TUVIA CONVALESCENT CENTER v. NAT. UNION OF HOSP., 82 Civ. 5414(MP).

• Decision Date: 21 December 1982
• Docket Number: No. 82 Civ. 5414(MP).,82 Civ. 5414(MP).
• Citation: 553 F. Supp. 303
• Parties: TUVIA CONVALESCENT CENTER, INC., d/b/a Hilldale Convalescent Home, Plaintiff, v. NATIONAL UNION OF HOSPITAL AND HEALTH CARE EMPLOYEES, A DIVISION OF RWDSU, AFL-CIO; Trustees, "1199" National Benefit Fund for Hospital and Health Care Employees; Trustees, "1199" National Pension Fund for Hospital and Health Care Employees, Defendants.
• Court: U.S. District Court — Southern District of New York

553 F. Supp. 303

TUVIA CONVALESCENT CENTER, INC., d/b/a Hilldale Convalescent Home, Plaintiff, v. NATIONAL UNION OF HOSPITAL AND HEALTH CARE EMPLOYEES, A DIVISION OF RWDSU, AFL-CIO; Trustees, "1199" National Benefit Fund for Hospital and Health Care Employees; Trustees, "1199" National Pension Fund for Hospital and Health Care Employees, Defendants.

No. 82 Civ. 5414(MP).

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

December 21, 1982.

Milman, Naness & Pollack by Sanford E. Pollack, Hewlett, N.Y., for plaintiff.

Sipser, Weinstock, Harper, Dorn & Leibowitz, by Jerome Tauber, New York City, for defendant Nat. Union.

Hendler & Murray, P.C., by Kenneth W. Malamy, Robert Post, New York City, for defendant Funds.

MEMORANDUM

MILTON POLLACK, District Judge.

The defendants have moved to dismiss the amended complaint pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure contending: (1) that complete diversity between the parties is lacking and that there is no jurisdiction under 28 U.S.C. § 1332; and (2) that the antitrust claims asserted in the Seventh and Eighth counts of the complaint are precluded by the labor exemption to the antitrust laws, contained in 15 U.S.C. § 17. Defendant National Union of Hospital and Health Care Employees, a Division of RWDSU, AFL-CIO (National Union) contends further that claims asserted against it under LMRA § 301, 29 U.S.C. § 185 are improperly raised since the National Union was not a party to the collective bargaining agreement. Defendant National Union states that if it were a party the claims in the first Six counts would be arbitrable and that in any event the claims are within the exclusive jurisdiction of the National Labor Relations Board. Defendants Trustees "1199" National Benefit Fund for Hospital and Health Care Employees and Trustees "1199" National Pension Fund for Hospital and Health Care Employees (Funds) further contend that plaintiff has no standing to bring claims arising under E.R.I.S.A., 29 U.S.C. § 1132 and that the Ninth claim should therefore be dismissed.

For the reasons appearing hereafter, based on the memoranda from all the parties and a hearing before the Court, the claims against the National Union and the Funds are dismissed in all respects.

I. The Underlying Dispute.

The amended complaint asserts nine claims for relief. The first six claims seek compensatory and punitive damages from the defendant National Union for various labor practices, accusations of false imprisonment and withholding of information necessary for good faith bargaining. The Seventh and Eighth claims accuse the National Union and the Funds of engaging in restraint of trade, suppression of competition and causing an anti-competitive impact in violation of the antitrust laws. Finally, the Ninth claim charges the Funds with violating their fiduciary responsibilities under E.R.I.S.A.

The plaintiff, Tuvia Convalescent Center, Inc. (Tuvia), was a Connecticut corporation which did business under the name Hilldale Convalescent Home, until it terminated its operations, allegedly due to a strike by its employees. Defendant National Union is an unincorporated association and labor organization with its principal place of business in the Southern District of New York. The Funds are jointly trusteed labor management benefit funds within the meaning of 29 U.S.C. § 186(c)(5) and are employee benefit plans within the meaning of 29 U.S.C. §§ 1002 & 1132(d)(1).

The collective bargaining agreement between plaintiff and the New England Health Care Employees Union, District 1199, RWDSU, AFL-CIO (Local Union) was made on November 12, 1979 to expire on September 30, 1980. The Local Union is not named as a defendant in this action. The National Union was not a signatory to the November 12, 1979 agreement.

On the expiry date of the first agreement, the plaintiff entered into an interim agreement with "(DISTRICT) 1199 N.E., NATIONAL UNION OF HOSPITAL AND HEALTH CARE EMPLOYEES, RWDSU, AFL-CIO (`Union')". The interim agreement was to have effect during the period of negotiations over a new contract after October 1, 1980. The sole substantive content of the interim agreement was to make provision for the continuation of employer contributions into the National Benefit Fund while negotiations continued. The interim agreement has no terms that limit the bargaining tactics of the parties.

Ultimately, negotiations failed and a strike ensued. Plaintiff complains that the strike was improper, that its bargaining agents were falsely imprisoned by union negotiators and that there were threats of violence. Plaintiff alleges that these activities caused its financial ruin and the eventual closing of the facility. Plaintiff also complains that the Funds failed to provide information that was needed in the bargaining process and that this failure was the result of a conspiracy between the Funds and the National Union.

II. Preliminary Issues.

Plaintiff conceded on oral argument that the absence of complete diversity precluded jurisdiction under 28 U.S.C. § 1332. Plaintiff is a resident and citizen of Connecticut and defendant National Union is an unincorporated labor association with Connecticut members. The Funds are managed by trustees, some of whom are citizens of Connecticut. Thus complete diversity is absent. See Green v. Santa Fe Indus., 391 F.Supp. 849, 853 (S.D.N.Y.1975), aff'd, 533 F.2d 1283 (2d Cir.1976), rev'd on other grounds, 430 U.S. 462, 97 S.Ct. 1292, 51 L.Ed.2d 480 (1977).

In their memorandum in support of the motion to dismiss, Defendant National Union argues that the first six causes of action concerning breach of the collective bargaining agreement are arbitrable under the contract and that they are not properly before the District Court. It was conceded upon oral argument that the absence of the Local Union from this suit eliminates the question of the exclusivity of the arbitration remedy from consideration.

The initial collective bargaining agreement between the plaintiff and the Local Union contained a broad based grievance and arbitration procedure that applies to a "dispute or complaint arising between the parties hereto under or out of this Agreement or the interpretation, application, performance, termination, or any alleged breach thereof". Were the Local Union a party it could demand arbitration, even though the contract terminated before the strike. See Nolde Brothers, Inc., v. Local 358, Bakery & Confectionery Workers, 430 U.S. 243, 97 S.Ct. 1067, 51 L.Ed.2d 300 (1977). See also ITT World Communications, Inc. v. Communications Workers, 422 F.2d 77 (2d Cir.1970). As the National Union concedes, since it is not a party to the agreement it cannot invoke the arbitration clause of the agreement.

III. LMRA § 301 — The First Six Claims.

Plaintiff's claims for breach of contract under LMRA § 301 cannot be asserted against the National Union. Plaintiff concedes that the National Union was not a signatory¹ to the initial agreement but argues that the Local Union is not an autonomous labor organization, but rather, that it is made an "inseparable part" of the National Union by its by-laws. The relationship between the National Union and the Local Union as set out in the by-laws does not make the National Union responsible for claims arising out of the termination of an agreement that the National Union was not a party to or where it did not act in complicity with the Local Union. Vicarious liability is not established by mere reference to an institutional document. See Carbon Fuel Co. v. United Mine Workers, 444 U.S. 212, 100 S.Ct. 410, 62 L.Ed.2d 394 (1979) (national union that signs contract is not responsible for wildcat strike by local union); Molded Materials Co. v. IUE, 418 F.Supp. 548 (W.D.Pa.1976) (where no officer of international union is involved, and only local is a party to the contract, there is no vicarious liability).

Plaintiff contends that the execution of the interim agreement gives the Court jurisdiction over the National Union. This contention is based on the signature of Doris Turner which is found on the interim agreement immediately below the designation "NATIONAL UNION OF HOSPITAL AND HEALTH CARE EMPLOYEES, RWDSU, AFL-CIO." Turner swears by affidavit that she is not the President of the National Union as is claimed by plaintiff. A determination of this controversy is unnecessary for the purpose of this motion to dismiss. The interim agreement only affects the continuation of welfare fund benefits during the negotiations for a new contract. It explicitly states that during the interim period there will be "no agreement in effect binding the parties." Thus, even if the signer of the interim agreement were an officer of the National Union, the interim agreement does not erect a collective bargaining relationship or agreement between the National Union and plaintiff. The only contract that could give rise to a § 301 lawsuit was the initial contract between the Local Union and plaintiff.

As stated above, the National Union was not a party to the initial agreement. Moreover, the complaint does not allege that the National Union induced a breach of the initial agreement. All of the conduct that allegedly injured plaintiff occurred after the termination of the initial contract. While plaintiff does allege that negotiations for the renewal of the agreement did not begin until August 15, 1980, later than the ninety day period required by contract, it does not claim that the delay was due to the National Union nor that it caused any injury. The allegations in the first six counts fail to state a contractual claim against the National Union.

Since there is no contractual relationship between the National Union and plaintiff, it is unnecessary to decide whether this Court has concurrent jurisdiction to decide claims which would also constitute unfair labor practices and would thus fall within the jurisdiction of the National Labor Relations Board. There...