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Federal court is the wrong ballpark for litigating the suit filed against Baseball Commissioner Alan H. “Bud” Selig and the American and National baseball leagues by Philadelphia sports attorney Richard G. Phillips, a federal judge has ruled. In the suit, Phillips v. Selig, Phillips, the longtime lawyer for the Major League Umpires Association, claims that Selig and the leagues used a smear campaign to force his umpire clients to hire new lawyers. Also named as defendants in the suit are the umpires’ new union, the World Umpires Association, and its new lawyers, Ronald Shapiro and Shapiro & Olander, as well as several umpires who allegedly played key roles in getting Phillips ousted. The suit was filed in Philadelphia Court of Common Pleas by attorneys Clifford E. Haines and Theodore J. Caldwell Jr. of Litvin Blumberg Matusow & Young on behalf of Phillips and his law practice, Richard G. Phillips Associates. But Shapiro removed the case to federal court, and all of the other defendants joined in the move. Phillips responded by urging that the case be remanded to state court since he is pressing only state law-based claims, including tortious interference with existing and prospective contracts; defamation; invasion of privacy; fraudulent conveyance; injurious falsehood; conspiracy; commercial disparagement; unjust enrichment; and breach of contract. But defense lawyers insisted that the case should stay in federal court because Phillips’ claims are “completely pre-empted” by Section 301 of the federal Labor Management Relations Act, since their resolution depends on an interpretation of the contracts between an employer and a labor organization. Now U.S. District Judge John R. Padova has sided with Phillips, finding that none of the claims is truly pre-empted by the LMRA. Padova found that Section 301 is not only jurisdictional, but “authorizes federal courts to fashion a body of federal law for the enforcement of these collective bargaining agreements.” As a result, Padova said, the U.S. Supreme Court has held that any state law cause of action for violation of a collective bargaining agreement or other contract governed by Section 301 of the LMRA is completely pre-empted by federal law “because of the need for uniform interpretation to facilitate negotiation and administration of such collective bargaining contracts.” But Padova found that a plaintiff’s state law claims are pre-empted only when “resolution of that claim is substantially dependent upon an analysis or the meaning of the terms of a labor agreement governed by Section 301, or is inextricably intertwined with the consideration of the terms of the agreement.” However, he said, Section 301 “does not pre-empt every dispute that tangentially concerns the terms of a collective bargaining agreement,” and “claims that are independent of a collective bargaining agreement, even if they are between employees and employers, are not removable.” And when the meaning of contract terms is not the subject of dispute, Padova said, “the bare fact that a collective-bargaining agreement will be consulted in the course of state-law litigation plainly does not require the claim to be extinguished.” Defense lawyers argued that it would be necessary to interpret the collective bargaining agreement to analyze Phillips’ claim for tortious interference with contract — and specifically the element of “lack of privilege” or “justification” required to prove such a claim. Likewise, they said, Phillips’ claims for defamation, invasion of privacy, commercial disparagement and injurious falsehood all contain the element of proof of a false statement which will also depend on an interpretation of the collective bargaining agreement. Finally, they said, Phillips’ retainer agreement itself constitutes a contract between an employer and a labor organization under Section 301. THREE STRIKES Padova struck out all three arguments. “Defendants argue that plaintiffs’ proof of the absence of privilege requires interpretation of the collective bargaining agreement between the MLUA and the Leagues because plaintiffs rely on allegations that defendants acted to usurp rights over umpires possessed by the Leagues despite knowledge that their actions violated the collective bargaining agreement,” Padova wrote. “The court rejects this argument because the allegation that the conduct violated the collective bargaining agreement is only tangential to plaintiffs’ claims.” Instead, Padova said, the “heart” of Phillips’ claim is that the defendants engaged in various acts for the purpose of provoking the MLUA and the umpires to reject his representation. “Whether the conduct also violated the collective bargaining agreement is irrelevant, especially since defendants (excluding the umpires and leagues) were not governed by or signatories to the collective bargaining agreement,” Padova wrote. “The only relevant considerations are defendants’ actual conduct, motive (to hurt plaintiffs), and the interest they were trying to advance (to get MLUA to fire plaintiff). The meaning of the terms of the collective bargaining agreement are neither the subject of the dispute nor inextricably entwined with plaintiffs’ claims. The bare fact that the collective bargaining agreement is mentioned in the complaint’s allegations is insufficient to preempt the claims,” he wrote. Likewise, Padova found that the allegedly disparaging statements identified in the suit do not require interpretation of the umpires’ contract. “Rather, the disparaging statements allege plaintiffs’ various ethical violations and general incompetence. As such, they are unrelated to the terms of the collective bargaining agreement,” he wrote. Padova also found that the retainer agreement is not covered by the LMRA since Phillips and his law firm do not meet the statute’s definition of an “employer.” But even if the definition were stretched, Padova found that the defense argument on that point was “completely inconsistent with the goals, purposes, and context of the LMRA. “Congress’ purpose in enacting Section 301 of the LMRA was to provide uniformity in the enforcement of collective bargaining agreements, and those contracts necessary to the maintenance of industrial labor peace,” Padova wrote. “As a contract for the provision of services to the labor union, the retainer agreement is completely unrelated to the maintenance of labor peace of the type with which Congress was concerned when it enacted the LMRA.” If the courts were to accept the defense argument, he said, they would “federalize any contract entered into by a labor union with an entity that has employees, regardless of whether the contract is the product of any collective bargaining on behalf of the employees of that entity or union members, or related to any labor dispute.” The result, Padova said, would be that “an ordinary breach of contract suit for payment on a service contract between a labor union and a janitorial company for the provision of cleaning services at a labor union’s headquarters would be completely pre-empted by federal law. Such a result would vastly expand the reach of federal labor law past the bounds that Congress intended.”

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