                                                                FILED
                                                           Mar 23 2017, 9:55 am

                                                                CLERK
                                                            Indiana Supreme Court
                                                               Court of Appeals
                                                                 and Tax Court




ATTORNEY FOR APPELLANTS                              ATTORNEYS FOR APPELLEE
Patrick L. Proctor                                   CHAUFFEURS, TEAMSTERS, AND
Eilbacher Fletcher, LLP                              HELPERS LOCAL UNION NO. 414
Fort Wayne, Indiana                                  Geoffrey S. Lohman
                                                     David T. Vlink
                                                     Fillenwarth Dennerline Groth & Towe, LLP
                                                     Indianapolis, Indiana



                                            IN THE
    COURT OF APPEALS OF INDIANA

John E. Warner, Jr.; Rick Clay;                           March 23, 2017
Sam Early; Brian Goeglein;                                Court of Appeals Case No.
Mike Campbell; Brad Wilson;                               02A04-1608-PL-2017
and John Zimmerman;                                       Appeal from the Allen Superior
                                                          Court
Appellants-Plaintiffs,
                                                          The Honorable Stanley A. Levine,
        v.                                                Judge
                                                          Trial Court Cause No.
                                                          02D03-1511-PL-524
Chauffeurs, Teamsters, and
Helpers Local Union No. 414
and Speedway Redi Mix, Inc.,
Appellees-Defendants.




Bradford, Judge.


Court of Appeals of Indiana | Opinion 02A04-1608-PL-2017 | March 23, 2017                  Page 1 of 14
                                            Case Summary                     1




[1]   Appellees-Defendants Speedway Redi Mix, Inc., (“Employer”) and Chauffeurs,

      Teamsters, and Helpers Local Union No. 414 (“the Union”) were parties to a

      collective-bargaining agreement (“the CBA”) that ran from May 1, 2013,

      through March 31, 2016. Employer is an Allen County company that produces

      and sells concrete, while the Union is the collective-bargaining representative of

      Employer’s truck drivers. The CBA included union security language (“the

      Clause”) which made membership in the Union a condition of employment for

      qualifying employees and authorized Employer to withhold union dues from

      their wages.


[2]   In early 2015, a part-owner of Employer approached Plaintiffs-Appellants John

      E. Warner, Jr., et al., who were truck drivers at Employer (“the Drivers”) and

      offered to transfer their employment to another company he apparently

      controlled, Speedway Construction Products Corp. (“SCP”). The Drivers all

      had, at various times, voluntarily executed dues checkoff authorizations (“Dues

      Checkoffs”) that allowed Employer to withdraw union dues from their wages

      for distribution to the Union. The Drivers accepted the owner’s offer, resigned

      from Employer and the Union, and began work at SCP, apparently still hauling




      1
       Oral argument was heard in this case on March 3, 2017, at the Maurer School of Law at Indiana
      University in Bloomington, Indiana, and was attended by students and faculty of that school, the School of
      Public and Environmental Affairs, and the Kelley School of Business. We would like to thank the Indiana
      University students, staff, faculty and administration who provided us with their hospitality and assistance.
      We would also like to thank counsel for the high quality of their written submissions and oral presentations.

      Court of Appeals of Indiana | Opinion 02A04-1608-PL-2017 | March 23, 2017                         Page 2 of 14
      Employer product, however. The Union filed several unfair labor practice

      complaints against Employer with the National Labor Relations Board

      (“NLRB”), which were ultimately settled by Employer and the Union.

      Pursuant to the settlement, the Drivers would return to Employer at their

      previous wage and benefit levels and still pay dues to Employer for transfer to

      the Union.


[3]   In 2015, the Drivers filed a complaint in the trial court against Employer and

      the Union, alleging that the Union was receiving their union dues in violation

      of Indiana’s right-to-work law (“the Act”) and seeking recovery of dues already

      paid under a theory of money had and received. At the same time, Plaintiff

      Warner filed a claim of unfair labor practice with the NLRB. In June of 2016,

      the NLRB dismissed Warner’s claim. In July of 2016, the trial court dismissed

      the Drivers’ claims, ruling that (1) they had failed to state a claim upon which

      relief could be granted because although the Act had rendered the Clause null

      and void, the Dues Checkoffs remained valid, and (2) their claims were

      preempted by federal law in any case. The Drivers contend on appeal that the

      trial court erred in granting the Union’s motion to dismiss because they were

      not required to prove the existence of the Clause in order to maintain their

      cause of action, the relevant federal law contains exceptions for state-enacted

      right-to-work laws, and the Dues Checkoffs are invalid in any event. We agree

      with the Drivers that the trial court erred in dismissing the Drivers’ claim that

      they were required to remain members of the Union in violation of the Act but

      agree with the Union that the Drivers’ claim based on the Dues Checkoffs is


      Court of Appeals of Indiana | Opinion 02A04-1608-PL-2017 | March 23, 2017   Page 3 of 14
      preempted by federal law. Consequently, we affirm in part, reverse in part, and

      remand for further proceedings.



                             Facts and Procedural History
[4]   Employer and the Union were parties to the CBA, which ran from May 1,

      2013, through March 31, 2016. Employer is an Allen County company that

      produces and sells concrete, while the Union is the collective-bargaining

      representative of Employer’s truck drivers. Article 4 of the CBA contains the

      Clause, requiring each qualifying Employer employee to join and maintain

      membership in the Union as a condition of employment. Section 4.04

      provides, however, that “[i]t is understood that the above [union security]

      language … is only effective to the extent that it is permitted by Indiana State

      and Federal law.” Appellant’s App. Vol. II p. 40.


[5]   In March of 2015, Todd Frederick, an owner of Employer and SCP, offered

      employment at SCP to the Drivers. At SCP, the Drivers apparently would still

      be hauling Employer’s product, much as they had before. At various times, it is

      undisputed that all of the Drivers had executed Dues Checkoffs authorizing

      Employer to deduct dues to be paid over to the Union.2 The Drivers accepted

      Frederick’s offer, resigning from Employer, withdrawing from the Union,




      2
        The actual Dues Checkoffs have not been made part of the record in this case, and we decline the Union’s
      request to take judicial notice of them.

      Court of Appeals of Indiana | Opinion 02A04-1608-PL-2017 | March 23, 2017                      Page 4 of 14
      beginning their work for SCP, and becoming members of the International

      Association of Machinists, Local 2569 (“Local 2569.”)


[6]   On March 17, 2015, the Union filed the first of four unfair labor practice

      complaints against Employer and/or SCP with the NLRB, alleging various

      violations of the National Labor Relations Act (“the NLRA”). During this

      period, the Union conducted a strike by Employer’s employees. On October 3,

      2015, the NLRB regional director approved a settlement agreement between

      Employer, SCP, and the Union. Among other terms, Employer and SCP were

      obligated to post a notice to employees and conduct themselves consistent with

      the following:

              WE WILL NOT tell you that you need to withdraw from [the
              Union] or any other labor organization.
              WE WILL NOT interfere with your relationship with your union
              by encouraging you to switch your employment from [Employer]
              to [SCP].
              WE WILL NOT assist [Local 2569], including by encouraging
              you to withdraw from your Union and to switch your employment
              from [Employer] to [SCP].
              WE WILL NOT give effect to your dues check-off authorizations
              for [Local 2569], and WE WILL continue to give effect to your
              check-off authorizations for the [the Union].
              WE WILL resume assigning work to the bargaining unit … as
              previously done prior to March 16, 2015.
              WE WILL restore your wages, benefits, seniority and other terms
              and conditions of employment to what they were before we
              changed them when we applied the terms of our collective
              bargaining agreement with [the Machinists] rather than the terms
              of our collective bargaining agreement with [the Union].

      Court of Appeals of Indiana | Opinion 02A04-1608-PL-2017 | March 23, 2017   Page 5 of 14
      Appellant’s App. Vol. II p. 13.


[7]   Following approval of the settlement agreement, the Drivers’ employment was

      transferred back to Employer, with their seniority, wages, and all other terms of

      employment the same as before they left to work for SCP. Employer resumed

      withholding union dues from the Drivers’ paychecks and paying those dues to

      the Union pursuant to Dues Checkoffs that the Drivers had executed before

      going to work for SCP.


[8]   On November 12, 2015, the Drivers filed a complaint in the trial court against

      Employer and the Union, alleging the Union of violating the Act by compelling

      them to remain members of and pay dues to the Union and seeking the return

      of those dues pursuant to the doctrine of money had and received. Also on

      November 12, 2015, Plaintiff Warner filed an unfair-labor-practices charge with

      Region 25 of the NLRB, alleging violations related to the continued

      withholding of union dues by Employer for payment to the Union. On January

      29, 2016, the regional director of the NLRB dismissed Warner’s charge, finding

      no NLRA violation.


[9]   On February 4, 2016, the Union moved to dismiss the Drivers’ complaint. The

      Union requested dismissal of the Drivers’ complaint pursuant to the Act for

      failure to state a claim and lack of subject matter jurisdiction as a result of

      preemption by federal labor law. On May 16, 2016, the trial court held a

      hearing on the Union’s motion to dismiss the Drivers’ claims against it.




      Court of Appeals of Indiana | Opinion 02A04-1608-PL-2017 | March 23, 2017   Page 6 of 14
       Meanwhile, Warner appealed the dismissal of his unfair-labor-practices charge

       to the NLRB’s General Counsel, who affirmed the dismissal on June 17, 2016.


[10]   On July 22, 2016, the trial court granted the Union’s motion to dismiss the

       Drivers’ complaint. The trial court concluded that the Drivers had failed to

       state a claim upon which relief could be granted because the Act rendered the

       Clause inoperative, meaning that nothing left in the CBA required them to

       maintain membership in the Union or pay dues as a condition of employment.

       The trial court, however, noted that the Drivers had executed Dues Checkoffs

       before leaving Employer for SCP, which the trial court concluded were

       unaffected by the Act or the temporary move to SCP and allowed Employer to

       continue to withhold dues to be paid to the Union. The trial court also

       concluded that it lacked jurisdiction over all claims related to the allegedly

       unlawful collection and retention of dues by the Union, as they were preempted

       by federal law.



                                  Discussion and Decision
[11]   Pursuant to Indiana Code section 22-6-6-8 of the Act,


               A person may not require an individual to:
                      (1) become or remain a member of a labor organization;
                      (2) pay dues, fees, assessments, or other charges of any kind
                      or amount to a labor organization; or
                      (3) pay to a charity or third party an amount that is
                      equivalent to or a pro rata part of dues, fees, assessments, or
                      other charges required of members of a labor organization;
               as a condition of employment or continuation of employment.

       Court of Appeals of Indiana | Opinion 02A04-1608-PL-2017 | March 23, 2017   Page 7 of 14
       Moreover, pursuant to Indiana Code section 22-6-6-12,

               (a) If an individual suffers an injury:
                   (1) as the result of any act or practice that violates this chapter;
                   or
                   (2) from a threatened violation of this chapter;
               the individual may bring a civil action.
               (b) A court may order an award of any or all of the following to an
               individual who prevails in an action under subsection (a):
                   (1) The greater of:
                       (A) actual and consequential damages resulting from the
                       violation or threatened violation; or
                       (B) liquidated damages of not more than one thousand
                       dollars ($1,000).
                   (2) Reasonable attorney’s fees, litigation expenses, and costs.
                   (3) Declaratory or equitable relief, including injunctive relief.
                   (4) Other relief the court considers proper.
               (c) The remedies and penalties set forth in subsection (b) are:
                   (1) cumulative; and
                   (2) in addition to other remedies and penalties imposed for a
                   violation of this chapter.


[12]   The Drivers alleged in their complaint that the Union and Employer violated

       Indiana Code subsection 22-6-6-8(1) by “requir[ing] the Plaintiffs to become or

       remain members of the Teamsters Union” and subsection (2) by requiring them

       “to pay dues, fees and assessments or other charges to the Teamsters over the

       Plaintiffs’ objections[.]” Appellant’s App. Vol. II p. 31.




       Court of Appeals of Indiana | Opinion 02A04-1608-PL-2017 | March 23, 2017    Page 8 of 14
                I. Whether the Drivers Failed to State a Claim
               Pursuant to Indiana Code Subsection 22-6-6-8(1)
[13]   The Drivers argue that the trial court erred in granting the Union’s motion to

       dismiss their claim pursuant to the Act on the ground that they failed to state a

       claim upon which relief can be granted.

               A complaint is not subject to dismissal unless it appears to a
               certainty that the plaintiff would not be entitled to relief under any
               set of facts. State v. Rankin (1973), 260 Ind. 228, 230, 294 N.E.2d
               604, 606; First Nat. Bank of Danville v. Reynolds, (1986), Ind. App.,
               491 N.E.2d 218, 220. The allegations of the complaint are taken
               as true and the plaintiff is entitled to all reasonable inferences
               which could be drawn therefrom. Id.; Gladis v. Melloh (1971), 149
               Ind. App. 466, 469, 273 N.E.2d 767, 769. On appeal from a
               denial of a motion to dismiss, we apply essentially the same
               standard as the trial court to see whether the trial court acted
               properly in denying the Motions to Dismiss under T.R. 12(B)(6).
               Iglesias v. Wells, (1982), Ind. App., 441 N.E.2d 1017, 1018.
       Bentz Metal Prod. Co. v. Stephans, 657 N.E.2d 1245, 1247 (Ind. Ct. App. 1995).


[14]   We conclude that the Drivers have stated a claim under Indiana law upon

       which relief can be granted and over which we have jurisdiction.


               The doctrine of primary jurisdiction … arises out of the United
               States Supreme Court’s interpretation of the National Labor
               Relations Act (NLRA). San Diego Building Trades Council v.
               Garmon (1959), 359 U.S. 236, 79 S. Ct. 773, 3 L.Ed.2d 775. In
               Garmon the Supreme Court held that Congress intended that
               matters of national labor policy be decided in the first instance by
               the NLRB. To protect this intent the Supreme Court provided,
               that as a general rule, federal courts do not have jurisdiction over
               activity which is “arguably subject to § 7 or § 8 of the National

       Court of Appeals of Indiana | Opinion 02A04-1608-PL-2017 | March 23, 2017   Page 9 of 14
                 Labor Relations Act.”[3] Garmon, at 245, 79 S. Ct. at 780, 3 L. Ed.
                 2d at 783.
                 The general rule of primary jurisdiction, however, has not been
                 given a broad mechanical application to bar all suits or defenses
                 that arise in labor relations cases from being decided by the courts.
                 Sears, Roebuck and Co. v. San Diego County District Council of
                 Carpenters (1978), 436 U.S. 180, 188-89, 98 S. Ct. 1745, 1753, 56 L.
                 Ed. 2d 209, 220.
       Commc’n Workers of Am., Local 5900 v. Bridgett, 512 N.E.2d 195, 198 (Ind. Ct.

       App. 1987) (footnote omitted).


[15]   We have squarely held that “[t]he issue of membership status vel non is not

       covered by sections 7 or 8 of the NLRA, and accordingly, not preempted by the

       doctrine of primary jurisdiction.” Id. at 198; see also Commc’ns Workers of Am.,

       Locals 5800, 5714 v. Beckman, 540 N.E.2d 117, 123 (Ind. Ct. App. 1989) (“Under

       the reasoning of Bridgett, supra, we hold the trial court had jurisdiction to

       consider the membership status of the Employees.”). We conclude that,

       pursuant to Bridgett, the trial court erred in granting the Union’s motion to

       dismiss the Drivers’ claim that they were required to become and/or remain




       3
           Section 7 of the NLRA provides as follows:

                 Employees shall have the right to self-organization, to form, join, or assist labor
                 organizations, to bargain collectively through representatives of their own choosing, and to
                 engage in other concerted activities for the purpose of collective bargaining or other mutual
                 aid or protection, and shall also have the right to refrain from any or all of such activities
                 except to the extent that such right may be affected by an agreement requiring membership
                 in a labor organization as a condition of employment as authorized in section 158(a)(3) of
                 this title.
       29 U.S.C. §157. Section 8 defines what constitutes unfair labor practices by employers or labor
       organizations. See 29 U.S.C. §158.

       Court of Appeals of Indiana | Opinion 02A04-1608-PL-2017 | March 23, 2017                          Page 10 of 14
       members of the Union. The Drivers allege that the Union and the Employer

       violated the Act by requiring them to become and/or remain members of the

       Union; this is sufficient to state a claim which survives a Trial Rule 12(B)(6)

       motion.


[16]   In dismissing the Drivers’ claim pursuant to the Act, the trial court accepted the

       Union’s argument that because the Clause was rendered void due to operation

       of the Act, the Drivers claim that they were required to be members of the

       Union must fail. The plain language of the Act, however, is not limited to the

       use of union security provisions like the Clause but, instead, covers all

       employer-union acts that compel union membership, i.e., “any act or practice

       that violates [the Act.]” Ind. Code § 22-6-6-12(a)(1). Because it can be based

       on any agreement between the Union and Employer, the fact that the Act has

       voided the Clause is not fatal to the Drivers’ claim.


              II. Whether This Court has Jurisdiction Over the
                  Drivers’ Claims Pursuant to Indiana Code
                            Subsection 22-6-6-8(2)
[17]   The Drivers also claim that the Union and Employer have violated Indiana

       Code subsection 22-6-6-8(2) by compelling them to pay dues to the Union over

       their objections. The trial court concluded that it lacked subject matter

       jurisdiction over this claim on the basis that federal law has preempted Indiana

       law on such questions, depriving it of subject matter jurisdiction.

               In ruling on a motion to dismiss for lack of subject matter
               jurisdiction, the trial court may consider not only the complaint
       Court of Appeals of Indiana | Opinion 02A04-1608-PL-2017 | March 23, 2017   Page 11 of 14
               and motion but also any affidavits or evidence submitted in
               support. In addition, the trial court may weigh the evidence to
               determine the existence of the requisite jurisdictional facts.
               ….
               If the facts before the trial court are not in dispute, then the
               question of subject matter jurisdiction is purely one of law. Under
               those circumstances no deference is afforded the trial court’s
               conclusion because appellate courts independently, and without
               the slightest deference to trial court determinations, evaluate those
               issues they deem to be questions of law. Thus, we review de novo a
               trial court’s ruling on a motion to dismiss under Trial Rule
               12(B)(1) where the facts before the trial court are undisputed.
       GKN Co. v. Magness, 744 N.E.2d 397, 400-01 (Ind. 2001) (citations and

       quotation marks omitted).


[18]   The Drivers contend that the trial court erred in concluding that federal labor-

       law preempts state law in the area of dues checkoff authorizations. It is well-

       settled, however, that “congressional regulation of checkoff is ‘sufficiently

       pervasive and encompassing to pre-empt’ the force of the state statute which ‘is

       inconsistent with the federal law and hence can properly have no application in

       this suit.’” See, e.g., SeaPak v. Indus., Tech. & Prof’l Emps., Div. of Nat’l Mar.

       Union, AFL-CIO, 300 F. Supp. 1197, 1199 (S.D. Ga. 1969) (quoting Int’l Bhd. of

       Operative Potters, AFL and CIO et al. v. Tell City Chair Co., 295 F. Supp. 961, 965

       (S.D. Ind. 1968)), aff’d, 423 F.2d 1229 (5th Cir. 1970), aff’d, 400 U.S. 985 (1971).

       Although the Supreme Court affirmed the district court’s opinion in SeaPak

       without opinion, it has held that “the precedential effect of a summary

       affirmance can extend no farther than ‘the precise issues presented and

       necessarily decided by those actions.’” Ill. State Bd. of Elections v. Socialist

       Court of Appeals of Indiana | Opinion 02A04-1608-PL-2017 | March 23, 2017     Page 12 of 14
       Workers Party, 440 U.S. 173, 182 (1979). Because the precise issue of whether

       states have any room to act in the area of dues authorization checkoffs was

       presented and necessarily decided in SeaPak, the Supreme Court’s summary

       affirmance lent it binding precedential effect.


[19]   In summary, United States Supreme Court precedent holds that congressional

       regulation of dues checkoffs is so pervasive as to totally displace a state’s ability

       to act in the field. The Drivers contend that federal law is clear that when an

       employee who has executed a dues checkoff authorization leaves an employer,

       the authorization is void and without effect if the employee later returns. Even

       if this is true, our hands are tied; the validity of a dues checkoff authorization is

       a matter of federal law pursuant to the binding precedent of Seapak.4



                                                   Conclusion
[20]   We conclude that the Drivers’ claim that the Union and Employer have

       required them to remain members of the Union in violation of the Act is a

       claim upon which relief can be granted. Consequently, we reverse the trial

       court’s grant of the Union’s motion to dismiss this claim. However, we

       conclude that the Drivers’ claim based on the Dues Checkoffs is a claim over




       4
         It is worth noting that all of the authority cited by the Drivers on this point is either an NLRB decision or
       an opinion issued by a federal Circuit Court of Appeals. Appellant’s Br. p. 24.

       Court of Appeals of Indiana | Opinion 02A04-1608-PL-2017 | March 23, 2017                          Page 13 of 14
       which Indiana courts have no jurisdiction. We affirm the trial court’s dismissal

       of that claim and its associated claim of money had and received.


[21]   We affirm the judgment of the trial court in part, reverse in part, and remand

       for further proceedings consistent with this opinion.


       Najam, J., and May, J., concur.




       Court of Appeals of Indiana | Opinion 02A04-1608-PL-2017 | March 23, 2017   Page 14 of 14
