No. 18-580

Nu Image, Inc. v. International Alliance of Theatrical Stage Employees, et al.

Lower Court: Ninth Circuit
Docketed: 2018-11-02
Status: Denied
Type: Paid
Tags: arbitration collective-bargaining-agreement declaratory-relief fraud fraud-claims intentional-misrepresentation labor-management-relations-act negligent-misrepresentation subject-matter-jurisdiction textron-lycoming
Key Terms:
Arbitration ERISA LaborRelations Privacy JusticiabilityDoctri
Latest Conference: 2019-02-15
Question Presented (AI Summary)

Do federal courts have subject matter jurisdiction pursuant to Section 301(a) of the Labor Management Relations Act over a complaint for intentional and negligent misrepresentation and declaratory relief, where the lawsuit seeks relief from claims that the plaintiff violated the parties' collective bargaining agreement?

Question Presented (OCR Extract)

QUESTION PRESENTED Under Section 301(a) of the Labor Management Relations Act, 29 U.S.C. § 185(a), federal courts have subject matter jurisdiction over “[s]uits for violation of contracts between an employer and a labor organization.” In Textron Lycoming Reciprocating Engine Div. v. United Auto., Aerospace and Agriculture Implement Workers of America, 523 U.S. 653, 118 S.Ct. 1626, 140 L.Ed. 2d 863 (1998), this Court held that, where neither the employer nor the labor organization asserts that there has been a breach of a labor agreement, federal courts do not have jurisdiction over a suit seeking to invalidate the agreement. In so holding, however, the Court noted that “a declaratory judgment plaintiff accused of violating a agreement may ask a [federal] court to declare the agreement invalid.” Id. at 658. Petitioner Nu Image and Respondent IATSE entered into a collective bargaining agreement, which Nu Image claims was fraudulently induced based on IATSE’s representations that Nu Image would not have to make any residual contributions to IATSE’s health and pension plans. The plans, third-party beneficiaries of the collective bargaining agreement, sued Nu Image in federal district court, claiming that Nu Image breached the agreement by failing to make residual contributions. Under established authority, Nu Image was unable to raise IATSE’s fraud as a defense and it settled with the plans. Thereafter, IATSE filed an arbitration against Nu Image, also claiming that Nu Image breached the collective bargaining agreement by failing to make residual contributions to the plans. In that arbitration, the arbitrator may be without power to consider Nu Image’s fraud defense. (i) ll Accordingly, Nu Image filed suit in federal district court against IATSE for fraud and declaratory relief. In a decision that misinterprets this Court’s decision in Textron and conflicts with decisions from the Fifth and Seventh Circuits, the Ninth Circuit held that Section 301(a) permits the exercise of jurisdiction only when a plaintiff asserts that a defendant breached a labor agreement. As a result, the Ninth Circuit affirmed the district court’s dismissal of Nu Image’s lawsuit for lack of subject matter jurisdiction, effectively precluding Nu Image from seeking any relief for the millions of dollars of damages it has suffered as a result of IATSE’s fraud. Against this factual backdrop, the question presented by this Petition is: Do federal courts have subject matter jurisdiction pursuant to Section 301(a) of the Labor Management Relations Act, 29 U.S.C. § 185(a) over a complaint for intentional and negligent misrepresentation and declaratory relief, where the lawsuit seeks relief from claims that the plaintiff violated the parties’ collective bargaining agreement?

Docket Entries

2019-02-19
Petition DENIED.
2019-01-22
Letter of January 17, 2019 from counsel for respondent received. (Distributed)
2019-01-09
DISTRIBUTED for Conference of 2/15/2019.
2019-01-08
Reply of petitioner Nu Image, Inc. filed. (1/9/2019)
2018-12-26
Brief of respondents Int'l Alliance of Theatrical Stage Employees, et al. in opposition filed.
2018-11-16
Motion to extend the time to file a response is granted and the time is extended to and including December 26, 2018.
2018-11-14
Motion to extend the time to file a response from December 3, 2018 to December 24, 2018, submitted to The Clerk.
2018-11-14
Corporate Disclosure Statement received.
2018-11-02
Petition for a writ of certiorari filed. (Response due December 3, 2018)

Attorneys

Int'l Alliance of Theatrical Stage Eployees, et al.
David A. RosenfeldWeinberg, Roger & Rosenfeld, Respondent
David A. RosenfeldWeinberg, Roger & Rosenfeld, Respondent
Nu Image, Inc.
Martin David KatzSheppard Mullin Richter & Hampton, LLP, Petitioner
Martin David KatzSheppard Mullin Richter & Hampton, LLP, Petitioner