2001 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

5-1-2001

Taylor Milk Co v. International Brotherhood

Teamsters

Precedential or Non-Precedential:

Docket 00-1598

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Recommended Citation

"Taylor Milk Co v. International Brotherhood Teamsters" (2001). 2001 Decisions. Paper 95.

http://digitalcommons.law.villanova.edu/thirdcircuit_2001/95
Filed 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 organization; 

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 organization; 

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, Dairy 

 Conference-USA and Canada, 

 Appellants in No. 00-1616 
On 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 the 

International Brotherhood of T eamsters ("IBT"), the 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 practices in 

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

violated the prohibition against secondary boycotts by 

coercing a neutral party into not doing business with TMC. 

The District Court found that the appellees had committed 

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 denial 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 that 

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 plant 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 sold. 

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 purchase the 

facility. Joseph Taylor, the pr esident of TMC, hoped that by 

shifting production operations to Borden's Youngstown 

plant, TMC would be able to turn a profit. The Borden 

Youngstown facility was generally a superior facility from an 

operational standpoint and the wages paid to the 

Youngstown production workers wer e significantly less than 

those paid to the workers in Ambridge. TMC planned to 

eliminate the Ambridge production jobs after acquiring the 

Youngstown facility but to keep the Ambridge plant as a 

distribution facility. 

The stipulated purchase price for the Y oungstown facility 

was approximately $1,200,000. The finalization of the 

agreement, however, was dependent upon TMC first 

obtaining bank financing for the deal. The bankfinancing 

_________________________________________________________________ 

1. TMC has now ceased operations. 

 3 
was in turn contingent upon the existence of a stable, longterm collective bargaining agreement ("CBA") between 

Borden and its labor force, which TMC would then assume. 

Toward its goal of forming such an agreement, TMC 

traveled to Youngstown to meet with the Bor den's 

Youngstown employees, represented by Teamsters Local 

377 ("Local 377"), and Eben Byers, the union's business 

agent. TMC proposed a new CBA with moderate increases 

in wages and benefits. Local 377 seemed responsive to 

these proposals, though Byers noted that since Borden was 

the employer of Local 377, any current agr eement needed 

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 could 

remain employed following Borden's sale of the Youngstown 

facility. 

On August 25, 1995, representatives fr om Local 205 and 

TMC met at a hotel. Local 205 was represented by its 

principal officer, William Lickert. Local 205 had somehow 

become aware of TMC's plans to shift pr oduction jobs to 

Youngstown and terminate workers at Local 205. Local 205 

had invited the Chairman of the Teamster's Dairy 

Conference, Fred Gregare, to the meeting in order to 

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 Taylor 

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 Local 

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 shift 

production to Youngstown. The CBA specified that "all dairy 

products . . . shall be manufactured, pr ocessed, packaged 

and/or handled by the Employer's employees .. . . No work 

or services presently performed or hereafter assigned to the 

collective bargaining unit . . . will be subcontracted . . . ." 

(emphasis added). TMC maintains that this pr ovision was 

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

"handle" the products which were manufactured in 

Ambridge and an exception clause excluded ice cr eam and 

some other products from the scope of this provision. 

Discussions deteriorated further. Gregar e, chairman of 

the Teamster's Dairy Conference, then stated that he was 

"implementing Article 12, Section 2" of the T eamster 

Constitution and "giving jurisdiction of the Bor den 

Youngstown plant to Local 205." (The parties now agree 

that section 2 of Article 12 conferred no such authority.) 

Gregare instructed Borden to sell the plant to someone else.2 

The meeting ended soon thereafter. 

Gregare sent follow-up letters to Bor den's Local 377 

stating that section 2 of Article 12 of the T eamster's 

Constitution was being implemented. Gregar e further 

stated that he was requesting in accordance with section 2 

of Article 12 that prior approval be granted before Local 377 

ratified any collective bargaining agr eement. Gregare then 

contacted Byers directly by telephone and told Byers not to 

re-negotiate the Local 377-Borden contract but to listen to 

any proposals and fax them to Gregar e. At trial, Gregare 

admitted that he had no authority to requir e Byers to 

obtain his approval before re-negotiating a contract. The 

District Court found that Byers complied with this directive 

out of fear that Local 377 would be placed in trusteeship if 

Byers disobeyed Gregare's orders. 

On September 1, Borden offered a CBA proposal to Local 

377 that Byers considered "ridiculous" but that would have 

normally served as the basis for a counter -proposal from 

Local 377. Per Gregare's instructions, Byers forwarded the 

proposal to Gregare and did not r espond to the offer. Local 

377 instead sent a letter to Gregare's superiors asking 

whether Gregare truly had authority to negotiate on behalf 

of Local 377 and requesting permission to proceed with 

negotiations. No response was received. 

On September 15, Borden again met with Byers and 

_________________________________________________________________ 

2. At trial, Gregare denied invoking Article 12, Section 2, denied 

awarding jurisdiction to Local 205, and denied telling Borden to sell its 

plant to someone else. The trial court credited none of these denials. 

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

Byers continued to follow Gregare's instructions not to 

negotiate. Borden concluded that dealing with Byers was 

not effective and that Borden would have to deal with 

Gregare directly. On October 2, Bor den met with Gregare 

on Gregare's home base in Wisconsin. Byers was present 

for "a very short meeting," but was then excluded from 

negotiations, which were conducted only by Gr egare and 

Borden. When negotiations were finished, Gregare informed 

Byers that a counter-proposal had been made, that the 

counter-proposal had been rejected, and that the plant 

would close. Byers expressed a desire to continue 

negotiations but Gregare refused to negotiate further. 

Consequently, the deal between TMC and Borden fell 

through and the Youngstown plant was closed. All Local 

377 employees at the Youngstown facility wer e terminated. 

TMC filed suit against IBT under the Labor Management 

Relations Act ("LMRA"), 29 U.S.C. S 187(a), seeking

damages for an alleged violation of the secondary boycott 

provisions codified at 29 U.S.C. S 158(b)(4). The District 

Court bifurcated the damage and liability trials. The trial 

court found that the defendants were liable for violating 29 

U.S.C. S 158(b)(4) and entered judgment for TMC in the 

amount of $50,000 plus prejudgment inter est. TMC appeals 

the damages verdict, alleging that it was entitled to a larger 

damages award. IBT cross-appeals the liability verdict, 

asserting that 29 U.S.C. S 158(b)(4) was never violated. 

The District Court had jurisdiction over this case 

pursuant to 29 U.S.C. S 187 and 28 U.S.C.S 1331. Our 

appellate jurisdiction is pursuant to 28 U.S.C.S 1291. 

Factual findings of the District Court are r eviewed 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 29 

U.S.C. S 158(b)(4)(ii)(B), and that the District Court erred by 

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

applicable part: 

 (b) Unfair labor practices by labor or ganization. It 

 shall be an unfair labor practice for a labor 

 organization or its agents-- 

 (4) . . . . (ii) to threaten, coerce, or restrain any person 

 engaged in commerce or in an industry af fecting 

 commerce, where . . . an object ther eof is-- 

 . . . . 

 (B) forcing or requiring any person . .. to cease doing 

 business with any other person, . . . Provided, That 

 nothing contained in this clause (B) shall be construed 

 to make unlawful, where not otherwise unlawful, 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 union conduct 

 designed to force a primary employer (the employer 

 with which the union has a dispute) to bargain with a 

 union or to force a neutral employer (an employer with 

 which the union has no dispute) to cease doing 

 business with the primary employer. The pr oscribed 

 methods used to achieve the objectives include 

 threatening, coercing, or restraining the secondary 

 employer. See, e.g., Soft Drink Workers Union Local 812 

 v. NLRB, 212 App. D.C. 10, 657 F.2d 1252 (D.C. Cir. 

 1980). Coercion can include economic pr essure upon 

 the neutral party. Allentown Racquetball & Health 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 against 

 secondary boycotts is to shield unoffending employers 

 from pressures in disputes not their own, though 

 preserving the rights of unions to bring pr essure to 

 bear on offending employers in primary labor disputes. 

 7 
 Anderson v. International Bhd. of Elec. W orkers, Local 

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

Id. 

The District Court found that IBT violated this section 

when Gregare, representing the interests of Local 205, 

usurped Local 377's place in negotiations to pr event Borden 

from continuing negotiations with TMC. The District Court 

concluded that Borden was a neutral thir d party and that 

Gregare's actions, in preventing negotiations between Local 

377 and Borden, forced Borden to cease doing business 

with TMC. IBT argues that this was an err oneous decision 

for a number of reasons. 

First, IBT suggests that because Local 377 was within its 

rights in "following Gregare's advice" and deciding not to 

negotiate with Borden, there was no unlawful activity. This 

ignores the Limbach rule that we look to the intention of the 

parties in coercing neutral parties, not to the general rights 

of parties to take particular actions. See id. , 949 F.2d at 

1252-53 (stating that the exercise of legitimate rights may 

be unlawful if exercised "for the purpose of applying 

economic coercion to achieve a prohibited secondary

objective"). IBT suggests that Gregar e was operating 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 fering in the 

negotiations between Local 377 and Borden towar ds the 

end of preventing Borden from continuing in its business 

negotiations with TMC. This determination has adequate 

support in the record. 

Second, IBT suggests that Gregare could not have exerted 

coercive economic influence on Borden because Borden 

never intended to negotiate an agreement with Local 377. 

For the same reason, IBT suggests that it was not the 

proximate cause of any damages, since Bor den would not 

have sold the facility to TMC. Again, there is no clear 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 unwillingness 

to negotiate but instead constituted an initial"wish-list" 

 8 
which, through the process of negotiation, could have 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. Therefore, 

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 constitute a 

"single entity" under the secondary boycott pr ovisions of 

the LMRA is based on: (1) common ownership; (2) common 

management; (3) centralized control of labor r elations; and 

(4) interrelationship of operations. Boich Mining Co. v. 

NLRB, 955 F.2d 431, 434 (6th Cir. 1992). The District 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 was 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 TMC 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 relationships 

operate to the mutual benefit of parties. 

Fourth, IBT suggests that Borden was not "doing 

business" with TMC because this was a case involving the 

sale of a single asset. This is relevant because if TMC and 

Borden were not doing business, it would be impossible for 

IBT to have coerced them to cease doing business in

violation of 29 U.S.C. S 158(b)(4)(ii)(B). IBT cites 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 continuing 

 business relationship which is capable of being 

 discontinued by one employer in order to for ce another 

 employer to accede to union demands. Thus, as noted 

 earlier, Section 8(e) was designed to pr otect neutral 

 employers and their employees, not involved in a labor 

 dispute, from being pressured to assist a union in a 

 dispute with another employer. 

 9 
In Amax, a union sought to bind its primary employer to a 

commitment that any successor to the operation would 

abide by the terms of the current bar gaining agreement. 

This Court held such proposed successorship arrangements 

do not constitute interference in "doing business." The 

Court also held in the alternative that "even if the 

conveyance of a portion of Amax's coal mining operations 

. . . constituted `doing business' " the fact that the 

employees of both businesses were identical made this a 

primary rather than secondary boycott. Id. at 886. 

The District Court concluded that Amax did not apply to 

this case because a trademark licensing provision in 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 had as its 

"object" the disruption of such a business r elationship. 29 

U.S.C. S 158(b)(4)(ii). This point is well-taken. Because 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 decision 

on this issue can be affirmed on the alter native ground that 

a continuing long-term negotiation over the purchase of a 

new asset from a neutral party meets the "doing business" 

requirements of 29 U.S.C. S 158(b)(4). As we stated in 

Limbach, the secondary boycott provisions are directed at 

preventing a union from leveraging a neutral third party's 

relationship with a primary employer in or der to force 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 negotiations with 

Local 377 with the objective of preventing TMC from

negotiating to purchase the Borden facility. Gregare'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. In 

Amax, no third party had yet appear ed on the scene. 

Therefore, in Amax, no neutral party could be leveraged in 

order to aid the union in its primary dispute. Here a third 

 10 
party did exist and was indeed successfully leveraged to 

allow IBT to achieve its primary objective. Accor dingly, we 

will affirm the District Court's decision on the issue 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 and cut 

production jobs at Ambridge, it would have made a profit 

from the resulting synergies. While the District Court 

characterized the exact calculations of Joseph T aylor and 

TMC's expert witnesses as "rosy," it apparently accepted 

that some profits would have been likely to r esult from this 

plan, dubbed "Plan A" by Taylor. Plan A, however, was 

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 been 

interpreted in favor of Local 205, he would have still 

purchased the Youngstown facility. T aylor had two 

contingency plans based on this eventuality, and Joseph 

Taylor testified some profits would have occurred under 

these two contingency plans (dubbed "Plan B" and "Plan 

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 controversy, 

 . . . and shall recover the damages by him sustained 

 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, including 

damages." Rochez Bros. v. Rhoades, 527 F.2d 891, 894 (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. International 

 11 
Longshoreman's Ass'n, 814 F.2d 32, 40 (1st Cir. 1987). The 

statute here, 29 U.S.C. S 187(b), r equires proof of injury "by 

reason" of an unfair labor practice. These two words must 

be read as requiring that TMC prove some causal nexus 

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 that some 

damage occurred, a District Court is per mitted to award an 

amount of damages that is "to some extent impr ecise." 

Scully v. US Wats, Inc., 238 F.3d 497, 515 (3d Cir. 2001). 

All that is required is that sufficient facts be introduced for 

a court to arrive at an intelligent estimate without 

speculation or conjecture. Id. "[T]he law does not command 

mathematical preciseness from the evidence in finding 

damages. . . ." Rochez, 527 F.2d at 895. 

Although the District Court did characterize TMC's 

damages claim as speculative, TMC mistakenly attributes 

the District Court's uncertainty to an inability tofix a 

precise amount of damages. Rather, the District Court was 

skeptical as to whether TMC had suffer ed damages at all, 

making the cases cited by TMC inapplicable. See Kemmerer 

v. ICI Ams., Inc., 70 F.3d 281, 290 (3d Cir. 1995) (finding 

that where "the very existence of damages" is in dispute, 

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 Plan C. TMC 

was, however, entitled to a determination of whether it 

could have implemented Plan A. If it was likely that 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, including the 

text of the CBA. 

It is not clear that the District Court made such an 

examination. Instead, the District Court declar ed that it 

 12 
would be usurping the role of the arbitrators if it

interpreted the relevant portion of the CBA. The District 

Court then relied on the following testimony of TMC's labor 

counsel: 

 If the whole thing hinged just on winning that 

 arbitration, if it was a gamble, throwing the dice or the 

 turn of the cards, on that alone, it would have been 

 chancie [sic] at best under the circumstances at which 

 we would have gone to the arbitration table. The 

 language was definitely in favor of Taylor Milk's 

 position. The "otherwise handled" language. However, 

 there were no attorneys permitted unless both 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 winning. 

 Under the burden under which we labored under 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 have 

been "a good possibility" of winning, the District Court 

concluded that TMC had "proved only that it had some 

possibility of winning an arbitration but not that a victory 

was assured or even likely." We find two legal errors in the 

District Court's analysis. 

First, because TMC was entitled to prove damages, the 

District Court was required to deter mine whether it 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. The 

District Court erred insofar as it concluded that it was 

precluded from considering the CBA because the parties 

had agreed to arbitrate and it was not pr oper for the 

District Court to opine as to the outcome of arbitration. To 

the contrary, it is not uncommon for a District Court to be 

called upon to determine what the result of a dispute 

resolution process would have been if one party had not 

forgone the opportunity to seek arbitration. 3 

_________________________________________________________________ 

3. TMC was required by law to establish by a preponderance of the 

evidence that it would have suffered damages. Given the District Court's 

 13 
Second, we conclude the District Court erred insofar it 

relied exclusively on the testimony of TMC's counsel to 

conclude that TMC was not likely to prevail. In fact, the 

testimony was consistent with the proposition that an 

arbitration victory for TMC was more likely than not. 

Although TMC's counsel did suggest that arbitration was 

chancy, he later stated that TMC had a "good possibility of 

winning." We do not see how these r emarks, taken as 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 $50,000 to 

TMC in damages. This amount is equal to the amount paid 

by TMC to Borden for the exclusive right to pur chase the 

Youngstown plant. At the same time, the District Court 

denied TMC $162,000 in out-of-pocket expenses associated 

with TMC's efforts to purchase the facility. Both parties are 

correct in arguing that this awar d was erroneous as 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 transaction. 

In the interest of administrative economy, we will clarify 

what we feel to be the correct legal analysis in relation to 

these expenses. If, upon remand, the District Court

determines that TMC would not have prevailed at 

arbitration and maintains its determination that Plans B 

and C would not have been profitable, it is clear that TMC 

could have suffered no damage from IBT's actions, as the 

loss of TMC's right to purchase the Bor den plant would 

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 

_________________________________________________________________ 

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 damages. 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 defendant that could 

have required arbitration of this issue and its failure to do so should 

not 

operate to the detriment of TMC. 

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

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 chase 

cannot be directly recovered. Instead, they should be 

factored as expenses counted against any calculation of 

future profits. 

III. 

For the above reasons, we will reverse the District Court's 

judgment and remand this matter to the District Court 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 statute 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 characterization of this award 

as 

"restitution" is both novel and err oneous. A theory of restitution could 

not justify such an award, as IBT was never unjustly enriched by TMC's 

payment. See ATACS Corp. v. Trans World Communs., 155 F.3d 659, 669 

(3d Cir. 1998) ("Accordingly, restitution damages will require the party 

in 

breach to disgorge the benefit received by returning it to the partywho 

conferred it."). 

 15