Opinion
01 Civ. 4451 (SAS)
July 16, 2002
Michael Starr, Esq., Hogan Hartson, L.L.P., New York, New York 10022 Jan F. Constantine, Esq., News America Incorporated, New York, New York 10036, For Plantiff.
Irwin Bluestein, Esq., Richard A. Brook, Esq., Meyer, Suozzi, English Klein, P.C. New York, New York 10018, For Defendants.
OPINION AND ORDER
NYP Holdings, Inc., doing business as New York Post ("the Post"), seeks damages pursuant to section 303 of the Labor Management Relations Act ("LMRA") for an illegal secondary boycott by Newspaper and Mail Deliverers' Union of New York and Vicinity ("the Union")
The Union now moves for dismissal on the grounds that the Post's claims are (1) time-barred, and (2) subject to the arbitration clause of the parties' collective bargaining agreement. For the reasons set forth below, the Union's motion is granted.
Because I find the Union's second ground for dismissal dispositive, I do not address the first.
The Union's assertion that arbitration is the proper forum for the Post's claims is considered a motion under Rule 12(b)(1) that this Court lacks subject matter jurisdiction over the action. See Brennan v. Bally Total Fitness, 198 F. Supp.2d 377, 381 (S.D.N.Y. 2002).
"The court properly dismisses a case for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it." Tasini v. New York Times Co., 184 F. Supp.2d 350, 353 (S.D.N.Y. 2002) (quotations, alterations omitted) Plaintiffs bear the burden of proving, by a preponderance of the evidence, that this Court has subject matter jurisdiction over their case. See Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000)
"It is well ingrained in the law that subject-matter jurisdiction can be called into question either by challenging the sufficiency of the allegation or by challenging the accuracy of the jurisdictional facts alleged." Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Found., Inc., 484 U.S. 49, 68 (1987). When faced with a Rule 12(b)(1) motion that contains a factual challenge, a court must draw jurisdictional facts from the complaint, affidavits and exhibits submitted by the parties. See Robinson v. Government of Malaysia, 269 F.3d 133, 140 (2d Cir. 2001); Kline v. Kaneko, 685 F. Supp. 386, 389-90 (S.D.N.Y. 1988).
If a defendant challenges only the legal sufficiency of a plaintiff's jurisdictional allegations, a court must take all facts alleged in the complaint as true and draw all reasonable inferences in favor of plaintiff. See Robinson, 269 F.3d at 140; Tasini, 184 F. Supp.2d at 353 (referring to such a challenge as "facial" as distinguished from a "factual attack"); Virtual Countries, Inc. v. Republic of South Africa, 148 F. Supp.2d 256, 262 (S.D.N.Y. 2001). of course, "where evidence relevant to the jurisdictional question is before the court, the district court may refer to that evidence." Robinson, 269 F.3d at 140 (quotation marks, citation and alterations omitted)
II. FACTUAL BACKGROUND
A. The Collective Bargaining Agreement
On October 1, 1993, the Union and the Post signed a collective bargaining agreement ("the CBA") which remains in effect through October 31, 2003. 10/1/93 CBA, Ex. 1 to Affirmation of Michael Starr, attorney for the Post. The CBA made the Union the exclusive collective bargaining representative for newspaper delivery workers and other categories of employees at the Post. Id. at 1.
The CBA provides, inter alia, that the Post "shall not distribute its newspapers or any of its other publications through any wholesaler or news company making distribution in any part of the Metropolitan Area, as herein defined, unless such wholesaler is under [a] written collective [bargaining] agreement with the Union or is willing to enter into [such an] agreement . . ." CBA § 11-A.1, at 23. The Metropolitan Area is defined as New York City and certain surrounding territory, including all of Long Island. See CBA § 1, at 1. Further, "[s]hould a dispute arise regarding the application of this section, such dispute, if not satisfactorily adjusted, shall be submitted to the Joint Conference Committee." CBA § ll-A.2, at 23. The CBA also contains the following arbitration provisions which explain the roles of the Joint Conference Committee and a designated arbitrator called the Impartial Chairman:
All grievances, differences and disputes arising out of the interpretation or application of this Agreement which cannot be settled at the plant level are to be referred in writing and as hereinafter provided, to the Joint Conference Committee . . . .
CBA § 15-A, at 33.
The Joint Conference Committee shall have full and complete authority . . . and any decision when reduced to writing and subscribed to by a majority of the members shall be binding upon the parties hereto and shall be enforceable as an arbitration award . . . .
CBA § 15-C, at 34.
In the event that the Joint Conference Committee is unable to resolve the issue, or fails to act within two (2) weeks from the date on which the dispute is referred to it, the members of the Committee shall refer the dispute to the designated Impartial Chairman, or Alternate Impartial Chairman . . . .
CBA § 15-D, at 34.
With the exception of a layoff . . . and except in case of discharge of employees, no change in condition not expressly permitted by this Agreement shall be put into effect by either party . . . without prior consent of the other. In the event that such change is placed in effect, either party may file formal written demand for a hearing before the Impartial Chairman without resort to the Joint Conference Committee . . . . If the change has not been in effect for more than thirty (30) days, the Union . . . may request the Impartial Chairman to direct the Publisher who has made the change to discontinue it and restore the prior existing conditions pending a full hearing by the Impartial Chairman . . . .
CBA § 15-I.1, I.2, at 35-36.
B. The Source of the Dispute
The following factual allegations derive from the Post's Amended Complaint, and are taken as true for the purposes of this motion. In or about August 1998, the Post sought to increase its daily circulation on Long Island to 20,000. See Amended Complaint ("Am. Compl.") ¶ 18. Prior to that time, United Media had been delivering approximately 2,500 copies of the Post per day on Long Island. Id. ¶ 17. United Media does not have a collective bargaining contract with the Union. Id. ¶ 16. The Union objected to the Post's plan, urging the Post to use CS, a delivery company which has a contract with the Union. Id. ¶ 19; Plaintiff's Memorandum of Law in Opposition to Defendant's Motion to Dismiss ("Pl. Mem."), at 2. On August 21, 1998, the Union raised its objections in an ex parte communication with the Impartial Chairman, who issued an oral Status Quo Order, pursuant to section 15-I.2 of the CBA, enjoining the Post from implementing the Long Island distribution increase. See Am. Compl. ¶¶ 21-23. A hearing was set for August 26. Id. ¶¶ 23-24.
United Media was previously known as Media Masters and is now called D.S.A. (Distribution Systems of America). Am. Compl. ¶ 15.
At the hearing, the Post contested the Status Quo Order, arguing that the Union was "coercing and restraining the Post with an object of forcing and require [sic] the Post to refrain from doing business with United Media . . . because United Media was not a party to a collectively bargained agreement with the Union," and that the Union was pursuing its grievance "for the secondary purpose of benefiting Union members outside of the bargaining unit at the Post and not to preserve work traditionally performed by bargaining unit employees." Am. Compl. ¶¶ 24-26. The Post further asserted that section 1l-A.1 was an illegal "hot cargo clause" which was therefore void and unenforceable under section 8(e) of the National Labor Relations Act ("NLRA"), 29 U.S.C. § 158(e). Am. Compl. ¶ 27. However, the Impartial Chairman "refused to consider the Post's" contentions. Id. ¶¶ 25-27. Rather, he confirmed and memorialized his prior Order, to remain in force pending the Post's negotiations with CS. Id. ¶¶ 27-28. CS, however, declined to deliver the additional 17,500 copies of the Post on Long Island because it deemed the job too small to be profitable. Id. ¶ 33. Over the next several months, the Post repeatedly urged the Union to agree to the dissolution of the Status Quo Order. Id. ¶¶ 29-30.
C. The Procedural History
On May 11, 1999, the Post filed an unfair labor practice charge with the National Labor Relations Board ("NLRB"), alleging that section 11-A.1 was an illegal clause under section 8(e) of the NLRA, and that by enforcing it, the Union had violated subdivisions (ii)(A) and (ii)(B) of section 8(b)(4) of the NLRA. Am. Compl. ¶ 34. As a result, the Director of Region 2 of the NLRB issued a complaint against the Union, and a hearing was held between March 28 and July 5, 2000, before Administrative Law Judge Eleanor MacDonald. Id. ¶ 35. On February 22, 2001, ALJ MacDonald issued a decision, finding, in pertinent part, that section 11-A.1 of the CBA and the Union's enforcement of it was unlawful under the aforementioned provisions of the NLRA. Id. ¶ 37; 2/22/01 ALJ Decision ("ALJ Dec."), App. to 5/31/02 NLRB Decision and Order, 337 NLRB No. 91 ("NLRB Dec.") at 17, App. to Plaintiff's Surreply Memorandum of Law in Opposition to Defendant's Motion to Dismiss ("Pl. Sur. Mem."). The ALJ ordered the Union to cease and desist from enforcing section 11-A.1, withdraw its grievance with the Impartial Chairman, and request that he lift the Status Quo Order, pending the filing of exceptions by either party. ALJ Dec. at 17-18. The parties proceeded to file exceptions and supporting briefs, and the matter was referred to the NLRB for decision. NLRB Dec. at 1. Meanwhile, on May 9, 2001, the Impartial Chairman lifted his Status Quo Order for ninety days. Am. Compl. ¶ 38.
This section provides:
It shall be an unfair labor practice for any labor organization and any employer to enter into any contract or agreement, express or implied, whereby such employer ceases or refrains or agrees to cease or refrain from handling, using, selling, transporting or otherwise dealing in any of the products of any other employer, or to cease doing business with any other person, and any contract or agreement entered into heretofore or hereafter containing such an agreement shall be to such extent unenforceable and void . . . 29 U.S.C. § 158(e).
These sections provide:
It shall be an unfair labor practice for a labor organization or its agents —
. . . (ii) to threaten, coerce, or restrain any person engaged in commerce or in an industry affecting commerce, where in either case an object thereof is
(A) forcing or requiring any employer or self-employed person to join any labor or employer organization or to enter into any agreement which is prohibited by subsection (e) of this section;
(B) forcing or requiring any person to cease using, selling, handling, transporting, or otherwise dealing in the products of any other producer, processor, or manufacturer, or to cease doing business with any other person, or forcing or requiring any other employer to recognize or bargain with a labor organization as the representative of his employees unless such labor organization has been certified as the representative of such employees . . . 29 U.S.C. § 158(b)(4).
While awaiting the outcome of the NLRB's review of the case, the Post filed suit in this Court on May 24, 2001, pursuant to section 303 of the LMRA. The suit sought damages for the period between August 21, 1998 and at least May 9, 2001, stemming from the Union's interference with the plan to increase circulation of the Post on Long Island. Am. Compl. ¶¶ 39-49. The Union moved to dismiss the Amended Complaint, arguing that (1) the Post had failed to state a claim under section 303; (2) the allegations did not constitute coercion by the Union; (3) the six-month limitations period contained in section 10(b) of the NLRA, 29 U.S.C. § 160(b), applied to a section 303 claim; and (4) the arbitration clause in the CBA covered this dispute. See 29 U.S.C.
Section 303 of the LMRA provides:
(a) It shall be unlawful, for the purpose of this section only, in an industry or activity affecting commerce, for any labor organization to engage in any activity or conduct defined as an unfair labor practice in section 158(b)(4) of this title.
(b) Whoever shall be injured in his business or property by reason of any violation of subsection (a) of this section may sue therefor in any district court of the United States subject to the limitations and provisions of section 185 of this title without respect to the amount in controversy, or in any other court having jurisdiction of the parties, and shall recover the damages by him sustained and the cost of the suit. 29 § 187.
Defendant's Memorandum of Law in Support of Its Motion to Dismiss the Amended Complaint ("Def. Mem."). This Court twice stayed the action in the interest of judicial economy, reasoning that it would be a waste of judicial resources to decide an unfair labor practice issue within the expertise of the NLRB that might create conflicting results depending on the outcome of the NLRB proceeding. 11/9/01 Stipulation and Order; 4/24/02 Extension Order.
On May 31, 2002, the NLRB issued a decision and order affirming the ALJ'S findings. Consequently, the Union withdrew its first two grounds for dismissal, but preserved them in anticipation of an appeal of the NLRB's decision. See Defendant's Reply Memorandum of Law in Support of Its Motion to Dismiss the Amended Complaint ("Def. Rep. Mem."). The revised motion is now before this Court.
III. DISCUSSION
A. The Scope of the Arbitration Clause
Because the Federal Arbitration Act expresses "a liberal federal policy favoring arbitration agreements," the general rule is that "any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration." See Louis Dreyfus Negoce S.A. v. Blystad Shipping Trading, Inc., 252 F.3d 218, 223 (2d Cir. 2001) (citing Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983)), cert. denied, 122 S.Ct. 546 (2001)
In Louis Dreyfus Negoce, the Second Circuit established a three-part inquiry for determining whether a particular dispute falls within the scope of an agreement's arbitration clause. First, a court must classify the arbitration clause as broad or narrow. Second, if the clause is narrow, "the court must determine whether the dispute is over an issue that "is on its face within the purview of the clause, ' or over a collateral issue that is somehow connected to the main agreement that contains the arbitration clause." Id. at 224 (quoting Rochdale Vill., Inc. v. Pub. Serv. Employees Union, 605 F.2d 1290, 1295 (2d Cir. 1979)). "Where the arbitration clause is narrow, a collateral matter will generally be ruled beyond its purview." Id. Third, if the arbitration clause is broad, ""there arises a presumption of arbitrability' and arbitration of even a collateral matter will be ordered if the claim alleged "implicates issues of contract construction or the parties' rights and obligations under it.'" Id. (quoting Collins v. Aikman Prods. Co. v. Bldg. Sys., Inc., 58 F.3d 16, 23 (2d Cir. 1955)).
An arbitration clause is broad if "the language of the clause, taken as a whole, evidences the parties' intent to have arbitration serve as the primary recourse for disputes connected to the agreement containing the clause." Louis Dreyfus Negoce, 252 F.3d at 225. It is narrow if the language indicates that "aribtration was designed to play a more limited role in any future disputes." Id.
Contrary to the Post's contentions, the arbitration clause contained in the CBA is a broad clause. Language identical or similar to that used here — "[a]ll grievances, differences, and disputes arising out of the interpretation or application of this Agreement" — is regularly deemed to signify broad coverage. See ATT Techs., Inc. v. Communications Workers of Am., 475 U.S. 643, 650 (1986); Abram Landau Real Estate v. Bevona, 123 F.3d 69, 74 (2d Cir. 1997); Wire Serv. Guild, Local 222 v. United Press Int'l, Inc., 623 F.2d 257, 260 (2d Cir. 1980); Oldroyd v. Elmira Savings Bank, FSB, 134 F.3d 72, 76 (2d Cir. 1998); WorldCrisa Corp. v. Armstrong, 129 F.3d 71, 75 (2d Cir. 1997); Acquaire v. Canada Dry Bottling, 906 F. Supp. 819, 835 (E.D.N.Y. 1995); Longview Publ'g Co., Inc. v. Metro. News Co., Inc., No. 87 Civ. 1103, 1990 WL 48104, at *7 (S.D.N.Y. Apr. 10, 1990); Eastern Cleaning Serv., Inc. v. Serv. Employees Int'l Union, No. 79 Civ. 554, 1980 WL 2059, at *5 (S.D.N.Y. Jan. 31, 1980). Moreover, where an arbitration clause "is by no means narrow," as can certainly be said in this case, "[i]t is not necessary to make the nice determination of exactly where in the range between broad and narrow this clause fits. The clause is close enough to the `broad' end of the spectrum to justify a presumption of arbitrability here." WorldCrisa, 129 F.3d at 75.
Once the presumption of arbitrability is established, the request for arbitration should not be denied "unless it may be said with positive assurance that the arbitration clause is not susceptible to an interpretation that covers the asserted dispute." Hartford Accident and Indem. Co. v. Swiss Reins. Am. Corp., 246 F.3d 219, 227 (2d Cir. 2001) (quoting ATT Techs., 475 U.S. at 650). As discussed below, the Post has failed to overcome the presumption that its claims against the Union are subject to arbitration.
The Post points to New York News, Inc. v. Newspaper Guild of New York, 927 F.2d 82 (2d Cir. 1991), in support of the proposition that an arbitration clause in a collective bargaining agreement applies only to "grievances as understood in traditional labor-relations practice." Pl. Sur. Mem. at 9. This contention is unavailing for two reasons.
First, it is unclear what determines whether a grievance is "traditional" as such, and why the claims at issue here are outside that arena. Second, the New York News court deemed the arbitration clause there narrow, and excepted the dispute on that basis. The clause's condition that only disputes "which have failed to be adjusted by the Shop Adjustment Committee" would be subject to the arbitration procedures was held to limit its reach. 927 F.2d at 83.
B. Section 303 Claims are Arbitrable
The Post argues that the CBA's arbitration clause does not cover statutory claims such as this section 303 action, which, it asserts, does not arise out of the "interpretation or application of the Agreement." As a threshold matter, however, statutory claims may be arbitrated where the clause at issue creates general coverage of grievances, and the underlying statute does not preclude a waiver of judicial remedies. See. e.g., Green Tree Fin. Corp.-Alabama v. Randolph, 531 U.S. 79, 89-90 (2000). The arbitration clause signed by the Post satisfies both these prongs.
The burden is on the party seeking a judicial forum to show that Congress intended to preclude arbitration as a forum for the statutory claim at issue. See Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26 (1991). The Post has not made such a showing.
As to the arbitrability of section 303 claims in particular, the Post and the Union each cite as controlling different cases from the Second Circuit. The Post relies on Old Dutch Farms, Inc. v. Milk Drivers, Local Union No. 584, 359 F.2d 598 (2d Cir. 1966), in which the court held that a section 303 claim was not subject to arbitration, while the Union cites Interstate Brands Corp. v. Bakery Drivers Bakery Goods Vending Machs., Local Union No. 550, 167 F.3d 764 (2d Cir. 1999), in which the court reached the opposite conclusion on somewhat different facts. The Post's attempt to distinguish the more recent holding of Interstate Brands is colorable but ultimately unpersuasive.
In Interstate Brands, the court repeatedly stressed that the arbitration clause in the parties' collective bargaining agreement was "unusually broad." 167 F.3d at 765, 768. This, the Post contends, was the sole basis for the court's holding that plaintiff's section 303 claim was arbitrable despite its prior holding in Old Dutch Farms. It is certainly true that the arbitration clause the Post signed with the Union more closely resembles the clause construed in Old Dutch Farms. See 359 F.2d at 600. There are other factors in the instant case, however, which distinguish it from Old Dutch Farms and make it similar to Interstate Brands.
First, the Union's unlawful actions consisted of its use of the grievance procedures outlined in the CBA to enforce a particular provision of that Agreement, albeit one later found to be illegal. Similarly, in Interstate Brands, the union initiated an allegedly illegal strike pursuant to a section of the collective bargaining agreement, which authorized such action in the event that negotiations regarding the employer's changes in distribution methods failed to resolve the parties' differences. 167 F.3d at 766. In contrast, in Old Dutch Farms, the union engaged in prohibited conduct outside the terms of the collective bargaining agreement — inducing employees of a neutral employer (a suppher of the plaintiff) to engage in work stoppages, and threatening that employer in order to make it cease doing business with the plaintiff — to enforce one of the agreement's provisions. Thus, here, the Union's conduct arguably arose from the application of the CBA. Whether in the absence of section 11-A the Union would still have unlawfully taken steps to prevent the Post from implementing the Long Island distribution increase can only be answered through speculation.
This Court must give collateral estoppel effect to the NLRB decision. See M. Prusman, Ltd. v. Ariel Mar. Group, Inc., 781 F. Supp. 248, 252 (S.D.N.Y. 1991) (citing Wickham Contracting Co., Inc. v. Bd. of Educ. of the City of New York, 715 F.2d 21, 26 (2d Cir. 1983)).
Second, as the Interstate Brands court noted, the Supreme Court has expressed its concern, since Old Dutch Farms was decided, with allowing a union to waive an employee's rights to a judicial forum for statutory claims — a concern that does not apply where, as here, the plaintiff negotiated away its own rights. Interstate Brands, 167 F.3d at 767, 769 (discussing Wright v. Universal Mar. Svc. Corp., 525 U.S. 70 (1998)). "We thus see no reason why an employer that, like IBC, has individually negotiated a CBA with a union should be held to have waived its statutory rights only if the waiver was "clear and unmistakable.' Such an employer has negotiated on behalf of itself." Id. at 767.
Finally, though not addressed in the parties' briefs, it is significant that the section of the CBA containing the ban on non-Union distributors also contains an abbreviated arbitration provision in the succeeding paragraph. See CBA § 11-A.2. The inclusion of this clause indicates that the parties contemplated the possibility of disputes arising in relation to the ban on non-Union distributors, and further places the Post's claims within the purview of matters intended for arbitration. Accordingly, I find that the Post's claims must be arbitrated rather than heard in this Court, and dismiss this action pursuant to Rule 12(b)(1)
The Post also urges the Court to exercise jurisdiction over this case on the ground that "any attempt to arbitrate this matter before the Impartial Chairman would be futile." Pl. Sur. Mem. at 14. See, e.g., Drywall Tapers and Pointers of Greater New York, Local 1974 of I.B.P.A.T. v. Local 530 of Operative Plasterers and Cement Masons Int'l Ass'n, 954 F.2d 69, 77-78 (2d Cir. 1992) (holding that pursuing contractual remedy would be "wholly futile" where designated arbitration panel had "explicitly stated that it would "deny any further hearings' concerning the dispute.") As evidence of the futility of arbitration in this case, the Post points to the Impartial Chairman's alleged refusal to entertain its substantive arguments in the initial proceedings. However, the NLRB decision binds the arbitrator as it does this Court, and there is insufficient basis to conclude that the Impartial Chairman would deny the Post's rights in light of intervening events. See supra note 8 (noting collateral estoppel effect of NLRB decision).
III. CONCLUSION
For the foregoing reasons, the Union's motion to dismiss is granted. The Clerk of the Court is directed to close this case.
SO ORDERED.