Opinion ID: 381806
Heading Depth: 1
Heading Rank: 3

Heading: Right to Contribution

Text: 12 In its cross-claim Murphy requested contribution for what it asserted was the International's share of the damages Murphy had paid in the settlement agreement. By its express terms Title VII does not provide for a right of contribution. Murphy asserts that nevertheless a right of contribution exists in the federal common law arising from Title VII. It is to this claim that we now turn.
13 At the outset we note our disagreement with the International and the dissent that no right of contribution exists in the federal common law because there is an established rule that contribution would not be implied in the absence of a statutory provision. At 267. Initially most American courts held that there was no right of contribution under the common law, relying on the English decision Merryweather v. Nixan, 8 Term R. 186, 101 Eng.Rep. 1337 (K.B.1799). See, e. g., Union Stock Yards Co. v. Chicago, Burlington, & Quincy Railroad Co., 196 U.S. 217, 25 S.Ct. 226, 49 L.Ed. 453 (1905). This prohibition resulted from the belief that a wrongdoer should not be able to shift the responsibility of his actions to the shoulders of another. The rule prohibiting contribution has come into disrepute. It is now widely recognized that fundamental fairness demands a sharing of the liability. Without a right of contribution a wrongdoer may escape liability for his actions because of the happenstance of the plaintiff's choice of defendants. See Prosser, The Law of Torts, § 50 (4th ed. 1971). See also Sellers, Contribution in Antitrust Damage Actions, 24 Vill.L.Rev. 829, 855-63 (1979) (reviewing state law on contribution). The vast majority of the states have now rejected the prohibition either by statute, e. g., Del.Code tit. 10, §§ 6301-08; Pa.Cons.Stat.Ann. tit. 42 §§ 8323-27 (Purdon 1979), or by judicial action. E. g., Knell v. Feltman, 174 F.2d 662 (D.C. Cir. 1949); State Farm Auto Insurance Co. v. Continental Casualty Co., 264 Wis. 493, 59 N.W.2d 425 (1953). 14 The International argues that the prohibition still exists in federal law, relying on Halcyon Lines v. Haenn Ship Ceiling & Refitting Corp., 342 U.S. 282, 72 S.Ct. 277, 96 L.Ed. 318 (1952). Cf. Olson Farms, Inc. v. Safeway Stores, Inc., 1979 2 Trade Cases P 62,995 (10th Cir. 1979) (relying on Halcyon Lines to deny contribution under federal anti-trust laws). We do not agree. Halcyon Lines was an action for contribution arising under the admiralty jurisdiction of the federal courts. The Court found the claim inconsistent with the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C. §§ 901-944. It denied the claim and stated, (I)n the absence of legislation, courts exercising a common-law jurisdiction have generally held that they cannot on their own initiative create an enforceable right of contribution as between joint tortfeasors. 342 U.S. at 285, 72 S.Ct. at 279. For a number of years this language was relied upon to deny claims for contributions brought under federal law. See, e. g., Goldlawr, Inc. v. Shubert, 276 F.2d 614, 616 n. 3 (3d Cir. 1960) (anti-trust law). However, in 1974 the Supreme Court held that its holding was not as far-reaching as the language suggests. In Cooper Stevedoring Co., Inc. v. Fritz Kopke, Inc., 417 U.S. 106, 111-13, 94 S.Ct. 2174, 2177-78, 40 L.Ed.2d 694 (1974), the Court explained that it had denied contribution in Halcyon Lines only because under the facts of that case contribution was inconsistent with the Harbor Workers' Act. It stated: 15 (W)e think Halcyon stands for a more limited rule than the absolute bar against contribution . . . . On the facts of this case, then, no countervailing considerations detract from the well-established maritime rule allowing contribution between joint tortfeasors. 16 The Supreme Court has yet to review a contribution claim in a case outside of the admiralty context since Cooper Stevedoring. But a number of lower courts have read Cooper Stevedoring as supporting rights of contribution in federal common law claims. E. g.,, Professional Beauty Supply Inc. v. National Beauty Supply, Inc., 594 F.2d 1179 (8th Cir. 1979) (anti-trust law); Kohr v. Allegheny Airlines Inc., 504 F.2d 400 (7th Cir. 1974), cert. denied, 421 U.S. 978, 95 S.Ct. 1980, 44 L.Ed.2d 470 (1975) (aviation law). But see Olson Farms, Inc. v. Safeway Stores, Inc. (denying right of contribution in anti-trust law). Thus, Cooper Stevedoring provides positive support for our conclusion that a federal common law right of contribution exists.
17 As we noted above, no right of contribution is expressly provided for in Title VII. This does not, however, end our inquiry. For this does not necessarily reflect a congressional intention to deny a right of contribution. Rather it reflects the probability that contribution, although of considerable importance, was not contemplated by the drafters of the legislation. We must therefore inquire into the interstices of Title VII to respond to Murphy's claim. 18 The responsibility of federal courts to define the body of federal common law which arises from the interstices of federal legislation has been established by a number of Supreme Court decisions. E. g., Illinois v. Milwaukee, 406 U.S. 91, 92 S.Ct. 1385, 31 L.Ed.2d 712 (1972) (federal common law right of nuisance recognized and applied to the pollution of interstate waters); Textile Workers v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957) (federal labor law); Texas & Pacific Railway v. Rigsby, 241 U.S. 33, 36 S.Ct. 482, 60 L.Ed. 874 (1916) (Safety Appliance Act). 19 The scholarly debate about the power of the federal courts to recognize common law claims rages as does the debate on the source of that power and the extent to which it can be exercised. See, e. g., Ely, The Irrepressible Myth of Erie, 87 Harv.L.Rev. 693 (1974); Friendly, In Praise of Erie And the New Federal Common Law, 39 N.Y.U.L.Rev. 383 (1964); Bickel & Wellington, Legislative Purpose and the Judicial Process, 71 Harv.L.Rev. 1 (1957). Yet, in spite of the stridency of the debate, two principles firmly and resolutely emerge. First, there is a federal common law, Illinois v. Milwaukee, 406 U.S. at 98-102, 92 S.Ct. at 1390-1392. Second, in some circumstances federal common law causes of action arise from the interstices of congressional acts. See, e. g., Textile Workers v. Lincoln Mills. Common law actions arising from federal legislation have been recognized in a variety of circumstances, including instances when the common law establishes remedies and standards not set forth in the legislation, but necessary for the fulfillment of the legislative purpose, e. g., Illinois v. Milwaukee ; Textile Workers v. Lincoln Mills, and instances where the common law provides a cause of action for an individual who has been harmed by the violation of the federal statute. E. g., J. I. Case Co. v. Borak, 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964); Texas & Pacific Railway v. Rigsby. In our review of the literature and the case law we discern two types of cases which establish the framework for our determination of whether a common law right of contribution arises from the interstices of Title VII. 20 The first are cases in which the common law provides remedies or standards when legislation related to the petitioner's claim does not address the specific situation presented. These cases are illustrated by the seminal decision, Textile Workers Union v. Lincoln Mills. In Lincoln Mills the plaintiff union charged Lincoln Mills with violating a collective-bargaining agreement. The Supreme Court held that the standards for evaluating the claim were to be found in the federal common law. The Court reasoned that when Congress granted to the federal courts jurisdiction over controversies involving labor organizations in the Labor Management Relations Act, 29 U.S.C. §§ 141-187, it wanted those controversies to be resolved by a federal common law. The Court argued that a uniform federal law was necessary to achieve the purposes of the Act. Although it made no extensive analysis of the source of its power to fashion this body of common law, it noted, (i)t is not uncommon for federal courts to fashion federal law where federal rights are concerned. 353 U.S. at 457, 77 S.Ct. at 918. The exact contours of this body of common law was to be determined by a review of the applicable legislation. 21 The Labor Management Relations Act expressly furnishes some substantive law. It points out what the parties may or may not do in certain situations. Other problems will lie in the penumbra of express statutory mandates. Some will lack express statutory sanction but will be solved by looking at the policy of the legislation and fashioning a remedy that will effectuate that policy. The range of judicial inventiveness will be determined by the nature of the problem. 22 Id. 23 A similar analysis was used in Illinois v. Milwaukee. In that case the Supreme Court was presented with a common law nuisance action brought by the State of Illinois. Illinois brought the action against four cities of Wisconsin, the Sewerage Commission of the City of Milwaukee, and the Sewerage Commission of the County of Milwaukee in an attempt to abate the alleged pollution of Lake Michigan, a body of interstate water. The Court found that Congress had a strong interest in the quality of the aquatic environment as it affects the conservation and safeguarding of fish and wildlife, 406 U.S. at 102, 92 S.Ct. at 1392, evidenced by legislation such as the Federal Water Pollution Control Act, 62 Stat. 1155, as amended (presently codified at 33 U.S.C. §§ 1251 et seq.) and the Fish and Wildlife Act of 1956, 70 Stat. 1119, 16 U.S.C. § 742a. Undaunted by the absence of an express cause of action in any of these acts covering Illinois' claim, the Court held that one existed in the federal common law. It stated: 24 The remedy sought by Illinois is not within the precise scope of remedies prescribed by Congress. Yet the remedies which Congress provides are not necessarily the only federal remedies available. It is not uncommon for federal courts to fashion federal law where federal rights are concerned. Textile Workers v. Lincoln Mills, 353 U.S. 448, 457, (77 S.Ct. 912, 918, 1 L.Ed.2d 972.) 25 Id. at 103, 92 S.Ct. at 1392. See also National Sea Clammers Association v. City of New York, 616 F.2d 1222, 1235 (3d Cir. 1980). (After considering the rationale of Illinois v. Milwaukee, this court concluded that there is a federal common law of nuisance (which) may be enforced by private plaintiffs.) 26 The second group of cases are similar yet distinctive. They deal with the specific issue of whether a federal common law action may be brought by an individual who has been harmed by a violation of legislation designed to protect that individual. The earliest Supreme Court decision of that nature seems to be Texas & Pacific Railway v. Rigsby. The Rigsby Court held: 27 A disregard of the command of the statute is a wrongful act, and where it results in damage to one of the class for whose especial benefit the statute was enacted, the right to recover the damages from the party in default is implied, according to a doctrine of the common law. 28 241 U.S. at 39, 36 S.Ct. at 484. See generally Note, Implied Civil Liability and the Trust Indenture Act, 52 Tul.L.Rev. 299, 309 (1978). 29 This issue has been the subject of a number of Supreme Court decisions, and the applicable analysis has become highly developed. In Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975), the Supreme Court set forth a four-prong test: 30 First, is the plaintiff one of the class for whose especial benefit the statute was enacted that is, does the statute create a federal right in favor of the plaintiff? Second, is there any indication of legislative intent, explicit or implicit, either to create such a remedy or to deny one? Third, is it consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff? And finally, is the cause of action one traditionally relegated to state law, in an area basically the concern of the States, so that it would be inappropriate to infer a cause of action based solely on federal law? 31 Id. at 78, 95 S.Ct. at 2088 (emphasis in original; citations omitted). As we have noted, the four-prong analysis of Cort v. Ash is designed to guide the courts in determining legislative intent. National Sea Clammers Association v. City of New York, 616 F.2d at 1229, citing, Touche, Ross & Co. v. Redington, 442 U.S. 560, 99 S.Ct. 2479, 61 L.Ed.2d 82 (1979), and Trans America Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 100 S.Ct. 242, 62 L.Ed.2d 146 (1979). The inquiry in a right to contribution claim is somewhat different because the party requesting contribution, by definition, will never be a member of the class protected by the legislation. Indeed that party will always be a member of the class from whom the especial class was to be protected. Northwest Airlines, Inc. v. Transport Workers, 606 F.2d 1350, 1354 (D.C. Cir. 1979), cert. granted, 445 U.S. 902, 100 S.Ct. 1077, 63 L.Ed.2d 318 (1980). 32 Although the question presented in each of these cases is different from Murphy's claim we find them helpful in our analysis. For in each of these cases the Court turns to the relevant legislation to determine whether the common law action exists, and ascertains the congressional intent as to both the underlying goals of the legislation and the specific action presented. It is this methodology which we will use in our evaluation of Murphy's contribution claim.
33 In our review of the legislative history of Title VII we have not found any materials which explicitly indicate whether or not Congress intended for a right of contribution to exist. The absence of such an explicit reference does not end our inquiry, for the legislative history of a statute that does not expressly create or deny a private remedy will typically be equally silent or ambiguous on the question. Cannon v. University of Chicago, 441 U.S. 677, 694, 99 S.Ct. 1946, 1956, 60 L.Ed.2d 560 (1979). As we are obliged to find an answer (we) must resort to materials from which the Congressional intent can only be inferred. United Parcel Service, Inc. v. United States Postal Service, 604 F.2d 1370, 1383 (3d Cir. 1979) (Higginbotham, J., dissenting). 34 The express terms of Title VII demonstrate a congressional intent that unions be held financially liable with employers for unlawful employment practices. Section 703(a), 42 U.S.C. § 2000e-2(a), proscribes employer discrimination, and section 703(c)(3), 42 U.S.C. § 2000e-2(c)(3), holds a union liable not only for discriminatory actions in which it independently engages, but also when it cause(s) or attempt(s) to cause an employer to discriminate against an individual . . . Furthermore, section 706(g) expressly states that a court may award damages for back pay (payable by the employer, employment agency, or labor organization), . . . 42 U.S.C. § 2000e-5(g). Under these provisions the union and the employer may be held jointly liable when the unlawful activity was a joint undertaking. See Evans v. Sheraton Park Hotel, 503 F.2d 177 (D.C. Cir. 1974) (employer, local union and international held jointly liable for back pay and attorneys' fees); Johnson v. Goodyear Tire & Rubber Co., 491 F.2d 1364 (5th Cir. 1974) (company and union held jointly liable for back pay and attorney's fees); Commonwealth of Pennsylvania v. Local 542, International Union of Operating Engineers, 469 F.Supp. 329 (E.D.Pa.1978) (union and company held jointly liable for injunctive relief). These provisions reflect a statutory policy that the responsibility for monetary relief should be borne by both unions and employers to the extent that they are responsible for violations of Title VII. A right of contribution would achieve this goal. In contrast, a holding that there is no right of contribution under Title VII would release some individuals from liability. 35 Other policies underlying Title VII would be served by a right of contribution. In Albemarle Paper Co. v. Moody, 422 U.S. 405, 417, 95 S.Ct. 2362, 2371, 45 L.Ed.2d 280 (1975) (footnote omitted), the Supreme Court emphasized that Title VII's primary objective (is) a prophylactic one. The Court stated: 36 It is the reasonably certain prospect of a back pay award that provide(s) the spur or catalyst which causes employers and unions to self-examine and to self-evaluate their employment practices and to endeavor to eliminate, so far as possible, the last vestiges of an unfortunate and ignominious page in this country's history. 37 Id. at 417-18, 95 S.Ct. at 2371-72, quoting United States v. N. L. Industries, Inc., 479 F.2d 354, 379 (8th Cir. 1973). Under a rule of contribution (b)oth union and employer will know that they both must be vigilant to eschew unlawful discrimination and that the employee's predilections as to whom to sue will not insure either immunity from the mandates of the law. Northwest Airlines, Inc. v. Transport Workers Union of America, 14 E.P.D. P 7730, 5596 (D.D.C.1977), rev'd on other grounds, 606 F.2d 1350 (D.C. Cir. 1979), cert. granted, 445 U.S. 902, 100 S.Ct. 1077, 63 L.Ed.2d 318 (1980). Cf. Globus, Inc. v. Law Research Service, Inc., 318 F.Supp. 955, 958 (S.D.N.Y.), aff'd, 442 F.2d 1346 (2d Cir. 1971), cert. denied, 404 U.S. 941, 92 S.Ct. 286, 30 L.Ed.2d 254 (1971) (implied right of contribution would strengthen the deterrent impact of the securities law). 38 A right of contribution would also serve the Title VII policy of favoring conciliation and settlement of these claims. (C)ooperation and voluntary compliance . . . (are) the preferred means for achieving the goal of equality of employment opportunities. Alexander v. Gardner-Denver Co., 415 U.S. 36, 44, 94 S.Ct. 1011, 1017, 39 L.Ed.2d 147 (1974). This is shown by the facts of this case. If Murphy had felt that it had no right of contribution against the unions it might have been unwilling to reach a settlement with the plaintiffs. It might have chosen instead to proceed with the litigation so that the unions would be held responsible for a share of the damages. Further, the contribution rule prevents a plaintiff from becoming unjustly enriched either by collusive activity with one of the defendants, or by threatening one defendant that the suit will be brought only against it, thereby forcing an unjustified settlement. See Note, Settlement in Joint Tort Cases, 18 Stan.L.Rev. 486, 490 (1966). 2 39 A right of contribution would implement the congressional intent to hold both unions and employers liable for unlawful employment practice and would aid the conciliation and settlement goals of Title VII. Thus, we hold that a federal common law right of contribution exists when a defendant charged with a violation of Title VII settles with a plaintiff prior to trial for the full amount of damages and requests contribution from a non-settling co-defendant who is jointly liable.
40 The dissent argues that by choosing, in this case, the rule of decision which we believe to be the better one we are unjustifiably performing a legislative function. It concedes that we are dealing with a subject matter requiring a uniform federal rule of decision. Thus we and the dissent agree that adoption of a contribution rule is no invasion of an area which state lawmaking authority, legislative or judicial, can claim as its own. The dissent's complaint is that by adopting what we think is the better rule of decision we are invading the exclusive preserve of Congress. If we were to announce a federal rule of decision implied from a constitutional provision, 3 and thus arguably beyond the future control of Congress there might be some merit to the dissent. See Monaghan, Forward: Constitutional Common Law, 89 Harv.L.Rev. 1 (1975). But the rule of decision which we have found to be preferable could be changed by Congress tomorrow. 41 The difficulty with the dissent's argument on legislative function is that it concedes If it was clear, as my colleagues apparently believe, that a right of contribution would strengthen the deterrent impact of Title VII, then there might be a judicial responsibility to make those rules which are needed to effectuate the significant national policy represented by the statute. At 268. There are countervailing arguments, and the policy choice is a difficult one. But the litigants before us have tendered the issue, and its closeness does not absolve us from the obligation to decide it. Nor does our action become an impermissible encroachment on the legislative branch, merely because of the difficulty of the issue presented. Whether we reject or adopt a contribution rule we must make a choice. 42 If we were to be convinced that a rule prohibiting contribution better served the purpose of Title VII our adoption of that rule would stand in relationship to Congress on exactly the same footing. The logic of the argument that adoption of a rule prohibiting rather than permitting contribution would be less legislative escapes us. Certainly the party whose claim for contribution was rejected would not think we acted any less legislatively in rejecting it. Reliance on deference to the legislative process cannot conceal the fact that the dissent has made such a choice.