Brooklyn Downtown Hotel LLC et al v. New York Hotel and Motel Trades Council, AFL-CIO

Filing 45

MEMORANDUM & ORDER granting in part and denying in part #23 & #24 , Motions to Change Venue, or, in the Alternative, for a Stay. For the reasons set forth herein, defendants' motions to transfer venue of this case to the United States District Court for the Southern District of New York are GRANTED. All other relief sought by defendants, including Interstate's motion for costs and attorney's fees, is DENIED without prejudice to the renewal of the requests before the transferee court. The Clerk of Court is directed to transfer this case to the Southern District of New York in accordance with the procedures set forth in Local Civil Rule 83.1 and to close the case here as soon as that transfer is complete. Ordered by Judge I. Leo Glasser on 2/25/2015. (Carey, Charles)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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BROOKLYN DOWNTOWN HOTEL LLC,
et al.,
Plaintiffs,
MEMORANDUM & ORDER
- against 14-CV-6067 (ILG) (SMG)
NEW YORK HOTEL AND MOTEL TRADES
COUNCIL, AFL-CIO, et ano.,
Defendants.
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GLASSER, Senior United States District Judge:
Plaintiffs, a web of 40 companies whose ultimate owners are members of the
family of Kin Chung Lam (also known as John Lam) and/or trusts intended to benefit
that family’s members, designees, or heirs (together, the “Lam Family”), bring this
action against the New York Hotel and Motel Trades Council, AFL-CIO (the “Union”)
and Interstate Hotels & Resorts, Inc. (“Interstate”; together, “defendants”). Plaintiffs
own eight hotels in New York City (four in Manhattan, three in Brooklyn and one in
Queens) and plan to open four more in Manhattan in the near future.1 Their Amended
Complaint accuses defendants of colluding with non-party co-conspirators in an
unlawful attempt to unionize the employees of those hotels in violation of the National
Labor Relations Act (“NLRA”), 29 U.S.C. §§ 151-169; Section 16 of the Clayton Act, 15
U.S.C. § 26; Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1-2; New York law; and
public policy.
Pending before the Court are motions by defendants to transfer this case to the
United States District Court for the Southern District of New York pursuant to 28 U.S.C.
Plaintiffs’ memorandum of law in opposition to defendants’ motions indicates that nine hotels are
currently open, but the Amended Complaint lists only eight.

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§ 1404(a), or, in the alternative, to stay these proceedings awaiting the determination of
an appeal to be explained hereafter. Interstate has also moved to recover its costs and
attorneys’ fees for litigating its motion. For the following reasons, the motions to
transfer are GRANTED and the other requests are DENIED without prejudice to their
renewal in the Southern District.
BACKGROUND
The core issue in this case, and the symbiotic cases referred to herein, reduced to
its skeletal terms, is whether plaintiffs’ hotels are bound by the provisions of a collectivebargaining Industry-Wide Agreement (“IWA”) between the Union and the Hotel
Association of New York City to which they were not parties. The Union believes that
the hotels are bound because Chelsea Grand, LLC (“Chelsea Grand,” another Lamcontrolled company that owns the Four Points by Sheraton hotel on West 25th Street in
Manhattan) engaged Interstate to manage its hotel at a time when Interstate was a party
to, and therefore bound by, the IWA. An accretion clause in the IWA obligates all hotels
and management organizations which are parties to it to apply its provisions to any
other hotel they subsequently acquire or manage. The Union argues that Interstate thus
bound Chelsea Grand to the IWA by virtue of its apparent authority as managing agent
and/or as a joint employer, and, therefore, all other hotels subsequently acquired or
managed by the Lam Family are also bound by the IWA, including the 12 at issue in this
case. Plaintiffs claim this argument (1) is factually incorrect because neither Chelsea
Grand nor plaintiffs here were ever signatories to the IWA or (2) violates federal and
state labor and antitrust law.2
2 Plaintiffs claim that the Union is premising its claims at least in part on a 2012 revision to the IWA’s
accretion clause, but the Union has been making the argument that the accretion clause applies to other
Lam Family hotels since at least 2008.

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This is not, however, the first dispute between Lam Family corporations and
defendants on this issue. The Court has reviewed the initial petition filed in March 2007
by Chelsea Grand against the Union with the New York State Supreme Court in New
York County to vacate three arbitral awards in favor of the Union which held Chelsea
Grand and Interstate to be joint employers (and therefore bound by the IWA) and
imposed continuing substantial monetary penalties on Chelsea Grand so long as it failed
to comply with the IWA. Those awards were obtained pursuant to the resolution of
disputes by arbitration provided by the terms of the IWA. Chelsea Grand claimed it was
not notified of those arbitration hearings until after the fact, was not a party to these
hearings, and did not in any way participate in them. Therefore, in its New York State
court petition, Chelsea Grand claimed that the awards should be set aside because (1) of
fraud or misconduct, (2) the procedures of Article 75 of the New York Civil Practice Law
and Rules (which govern arbitrations) were not followed, (3) there was no valid
agreement to arbitrate by which Chelsea Grand was bound, and (4) even if there were
such an agreement, it was not complied with. The Union removed that state proceeding
to the United States District Court for the Southern District of New York, federal
jurisdiction being based on the asserted existence of a federal question to which 29
U.S.C. § 185 is applicable. The Southern District docketed that removed proceeding as
07 Civ. 2614 (the “’07 Action”) and it was assigned to the Honorable Paul A. Crotty,
U.S.D.J.. The Union, by its answer to the petition, sought confirmation of the arbitral
awards.
In November 2008, with the ’07 Action pending in the Southern District, Chelsea
Grand commenced another action (the “’08 Action”), this time against Interstate, in the
United States District Court for the Eastern District of Virginia. That action was pleaded
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in a 30-page complaint of more than 100 paragraphs which, although alleging claims for
breach of contract, breach of fiduciary duty, and fraud based on the same facts, sought
essentially the same relief in another guise as was sought in the succinctly pleaded 7page petition in the ’07 Action. Interstate’s motion to transfer the ’08 Action to the
Southern District of New York was granted in January 2009, and the matter was
docketed there as 09 Civ. 924 (the “’09 Action”) and also assigned to Judge Crotty as
related to the ’07 Action. Adjudication of the ’09 Action has been stayed pending a final
decision on the ’07 Action against the Union.
On September 29, 2014, Judge Crotty decided the ’07 Action in an Opinion &
Order containing a comprehensive explication of the facts found after a bench trial and a
carefully reasoned application of the law to those facts, confirming the arbitral awards
and directing that judgment be entered in favor of the Union. Familiarity with that
decision, reported at 2014 WL 4813028, is presumed. Chelsea Grand’s appeal from that
decision was promptly filed on October 20, 2014, and it is currently pending in the
United States Court of Appeals for the Second Circuit as of this writing.
On October 16, 2014, four days before Chelsea Grand filed its appeal, these
plaintiffs filed their original 91-paragraph, 21-page Complaint in this case (Dkt. No. 1),
naming only the Union as a defendant and seeking only a declaratory judgment. On
November 16, 2014, plaintiffs filed an Amended Complaint (Dkt. No. 12), consisting of
163 paragraphs spread over 49 pages, which named Interstate as an additional
defendant and added antitrust and New York law claims to their initial claims for
declaratory relief. Chelsea Grand is not among the 40 plaintiffs here for the obvious
reason that it is the plaintiff seeking essentially the same relief in the ’07 Action and the
’09 Action before Judge Crotty in the Southern District. The essential issues in all the
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actions referenced above are the same, whatever the dress with which the plaintiffs seek
to adorn them.
DISCUSSION
In ruling on a motion pursuant to 28 U.S.C. § 1404(a), the Court would
customarily bottom its decision on a discussion of the burden of proving the merits of
that motion, who bears that burden, the two-pronged test for determining whether the
motion should be granted and the ten or so factors to consider in arriving at that
determination. See, e.g., Filmline (Cross-Country) Prods., Inc. v. United Artists Corp.,
865 F.2d 513, 520 (2d Cir. 1989) (citing, inter alia, Van Dusen v. Barrack, 376 U.S. 612,
616 (1964)); In re Hanger Orthopedic Grp., Inc. Sec. Litig., 418 F. Supp. 2d 164, 168
(E.D.N.Y. 2006).
Here, however, having read Chelsea Grand’s initial petition that was removed to
the Southern District in 2007, the Opinion & Order issued by Judge Crotty regarding
that petition (cited above), the complaint against Interstate filed in Virginia which was
transferred to and is pending before the Southern District, and the Amended Complaint
now before this Court, to say nothing of the voluminous attorney declarations,
memoranda of law, and exhibits filed in this motion, the Court is driven to conclude that
this case reeks of forum shopping. If the purpose of 28 U.S.C. § 1404(a) is to be
honored, the interests of justice compel the Court to transfer this action to the Southern
District, where its underlying allegations have been litigated for the past eight years.
The motion to transfer having been determined, the Court is impelled to observe
that the Amended Complaint is a stunning violation of Federal Rule of Civil Procedure
8(a)(2), which provides that “[a] pleading that states a claim for relief must contain a
short and plain statement of the claim showing that the pleader is entitled to relief.” It
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is neither short, nor plain, nor are a sizeable number of its 163 paragraphs relevant to a
statement of the discrete issues in this case which form the basis for plaintiffs’ claims for
relief. For example, paragraphs 1-101 are “repeat[ed] and incorporated by reference . . .
as if fully set forth herein” 8 times. Many other paragraphs are repeated verbatim
throughout. Compare Am. Compl. ¶ 121 with ¶¶ 131, 139, 150, 159; compare ¶ 123 with
¶¶ 132, 140, 147, 160.
This outsized complaint calls to mind an address by Lord Buckmaster, formerly
Lord Chancellor of England, in the course of which he related that
in the reign of the Stuarts there was one counsel who had
offended the court by preparing a needlessly long and prolix
pleading on parchment. He was ordered to have his
pleadings taken, a large hole to be cut in the middle, he was
to have his head pushed through it, and he was to attend the
first day of the term of every court with his head through the
pleadings.
Lord Buckmaster, The Romance of the Law, 11 A.B.A. J. 579, 581 (Sept. 1925).
CONCLUSION
For the foregoing reasons, defendants’ motions to transfer venue of this case to
the United States District Court for the Southern District of New York are GRANTED
pursuant to 28 U.S.C. § 1404(a) and in the interests of justice. All other relief sought by
defendants, including Interstate’s motion for costs and attorney’s fees, is DENIED
without prejudice to the renewal of the requests before the transferee court. See In re
Plumbing Fixture Cases, 298 F. Supp. 484, 495 (J.P.M.L. 1968) (“the jurisdiction and
powers of the transferee court are coextensive with that of the transferor court . . . the
transferee court may make any order to render any judgment that might have been
rendered by the transferor court in the absence of transfer” (citations omitted)). The
Clerk of Court is directed to transfer this case to the Southern District of New York in
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accordance with the procedures set forth in Local Civil Rule 83.1 and to close the case
here as soon as that transfer is complete.
SO ORDERED.
Dated:

Brooklyn, New York
February 25, 2015
/s/
I. Leo Glasser
Senior United States District Judge

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