Opinion
No. 3172/2004.
2012-10-9
Robert BARBANTI, Plaintiff, v. METRO–NORTH COMMUTER RAILROAD, Defendant.
Robert J. Anderson, Esq., Landman Corsi Ballaine & Ford P.C., New York, Attorney for Defendant. Mark T. Startman, Esq., Jacobowitz and Gubits, LLP, Walden, Attorney for Plaintiff.
Robert J. Anderson, Esq., Landman Corsi Ballaine & Ford P.C., New York, Attorney for Defendant. Mark T. Startman, Esq., Jacobowitz and Gubits, LLP, Walden, Attorney for Plaintiff.
PAUL I. MARX, J.
Upon the foregoing papers, it is ORDERED that the branch of Defendant's motion for summary judgment based upon preemption is denied. The branch of Defendant's motion for summary judgment on the merits of Plaintiff's claims is granted.
Background
Plaintiff Robert Barbanti filed an action against Defendant Metro–North Commuter Railroad alleging fraudulent inducement, breach of contract, and negligent/reckless misrepresentation. His claims arise from Metro–North's acquisition of a long-term lease of the Port Jervis Line (the “Line”) from Plaintiff's former employer, Norfolk Southern Railway. As part of the acquisition, Metro North allegedly determined to offer employment to Norfolk Southern's workers on the Line, so that Metro North would have experienced workers. Plaintiff, who was then employed as an Electronic Specialist with Norfolk Southern, was offered a position with Metro–North as a Signal Inspector. Plaintiff accepted Metro–North's offer of employment and began working for them on April 1, 2003 as a Signal Inspector on the Line. Metro–North's signal workers were subject to an existing collective bargaining agreement (“CBA”) between Metro–North and the Association of Commuter Rail Employees Local 166 (“Local 166”).
Plaintiff subsequently learned that Local 166 objected to Metro–North's decision to give him the Signal Inspector position without it first having been made available to the union's existing members. Local 166 and Metro–North negotiated this and other issues related to the employees acquired with the Port Jervis Line and they entered into a Letter Agreement, dated April 15, 2003. The Letter Agreement provided, inter alia, for Plaintiff's removal from the Signal Inspector position and his placement in a new position as an Electronic Technician at a rate of pay that was lower by $0.58 per hour. The Signal Inspector position was then offered to Metro–North employees.
Plaintiff contends that Metro–North induced him to leave his position as an Electronic Specialist with Norfolk Southern and forego his seniority and other rights by representing to him that he would obtain a protected supervisory position with Metro–North as a Signal Inspector. Plaintiff specifically alleges that these representations were not made in good faith because at the time they were made Metro–North had not concluded its negotiations with Local 166 regarding the integration of the Port Jervis Line. Plaintiff complains that “[w]hen the offer was made to [him], it was simply made without conditions and without advice that it may change depending on the position taken by the Union in future negotiations.” Opposition at p. 4.
Metro–North removed Plaintiff's case to federal court on the ground that his claims were preempted by the Railway Labor Act, 45 U .S.C. §§ 151, et seq. (“RLA”), an argument it continues to make here. Plaintiff moved to remand, arguing that there was no preemption, and Metro–North moved for judgment on the pleadings on the basis of preemption. The federal court found that Plaintiff's claims were not preempted by the RLA, because they do not “require [ ] interpretation of the CBA; instead, they are grounded in rights and obligations that exist independent of the collective-bargaining agreement.” Barbanti v. MTA Metro North Commuter Railroad, 387 F.Supp.2d 333, 337 [SDNY 2005]. More specifically, the court found that “the terms of both the Letter Agreement and the CBA are irrelevant to whether Defendant's prior promises to the Plaintiff were knowingly false statements of material fact on which Plaintiff relied in changing his employer.” Id. at 337 (citing Livadas v. Bradshaw, 512 U.S. 107, 124 [1994] ). Thus, the court found that Plaintiff's claims were not preempted. The court granted remand and denied Metro North's cross-motion for judgment on the pleadings. The federal court sent the case back to this Court where it was filed initially. Following remand, the parties conducted discovery, including depositions of Plaintiff and Metro North representatives involved in Plaintiff's hiring.
Metro North now moves for summary judgment, again arguing that Plaintiff's claims are preempted by the RLA and that this Court has no jurisdiction to adjudicate Plaintiff's claims because they constitute “minor disputes” under the RLA over which Boards of Adjustment have exclusive jurisdiction.
Metro North also contends that even if Plaintiff's claims are not preempted, summary judgment is warranted on the breach of contract claim because there was no employment contract that existed independent of the CBA. With regard to Plaintiff's claims of fraudulent inducement and negligent misrepresentation, Metro North asserts that there are no triable issues of fact because Metro North did not knowingly or negligently make a false representation to Plaintiff.
“Minor disputes” under the RLA are disputes which “grow out of grievances or out of the interpretation or application of agreements covering rates of pay, rules, or working conditions.” 45 U.S.C. § 151a. “Minor disputes are defined as those involving the interpretation or application of existing labor agreements.” Barbanti, 387 F.Supp.2d at 337.
In opposition, Plaintiff contends that Metro North may not re-litigate the preemption issue because that issue was already decided by the federal court prior to remand and that court's determination is the “law of the case.” Metro North argues that the law of the case doctrine does not bar re-examination of the issue because the federal court was limited to the pleadings and this Court now has the benefit of a full evidentiary record. That record, Metro North asserts, supports finding that the RLA preempts Plaintiff's claims and warrants raising the issue again on a motion for summary judgment.
Law of the Case
The doctrine of “law of the case” is “in essence a doctrine of intra-action res judicata,” which “holds that once an issue is decided, it cannot again be litigated at trial level.” Siegel, N.Y. Prac § 276, at 475 [5th ed]. “Once a point is decided within a case, the doctrine of the law of the case makes it binding not only on the parties, but on the court as well: no other judge of coordinate jurisdiction may undo the decision.” Siegel, N.Y. Prac § 448, at 781 [5th ed] (citing State of New York Higher Educ. Svcs. Corp. v. Starr, 158 A.D.2d 771, 551 N.Y.S.2d 363 (3rd Dept 1990] ).
The federal district court is a court of coordinate jurisdiction in that it, like this court, is a trial court. That court made a determination in this case that Plaintiff's claims are not preempted by the RLA. Thus, the application here of the law of the case doctrine would preclude any re-examination by this Court of that issue.
However, in Matter of Seltzer v. New York State Democratic Committee, 293 A.D.2d 172, 174, 743 N.Y.S.2d 565 [2nd Dept 2002], a case arising in a similar procedural context, the Second Department declined to follow a federal district court's decision in the same case. Matter of Seltzer was initially brought in state court under Election Law § 2–126 and was then removed to federal court on the ground that the claim was preempted by the Federal Election Campaign Act (“FECA”). The federal court found that the claim was not preempted and remanded the case to state court. Following remand, the Federal Election Commission issued an advisory opinion finding that Election Law § 2–126 is preempted by the FECA in a primary election for federal office. The Second Department determined that it could re-examine the issue of preemption in light of the FEC's later opinion.
In reaching that decision, the Second Department found in the first instance that a federal court's “initial ruling on the preemption issue does not constitute controlling authority,” because state courts are “not necessarily bound by the decisions of intermediate and lower federal courts.” Matter of Seltzer, 293 A.D.2d at 174 (citing People v. Kin Kin, 78 N.Y.2d 54;Flanagan v. Prudential–Bache Sec., 67 N.Y.2d 500;Alvez v. American Export Lines, 46 N.Y.2d 634,aff'd446 U.S. 274). The Second Department also determined that it was “not bound by the doctrine of the law of the case.” 293 A.D.2d at 174. It stated that the doctrine “is not so inflexible as to preclude the correction of a ruling based on new evidence or a change in the law if the error sought to be corrected is so plain ... [that it] would require [the] court to grant a reargument of a cause.' “ Id. at 174 (citing Foley v. Roche, 86 A.D.2d 887, 887, quoting Eaton v. Alger, 47 N.Y. 345, 348). Finding the federal court's decision in the case to be plainly wrong in light of the FEC's opinion, the Second Department held that it was not bound to follow that court's erroneous decision. Id. at 175.
Applying that reasoning here, this Court need not adhere to the district court's initial ruling on the issue of preemption if new evidence or a change in the law supports a finding that the decision was plainly wrong.
Here, as in Matter of Seltzer, a later decision of the Second Circuit Court of Appeals shows that the district court's decision was plainly in error. Shortly after the case was remanded to this Court in May, 2005, the Second Circuit considered the same issue that arose in this case-specifically, whether state law claims that qualify as minor disputes are preempted by the RLA and are within the exclusive jurisdiction of arbitral panels. See Sullivan v. American Airlines, Inc., 424 F .3d 267 [2nd Cir2005] (decided September 13, 2005). Sullivan held that the district court lacked subject matter jurisdiction over the case because the RLA did not provide complete preemption and the case could not be removed to federal court based upon the defense of ordinary preemption.
This Court does not read Matter of Seltzer as a blanket rejection of the law of the case doctrine where there is an earlier federal court decision in the case. In order to set aside a federal court's prior decision in a case, the Court must find either a change in law or new evidence which shows that the federal decision was “plainly” in error.
Sullivan involved defamation claims brought by employees of American Airlines against the airline, two of the airline's managers, and three union members who had fought against the plaintiffs in a bitter union election. American removed the case to federal court, claiming that the suit was preempted by the Railway Labor Act and that the federal court had jurisdiction to determine that the Act preempts such “minor disputes” and to then dismiss the action. The federal district court dismissed one count of the complaint and remanded the remaining counts to state court. On appeal, the Second Circuit found that the district court lacked subject matter jurisdiction because the Railway Labor Act did not confer original jurisdiction on federal courts; the RLA vests exclusive jurisdiction in arbitral panels over “minor disputes” involving “rates of pay, rules, or working conditions.” Therefore, the federal district court did not have jurisdiction upon removal of the case from state court.
The instant case was removed to federal court on the same grounds at issue in Sullivan. Defendant in this case also asserted a defense of preemption of “minor disputes” under the RLA as the basis for federal court jurisdiction. As Sullivan demonstrates, the federal district court lacked subject matter jurisdiction over the case and therefore had no jurisdiction to decide Defendant's motion for judgment on the pleadings. Accordingly, the federal district court's decision was plainly in error insofar as it asserted jurisdiction to determine whether Plaintiff's state claims were preempted by the RLA. Therefore, this Court is not bound to follow it and may reexamine the preemption issue.
Preemption
Although this Court finds that it is not bound by the federal court's decision in this case, it nonetheless agrees with the federal court's determination that Plaintiff's claims are not preempted by the RLA.
As the federal court stated in Barbanti, the RLA preempts state law claims “where the resolution of [the] state-law claim depends on an interpretation of the collective-bargaining agreement.” 387 F.Supp.2d at 337 (quoting Shafi v. British Airways, PLC, 83 F.3d 566, 569–70 [2d Cir.1996] ). Where the claim “involves rights and obligations that exist independent of the CBA” and where the meaning of the CBA is not the subject of the dispute, the claim is not preempted by the RLA. Id. “Plaintiff's causes of action allege, in short, that the Defendant made material misrepresentations regarding the position and salary that Plaintiff would be given if he resigned from his then-employer and agreed to work for the Defendant.” Id.
The elements of fraudulent inducement are: (1) a knowingly false representation of a material fact, and (2) detrimental reliance thereon. Defendant's claim of fraudulent inducement does not require interpretation of, or reference to, the CBA and the Letter Agreement. At the time Metro North made the offer of employment to Plaintiff and he accepted the offer, the Letter Agreement, which purports to extend the CBA to the newly—acquired employees, was not yet in existence. “Although the Letter Agreement might reveal the reason why Plaintiff was not ultimately given the position of Signal Inspector, the terms of both the Letter Agreement and the CBA are irrelevant to whether Defendant's prior promises to the Plaintiff were knowingly false statements of material fact on which Plaintiff relied in changing his employer.” Id. (citing Livadas v. Bradshaw, 512 U.S. 107, 124 [1994] ). The right Plaintiff asserts—to not have been fraudulently induced to leave his prior employment—does not arise from the Letter Agreement or the CBA. There is no need to interpret either agreement to determine whether Defendant made false representations. “State law-not the CBA-is the source of the rights asserted by [Plaintiff]: the right to be free of economic harm caused by misrepresentation.' “ Wynn v. AC Rochester, 273 F3d 153, 159 [2d Cir. 1002] (quoting Foy v. Pratt & Whitney Group, 127 F3d 229, 235 [2d Cir.1997] ). Accordingly, Plaintiff's claims are not preempted by the RLA and Defendant's motion for summary judgment on that ground must be denied.
The Merits of Plaintiff's Claims
Defendant asserts that even if the Court finds that Plaintiff's claims are not preempted, summary judgment must be granted nonetheless because there are no triable issues of fact regarding Plaintiff's claims. Defendant contends that summary judgment must be granted on Plaintiff's breach of contract claim because he has not proven the existence of an employment contract. See Palmetto Partners, L.P. v. AJW Qualified Partners, LLC, 83 AD3d 804, 806 [2nd Dept 2011]. In opposition, Plaintiff asserts that “his employment contract with the railroad was both made and breached (or anticipatorily breached) at the same time.” Affirmation in Opposition at ¶ 15. Plaintiff then refers to Defendant's employment offer, which was confirmed by letter and accepted by him, but he does not identify an employment contract beyond that. The offer letter confirms employment “as a Signal Inspector at a rate of pay of $29.15 per hour or $60,865 annually” and waives a “wait period for ... enrollment in ... visual and dental benefits.” Affirmation in Opposition, Exhibit 3. There are no other terms of employment contained in the letter. Defendant maintains that there is no employment contract other than the CBA and the Letter Agreement but asserts that if the offer letter is construed to be an employment contract, Defendant did not breach any of the terms set forth in the letter. Defendant establishes that it complied with the terms of the offer letter by hiring Plaintiff for the position specified in the letter and paying him the salary set forth therein. Accordingly, Defendant is entitled to summary judgment on Plaintiff's contract claim.
Defendant also seeks summary judgment on Plaintiff's claims for fraudulent inducement and negligent misrepresentation on the ground that the undisputed evidence shows that Defendant did not make any representations to Plaintiff with the intent to deceive or defraud him into accepting its offer of employment. The deposition testimony and affidavits of the Metro–North representatives involved in Plaintiff's hiring establish that at the time the offer of employment was made they had no knowledge that Local 166 had any objection to Plaintiff being hired in the Signal Inspector position. Local 166 did not raise this objection until after Plaintiff was hired and had begun working in that position, and it's objection was based, in part, on the fact that their research showed that Plaintiff did not have the same rights of the Signal Inspector position when he worked with Norfolk Southern. See Notice of Motion, Exhibit P at 64–66, Exhibit Q at ¶ 5. As a result, the union claimed that he was not entitled to hold the position at Metro–North.
Defendant also contends that Plaintiff's reliance on any representations allegedly made to him at the time of his employment offer is not reasonable. Reasonable reliance is a necessary element of causes of action for fraudulent inducement and negligent misrepresentation. Epifani v. Johnson, 65 AD3d 224, 230, 882 N.Y.S.2d 234 [2nd Dept 2009] (citing Marino v. Oakwood Care Center, 5 AD3d 740, 774 N.Y.S.2d 562 [2nd Dept 2004] ). Without the benefit of an employment contract that specifies that employment shall be for a definite and specified term, or which limits the employer's right to change the terms of the employment offer, Plaintiff is subject to the doctrine of at-will employment. Epifani, 65 AD3d at 230. As such, he would not be able to establish “reasonable reliance on a prospective employer's representations.” Id., 65 AD3d at 230. The at-will employment doctrine even bars a claim that is predicated upon the acceptance of an offer of a position, see Marino v. Oakwood Care Center, 5 AD3d at 741, as is the case here. Moreover, Plaintiff signed a certification statement on his employment application which states that his employment would be subject to “applicable collective-bargaining agreements” and that he could not rely upon contrary oral or written statements made by any Metro–North officer or employee. Because Plaintiff is unable to establish reasonable reliance, a necessary element of his claims of fraudulent inducement and negligent misrepresentation, and because of Plaintiff's acknowledgment that his position would be subject to the collective-bargaining agreements, summary judgment is granted as to those claims.
Accordingly, the branch of Defendant's motion for summary judgment based upon preemption is denied. The branch of Defendant's motion for summary judgment on Plaintiff's claims is granted as to all claims.
The foregoing constitutes the decision and order of the Court.