Erin Fulton, et al., Plaintiffs-appellants, v. Plumbers and Steamfitters, et al., Defendants-appellees.john Osborn, et al., Plaintiffs-appellants, v. Plumbers and Steamfitters, et al., Defendants-appellees, 695 F.2d 402 (9th Cir. 1982)

This appeal is from a district court dismissal of complaints filed by appellants in these consolidated actions for damages pursuant to section 303 of the Labor Management Relations Act, 29 U.S.C. § 187 (1976). The district court dismissed the complaints, holding that appellants lacked standing under section 303 to maintain the suit. We affirm.

Appellants are employees of Guy F. Atkinson Company and Wright-Schuchart-Harbor, a joint venture engaged in various construction projects for the Washington Public Power Supply System on the Hanford Nuclear Reservation in Washington. Most of the appellants are carpenters who are members of the United Brotherhood of Carpenters and Joiners (hereinafter "Carpenter's Union"). The other appellants belong to other craft unions, including the Ironworkers, Laborers, Teamsters, and Operating Engineers.

Appellees are Plumbers and Steamfitters Union, Local No. 598, its business agent Ray McKnight, and the International Brotherhood of Electrical Workers, Local No. 112. The two appellee unions represent pipefitters and electricians employed at the Hanford construction site. None of the appellants are members of the appellee unions.

A dispute arose in 1979 between the Carpenter's Union and the appellee unions concerning certain work assignments at the Hanford construction site. The dispute was submitted to the AFL-CIO's Impartial Jurisdictional Disputes Board under procedures set forth in the AFL-CIO Constitution. In November 1979, the Board entered an award determining that part of the work at issue was within the Carpenter Union's work jurisdiction. The employer made its work assignments based upon the award.

In March 1980, the appellee unions submitted to the site employer a demand to reassign the disputed work from the carpenters to members of the appellee unions. Shortly afterward, members of the appellee unions destroyed work completed by the carpenters at the site and encouraged a strike and a site boycott. Because of these activities, the site employer suspended operations for ten days. All the employees at the site were laid off during the work suspension, resulting in a ten-day wage loss.

On March 25, 1980, appellants filed an action in federal district court against appellees under section 303 of the Labor Management Relations Act [hereinafter LMRA], 29 U.S.C. § 187 (1976).²  The complaint alleged that appellee's actions constituted a violation of section 8(b) (4) (D) of the LMRA, 29 U.S.C. § 158(b) (4) (D) (1976)³ , and sought damages for the wages lost during the work suspensions. Appellants also petitioned for class certification.

Appellees answered with a general denial, and moved to dismiss the action on the ground that appellants lacked standing to sue under section 303. On April 24, 1981, the district court granted appellees' motion, holding that appellants lacked standing because: (1) appellant's wage loss was "incidental" and "secondary" to the alleged violation of section 8(b) (4) (D); and (2) wages are not "business or property" within the meaning of section 303 and are therefore not recoverable under the section. The question of class certification was not reached. Appellants appeal the dismissal.

In this appeal we must decide whether employees of an enterprise injured by a union's violation of section 8(b) (4) (D) of the LMRA have standing under section 303 of the LMRA to maintain a suit for damages against the offending union. Section 303(b) of the LMRA provides that " [w]hoever shall be injured in his business or property by reason of" a union's violation of section 8(b) (4) of the LMRA has a federal cause of action to recover damages. Appellants argue that section 303 imposes no greater standing limitation than that imposed generally by article III of the United States Constitution. Relying principally on the statute's reference to "whoever", appellants maintain that any plaintiff suffering an actual loss or injury attributable to a union's violation of section 8(b) (4) has standing to pursue an action for damages under section 303.

The expansive interpretation urged by appellants overlooks the section 303 requirement that the injury must occur "by reason of" a section 8(b) (4) violation. We conclude that the "by reason of" language imposes standing limitations. We are drawn to this conclusion by comparisons to the operative effect of similar statutory language in the antitrust field, our analysis of the statute's legislative history and by interpretations of section 303's standing requirements enunciated by courts in other circuits.

The language of section 303(b) of the LMRA is strikingly similar to that of section 4 of the Clayton Act, 15 U.S.C. § 15 (Supp. V 1981).⁴  The similarity in language utilized by Congress in drafting the two sections has prompted this circuit to look to judicial interpretations of section 4 for guidance in construing section 303. Mead v. Retail Clerks International Ass'n, Local 839, 523 F.2d 1371, 1376 (9th Cir. 1975). The "by reason of" phrase appearing in section 303 also appears in section 4. This circuit has interpreted the phrase to impose standing limitations in the section 4 antitrust context. See, e.g., In re Multidistrict Vehicle Air Pollution M.D.L. No. 31, 481 F.2d 122, 126 (9th Cir.), cert. denied sub nom., 414 U.S. 1045, 94 S. Ct. 551, 38 L. Ed. 2d 336 (1973). Thus, it would seem appropriate to give a similar interpretation to the phrase in the context of the LMRA.

This conclusion follows not only from the similarity in the language of the two statutes but also from the legislative history of section 303. The legislative history surrounding the enactment of section 303 suggests that the similarity in language was intentional, and that Congress intended for courts to look to antitrust standing principles formulated under section 4 for guidance in interpreting the standing requirements embodied in section 303.⁵  Moreover, a majority of the courts that have examined standing under section 303 have adopted standards formulated under section 4 of the Clayton Act. See Comment, Standing to Sue Under Section 303 of the Labor Management Relations Act, 45 N.Y.U. L. Rev. 539, 546, 549-51 (1970); Case Note, 43 Cin.L.Rev. 212, 215-16 (1974). For example, in United Mine Workers, Dist. 19 v. Osborne Mining Co., 279 F.2d 716 (6th Cir.), cert. denied, 364 U.S. 881, 81 S. Ct. 169, 5 L. Ed. 2d 103 (1960), the Sixth Circuit borrowed the "direct/remote injury" test from the antitrust context and employed that standard to determine section 303 standing.⁶  See also United Brick & Clay Workers v. Deena Artware, 198 F.2d 637, 644 (6th Cir.), cert. denied, 344 U.S. 897, 73 S. Ct. 277, 97 L. Ed. 694 (1952) (analogy drawn to antitrust laws in context of standing determination under section 303); Gilchrist v. United Mine Workers, 290 F.2d 36, 39 (6th Cir.), cert. denied, 368 U.S. 875, 82 S. Ct. 120, 7 L. Ed. 2d 76 (1961) ("direct/indirect" test employed); W.J. Milner & Co. v. International Brotherhood of Electrical Workers, Local 349, 476 F.2d 8, 12 (5th Cir. 1973) ("line of fire" test prevalently employed in antitrust context utilized in determining section 303 standing).

We therefore conclude that we should look to the standing principles we have developed under section 4 of the Clayton Act for guidance in interpreting section 303's standing requirements. We are not obliged, however, to follow blindly the results obtained in the antitrust context. Our application of the principles of standing developed under section 4 have been informed by the broad remedial policies the antitrust laws reflect and seek to serve. See, e.g., Ostrofe v. H.S. Crocker Co., 670 F.2d 1378, 1387 (9th Cir. 1982). The regulatory scheme and objectives of the National Labor Relations Act are, however, fundamentally different from the scheme and purposes of the antitrust laws. Thus, while we may look to antitrust principles for general guidance, the policies reflected in the National Labor Relations Act must inform the standards' application under section 303. We proceed with this caveat in mind.

In our circuit, section 4 standing has been determined under the "target area" test. See, e.g., In re Multidistrict Vehicle Air Pollution M.D.L. No. 31, 481 F.2d at 127-30 (rejecting the "direct/remote injury" test and embracing the "target area" approach). The target area rule confers standing if the plaintiff was within the target area of the defendant's illegal practices and was not only "hit", but also "aimed at." Karseal v. Richfield Oil Corp., 221 F.2d 358, 362 (9th Cir. 1955). A plaintiff satisfies this standard by being "within the area of the economy which [defendants] reasonably could have or did foresee would be endangered by the breakdown of competitive conditions." In re Western Liquid Asphalt Cases, 487 F.2d 191, 199 (9th Cir. 1973), cert. denied sub nom., 415 U.S. 919, 94 S. Ct. 1419, 39 L. Ed. 2d 474 (1974). The key to meeting this burden is a demonstration that the plaintiff suffered the type of core injury that Congress sought to prevent by enacting the antitrust laws. See Solinger v. A & M Records, 586 F.2d 1304, 1311 (9th Cir. 1978), cert. denied, 441 U.S. 908, 99 S. Ct. 1999, 60 L. Ed. 2d 377 (1979). See also 2 Areeda & Turner, Antitrust Law p 334d at 166 (1978). The Supreme Court recently refined these principles in Blue Shield of Virginia v. McCready, --- U.S. ----, 102 S. Ct. 2540, 73 L. Ed. 2d 149 (1982). The court held that when "faced with a claim that an injury is too remote from the alleged violation to warrant Sec. 4 standing", a court must look to (1) the nexus between the injury and the statutory violation, and (2) the relationship of the injury alleged to the forms of injury that Congress sought to prevent or remedy by enacting the statute. Id. 102 S. Ct. at 2548.⁷ 

Applying the standards as refined by McCready and informed by the policies of the National Labor Relations Act, we conclude that appellants lack standing under section 303. This action arises from a work jurisdiction dispute. The principal object of appellee unions' illegal activities was to pressure the site employer to reassign work from the members of the Carpenter's Union to members of the appellee unions. Instead of acceding to this pressure, the employer responded by suspending operation and temporarily laying off workers. This consequence was not a "necessary and integral" aspect of the section 8(b) (4) (D) violation. The injury alleged is too remote from the alleged violation to warrant section 303 standing. Thus, the required nexus between the injury and the section 8(b) (4) (D) violation has not been established.

It is also apparent that the injury alleged is not reflective of Congress' core concerns in prohibiting the type of conduct engaged in by appellee unions. Section 303's legislative history reveals that Congress was principally concerned with the debilitating effect secondary activity and jurisdictional disputes have on farmers and small businesses. See, e.g., 93 Cong.Rec. 4838 (1947) (remarks of Senator Ball), reprinted in 2 NLRB, Legislative History of the Labor Management Relations Act, 1947, at 1354 (1948); S.Rep. No. 105 on S. 1126, Supplemental Views, 80th Cong., 1st Sess. 54 (1947), reprinted in 1 NLRB, Legislative History of the Labor Management Relations Act, 1947, at 460 (1948). We are unable to find any indication that Congress sought to extend the right of action afforded by section 303 to employees of an injured employer and we are unwilling to render such a broad interpretation of the statute.

The avowed purpose of the National Labor Relations Act is the promotion of industrial peace by the creation of stable collective bargaining relationships. 29 U.S.C. § 151 (1973). The imposition of unlimited liability would tend to subvert our national labor policy. If employees of an injured concern are permitted to sue, unions would become subject to liability to a potentially huge class of plaintiffs. The plaintiffs in this case sought to represent a class of nearly 1800 employees. The resultant financial burden may have a destabilizing effect upon the union and render it incapable of effective representation. Moreover, the threat of such liability may inhibit legitimate union activity, frustrating the exercise of rights granted by the National Labor Relations Act. In light of these considerations, we are not persuaded that extension of liability to the class of employees of an injured enterprise is reflective of the core concerns that Congress sought to address by the enactment of section 303.⁸ 

Section 303 of the Labor Management Relations Act provides a remedy to "whoever" is injured "by reason of" a labor organization's violation of section 8(b) (4). We are asked to construe this statute to confer standing to sue to anyone who can demonstrate an injury. Having reviewed our precedents, the legislative history of section 303, and the policies of our national labor laws, we conclude that Congress did not intend to grant such a broad right of action. Appellants lack standing to pursue this action under section 303; the district court properly dismissed their complaints.⁹ 

The judgment of the district court is AFFIRMED.