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  CHARLES A. THOMAS, et al.,
v. No. 93-7613 NORTH STAR STEEL COMPANY, INC.,
Our opening brief demonstrated that appellee North Star Steel Company had failed to show any basis for departing from the normal rule that establishes a strong presumption, in labor law and elsewhere, that limitations periods for suing under federal statutes are borrowed from state law. As we explained, North Star has satisfied neither prong of the exception to this presumption -- (1) a federal limitations period must clearly provide a better analogy than any of the state law options, and (2) given the practicalities of litigation, adoption of a state law period must significantly interfere with the federal policies at stake -- even though both must be shown in order for North Star to prevail. Neither North Star nor its amicus curiae is able to respond to this presumption; instead, their briefs are replete with arguments that either ignore the existence of the presumption, or apply the exception in so expansive a manner that it would necessarily replace the presumption with a rule under which federal limitations periods would be borrowed in most cases, in labor law and elsewhere. After showing that most of appellee's arguments suffer from this fundamental flaw, this reply brief points out the other defects in its arguments. 1. North Star's Arguments Would Eviscerate the Presumption in Favor of Borrowing Limitations Periods from State Law. Although the Court in DelCostello v. Teamsters, 462 U.S. 151 (1983), borrowed a federal limitations period to govern hybrid actions seeking to enforce the duty of fair representation ("DFR") and section 301 of the Labor-Management Relations Act ("LMRA"), the Court has been careful to emphasize that this holding represents a "narrow exception to the general rule" requiring the borrowing of limitations periods from state law. Reed v. UTU, 488 U.S. 319, 324 (1989): As we made clear in DelCostello, "in labor law or elsewhere," application of a federal statute will be unusual, and "resort to state law remains the norm for borrowing of limitations periods." Id., quoting 462 U.S. at 171. This Court, too, has emphasized that borrowing from federal law should occur only in "exceptional" situations. National Iranian Oil Co. v. Mapco Int'l, 983 F.2d 485, 493 (3d Cir. 1992); Gomez v. Government of Virgin Islands, 882 F.2d 733, 736 n.6 (3d Cir. 1989) In order to ensure that borrowing from federal law would remain a narrow exception, the Supreme Court requires the proponent of federal borrowing to meet two separate tests -- first, "a rule from elsewhere in federal law [must] clearly provide[] a closer analogy than available state statutes," and second, "the federal policies at stake and the practicalities of litigation [must] make the rule a significantly more appropriate vehicle." DelCostello, 462 U.S. at 171-172 (emphasis added). Moreover, a "compelling demonstration" must be made of the practicalities and policies that warrant departure from the normal rule of state borrowing. Reed, 488 U.S. at 327 (1989). Indeed, in Reed, the Court upbraided the lower courts because they had "fail[ed] to take seriously our admonition" in this regard. Id. North Star is able to present a superficially cohesive brief supporting the decision below only by failing to take the Supreme Court's admonition seriously. For example, on the first prong of the exception, North Star and its amicus repeatedly assert that their chosen federal law period provides a "closer" analogy than various state limitation periods, or is "most analogous." North Star Br. at 10, 35, 37, see also captions at 9, 10; Chamber Br. at 3, 5. Rather than trying to demonstrate, as they must, that the National Labor Relations Act ("NLRA") provides a claim that is "clearly" closer to the WARN cause of action than any state law category of claims, North Star simply places all of the possible analogies in a pot and tries to show that none of the state analogies is perfect and that the NLRA is closer than any alternative. But if this were the test, there would no longer be any presumption in favor of borrowing from state rather than federal law, let alone the strong one established by the Supreme Court.(1) Similarly, in applying the second prong of the test, the arguments of North Star and its amicus would, if accepted, obliterate the general rule and require that limitations period always be borrowed from federal law. For example, they argue that employers that operate in several different states could be inconvenienced in making nationwide decisions that could lead to layoffs in several different states, unless a single limitations period were applied to all of its operations. North Star Br. at 29-33; Chamber Br. at 8-9. But by their very nature, if not the constitutional imperative of the commerce clause, federal laws apply to national entities that operate in different states. Different states regularly differ in the amount of time they allow for bringing the same type of claim, and yet state statutes of limitations are routinely borrowed for federal claims against defendants who operate in more than one jurisdiction. Only by choosing federal statutes could the Court ensure that claims under a particular federal statute always expire in the same amount of time regardless of the jurisdiction in which the violation was committed or in which the plaintiff lives. But such a strong presumption in the direction of borrowing from federal law would stand on its head the repeated statements by this Court and the Supreme Court, in labor law as in other areas of the law, that borrowing from state law is the norm, and borrowing from federal law the rare exception. North Star's "uniformity" argument does not serve to distinguish the WARN cause of action from most federal causes of action, or to show why this case warrants the application of the exception rather than the general rule. It is, at best, an argument for changing the presumption that should be presented to the Supreme Court or to Congress.(2) Similarly, North Star's argument based on the practicalities of litigation is replete with lamentations about the possibility that, under a two or three year statute of limitations, evidence may disappear, potential plaintiffs may be harder to find to give them their damages, parties may be harder to serve, and the like. Again, even assuming that this is a serious problem, it affects most federal causes of action to which the DelCostello presumption nevertheless applies. Its invocation does not help distinguish between those federal causes of action that ought to follow the normal rule of borrowing from state law, and those which ought to be brought within the exception. Indeed, only two "practicalities" are held by this Court or the Supreme Court to be sufficient to warrant departure from the normal rule of borrowing from state law -- the prospect of lengthy wrangling over the proper limitations periods to be selected for federal statutes that include a wide variety of causes of action (as in the case of RICO and the securities laws), and the danger of interference with the administration of collective bargaining agreements ("CBA") (as in the cases of hybrid actions and the Airline Deregulation Act's Employee Protection Program). North Star does not contend that either such danger is present here, and that ought to be sufficient to warrant rejection of its argument for borrowing from federal law. Amicus Chamber of Commerce suggests, Br. 10-11, that the Court should borrow the six-month limitations period because some federal labor statutes have express six-month periods. However, other federal labor statutes have substantially longer express limitations periods. For example, the Portal-to-Portal Pay Act, 29 U.S.C. § 255, provides a two-year limitations period for seeking unpaid wages under the Fair Labor Standards, Walsh-Healey, or Bacon-Davis Acts, and that same period governs actions under the Age Discrimination in Employment Act. Similarly, the Railway Labor Act allows two years for suits to vacate arbitration awards, section 3, First (r), 45 U.S.C. § 153, First (r), and six years are allowed to sue fiduciaries under the Employee Retirement Income Security Act, 29 U.S.C. § 1113. But the biggest flaw in this argument is that it ignores the Supreme Court's admonition that the principle of borrowing from state law remains the norm, "in labor law as elsewhere." If the Chamber of Commerce desires a uniform six-month statute of limitations for labor cases, it must apply to Congress, not to this Court. 2. The NLRA Does Not Provide a Closely Analogous Cause of Action. In our opening brief, at 18-24, we showed that the district court erred in concluding that there was a close analogy between the WARN Act cause of action and the fact that, in a small fraction of all cases, an employer may commit an unfair labor practice ("ULP") if, upon closing a plant, it fails to advise a union of its intention in that regard in order to bargain about the effects of the closing. We showed that the purposes of the two laws are different, that the two laws impose very different requirements, and that the forms of relief available for violations are also very different. North Star's brief largely ignores these arguments.(3) North Star does, however, object to our observation that the NLRA rule that it invokes as analogous applies only to about 11% of the private sector workforce, because only this small fraction are represented by unions in collective bargaining. We cited this statistic in arguing that, if the limitations period for an administrative claim that is available only to that small fraction of all employees covered by WARN were to control the period for all WARN plaintiffs, the tail would be wagging the dog. This reasoning is faulty, according to North Star, because, "[l]ike WARN, the NLRA applies regardless of whether an affected employee is represented by a union." Br. at 14. It is North Star's reasoning, however, that is faulty. The vast bulk of the NLRA is concerned solely with the certification of union representatives for bargaining units and supervision of the process of collective bargaining. There is one aspect of the NLRA that applies to union and non-union employees alike -- the section 7 right to engage in "concerted activities . . . for mutual aid and protection," retaliation for which is declared by section 8(a)(1) to be a ULP. And yet every one of the cases cited by North Star stands only for the proposition that this particular ULP applies whether or not a union is involved. Significantly, North Star does not contend that the WARN Act bears any resemblance to the only ULP that it cites as applying to union and non-union employees alike. Rather, it invokes an analogy to the duty to bargain with a union under section 8(a)(5), which has been held, inter alia, to require certain forms of bargaining with the union when the employer desires to take certain unilateral actions. North Star does not pretend that this ULP applies to nonunion employees, and we know of no precedent that so holds. Accordingly, our argument that the section 8(a)(5) ULP not only fails to resemble the WARN cause of action, but also applies to only a small fraction of all WARN plaintiffs, stands unrefuted, and this effort to save the analogy to a claim covered by section 10(b) fails. North Star also relies on a remark by Senator Hatch contending that WARN was, in effect, an amendment to the NLRA, in support of argument that the NLRA's limitations period should be applied to WARN claims. Br. at 11, citing 134 Cong. Rec. 15923, 15924 (1988). But although North Star emphasizes that Senator Hatch holds an important post on the Senate Labor Committee, it neglects to mention that he voted against WARN, see 134 Cong. Rec. 16691 (1988), and that the speech that North Star quotes was given in support of the unsuccessful Kassebaum amendment, which would have eliminated its application to layoffs. 134 Cong. Rec. 16020-16021. The theme that WARN amended the NLRA was a constant one in Senator Hatch's arguments against the bill, see 134 Cong. Rec. 15763, 15764 (1988), but he failed to persuade a majority of the Senate of this point. It is, of course, a cardinal rule of statutory construction that statements by a bill's opponents are accorded little weight. Shell Oil Co. v. Iowa Dep't of Revenue, 488 U.S. 19, 29 (1988). By contrast, in citing legislative history to show how different WARN's purpose of providing minimum protection for workers and their communities was from the NLRA's basic objective of fostering collective bargaining -- legislative history that North Star ignores -- appellants were careful to cite only statements by the bill's sponsors. Br. 20. In further support of its argument that the WARN Act is analogous to the NLRA, North Star relies on the fact that a number of provisions of WARN make express reference to the NLRA. But many of the provisions it cites simply confirm how disparate the two laws are, because they show the lengths to which Congress went to keep the WARN Act from having any impact on the collective bargaining process that the NLRA is intended to foster. E.g., 29 U.S.C. § 2103(2) (WARN does not cover economic action protected by NLRA); 29 U.S.C. § 2108 (giving notice under WARN cannot violate NLRA). Other provisions simply incorporate into WARN the definitions used by the NLRA for basic terms. E.g., 29 U.S.C. § 2101(a)(4). But as North Star's amicus concedes, many labor statutes, including the Labor-Management Reporting and Disclosure Act ("LMRDA") and the Age Discrimination in Employment Act, incorporate definitions from the NLRA, Chamber Br. 6 n.2, and are to some extent interpreted in pari materia with it. E.g., Machinists Lodge 702 v. Loudermilk, 444 F.2d 719, 722 (5th Cir. 1971) (invoking NLRB precedents to decide whether LMRDA allows union to impose fines for dual unionism). And yet in Reed v. UTU, supra, the Supreme Court has applied the normal rule of borrowing from state law to the LMRDA, expressly rejecting borrowing from the NLRA. Thus, the fact that some provisions in WARN mention the NLRA does not support the conclusion that the NLRA is clearly more analogous to WARN than any state cause of action. 3. Borrowing from State Law Would Not Harm Federal Policies, But Borrowing the Six-Month Limitations Period Could Frustrate the Enforcement of the WARN Act. North Star argues that the adoption of a limitations period longer that six months would frustrate the policy behind WARN that favors prompt payment of WARN damages. North Star claims to find such a policy in a provision that exempts employers from paying the $500 per day penalty to local government units if they make their WARN payments within three weeks of a plant closing. We certainly agree that it is better if employers meet their obligations promptly after failing to give notice, and we assume both that Congress wanted employers to do so and that, in most cases, employees will promptly sue as soon as it is clear that a WARN violation occurred. But the statute of limitations does not determine the time within which employers will give notice of a plant closing; it only determines, once an employer has failed to meet its obligations in a timely manner, the amount of time its employees have to get into court to seek redress. Once an employer has failed to honor its obligations under WARN, there is nothing in the statute or in the underlying policies that favors the speedy resolution of disputes any more than speedy resolution is generally desirable for all disputes. There is nothing at all comparable to the need for industrial peace argument that was accepted in DelCostello, or the comparable concern in Haggerty v. USAir, 952 F.2d 781 (3d Cir. 1992), that decisions about the proper seniority to be accorded to individual airline pilots might have a ripple effect on all other pilots' seniority, with possible repercussions on labor relations. On the other hand, an unduly short limitations period would make it far more difficult for employees, especially unrepresented employees who do not have a union with experienced officers and counsel looking out for their interests, to secure enforcement of the duties that WARN imposes on employers. The ultimate result will be less compliance with WARN, not more timely compliance. Indeed, as appellants' opening brief pointed out, at 30-31, employees may have difficulty ascertaining within six months whether the facts pertaining to a particular layoff warrant the conclusion that WARN was violated. North Star makes light of this fact, Br. at 27, arguing instead that the only questions are whether there was a lay-off, when notice was given, and how many employees were involved. As we showed in our brief, there are a number of questions about numbers of employees that may not be as easy for individual employees to obtain as it presumably is for sophisticated labor counsel retained by larger employers. But even North Star's own brief makes clear that far more may be involved. For example, North Star is at pains to show that WARN courts have adopted NLRB standards, applied in election eligibility cases, for deciding whether particular employees have a reasonable expectation of recall and therefore are on only temporary layoff. Br. at 12-13, citing Damron v. Rob Fork Mining Corp., 945 F.2d 121, 124 (6th Cir. 1991). As this case makes clear, that determination turns on a variety of criteria that themselves depend on data to which individual employees are simply not likely to have access. There is a real danger that adoption of a six-month limitations period within which workers would have to ascertain such information, find counsel, and file suit could cripple enforcement of WARN, and this provides yet another reason why the judgment below should be reversed. The judgment below should be reversed, and the case remanded for proceedings on the merits of plaintiffs' claims.(4) Respectfully submitted,
Paul Alan Levy Alan B. Morrison Public Citizen Litigation Group
Attorneys for Appellants December 23, 1993 1. North Star makes inconsistent arguments in pointing out imperfections in the state law analogies. Pennsylvania's Wage Payment Collection Law is said to be an imperfect analogy because WARN provides for compensation in addition to mere back pay, Br. 18-19, but its civil penalty limitation period is said not to apply because WARN relief merely allows compensatory back pay. Br. 21-22. 2. North Star undertakes a lengthy exposition of the dangers of forum shopping for claims involving nationwide layoffs, disagreeing with a footnote in a Second Circuit's opinion asserting that the statute of limitations will be based on the locus delicti, rather than the law of the forum state. Br. 29-33, discussing Paperworkers Local 340 v. Specialty Paperboard, 999 F.2d 51, 56 n.9 (2d Cir. 1993). But this analysis is refuted by the very example given elsewhere in North Star's brief to show how a national layoff may be litigated in different courts, Br. 7, citing Halkias v. General Dynamics, 825 F. Supp. 123 (N.D. Tex 1993) and Machinists v. General Dynamics, 821 F. Supp. 1306. There was no forum shopping in these cases -- claims based on the layoffs in Missouri were filed in federal court there, and claims based on the layoffs in Texas were litigated in federal court in that state. 3. North Star does embrace appellants' argument that the one form of relief that the two laws do have in common -- monetary relief based on an employee's wage rate -- is really very different because WARN damages do not depend on whether an employee would actually have worked on each of the dates of delayed notice, Steelworkers v. North Star Steel, 5 F.2d 39 (3d Cir. 1993) (our opening brief cited the case at page 48, using the citation from West Publishing's preliminary pagination), while the NLRA only provides back pay for days when an employee would have worked. Although North Star argues that the availability of WARN damages for time not spent working shows an imperfection in the analogy between WARN and Pennsylvania's Wage Payment Collection Law, Br. 17-20, the same argument distinguishes WARN from the NLRA. 4. Since submission of our opening brief, another court in this Circuit has followed the majority rule by borrowing a state limitations period to govern WARN claims. In re Hanlin Group, No. 91-33872 (Bankr. D.N.J., December 3, 1993). A copy of this opinion will be lodged with the Clerk and furnished to opposing counsel. more resources
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