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BOWER v. BUNKER HILL CO.

October 16, 1986

Russell Bower, et al., Plaintiffs,
v.
The Bunker Hill Company, Defendant; Russell Bower, et al., Plaintiffs, v. Gulf Resources & Chemical Corporation, Defendant



The opinion of the court was delivered by: MCNICHOLS

 Robert J. McNichols, United States District Judge

 Defendants have brought several summary judgment motions which will be addressed in the order presented.

 I.

 Statute Of Limitations Defense Against Gulf

 Defendants argue that the claim against Gulf based upon the "alter ego" theory arises under section 301 of the LMRA and as such, is governed by the Supreme Court's decision in DelCostello v. International Brotherhood Of Teamsters, 462 U.S. 151, 76 L. Ed. 2d 476, 103 S. Ct. 2281 (1983). DelCostello was a consolidated hybrid 301 action brought by three employees. In each case, the employee alleged that his employer had breached a provision of a collective bargaining agreement and that the union had breached its duty of fair representation. The issue presented was what statute of limitations should apply to such suits. The Court held that the action was more closely analogous to a charge of unfair labor practice before the NLRB and thus, applied the six-month statute of limitations contained in § 10(b) of the National Labor Relations Act, 29 U.S.C. § 160(b).

 It is clear not only from examining the rationale for the Court's decision, but also from its express language, the Court was not establishing a statute of limitations to govern all labor disputes "we stress that our holding today should not be taken as a departure from prior practice in borrowing limitations periods for federal causes of action, in labor law or elsewhere." Id. at 171. By this language, the Court left intact its more closely analogous decision in Auto Workers v. Hoosier Cardinal Corp., 383 U.S. 696, 86 S. Ct. 1107, 16 L. Ed. 2d 192 (1966). Hoosier Cardinal, was an action to recover accumulated vacation pay that the union claimed had been withheld from discharged employees in violation of the collective bargaining agreement. The Court rejected the employer's argument that section 10(b) should apply and affirmed the lower court's application of a state statute of limitations governing actions for breach of an oral contract. Id. at 706-07. The Court observed that the action was essentially one for damages caused by the employer's breach of an obligation contained in the collective bargaining agreement and as such more closely resembled a common law action for breach of contract. Id. at 705, n. 7.

 The rule to be culled from the foregoing cases is that the statute of limitations to be applied in a 301 action depends upon the court's characterization of the action in the first instance. If the case is one that touches on the very heart of the labor process as in DelCostello, then the six-month period should apply. Such cases fall within the scope of federal policies that favor the prompt resolution of labor disputes and the preservation of harmony between labor and management. The question which remains then is whether an action brought pursuant to section 301 to enforce collectively bargained for employee benefits impacts such interests.

 In an analogous setting, the Third Circuit held that it did not. Adams v. Gould, 739 F.2d 858 (3d Cir. 1984), cert. denied, 469 U.S. 1122, 105 S. Ct. 806, 83 L. Ed. 2d 799 (1985). Adams involved a dispute over collectively bargained pension benefits. Plaintiffs in essence claimed that the employer and the union entered into a settlement agreement which was contrary to the mandate of an arbitrator's award regarding the benefits. This in turn was claimed to be a violation of the collective bargaining agreement by the employer and a breach of the union's duty of fair representation. The defendants claimed that the action was barred by the six-month statute of limitations contained in § 10(b) of the NLRA.

 The reasoning of the foregoing decisions is persuasive and fully applicable here. Since plaintiffs filed this action against Gulf on January 22, 1985 and their claims against Gulf arose at the earliest on May 15, 1982, their complaint was timely filed whether this court follows Adams or adopts a straightforward application of Hoosier Cardinal.1

 This same result would obtain by declining to apply DelCostello retroactively. This Circuit has held that DelCostello is not to be applied retroactively unless it would have the effect of lengthening the otherwise applicable state statute of limitations. Aragon v. Federated Dept. Stores, Inc., 750 F.2d 1447, 1451 (9th Cir. 1985), cert. denied, 474 U.S. 902, 106 S. Ct. 229, 88 L. Ed. 2d 229 (1985). Thus, DelCostello could only be applied retroactively if the state statute of limitations applicable to plaintiffs' claim were shorter than the six-month statute. Under the analysis set out above, the state statute of limitations applicable to plaintiffs' claim granted them at least three years to bring their claim. Therefore, DelCostello would have the effect of shortening the time period and cannot be applied retroactively.

 Plaintiffs argue further that even if DelCostello is applicable under the facts and circumstances presented here, they can avoid its impact by amending their complaint in Cause No. C-82-412 to add Gulf Resources. Alternatively, plaintiffs argue that since their claims against Gulf are based upon the "alter ego" doctrine, the timely filing of their complaint against Bunker Hill "tolled" the statute of limitations as to Gulf. In spite of my ruling that DelCostello does not apply to the facts and circumstances presented in this case, all parties expressed a desire to have a ruling on the foregoing issues.

 Plaintiffs' first argument is based upon the relation back provision of Rule 15(c), Fed.R.Civ.P. The Supreme Court recently identified four criteria which must be met before an amended complaint adding additional parties may relate back to the date of filing of the original pleading:

 
(1) the basic claim must have arisen out of the conduct set forth in the original pleading; (2) the party to be brought in must have received such notice that it will not be prejudiced in maintaining its defense; (3) that party must or should have known that, but for a mistake concerning identity, the action would have been brought against it; and (4) the second and third requirements must have been fulfilled within the prescribed limitations period.

 Schiavone v. Fortune, aka Time, Inc., 477 U.S. 21, 106 S. Ct. 2379, 2384, 91 L. Ed. 2d 18 (1986).

 Defendants argue that plaintiffs have failed to meet the third criteria in that they have not established a mistake concerning identity and that Rule 15(c) does not apply when the amendment is for the purpose of adding a party as opposed to adding additional claims against an existing party. The first of defendants arguments has merit. In their initial complaint against Bunker Hill, plaintiffs alleged that Bunker Hill "is a wholly owned subsidiary of Gulf Resources & Chemical Company . . ." Thus, the complaint itself is a confession by the plaintiffs that they were aware of the relationship between Gulf and Bunker Hill.

 In the face of this knowledge, to hold that the complaint is entitled to relate back to their initial filing, I would be required to hold that Rule 15(c) was intended to lengthen the time period during which the plaintiffs could engage in discovery to determine the precise role played by an otherwise known party. Such a holding would be contrary to the purpose of Rule 15(c) which was "never intended to assist a plaintiff who ignores or fails to respond in a reasonable fashion to notice of a potential party, nor was it intended to permit a plaintiff to engage in piecemeal litigation." Kilkenny v. Arco Marine Inc., 800 F.2d 853 at 857-58 (9th Cir. 1986). Plaintiffs' motion to amend is Denied.

 As an alternative basis for avoiding the statute of limitations defense, plaintiffs claim that because Bunker Hill is merely the alter ego of Gulf, the filing of their claim against Bunker operated to toll the statute of limitations against Gulf. I will defer ruling on this question until such time as the relationship is established. In the interim, it would be ...


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