Delta-Sonic Carwash Systems, Inc. v. Building Trades Council, AFL-CIO

• Decision Date: 05 October 1995
• Docket Number: AFL-CIO,DELTA-SONIC
• Citation: 168 Misc.2d 672,640 N.Y.S.2d 368
• Parties: , 132 Lab.Cas. P 11,682 CARWASH SYSTEMS, INC., Plaintiff, v. BUILDING TRADES COUNCIL,, et al., Defendants.
• Court: New York Supreme Court

Page 368

640 N.Y.S.2d 368

168 Misc.2d 672, 132 Lab.Cas. P 11,682

DELTA-SONIC CARWASH SYSTEMS, INC., Plaintiff, v. BUILDING TRADES COUNCIL, AFL-CIO, et al., Defendants.

Supreme Court, Monroe County.

Oct. 5, 1995.

Nicholas J. Sargent, P. C., Buffalo, for plaintiff.

(Jules L. Smith, of counsel), Blitman & King, Rochester, for defendants.

KENNETH R. FISHER, Justice.

Plaintiff ("Delta-Sonic") commenced this action seeking an order enjoining defendant (the "Council") from distributing handbills Delta-Sonic moved for a remand to state court on the ground that a federal question did not exist on the face of the complaint and, therefore, federal court lacked jurisdiction. Delta-Sonic's motion for a remand was granted in a decision of Chief Judge Michael A. Telesca. A statement of the facts appearing below is taken largely from Chief Judge Telesca's decision.

outside of Delta-Sonic carwashes in the Rochester area. See N.Y.Labor Law § 807 (governing the general availability of injunctive relief in labor disputes). A temporary restraining order was issued by Administrative Supreme Court Justice Charles Willis enjoining the Council from distributing its handbills pending a preliminary injunction hearing. The Council thereafter removed Delta-Sonic's action to federal court on the ground that the complaint stated a cause of action under § 303 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 187.

BACKGROUND

The Council represents the Operating Engineers, Carpenters, Bricklayers, Electricians, Plumbers, Painters and other construction unions, and has approximately 40,000 members. Convinced that Benderson Corporation ("Benderson"), the owner of Marine Midland Plaza, hired non-union labor at substandard wages to renovate that building, the Council decided to initiate a protest against Benderson and petition it to hire only union labor for the renovation project.

Based upon its understanding that Benderson also owns Delta-Sonic carwashes, the Council planned to distribute handbills to carwash customers at Delta-Sonic locations in Rochester in an effort to gain sympathetic public reaction to its protest that non-union labor was being used for Marine Midland Plaza renovations. The proposed handbills stated that Benderson owned Delta-Sonic and requested that consumers not patronize Delta-Sonic until Benderson hired union labor for the renovation. The Council's handbilling campaign was scheduled to begin on July 28, 1995.

In an effort to pre-empt the Council's protest, Delta-Sonic filed this action alleging that the Council's handbill distribution campaign constituted tortious interference with its business because the information contained in the handbill was misleading and would injure Delta-Sonic's business. Delta-Sonic is emphatic that it is not affiliated with Benderson and has no "unity of interest" with it and, therefore, it could not be considered a proper target of the Council's protest.

After issuance of the TRO enjoining the Council from picketing, handbilling or protesting at Delta-Sonic locations pending a hearing, and removal to federal court, Chief Judge Telesca granted Delta-Sonic's remand motion, holding (1) that Delta-Sonic's complaint alleges on its face only a New York state law cause of action for infringement of its property right to carry on unobstructed business activities, Barclay's Ice Cream Co., Ltd. v. Local No. 757, 51 A.D.2d 516, 517, 378 N.Y.S.2d 395 (1st Dept.1976), aff'd, 41 N.Y.2d 269, 392 N.Y.S.2d 278, 360 N.E.2d 956 (1977), cert. denied, 436 U.S. 925, 98 S.Ct. 2818, 56 L.Ed.2d 767 (1978); David Harp Restaurant Management, Inc. v. Cromwell, 183 A.D.2d 423, 586 N.Y.S.2d 210 (1st Dept.1992), (2) that peaceful handbilling activity is not a prohibited labor practice under the NLRA and, therefore, the Council's protest (which would not involve threats, coercion, or a restraining of Delta-Sonic customers) would not be actionable under section 8(b)(4), 29 U.S.C. § 158(b)(4); DeBartolo Corporation v. Florida Gulf Coast Building and Construction, 485 U.S. 568, 576-78, 108 S.Ct. 1392, 1398-99, 99 L.Ed.2d 645 (1988), (3) that the LMRA only permits recovery of monetary damages, whereas Delta-Sonic sought only injunctive relief against the Council, 29 U.S.C. § 187; Table Talk Pies of Westchester v. Strauss, 237 F.Supp. 514 (S.D.N.Y.1964), and (4) that the Council's separate contention that the state action is preempted by federal labor law, see San Diego Building Trades Council v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959) (state court tort action preempted where labor activity is arguably protected or prohibited under federal labor law); Sears Roebuck & Company v. San Diego County Dist. Council of Carpenters, 436 U.S. 180, 98 S.Ct. 1745, 56 L.Ed.2d Delta-Sonic moves in this court for a preliminary injunction. The Council responds that the mechanisms and procedures of the Labor Management Relations Act (29 U.S.C. §§ 141-187), not state law, should govern this dispute, and that a preliminary injunction would violate defendants' rights to engage in free speech protected by the federal and state constitutions. The Council also contends that Supreme Court lacks jurisdiction to issue an injunction because of the anti-injunction statute, N.Y.Labor Law § 807(1), and because Delta-Sonic cannot show irreparable harm or a likelihood of success on the merits. Finally, the Council contends that Delta-Sonic does not plead a valid cause of action. This court agrees with the preemption argument, and therefore does not reach the constitutional and other arguments presented in defense by the Council.

209 (1978) (same); Local 20, Teamsters, Chauffeurs and Helpers Union v. Morton, 377 U.S. 252, 84 S.Ct. 1253, 12 L.Ed.2d 280 (1964) (preemption where labor activity is not expressly protected or prohibited by federal labor law), is only a defense to the state court action and therefore may not support removal to federal court, Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 14, 103 S.Ct. 2841, 2848-49, 77 L.Ed.2d 420 (1983) ("a case may not be removed to federal court on the basis of a federal defense, including the defense of pre-emption, even if the defense is anticipated in the plaintiff's complaint, and even if both parties admit that the defense is the only question truly at issue in the case"). In an observation relevant to the issues this court must now decide, Chief Judge Telesca stated that the preemption defense, and the Council's defense to the state court action that injunctive relief against handbilling would violate its First Amendment rights, "can ... be raised and determined in state court."

DISCUSSION

The Council's position on preemption may be summed up as follows: Because consumer handbilling of secondary employers is not prohibited by Section 8(b)(4) of the LMRA, DeBartolo Corporation v. Florida Gulf Coast Building and Construction, 485 U.S. 568, 108 S.Ct. 1392, 99 L.Ed.2d 645 (1988), it is arguably permitted under Section 8(b)(4)(ii)(B), and is also "arguably protected" under Section 7 of the LMRA. When the labor activity at issue in the case is arguably permitted or arguably protected in such manner, the case is preempted to the LMRA scheme. San Diego Building Trades Council v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959); Local 20, Teamsters, Chauffeurs and Helpers Union v. Morton, 377 U.S. 252, 84 S.Ct. 1253, 12 L.Ed.2d 280 (1964). Delta-Sonic, on the other hand, contends that the Council's proposed handbilling activity is not "arguably" subject to the LMRA, "either by way of protection or prohibition," and that "it may [not] rationally be concluded that the conduct in question is activity conducted for the purpose and within the scope of recognized labor union objectives ... [because instead] it is conduct outside that scope although engaged in by the members of a labor union." Barclay's Ice Cream Co., Ltd. v. Local No. 757, 41 N.Y.2d 269, 272, 392 N.Y.S.2d 278, 360 N.E.2d 956 (1977).

"When it is clear or may fairly be assumed that the activities which a State purports to regulate are protected by § 7 of the National Labor Relations Act, or constitute an unfair labor practice under § 8, due regard for the federal enactment requires that state jurisdiction must yield." San Diego Building Trades Council, Millmen's Union, Local 2020 v. Garmon, 359 U.S. 236, 244, 79 S.Ct. 773, 779, 3 L.Ed.2d 775 (1959). "At times it has not been clear whether the particular activity regulated by the States was governed by [00fa] § 7 or § 8 or was, perhaps, outside both these sections. But courts are not primary tribunals to adjudicate such issues. It is essential to the administration of the Act that these determinations be left in the first instance to the National Labor Relations Board." Id. 359 U.S. at 244-45, 79 S.Ct. at 779.

Under the Garmon scheme, "[i]f the Board decides, subject to appropriate federal judicial review, that conduct is protected by § 7, or prohibited by § 8, then the matter is at an end, and the states are ousted of all jurisdiction." Id. 359 U.S. at 245, 79 S.Ct. at 780. "Or, the Board may decide that Delta-Sonic's argument, that the Council's proposed activity is clearly outside both § 7 and § 8, and that therefore there is nothing to defer to the National Labor Relations Board (NLRB), is premised on the twin view that the Council's proposed handbilling is not a prohibited labor practice under the NLRA, DeBartolo Corporation v. Florida Gulf Coast Trades Council, 485 U.S. 568, 576-78, 108 S.Ct. 1392, 1398-99, 99 L.Ed.2d 645 (1988), and that the handbilling is concomitantly not a protected labor activity either. Edward J. DeBartolo Corporation v. NLRB, 463 U.S. 147, 103 S.Ct. 2926, 77 L.Ed.2d 535 (1983). The first stated premise is correct, but Delta-Sonic is in error on the second premise. Even if Delta-Sonic was correct in regard to the second premise, however, analysis would turn to a second pre-emption doctrine...