TEAMSTERS v. TERRY

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Argument of J. David James

Chief Justice Rehnquist: We'll hear argument next in No. 88-1719, Chauffeurs, Teamsters and Helpers v. Terry.

Mr. James.

Mr. James: Mr. Chief Justice, and may it please the Court:

The question presented in this case is whether there is a right to a jury trial in a case where an employee sues his union alleging a breach of the duty of fair representation whenever he seeks also some type of monetary damages, which in this case are the back pay.

Unknown Speaker: It doesn't sound very interesting.

Mr. James: It certainly didn't draw the crowd that the first one did.

[Laughter]

It is, however, important for not only these parties, but for the large number of cases that this raises.

We contend that there is no right to a jury trial in such a case, and we do that based upon the historical analysis that this Court has set forth we should follow in Seventh Amendment questions.

We have to go to the Seventh Amendment because, like everybody agrees, there is no statutory right to a jury trial and so the question turns on if there is a right to a jury trial, it could be found only in the Seventh Amendment.

The first, and this Court has set out that that's a two-pronged test, look at the historical analog to see if this is more like an equitable or a legal action, and then turn to the more important issue, what are the types of remedies asked for in the case, the nature of those remedies and are they more legal or equitable in nature.

We say, turning to the first prong, that this, while not recognized in... at the time the Constitution and the Seventh Amendment was enacted... the duty of fair representation action was not recognized then... that the duty of fair representation action does have its origin in the traditions of equities law trust.

And we have discussed that our brief... in our briefs at some length, how the union in a duty of fair representation case is much like a trustee situation that was found prior to the enactment of the Seventh Amendment.

A union, like a trustee, is given discretionary power to be exercised for the benefit of certain employees.

In Steele v. L&N Railroad, this Court recognized that the union, like a trustee, must act on behalf of these employees non-arbitrarily, must act in good faith.

The relationship that we find between a union and the employees that it represents is very much like that between a trustee and beneficiaries that it represents.

The union has broad discretion, just like a trustee has broad discretion.

The trustee, or a union, can represent employees or beneficiaries with divergent, even conflicting interests.

That's unlike the lawyer/client relationship where the client controls and tells the lawyer what he has to do and can withdraw, have other counsel, if he does not like what the attorney is doing.

With a union, an employee cannot insist that the union take any specific action.

It... the union, like a trustee... has discretion to decide itself what to do.

And as long as it stays within the certain bounds allowed by the courts in that discretion, the employee cannot force the union, just like a beneficiary could not force a trustee to take any particular action.

Thus, we say that the duty of fair representation action is very similar to the trust action which was found prior to the enactment of the Seventh Amendment, and it's clear that those trust actions were developed solely in equity, that they were not recognized in law courts.

And we say that, therefore, if you look at the nature of the duty of fair representation action, it is most like that trust analogy and it's thus equitable.

That's particular seen in the sort of hybrid action that we have here where a union is sued by an employee who claims that the union did not take some action properly and at the same time the employee claims the company that it... is its employer also acted improperly.

That is very similar to the old trust actions where a... an... a beneficiary of a trust would say the trustee should have taken some action against a third party but... and it was an abuse of its discretion, the trustee's discretion, not to take that action.

And, therefore, in equity courts... not in law courts, could not do it there... but in equity courts the beneficiary would go in and say to the court, the trustee has acted improperly in not taking this action against the third party, and the third party has acted improperly.

Give me a remedy against them.

That is something that it is clear could not be done in law courts.

Unknown Speaker: What sort of a remedy would the chancellory court give in that situation?

Mr. James: In that situation it was not unusual for the equity court to give money damages as a remedy.

It was... they could give the traditional equitable remedies also, but they also gave money damages against a trustee.

And we've cited some cases and cited some authorities about that so that if actions of the third party were harmful to the beneficiary, caused it to lose some money, and because of running the statute of limitations or some reason that money could not be recovered from the third party, it could be recovered from the trustee.

Or, it could be recovered from both.

But, in any case, it was a money damage recoverable in equity.

Unknown Speaker: Yes, but is... aren't those cases in which, had the trustee acted properly in the first instance, the trustee would have recovered money damages in a jury trial from the... from the third party?

Mr. James: No, they don't... you don't... if the beneficiary in that situation wanted to... thought that the trustee had not acted properly, he couldn't go to the law court.

He couldn't--

Unknown Speaker: The beneficiary couldn't.

But I'm assuming a case in which the third party caused some injury to the trust, embezzled some money or something like that, for which the trustee, suing on behalf of the trust, would have had a remedy at law.

There would be such--

Mr. James: --There are cases where the trust would have a remedy at law, yes.

Unknown Speaker: --Which would be something like... sort of like a derivative suit where it--

Mr. James: It's not like a derivative suit.

Unknown Speaker: --Well, that the corporation might have a remedy at law and the shareholder in... before the merger of law and equity, and all the rest, the shareholder could have had, you know, had an equitable proceeding which would have brought something comparable to the damages that you describe here.

Mr. James: Let me tell you why I think it's not the same.

Unknown Speaker: Because I know perfectly well--

Mr. James: Is that in those shareholder derivative suits you had basically the shareholder standing in the shoes of the corporation asserting the corporation's claim.

Here, this is not a claim of the trustee.

These are rights that the beneficiary claims it has.

If... if there is a recovery, it doesn't go to the corporation, like in the shareholder's derivative action.

It goes directly to the beneficiary.

And in those shareholder derivative actions, they came about, as this Court explained in Ross v. Bernhard, because of procedural problems that they could not be brought in the law court.

And so... but that procedural problem is not here.

The law courts didn't recognize the beneficiaries' rights at all.

Unknown Speaker: --Well, but there is an analogy in this sense.

That the member of the labor union may not directly sue the employer because of the collective bargaining agreement there.

So he has to really basically... basically has to rely on the union as the intermediary to process grievances and all of that.

Mr. James: But he doesn't stand in the shoes of the union the way he does in a shareholder's derivative suit, because in a shareholder's derivative suit he stands in the shoes and he recovers a benefit for the corporation.

Here, he doesn't stand in their shoes.

He recovers a benefit for himself and in fact can recover it directly from the union.

In a shareholder's derivative suit--

Unknown Speaker: I understand.

Mr. James: --he wasn't getting it from the corporation.

That's why I think they are different.

And because the shareholder's derivative suit was this procedural device used by the equity courts to get to it... that's not a procedural device here.

This is just a pure equity claim against... against... like the equity claim like against the trustee.

Unknown Speaker: Mr. James, we're not talking about any tort-like recovery here, are we?

Are we only talking about giving to the union member a fixed monetary sum that would have been his but for the action of the union, or are we talking about some smart money against the union or some tort-like--

Mr. James: Well, I don't think we're talking about smart money.

That goes to the second prong of the test dealing with what remedy is available.

I think in this case that it is not a fixed set sum that is sought.

It is a sum that the court in its discretion can decide how much or how little to give.

Unknown Speaker: --Well, I know, but is it... well, but to make it really analogous to those trust actions don't you have to say that what this individual is getting is precisely what the union would have obtained had it acted... would have obtained on his behalf had it acted properly?

Mr. James: Well, I think--

Unknown Speaker: And that no element of it is... is a sort of tortious recovery against the union.

Mr. James: --Well, I think that if you look at the... the duty of fair representation actions, they talk in terms that you are to get only a make whole relief.

You are not to get something beyond what would make that employee whole.

You are not to recover... for instance, in Faust you do not recover punitive damages.

Unknown Speaker: Well, what does making whole consist of?

Does it consist of the... the employee's pain and suffering, his emotional upset at not... any of those elements ever included?

Mr. James: I would say that it does not.

This Court has not specifically passed on that issue, but I would say that it does not include those.

Unknown Speaker: It only consists of what he would have gotten from the employer had the union acted... acted properly?

Mr. James: And it may include some additional damages for legal fees and things like that to make him whole.

What he had to spend to get to... to get to that position.

That's what I'm talking about... about make whole relief.

The Respondents argue that Beacon Theatres and Dairy Queen and Ross v. Bernhard do say that these are legal issues, ultimate legal issues and that, therefore, this is a legal case.

I'd say that those cases do not say that.

They say that if there are purely legal claims that are being raised, then you cannot be denied your right to jury trial.

But we're--

Unknown Speaker: So, to prevail you really have to show that none of the claims in the case are triable by jury under the Seventh Amendment?

Mr. James: --I believe that's correct, Your Honor.

If they are legal claims triable to a jury, then... that those would... there would be a right to a jury trial under the Seventh Amendment for those.

But we assert they are not, these legal claims.

Of course, there's the two prongs.

The first prong would be not as important as the remedy section, but we think that under that first prong that these claims are purely equitable claims.

They were recognized only in the equity courts and not legal claims at all.

There are some factual inquiries that are found both in legal courts and equitable courts.

But when this issue is raised in the equitable court, the equitable court passed on those factual inquiries as the... factor... finders of fact.

And it was because the claim was purely an equitable claim that it had to do that.

Therefore, because we think those are purely equitable issues, we do believe that the first prong of the test, that the nature of the claim shows that there is no right to a jury trial.

Which leads us, then, to the second prong of the test which, of course, this Court has said is the more important, which is the nature of the remedies.

The only remedy sought here, which the plaintiffs claim is legal rather than equitable, is the back pay remedy.

There was a claim made for punitive damages, emotional distress damages, but that was dismissed by the trial court.

Those claims are not in this... found that those were not appropriate in duty of fair representation cases, and that is consistent with the decisions of this Court and other courts.

Unknown Speaker: xxx suit solely against the employer?

Suppose there was a breach of duty by the union and the employee thinks that the employer breached the contract but I don't want to sue the union, I'm just going to sue the employer.

And if he can prove a breach of duty by the union, the employer must respond.

Mr. James: That's correct.

I don't think the issues are--

Unknown Speaker: Then... then--

Mr. James: --are any different in that situation.

Unknown Speaker: --So you think that no jury trial then either?

Mr. James: No jury trial there either.

Unknown Speaker: Because of the... because you have to prove a breach of trust first?

Mr. James: You have to show the same breach of duty in that case that you do if you're suing the union.

The issues are identical in both cases.

Unknown Speaker: Well, I... I thought in trust law that if the... if the... if the beneficiary thinks the trustee hasn't acted properly and hasn't collected something from some third party he asks the trustee to sue and the trustee doesn't... says no, and he goes and sues the third party directly.

Mr. James: I believe he can.

Unknown Speaker: Yes, but he gets a jury trial.

Mr. James: No.

That... that is not my understanding.

If he is a beneficiary and he is suing claiming that there is a relationship between the trustee and this third party and the trustee isn't doing what he wants, he cannot go into the law courts and bring that.

He could only go into the equity courts and bring that action.

That's my understanding as it was back--

Unknown Speaker: And you say the same thing applies here, therefore, even if he sued the employer alone?

Mr. James: --Yes, I believe it does.

I believe since the issues that he would have to prove in both the suit against the company or against the union, or both, are the same, then the same rules would apply across the board.

The plain... the respondents in this case argue that the back pay is always legal.

That is, upon a proof of a breach of the duty that there is an automatic and mandatory requirement that they receive this back pay.

We say that that's just not true, that there is a discretionary element.

When they cite in their brief a quote that generally at equity, money judgments were allowed only when ancillary to traditional equity relief, we say, while that's generally true, it's not always true, and we've given you the specific example in the trust situation where money damages were recovered.

And that was recognized by this Court, I think, in Curtis v. Loether where it says that just because it's monetary damages you don't say that that always makes it legal relief.

So you have to look beyond the fact that it's money damages and look at those money damages and the nature of those damages to make this determination.

And on that the issue is, is there discretion in awarding these monetary damages or is there not?

If there's no discretion, then it's a legal type relief.

If there is discretion, it's equitable.

I think the respondents in their brief concede that that's the line, that that's the test to be followed.

And if you follow that test, you find that these... there is this discretionary element and thus these are equitable type remedies.

I think that most clearly can be seen by comparing the duty of fair representation remedies with those found... found in Title VII.

When you find Title VII, you find that those remedies are based upon the NLRA, the National Labor Relations Act, that there is a discretionary element in this damages.

This Court has held that there is that discretionary element.

Unknown Speaker: I suppose that in a suit against the union alone to prove a breach you don't have to prove that the employer breached a contract.

You just have to prove that the--

Mr. James: In this particular kind of duty of fair representation case you certainly do have to prove that the employer--

Unknown Speaker: --Well, yeah, you're--

Mr. James: --had breached the contract.

Unknown Speaker: --going to have to prove... you're going to have to prove the employer breached it in order to get... to get any--

Mr. James: Relief.

Unknown Speaker: --to get the damages... to get back pay--

Mr. James: That's correct.

Unknown Speaker: --or whatever you want to call it.

Mr. James: That's correct.

Unknown Speaker: But you can prove the duty, breach of the duty, without proving the breach by the employer.

Mr. James: My understanding of the breach--

Unknown Speaker: Because if... but if it's... but if it's a... if it's a case that should be then taken to arbitration, the union... and the union doesn't take it, the union's breached its duty, whether you... whether it turns out that an arbitrator would have held for the employee or not.

Mr. James: --Well, my reading of the cases says that you have to prove both of those things in this sort of situation before--

Unknown Speaker: Well, you can--

Mr. James: --you could recover.

Unknown Speaker: --Well, you're going to have to prove the breach by the employer to get--

Mr. James: Relief.

Unknown Speaker: --to get the kind of relief you want.

Mr. James: That's correct.

Back, just a minute, to the Title VII where this Court has held that those Title VII remedies are discretionary because they're based on the NLRA, and under the National Labor Relations Act remedies are discretionary.

In Phelps Dodge, this Court has said that they're not to be mechanically complied with, but are entrusted to the discretion of the NLRB.

Likewise, the duty of fair representation remedies are derived from the National Labor Relations Act.

This Court has held that the remedies in duty of fair representation cases must effectuate the policies under the Labor Act, just like in Title VII.

The remedies in Title VII are make whole remedies.

That's what you talked about in Albermarle Paper.

Here they're make whole remedies.

Unknown Speaker: Well, really, this kind of hybrid action isn't based on the National Labor Relations Act the same way that the ADA... the ADEA is.

I mean, it patterned after it... by statute.

Mr. James: Well, you talk in Faust, though, that the remedial policy... the remedies given under... for duty of fair representation breaches... must effectuate the policies espoused by the Act.

And I think that that, sort of by implication, does the same thing you found in Title VII.

Unknown Speaker: But all we held in Faust was that no punitive damages, wasn't it?

Mr. James: Yes, but in getting to that position you did talk about how the remedial policies... remedies available for DFR, duty of fair representation cases, must be such that effectuate the policies underlying the Act.

And you found that punitive damages did not effectuate those policies in that case.

Unknown Speaker: But we certainly didn't find that ordinary damages would not?

Mr. James: It wasn't presented in that case.

No, Judge, it has not.

The--

Unknown Speaker: Can you give me an example of... of where discretion would be exercised not to... not to give a--

Mr. James: --Well, there's a... there's a case cited in our brief called Navigation... American Navigation, or something like that.

It's an NLRB case.

And in that case, they found that the employer had violated... had committed an unfair labor practice but did not award back pay remedies to the employee because the employee in the midst of the compliance proceedings had lied, had said, well, we didn't work here or did work here.

Had lied about what money it had earned.

And so the board said, we're going to exercise our discretion.

We're going to deny you back pay relief in that situation.

Unknown Speaker: --And you think that in a... in a duty of fair representation case you could similarly not... not award any relief against... against the union on the basis of--

Mr. James: I believe that's true.

If you look at our brief, we talk at length about how the parties in these agreements really negotiate for a decision by an arbitrator and give an arbitrator wide discretion as to what relief is given.

It is not at all unusual for an employee who is discharged to go to arbitration and be found that the company has improperly discharged it.

But then be placed back at work without back pay.

It is not at all unusual to have that sort of remedy come in an arbitration proceeding.

If the idea is to make whole the employee, not give him a windfall, then I think that you have to look at what were the possible remedies he could get in an arbitrator's decision but for this DFR breach.

And if that's true, then there is this wide range of discretion given to arbitrators that I think carries over into the DFR area as well.

And because you have that wide range of discretion which is applicable not only to the arbitrator's decision, not only applicable for the board, but also by the courts in the duty of fair representation area, the remedy, the nature of the remedy, is an equitable remedy and not a legal remedy.

When you take that prong, the stronger of the two prongs, and it clearly says that the remedies are equitable, and attach it to the first prong which says that the nature of the action was basically an equitable... like an equitable... not exactly the same, but like the old trust action... then I conclude that the action here, the duty of fair representation action in this sort of hybrid situation, is an equitable action, does not call for a jury trial under the Seventh Amendment, and that the district court was incorrect below when they denied our motion to strike their jury trial demand.

Unknown Speaker: --May I ask one question, Mr. James?

I'm just not... just to show my ignorance.

But, just as a general practice in this kind of litigation, have there been a fair number of jury trials or... are these cases often tried to juries?

Mr. James: I think it would be fair to say there often have been jury trials in these areas in the past.

Unknown Speaker: Thank you.

Mr. James: And, as you would see from the cases cited, it's slowly building through the circuit.

Some say yes, some say no.

Unknown Speaker: There are different... different views among the circuits.

Mr. James: That's right.

Unknown Speaker: Yeah.

Mr. James: If you have no further questions, I'll just reserve the remainder of my time.

Thank you.

Unknown Speaker: Thank you, Mr. James.

Mr. Elliot, we'll hear now from you.

Argument of Robert M. Elliot

Mr. Elliot: Thank you, Mr. Chief Justice.

May it please the Court:

The question in this case is whether there are legal issues and remedies involved in this case which must be tried before a jury.

If there are, this Court has said in its past decisions, that the Seventh Amendment applies and that my clients, or respondents, are entitled to a jury trial.

Now, in response... or in his argument, the petitioner states, or tries to wrap the entire action in a trust cloak, so to speak, and tries to say that because this action has some resemblance to a trust, that that analogy should pervade the entire analysis and go off over to the second prong of the Ross test.

And, therefore, since there maybe some resemblance to a trust, that the remedy sought in this case should be considered trust remedy.

We contend that that analogy does not fit for a number of reasons.

It's important to remember at the outset that in this case are talking at this point in time about an action against the union alone.

The company is bankrupt and we have an action against the union saying that the union breached its duty of fair representation and as a result, a direct result of that breach, we have lost the opportunity to earn wages.

Compensatory... traditional compensatory monetary relief.

In... I would like to begin with--

Unknown Speaker: How much are you going to ask for?

How are you going to measure your damages?

Mr. Elliot: --Our damage will be... damages will be measured by what these respondents would have made in... in their wages if they--

Unknown Speaker: Back pay.

Essentially back pay.

Mr. Elliot: --if they had been successful in arbitration.

Yes, sir.

Unknown Speaker: But no... no other damages and no punitive damages?

Mr. Elliot: At this point there are no other damages involved.

There are some moving expenses which may classify as compensatory relief as well.

Unknown Speaker: If the employer had not been bankrupt and had still been in the suit, would our analytic problem here today be the same?

Mr. Elliot: I think the answer should be the same.

But perhaps it's not quite as clear.

In a case against the union, this more clearly can be analogized to a legal malpractice case because we have no company to pay the damages and we're going against the union, and that's where the focus is.

Unknown Speaker: Well, why wouldn't... if the employer were here, why wouldn't it just be a breach of contract case?

Mr. Elliot: Well, that... one side of the Vaca standards would be satisfied by a breach of contract issue.

And there is clearly a legal issue there.

The--

Unknown Speaker: I'm not sure how it changes just because the employer is either here or not here.

Mr. Elliot: --The only way it changes... I don't think it really changes the constitutional analysis.

But it does change the analogy to some extent because since we are suing the union only in this case at this point in time as a representative, then it's more analogous to a legal malpractice case where you are suing the lawyer for failing to represent you before a court or an arbitration panel.

And our damages all flow in this case, at this point in time, from the breach of the union agent in failing to represent us.

And since we are not suing the company at this time, our damages are not flowing from the actual breach of contract.

I would like to set out some of the facts before I get too far along.

But before I do so, I think it's important to keep in mind, especially in considering this trust analogy, the various roles that a union plays as an agent of its members.

It's not always in this, quote, "trustee's discretionary role".

Obviously, as a negotiator in negotiating a collective bargaining agreement, a union is playing a role that requires expertise and requires a great deal of discretion in considering all aspects of the labor management relationship.

Unknown Speaker: That's all very true, but the only... the only element of the union's role at issue in this case is its... is its obligation fairly to represent its employees.

Mr. Elliot: That's my point, Your Honor.

My point is that in this case we're not talking about a great discretionary duty.

We're talking about an absolute duty to these union members to represent them on a grievance, which is a duty much more akin to the duty of a lawyer than it is to the duty of a trustee.

The facts bear this out.

The essence of our case is discrimination.

The change of operation procedure was designed to allow my clients the right to follow their work to Winston-Salem.

At the time they followed their work they were supposed to have some seniority preferences because they were following their work, theoretically.

The order of recalls and layoffs after that were in direct violation of that procedure which had been devised by the collective bargaining procedure.

At that time we have alleged that the union, in direct discrimination or blatant discrimination against my clients, sided with the locals, the local inactive people who had been off the board, to try to bring them back on the board, at which time they would dovetail in my clients seniority.

Unknown Speaker: What is the... what is the board, Mr. Elliot?

Mr. Elliot: The... the active employment.

The active board in this case would be the list of truck drivers who were actually getting calls.

According to the change of operations procedure, my clients were supposed to have seniority over the people who were actively working... I mean, over the people who were not actively working, regardless of their continuous company seniority when they came in.

We have contended that the union in this case discriminated, that they sided with the locals to try to get the locals back on the board... the active employment... so that they would all dovetail and my clients would lose their rights.

That was the first aspect of our case, and everything... flowed from there.

Then the first decision was decided, which decided exactly that.

The order of recalls had been a violation, and a clear violation, of the change of operations procedure in the contract even though the union... the union had gone along with that... that interpretation and that order of recall.

And the grievance committee found it was a clear violation.

A week later the union and the company got together and decided that we are going to do exactly what the decision said, we're calling back the... the foreign drivers... my clients who were laid off in direct violation of the agreement.

We'll call them back... that's 30 drivers... and we're going to lay off the 30 local drivers who had not been active.

Unknown Speaker: What's this got to do with the issue we've got to--

Mr. Elliot: Well, Your Honor, the point I'm trying to get to is... is that at that point in time the union played a role as lawyer.

It accepted a grievance that this was a subterfuge and that this was a circumvention of the decision.

And from then on, it took that grievance to the grievance committee and we say acted perfunctorily in representing our clients on that grievance because--

Unknown Speaker: --Sometimes the trustee has to play a role as lawyer... I mean, when he has a claim on behalf of the trust against someone that he fails to prosecute, either by prosecuting it himself if he's a lawyer, or hiring a lawyer, you have a cause of action against the trustee, but it's purely an equitable cause of action.

Mr. Elliot: --I think in that case the trustee would have to get a lawyer, and the trustee would not be acting in the role of the lawyer but in the role of a client.

Unknown Speaker: Well, that may well be, but you'd still... the decision of whether to prosecute or not is a decision of the trustee and he'd be... he'd be suable in equity.

Mr. Elliot: That... that is--

Unknown Speaker: If the lawyer did a bad job in prosecuting this suit, I guess that... you might have a malpractice action against him, although I'm not sure that that wouldn't have to be brought in equity too.

But the problem here is not that he was a bad lawyer.

The problem is he didn't bring a lawsuit.

Mr. Elliot: --He did bring the lawsuit, Your Honor.

He... he filed a grievance on my clients' behalf, that the actions of the company and the union a week after the first decision was a subterfuge.

And that's the words that are used.

It had circumvented the decision because it had just turned everything right where it was before the decision applied.

At that time he filed the grievance.

Unknown Speaker: The employer was entitled, under his contract, the collective bargaining contract, the employer was entitled to rely on the decision of the arbitrator or the arbitrating... whoever it was that decided the grievance... unless the union breached its duty.

And if the union breached its duty, then the employer could not rely on his... could not rely on the board's decision.

Isn't that right?

Mr. Elliot: Yes, sir.

Unknown Speaker: Now, you say that that a... if you're going to set aside a contract, isn't that sort of an equitable action?

Mr. Elliot: Your Honor, we're not trying to set aside anything in this case.

We're suing the union directly for--

Unknown Speaker: Well, I know.

Mr. Elliot: --for its breach.

Unknown Speaker: Yeah, yeah.

I know.

I know.

But the employer... to stick the employer, you've got to prove a breach by the union and you say that... that the union's duty is... should not be analogized at all to a trust operation, to a trustee.

It should be analogized to a... to a--

Mr. Elliot: Lawyer.

Unknown Speaker: --to a lawyer.

Mr. Elliot: In that respect.

Now, you know... and there are other... there are certainly other characteristics of this action which are not so close to a lawyer, and I'm not denying that.

But I'm just saying that's probably the best common law analog to the case in its posture before the Court at this time.

But there are several other reasons the trust analogy does not fit.

Trust, as I understand it, was created by the courts of equity because courts of law did not recognize the distinction between legal and beneficial title.

Therefore, beneficiaries... beneficiaries had no rights before courts of law and the re... courts of equity recognized rights... that there was no adequate remedy at law.

So these trusts... beneficiaries had to go to courts of equity.

There's no property in this case.

And that was it... an absolute essential element of a trust, that there be a corpus.

Now the petitioner tries to argue that the contract rights was property in this case.

But I'd contend that the only thing about this case that resembles the trust relationship is the relationship itself.

And that relationship is recognized and was recognized at law just as well as it was at equity.

It's... it's the confidential relationship between these parties.

It's no different from the relationship between the director in the corporation in Ross... there's no difference between that relationship and the relationship we have here.

And if the only thing that resembles a trust is the relationship which was also recognized at law, the trust analogy loses... loses its force, its persuasive force.

That relationship, as this Court found in Ross, could be the focus of an illegal action.

In Ross the case... the legal issues that were found were negligence and breach of contract by a director who owed a fiduciary duty to his corporation.

Another issue was breach of fiduciary duty.

So, the union membership... the union member relationship in this case does not magically convert this action to a trust action any more than the director's relationship did in Ross.

Even beyond the derivative stockholder standing issue, the relationship itself is the same.

Going to the second part of the Ross test, the nature of relief, in this Court's... it's clear that this Court has recognized on a number of occasions that, generally speaking, monetary relief is traditional legal relief because there was an adequate remedy at law.

And that's what we have here in DFR actions.

But more importantly, when this Court has been... has decided cases involving statutory rights to a jury trial, the Court has looked at statutory intent on the specific statute at issue, such as Title VII or the ADEA in the Lorillard case.

We contend that in deciding the issue in this case there is no statutory intent because it's a judicial action.

But this Court should look at the judicial common law, the federal common law which has evolved over the years in DFR actions.

And that... the number of decisions decided by this Court in the DFR... 301 DFR area indicates that this... that monetary damages is a form of legal relief.

Even the Steele case said that.

The Steele decision, while saying it was a grant of power to act on behalf of another... which inferred some relationship not necessarily trust, Steele also said that the full range of judicial remedies should be available to a victim of the breach of duty of fair representation, including injunction and damages.

The Vaca court underscored that in talking about the compensation principle.

The Faust court, while striking punitive damages, again emphasized the compensation principle and the very distinction between this kind of action and the action before the NLRB on an unfair labor practice.

That this type of action that's involved is focused on the individual, the private right of the individual.

And I believe this Court underscored that principle once again in its decision yesterday in the Breininger case, that there are two different types of actions, two different sets... at least, to some extent, two different sets of policies and two different sets of rules because one was created or implied... or one was recognized by the board according to a statute and the other was recognized by this Court and implied... developed by this Court.

And in the Faust case I think it becomes even clearer in the concurring opinion by Justice Blackmun.

Justice Blackmun stated, along with three other members of this Court, that punitive damages... there should be no per se rule against punitive damages because Steele recognized the full range of judicial remedies.

And that should include punitive damages.

Now, this Court, as a matter of federal labor policy, the majority decided to strike punitive damages at least in that kind of action.

But the fact remains that while limiting the range of remedies, this Court has always at least implicitly recognized that we're dealing with legal relief.

And for that reason, this case is very distinguishable from the Title VII case and the cases under the NLRA.

The last point I'd like to make on the second part of the Ross test is that the other theories on which back pay in various types of actions has been found to be equitable relief has to do... is whether it's restitutionary, whether it's ancillary to or incidental to equitable relief or whether specific performance.

As Justice Marshall I think stated in Curtis, for the same reason restitution was not an appropriate theory in that case, it's not in this case.

This... this... we're not trying to discourage the company or the union from any kind of unjust enrichment.

We're not trying to follow money.

We're trying to seek compensation for what we've lost.

In conclusion, we contend that these individuals who've alleged that their union sold them out in effect, and discriminated against them in favor of the other members, have a right to a jury trial on this case which presents legal issues and monetary relief.

Unknown Speaker: Could you... you mentioned at the outset that part of your claim includes moving expenses.

Mr. Elliot: Yes, sir.

Unknown Speaker: What... what do they consist of?

Mr. Elliot: According to the change of operations procedure, Justice Scalia, our clients were moved into Winston-Salem.

The company picked up some of those expenses but our client picked up the rest of them in moving their family and reestablishing themselves in a new location.

Unknown Speaker: But they would have been moved anyway.

I mean, how can you get both the wages and the moving expenses?

Aren't the two inconsistent?

If you would have gotten the wages, you would have incurred the moving expenses.

Mr. Elliot: Well, that... that's correct.

There is... there is some inconsistency there.

We have asked for those expenses.

At this point... you know, even in view of the district court's ruling on our other compensatory relief, those claims are still viable.

Thank you.

Unknown Speaker: Thank you, Mr. Elliot.

Mr. James, you have six minutes remaining.

Rebuttal of J. David James

Mr. James: We did not seek to have that claim for moving expenses struck at the same time we did emotional distress damages and punitive damages.

In hindsight, we should have.

It was just one of those things.

We never could understand that claim, and we always thought it was inconsistent.

They never said it once before, and so we didn't make that motion at that time.

But I think he's right, it is inconsistent.

I've never understood.

There's no contract breach about that.

They got what the contract was... required about the moving expenses, and so I've always ignored that in this case.

I do want to say that we think that the trust analogy is much more apt than the legal malpractice analogy principally because of the discretion given the union to act on behalf of these employees.

An attorney does not have that discretion.

It... an attorney cannot represent conflicting views.

A union does do that all the time and so did a trustee who had beneficiaries with conflicting interests, directly conflicting.

And that's why we say that the trust analogy is more apt in this case than is that legal malpractice action.

In fact, a union doesn't have any duty to file the grievance.

If it files it, it doesn't have to take it to arbitration.

it can even refuse to take something to arbitration because it's too costly if in its exercise of discretion yet in good faith determines that for the best interests of everyone in that group this grievance should not be taken to arbitration.

An attorney doesn't have that.

He can't make that choice.

He's specifically prohibited from making that--

Unknown Speaker: Well, an attorney's duty is the standard of care.

Mr. James: --That's correct.

Unknown Speaker: But the trustee has a similar duty.

He really wears two hats.

Mr. James: The trustee's duty is somewhat different than... than the... than the attorney's.

I've seen someplace... some people call it the standard of conduct rather than the standard of care.

That doesn't help me a whole lot to understand the difference.

But with a trustee and with a union, they have this discretion... discretion of whether they should bring this claim or not.

If a client comes to an attorney and employs and attorney and says, I want you to bring this claim, and the attorney just doesn't, well, he breaches his standard of care.

He can't make that decision.

The union can make that decision.

The trustee can make that decision.

That's why we think that analogy is more apt.

It's also... the rights of the employee in this case are not equal to simple contract rights against the employer.

The employee must rely upon the union, like a beneficiary must rely upon the trustee.

And the rights the employees have are like the rights beneficiaries have.

That is, they come from this trust relationship.

All of that leads us to conclude that this is more analogous to the trust situation.

Finally, just one point.

In talking about whether the... he mentioned in Ross how there was a claim of a breach of fiduciary duty there.

This Court specifically reserved the question and did not say that... whether that had a right to a jury trial on that issue or not.

The only issues in Ross that it found it... was a right to a jury trial were the clearly legal issues.

And as we've said, these are not those clearly legal issues.

Thank you very much.

Chief Justice Rehnquist: Thank you, Mr. Elliot.

The case is submitted.

Print this transcript Transcript: 

Argument of Justice Marshall

Mr. Marshall: In the other case, Teamsters and Helpers Local No. 391, we hold that an employee who seeks relief in the form of backpay for a union’s alleged breach of its duty of fair representation is entitled under the Seventh Amendment to a jury trial.

We therefore, affirm the judgment of the Fourth Circuit.

Justice Brennan has filed an opinion concurring in part in 1, 2, 3B, and 4, and concurring in the judgment; Justice Stevens has filed an opinion concurring in all but part 3A and concurring in the judgment; Justice Kennedy has filed a dissenting opinion in which Justices O’Connor and Scalia have joined.