Court Opinion

ID: 4644694
Source: CourtListenerOpinion
Date Created: 2020-12-18 18:00:17.366844+00
Date Added: 2024-06-11T08:00:47.502027
License: Public Domain

NOT PRECEDENTIAL

                     UNITED STATES COURT OF APPEALS
                          FOR THE THIRD CIRCUIT
                             ________________

                                    No. 20-1461
                                 ________________

           UTILITY WORKERS UNITED ASSOCIATION, LOCAL 537,
        an unincorporated association, by J. Kevin Booth, its Trustee ad Litem,
                                                                          Appellant

                                          v.

               PENNSYLVANIA AMERICAN WATER COMPANY,
                             a Corporation

                                 ________________

                   On Appeal from the United States District Court
                      for the Western District of Pennsylvania
                           (D.C. Civil No. 2-19-cv-00580)
                      District Judge: Honorable Cathy Bissoon
                                 ________________

                              Argued: September 29, 2020

             Before: SHWARTZ, PHIPPS, and SCIRICA, Circuit Judges

                              (Filed: December 18, 2020)

Samuel J. Pasquarelli [ARGUED]
Sherrard German & Kelly
535 Smithfield Street
Suite 300
Pittsburgh, PA 15222

      Counsel for Appellant
Craig M. Brooks [ARGUED]
Houston Harbaugh
401 Liberty Avenue
22nd Floor, Three Gateway Center
Pittsburgh, PA 15222

       Counsel for Appellee

                                    ________________

                                        OPINION*
                                    ________________

SCIRICA, Circuit Judge

       Utility Workers United Association, Local 537 (the “Association”) brought this

action alleging Pennsylvania American Water Company (“PAWC”) breached the terms

of two contracts. PAWC contends the trial court lacked jurisdiction to hear this case and,

alternatively, the Association failed to state a claim because the contracts at issue are null

and void. While we disagree with PAWC on the question of jurisdiction, we agree that

the Association has failed to state a claim. Accordingly, we will affirm the trial court’s

grant of PAWC’s motion to dismiss.

                                              I.

       The Association, a labor organization, is the exclusive bargaining representative

for certain employees of PAWC. These employees were previously represented by

System Local 537 of the Utility Workers Union of America, AFL-CIO (“Former

*
 This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.

                                              2
Union”). PAWC and the Former Union entered into collective-bargaining agreements—

the contracts at issue in this case.

         On March 19, 2018, the employees covered by the contracts determined to

disaffiliate from the Former Union and affiliate with the Association as their exclusive

bargaining representative.

         Later, employees filed petitions with the National Labor Relations Board seeking

to decertify the Former Union and to have the Association certified as their exclusive

bargaining representative. In December 2018, the NLRB held elections on the petitions,

resulting in the Association’s certification as the exclusive bargaining representative for

the employees. Once the Association was certified, PAWC refused to honor the contracts

it entered into with the Former Union. PAWC contends the certification rendered the

contracts between it and the Former Union null and void, creating an obligation for the

Association to bargain with PAWC for a new contract.

         The Association commenced this litigation, and PAWC filed a motion to dismiss

the complaint under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). The trial

court granted the motion to dismiss based on lack of subject matter jurisdiction. This

appeal followed.1

1
    We have appellate jurisdiction under 28 U.S.C. § 1291.

                                             3
                                              II.

                                              A.

       The question of whether the trial court had subject matter jurisdiction is an issue of

law we review de novo. In re Phar–Mor, Inc. Sec. Litig., 172 F.3d 270, 273 (3d Cir.

1999). Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185, provides

United States district courts with jurisdiction over suits for violations of contracts

between an employer and a labor organization. PAWC contends there is no jurisdiction

under § 301 because there is no labor contract between the parties. We disagree.

Section 301 “confers jurisdiction on a district court to determine the existence of a

collective bargaining agreement.” Mack Trucks, Inc. v. Int’l Union, UAW, 856 F.2d 579,

590 (3d Cir. 1988); see also Pittsburgh Mack Sales & Serv., Inc. v. Int’l Union of

Operating Eng’rs, Local Union No. 66, 580 F.3d 185, 189 (3d Cir. 2009) (“[T]he

existence of a contract is not a jurisdictional element of a section 301 claim.”).

Accordingly, the trial court had subject matter jurisdiction under § 301.2

2
  The trial court, by virtue of adopting Magistrate Judge Lenihan’s report, found it lacked
jurisdiction because, in order to determine the contract issue, it would have to determine
an issue of representation—whether the Association was a successor to the Former
Union—which it believed was within the NLRB’s exclusive jurisdiction. We find,
however, that the well-pleaded facts show the representation question was already settled
through an NLRB representation election.

                                              4
                                            B.

       The issue of the plausibility of the Association’s claims also came before us on

appeal, and we now consider PAWC’s 12(b)(6) motion.3 In analyzing a 12(b)(6) motion

to dismiss, we accept as true the well-pleaded facts of the amended complaint and

disregard legal conclusions. Davis v. Wells Fargo, 824 F.3d 333, 341, 351 (3d Cir.

2016).4

       In order to state a claim for breach of contract against PAWC under § 301, the

Association must allege facts demonstrating the existence of a contract in effect between

the parties at the time of the alleged breach. See 29 U.S.C. § 185; Pittsburgh Mack, 580

F.3d at 190.5 The Association premises this action on the contracts executed between

PAWC and the Former Union. But the well-pleaded facts show that those contracts

became null and void prior to the alleged breaches.

       A contract between a former union and an employer becomes null and void when

a challenging union prevails against the former union in an NLRB representation election

3
 Though the trial court granted the motion to dismiss on jurisdictional grounds, we may
affirm on any basis supported by the record. Davis v. Wells Fargo, 824 F.3d 333, 350 (3d
Cir. 2016) (citing Guthrie v. Lady Jane Collieries, Inc., 722 F.2d 1141, 1144–45 (3d Cir.
1983)).
4
 Additionally, we “construe the complaint in the light most favorable to the plaintiff, and
determine whether, under any reasonable reading of the complaint, the plaintiff may be
entitled to relief.” Pittsburgh Mack, 580 F.3d at 192 (quoting McTernan v. City of York,
Pa., 564 F.3d 636, 646 (3d Cir. 2009)).
5
 The Association contends in its complaint that it is party to contracts with PAWC by
nature of being a successor to the Former Union. We disregard the Association’s legal
conclusions regarding its successor status.

                                             5
and the challenging union is certified as the new collective-bargaining representative of

the employer’s employees. RCA Del Caribe, Inc., 262 NLRB 963, 966 (1982); see More

Truck Lines, 336 NLRB 772, 773 (2001) (“[I]f a challenging union is certified, then the

contract between the employer and the incumbent becomes void . . . .”) enfd., 324 F.3d

735 (D.C. Cir. 2003).

       Here, the Association prevailed over the Former Union in the NLRB

representation elections and was certified as the new collective-bargaining representative

of the relevant employees. Upon the Association’s certification, the contracts executed

between PAWC and the Former Union became null and void.6 Once the contracts became

null and void, PAWC refused to honor them moving forward. Because PAWC cannot

breach a contract that is null and void, we will affirm the court’s order on the ground that

the Association failed to state a claim.

                                            III.

       For the reasons provided, we will affirm the dismissal.

6
  The National Labor Relations Board reached the same conclusion in NLRB Case No.
06-CB-235968. The NLRB case began when, pursuant to a charge PAWC filed with the
NLRB, the General Counsel issued a complaint alleging, among other things, that the
Association violated § 8(b)(3) of the National Labor Relations Act by failing to bargain
with PAWC for an initial contract. See NLRB Case No. 06-CB-235968; J.A. 199A. The
Association argued that it should not have to bargain for an initial contract because it is a
successor to the Former Union with the option of accepting the Former Union’s contracts
with PAWC. Supp. J.A. 232A. PAWC filed a motion for partial summary judgment on
the effect of the Association’s NLRB election and certification as bargaining
representative. Supp. J.A. 232A. On June 8, 2020, the NLRB issued a decision holding
that the collective-bargaining agreements between PAWC and the Former Union were
voided by the Association’s post-election certification. Supp. J.A. 232A-234A. Though
we reach the same conclusion, we do not rely on the NLRB decision.

                                              6