rather, the District Cou rt was skeptical as to whether TMC had suffer ed damages a t all, making the cases cited by TMC inapplicable. See Kem merer v. ICI Ams., Inc., 70 F.3d 281, 290 (3d Cir. 1995) (finding that where "the very existence of damages" is in di spute, equitable principles do not compel a damages awar d ); Blanche Road Corporation v. Bensalem Township , 57 F.3d 253, 265 (3d Cir. 1995).

Our review of the record reveals that the District Court
did not commit clear error insofar as it found that TMC had failed to prove the profitability of Plan B and Pla n C. TMC was, however, entitled to a determination of whethe r it could have implemented Plan A. If it was likely tha t Plan A would have been successfully implemented, TMC would presumably have suffered some damages. To determine if Plan A could be implemented, the District Court was required to examine all the evidence befor e it, in cluding the

text of the CBA.

It is not clear that the District Court made such a n examination. Instead, the District Court declar ed that it

12would be usurping the role of the arbitrators if it

interpreted the relevant portion of the CBA. The Di strict Court then relied on the following testimony of TMC 's labor

counsel:

If the whole thing hinged just on winning th at arbitration, if it was a gamble, throwing th e dice or the turn of the cards, on that alone, it would h ave been chancie [sic] at best under the circumstance s at which we would have gone to the arbitration table. The language was definitely in favor of Taylor M ilk's position. The "otherwise handled" language. However, there were no attorneys permitted unless bot h sides agreed. There were named arbitrators. And I believe had we had ad hoc arbitration with attorneys present,
we would have had an excellent chance of win ning.
Under the burden under which we labored unde r that contract, I think it would have been a good possibility of winning, but it would not have been a sur e thing by

any means.

Apparently, based upon the attorney's opinion that the arbitration would be chancy and that there would ha ve been "a good possibility" of winning, the District Court concluded that TMC had "proved only that it had som e possibility of winning an arbitration but not that a victory was assured or even likely." We find two legal erro rs in the District Court's analysis.

First, because TMC was entitled to prove damages, t he District Court was required to deter mine whether i t was more likely than not that TMC would have won the
arbitration. The District Court could not have done this without considering the disputed text of the CBA. T he
District Court erred insofar as it concluded that i t was precluded from considering the CBA because the part ies had agreed to arbitrate and it was not pr oper for the District Court to opine as to the outcome of arbitr ation. To the contrary, it is not uncommon for a District Cou rt to be called upon to determine what the result of a dispu te resolution process would have been if one party had not forgone the opportunity to seek arbitration. 3

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3. TMC was required by law to establish by a prepon derance of the evidence that it would have suffered damages. Given the District Court's

13Second, we conclude the District Court erred insofa r it

relied exclusively on the testimony of TMC's counse l to conclude that TMC was not likely to prevail. In fac t, the testimony was consistent with the proposition that an arbitration victory for TMC was more likely than no t. Although TMC's counsel did suggest that arbitration was chancy, he later stated that TMC had a "good possib ility of winning." We do not see how these r emarks, taken a s a whole, can be interpreted as suggesting that it was unlikely that TMC would have prevailed at arbitration.

We also note that the District Court awar ded $50,0 00 to TMC in damages. This amount is equal to the amount paid by TMC to Borden for the exclusive right to pur cha se the Youngstown plant. At the same time, the District Co urt denied TMC $162,000 in out-of-pocket expenses assoc iated with TMC's efforts to purchase the facility. Both p arties are correct in arguing that this awar d was erroneous a s it appears internally inconsistent to awar d one sunk cost associated with TMC's right to purchase the Bor den facility yet deny other sunk costs related to the same trans action.

In the interest of administrative economy, we will clarify what we feel to be the correct legal analysis in re lation to these expenses. If, upon remand, the District Court determines that TMC would not have prevailed at
arbitration and maintains its determination that Pl ans B and C would not have been profitable, it is clear t hat TMC could have suffered no damage from IBT's actions, a s the loss of TMC's right to purchase the Bor den plant w ould have placed it in no worse of an economic position than if it had purchased the plant. In other wor ds, If TMC could not have profited from purchasing the Borden plant, there

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determination that TMC did not carry its bur den of proving the feasibility of Plans B and C, TMC was requir ed to prove it would have prevailed in the arbitration in order to prove dama ges. Only if Plan A was
feasible could TMC have suffered fr om the loss of the ability to implement plan A. Thus, some analysis of the likely outcome of arbitration was required. Local 205 was the only de fendant that could have required arbitration of this issue and its fai lure to do so should

not operate to the detriment of TMC.

14can be no basis for awarding TMC damages.4 If, on t he

other hand, TMC can prove to the District Court's
satisfaction that it would have consummated Plan A and made a profit, then the exclusive pur chase option and the out-of-pocket expenses associated with that pur cha se cannot be directly recovered. Instead, they should be factored as expenses counted against any calculatio n of future profits.

III.

For the above reasons, we will reverse the District Court's judgment and remand this matter to the District Cou rt for further proceedings consistent with this opinion.

A True Copy:

Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

___________________________________________________ ______________

4. The District Court characterized the $50,000 as money which TMC "indisputably lost." Though this is true, the statu te is explicitly
limited to losses which occur by reason of the defendant's unfair labor practices. Even had IBT not violated the law, TMC would never have recovered the cost of its purchase option. Plaintiff 's character ization of this award

as "restitution" is both novel and err oneous. A theor y of restitution could not justify such an award, as IBT was never unjustl y enriched by TMC's payment. See ATACS Corp. v. Trans World Communs., 1 55 F.3d 659, 669 (3d Cir. 1998) ("Accordingly, restitution damages w ill require the party

in breach to disgorge the benefit received by returnin g it to the partywho conferred it.").

15