Denver & Rio Grande Western Railroad v. Brotherhood of Railroad Trainmen
Docket: 794
Court: Supreme Court of the United States; June 5, 1967; Federal Supreme Court; Federal Appellate Court
Justice White delivered the Court's opinion regarding the appropriate venue for a lawsuit against an unincorporated labor union under 28 U.S.C. § 1391(b). The statute, at the time of the action, stipulated that a civil suit not based solely on diversity of citizenship could be filed only in the judicial district where all defendants reside. The case arose after the National Railroad Adjustment Board issued monetary awards to certain union members for breaches of collective bargaining contracts with the Denver, Rio Grande Western Railroad Company. The railroad's refusal to honor these awards led to a strike by the union, which was subsequently enjoined by the District Court. The railroad then sued the union and several of its officials in the District of Colorado, alleging breaches under the Railway Labor Act.
The District Court dismissed the union's motion to dismiss for improper venue, ruled the strike illegal due to the union's failure to exhaust statutory remedies, and awarded damages to the railroad. The Court of Appeals reversed this decision, stating that the union could only be sued where it resided, which was determined not to be Colorado. This case raised a conflict with a previous ruling in Rutland R. Co. v. Brotherhood of Locomotive Eng'rs.
The Supreme Court reversed the Court of Appeals' decision, clarifying that prior to the 1966 amendment of § 1391(b), the proper venue for federal-question cases was strictly limited to the residence of the defendant, irrespective of whether the defendant was an individual or an unincorporated association. The Court noted that Congress has not explicitly defined the residence of unincorporated associations for venue purposes, leaving this determination to the courts. The issue at hand was significant only if the unincorporated association was deemed suable.
At common law, unincorporated associations could only be sued in the names of their members, making each member liable. This principle was overturned in United Mine Workers v. Coronado Co., where the Supreme Court acknowledged the significant role of labor organizations and ruled that they could be sued as entities in federal courts, and their funds were subject to legal actions for torts during strikes. This ruling is reflected in Federal Rule of Civil Procedure 17(b). Although the Coronado case did not address venue, it established the legitimacy of suing unincorporated associations as entities. While such associations lack independent citizenship for diversity jurisdiction, as noted in Steelworkers v. Bouligny, the venue for these defendants should be based on the association's residence rather than that of individual members. This approach prevents the impracticality of disallowing lawsuits against associations with members in different states and avoids unfair venue determinations.
Determining the residence of unincorporated associations requires an evaluation of congressional intent and the principles underlying venue limitations, as seen in Sperry Prods. Inc. v. Association of American Railroads, where the court treated unincorporated associations like corporations, which have a single residence at their principal place of business. Neirbo Co. v. Bethlehem Corp. established that corporations could be sued in federal diversity suits wherever they are licensed to do business. Although the respondent argues that Congress did not intend for this expanded definition of residence to apply to unincorporated associations, the issue of how to define an association's residence for venue purposes remains unresolved, as there was no clear understanding of the law in 1948.
Congress did not indicate a limited view of residence for labor unions, nor did it suggest that such unions should be confined to a single location. The 1948 legislative action was aimed at correcting a narrow judicial definition of corporate residence, while leaving unincorporated associations, like labor unions, unaddressed. It is reasonable to assume Congress expected courts to analogize between incorporated and unincorporated entities, allowing suits against unions wherever they conduct business, similarly to corporate entities. This interpretation aligns with the Second Circuit's ruling in Rutland R. Co. v. Brotherhood of Locomotive Eng’rs, which recognized the multi-state nature of labor unions.
Congress acknowledged this flexibility in the Labor Management Relations Act of 1947, permitting lawsuits against unions in any district where they operate. This indicates Congress did not intend to restrict the venue for labor union suits to the location of their principal office. Moreover, it would be illogical to permit broader venue options for unions under the National Labor Relations Act while restricting those under the Railway Labor Act.
The Court of Appeals' application of 28 U.S.C. § 1391(b) was deemed improper, but even if it were correct, the current version of the statute—amended in 1966 to allow venue where the claim arose—would apply to this case. This amendment is procedural and does not alter substantive law. There is no vested right in a specific procedure, and should the lower court's decision be upheld, the petitioner could still file the same action in the appropriate district under the updated statute, without facing statute of limitations issues.
The determination of whether the claim arose in the District of Colorado is left to the District Court, particularly if it is found that the respondent was not conducting business there at the time the suit was initiated. The previous ruling and damage award against respondent Carroll have been reversed by the Court of Appeals, which found Carroll not accountable for the strike in question; this finding is upheld. Carroll resides in the District of Colorado. The excerpt highlights a division among lower court cases regarding the venue for suing unincorporated associations, noting that some cases restrict venue to their principal place of business while others allow for lawsuits where they conduct business. Specific cases are cited to illustrate both positions on this venue issue.
