United States District Court, D. Columbia.
DISTRICT OF COLUMBIA NURSES ASSOCIATION, Plaintiff: H. David
Kelly, Jr., Jonathan G. Axelrod, LEAD ATTORNEYS, BEINS,
AXELROD, P.C., Washington, DC.
OPINION & ORDER
BATES, United States District Judge.
District of Columbia Nurses Association, a labor
organization, has brought this action against Herman Brown,
its former Executive Director, alleging that Brown breached
his federally codified fiduciary duties to the Association
when he made unauthorized loans of its funds to himself and
two other officers. See Compl. [ECF No. 1] PP 17-18. Brown
filed a motion to dismiss, asking the Court to compel
arbitration of this dispute based on the Association's
" past practice, policy and procedures." Def.'s
Mot. to Dismiss [ECF No. 6]. Before addressing Brown's
motion, however, the Court asked the parties to submit
supplemental briefs on the issue of its subject-matter
jurisdiction. See May 19, 2015, Order [ECF No. 11]. The Court
now concludes that it has subject-matter jurisdiction over
the Association's suit, and will deny Brown's motion
Association brought this action under Section 501 of the
Labor-Management Reporting and Disclosure Act of 1959,
codified at 29 U.S.C. § 501. See Compl. P 1. Section
501(a) codifies the fiduciary duties that the "
officers, agents, shop stewards, and other representatives of
a labor organization" owe to their organization and its
members. Section 501(b) is titled : " Violation of
duties; action by member after refusal or failure by labor
organization to commence proceedings; jurisdiction; leave of
court; counsel fees and expenses." (emphasis added). It
provides that, when an officer of a labor organization is
alleged to have violated the duties in Section 501(a), "
and the labor organization or its governing board or officers
refuse or fail to sue or recover damages or secure an
accounting or other appropriate relief within a reasonable
time after being requested to do so by any member of the
labor organization, such member may sue . . . in any district
court of the United States or in any State court of competent
jurisdiction" to secure relief for the benefit of the
501's language clearly contemplates that a federal action
may be brought by a union member, subject to certain
procedural prerequisites. But courts have divided over
whether it also allows for a suit by the union itself.
Compare Bldg. Material & Dump Truck Drivers, Local 420 v.
Traweek, 867 F.2d 500 (9th Cir. 1989) (union cannot sue
in federal court), with Int'l Union of Operating
Eng'rs, Local 150 v. Ward, 563 F.3d 276 (7th Cir.
2009) (union can sue in federal court), and Int'l
Union of Elec., Elec., Salaried, Mach. & Furniture Workers v.
Statham, 97 F.3d 1416 (11th Cir. 1996) (same). Perhaps
unsurprisingly, given that Section 501(b) in its title
addresses itself in part to " jurisdiction," the
courts grappling with this issue have often considered it to
be one of subject-matter jurisdiction. In Traweek, for
example, the Ninth Circuit concluded that it lacked
subject-matter jurisdiction over a Section 501 claim brought
by a union. 867 F.2d at 505-07. Earlier this year, a court in
this district did the same. See Int'l Union, Sec.,
Police and Fire Prof'ls. of Am. v. Faye, 115
F.Supp.3d 40, 2015 WL 4450119, at *2, 5 (D.D.C. July 16,
2015), appeal docketed, No. 15-7084 (D.C. Cir. Aug. 18,
approach, however, is inconsistent with Supreme Court
precedent that carefully distinguishes the existence of
subject-matter jurisdiction from the scope and validity of a
plaintiff's cause of action. See, e.g., Arbaugh v. Y&
H Corp., 546 U.S. 500, 510-16, 126 S.Ct. 1235, 163
L.Ed.2d 1097 (2006); Verizon Md. Inc. v. Pub. Serv.
Comm'n of Md., 535 U.S. 635, 642-44, 122 S.Ct. 1753,
152 L.Ed.2d 871 (2002). " Jurisdiction refers to a
court's adjudicatory authority." Reed Elsevier,
Inc. v. Muchnick, 559 U.S. 154, 160, 130 S.Ct. 1237, 176
L.Ed.2d 18 (2010) (internal quotation marks omitted). The
court's adjudicatory authority extends to " all
civil actions 'arising under' the laws of the United
States." Arbaugh, 546 U.S. at 503 (quoting 28
U.S.C. § 1331). Of course, Congress may exclude from
this broad grant of authority certain categories of cases
that would otherwise fit within it. See Verizon, 535
U.S. at 643-44. But absent some statutory exclusion, district
courts have subject-matter jurisdiction over any case where
" the right of the [plaintiffs] to recover under their
complaint will be sustained if the Constitution and laws of
the United States are given one construction and will be
defeated if they are given another, unless the claim clearly
appears to be immaterial and made solely for the purpose of
obtaining jurisdiction or where such a claim is wholly
insubstantial and frivolous." Steel Co. v. Citizens
for a Better Env't, 523 U.S. 83, 89, 118 S.Ct. 1003,
140 L.Ed.2d 210 (1998) (internal quotation marks and citation
omitted). As long as the complaint raises a federal question,
then, " the absence of a valid (as opposed to arguable)
cause of action does not implicate subject-matter
jurisdiction." Lexmark Int'l, Inc. v. Static
Control Components, Inc., 134 S.Ct. 1377, 1388 n.4, 188
L.Ed.2d 392 (2014) (internal quotation marks omitted). Thus,
inquiries about " whether the statute at issue confer[s]
a 'cause of action' encompassing 'a particular
plaintiff's claim'" go, not to subject-matter
jurisdiction, but rather to the merits. United States v.
Emor, 785 F.3d 671, 677 (D.C. Cir. 2015) (quoting
Lexmark, 134 S.Ct. at 1387).
Court has subject-matter jurisdiction over this suit whether
or not Section 501 affords the Association a private right of
action. The Association's right to recover depends upon
whether Section 501 gives unions the right to sue, and the
answer to that question depends upon the construction of a
federal statute. Hence, the Association's suit arises
under federal law. See Steel Co., 523 U.S. at 89-90. And
although Section 501(b) employs the word "
jurisdiction" in its title, it does not evidence
Congressional intent to exclude a category of cases from the
Court's subject-matter jurisdiction under 28 U.S.C.
§ 1331. " Jurisdiction . . . is a word of many, too
many, meanings," Steel Co., 523 U.S. at 90
(internal quotation marks omitted), and thus " even a
statutory provision that uses the word 'jurisdiction'
may not relate to 'subject-matter
jurisdiction,'" Verizon, 535 U.S. at 644
(describing analysis in Steel Co., 523 U.S. at
90-91). By addressing itself to who may bring an action and
when they may do so, Section 501(b) " reads like the
conferral of a private right of action,"
Verizon, 535 U.S. at 644, speaking more to the
rights of the parties than to the Court's authority, see
Reed Elsevier, 559 U.S. at 160-61.
the Court concludes that it has subject-matter jurisdiction
over this case. Although the parties disagree about whether
the Association has a valid cause of action under Section
501, that issue is non-jurisdictional in nature and has not
been properly raised by motion at this time. The Court,
therefore, will refrain from resolving it now, and will turn
instead to Brown's motion to dismiss.
(one sentence) motion requests " an order dismissing
this action pending arbitration and compelling [p]laintiff to
proceed to arbitration pursuant to an arbitration policy at
[the D.C. Nurses Association]." Def.'s Mot. at 1.
Brown has not submitted any documentary evidence with his
motion. Nonetheless, he asserts that the Association's
" past practice, policy and procedures" support his
request for arbitration.
[T]he first task of a court asked to compel arbitration of a
dispute is to determine whether the parties agreed to
arbitrate that dispute." Mitsubishi Motors Corp. v.
Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626, 105
S.Ct. 3346, 87 L.Ed.2d 444 (1985). " [A] party cannot be
compelled to arbitrate any matter in the absence of a
contractual obligation to do so." Wolff v. Westwood
Mgmt., LLC, 558 F.3d 517, 520, 385 U.S.App.D.C. 1 (D.C.
Cir. 2009) (internal quotation marks omitted). When
determining whether such a contract exists, " 'the
appropriate standard of review for the district court is the
same standard used in resolving summary judgment motions'
pursuant to Federal Rule of Civil Procedure 56(c)." See
Haire v. Smith, Currie & Hancock LLP, 925 F.Supp.2d
126, 129 (D.D.C. 2013) (quoting Aliron Int'l, Inc. v.
Cherokee Nation Indus., Inc., 531 F.3d 863, 865, 382
U.S.App.D.C. 134 (D.C. Cir. 2008)). " Arbitration shall
be compelled if there is no genuine issue of fact concerning
the formation of the agreement to arbitrate." Hill
v. Wackenhut Servs. Int'l, 865 F.Supp.2d 84, 89
(D.D.C. 2012) (internal quotation marks omitted); see also
Bailey v. Fed. Nat'l Mortg. Ass'n, 209 F.3d
740, 746, 341 U.S.App.D.C. 112 (D.C. Cir. 2000) (" [T]he
party asserting the existence of a contract has the burden of
proving its existence." ).
has come forward with no evidence suggesting that he and the
Association agreed to arbitrate the issues underlying this
case. The Association, on the other hand, has supplied some
evidence indicating that no relevant agreement, practice,
policy, or procedure exists. See Aff. of Edward Smith [ECF
No. 10-1] PP 3, 7; Ex. 3 to Pls.' Resp. [ECF No. 10-3].
The Court, therefore, has no basis on which to conclude that
the Association agreed to arbitrate this dispute, and "
a party cannot be compelled to arbitrate any matter in the
absence of a contractual obligation to do so."
Wolff, 558 F.3d at 520. In short, Brown has failed
to carry his burden of showing the existence of an agreement
opinion does not decide whether the Association has a valid
cause of action under Section 501. If Brown wishes to argue
that it does not, he should file a motion consistent with
Federal Rule of Civil Procedure 12(h)(2) by not later than
February 1, 2016. See DSMC, Inc. v. Convera Corp.,273 F.Supp.2d 14, 23 (D.D.C. 2002) (" Rule 12(h)(2) does
allow a motion for judgment on the pleadings that asserts the
defense of failure to state ...