Tennessee Consolidated Coal Co. laid off 100 of UMW's Local 5881 mine workers.
Grundy Co., a subsidiary of TCCC, hired Gibbs as a mine superintendent to try to open a new mine on TCCC's property using members of the Southern Labor Union. Grundy also gave Gibbs a contract to haul the mine's coal to the nearest railroad loading point.
Armed members of UMW's Local 5881 forcibly prevented the opening of the mine and threatened Gibbs because they said TCCC had promised them the jobs. A picket line was maintained for 9 mos.
Gibbs lost his job, never performed his haulage contract. He also lost other contracts in nearby areas.
He claimed these effects were a result of a union plan against him, and sued the international union (UMW).
Fed. jurisdiction was premised on allegations of secondary boycotts under §303. State law claim of malicious conspiracy and unlawful boycott was based on pendent jurisdiction.
Procedural History
Trial court jury ruled for Gibbs on both federal and state law and was awarded $60k in damages for the employment contract and $14.5k in damages under the haulage contract. He was also awarded $100k in punitives.
Judge set aside $14.5k and said that the §303 was not applicable, because the union pressure on Grundy to fire Gibbs was only a primary dispute with the employer, Grundy.
Remitted award of $75k was sustained on the state law claim, even though fed claim was dismissed.
Ct of Appeals affirmed the ruling and said it was ok for trial court to rule only on the state law claim after the federal one was dismissed by judge.
SCOTUS reversed the ruling, insufficient proof, but said it was okay for the trial court to rule on the state law claim only, because pendant jurisdiction did exist.
Issues
When can a federal court properly entertain jurisdiction of a state law claim that would not, on its own, have federal subject matter jurisdiction?
Holding/Rule
A federal court can properly entertain jurisdiction of a state law claim that would not, on its own, have federal subject matter jurisdiction if the state and federal claims derive from a common nucleus of operative fact.
Reasoning
In Hurn v. Oursler, the Court held that state law claims are appropriate for fed court determination if they form a separate but parallel ground for relief also sought in a substantial claim based on federal law. Two possibilities:
Permissible: a case where two distinct grounds in support of a single cause of action are alleged, one only of which presents a federal question.
Not permissible: a case where two separate and distinct causes of action are alleged, only one of which is federal in character.
If a P's claims are such that he would ordinarily be expected to try them all in one judicial proceeding then, assuming substantiality of the federal issues, there is power in federal courts to hear the whole. However, the power need not be exercised in every case in which it is found to exist.
Needless decisions of state law should be avoided as a matter of comity and to promote justice between the parties.
If the federal claims are dismissed before trial, the state claims should be dismissed as well.
If jury confusion might result from treating divergent legal theories of relief, that would justify separating the state and federal claims for trial.
In the present case, the allowable scope of the state claim implicates the federal doctrine of pre-emption. While this interrelationship does not create statutory federal question jurisdiction, its existence is relevant to the exercise of discretion.
Even though the judge dismissed the §303 claim, these claims were still substantial. The state and federal claims arose form the same nucleus of operative fact and reflected alternate remedies. (Jury could only fill in one award for both claims because they were so similar).
Even though the §303 claim ultimately failed, "we cannot confidently say…that the federal issues were so remote or played such a minor role at trial that in effect the state claim was only tried."
§303 claim got to the jury and was only dismissed on UMW's motion for a directed verdict and a judgment n.o.v.
