Opinions of the United
2006 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


11-1-2006

Stanley v. Intl Brhd Electrial
Precedential or Non-Precedential: Non-Precedential

Docket No. 05-4678




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                                          NOT PRECEDENTIAL

                 UNITED STATES COURT OF APPEALS
                      FOR THE THIRD CIRCUIT


                                No. 05-4678

    ROGER STANLEY; JERRY CLOSE; CHARLES F. TAYLOR, JR.; GLEN
    MAZOFF; PETE KURTZ; TERRY L. SHUBERT; CHARLES F. TAYLOR,
    III; JACK L. TAYLOR; ROBERT MCMUNN; WILLIAM TAYLOR; BILL
   CROYLE; VINCENT KOVALCHIK; RAY CUNNINGHAM; NANCY IRWIN,
                Executive of the Estate of CHARLES IRWIN SR.,

                                                Appellants

                                     v.

INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, AFL-CIO CLC;
 THE INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL
   5; LAUREN WARD, also known as LARRY WARD; VERNON C. FORDYCE,
      also known as CHRIS FORDYCE; RICHARD DUNKEL, Business Agent
         of Local 5; JOHN CHALOVICH, Business Agent Local 5; DENNY
              EICKER, Business Agent Local 5; FRANK GALLAGHER,
            retired Business Agent of Local 5; DAVE CORNELIUS; RON
           DUNKEL; MICHAEL R. DUNLEAVY, as President of Local 5;
 WESTERN PENNSYLVANIA ELECTRICAL EMPLOYEES INSURANCE TRUST
                                       FUND


               On Appeal from the United States District Court
                  for the Western District of Pennsylvania
                        (D.C. Civil No. 05-cv-00068)
                 District Judge: Hon. Terrence F. McVerry


              Submitted Pursuant to Third Circuit LAR 34.1(a)
                             October 25, 2006

           BEFORE: SMITH, FISHER and COWEN, Circuit Judges

                         (Filed November 1, 2006 )
                                        OPINION


COWEN, Circuit Judge.

       Appellants, members of the International Brotherhood of Electrical Workers

(IBEW) and local unions other than IBEW Local 5 (“Local 5"), filed a seven-count

complaint against IBEW; Local 5; nine individuals who were alleged to be officials,

former officials, or members of Local 5; and the Western Pennsylvania Electrical

Employees Insurance Trust Fund (“Trust Fund”). The District Court dismissed the

complaint, and appellants now appeal. For the reasons set forth below, we will affirm.

                                             I.

       Appellants are journeymen/travelers who applied for, but were denied,

membership in Local 5. Because they are not members of Local 5, they have been

precluded from attending union meetings and voting on the business of those meetings.

       Local 5 distributes work through a hiring hall procedure. Appellants claim that

they have been assigned a secondary classification for purposes of the hiring hall, and

thus have not received a fair allotment of work. Appellants Stanley and Close filed a

complaint with the National Labor Relations Board protesting this situation, which they

then withdrew after Local 5 agreed to end its discriminatory practices. However, Local 5

has allegedly failed to abide by that agreement, and instead, according to appellants,

members of the union have threatened Stanley and Close with physical violence.

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       Appellants also claim that the IBEW, through Local 5, negotiated collective

bargaining agreements on behalf of the workers. Those agreements included health and

welfare and pension plans that required participating employers to contribute money to

the plans for each hour worked by a covered employee. Appellants allege that appellees

prevented them from working sufficient hours to establish coverage under the plans, and

then retained the contributions to the plans made on appellants’ behalf.

       Appellants commenced this case by filing a complaint in January 2005. Each

appellee then filed a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), and

appellants responded by filing an amended complaint. The amended complaint contained

seven counts: (1) infringement of union rights; (2) breach of contract; (3) intentional

interference with economic opportunities; (4) intentional infliction of emotional distress;

(5) unjust enrichment; (6) ERISA violations; and (7) civil RICO violations.

       The appellees again moved to dismiss the complaint, and on July 28, 2005, a

Magistrate Judge issued a Report and Recommendation recommending that the motions

to dismiss be granted as to the federal claims and that the court decline to exercise

supplemental jurisdiction over the remaining state claims. On September 19, 2005, the

District Court adopted the Report and Recommendation, and dismissed the complaint.

This appeal followed.

                                             II.




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       The district court had jurisdiction pursuant to 28 U.S.C. § 1331. We exercise

appellate review pursuant to 28 U.S.C. § 1291. We have plenary review over a district

court's dismissal of a complaint under Fed. R. Civ. P. 12(b)(6). Lum v. Bank of Am., 

, 223 (3d Cir. 2004). A motion to dismiss pursuant to Rule 12(b)(6) should be

granted only if, accepting as true the facts alleged and all reasonable inferences that can

be drawn therefrom, there is no reasonable reading upon which the plaintiff may be

entitled to relief. 

argue that the District Court erred in dismissing each of their four

federal claims. Appellants first argue that the District Court wrongly dismissed their

claim alleging that IBEW and Local 5 infringed their union rights under the Labor

Management Reporting and Disclosure Act (LMRDA) by denying them the equal rights

and privileges guaranteed by 29 U.S.C. § 411. However, § 411 only guarantees rights to

union “members.” “Member” is defined by 29 U.S.C. § 402(o) to include “any person

who has fulfilled the requirements for membership.” When a union’s constitution gives

the local union the discretion to accept or deny membership to applicants, unsuccessful

applicants have not fulfilled the requirements for membership, and thus are not members

of the local union. See Bullock v. Sweeney, 

, 509 (N.D. Cal. 1986) (“The

mere application for membership, which is subject to approval as prescribed by the

Unions' constitution, does not constitute membership or result in any vested right.”);



                                              4
cf. Hughes v. Local No. 11 of Int’l Ass’n of Bridge, Structural and Ornamental

Ironworkers, 

, 816 (3d Cir. 1961) (explaining “this case may be

distinguished from the ordinary case of an application for membership in a voluntary

association on the ground that there was not in this case a reservation of power by the

organization to refuse membership, in its discretion, to those who have fulfilled its

standard membership requirements”). Here, the IBEW Constitution does grant each local

union the “full autonomy to accept or reject all requests for transfers.” (App. 167.)

Accordingly, appellants are not members of Local 5, and the District Court was correct to

rule that they are unable to present a viable claim under § 411.

       Appellants’ civil RICO claim, in which they alleged that appellees engaged in a

scheme to defraud them out of income and benefits, was also correctly dismissed.

Pursuant to 18 U.S.C. § 1962(c), it is “unlawful for any person employed by or associated

with any enterprise . . . to conduct or participate, directly or indirectly, in the conduct of

such enterprise's affairs through a pattern of racketeering activity or collection of

unlawful debt.” “Racketeering activity” may include, inter alia, mail fraud or wire fraud,

18 U.S.C. § 1961(1); a “pattern” requires at least two such acts, 18 U.S.C. § 1961(5).

Appellants argue that they sufficiently alleged a pattern of racketeering activity because

they claimed that appellees committed numerous acts of mail and wire fraud. However,

appellants’ complaint contained no allegations of racketeering activity concerning the

Trust Fund, and accordingly, the claim against the Trust Fund was correctly dismissed.



                                               5
Further, there are two requirements for the predicate acts of racketeering activity that

doom appellants’ claim against the IBEW and Local 5: (1) Fed. R. Civ. P. 9(b)’s

requirement that fraud be pleaded with specificity applies to appellants’ mail and wire

fraud allegations, see Lum v. Bank of Am., 

, 223 (3d Cir. 2004); and (2) the

wire fraud statute, 18 U.S.C. § 1343, criminalizes a scheme to defraud that is transmitted

by wire “in interstate or foreign commerce”; thus, a complaint must allege interstate use

of the wire for each predicate act, see, e.g., Smith v. Ayres, 

, 1366 (5th Cir.

1988). All of appellants’ allegations of fraud concerning IBEW, and most of their

allegations concerning Local 5, lack specificity because they are just general allegations

that fail to include details concerning the “date, place or time of the fraud” and “who

made a misrepresentation to whom and the general content of the misrepresentation.”

(internal quotation marks omitted). Further, while a few of

appellants’ charges against Local 5 are sufficiently specific, all but one 1 lacks an

allegation that the phone call was interstate. Thus, appellants failed to allege that any of

the appellees engaged in a pattern of racketeering activity, and accordingly, the District

Court was correct to dismiss the civil RICO claim. Appellants argue that they should

survive dismissal because they have identified a “log,” in appellees’ possession, which

they claim lists more instances of fraud with great specificity. However, this argument is

  1
    The one allegation that contains sufficient specificity and includes a claim that the
call was interstate is pleaded at ¶ 74(b)(4), and alleges that Robert McMunn received a
solicitation from a Pittsburgh dispatcher, Vince Mandella, on or about September 18,
1998, while McMunn was in Ohio.

                                              6
too speculative to constitute an “alternative means of injecting precision and some

measure of substantiation into their allegations of fraud.” 

does not

save the claim.

       The District Court also properly dismissed appellants’ claim under section

502(a)(1)(B) of ERISA, in which appellants challenged the “confiscatory forfeiture”

caused by the coverage limits of the plans. First, section 502(a)(1)(B) may only be

invoked against the plan itself, a plan fiduciary, or, perhaps, a plan administrator. See

Curcio v. John Hancock Mut. Life Ins. Co., 

, 233 (3d Cir. 1994). Appellants

failed to allege that the IBEW or Local 5 was a plan, fiduciary, or administrator. Further,

in order to bring a claim attempting to enforce the terms of a benefit plan under section

502(a)(1)(B), a party must first exhaust the internal administrative remedies of the plan,

see D'Amico v. CBS Corp., 

, 291 (3d Cir. 2002), which appellants have

acknowledged they failed to do. Appellants argue that it would be futile to pursue

administrative remedies; however, they base this conclusion on the fact that the Trust

Fund is required to apply the terms of the plans. If the appellants desire the Trust Fund to

do something other than apply the terms of the plan, section 502(a)(1)(B) is an improper

vehicle, because that section provides a cause of action solely to vindicate rights as

provided “under the terms of the plan.” Accordingly, appellants’ claim against the Trust

Fund was also properly dismissed.




                                              7
       The District Court also correctly dismissed appellants’ unjust enrichment claim, in

which appellants argued that the benefit plans require appellants to work an excessive

amount of hours to qualify for coverage, and that when appellants have failed to reach

those requirements, the appellees have unjustly kept the money earmarked for benefits.

Section 514(a) of ERISA preempts state law claims that “relate to” an employee benefit

plan. A state law claim relates to an employee benefit plan if “the existence of an ERISA

plan [is] a critical factor in establishing liability” and “the trial court's inquiry would be

directed to the plan.” 1975 Salaried Ret. Plan for Eligible Employees of Crucible, Inc. v.

Nobers, 

, 406 (3d Cir. 1992). The parties agree that the plans at issue are

employee benefit plans within the meaning of section 514(a). The ERISA plans are a

critical factor here because the appellants’ claim is predicated on the very terms of the

ERISA plans; i.e., the allegedly confiscatory limits mandated by the plans. Thus, ERISA

preempts this claim, and it was correctly dismissed by the District Court.2

       Appellants also seek leave to amend their complaint. However, after final

judgment, leave to amend will be granted only sparingly, and will be the “long-odds

exception.” Werner v. Werner, 

, 296 (3d Cir. 2001) (internal quotation

marks omitted); see also Harris v. City of Auburn, 

, 1287 (7th Cir. 1994)

(explaining that after judgment has been entered, a party seeking to amend a pleading

“had better provide the [court] with a good reason to grant its motion”). In this case,

  2
   Because the District Court was correct to dismiss each federal claim, it was entirely
appropriate for it to decline to exercise supplemental jurisdiction over the state claims.

                                               8
appellants have not presented any compelling reason that justice requires they be granted

leave to amend, beyond that it would be to their advantage to have a third bite at the

apple. That alone will not suffice. Accordingly, we will also deny this request.

       For the foregoing reasons, the judgment of the District Court entered on September

19, 2005, will be affirmed




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