Gisela Carino v. Marc Stefan, Esq

PRECEDENTIAL
UNITED STATES
COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 03-3679
GISELA CARINO,
Appellant
v.
MARC STEFAN, ESQ;
BUTSAVAGE & ASSOCIATES, LLC.
Appeal from the United States
District Court for the
District of New Jersey
(D.C. Civil No. 03-cv-01894)
District Judge:
Honorable Joseph H. Rodriguez
Submitted Under
Third Circuit LAR 34.1(a)
May 26, 2004
Before: SCIRICA, Chief Judge,
RENDELL and
ALARCÓN*, Circuit Judges.
(Filed July 19, 2004)
* Honorable Arthur L. Alarcón, Senior
Judge, United States Court of Appeals for
the Ninth Circuit, sitting by designation.
Winston C. Extavour
203 Kings Highway East
Haddonfield, NJ 08033
Counsel for Appellant
James Katz
Jennings Sigmond
1040 North Kings Highway, Suite 300
Cherry Hill, NJ 08034
Counsel for Appellees
OPINION OF THE COURT
RENDELL, Circuit Judge.
Gisela Carino brought suit against
attorney Marc Stefan and Stefan’s
employer, Bustavage & Associates, for
legal malpractice in representing her in
connection with a labor grievance
proceeding against her employer. The
District Court granted a motion to dismiss
on the basis that the attorneys were
immune from liability under 29 U.S.C. §
185(b), Section 301(b) of the Labor
Management Relations Act (“LMRA”).
We agree with the District Court and with
those courts of appeals who have spoken
on this issue, and will affirm.
I.
Carino, a New Jersey resident, was
employed as an insurance agent with
Prudential Insurance Company of America
from 1989 to 1998. During this time
period, she was a member of the United

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F o o d a n d C o m m e r c i a l W o r k e r s
International Union, which had entered
into a collective bargaining agreement
with Prudential.
Prudential terminated Carino’s
employment in October 1998, because it
believed that she had engaged in
professional misconduct by selling
insurance policies to individuals in poor
health and naming disinterested parties as
the beneficiaries of the policies, and the
company referred the charges against
Carino to the Federal Bureau of
Investigation (“FBI”).1
F o l l o wi n g t h e p r o c e d u r e s
established by the collective bargaining
agreement, the Union filed a grievance on
Carino’s b e h a l f , c o n t e s ti n g h er
termination. Dissatisfied with the review
of the grievance, the Union exercised its
right to take the matter to arbitration.2 The
Union retained Butsavage & Associates
(“Butsavage”), a Washington, D.C. law
firm, to represent Carino at the arbitration
hearing, which was to be held July 27-29,
2001, at the Sheraton Convention Center
in Atlantic City, New Jersey. The firm
appointed Marc Stefan, Esquire, to appear
on her behalf.
Carino alleges that the following
events occurred two days prior to her
hearing. Stefan telephoned her and asked
her to meet him at the Radisson Hotel in
Mt. Laurel, New Jersey. At this meeting,
Stefan advised her that the venue for the
arbitration meeting had been changed to
the Radisson Hotel. Furthermore, he
indicated that Prudential and FBI
investigators were at the hotel interviewing
witnesses who would testify against her
regarding her alleged misconduct, that they
were prepared to take her to jail, and that
she would need $100,000.00 to get out of
jail.
Stefan then asked what Carino
hoped to get out of the arbitration hearing.
Carino replied that she wanted her
employment record cleared of Prudential’s
false charges; the FBI investigation closed;
a promise that Prudential would not sue
her for attorney’s fees; and her pension
reinstated. Stefan claimed “that would be
no problem and that he could work that out
with Prudential.” Carino agreed she would
withdraw the grievance in return for
Prudential’s acceptance of her conditions.
Stefan then suggested they go
downstairs to the bar and wait for the
arbitrating judge. After an hour of
waiting, he told Carino that they could
leave and “call it a mutual agreement.” He
presented her with various forms,
including a two-page document entitled
1According to Carino, the FBI
investigation disclosed no evidence of
wrongdoing on her part.
2Article 28 of the CBA provides that
the Union may refer any grievance
regarding the termination of a Prudential
Representative to arbitration if the Union
is dissatisfied with the outcome of the
grievance procedure. Furthermore, it
indicates that the Union is the only entity
with the power to refer a matter to
arbitration.

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“Grievance Release,” and asked her to sign
them. He did not explain what the forms
were or why she had to sign them. After
she signed them, Stefan said he would
meet with Prudential and obtain its
agreement to what she wanted without any
problem.
Thereafter, Carino realized that the
documents she had signed made no
reference to Prudential’s concessions in
return for her withdrawal and release. She
contacted Stefan and his firm to complain,
but heard no reply. In fact, she never
heard from them again.
Carino argues that Stefan deceived
her into settling her grievance in return for
various promises which were never kept.
She claims that, as a result of Stefan’s
alleged misconduct, she lost her
opportunity to arbitrate her claims, her
employment record remains blemished and
her pension was never restored.
Carino filed a four count complaint
in the Superior Court of New Jersey
against Stefan and Butsavage alleging: (1)
legal malpractice against Stefan; (2)
intentional misrepresentation against
Stefan; (3) breach of attorney’s fiduciary
duty against Stefan; and (4) liability under
the doctrine of respondeat superior against
Butsavage. Defendants removed the
action to federal court based on diversity
jurisdiction and, alternatively, based on
federal jurisdiction under § 301 of the
LMRA. The defendants then moved to
dismiss the complaint pursuant to Fed. R.
Civ. P. 12(b)(6) for failure to state a claim.
The District Court granted this motion, and
Carino filed a timely Notice of Appeal.
II.
Our review of a district court’s
dismissal of a complaint under Rule
12(b)(6) for failure to state a claim is
plenary, and we apply the same standard as
the district court. Oatway v. Am. Int’l
Group, Inc., 325 F.3d 184, 187 (3d Cir.
2003). In deciding a motion to dismiss, we
must accept all well-pleaded allegations in
the complaint as true, and view them in the
light most favorable to the plaintiff. Id.
We may grant such a motion only where
“it appears beyond doubt that the plaintiff
can prove no set of facts in support of his
claim which would entitle him to relief.”
Conley v. Gibson, 355 U.S. 41, 45-46
(1957).
III.
This appeal presents a question of
first impression for our Court, namely,
whether an attorney hired by a union to
perform services on behalf of a union
member in connection with an arbitration
hearing conducted pursuant to a collective
bargaining agreement is immune from suit
for malpractice by that member. We
conclude that the LMRA bars such a suit.
Section 301(b) of the LMRA
provides, in part, that “[a]ny money
judgment against a labor organization in a
District Court of the United States shall be
enforceable only against the organization

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as an entity and against its assets, and shall
not be enforceable against any individual
member or his assets.” 29 U.S.C. § 185(b).
Viewed narrowly, this language could be
said to only exempt union members from
personal liability for judgments against the
union. However, the Supreme Court has
given the statute a more expansive reading,
stating that § 301(b) “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.’”
Atkinson v. Sinclair Refining Co., 370
U.S. 238, 249 (1962) (quoting Lewis v.
Benedict Coal Corp., 361 U.S. 459, 470
(1960)). Confronted by an action against
a union and several of its officers in their
individual capacities, the Court in
Atkinson dismissed the count against the
officers, stating that § 301 “cannot be
evaded or truncated by the simple device
of suing union agents or members, whether
in contract or tort, or both, in a separate
count or in a separate action for damages
for violation of a collective bargaining
contract for which damages the union
itself is liable.” Id. As a result, the law is
clear that individual union officers are not
personally liable to third parties for actions
taken on behalf of the union in the
collective bargaining process.
The Supreme Court thereafter
extended the Atkinson rule in Complete
Auto Transit, Inc. v. Reis, 451 U.S. 401
(1981), holding that a damage claim may
not be maintained against an individual
union officer even if the individual’s
conduct was unauthorized by the union
and was in violation of an existing
bargaining agreement. Id. at 402. The
Court noted that “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.” Id. at 407.
Our court has recognized that
Atkinson provides individual union
members and officers immunity from suit
for union wrongs . See, e.g., Wilkes-Barre
Pub. Co. v. Newspaper Guild of Wilkes-
Barre, Local 120, 647 F.2d 372, 377 (3d
Cir. 1981); Republic Steel Corp. v. United
Mine Workers of America, 570 F.2d 467,
478 (3d Cir. 1978). And, “with
monotonous regularity, [other courts of
appeals have] cited Atkinson to foreclose
state-law claims, however inventively
cloaked, against individuals acting as
union representatives within the ambit of
the collective bargaining process.”
Montplaisir v. Leighton, 875 F.2d 1, 4 (1st
Cir. 1989); see also Morris v. Local 819,
Int’l Bhd. of Teamsters, 169 F.3d 782, 784
( 2 d C i r . 1 999); Evangel i st a v.
Inlandboatmen’s Union of the Pacific, 777
F.2d 1390, 1400 (9th Cir. 1985); Ramsey
v. Signal Deliver Service, Inc., 631 F.2d
1210, 1212 (5th Cir. 1985).
The only courts of appeals to have
considered the specific question presented
here, where attorneys acted on behalf of
the union, have uniformly concluded that
Atkinson prohibits claims made by a union
member against attorneys employed by or
retained by the union to represent the

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member in a labor dispute. See Waterman
v. Transport Workers’ Union Local 100,
176 F.3d 150 (2d Cir. 1999); (“[U]nder
Atkinson, a union’s attorneys may not be
sued by an individual union member for
actions taken pursuant to a collective
bargaining agreement.”); Arnold v. Air
Midwest, Inc., 100 F.3d 857, 862 (10th
Cir. 1996) (“[A]n attorney who performs
services for and on behalf of a union may
not be held liable in malpractice to
individual grievants where the services
performed constitute a part of the
collective bargaining process.”); Breda v.
Scott, 1 F.3d 908, 909 (9th Cir. 1993)
(holding that employees cannot sue inside
or outside counsel for services rendered
under a collective bargaining agreement);
Montplaisir, 875 F.2d at 7 (“[F]or
purposes of the Atkinson principle,
[attorneys] must be treated the same as
other union agents.”); Peterson v.
Kennedy, 771 F.2d 1244, 1258 (9th Cir.
1985), cert. denied, 475 U.S. 1122 (1986)
(“Where, as here, 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, the first case to
consider the question, 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 Ninth Circuit Court of
Appeals rejected the athlete’s contention
that an exception to the Atkinson rule
should be fashioned for attorneys
employed by or retained by the union.
Peterson, 771 F.2d at 1257. The 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. Id. at 1258. If the union
chooses to make use of 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 “assume[s] a function that often is
performed by a union’s business agents or
representatives.” Id. Although “[t]hat
union member is surely justified in
expecting the attorney to perform in a
competent and professional manner . . .
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.” Id. Based on this “functional
assessment of the attorney’s role as a
union representative within the collective
bargaining process,” the court concluded
that Atkinson protected union attorneys
from individual liability for acts performed
on behalf of the union. Id. at 1259.
In addition to relying on the rule
promulgated by the Supreme Court in
Atkinson, the courts 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. First,

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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, a
plaintiff with a malpractice claim against
an attorney must only prove that the
attorney’s conduct was negligent. As a
result, 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. See,
e.g, Arnold, 100 F.3d at 862. Second,
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. “If
union attorneys were sub ject 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.” Peterson, 771
F.2d at 1259. Finally, were union
members permitted to sue union attorneys,
the attorneys could be held liable for
damages “flow[ing] from the union’s
political or tactical choices,” which “could,
in turn, severely hamper unions in
enlis ting q u a l i ty re p r e s e n ta t i o n .”
Montplaisir, 875 F.2d at 7.
We note that Carino has advanced
several arguments in an effort to avoid the
Atkinson rule, but we find them
unconvincing. First, she contends that the
LMRA does not completely preempt her
state law claim,3 and that, as a result, §
301(b) cannot be a basis for barring her
claim. But the question of whether the
preemptive power of § 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 § 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 § 301(b) bars her claim
under Atkinson. In Aragon v. Papy,
Kaplon, Vogel and Phillips, 262 Cal. Rptr.
646 (Cal. Ct. App. 1989), after the Ninth
Circuit had held that complete preemption
did not apply to plaintiff’s malpractice
claim against attorneys provided by her
union and remanded the case to state court,
see Aragon v. Federated Dept. Stores, 750
F.2d 1447 (9th Cir.), cert. denied, 474 U.S.
902 (1985), the California Court of Appeal
concluded “federal case law and policy
considerations provide immunity under §
3The doctrine of complete preemption,
an “independent corollary” to the well-
pleaded complaint rule, applies where a
federal law with “extraordinary”
preemptive force essentially transforms a
claim under state law into a claim under
federal law for jurisdictional purposes.
See Caterpillar, Inc v. Williams, 482 U.S.
386, 393 (1987). It is to be distinguished
from the use of preemption as a defense,
which applies federal law to bar state law
claims.

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301(b) to retained counsel functioning as
union agents in the collective bargaining
process.” Aragon, 262 Cal. Rptr. at 654.
In reaching its conclusion, the court
reiterated that the Ninth Circuit’s decision
regarding complete preemption had no
bearing on “whether the immunity set forth
in Section 301(b) . . . was available to the
[attorneys] as a defense.” Id. at 650.
Again, the issue is not one of preemption,
but, rather, one of applicable substantive
law.
Second, Carino maintains that even
if § 301(b) applies, the immunity it
provides to union attorneys does not apply
because Stefan performed no services
within the collective bargaining process.
Carino is correct that the protection of §
301(b) only applies where a union agent’s
liability grows out of activities performed
in relation to a collective bargaining
agreement. Wilkes-Barre, 647 F.2d at 377.
However, her assertion that Stefan
provided no services because he convinced
her to withdraw her grievance rather than
arbitrate it is clearly incorrect. 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. 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. The fact that he 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.”
Arnold, 100 F.3d at 863; see Peterson, 771
F.2d at 1251, 1261 (applying Atkinson
immunity to pre-arbitration counseling).
Lastly, Carino notes that under New
Jersey law “a lawyer’s duty may run to
third parties who foreseeably rely on the
lawyer’s opinion or other legal services.”
Petrillo v. Bachenburg, 655 A.2d 1354,
1359-60 (1995). As a result, she argues
that while Stefan was retained by the
Union, he still owed a duty of care to her.
While this may indeed be true, this does
not alter the fact that he was acting on
behalf of the Union. The fact that he may
have also have owed a duty to her does not
remove the Atkinson bar.
IV.
Accordingly, guided by Atkinson
and Reis and the logic of the opinions of
our sister courts of appeals, we join these
courts in holding that § 301 of the LMRA
immunizes attorneys employed by or hired
by unions to perform services related to a
collective bargaining agreement from suit
for malpractice. Thus, for all of the
reasons above, we will affirm.

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