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International Union of Operating Engineers Local 370 v. Wasden

United States District Court, D. Idaho

October 24, 2016

INTERNATIONAL UNION OF OPERATING ENGINEERS LOCAL 370, Plaintiff,
v.
LAWRENCE G. WASDEN, in his official capacity as Attorney General for the State of Idaho, Defendant.

          MEMORANDUM DECISION AND ORDER

          Edward J. Lodge United States District Judge

         Pending before the Court is Defendant State Attorney General Lawrence Wasden's Motion to Dismiss First Amended Complaint (Dkt. 16.) The parties have submitted their briefing on the motion and the matter is now ripe for the Court's review. Having fully reviewed the record herein, the Court finds the facts and legal arguments are adequately presented in the briefs and record. Accordingly, in the interest of avoiding further delay, and because the Court conclusively finds the decisional process would not significantly aided by oral argument, the pending motion will be decided on the record and without oral argument.

         BACKGROUND

         Plaintiff, the International Union of Operating Engineers Local 370 (“Local 370” or “Union”), is a labor organization that represents workers in Idaho, including approximately 400 workers at MotivePower, a locomotive manufacturer in Boise, Idaho. (Dkt. 14.) Local 370 has a duty to represent all workers in a bargaining unit, even those who are not Union members. Although Local 370's representational work benefits all bargaining unit employees, it is paid for entirely by those workers who choose to be Union members. The Union members-who make up approximately 32 percent of the MotivePower bargaining unit-pay monthly dues of 2.5 times their hourly wage, while nonmembers-the other 68 percent-pay nothing.

         In an attempt to resolve this issue, Local 370 negotiated with MotivePower to enter into a Fair Representation Fee Agreement, which would require all bargaining unit employees to pay a service fee to cover a portion of the cost of the Union's representation. Local 370 proposed a service fee of less than 50 percent of Union dues. MotivePower rejected Local 370's proposal on the grounds that the proposed agreement violated Idaho's right to work law, Idaho Code § 44-2003(3).

         The aforementioned provision of Idaho's right to work law prohibits any person from being “required, as a condition of employment or continuation of employment, … to pay any dues, fees, assessments, or other charges of any kind or amount to a labor organization.” Id. Local 370 believes Idaho Code § 44-2003(3) is preempted by the National Labor Relations Act (“NLRA”), 29 U.S.C. §§ 151 to 169. Local 370 also contends the Idaho law's prohibition constitutes an unconstitutional taking without just compensation in violation of the Fifth Amendment to the United States Constitution.

         On October 22, 2015, Local 370 filed this action against the Attorney General for the State of Idaho, Lawrence Wasden (hereinafter “Defendant”), to invalidate the Idaho law. (Dkt. 1) (seeking a declaration that § 44-2003(3) is preempted by the NLRA and is unconstitutional). Defendant filed a Motion to Dismiss Plaintiff's initial Complaint on November 17, 2015 (Dkt. 11). Prior to responding, Plaintiff filed a First Amended Complaint (“FAC”) on December 14, 2015 (Dkt. 14). Defendant then filed an amended Motion to Dismiss the FAC on December 17, 2015 (Dkt. 16).[1] Defendant's Motion to Dismiss FAC was fully briefed by February 26, 2016. (Dkt. 26.)

         Local 370 filed a Notice of Supplemental Authority (Dkt. 27) on April 11, 2016, to which Defendant responded (Dkt. 28.) Upon obtaining this Court's permission, the National Right to Work Legal Defense and Education Foundation, Inc. thereafter filed an amicus brief in support of Defendant's amended Motion to Dismiss (Dkt. 40). Finally, Defendant filed a Second Notice of Supplemental Authority (Dkt. 41) on October 4, 2016, to which Local 370 responded (Dkt. 42) on October 5, 2016. Having considered the briefing by the parties and amici, the Court will grant Defendant's Motion to Dismiss FAC.

         STANDARD OF REVIEW

         Defendant seeks to dismiss Local 370's FAC under Federal Rule of Civil Procedure 12(b)(6) and Rule 12(b)(1). A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the claims alleged in the complaint. Ileto v. Glock, Inc., 349 F.3d 1191, 1199-1200 (9th Cir.2003). All allegations of material fact are taken as true, and must be construed in the light most favorable to the plaintiff. Id. at 1200 (citation omitted). However, legally conclusory statements, not supported by actual factual allegations, need not be accepted. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A plaintiff's obligation to provide the grounds of his entitlement to relief “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations and quotations omitted). Rather, the allegations in the complaint “must be enough to raise a right to relief above the speculative level.” Id. Review is generally limited to the contents of the complaint and documents attached thereto. Allarcom Pay Television. Ltd. v. Gen. Instrument Corp., 69 F.3d 381, 385 (9th Cir.1995). However, the court also may consider a matter that is properly the subject of judicial notice without converting a motion to dismiss into one for summary judgment. Lee v. Los Angeles, 250 F.3d 668, 688-89 (9th Cir.2001).

         A challenge to subject matter jurisdiction under Rule 12(b)(1) “can be either facial, confining the inquiry to allegations in the complaint, or factual, permitting the court to look beyond the complaint.” Savage v. Glendale Union High School, 343 F.3d 1036, 1039-40 n. 2 (9th Cir.2003); see also White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). In a facial attack on the court's subject matter jurisdiction, the defendant challenges the sufficiency of the allegations of subject matter jurisdiction in the complaint. Love v. United States, 915 F.2d 1242, 1245 (9th Cir. 1989). The standard of review is akin to the Rule 12(b)(6) standard. That is, all allegations of the complaint are taken as true and all disputed issues of fact are resolved in favor of the plaintiff. Id. In a factual challenge under Rule 12(b)(1), “the district court is not restricted to the face of the pleadings, but may review any evidence, such as affidavits and testimony, to resolve factual disputes concerning the existence of jurisdiction.” McCarthy v. United States, 850 F.2d 558, 560 (9th Cir.1988); see also Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir.2004) (court may review evidence beyond complaint without converting Rule 12(b)(1) motion into one for summary judgment). Where, as here, a factual challenge is raised, the court may resolve disputed issues of fact if they do not depend upon resolution of factual issues going to the merits. Leite v. Crane Co., 749 F.3d 1117, 1121-22 (9th Cir. 2014.)

         ANALYSIS

         Defendant moves to dismiss the FAC on three grounds: (1) that the Court lacks subject matter jurisdiction over Local 370's claims; (2) that Local 370's preemption and takings claims are barred by the applicable statute of limitations; and (3) that both claims fail to state a basis upon which relief may be granted. The Court must address the jurisdictional issue before it considers the merits of the case. Steel Company v. Citizens for a Better Environment, 523 U.S. 83, 94-95 (1998) (“The requirement that jurisdiction be established as a threshold matter… is inflexible and without exception.”) (internal citation and quotation marks omitted). Before doing so, however, a brief review of the legislation in question is necessary.

         1. The National Labor Relations Act, 29 U.S.C. § 151 et. seq.

         The National Labor Relations Act (“NLRA”) was enacted by Congress in 1935. Pub.L. 74-189, 49 Stat. 449 (1935). Broadly, the NLRA (also known as the Wagner Act) set forth a national labor policy and created the National Labor Relations Board (“NLRB”) to implement it. Michigan v. State AFL-CIO v. Callaghan, 15 F.Supp.3d 712, 715 (E.D. Mich. 2014) (citing N.L.R.B. v. Jones & Laughlin Steel Corp., 301 U.S. 1, 22-24 (1937)). The NLRA said little about the respective role of the state and federal governments in regulating labor practices. Bethlehem Steel Co. v. New York State Labor Relations Bd., 330 U.S. 767, 771 (1947) (“Congress has not seen fit to lay down even the most general of guides to the construction of [the NLRA], as it sometimes does, by saying that its regulation either shall or shall not exclude state action.”)

         After World War II, “there was a feeling by some in Congress that the pendulum had swung too far in the direction of unionization. In particular, closed-shop agreements, under which an employer agreed to hire union members only, were thought by some members of Congress to be a powerful tool that union leaders were abusing.” Sweeney v. Pence, 767 F.3d 654, 681 (7th Cir. 2014) (Wood, J., dissenting.) In response, Congress amended the NLRA with the Taft-Hartley Act. Pub. L. 80-101, 61 Stat. 136 (1947). The amendments outlawed the closed-shop. N.L.R.B. v. Local Union No. 55, 218 F.2d 226, 232 (10th Cir. 1954) (recognizing amendments made closed-shop agreements illegal).

         The Taft-Hartley Act did not, however, outlaw the “union shop, ” or a workplace where the employer is free to hire anyone, but can require new employees to join the union after they are hired. International Union of the Plumbing and Pipefitting Indus. v. N.L.R.B., 675 F.2d 1257, 1267-68 (D.C. Cir. 1982) (Mikva, J. dissenting). Instead, “Congress added provisions making it more difficult for workers to obtain a union shop, but retained the union shop as a mandatory subject of bargaining in section 8(a).” Id. at 1272. In relevant part, Section 8(a)(3) of the NLRA now provides:

         It shall be an unfair labor practice for an employer… by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization… [p]rovided, [t]hat nothing in this subchapter… shall preclude an employer from making an agreement with a labor organization… to require as a condition of employment membership therein…[.] 29 U.S.C. § 158(a)(3) (emphasis added). Congress also clarified the role of state and federal officials in regulating labor practices by adding Section 14(b) to the NLRA. Section 14(b) provides:

Nothing in this subchapter shall be construed as authorizing the execution or application of agreements requiring membership in a labor organization as a condition of employment in any State or Territory in which such execution or application is prohibited by State or Territorial law.

29 U.S.C. § 164(b) (emphasis added).

         Under Section 14(b), states are free to pass laws prohibiting employers from requiring “membership” in a labor organization as a condition of employment. Local 370 argues Idaho Code § 44-2003(3) goes much further than Section 14(b) permits by prohibiting mandatory “fees … of any kind or amount.”[2] (Dkt. 21, p. 14). Local 370 contends Idaho law “thus prohibits an agreement that requires all workers simply to pay for representation of their own bargaining unit (and not for any political, institutional, or non-representational expenses).”[3] (Id.) Defendant counters the Supreme Court has determined union “membership” is synonymous with paying a portion of the dues connected to a union's collective bargaining. (Dkt. 16-1, p. 15). Thus, Defendant suggests Idaho's right to work law is explicitly authorized under Section 14(b). The Court will address such arguments after first ensuring it has subject matter jurisdiction over this dispute.

         2. Subject Matter Jurisdiction

         It is a “fundamental principle that federal courts are courts of limited jurisdiction.” Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 374 (1978). A federal court is presumed to lack jurisdiction unless the contrary affirmatively appears. California ex rel. Younger v. Andrus, 608 F.2d 1247, 1249 (9th Cir. 1979). The plaintiff bears the burden of establishing the existence of subject matter jurisdiction. Thornhill Pu. Co., Inc. v. Gen. Tel. & Elec., Corp., 594 F.2d 730, 733 (9th Cir. 1979). Defendant contends subject matter jurisdiction is lacking in this case because Local 370 lacks standing and because the NLRB has primary jurisdiction over the Union's preemption claim.

         a. ...


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