Building Industry Fund v. Local Union No. 3, 93 CV 2721.

• Citation: 992 F.Supp. 162
• Decision Date: 08 February 1996
• Docket Number: No. 93 CV 2721.,93 CV 2721.
• Parties: BUILDING INDUSTRY FUND et al., Plaintiffs, v. LOCAL UNION NO. 3, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, AFL — CIO et al., Defendants.
• Court: U.S. District Court — Eastern District of New York

992 F.Supp. 162

BUILDING INDUSTRY FUND et al., Plaintiffs, v. LOCAL UNION NO. 3, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, AFL — CIO et al., Defendants.

No. 93 CV 2721.

United States District Court, E.D. New York.

February 8, 1996.

Opinion on Reconsideration May 8, 1996.

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Pollack & Greene by Alan M. Pollack, Mitchell G. Mandell, Stuart Parker, Scott Sommer, Renee Schimkat, New York City, Phillips, Nizer, Benjamin, Krim & Ballon by James Frank, Mark R. Weiss, Joshua Adler, New York City, for Plaintiffs.

Norman Rothfeld, New York City, for Defendant, Local Union 3, Intern. Broth. of Elec. Workers, AFL-CIO.

Menagh, Trainor, Mundo & Falcone, P.C. by Douglas Menagh, Vito V. Mundo, New York City, for Defendant Joint Industry Bd.

Murtagh, Cohen & Byrne by Edward T. Byrne, Garden City, NY, for Defendant NYECA.

Taubenblatt & Mopper by Leonard Taubenblatt, New York City, for Defendant AECI.

OPINION AND ORDER

ROSS, District Judge.

This rather complex case represents another unfortunate chapter in a long history of labor discord in the electrical segment of the construction industry in New York City. Plaintiffs in this action, a number of individual corporations engaged in the business of providing electrical contracting services and materials in the New York metropolitan area, and the Building Industry Fund, alleged to be an unincorporated trade association of over one hundred such contractors, have filed a civil suit under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1962(a), (c) and (d) (hereinafter "RICO"); the Sherman Anti-Trust Act, 15 U.S.C. §§ 1 and 2 (hereinafter "Sherman Act"); the Labor Management Relations Act, 29 U.S.C. § 187 (hereinafter "LMRA"); and state tort law. Defendants named in the Second Amended Complaint include four entities: Local Union No. 3 of the International Brotherhood of Electrical Workers, AFL — CIO; the Joint Industry Board of the Electrical Industry; the Association of Electrical Contractors, Inc.; and the New York Electrical Contractors Association. Plaintiffs allege that defendants have engaged in a twenty-year campaign of threats, violence and extortion, amounting to a pattern of racketeering activity, a conspiracy to restrain trade in and monopolize the New York electrical services market, and a systematic program of unfair labor practices. Presently pending before the court, after months of voluminous expedited discovery, are motions for summary judgment on all counts by each of the four defendants. For the reasons that follow, the motions are granted in part and denied in part.

FACTUAL BACKGROUND

The New York Electrical Contractors Association, Inc. and the Association of Electrical Contractors, Inc. (hereinafter "NYECA" and "AECI" respectively, or jointly "the Associations") are trade organizations which, together, represent approximately two hundred individual companies, each engaged in providing electrical services in the New York metropolitan region. In the construction industry, project contracts are typically awarded to general contractors, who then subcontract specific parts of the job to smaller trade contractors which perform such specialized services as electrical, plumbing, and dry wall installation. The Associations act as multi-employer bargaining units, and have for many years been bound by a series of collective bargaining agreements with Local Union No. 3, International Brotherhood of Electrical Workers, AFL — CIO (hereinafter "Local 3"), which represents the electrician employees of between four and five hundred electrical contractors (hereinafter "Local 3 contractors").

In the collective bargaining agreement of January 1, 1943, the contractors and Local 3 established an entity to be known as the Joint Industry Board of the Electrical Industry (hereinafter "JIB"), whose stated purpose at the time was, among other things, to negotiate collective bargaining agreements, arbitrate disputes between employees and employers, and operate pension plans. JIB Ex. B, at 7 ("History and Organization of JIB"). Today, the stated purposes include administering qualified employee benefit plans, instituting initiatives for the betterment of the electrical industry, and promoting harmony between management and labor by deciding controversies, problems or disputes arising under the collective bargaining agreement. Schuck Aff., ¶ 8; JIB, Ex. C and Pl.'s Ex. 5 (Rules and Regulations of JIB). JIB is composed of thirty representatives: fifteen chosen by Local 3, ten chosen by NYECA, four chosen by AECI, and one by independent contractors affiliated with Local 3.¹ The Local 3 contractors contribute funds for the operation of JIB, and the Associations guarantee those funds with respect to its members.

Sometime in the early 1970's, Local 363 of the International Brotherhood of Teamsters (hereinafter "Local 363") also began organizing electricians. Labor strife between Local 363 and Local 3 ensued, which at one point was described in the media as a "violent war over the right to represent electrical workers," including "bombings, arson, sabotage of work sites, beatings, and death threats." Michael Oreskes, Corruption is Called a Way of Life in New York Construction Industry, N.Y. Times, Apr. 25, 1982, § 1, at 1. Ultimately, Local 363 entered a collective bargaining agreement with another multi-employer trade association known as the United Construction Contractors Association (hereinafter "Contractors Association"). Throughout this period, however, Local 363 apparently remained the minority representative of electrical workers in New York City.

The collective bargaining agreement between Local 363 and the Contractors Association provided for the creation of a fund to be called the Building Industry Fund (hereinafter "Fund"), to which each employer was obligated to contribute. JIB Ex. AT, art. 35 (Collective Bargaining Agreement between Local 363 and Contractors Association). The Fund was established to promote the business, welfare and interests of the electrical industry, support various training and educational programs, and stabilize and improve employer-union relations. It was to be administered by employer-appointed trustees, who were to meet with the union every three months.

On October 18, 1989, the National Labor Relations Board (hereinafter "NLRB") held a representation election among various classes of electrical workers in the employ of the individual Contractors Association members, which Local 363, the incumbent union, boycotted. On the eve of election, all but six members of the Contractors Association withdrew from that organization. Local 3 was elected, and on February 23, 1993, the NLRB certified Local 3 as the representative of all Contractors Association electricians. Thereafter, the former Contractors Association contractors refused to bargain with Local 3, and on October 29, 1993, the NLRB entered a cease and desist order,² which the Second Circuit later enforced on September 2, 1994.³ Thus, all former members of the Contractors Association are presently obligated to engage in collective bargaining with defendant Local 3.

Plaintiffs include thirteen individual electrical contracting companies (hereinafter "the corporate plaintiffs") who had been bound by the collective bargaining agreement with Local 363. They do not deny that they had also been members of the Contractors Association. The Fund, which now purports to be a trade association representing over one hundred electrical contractors, including the thirteen named plaintiffs, is also named as a plaintiff. Together, on June 18, 1993, they filed the present lawsuit pursuant to the Racketeering Influenced and Corrupt Organizations Act, the Sherman Anti-Trust Act, the Labor Management Relations Act, and state tort law, against Local 3, the Associations, and JIB.

Plaintiffs allege that sometime prior to January 1, 1975, and continuing to the present, all four defendants entered into an unlawful "conspiracy," the purpose of which, through racketeering acts of extortion, was to restrain trade, monopolize the market for electrical contracting in New York City, and drive plaintiffs out of business. Paragraphs 25 through 27 of the Second Amended Complaint (hereinafter "the complaint") allege that members of Local 3 employed arson, threats, vandalism, and other forms of violence and harassment against plaintiffs and other electrical contractors to secure contracts for Local 3 contractors at the expense of Local 363 contractors. They also allege that strikes, sit-ins and secondary boycotts were threatened and carried out. In some cases, the Local 3 members allegedly responsible for these activities are also identified as representatives of JIB. Although the complaint alleges that JIB, AECI, and NYECA were complicit in these activities, it does not detail their involvement, except to allege that all defendants were part of the "conspiracy."

Furthermore, plaintiffs allege that JIB has used the funds it receives from Local 3 contractors to mount a systematic campaign to harass them through litigation and administrative proceedings. Most of these activities have taken the form of "prevailing wage law" suits pursuant to N.Y. Lab. Law § 220. A final allegation does not appear in the complaint, but in plaintiffs' papers on the instant motion. Plaintiffs allege that defendants conspired illegally to fund JIB in violation of 29 U.S.C. § 186, creating a "slush fund" to support its litigation activities.

DISCUSSION

I. Summary Judgment Standard

Summary judgment is appropriate when there exists no genuine issue of material fact in a case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A disputed material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving p...