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A lawyer hired by a union to represent one of its members in an arbitration hearing cannot later be sued by the worker for malpractice because the federal Labor Management Relations Act effectively immunizes the lawyer from such a claim, the 3rd U.S. Circuit Court of Appeals has ruled. In Carino v. Stefan, a unanimous three-judge panel upheld a New Jersey federal judge’s decision to dismiss a malpractice suit against attorney Marc Stefan and his firm, Bustavage & Associates of Washington, D.C., after finding that the LMRA “immunizes attorneys employed by or hired by unions to perform services related to a collective bargaining agreement from suit for malpractice.” Writing for the court, U.S. Circuit Judge Marjorie O. Rendell found that although Gisela Carino’s appeal presented a question of first impression in the 3rd Circuit, several other federal appellate courts have already extended the LMRA’s immunity to include lawyers. Carino’s lawyer urged the appellate court to carve out an exception in her case, arguing that Stefan allegedly deceived her into withdrawing her grievance and therefore had not performed any activity that was entitled to immunity. Rendell disagreed, saying “the fact that he [Stefan] did not take the matter to arbitration is insufficient to distinguish it from the activity by union attorneys which has consistently been found to be immune.” Under �301(b) of the LMRA, Rendell noted, a money judgment against a union is “enforceable only against the organization as an entity and against its assets, and shall not be enforceable against any individual member or his assets.” Rendell found that the U.S. Supreme Court gave an “expansive reading” to �301(b) in a 1962 decision captioned Atkinson v. Sinclair Refining Co. In Atkinson, the justices held that the statute “evidences a congressional intention that the union as an entity, like a corporation, should in the absence of an agreement be the sole recovery for injury inflicted by it.” In Atkinson, the justices dismissed all claims against several union officers who had been sued in their individual capacities. Rendell found that the justices “extended the Atkinson rule” in their 1981 decision captioned Complete Auto Transit Inc. v. Reis, where the high court held that individual union officers cannot be sued even if their conduct was not authorized by the union and violated an existing bargaining agreement. In Reis, Rendell said, the justices said “the legislative history of �301 clearly reveals Congress’ intent to shield individual employees from liability for damages arising from their breach of … a collective bargaining agreement, whether or not the union participated in or authorized the illegality.” Since Reis, Rendell said, four federal circuits — the 1st, 2nd, 9th and 10th — have concluded that the Atkinson rule also “prohibits claims made by a union member against attorneys employed by or retained by the union to represent the member in a labor dispute.” The leading case — the 9th Circuit’s 1986 decision in Peterson v. Kennedy — held that “where … the attorney performs a function in the collective bargaining process that would otherwise be assumed by the union’s business agents or representatives, the rationale behind the Atkinson rule is squarely applicable.” In Peterson, a professional football player brought a malpractice suit against two attorneys provided by the player’s union, claiming that they had furnished him with inaccurate advice upon which he had detrimentally relied in pursuing his grievance against his former employer. The 9th Circuit rejected the athlete’s contention that an exception to the Atkinson rule should be carved out for attorneys employed by or retained by the union. In so ruling, the Peterson court noted that a union may choose to have its members’ labor grievances handled by a union representative with no legal training, or by an attorney. As a result, the Peterson court concluded that, if the union chooses to hire an attorney, that attorney has not “entered into an ‘attorney-client’ relationship in the ordinary sense with the particular union member who is asserting the underlying grievance,” but merely “assumes a function that often is performed by a union’s business agents or representatives.” Despite finding that a union member is “surely justified in expecting the attorney to perform in a competent and professional manner,” the Peterson court found that “when the union is providing the services, it is the union, rather than the individual business agent or attorney, that represents and is ultimately responsible to the member.” Rendell found that Peterson and other decisions “have identified several policy considerations weighing against the imposition of malpractice liability on union attorneys representing union members in labor grievances under a collective bargaining agreement.” While a plaintiff with a breach of the duty of fair representation claim against a union must prove that the union’s conduct was “arbitrary, discriminatory, or in bad faith,” Rendell noted, a plaintiff with a malpractice claim against an attorney must prove only that the attorney’s conduct was negligent. “As a result,” Rendell said, courts have held that “it would be anomalous if the union attorney could be liable if merely negligent, while the union would be liable only if a higher standard were met, namely, arbitrariness or bad faith.” In Peterson, Rendell said, the court noted that state statutes of limitations for malpractice are generally longer than the time limit for the filing of suits by union members claiming that their employer or their union mishandled their labor grievances. The Peterson court warned that: “If union attorneys were subject to malpractice liability in such cases, litigants would be able to proceed against the attorney long after the expiration of the statutory period for suits against both the union and the employer.” Likewise, Rendell said, the 1st Circuit warned in its 1989 decision in Montplaisir v. Leighton that if union members were permitted to sue union attorneys, the attorneys could be held liable for damages “flowing from the union’s political or tactical choices,” which “could, in turn, severely hamper unions in enlisting quality representation.” Rendell said Carino’s lawyer, Winston C. Extavour of Haddonfield, N.J., “has advanced several arguments in an effort to avoid the Atkinson rule, but we find them unconvincing.” Extavour argued that the LMRA does not completely pre-empt her state law claim, and that, as a result, �301(b) cannot be a basis for barring her claim. Rendell disagreed, saying “the question of whether the pre-emptive power of Section 301 of the LMRA is so complete as to transform her state law claim into a federal claim is distinct from the question of whether Section 301(b) applies so as to bar her claim. Any court considering her suit against the union attorneys, whether it be a federal court with federal question jurisdiction, a federal court sitting in diversity, or a state court, would be compelled, as a matter of substantive law, to conclude that Section 301(b) bars her claim under Atkinson.” Extavour also argued that even if �301(b) applies, the immunity it provides to union attorneys would not apply to Stefan because he performed no services within the collective bargaining process. Rendell rejected that argument, too, saying Carino’s claim that Stefan “provided no services because he convinced her to withdraw her grievance rather than arbitrate it is clearly incorrect.” Instead, Rendell said, “Stefan’s actions, tortious or otherwise, grew out of the retention of his law firm by the union to represent Carino during the arbitration of the grievance the union had filed on her behalf under the collective bargaining agreement.” As a result, Rendell said, “while he may have deceived Carino into withdrawing her grievance, advising her to withdraw was an activity performed in relation to the collective bargaining agreement.”

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