Opinion ID: 3001839
Heading Depth: 2
Heading Rank: 2

Heading: Jurisdiction under the LMRA

Text: The appellants’ next argument is that the district court erred by dismissing the case because it had jurisdiction under LMRA § 301, which provides jurisdiction over “[s]uits for violation of contracts between an employer and a labor organization representing employees.” 29 U.S.C. § 185. The appellants contend that jurisdiction existed for their suit requesting a declaration that the Plan amendments did not violate the collective-bargaining agreements between Kirsch and the UAW. The appellants’ argument for jurisdiction under the LMRA relies heavily on our decision in J.W. Peters, Inc. v. Bridge, Structural & Reinforcing Iron Workers, for the proposition that when an employer accused of violating the terms of a collective-bargaining agreement files suit for declaratory relief, that suit is an action “for violation of 12 No. 07-1931 contracts within the meaning of § 301.” 398 F.3d 967, 973 (7th Cir. 2005) (internal quotation omitted). Jurisdiction under LMRA § 301 is “extremely limited” and encom- passes only suits “ ‘filed because a contract has been violated’ ”—it does not extend to “ ‘suits that claim a contract is invalid.’ ” Troha, 328 F.3d at 329 (quoting Textron Lycoming Reciprocating Engine Div. v. United Auto., Aerospace, Agric. Implement Workers of Am., 523 U.S. 653, 656-57 (1998)). But “ ‘a declaratory judgment plaintiff accused of violating a collective-bargaining agreement may ask a court to declare the agreement invalid.’ ” Stevens Constr. Corp. v. Chi. Reg’l Council of Carpenters, 464 F.3d 682, 685 (7th Cir. 2006) (quoting Textron, 523 U.S. at 658). Although § 301 provides only limited jurisdiction, we agree with the appellants (and the district court’s footnote) that the appellants’ LMRA § 301 claim falls within the statute’s jurisdictional contours. Newell amended the Plan to charge premiums to retirees. Kirsch’s collective-bargaining agreement with the UAW obligated Newell to provide certain welfare benefits for the lives of the retirees. Some retirees, and the UAW, claim that the amendments to the Plan violated the terms of the collective-bargaining agreements by ceasing to provide these benefits for life to retirees who do not pay premiums. This dispute is over whether Newell’s conduct violated the collective-bargaining agreement, and Newell seeks a declaration that its amendments were appropriate. This suit involves the alleged violation of the collectivebargaining agreement, and therefore falls within the plain terms of LMRA § 301. But that does not end the matter because the complaint advanced only claims for declaratory relief under the LMRA, and these claims are covered by the umbrella of the Declaratory Judgment Act. See Haw. Stevedores, Inc. v. No. 07-1931 13 HT&T Co., 363 F. Supp. 2d 1253, 1267 n.16 (D. Haw. 2005) (“That jurisdiction may be proper under the LMRA does not override the Court’s discretion to decline [Declaratory Judgment Act] jurisdiction.” (citing Krey Packing Co. v. Hamilton, 572 F.2d 1280, 1284 (8th Cir. 1978))). A district court has “wide discretion” to decline to hear actions that pursue only declaratory relief. North Shore Gas Co. v. Salomon Inc., 152 F.3d 642, 647 (7th Cir. 1998); In re VMS Secs. Litig., 103 F.3d 1317, 1327 (7th Cir. 1996); see also Wilton v. Seven Falls Co., 515 U.S. 277, 288 (1995) (“By the Declaratory Judgment Act, Congress sought to place a remedial arrow in the district court’s quiver; it created an opportunity, rather than a duty, to grant a new form of relief to qualifying litigants. Consistent with the nonobligatory nature of the remedy, a district court is authorized, in the sound exercise of its discretion, to stay or to dismiss an action seeking a declaratory judgment before trial or after all arguments have drawn to a close.”); Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 494 (1942). And the district court evaluated the claims in the complaint under the Declaratory Judgment Act and exercised its “wide discretion” by declining jurisdiction. There is some debate over what standard of review should be used to evaluate a district court’s decision to decline jurisdiction over a declaratory-judgment case. Nationwide Ins. v. Zavalis, 52 F.3d 689, 693 n.3 (7th Cir. 1995) (noting a “simmering circuit split” on the issue). This circuit has opted for a de novo standard of review. See VMS Secs. Litig., 103 F.3d at 1327; see also Salomon Inc., 152 F.3d at 647 (reviewing decision retaining case de novo).1 1 The Supreme Court announced in Wilton v. Seven Falls Co., that a district court’s decision to stay a Declaratory Judgment (continued...) 14 No. 07-1931 The district court noted that “the retirees and their union filed a class action suit approximately one month after this declaratory-judgment action was filed. The record reflects both sides expected the action by the ‘natural plaintiffs.’ ” We are usually wary of a declaratory-judgment action that is “ ‘aimed solely at wresting the choice of forum from the natural plaintiff.’ ” Hyatt Int’l Corp. v. Coco, 302 F.3d 707, 718 (7th Cir. 2002) (quoting Allendale Mut. Ins. Co. v. Bull Data Sys., Inc., 10 F.3d 425, 431 (7th Cir. 1993) (internal quotation marks omitted)). And we agree with the district court that the “natural plaintiffs” are the UAW and the retirees. It seems far more sensible to us that the retirees adjudicate their claims in Michigan, where the plant was located, where the ERISA and LMRA claims may go forward in the same litigation, and where the retirees may avail themselves of the benefits of a class-action lawsuit—which will offer a much greater possibility of settlement than the current posture of this case with its hundreds of defendants. These pragmatic and realistic concerns counsel in favor of dismissal. Moreover, it is completely understandable that the district court declined its jurisdiction under the Declaratory 1 (...continued) Act action in favor of a pending state-court action is reviewed for “abuse of discretion.” 515 U.S. at 289-90; see also Grinnell Mut. Reinsurance Co. v. Shierk, 121 F.3d 1114, 1117 (7th Cir. 1997). However, in several cases after Wilton, our circuit has continued to review de novo a district court’s decision to decline jurisdiction under the Declaratory Judgment Act. See Salomon Inc., 152 F.3d at 647; VMS Secs. Litig., 103 F.3d at 1327. No. 07-1931 15 Judgment Act because this case raises serious questions about the wisdom of allowing litigation to go forward in the Northern District of Illinois. The UAW and the retirees raised the issue before the district court by filing the motion to transfer to the Western District of Michigan under 28 U.S.C. § 1404(a). The retirees reside in many states throughout the country; the majority live in Michigan. As the district court noted, the negotiations over the collective-bargaining agreement and the Sturgis plants were in Michigan. The Plan administration was only recently moved to Illinois, and only one retiree defendant resides in Illinois—in the Central District of Illinois, not in the Northern District where this case commenced. Thus, both convenience and the “interests of justice” practically dictate transfer to Michigan, where the mirror image of this suit has been filed. See 28 U.S.C. § 1404(a) (“For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.”). And if the district court would have granted a motion to transfer if it had retained the case (and it appears nearly certain that it would have), it seems more than sensible to us that the district court facilitated the process by exercising its “wide discretion” to decline jurisdiction. See Salomon Inc., 152 F.3d at 647. Given the status of the pending suit in the Western District of Michigan and the other considerations we have articulated, we affirm the district court’s discretionary dismissal of the LMRA count. 16 No. 07-1931