Opinion
99 CIV. 12270 (DLC)
April 17, 2001
Attorney for counter-defendant Targeted Media, Inc.: Milton L. Williams, Jr., Time Inc., 1271 Avenue of the Americas, New York, N.Y. 10020.
Attorney for counter-plaintiffs: Anne L. Clark, Vladeck, Waldman, Elias Engelhard, P.C., 1501 Broadway, Suite 800, New York, N.Y. 10036.
MEMORANDUM OPINION AND ORDER
Plaintiff, the Administrative Committee of the Time Warner, Inc. Benefit Plans ("the Committee") brought this action in December 1999. The Committee sought a declaratory judgment that the defendants, alleged to have worked as independent contractors for subsidiaries of Time Warner, Inc. ("Time Warner"), were not entitled to benefits under Time Warner's employee benefits plans. The defendants filed an answer in which they asserted counterclaims seeking, inter alia, recovery of "commissions" from counterclaim-defendant Targeted Media, Inc. ("TMI") . On November 17, 2000, the Court granted the Committee's motion for summary judgment on its claims against defendants, and its motion for partial summary judgment, dismissing the counterclaims brought against the Committee under the Employment Retirement Income Security Act of 1974 ("ERISA").
Counterclaim-plaintiffs Gloria Biscardi, Michael Jilek, Joseph Scotto, Tina Sonzogni, and Lowell Fox (collectively, the "counterclaim-plaintiffs") contend that TMI breached their contracts (Fourth Cause of Action), and violated New York Labor Law Sections 191 (Fifth Cause of Action), 193 (Sixth Cause of Action), and 191-c (Seventh Cause of Action). Although all of the federal claims in this action have been dismissed, the Court will exercise supplemental jurisdiction over counterclaim-plaintiffs' remaining state law claims. See 28 U.S.C. § 1367 (c)(3) . The same facts relate to both the federal and state claims. The parties have concluded discovery on the state law claims and have fully submitted the summary judgment motion. The parties as well as the Court have already spent significant time and resources on these issues. No party has suggested that the state claims at issue in this case involve novel or particularly complex questions of New York state law. Thus, in considering the fairness to the parties, judicial economy, and convenience to both the parties and the Court, the exercise of supplemental jurisdiction is appropriate. See Mauro v. Southern New England Telecomms., Inc., 208 F.3d 384, 388 (2d Cir. 2000); Nowak v. Ironworkers Local 6 Pension Fund, 81 F.3d 1182, 1191 (2d Cir. 1996) ;Finz v. Schlesinger, 957 F.2d 78, 83-84 (2d Cir. 1992).
The Court's November 17, 2000 Opinion and Order precludes Fox from bringing his ERISA claim for discrimination in Count Three.
TMI moves for summary judgment on the state law counterclaims. In their breach of contract claim the counterclaim-plaintiffs seek compensation for all subscriptions they sold, not just those mailed, and to recover for themselves commissions" "split" by TMI between the counterclaim-plaintiffs and others. The material issues of fact in dispute include the interplay between paragraphs 6 and 6(b) of the contracts and whether the contracts permit TMI to pay for only subscriptions in service" and to split "service fees"; whether the penalty provisions in paragraph 7 of the contracts limit the ability of TMI to claim that the counterclaim-plaintiffs breached their contracts by not meeting their "target levels" of sales; and whether the counterclaim-plaintiffs in any event substantially performed their obligations.
With respect to the claims under Sections 191 and 193 of New York Labor Law, in which the counterclaim-plaintiffs seek not only the compensation described above, but also compensation which they contend was due after their employment ended, material issues of fact in dispute include whether the counterclaim-plaintiffs were "employees, " whether the "service fees" they were paid were "wages" covered by the terms of Sections 191 and 193, and such other issues as would permit a determination to be made as to whether paragraphs 8 and 9 of the contracts are void as violations of these two Sections.
In Scotto's Section 191-c claim, he seeks through a claim pled in the alternative, unpaid "commissions" earned upon sales in the event he is deemed an independent contractor. The determination of whether he was an independent contractor and whether he was entitled to commissions earned on subscriptions sold raise material issues of fact that are in dispute.
CONCLUSION
For the reasons stated, TMI's motion for summary judgment is denied. A scheduling order shall be issued with this Memorandum Opinion and Order.
SO ORDERED: