Professional Staff Nurses Ass'n v. Dimensions Health Corp.

EYLER, Judge. The gradual deterioration of the collective bargaining process between labor and management resulted in labor giving notice to management of labor’s intent to strike, and management, in anticipation thereof, seeking replacement workers. The Circuit Court for Prince George’s County considered labor’s complaint, in which labor alleged that the firm offering replacement workers to management had maliciously and wrongfully interfered with the economic relationship between labor and management, based on § 4-403 of the Labor and Employment Article (strikebreaker statute), and dismissed it under the doctrine of federal preemption and for failing to state a cause of action. Aggrieved with that result, labor exercised its prerogative and noted an appeal to this Court.

For reasons discussed below, we shall affirm the judgment of the circuit court. The parties to this dispute are members of the health-care industry. Dimensions Health Corporation, appellee (“Dimensions”), owns and operates health-care facilities in Maryland. ²⁷⁶ Professional Staff Nurses Association, appellant (“Professional”), is an unincorporated labor union that represents nursing professionals throughout Maryland, including approximately seven hundred registered nurses employed by Dimensions. The last party to this triangle is Favorite Nurses, Inc., appellee (“Favorite”), a company that provides replacement registered nurses to employers whose employees are on strike. 1 Professional presents three issues for our consideration.

Slightly rephrased, they are as follows: I. Did the court below err in permitting DHC to intervene as a party defendant when no claim was asserted against it, and assuming intervention in some form were appropriate, did the lower court err in treating DHC’s answer as though it constituted an amendment to plaintiffs complaint, adding a non-existent and meritless tort claim against DHC, and then holding the non-asserted tort claim both preempted and dismissed for failure to state the elements of the tort?

II

Did the lower court improperly consider and rely on matters outside the pleadings in ruling on a motion to dismiss, and did the complaint in any event plead the elements of the claim that Favorite Nurses tortiously interfered with economic and business relations between PSNA and DHC?

III

Is the tortious interference claim against FN preempted by either Garmon or Machinists NLRA preemption where FN is not in an employer-employee or employer-union relationship with either PSNA or DHC, and where the narrow regulatory range of the tort and the strikebreaker act as to FN place the claim squarely within preemption exceptions for matters deeply rooted in local feeling and responsibility and for matters of only peripheral concern to the federal labor law system? ²⁷⁷ I. Facts 2 Dimensions owns and operates four health-care facilities in Prince George’s County: Prince George’s Hospital Center, Laurel Regional Medical Center, Gladys Spellman Nursing Center, and the Bowie Health Center. Professional, an unincorporated labor union, represents approximately seven hundred registered nurses who work at Dimensions’s Prince George’s County facilities. For eight years, beginning in 1986, Dimensions and Professional successfully negotiated collective bargaining agreements relating to the wages, hours, and other terms and conditions affecting Professional’s union members employed by Dimensions. Beginning in the summer of 1994, and continuing into early winter of that same year, the parties engaged in collective bargaining negotiations.

The efforts were to no avail, and Professional served Dimensions with a ten day notice 3 that its members would go on strike beginning on December 14, 1994. 4 Professional apparently called off the strike, for on December 24, 1994, the parties attended a mediation session conducted by the Federal Mediation and Conciliation Service. Over the next several months, ending in March of 1995, the parties pursued a course of negotiation. On April 4,1995, Professional served Dimensions with its second ten day strike notice. Two days before the ²⁷⁸ strike date, Professional filed suit in the Circuit Court for Prince George’s County against Favorite and other firms providing similar services.

II

Proceedings On April 13, 1995, one day after Professional filed its complaint, Dimensions filed, pursuant to Maryland Rule 2-214, a motion for permissive intervention supported by an affidavit of Steven Smith, its Senior Vice President and General Counsel. 5 On the same day, Dimensions and Favorite filed a motion to dismiss Professional’s complaint. Due to the time sensitive nature of the matter, the circuit court scheduled a hearing for April 14, 1995. After hearing argument on the pending motions, the circuit court ruled, in part, that Professional would have until May 1, 1995 to respond to the motion to intervene filed by Dimensions and the motion to dismiss filed by Dimensions and Favorite. Instead of entertaining arguments on the motions on May 5, 1995, as it had previously announced, the circuit court, with consent of the parties’ counsel, took the case out of the assignment.

In a memorandum opinion and scheduling order dated May 8, 1995, the circuit court set forth the timetable for motions and other matters. For our purposes, the circuit court stated: When analyzing and ruling on the pending Motions to Dismiss, the Court will confine itself to the pleadings and the supporting documents filed as of this date. For the reason that discovery has not been obtained and will be deferred until after a ruling on the Motion to Dismiss, the Court will not convert the Motion to Dismiss to a Motion for Summary Judgment at the hearing on May 30, 1995 as the rule normally permits this Court to do in its discretion. Furthermore, until discovery has been completed, this ²⁷⁹ Court will not rule on any further dispositive motions which may be filed in the future.

At the conclusion of the May 30th hearing, the circuit court granted Dimensions’ motion for permissive intervention. At that time, the circuit court took under advisement the motion to dismiss filed by Dimensions and Favorite. Approximately one month later, on July 25, 1995, the circuit court issued its opinion and order, in which it dismissed Professional’s complaint under alternative but overlapping theories: federal preemption and failure to state a claim. On August 2, 1995, Professional timely noted an appeal to this Court.

III

Discussion Section 4-403 of the Labor and Employment Article is the crux of this dispute. Strikebreakers. (a) Recruitment restricted.—A person who is not directly interested in a strike may not provide, obtain, recruit, or refer, for employment in place of a striker, an individual who customarily and repeatedly offers to be employed in place of strikers. (b) Employment as strikebreaker restricted.—An individual who customarily and repeatedly offers to be employed in place of strikers may not take or offer to take the position of a striker.

(c) Penalty.—A person who violates any provision of this section is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $1,000 or imprisonment not exceeding 3 years or both. The General Assembly enacted the predecessor to § 4-403, Md.Code (1957, 1964 Repl.Vol.), Art. 100 § 51A, in 1961. Since that time, neither our Court nor the Court of Appeals has been called upon to examine the section. We now proceed to do so. ²⁸⁰ A. Professional contends that the circuit court erred when it allowed Dimensions to intervene in the action between Professional and Favorite and that the circuit court’s consideration of Dimensions’ pleadings resulted in the circuit court addressing claims not made by Professional.

The court in its opinion below constructs the straw man of a hypothetical tort claim against DHC for interference with its own relationship with PSNA, and then, unsurprisingly, concludes such a theory is unworkable. Of course it is; it was never pled by plaintiff here, and the blatant inappropriateness of the argument demonstrates the inappropriateness of permitting intervention. Even worse, the court’s entire consideration of the preemption issues was framed as thought] the tortious interference claim were asserted against DHC, an employer in an NLRA-established relationship with PSNA. This, of course, is precisely the opposite of the theory of the Complaint.

Maryland Rule 2-214(b) governs permissive intervention; subsection (c) sets forth the applicable procedure. (b) Permissive.— (1) Generally.—Upon timely motion a person may be permitted to intervene in an action when the person’s claim or defense has a question of law or fact in common with the action. (3) Considerations.—In exercising its discretion the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties. (c) Procedure.—A person desiring to intervene shall file and serve a motion to intervene.

The motion shall state the grounds therefor and shall be accompanied by a copy of the proposed pleading setting forth the claim or defense for which intervention is sought. An order granting intervention shall designate the intervenor as a plaintiff or a defen ²⁸¹ dant. Thereupon, the intervenor shall promptly file the pleading and serve it upon the parties. Our review of the circuit court’s ruling on a motion for permissive intervention is limited to determining whether the court abused its discretion.

Maryland Radiological Soc’y, Inc. v. Health Servs. Cost Review Comm’n, 285 Md. 383, 392 , 402 A.2d 907 (1979). 6 Maryland Rule 2-214 requires that the prospective intervenor timely file an application to intervene. Coalition for Open Doors v. Annapolis Lodge No. 622, 333 Md. 359, 367 , 635 A.2d 412 (1994). In the case at bar, timeliness is not an issue because Dimensions filed its first motion to intervene before Professional served process upon the defendants named in the complaint.

The other requirement under Rule 2-214 is that the intervenor’s claim or defense present “a question of law or fact in common with the action.” Dimensions and Favorite jointly asserted federal preemption as a defense to Professional’s reliance on Maryland’s strikebreaker statute. See supra § 4-403. Without doubt, a common question of law or fact was presented. Moreover, Dimensions had an interest in the cause in that an adverse ruling against the ²⁸² named defendants would have directly affected Dimensions’s ability to respond to Professional’s threatened strike.

Once the circuit court granted Dimensions’ motion to intervene, Dimensions became a party to the action and was entitled to assert its rights as such. [A]n intervening defendant becomes a party when the order granting intervention is signed, not when the intervening defendant files an answer. The language of Maryland rule 2—214(c) itself implies that the intervenor becomes a party when the order is granted because the Rule requires the order granting intervention to designate the intervenor as a plaintiff or defendant, terms used for parties. In addition ... Rule 2-214(c) requires that an intervening defendant file, along with its motion to intervene, a proposed pleading which shall promptly be filed and served, upon the granting of intervention.

Because only a party may assert rights in the case, this requirement supports our interpretation that an intervenor immediately becomes a party. MAIF v. Soffas, 89 Md.App. 663, 673 , 599 A.2d 837 (1991). “After intervention, an intervenor has the same rights and powers to effectuate its rights as an original party.” Id. at 674 , 599 A.2d 837 ; Montgomery County v. Supervisor of Assessments, 275 Md. 58 , 62^3, 337 A.2d 679 (1975); Montgomery County v. Meany, 34 Md.App. 647, 650 , 368 A.2d 1107 , aff'd, 281 Md. 206 , 377 A.2d 1184 (1977) (;per curiam) (“As an intervenor has all the rights as a party and a party has the right to appeal, Montgomery County [the intervenor] has the right to appeal.”). A remaining hurdle is whether Dimensions may litigate issues that existed in the original dispute and inject new issues. In Conroy v. Southern Maryland Agrie.

Ass’n, 165 Md. 494 , 169 A. 802 (1934), the Court of Appeals touched upon that issue. The question before the Court was whether the circuit court erred when it dismissed the petition of an individual whom the circuit court had allowed to intervene as a plaintiff in the underlying action. ²⁸³ The effect of the order was not, necessarily, to dismiss Conroy [the intervenor] as a party to the suit, although it reserved to him the privilege of moving for a rescission of the order making him a party, if he deemed such action appropriate to his seeking relief in an independent action. Nor did it prevent him from litigating in this proceeding any issue made by the pleadings as he found them when he was made a party. If his petition introduced no issues in the case other than those already made when he became a party, he was not injured by its dismissal, for in that case it was no more than a restatement of existing issues.

If, on the other hand, his petition did raise additional issues different from those made by the pleadings as he found them when he came into the case, then in dismissing it the court acted within the proper limits of a sound discretion. There may be cases in which an interven[o]r may be entitled as a matter of right to assert in a proceeding in which he has been allowed to intervene claims adverse to those of any or all of the original parties, even though the exercise of the right involves the introduction of additional issues, where that is necessary to protect his interests which will be concluded by the ultimate decision, and where such issues are consistent with and incidental to the objects and purposes of the suit ibidem, but this is not such a case. Id. at 502 , 169 A. 802 (emphasis added). Dimensions and Favorite jointly filed all motions to dismiss and raised federal preemption and failure to state a cause of action as their primary defenses.

The circuit court analyzed Professional’s complaint in relation to Favorite, the original defendant, and Dimensions, the intervenor. Professional argues that the circuit court erred in examining Professional’s complaint as if it were drafted to include Dimensions because Professional conceded that it could not state a cause of action against Dimensions. The circuit court acknowledged the reasoning and stated, “Our research reveals no Maryland case law creating a tort in which a defendant interferes in a ²⁸⁴ business relationship between itself and a third party.” Maryland does not recognize that variation of the tort. See Travelers Indem.

Co. v. Merling, 326 Md. 329, 343 , 605 A.2d 83 , cert. denied, 506 U.S. 975 , 113 S.Ct. 465 , 121 L.Ed.2d 373 (1992) (“For the tort [of 'wrongful interference with contractual or economic relations] to lie, the defendant tortfeasor cannot be a party to the contractual or economic relations with which he has allegedly interfered.”). The circuit court properly considered arguments made by both Dimensions and Favorite, however, with respect to the issues of federal preemption and whether a cause of action was stated against Favorite. Having been permitted to intervene based on common questions of law or fact, Dimensions had the right to take a position on existing issues and to inject new issues consistent with the objects and purposes of the original suit. 7 We conclude that the circuit court neither abused its discretion in granting the motion to intervene nor in considering arguments made by Dimensions in its motion to dismiss. B. The circuit court, Professional argues, improperly considered and relied on matters outside of the complaint in ruling on Favorite and Dimensions’ motion to dismiss.

We agree. The circuit court informed the parties that it would not convert the motion to dismiss into a motion for summary judgment at the May 30, 1995 hearing (see Maryland Rule 2-322(c)), but the circuit court’s opinion makes reference to matters outside the complaint. The circuit court referred to the proposed answer of Dimensions and the supplemental ²⁸⁵ affidavit provided by Dimensions’ Senior Vice President and General Counsel, Steven Smith. In deciding a motion to dismiss for failure to state a claim, pursuant to Maryland Rule 2-322, a court “must assume the truth of all relevant and material facts that are well pleaded and all inferences which can be reasonably drawn from those pleadings.” Moreover, we consider the “well-pleaded allegations” in the light most favorable to the non-moving party.

Our task is to determine whether the facts alleged in appellant’s complaint are legally sufficient to state a cause of action. We limit our review, however, to specific allegations of fact and the inferences deducible from them, and not “merely conclusory charges.” McIntyre v. Guild, Inc., 105 Md.App. 332, 342-43 , 659 A.2d 398 (1995) (citations omitted). The parties agree that a ruling on a motion to dismiss is before us. Accordingly, our focus centers upon the complaint.

Maryland common law recognizes two types of actions for tortious interference with business relationships. Macklin v. Robert Logan Assocs., 334 Md. 287, 297 , 639 A.2d 112 (1994). In Natural Design, Inc. v. Rouse Co., 302 Md. 47, 69 , 485 A.2d 663 (1984), Judge Eldridge, writing for the Court of Appeals, traced the history of, and recited the elements of, the tort. He stated: [T]he two general types of tort actions for interference with business relationships are inducing the breach of an existing contract and, more broadly, maliciously or wrongfully interfering with economic relationships in the absence of a breach of contract.

The principle underlying both forms of the tort is the same: under certain circumstances, a party is liable if he interferes with and damages another in his business or occupation. The two types of actions differ in the limits on the right to interfere which will be recognized in either case. Thus, where a contract between two parties exists, the circumstances in which a third party has a right to interfere with the performance of that contract are more narrowly restricted. A broader right to interfere with ²⁸⁶ economic relations exists where no contract or a contract terminable at will is involved.

Id. at 69-70 , 485 A.2d 663 (footnote omitted). 8 In paragraphs seventeen and nineteen of its complaint, Professional sets forth the actions it protests. 17. At all times mentioned herein, including, but not limited to the two ten (10) day strike notice periods (from December 14 to December 24, 1994, and from April 4 to April 14, 1995), Defendants Cross Country, Favorite Nurses, Healthcare Options, Travacorps, and U.S. Nursing have intentionally and without legal justification interfered with the continuing economic/business relationship between Plaintiff PSNA and DHC by providing, obtaining, recruiting, or referring for employment in the place of the striking 700 RN [registered nurses] PSNA members, individuals (i.e., RN strikebreakers) who customarily and repeatedly offer to be employed in the place of striking RN’s. 19. Defendants Cross Country’s, Favorite Nurses’, Healthcare Options’, Travacorps’, and U.S. Nursing’s conduct as described in Paragraph 17 of this Complaint, has been malicious, wrongful and in violation of Maryland Code Ann., Labor and Employment, Sections ]-]03(a), as amended, which prohibits persons not directly interested in the strike from providing, obtaining, recruiting, or referring individuals who customarily and repeatedly offer to be employed in place of strikers, for employment in place of strikers. ²⁸⁷ (Emphasis added). The language of Professional’s complaint contains a charge of maliciously or wrongfully interfering with economic relationships in the absence of a breach of contract.

The conduct at issue, alleged to be “malicious, wrongful and in violation of’ § 4-403, is Favorite’s “providing, obtaining, recruiting, or referring for employment in the place of the striking 700 RN [registered nurses] PSNA members, individuals (i.e., RN strikebreakers) who customarily and repeatedly offer to be employed in the place of striking RN’s.” Professional suggests that this “case presents the classic ends-means analysis for tortious interference with economic relations.... Either an unlawful purpose or improper means will render economic interference tortious, particularly when the interfering actor is not a direct competitor of the party whose business relationship is disrupted.” Professional’s use of the disjunctive is fallacious. Liability will not attach unless there is, among other things, an unlawful purpose coupled with an unlawful or improper act. Macklin, 334 Md. at 301 , 639 A.2d 112 (“To establish tortious interference with prospective contractual relations, it is necessary to prove both a tortious intent and improper or wrongful conduct.”); see Restatement (Second) of Torts § 768(l)(b) (1977).

In Willner v. Silverman, 109 Md. 341 , 71 A. 962 (1909), the Court of Appeals considered the appeal of an employee whose claims included that his former employers, who had discharged him, “maliciously conspired or contrived to injure him by blacklisting him and writing a letter, containing false statements, to the members of an association .. . and requesting such Association members to refuse employment to” him. Id. at 353 , 71 A. 962 . Judge Henry, writing for the Court of Appeals, quoted Walker v. Cronin, 107 Mass. 555 (1871), for that Court’s recitation of the elements of tortious interference with economic relations. (1) intentional and wilful acts (2) calculated to cause damage to the plaintiffs in their lawful business, (3) done with the unlawful purpose to cause such damage and loss, without right or justifiable cause on the part of the defendant, (which constitutes malice), and (4) actual damage and loss resulting. ²⁸⁸ Walker, 107 Mass, at 562.

One year earlier than Willner, in Knickerbocker Ice Co. v. Gardiner Dairy Co., 107 Md. 556 , 69 A. 405 (1908), Chief Judge Boyd discussed the distinctions between motives and acts. Among the questions before the Court was whether appellant had caused a third party to break its contract to supply ice to appellee. Id. at 558 , 69 A. 405 . After surveying the common law, Chief Judge Boyd made the following observations: It is not altogether easy to lay down general rules as established by the cases but some principles are quite well settled by them.

It may be safely said that if wrongful or unlawful means are employed to induce the breach of a contract, and injury ensues, the party so causing the breach is liable in an action of tort. While lawful competition must be sustained and encouraged by the law, it is not lawful, in order to procure the benefit for himself, for one to wrongfully force a party to an existing contract to break it, and a threat to do an act which would seriously cripple, if not ruin, such party, unless he does break it, is equivalent to force as that term is used in this connection. We say ‘wrongfully’ force, because the procurer would not be liable if he had the right to compel the party to break his contract____ Again the mere fact that a party acts from a bad motive or maliciously does not necessarily make him liable. If he has the right to act, his motive in acting cannot of itself make his act wrongful, but if he had no right to procure a breach of contract and resorts to unlawful means in doing so, he is liable to the injured party.

We say ‘unlawful means’ because a party may be the means of causing a contract to be broken, and still not be liable. To illustrate, A may advertise his goods for sale at such a low rate as to result in a breach of contract by B, who was under contract with C, to buy at a higher price, but that would not make A liable to C.... Id. at 566-67 , 69 A. 405 . Turning back to Natural Design, Inc., a case involving matters pertaining to restraint of trade, the Court of Appeals ²⁸⁹ discussed several other issues germane to the present discussion.

The Court quoted from Goldman v. Harford Rd. Bldg. Ass’n, 150 Md. 677 , 133 A. 843 (1926), for that Court’s discussion of competition. Iron sharpeneth iron is ancient wisdom, and the law is in accord in favoring free competition, since ordinarily it is essential to the general welfare of society, notwithstanding competition is not altruistic but is fundamentally the play of interest against interest, and so involves the interference of the successful competitor with the interest of his unsuccessful competitor in the matter of their common rivalry.

Competition is the state in which men live and is not a tort, unless the nature of the method employed is not justified by public policy, and so supplies the condition to constitute a legal wrong. Id. at 684 , 133 A. 843 . In Natural Design, Inc., the Court of Appeals agreed with appellants, shopping center tenants, that they had presented sufficient evidence to preclude the entry of summary judgment on their claim for intentional interference with