Lewis v. Tuscan Dairy Farms, Inc.

• Decision Date: 07 June 1994
• Docket Number: D,1405,Nos. 1404,s. 1404
• Citation: 25 F.3d 1138
• Parties: 146 L.R.R.M. (BNA) 2601, 128 Lab.Cas. P 11,112 Ernest LEWIS, et al., Plaintiffs-Appellees, v. TUSCAN DAIRY FARMS, INC. and Willie Whelan, as President of Local 584, International Brotherhood of Teamsters, Defendants-Appellants. ockets 93-9188, 93-9190.
• Court: U.S. Court of Appeals — Second Circuit

Page 1138

25 F.3d 1138

146 L.R.R.M. (BNA) 2601, 128 Lab.Cas. P 11,112

Ernest LEWIS, et al., Plaintiffs-Appellees, v. TUSCAN DAIRY FARMS, INC. and Willie Whelan, as President of Local 584, International Brotherhood of Teamsters Defendants-Appellants.

Nos. 1404, 1405, Dockets 93-9188, 93-9190.

United States Court of Appeals Second Circuit.

Argued April 11, 1994.

Decided June 7, 1994.

Richard M. Naness, Melville, NY (Kaufman, Naness, Schneider & Rosensweig, P.C., Clifford P. Chaiet, Carmelo Grimaldi, of counsel), for defendant-appellant Tuscan Dairy Farms, Inc.

John T. Driscoll, New York City (Driscoll & Delaney, of counsel), for defendant-appellant Willie Whelan, as President of Local 584, Intern. Broth. of Teamsters.

Louie Nikolaidis, New York City (Lewis, Greenwald, Kennedy, Lewis, Clifton & Schwartz, P.C., Daniel E. Clifton, Lauren Esposito, of counsel), for plaintiffs-appellees.

Before: FEINBERG, MINER and JACOBS, Circuit Judges.

FEINBERG, Circuit Judge:

Defendant-appellant Local 584, International Brotherhood of Teamsters (Union), was the collective bargaining representative of plaintiffs-appellees, former workers at the Liberty Farms, Inc., milk processing plant in Ozone Park, New York, under the multi-employer Milk Industry Collective Bargaining Agreement (Agreement). In 1990, the United States District Court for the Southern District of New York, Michael B. Mukasey, J., found after a four-day bench trial that defendant-appellant Tuscan Dairy Farms, Inc. (Tuscan), which purchased the plant in 1987, had breached its obligation under the Agreement to dovetail the seniority of plaintiffs with the seniority of employees at two other Tuscan plants. Lewis v. Tuscan Dairy Farms, 752 F.Supp. 116 (S.D.N.Y.1990) (Lewis I ). The court further found that the Union, through the actions of its president, Willie Whelan, had violated its duty of fair representation of plaintiffs. Id. The court held Tuscan and the Union jointly and severally liable for damages of some $5.3 million in back pay, pension benefits, severance pay and fringe benefits.

On the appeal by Tuscan and the Union from the judgment in Lewis I, we remanded the case for reconsideration in light of the Supreme Court's opinion in Air Line Pilots Association v. O'Neill, 499 U.S. 65, 111 S.Ct. 1127, 113 L.Ed.2d 51 (1991). Alier v. Tuscan Dairy Farms, 979 F.2d 946 (2d Cir.1992) (per curiam). On remand, the district court confirmed its 1990 decision in an opinion and order dated August 30, 1993. Lewis v. Tuscan Dairy Farms, 829 F.Supp. 665 (Lewis II ). Tuscan and Whelan again appeal. For reasons set forth below, on the Union's appeal we affirm, and on Tuscan's appeal we vacate and remand for further proceedings.

I. Background

The milk industry in New York State went through a "period of upheaval" following a January 1987 decision of the United States District Court for the Eastern District of New York, which declared unconstitutional New York's restrictions on the distribution of milk coming from outside the state. Farmland Dairies v. Commissioner of New York State Dept. of Agric. and Markets, 650 F.Supp. 939. Shortly after that decision, Whelan began meeting with Jules Kotcher, owner of Liberty Farms and several other milk processing and distributing companies, and Louis Caiola, president of Tuscan, to discuss Tuscan's possible purchase of Kotcher's operations, including the Ozone Park plant. Whelan supported the purchase "because he believed Kotcher did not have the resources or the will to compete with Farmland [Dairies]," a major out-of-state competitor. Lewis I, 752 F.Supp. at 118.

By February 1987, rumors of an impending sale were circulating around the Ozone Park plant. The rumors were discussed at Union meetings, but Whelan "provided no definite information to the members as to whether a sale was imminent." Id. Plaintiffs, who were utility workers at Ozone Park, ¹ were concerned about their rights should Tuscan shift production from the Ozone Park plant to Tuscan's other facilities. General Rule IV C of the Agreement required an employer to dovetail seniority lists when it merges or consolidates facilities:

In all consolidations of branches or plants, company craft group seniority shall prevail for the purpose of layoffs, vacations, bidding and in all other usual respects.

If the Employer acquires all or any part of a milk business ... and merges or consolidates the same with its own business, or handles the same in any other manner, ... the Employer shall be required to assume responsibility for the employment of the employees who elect to or who are transferred to the new Employer as provided herein who shall enjoy craft group seniority, on the basis of the period of employment in the business acquired for the purpose of layoffs, vacations, bidding and in all other usual respects. (Emphasis supplied).

Union counsel John Driscoll testified at trial that he had advised Whelan that even if Rule IV C required the dovetailing of seniority, " '[Whelan] had the power to modify that or to ignore that if he thought it necessary in order to promote the interest of the general membership.' " Lewis I, 752 F.Supp. at 119. Under the Union's bylaws, however, amendments to collective bargaining agreements require meeting with Union membership to discuss demands, approval by the Union's Joint Council and Area Conference before submission to the employer and, finally, ratification by vote of the membership. Whelan testified to his understanding that although the Union may not modify a provision of the Agreement without ratification, the Union may simply ignore provisions of the Agreement without modifying them.

Thus, without following the modification procedure outlined in the Union's bylaws, Whelan and Caiola "apparently worked out an ad hoc arrangement which Whelan felt empowered to implement." Id. Even before the precise terms of the Tuscan-Kotcher deal had been set, Whelan assured Caiola that the Union would not seek a merger of the seniority lists under Rule IV C. Id. Whelan concealed this fact from Ozone Park employees. In fact, he told them if Tuscan bought the plant's equipment or paid Kotcher's unfunded liability under the Employee Retirement Income Security Act (ERISA), such action would constitute a merger requiring the dovetailing of seniority under Rule IV C. He also encouraged Ozone Park employees to stay on the job and told them that if they were to leave, they would be denied Union work cards allowing them to find work elsewhere. Id. at 119-20.

Whelan also told two Ozone Park workers that because he was running for reelection that year, he was hesitant to merge the Ozone Park seniority list with those of the two other Tuscan plants that would assume the Ozone Park plant's functions after the sale. To do so would risk alienating over 200 Tuscan workers to please 100 or so Ozone Park workers, who were relatively senior. In addition, Whelan was trying to obtain from Tuscan a $2.5 million payment to cover Kotcher's unfunded pension fund liability under ERISA.

In June 1987, Tuscan and Kotcher signed a series of agreements under which Tuscan would buy Kotcher's plants. Tuscan also agreed to indemnify Kotcher for all unfunded ERISA liability. Id. at 117. On July 20, 1987, Tuscan bought the Ozone Park plant and shut it down, transferring most of its production and 75% of its processing equipment to Tuscan plants in Lindenhurst, New York and Woodside, New York, also covered by the Agreement. Some displaced Ozone Park employees found work at these two plants, but only at the bottom of the seniority list. If the seniority lists had been merged, it was likely that all of the approximately 110 displaced Ozone Park employees could have been employed at the two plants. Id. at 120.

Four days after the Ozone Park plant closed, plaintiff-appellee Ernest "Buddy" Lewis sent a letter to Whelan demanding that the seniority lists be merged under Rule IV C. Lewis, the plant's former shop steward, was "a frequent antagonist of Whelan and aggressive in protecting the interests of his constituents." Id. Whelan understood Lewis's letter to be a demand that the issue be submitted to arbitration. According to usual Union procedure, such a demand is voted on by the Union's executive committee and its membership. Whelan, however, failed to bring Lewis's demand before either the executive committee or the membership.

Thereafter, plaintiffs brought this suit, invoking jurisdiction under Sec. 301 of the Labor Management Relations Act, 29 U.S.C. Sec. 185, and under 28 U.S.C. Secs. 1331 & 1337. As indicated above, this appeal now comes to us after Judge Mukasey's decision in Lewis I, our remand and the judge's decision in Lewis II.

II. Discussion

1. Recusal

The Union argues that Judge Mukasey should have recused himself from the case on grounds of personal bias under 28 U.S.C. Secs. 144 and 455(b)(1). ² This contention is based on an unrelated proceeding that took place shortly before the trial in this case. In that proceeding, Judge Mukasey found Whelan's testimony not credible and ordered him imprisoned for contempt of court for refusing to order striking union members back to work. Dellwood Foods, Inc. v. Local 584, Int'l Bhd. of Teamsters, 89 Civ. 4635 (S.D.N.Y.1989). According to the Union, that order casts doubt upon the judge's ability to be impartial in the present case.

We reject this argument. A motion for recusal requires a showing of personal bias. Ordinarily, such a showing must be based on "extrajudicial conduct ... not conduct which arises in a judicial context." Apple v. Jewish Hosp. and Medical Ctr., 829 F.2d 326, 333 (2d Cir.1987) (citing In re International Business Machines Corp., 618 F.2d 923, 928 (2d Cir.1980)). The Union points to no extra-judicial conduct by Judge Mukasey. It is true that "[t]here may be instances in which a judge's behavior during prior judicial proceedings can demonstrate sufficient friction between the judge and the...