Halsey Drug Co., Inc. v. Drug, Chemical, Cosmetic, 01 CIV. 4899(CM).

• Court: United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
• Writing for the Court: McMahon
• Citation: 192 F.Supp.2d 192
• Parties: HALSEY DRUG CO., INC., Plaintiff, v. DRUG, CHEMICAL, COSMETIC, PLASTICS AND AFFILIATED INDUSTRIES WAREHOUSE EMPLOYEES, LOCAL 815, Defendant.
• Docket Number: No. 01 CIV. 4899(CM).,01 CIV. 4899(CM).
• Decision Date: 26 March 2002

192 F.Supp.2d 192 HALSEY DRUG CO., INC., Plaintiff,
v.
DRUG, CHEMICAL, COSMETIC, PLASTICS AND AFFILIATED INDUSTRIES WAREHOUSE EMPLOYEES, LOCAL 815, Defendant. No. 01 CIV. 4899(CM). United States District Court, S.D. New York. March 26, 2002.

Page 193

James P. Anelli, Esq., St John & Wayne, L.L.C., for Plaintiff.

Andrew S. Hoffman, Esq., Wiseman, Hoffman & Walzer, for Defendant.

MEMORANDUM DECISION AND ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

McMAHON, District Judge.

Plaintiff brings this action pursuant to the Federal Declaratory Judgment Act, 28 U.S.C. § 2201, and requests that this Court determine the arbitrability of certain issues under a collective bargaining agreement between the two parties. Plaintiff also claims jurisdiction under 28 U.S.C. § 1332 and Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185. Both parties move for summary judgment pursuant to Federal Rules of Civil Procedure, Rule 56.

FACTS PERTINENT TO THIS MOTION

Plaintiff Halsey Drug Co., Inc. ("Halsey") manufactures and distributes pharmaceutical drug products. Defendant Drug, Chemical, Cosmetic, Plastic and Affiliated Industries Warehouse Employees, Local 815 ("Local 815") is a labor organization within the meaning of 29 U.S.C. § 185. Approximately fifty years ago, Local 815 certified a unit of employees at a facility formerly operated by Halsey in Brooklyn, New York that manufactured and distributed various pharmaceutical products produced by Halsey (the "Brooklyn facility"). Pl. 56.1 ¶ 1. Local 815 represented the employees of the Brooklyn facility

Page 194

since that time until the closing of the Brooklyn facility on March 30, 2001. Pl. 56.1 ¶ 2.

The most recent collective bargaining agreement between Halsey and Local 815 was effective from July 2, 1997 through July 1, 2000. See Bellach Aff. Ex. E (the "CBA"). In the CBA, Halsey recognizes Local 815 "as the sole collective bargaining agent for all employees in its employ, excluding executives, salesmen, technical skilled help in the analytical laboratory, supervisors and armed guards." CBA ¶ 1. The CBA provides:

This Agreement and all of the conditions and terms thereof shall be binding upon the Employer, and upon each partner of the Employer if such Employer is a partnership, and upon each individual officer of the Employer if the Employer is a corporation, and shall also be binding upon and govern the working conditions and terms of employment in any new or future acquired establishment that the Employer or any partner or officer of the Employer shall acquire, conduct or maintain during the term of this Agreement. CBA ¶ 16.

The CBA also contains a broad grievance and arbitration clause that provides:

Should any dispute arise concerning the application, interpretation, effect, purpose or breach of any term or condition of this Agreement, or in the event that there shall exist any claim, demand, dispute or controversy between the parties hereto, including but not limited to a demand or dispute arising out of a proposed addition, deletion or modification of this Agreement, the parties hereto shall first attempt to settle and adjust such dispute, claim, demand or controversy by negotiation. In the event that said dispute, claim, demand or controversy shall not be completely settled and adjusted, the parties agree that either of them may submit the question, including any damages that have been suffered, to arbitration before an arbitrator designated by the New York State Board of Mediation, the American Arbitration Association, or the Federal Mediation & Conciliation Service in accordance with their rules.... It is the intent of the parties hereto that all disputes between them both within and outside of the Agreement, shall be submitted to arbitration and that no defense to prevent the holding of the arbitration shall be permitted. CBA ¶ 6 (emphasis added).

In late 1999, Halsey decided to close its Brooklyn facility. Pl. 56.1 ¶ 3; Whitney Aff. ¶¶ 2 & 8, Ex. B. At that time, Larry Plotnick served as the President of Local 815. Halsey claims that in late 1999, it informed Local 815 that Halsey would close the Brooklyn facility in the future and would transfer some of its operations to a new facility located in Congers, Rockland County, New York (the "Congers facility"). Pl. 56.1 ¶ 4. Halsey claims that Mr. Plotnick knew that it intended to transfer some of its operations to the Congers Facility, but that during negotiations, Mr. Plotnick stated that "Local 815 had no interest in any of its employees going to work at Halsey's facility in [Congers] insofar as its members had no interest in traveling there because of the time involved and the lack of public transportation." Whitney Aff. ¶ 5. Instead, Halsey contends, Mr. Plotnick stated that Local 815's sole concern was making sure its members received severance. Id.

Local 815 argues that Halsey told the union only that the Brooklyn facility would be closed, but did not inform the union that some of the Brooklyn facility's operations were going to be transferred to Congers. Def. 56.1 ¶ 7. Local 815 claims that it believed that Halsey would subcontract

Page 195

out all of its operations to other manufacturers. Id.

On November 29, 1999, Carol Whitney, Vice President of Halsey, sent a letter to Mr. Plotnick regarding the closure of the Brooklyn facility and the proposed severance package for the Local 815 members for his acceptance and approval (the "Closing Agreement"). Pl. 56.1 ¶ 13; Whitney Aff. ¶ 6, Ex. A. Mr. Plotnick signed the letter under the term "Accepted and Approved" on December 3, 1999.

On December 1, 1999, Mr. Michael Reicher, Halsey's Chairman and Chief Executive Officer, sent a memo to all of Halsey's employees advising them of the closure of the Brooklyn facility, and advising them that some work previously done in Brooklyn would be moved to Congers, but that most of the work would be contracted out to third-parties. Whitney Aff. ¶ 8, Ex. B.

On January 14, 2000, Mr. Robert Bellach replaced Mr. Plotnick as Local 815's representative. Def. 56.1 ¶ 2.

By its terms, the CBA was set to expire in July of 2000. On April 17, 2000, Local 815 sent notice to Halsey that it intended to terminate the CBA on its expiration date and to negotiate a successor agreement. Bellach Aff. ¶ 4, Ex. A. Mr. Bellach claims that only after this notice was sent did he learn that Halsey intended to shut down its Brooklyn facility. Bellach Aff. ¶ 5. Ms. Whitney claims that she had had conversations with Mr. Bellach before April about the closing. Whitney Aff. ¶ 9.

In April 2000, Halsey believed that it would shut down the Brooklyn facility in Fall 2000. Rather than negotiate a new contract, the parties extended the terms of the CBA. On August 8, 2000, both parties signed a letter agreement. Whitney Aff. Ex. F. The letter confirms the parties' understanding "regarding the extension of the closing date to Nov. 30, 2000," and provides that "the terms of the Collective Bargaining Agreement between Local 815 and Halsey Drug remain in effect including agreements made concerning the closing of the Brooklyn facility." Id.

The...