Smith v. Hickey

• Decision Date: 19 December 1979
• Docket Number: No. 79 Civ. 3122 (RWS).,79 Civ. 3122 (RWS).
• Citation: 482 F. Supp. 644
• Parties: R. C. SMITH, Charles Calhoun, Joseph Penot, Martin Hickey, Michael Diprisco, James Hayes, Thomas E. Murphy, Franklin K. Riley and J. Eric May, as Trustees of the R.O.U. Benefits Plan, Plaintiffs, v. Martin HICKEY, Michael Diprisco, Nicholas Telesmanic, C. J. Bracco, David Schultze, Allen Taylor, William Ristine, William Steinberg, Bernard Smith, Harvey Strichartz, Joseph Rubin, Phillip O'Rourke, Floyd Hepting, Ralph Baird, as Trustees of the A.R.A.-P.M.A. Welfare Plan and the A.R.A. Pension and Welfare Plan and John Sokolowski, as Administrator of the A.R.A. Pension and Welfare Plans and Paul Anselmo, as the Training Director of the A.R.A.-R. O.U. Training School, Defendants.
• Court: U.S. District Court — Southern District of New York

482 F. Supp. 644

R. C. SMITH, Charles Calhoun, Joseph Penot, Martin Hickey, Michael Diprisco, James Hayes, Thomas E. Murphy, Franklin K. Riley and J. Eric May, as Trustees of the R.O.U. Benefits Plan, Plaintiffs, v. Martin HICKEY, Michael Diprisco, Nicholas Telesmanic, C. J. Bracco, David Schultze, Allen Taylor, William Ristine, William Steinberg, Bernard Smith, Harvey Strichartz, Joseph Rubin, Phillip O'Rourke, Floyd Hepting, Ralph Baird, as Trustees of the A.R.A.-P.M.A. Welfare Plan and the A.R.A. Pension and Welfare Plan and John Sokolowski, as Administrator of the A.R.A. Pension and Welfare Plans and Paul Anselmo, as the Training Director of the A.R.A.-R. O.U. Training School, Defendants.

No. 79 Civ. 3122 (RWS).

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

December 19, 1979.

Marchi, Jaffe, Cohen, Crystal & Katz, New York City, for plaintiffs by David Jaffe, New York City, of counsel.

Edwin Steinberg, New York City, for defendants by Lydia Tugendrajch, New York City, of counsel.

OPINION

SWEET, District Judge.

Plaintiffs commenced this action against defendants in New York Supreme Court for breach of contract and for an accounting. Defendants removed the action to this court under 28 U.S.C. § 1441. Plaintiffs now move to remand the action to state court pursuant to 28 U.S.C. § 1447(c). A review of the facts underlying this action demonstrates a lack of subject matter jurisdiction over the claims asserted in the complaint.¹ Therefore, the motion to remand is granted.

A. Parties and Factual Setting.

Plaintiffs are trustees of the R.O.U. Benefits Plan (the "ROU Plan"). The ROU Plan is a benefit and welfare trust fund for radio officers established pursuant to a collective bargaining agreement between the Radio Officers Union, United Telegraph Workers, AFL-CIO ("ROU") and employers in the American merchant marine. Defendants are trustees of the A.R.A.-P.M.A. Welfare Plan and of the A.R.A. Pension and Welfare Plan (the "ARA Plans"). These plans are benefit trust funds for radio officers created pursuant to a collective bargaining agreement between the American Radio Association, AFL-CIO ("ARA") and American merchant marine employers. All three plans are funded by contributions received from employers who are parties to the respective collective bargaining agreements. They are maintained in accordance with the requirements of Section 302(c) of the Labor Management Relations Act of 1947, as amended ("LMRA"), 29 U.S.C. § 186(c). In addition, defendant Sokolowski is the administrator of the A.R.A. Pension and Welfare Plan, and defendant Paul Anselmo is the training director of the A.R.A.R.O.U. Training Program.

In January, 1951, the trustees of the ARA Plans voted to establish a training program to provide correspondence and residence training courses for the benefit of ARA members, to be known as the ARA Technology Institute for Maritime Electronics ("T.I.M.E."). On October 4, 1960 and December 1, 1962; the ROU Plan signed contracts with the ARA Plans (the "Contracts") under which it agreed to contribute to T.I.M.E. and under which ROU members became eligible to participate in T.I.M.E. programs.

T.I.M.E. itself is not a Section 302(c) trust. It receives no direct contributions from employers, but rather is funded by contributions from the ROU Plan and the ARA Plans in accordance with the Contracts. T.I.M.E. has no trust assets of its own and has no trustees. Defendants have not disputed plaintiffs' assertion that T.I. M.E. is regulated neither under the LMRA nor under the Employee Retirement Income Security Act of 1974, ("ERISA"), 29 U.S.C. §§ 1001 et seq.

Plaintiffs commenced this suit in New York Supreme Court in 1979, shortly after the ROU Plan terminated its participation in T.I.M.E. Plaintiffs allege that, beginning in 1976, the ARA Plans pursued a course of harassment of the ROU Plan by preventing the trustees of the ROU Plan from participating in setting policies pertaining to the operation of T.I.M.E. The complaint alleges that the defendants denied access to training programs to ROU officers, prevented the ROU Plan from participating in the restructuring of T.I.M.E.'s curriculum, and withheld financial data concerning T.I.M.E. from ROU trustees. Plaintiffs aver that these actions constitute a breach of the Contracts, for which they are entitled to recover damages.

Plaintiffs' second cause of action seeks an accounting of T.I.M.E.'s assets and inventory, which the ARA Plans have allegedly prevented T.I.M.E. from providing.

Defendants have counterclaimed for $200,000 for the averred failure of plaintiffs to make sufficient contributions to the T.I. M.E. program as required by the Contracts.

Defendants urge that federal jurisdiction exists over the claims asserted in the complaint pursuant to Sections 301 and 302 of the LMRA, 29 U.S.C. §§ 185, 186, Section 502 of ERISA, 29 U.S.C. § 1132, and 28 U.S.C. § 1337.²

Whether a basis for federal jurisdiction exists which will support removal of an action is determined solely by reference to the allegations in plaintiffs' complaint, and not to those contained in defendants' answer. Gully v. First National Bank, 299 U.S. 109, 113, 57 S.Ct. 96, 81 L.Ed. 70 (1936). Moreover, claims asserted in a counterclaim can not serve as the basis for a finding of federal jurisdiction. Coditron Corp. v. AFA Protective Systems, Inc., 392 F.Supp. 158, 161 (S.D.N.Y.1975).

B. Section 301 of the LMRA.

Section 301 of the LMRA provides:

Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce or between any such labor organizations . . . may be brought in any district court of the United States having jurisdiction of the parties . . .

29 U.S.C. § 185(a). Defendants argue that this suit should be viewed as one involving the breach of the collective bargaining agreement between ROU and the employers it represents, or as one concerning the breach of a contract between two labor organizations.

In order to sustain jurisdiction over an action under Section 301, the action must allege: (1) a violation (2) of a contract (3) between an employer and a labor organization or between two labor organizations. Alvares v. Erickson, 514 F.2d 156, 161 (9th Cir.), cert. denied, 423 U.S. 874, 96 S.Ct. 143, 46 L.Ed.2d 106 (1975); Maita v. Killeen, 465 F.Supp. 471, 472 (E.D.Pa.1979). Section 301 has been construed to provide a jurisdictional basis for suits by employers, unions or employees to enforce rights under a collective bargaining agreement. Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 562, 96 S.Ct. 1048, 47 L.Ed.2d 231 (1976) (alleged unfair labor practice by employer); National Rejectors Industries v. United Steelworkers, 562 F.2d 1069, 1074 (8th Cir. 1977), cert. denied, 435 U.S. 923, 98 S.Ct. 1486, 55 L.Ed.2d 517 (1978); Leonardis v. Local 282 Trust Fund, 391 F.Supp. 554 (E.D.N.Y.1975) (claim by employee that pension fund improperly denied him pension). Jurisdiction has also been sustained over actions for breach of contract between two labor organizations. Local 33, International Hod Carriers v. Mason Tenders, 291 F.2d 496 (2d Cir. 1961). However, the courts have declined to exercise jurisdiction under Section 301 in the absence of a claimed breach of contract between a union and an employer or between two unions. In Miller v. Davis, 507 F.2d 308, 311 (6th Cir. 1974), the court held that Section 301 did not confer jurisdiction over an action alleging improper administration of union trust funds. The court in Weiss v. Legal Aid Society, 449 F.Supp. 571, 573 (S.D.N.Y.1978), held that an action for breach of employment contract by an employee who was not covered by a collective bargaining agreement did not fall within Section 301 since that section "confers jurisdiction . . . only when the complaint alleges a violation of an agreement between an employer and a labor organization."

Section 301 also does not extend to suits brought against defendants who are not parties to the contract whose breach is alleged. In Bowers v. Ulpiano Casal, Inc., 393 F.2d 421 (1st Cir. 1968), it was held that Section 301(a) did not confer jurisdiction over a suit by pension fund trustees against individuals who had allegedly participated in the illegal looting of the fund. Such malfeasance, the court ruled, could not be construed as a breach of the collective bargaining agreement or of the contract creating the fund, since the defendants were not parties to those contracts. In Colorado Pipe Industry Employee Benefit Funds v. Colorado Springs Plumbing and Heating Company, 388 F.Supp. 71, 73 (D.Colo.1975), the court held that Section 301(a) did not grant jurisdiction over a claim by pension fund trustees against a surety which had issued a bond securing payment of an employer's obligations under a collective bargaining agreement.

Defendants contend that plaintiffs' suit alleges a breach of the collective bargaining agreement between ROU and its employers. That agreement requires provision of training facilities and programs to ROU members, and authorizes the trustees of the ROU Plan to expend funds contributed by employers to make these programs and facilities available. Under the agreement, the employers agree fully to "cooperate in the fulfillment" of the training programs and to make contributions for that purpose.

Defendants argue that T.I.M.E. is a benefit plan created in order to fulfill the training requirements of the ROU collective bargaining plan. They claim that since plaintiffs essentially seek to recover for failure of T.I.M.E. to supply training services to ROU employees, as required by the ROU collective bargaining agreement, this suit must be regarded as alleging a violation of the ROU collective bargaining agreement.³

However, the complaint does not allege any breach of the ROU collective bargaining agreement by either the ROU or the employers whom it represents. The fact that provision of some...