Holmes v. Grooms
Opinion of the Court
By ORDER entered on May 17, 2019 (ECF No. 48), the Court directed the parties to provide supplemental briefing on whether the Court has subject matter jurisdiction over the claims asserted in the *539FIRST AMENDED COMPLAINT ("FAC") (ECF No. 27). Having considered PLAINTIFF OLIVER HOLMES' SUPPLEMENTAL BRIEF REGARDING SUBJECT MATTER JURISDICTION (ECF No. 49), DEFENDANTS' JOINT SUPPLEMENTAL BRIEF REGARDING SUBJECT MATTER JURISDICTION (ECF No. 50), and PLAINTIFF OLIVER HOLMES' SUPPLEMENTAL REPLY BRIEF REGARDING SUBJECT MATTER JURISDICTION (ECF No. 51), the Court concludes that it lacks subject matter jurisdiction over the claims asserted in the FAC. However, the FAC will be dismissed without prejudice to the filing of an action in compliance with the requirements of
BACKGROUND
Oliver Holmes ("Holmes") is a member of the American Postal Workers Union Local 199 ("APWU" or the "Union"). See FAC ¶ 1. He brings this action against the Union and three of its current officers, Sylvia Grooms ("Grooms") (the current President), Sherry Gay ("Gay") (the current Secretary), and Jerome Cosby ("Cosby") (the current Director of Industrial Relations) (collectively, the "Defendants").
The FAC alleges that Holmes attempted to investigate certain perceived improper expenditures by the Union on behalf of Gay and Cosby.
Count I of the FAC alleges a violation of fiduciary duties by Grooms, Gay, and Cosby under the Labor-Management Reporting and Disclosure Act ("LMRDA"),
In response to the FAC, the Defendants filed DEFENDANTS' MOTION TO DISMISS FIRST AMENDED COMPLAINT (ECF No. 29) pursuant to Fed. R. Civ. P. 12 (b) (6). In reviewing that Motion, and the parties' supporting and opposing memoranda thereto (ECF Nos. 30, 36, 37), it appeared that the Court might lack subject matter jurisdiction over the case because: (1)
*540The parties have submitted their supplemental briefing on subject matter jurisdiction. ECF Nos. 49, 50, 51. Having considered the supplemental briefing, the Court is satisfied that the facts and legal contentions are adequately presented in the materials before the Court; and that, therefore, oral argument would not aid the decisional process. The matter is ripe for decision.
DISCUSSION
A. Legal Framework
Count I of the FAC is based on the LMRDA, 29 U.S.C § 501. Section 501 (a) establishes that certain union officials owe their union fiduciary duties.
In relevant part, Section 501(b) reads:
When any [covered union official] is alleged to have violated the duties declared in subsection (a) and the labor organization or its governing board or officers refuse or fail to sue or recover damages or secure an accounting or other appropriate relief within a reasonable time after being requested to do so by any member of the labor organization, such member may sue such [covered union official] in any district court of the United States or in any State court of competent jurisdiction to recover damages or secure an accounting or other appropriate relief for the benefit of the labor organization. No such proceeding shall be brought except upon leave of the court obtained upon verified application and for good cause shown, which application may be made ex parte.
(emphasis added). Based on the plain text of the statute, Section 501(b) imposes three requirements of a plaintiff who files suit thereunder. First, the plaintiff must make certain demands on the union, its governing board, or its officers that are refused or ignored. Second, the plaintiff must receive "leave of the court obtained upon verified application" before bringing such an action. Third, to secure leave of court to sue, the plaintiff must demonstrate "good cause." See
"[C]ourts, including [the Supreme Court], have an independent obligation to determine whether subject matter jurisdiction exits, even in the absence of a challenge from any party." Arbaugh v. Y & H Corp.,
B. The Court Lacks Subject Matter Jurisdiction Over Count I
a. Section 501 (b) Is Properly Understood As A Subject Matter Jurisdiction Limitation
In their supplemental briefing, the parties are in accord that *541
In recent years, the Supreme Court of the United States has sought to clarify the distinction between "jurisdictional prescriptions and nonjurisdictional claim-processing rules." See Fort Bend Cty. v. Davis, 587 U.S. ----,
As the Supreme Court has held, the "word 'jurisdictional' is generally reserved for prescriptions delineating a class of cases a court may entertain (subject matter jurisdiction) and the persons over whom the court may exercise adjudicatory authority (personal jurisdiction)." Fort Bend,
Where Congress has "clearly state[d] that a threshold limitation on a statute's scope shall count as jurisdictional," courts must so treat it, but where it has not done so, such a limitation should be treated as non-jurisdictional. Arbaugh,
Under these Supreme Court precedents, Section 501 (b) delineates a jurisdictional limit. That conclusion is supported by the text, the structure, and the purpose of the statute.
First, the text of the statute speaks in mandatory language and limits the filing of particular types of "proceedings" in this Court. While mandatory language alone does not make a provision jurisdictional (i.e. is not sufficient), see Henderson,
Under Section 501(b), a claim by a union member for a breach of fiduciary duty may be brought in "any district court of the United States or any State court of competent jurisdiction," but "[n]o such proceeding shall be brought except upon leave of the court obtained upon verified application and for good cause shown, which application may be made ex parte."
Second, an assessment of the statutory structure supports the conclusion that Section 501 (b) is jurisdictional. Title 29, Chapter 11 of the United States Code contains the Labor-Management Reporting and Disclosure Act. Section 501(b) is located in "Subchapter VI-Safeguards for Labor Organizations." The other subchapters deal with different topics, like elections (Subchapter V) and the Bill of Rights of Members of Labor Organizations (Subchapter II). Many of these other subchapters have jurisdictional provisions. For example,
Thus, the statutory scheme teaches that Congress intended that the subchapters of Title 29, Chapter 11 were to have different jurisdictional requirements. There is not a "catch-all" jurisdictional section that applies to the entire Chapter. See Henderson,
Finally, the purpose of Section 501(b) also teaches that Congress intended to limit this Court's jurisdiction over suits such as the one filed by Holmes. As the Second Circuit held in Dinko, "the requirements of section 501 (b) were designed 'to protect union officials from unjust harassment.'...[W]e take that statutory purpose very seriously." Dinko v. Wall,
In sum, Section 501(b) is properly understood as a limitation on the Court's subject matter jurisdiction. So now, it is necessary to determine whether Holmes satisfied the statute's requirements.
b. Holmes Has Failed To Seek Leave Of Court
As discussed above, Section 501(b) requires that Holmes: (1) make a demand on the Union; (2) request leave of court upon a verified application; and (3) show good cause.
Holmes acknowledges that he never sought leave of court before he filed the FAC. See ECF No. 4 9 at 6. Nor did he "verify" the allegations in the FAC until after the Court requested the additional briefing on subject matter jurisdiction. Id.; Ex. 1,
Holmes relies on the Third Circuit's decision in Sabolsky v. Budzanoski,
The Third Circuit remanded to the district court on this determination, holding that the district court was "to grant leave, nunc pro tunc, to file the complaint."
The complaint in this case was verified by over 100 plaintiffs. Section 501(b) specifically allows an "ex parte" grant of leave to proceed. The appellants contend that by filing the complaint they, in effect, made an ex parte application to the court. It has been held that a lack of formality in observing the procedures of Section 501(b) will not bar a court from granting leave, where appropriate. Executive Board, Local Union No. 28 v. I.B.E.W.,184 F.Supp. 649 (D.Md. 1960). As the court said in Horner v. Ferron,362 F.2d 224 (9th Cir. 1966), [t]he allegations of the verified complaint may be sufficient to enable the court to determine whether there is 'good cause.' "
Id. at 1249-50 (emphasis added).
Holmes is correct that Sabolsky permitted the verified complaint to be treated as a request for leave of court. However, he ignores the fact that, in Sabolsky (and the Horner case cited therein), the plaintiff (s) had filed a "verified complaint" and the courts there excused the plaintiff's failure to seek leave of court. Here, Holmes neither sought leave of court nor filed a "verified complaint." Instead, after learning of the Court's concern about jurisdiction, he filed his "verification" (ECF No. 49-1) as an attachment to his brief on jurisdiction. In other words, he asks the Court to excuse not one, but two jurisdictional failures on his part. Sabolsky does not support that position, and Holmes has cited no authority to the contrary. See Austin Trandell,
Moreover, it is quite important that a plaintiff seek leave of court because, when a motion for leave is filed, the views of the Union officials are entitled to be heard on whether Holmes has demonstrated good cause. Proceeding as Holmes suggests forecloses the opportunity for union officials to present their views on that topic. That is no mean deprivation. To the extent that Sabolsky may hold otherwise, the Court declines to follow Sabolsky because it is at odds with the clear text of Section 501(b).
That the statute permits an ex parte filing of the motion for leave to file the Complaint does not mean that an ex parte filing is appropriate. And, it should be the rare case that any court should hear important matters ex parte. Indeed, the Court rarely allows ex parte hearings and then only in cases of genuine general emergency, such as the need to stop theft or to preserve the Court's jurisdiction. And even then, the adverse party (here the Union officials) are given notice and an immediate opportunity to be heard about whether the ex parte action should stand.
Courts must remember that "statutes extending federal jurisdiction, such as Section 501(b), are narrowly construed so as not to reach beyond the limits intended by Congress." Phillips,
Count I will be dismissed without prejudice because Holmes may have a valid claim and may be able to satisfy Section 501(b).
C. The Court Cannot Exercise Supplemental Jurisdiction Over State Law Claims in Counts II through V
The Court is asked to exercise supplemental jurisdiction over Holmes' state law claims pursuant to
As explained above, the Court lacks original jurisdiction over Count I because of Holmes' failure to satisfy
*546Miller v. Herman,
CONCLUSION
For the reasons set forth above, the FAC will be dismissed without prejudice for lack of subject matter jurisdiction.
It is so ORDERED.
According to the FAC, Cosby received "fifteen times more per month in transportation reimbursement than the previous APWU Director of Industrial Relations" and Gay was paid for APWU duties without demonstrating that she was "on leave for from her regular Postal Service position." See FAC 55 9-23.
These officials, for example, shall "hold [union] money and property solely for the benefit of the organization and its members and to manage, invest, and expend the same in accordance with its constitution and bylaws and any resolutions of the governing bodies adopted thereunder...."
See ECF No. 49 at 2 ("Mr. Holmes has satisfied the subject matter prerequisites of LMRDA Section 501(b)"); ECF No. 50 at 2 ("Plaintiff has failed to satisfy the prerequisites of LMRDA Section 501(b), which are prerequisites to the exercise of jurisdiction by this Court.").
As examples of claims-processing rules, the Supreme Court in Fort Bend cited, inter alia, the Copyright Act's registration requirement; the Railway Labor Act's mandatory settlement conference requirement; and Title VII's 15-employer requirement. See Fort Bend,
In his reply brief on subject matter jurisdiction, Holmes argues that, assuming the Defendants are correct on their jurisdictional argument, "dismissal would be wasteful." ECF No. 51 at 1. Whatever the merits of that argument, simply put, the Court lacks subject matter jurisdiction over Holmes' action. Congress has placed a limit on this Court's jurisdiction, and it is not for Holmes (or the Court) to determine that enforcing such a limitation is "wasteful."
This document is entitled PLAINTIFF OLIVER HOLMES' VERIFICATION OF THE FIRST AMENDED COMPLAINT and was attached as an exhibit to Holmes' opening brief on subject matter jurisdiction. ECF No. 49.
It is also possible that jurisdiction over state law claims could exist pursuant to
Reference
- Full Case Name
- Oliver W. HOLMES v. Sylvia GROOMS
- Cited By
- 1 case
- Status
- Published