Trustees of Empire State Carpenters Annuity, Apprenticeship, Labor-Management Cooperation, Pension and Welfare Funds v. Thalle/Transit Construction Joint Venture
Filing
38
ORDER granting 28 Motion for Summary Judgment. For the reasons set forth herein, the Court grants plaintiffs' motion for summary judgment and confirms the arbitration award of October 5, 2012. The Clerk of the Court shall enter judgment accordingly and close this case. SO ORDERED. Ordered by Judge Joseph F. Bianco on 7/15/2014. (Gibaldi, Michael)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
_____________________
No 12-CV-5661 (JFB)(ARL)
_____________________
TRUSTEES OF EMPIRE STATE CARPENTERS ANNUITY, APPRENTICESHIP, LABORMANAGEMENT COOPERATION, PENSION AND WELFARE FUNDS,
Plaintiff,
VERSUS
THALLE/TRANSIT CONSTRUCTION JOINT VENTURE,
Defendant.
___________________
MEMORANDUM AND ORDER
July 15, 2014
___________________
JOSEPH F. BIANCO, District Judge:
facts. Upon consideration of a motion for
summary judgment, the Court construes the
facts in the light most favorable to the
nonmoving party. See, e.g., Capobianco v.
City of New York, 422 F.3d 47, 50 n.1 (2d
Cir. 2005). Unless otherwise noted, where a
party’s Rule 56.1 statement is cited, that fact
is undisputed, or the opposing party has not
pointed to any evidence in the record to
contradict it.1
The Trustees (“plaintiffs”) of Empire
State Carpenters Annuity, Apprenticeship,
Labor-Management Cooperation, Pension
and Welfare Funds (the “Funds”)
commenced
this
action
against
Thalle/Transit Construction Joint Venture
(“defendant” or “Thalle/Transit”) to confirm
and enforce an arbitration award. Before the
Court is plaintiffs’ motion for summary
judgment. For the reasons set forth below,
the Court grants the motion for summary
judgment and confirms the arbitration
award.
Thalle/Transit is a member of the
Construction
Industry
Council
of
Westchester and Hudson Valley, Inc. (the
“Trade Group”). (Pls.’ 56.1 ¶ 1.) As a
member of the Trade Group, Thalle/Transit
was bound to a collective bargaining
agreement (the “CBA”) between the Trade
I. BACKGROUND
A. Facts
Although the parties’ respective Rule 56.1
statements of facts contain specific citations to the
record, the Court cites to the Rule 56.1 statement
instead of the underlying citation to the record.
1
The following facts are taken from the
parties’ depositions, declarations, exhibits,
and respective Local Rule 56.1 statements of
1
“Independent Accountants’ Report,” not an
audit, and it contains the following
paragraph:
Group and the Northeast Regional Council
of Carpenters (the “Union”). (Id.) Among
other provisions, the CBA required
Thalle/Transit to make contributions to the
Funds for every hour of work performed
within the trade and geographical
jurisdiction of the Union. (Id. ¶ 3.) The CBA
also vested the Funds with the authority to
audit Thalle/Transit’s books and payroll
records, so that the Funds could ensure
Thalle/Transit’s compliance with its
contribution requirements. (Id. ¶ 4.)
We were not engaged to and did not
conduct an audit, the objective of
which would be the expression of an
opinion on whether the Employer
remitted contributions to the Funds
in accordance with the applicable
collective bargaining agreement.
Accordingly, we do not express such
an opinion. Had we performed
additional procedures, other matters
might have come to our attention that
would have been reported to you.
Disputes over contributions were subject
to arbitration pursuant to the Funds’
Collection Policy, a document incorporated
by reference in the CBA. (Id. ¶¶ 6–7.)
Specifically, the Funds could demand
arbitration of disputes lasting more than
sixty days without resolution by sending a
Notice to Arbitrate to the employer. (Id. ¶ 7;
Craven Decl. Ex. B, Collection Policy at
2.2.) If the employer received a Notice to
Arbitrate and objected to arbitration, then
the Funds would instead initiate legal action
in a federal court. (Id.) In other words, an
employer had the right to opt out of
arbitration. (Pls.’ 56.1 ¶ 7.)
(Accountants’ Report at 2.) On the other
hand, the top of page two of the Report
identifies the document as a “Payroll Audit”
(see id.), and the notes accompanying the
Report are entitled “Audit Notes” (id. at 3).
Notwithstanding
the
parties’
disagreement over how to classify the
Report, it is uncontroverted that on June 22,
2012, the Funds demanded arbitration to
determine whether Thalle/Transit owed the
Funds the deficiency amount identified in
the Report. (Pls.’ 56.1 ¶ 9; see Craven Decl.
Ex. C, Notice to Arbitrate.) Thalle/Transit
did not respond to the notice. (Pls.’ 56.1
¶ 9.) Thereafter, a hearing was held before
arbitrator J.J. Pierson, Esq., on July 31,
2012. (Id. ¶ 10; Craven Decl. Ex. D,
Arbitration Order.) Thalle/Transit did not
appear at the hearing. (Pls.’ 56.1 ¶ 10.)
Thalle/Transit attributes its lack of
participation to a “period of transition,”
during which it “did not receive much
information concerning the underlying claim
that is at issue here.” (Bakal Decl. ¶ 3.)
On August 16, 2011, an accountant
retained by the Funds issued an
“Independent
Accountants’
Report”
concerning Thalle/Transit’s contributions to
the Funds for the period from January 1,
2008, through February 28, 2011 (the
“Report”). (Id. ¶ 5; Def.’s 56.1 ¶ 5; Bakal
Decl. Ex. 5, Accountants’ Report.) The
Report found “[a] deficiency totaling
$17,790.76 including interest, penalty and
audit cost.” (Accountants’ Report at 2.)
Excluding interest, audit cost, and penalties,
the fringe benefit deficiency amounted to
$11,148.17. (Id. at 4.) The parties dispute
whether the Report qualifies as an audit of
defendant’s books and records. (Compare
Pls.’ 56.1 ¶ 5, with Def.’s 56.1 ¶ 5.) On the
one hand, the Report is titled an
The arbitrator issued his award in an
order dated October 5, 2012. (Pls.’ 56.1
¶ 11.) The arbitrator concluded that the
Report, which he described as an audit,
2
constituted “prima facie evidence of
liability” where “notice of the claim [had]
been given to the Employer and the
Employer [had] been given reasonable
opportunity to question the findings, offer
information to adjust or amend the audit
results and given the final opportunity to
present evidence to correct alleged errors.”
(Arbitration Award at 2.) Relying on the
Report, which he noted had been provided to
Thalle/Transit, the arbitrator concluded that
Thalle/Transit had failed to contribute a total
of $11,148.17 to the Funds between January
1, 2008, and February 28, 2011. (Id.)
Accordingly,
the
arbitrator
ordered
Thalle/Transit to pay to the Funds the
following amounts: $11,148.17 in principal;
$1,430.46 in interest; $2,229.63 in
liquidated damages; $2,982.50 in audit fees;
$350.00 in attorneys’ fees; and $350.00 as
an arbitrator’s fee. (Id. at 4.)
default judgment should not enter. Counsel
for defendant entered an appearance and
responded to the Court’s order on April 16,
2013. The Court held a telephone
conference with the parties on May 6, 2013,
during which the Court denied the motion
for default judgment and ordered the Clerk
of the Court to vacate the entry of default.
Following discovery by the parties,
plaintiffs moved for summary judgment on
May 19, 2014. Defendant filed its opposition
to the motion on June 16, 2014, and
plaintiffs filed their reply on June 30, 2014.
The Court heard oral argument on the
motion on July 11, 2014. The Court has
fully considered the submissions of the
parties.
II. STANDARD OF REVIEW
The standard for summary judgment is
well settled. Pursuant to Federal Rule of
Civil Procedure 56(a), a court may grant a
motion for summary judgment only if “the
movant shows that there is no genuine
dispute as to any material fact and the
movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a); Gonzalez v. City
of Schenectady, 728 F.3d 149, 154 (2d Cir.
2013). The moving party bears the burden of
showing that he is entitled to summary
judgment. See Huminski v. Corsones, 396
F.3d 53, 69 (2d Cir. 2005). “A party
asserting that a fact cannot be or is
genuinely disputed must support the
assertion by: (A) citing to particular parts of
materials in the record, including
depositions,
documents,
electronically
stored
information,
affidavits
or
declarations, stipulations (including those
made for purposes of the motion only),
admissions, interrogatory answers, or other
materials; or (B) showing that the materials
cited do not establish the absence or
presence of a genuine dispute, or that an
adverse party cannot produce admissible
After learning of the arbitrator’s award,
Thalle/Transit retained an accountant to
audit the identified contribution deficiencies.
(Bakal Decl. ¶ 4.) The auditor determined
that Thalle/Transit should not have been
held liable because “everything was paid
that was due.” (Id.) Thalle/Transit claims to
have received the Report supporting the
arbitrator’s award for the first time during
the pendency of this action, on April 24,
2014 (id. ¶ 8), even though the arbitrator
found that the Report had been provided to
Thalle/Transit before arbitration (see
Arbitration Award at 2).
B. Procedural History
Plaintiffs commenced this action on
November 16, 2012. After defendant failed
to respond to the complaint, the Clerk of the
Court noted the default of defendant on
December 26, 2012. On February 5, 2013,
plaintiffs moved for a default judgment. On
April 2, 2013, the Court directed defendant
to respond within fourteen days as to why
3
evidence to support the fact.” Fed. R. Civ. P.
56(c)(1). The court “‘is not to weigh the
evidence but is instead required to view the
evidence in the light most favorable to the
party opposing summary judgment, to draw
all reasonable inferences in favor of that
party,
and
to
eschew
credibility
assessments.’” Amnesty Am. v. Town of W.
Hartford, 361 F.3d 113, 122 (2d Cir. 2004)
(quoting Weyant v. Okst, 101 F.3d 845, 854
(2d Cir. 1996)); see Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986)
(summary judgment is unwarranted if “the
evidence is such that a reasonable jury could
return a verdict for the nonmoving party”).
without supplying supporting arguments or
facts.’” BellSouth Telecomms., Inc. v. W.R.
Grace & Co., 77 F.3d 603, 615 (2d Cir.
1996) (quoting Research Automation Corp.,
585 F.2d at 33).
III. DISCUSSION
“Section 301 of the Labor Management
Relations Act (LMRA), 29 U.S.C. § 185,
provides federal courts with jurisdiction
over petitions brought to confirm labor
arbitration awards.” Local 802, Associated
Musicians of Greater N.Y. v. Parker
Meridien Hotel, 145 F.3d 85, 88 (2d Cir.
1998). “Confirmation of a labor arbitration
award under LMRA § 301 is ‘a summary
proceeding that merely makes what is
already a final arbitration award a judgment
of the Court.’” N.Y. Med. Ctr. of Queens v.
1199 SEIU United Healthcare Workers E.,
No. 11-CV-04421 (ENV) (RLM), 2012 WL
2179118, at *4 (E.D.N.Y. June 13, 2012)
(quoting N.Y. City Dist. Council of
Carpenters Pension Fund v. E. Millennium
Constr., Inc., No. 03-CV-5122, 2003 WL
22773355, at *2 (S.D.N.Y. Nov. 21, 2003)).
Once the moving party has met its
burden, the opposing party “‘must do more
than simply show that there is some
metaphysical doubt as to the material
facts . . . . [T]he nonmoving party must
come forward with specific facts showing
that there is a genuine issue for trial.’”
Caldarola v. Calabrese, 298 F.3d 156, 160
(2d Cir. 2002) (alteration and emphasis in
original) (quoting Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574,
586–87 (1986)). As the Supreme Court
stated in Anderson, “[i]f the evidence is
merely colorable, or is not significantly
probative, summary judgment may be
granted.” 477 U.S. at 249–50 (citations
omitted). Indeed, “the mere existence of
some alleged factual dispute between the
parties alone will not defeat an otherwise
properly supported motion for summary
judgment.” Id. at 247–48 (emphasis in
original). Thus, the nonmoving party may
not rest upon mere conclusory allegations or
denials but must set forth “‘concrete
particulars’” showing that a trial is needed.
R.G. Grp., Inc. v. Horn & Hardart Co., 751
F.2d 69, 77 (2d Cir. 1984) (quoting SEC v.
Research Automation Corp., 585 F.2d 31, 33
(2d Cir. 1978)). Accordingly, it is
insufficient for a party opposing summary
judgment “‘merely to assert a conclusion
The Supreme Court has recognized that
the LMRA expresses a “‘federal policy of
settling labor disputes by arbitration,’”
which “‘would be undermined if courts had
the final say on the merits of the awards.’”
United Paperworkers Int’l Union, AFL-CIO
v. Misco, Inc., 484 U.S. 29, 36 (1987)
(quoting Steelworkers v. Enter. Wheel &
Car Corp., 363 U.S. 593, 596 (1960)).
Accordingly, “the courts play only a limited
role when asked to review the decision of an
arbitrator.” Id.; see, e.g., Major League
Baseball Players Ass’n v. Garvey, 532 U.S.
504, 509 (2001); First Nat’l Supermarkets,
Inc. v. Retail, Wholesale & Chain Store
Food Emps. Union Local 338, Affiliated
with the Retail, Wholesale & Dep’t Store
Union, AFL-CIO, 118 F.3d 892, 896 (2d Cir.
1997); Local 1199, Drug, Hosp. & Health
4
Care Employees Union, RWDSU, AFL-CIO
v. Brooks Drug Co., 956 F.2d 22, 25 (2d Cir.
1992). In this limited role, a court must
confirm an arbitration award as long as it
“‘draws its essence from the collective
bargaining agreement’ and is not the
arbitrator’s ‘own brand of industrial
justice.’” First Nat’l Supermarkets, 118 F.3d
at 896 (quoting Misco, 484 U.S. at 36).
“Courts are not authorized to review the
arbitrator’s decision on the merits despite
allegations that the decision rests on factual
errors or misinterprets the parties’
agreement.” Major League Baseball Players
Ass’n, 532 U.S. at 509. Indeed, “serious
error” and “improvident, even silly,
factfinding do[] not provide a basis for a
reviewing court to refuse to enforce the
award.” Id. (internal quotation marks and
citations omitted).
has passed for Thalle/Transit to dispute the
conclusions of the Report upon which the
arbitration award at issue was based. In fact,
because the Supreme Court has held that a
court should confirm even an arbitration
award based upon “serious error,” Major
League Baseball Players Ass’n, 532 U.S. at
509, Thalle/Transit’s argument that the
arbitration award was based on “clear and
convincing error” is misplaced.
Moreover, to the extent this Court could
vacate the arbitrator’s award if it were
irrational, 2 the arbitration award at issue in
the instant case is hardly irrational. Even
assuming that the arbitrator erred in
referring to the Report as an audit, there is
no suggestion that the arbitrator’s award
could not have been based on an
independent accountant’s report instead of
an audit. Moreover, it is undisputed that the
arbitrator based his decision upon an
“Independent
Accountants’
Report”
showing a deficiency of $11,148.17.
Because Thalle/Transit did not appear at the
arbitration hearing, no contrary evidence
was
presented
to
the
arbitrator.
In the instant case, Thalle/Transit resists
confirmation of the October 5, 2012
arbitration award on the basis that the award
is “irrational” because it was based on “clear
and convincing error”—namely, that the
Report was not actually an audit, and that
Thalle/Transit’s own audit proves that it was
not delinquent in making contributions to
the Funds. (See Def.’s Opp. at 5.)
Essentially, Thalle/Transit invites this Court
to second guess the wisdom of the
arbitrator’s award in light of the arbitrator’s
reference to the Report as an “audit” and
new evidence casting doubt on that Report’s
conclusion. As the cases above make clear,
however, it is not up to this Court to
determine whether Thalle/Transit made
$11,148.17 in contributions to the Funds or
not. See, e.g., Beth Israel Med. Ctr. v.
1199/S.E.I.U. United Healthcare Workers
E., 530 F. Supp. 2d 610, 614 (S.D.N.Y.
2008) (noting that courts “are ‘not
empowered to reexamine the merits’ of an
award” (quoting Int’l Bhd. of Elec. Workers,
Local 97 v. Niagara Mohawk Power Corp.,
143 F.3d 704, 714 (2d Cir. 1998))). The time
2
The Second Circuit has explicitly rejected
irrationality as a separate basis for vacating an
arbitrator’s award under the Federal Arbitration Act,
9 U.S.C. §§ 1 et seq. See Porzig v. Dresdner,
Kleinwort, Benson, N. Am. LLC, 497 F.3d 133, 139
(2d Cir. 2007). Although the FAA does not apply in
cases brought under the LMRA, as the instant case is,
see Coca-Cola Bottling Co. of N.Y., Inc. v. Soft Drink
& Brewery Workers Union Local 812 Int’l Bhd. of
Teamsters, 242 F.3d 52, 54–55 (2d Cir. 2001), “the
stringent standard for vacating an arbitration award is
materially the same under the FAA, [LMRA], and the
[Postal Reorganization Act],” Am. Postal Workers
Union, AFL-CIO v. U.S. Postal Serv., --- F.3d ----,
No. 13-2579-CV, 2014 WL 2535249, at *3 n.4 (2d
Cir. June 6, 2014). Thus, the Court doubts that it
could vacate the arbitration award at issue here solely
on grounds of irrationality. The Court need not
determine whether, in certain cases, vacatur of an
irrational award would be appropriate, however,
because the award in this case was clearly rational.
5
Thalle/Transit’s belated submission of
contrary evidence to this Court neither
renders the arbitration award less rational,
nor does it cast doubt on this Court’s
conclusion that the award “draws its essence
from the collective bargaining agreement.”
Misco, 484 U.S. at 36. If the Court held
otherwise—i.e., that the arbitrator acted
irrationally and outside the scope his
authority solely on the basis of new
evidence undermining the arbitrator’s
conclusion—then
the
Court
would
effectively invite litigants to defer the
presentation of evidence until after
arbitration proceedings. That result would be
unacceptable in light of the LMRA’s
“decided preference for private settlement of
labor disputes” through arbitration. Id. at 37.
Indeed, in Bridgeport Rolling Mills Co. v.
Brown, the Second Circuit rejected a similar
attempt to vacate a labor arbitration award,
holding that new evidence submitted for the
first time after arbitration was “irrelevant to
the issues the arbitrator heard and ha[d] no
bearing upon the arbitrator’s determination.”
314 F.2d 885, 885–86 (2d Cir. 1963);
accord Tate v. Fischer Steel Corp., 791 F.2d
935 (6th Cir. 1986) (“Labor arbitrators’
awards may not be vacated on the basis of
new evidence. Since the arbitrator made a
specific finding, on the record, that Tate was
not the most senior laid-off helper, it was
impermissible to attack this factual finding
with post-arbitration affidavits.”).
Federal Rule of Civil Procedure 56(d)
(formerly Rule 56(f)) to defer its decision on
the motion pending further discovery.
Thalle/Transit has failed to submit “an
affidavit describing: (1) what facts are
sought and how they are to be obtained; (2)
how these facts are reasonably expected to
raise a genuine issue of material fact; (3)
what efforts the affiant has made to obtain
them; and (4) why the affiant’s efforts were
unsuccessful.” Gualandi v. Adams, 385 F.3d
236, 244 (2d Cir. 2004). The mere
“reference to a need for additional discovery
in its memorandum in opposition to the
motion . . . is not an adequate substitute for a
Rule 56(f) affidavit, and the failure to file an
affidavit under Rule 56(f) is itself sufficient
grounds to reject a claim that the
opportunity for discovery was inadequate.”
Paddington Partners v. Bouchard, 34 F.3d
1132, 1137 (2d Cir. 1994). Moreover, to the
extent Thalle/Transit seeks discovery
concerning the merits of the arbitrator’s
award, such discovery would be immaterial
for the reasons stated supra. Finally,
Thalle/Transit’s request to depose the
arbitrator is denied for the additional reason
that the bare accusation of corruption, fraud,
or misconduct does not warrant the
reopening of discovery to depose an
arbitrator. See Hunt v. Mobil Oil Corp., 654
F. Supp. 1487, 1495 (S.D.N.Y. 1987)
(“[T]he repetitive and perjorative charges of
partiality and fraudulent and corrupt conduct
levelled at the arbitrators, however
satisfying this may be to counsel and their
clients, are not a substitute for evidentiary
proof. A constant drumfire of charges,
lacking factual support, does not warrant
granting the Hunts’ motion for the taking of
depositions of the arbitrators or for an
evidentiary hearing.”).
In sum, the arbitrator issued an award
based upon the only evidence submitted at
the arbitration hearing. His award is clearly
consistent with that evidence, and it
certainly draws its essence from the CBA.
Thalle/Transit has neither made any
argument nor submitted any evidence
suggesting otherwise.
In concluding that summary judgment
for plaintiff is warranted, the Court also
denies Thalle/Transit’s request pursuant to
6
IV. CONCLUSION
For the reasons set forth herein, the
Court grants plaintiffs’ motion for summary
judgment and confirms the arbitration award
of October 5, 2012. The Clerk of the Court
shall enter judgment accordingly and close
this case.
SO ORDERED.
_______________________
JOSEPH F. BIANCO
United States District Judge
Dated: July 15, 2014
Central Islip, NY
*
*
*
Plaintiffs are represented by Charles R.
Virginia, Richard B. Epstein, and Elina
Turetskaya, Virginia & Ambinder, LLP, 111
Broadway, Suite 1403, New York, NY
10006. Defendant is represented by Todd
Allan Bakal, Law Office of Todd A. Bakal,
445 Hamilton Avenue, Suite 1102, White
Plains, NY 10601.
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