Hudson Yards Construction LLC v. Building & Construction Trades Council of Greater New York and Vicinity et al

Filing 31

MEMORANDUM OPINION AND ORDER re: 24 FIRST MOTION to Remand filed by Hudson Yards Construction LLC. For the reasons stated above, Plaintiff's motion to remand is GRANTED. The Clerk of Court is directed to remand this case to New York State Supreme Court, County of New York. (Signed by Judge Gregory H. Woods on 1/15/2019) (mro) Transmission to Docket Assistant Clerk for processing.

USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #:
DATE FILED: 1/15/19
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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HUDSON YARDS CONSTRUCTION LLC,
:
:
Plaintiff,
:
-against:
:
:
BUILDING AND CONSTRUCTION
:
TRADES COUNCIL OF GREATER NEW
:
YORK AND VICINITY AND GARY
:
LaBARBERA
:
:
Defendants. :
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1:18-cv-2376-GHW
MEMORANDUM OPINION
AND ORDER

GREGORY H. WOODS, United States District Judge:
Defendants removed this case from New York Supreme Court, County of New York,
asserting that § 301 and § 303 of the Labor Management Relations act of 1947 (“LMRA) preempt
Plaintiff’s state-law claims. Plaintiff moved to remand the case, arguing that neither section § 301 or
§ 303 is implicated by its complaint. On a motion to remand, Defendants bear the burden of
proving that removal was proper; they have failed to meet that burden. Accordingly, Plaintiff’s
motion is GRANTED and this case is remanded to New York Supreme Court.
I.

B ACKGROUND
A. Factual Background
Plaintiff is the construction manager of the Hudson Yards Development Project (the

“HYD”). Compl. (ECF. No. 3-2) ¶ 1. The Building and Construction Trades Council of Greater
New York (the “BCTC”) is an “umbrella organization comprised of representatives of
approximately 15” affiliated-member unions which participate in the BCTC though elected
delegates. Pl.’s Mot. (ECF No. 27) at 4 (citing Compl. ¶ 24); BCTC’s Constitution and Bylaws

(“BCTC’s Bylaws”) (ECF No. 28-1) art. III §§ 1, 5. Mr. LaBarbera is the President of the BCTC.
Compl. ¶ 14.
On January 16, 2013, Plaintiff “executed a site-wide project labor agreement (‘PLA’) with the
BCTC and certain of its affiliated-member unions “permitting those unions to be hired for HYD’s
Eastern Railyards construction (‘ERY’).” Pl.’s Mot. at 1; see Compl. ¶ 3. “The PLA only covers the
building and construction trades and crafts work within the ERY at the HYD.” Compl. ¶ 26. “It
does not cover 50 Hudson Yards, 55 Hudson Yards, the [Western Railyards construction], or any
other portions of the HYD.” Id. Over time, the relationship between Plaintiff and Defendants
broke down due to conduct which Plaintiff alleges violated the PLA. Id. ¶¶ 29-71. Those alleged
breaches are the subject of current and forthcoming arbitration pursued by Plaintiff under article 9
of the PLA. Id. ¶ 86.
Due to the strained relationship between Plaintiff and Defendants, Plaintiff decided not to
negotiate another PLA with the BCTC, and instead Plaintiff “is bidding the project work and
negotiating directly with individual trade contractors and their respective unions and trade councils”
for the labor needed for the non-ERY portions of the HYD. Id. ¶ 73. Plaintiff alleges that
Defendants, in retaliation for Plaintiff’s decision not to negotiate another PLA, have engaged in
activities designed to “force [Plaintiff] into signing a new PLA” with the BCTC. Id. ¶ 79. Plaintiff
further alleges that those retaliatory acts include pressuring the BCTC’s affiliated-member unions to
decline or terminate negotiations with Plaintiff regarding agreements as to non-ERY portions of the
HYD. Id. ¶¶ 80-83. Additionally, Plaintiff claims that Defendants made malicious, false, and
damaging statements regarding Plaintiff. Id. ¶¶ 94-104.
B. Procedural History
On or about March 8, 2018, Plaintiff brought suit against Defendants alleging tortious
interference with prospective economic advantage and defamation in New York State Supreme
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Court, County of New York. Pet. for Removal (ECF. No. 3-1) at 1; Compl. at 1, 23-24. On March
16, 2018. Defendants removed this case from New York Supreme Court, invoking both federal
question and diversity jurisdiction. Pet. for Removal ¶ 11. On April 30, 2018, Plaintiff moved to
remand. Pl.’s Mot. In their May 21, 2018 opposition to that motion, Defendants conceded that in
this case “diversity does not provide a basis for removal.” Defs.’ Opp. (ECF No. 27) at 3 n.1.
Plaintiff replied on June 4, 2018. Pl.’s Reply (ECF No. 30).
II.

DISCUSSION
A. Standard
Under 28 U.S.C. § 1441(a), defendants may remove to federal court an action originally filed

in state court if it could have been brought in federal court:
Except as otherwise expressly provided by Act of Congress, any civil action
brought in a State court of which the district courts of the United States have
original jurisdiction, may be removed by the defendant or the defendants, to
the district court of the United States for the district and division embracing
the place where such action is pending.
28 U.S.C. § 1441(a).
Defendants assert federal question jurisdiction as the basis for removal. 18 U.S.C. § 1331.
As they are the party asserting federal question jurisdiction, Defendants bear the burden of
“establishing to a reasonable probability” that removal was proper. Anwar v. Fairfield Greenwich Ltd.,
676 F. Supp. 2d 285, 292 (S.D.N.Y. 2009) (citing Blockbuster, Inc. v. Galeno, 472 F.3d 53, 58 (2d Cir.
2006)). “Unless that burden is met, the case must be remanded back to state court. At this stage
therefore, the party seeking remand is presumed to be entitled to it unless the removing party can
demonstrate otherwise.” Wilds v. United Parcel Serv., Inc., 262 F. Supp. 2d 163, 171 (S.D.N.Y. 2003)
(quoting Bellido–Sullivan v. American International Group, Inc., 123 F. Supp. 2d 161, 163 (S.D.N.Y.
2000)). “Any doubts regarding the propriety of removal are resolved in favor of remand, and
‘federal courts construe the removal statute narrowly.’” Anwar 676 F. Supp. 2d at 292 (quoting Lupo
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v. Human Affairs Int’l, Inc., 28 F.3d 269, 274 (2d Cir. 1994)). “When the removal of an action to
federal court is challenged, the burden falls squarely upon the removing party to establish its right to
a federal forum by competent proof.” Rosario v. Target Corp., 15-cv-3724-KBF, 2015 WL 4597428, at
*2 (S.D.N.Y. July 30, 2015) (quotation marks omitted).
“The presence or absence of federal-question jurisdiction is governed by the ‘well-pleaded
complaint rule,’ which provides that federal jurisdiction exists only when a federal question is
presented on the face of the plaintiff's properly pleaded complaint.” Caterpillar Inc. v. Williams, 482
U.S. 386, 392 (1987). “A case may not be removed to federal court on the basis of a defense of
federal preemption, even if the defense is anticipated in the complaint, and even if the preemption is
the only issue in the case.” Foy v. Pratt & Whitney Grp., 127 F.3d 229, 232 (2d Cir. 1997) (citing
Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987)).
“Occasionally, however, ‘the pre-emptive force of a statute is so extraordinary’ that any claim
based on preempted state law is considered a federal claim arising under federal law.” Id. (quoting
Caterpillar, 482 U.S. at 393). “This ‘complete pre-emption corollary to the well-pleaded complaint
rule’ applies to claims under § 301 of the LMRA.” Id. (quoting Caterpillar, 482 U.S. at 393).
Accordingly, if the state claims pleaded by a plaintiff are preempted by § 301 of the LMRA, “the
action may properly be removed to the federal courts, even when the plaintiff’s complaint does not
itself include a federal cause of action.” Shafii v. British Airways, PLC, 83 F.3d 566, 569 (2d Cir. 1996)
(citing Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 258-64 (1994)).
B. Removal Was Improper Because Plaintiff’s Claims Are not Preempted
The Complaint alleges only state-law claims—tortious interference with prospective
economic advantage and defamation. As neither claim implicates federal law on the face of the wellpleaded complaint, and the only potential basis for removal is federal question jurisdiction,
Defendant must establish a reasonable probability that Plaintiff’s claims are completely preempted
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by federal law in order to avoid remand. Defendants contend that § 301 and § 303 do just that. For
the reasons that follow, Defendants have not carried their burden.
1. LMRA § 301 Does Not Preempt Plaintiff’s Claims
Section 301 of the LMRA does not preempt Plaintiff’s claims as neither of those claims are
substantially dependent upon, or founded on, the terms of the PLA. LMRA § 301 confers federal
jurisdiction over “[s]uits for violation of contracts between an employer and a labor organization
representing employees in an industry affecting commerce.” 29 U.S.C. § 185(a). When “resolution
of the state-law claim does not require construing [such a] collective-bargaining agreement,” § 301
does not preempt state law. Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 407 (1988). It is only
when the state-law claim is “founded directly on rights created by collective-bargaining agreements,”
Caterpillar, 482 U.S. at 394, or that the “resolution of a state-law claim is substantially dependent
upon analysis of the terms of an agreement made between the parties in a labor contract” that the
state-law claim is preempted by § 301. Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 220 (1985)
(internal citation omitted). “[W]hen the meaning of contract terms is not the subject of dispute, the
bare fact that a collective-bargaining agreement will be consulted in the course of state-law litigation
plainly does not require the claim to be extinguished.” Livadas v. Bradshaw, 512 U.S. 107, 124 (1994).
“Nor would a state claim be preempted if its application required mere referral to the CBA for
‘information such as rate of pay and other economic benefits that might be helpful in determining
the damages.’” Vera v. Saks & Co., 335 F.3d 109, 115 (2d Cir. 2003) (quoting Lingle, 486 U.S. at 413
n.12.
Plaintiff alleges claims of tortious interference with prospective economic advantage and
defamation. Neither claim is substantially dependent upon the terms of the PLA, nor is either claim
founded directly on the rights established in the PLA. As to the tortious interference claim, Plaintiff
alleges tortious interference with Plaintiff’s capacity to enter into agreements regarding the
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construction of non-ERY portions of the HYD, and the PLA only is applicable to the ERY. The
Court is unaware of any basis supporting the conclusion that the tortious interference claim is
founded directly on rights established in the PLA or substantially dependent upon the terms of the
PLA.
Unable to cite to a single provision of the PLA which would be implicated in Plaintiff’s
tortious interference claim, see Defs.’ Mem at 19-22, Defendants instead set forth the conclusory
argument that “[t]he gravamen of Plaintiff’s allegations are that Defendants are responsible for
Plaintiff’s alleged failure to realize cost savings anticipated from the ERY PLA” in other portions of
the project. Id. at 20. That argument, at most, speaks only to a potential method for calculating
damages—which is insufficient to trigger preemption. See Vera v. Saks & Co., 335 F.3d at 115. As
Defendant has failed to identify any provision of the PLA which would necessarily be implicated in
Plaintiff’s tortious interference claim, they have failed to carry their burden to show a reasonable
probability that § 301 preempts that claim.
As to Plaintiff’s defamation claim, Defendant has again failed to demonstrate that in order to
determine the defamatory nature of the conduct alleged, that any provision of the PLA would need
to be interpreted, much less that the defamation claim is somehow “substantially dependent” on the
terms of the PLA. Indeed, none of the allegedly defamatory statements even mentions the PLA.
Compl. ¶¶ 78, 94-104. However, in this area, Defendants’ arguments suffer from an additionalfatal flaw, in that they do not address Plaintiff’s invocation of Linn v. United Plant Guard Workers,
Local 114, 383 U.S. 53 (1966).
“In Linn the Court held that the interest of the state in protecting its residents from
malicious libel is ‘an overriding state interest,’ comparable to its interest in the ‘maintenance of
domestic peace,’ and that state law is therefore not preempted by the LMRA when such statements
are made in the course of a union organizational campaign,” Iodice v. Calabrese, 512 F.2d 383, 390
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n.11 (2d Cir. 1975) (quoting Linn v. 383 U.S. at 63), and “the complainant can show that the
defamatory statements were circulated with malice and caused him damage. Linn, 383 U.S. at 64.
Plaintiff has pled actual malice and that the allegedly defamatory statement caused the Plaintiff
damage. Compl. ¶¶ 99-100. Accordingly, the defamation claim is not preempted.
2. LMRA § 303 Does Not Preempt Plaintiff’s Claims
LMRA § 303 also does not preempt Plaintiff’s claims because those claims do not identify
any neutral-secondary actors, as required to implicate § 303. 1 “[T]he Supreme Court has explained
that ‘state law has been displaced by § 303 in private damage actions based on peaceful union
secondary activities.’ The Court also held that the preemptive effects of section 303 extended to
punitive damages.” 2 Monarch Long Beach Corp. v. Soft Drink Workers, Local 812, Int'l Bhd. of Teamsters,
762 F.2d 228, 232 (2d Cir. 1985) (quoting Local 20, Teamsters v. Morton, 377 U.S. 252, 260-61 (1964)).
Section 303 “is commonly referred to as the Act’s ‘secondary boycott’ provision, which prohibits
any labor organization from ‘picketing against an employer with whom it does not have a dispute,
with an object of forcing that secondary employer to cease doing business with a primary
employer.’” NLRB v. Local 3, Int’l Bhd. of Elec. Workers, 471 F.3d 399, 402 (2d Cir. 2006) (quoting
NLRB v. Local 3, 730 F.2d 870, 875-76 (2d Cir. 1984)).
Section 303 “prohibits labor organizations from using threats, coercion, or restraint to
interfere with the business relationships of employers engaged in commerce for the purpose of
causing the employer to cease doing business with any other person. Such conduct has been labeled

1

Section 303 provides a federal claim for violations of 29 U.S.C. § 158(b)(4). 29 U.S.C. § 187.

There is some dispute amongst the Circuits as to whether § 303 completely preempts state law if prohibited secondary
activity is the basis for the state-law claim. Compare Smart v. Local 702 Int'l Bhd. of Elec. Workers, 562 F.3d 798, 808 (7th
Cir. 2009) (“[W]e hold therefore that section 187(b) [§ 303] completely preempts state-law claims related to secondary
boycott activities described in section 158(b)(4)”) with Retail Prop. Tr. v. United Bhd. of Carpenters & Joiners of Am., 768 F.3d
938, 960 (9th Cir. 2014) (“[section] 303 does not fully preempt any suit that is based on conduct arguably prohibited by
the secondary boycott provisions of § 8 and made actionable by § 303”) (discussing and disagreeing with Smart).
However, as the Court rests its § 303 analysis on the conclusion that Plaintiff has not alleged secondary activity within
the meaning of § 303, the Court need not determine the extent to which § 303 preempts such claims.

2

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a ‘secondary boycott’ or ‘secondary picketing’ because it is not aimed at the primary employer . . .
but rather, is directed ‘to persuad[ing] the customers of the secondary employer to cease trading with
him in order to force him to cease dealing with, or to put pressure upon, the primary employer.’”
Allstate Interiors Inc. v. Carpenters, 10-cv-2861, 2010 WL 3894915, at *2 (S.D.N.Y. Sept. 10, 2010)
(quoting NLRB v. Retain Store Employees Union, 447 U .S. 607, 612 (1980). “The gravamen of a
secondary boycott . . . is that its sanctions bear, not upon the employer who alone is a party to the
dispute, but upon some [neutral] third party who has no concern in it. Its aim is to compel him to
stop [doing] business with the employer in the hope that this will induce the employer to give in to
his employees’ demands.” Int’l Bhd. of Elec. Workers v. NLRB, 181 F.2d 34, 37 (2d Cir. 1950)) (L.
Hand, C. J.). “[N]eutral parties[ are] ‘the helpless victims of quarrels that do not concern them at
all.’” Int’l Longshoremen’s Ass’n, AFL-CIO v. Allied Int’l, Inc., 456 U.S. 212, 225 (1982) (quoting H.R.
Rep. No. 245, 80th Cong., 1st Sess., 23 (1947)).
Plaintiff alleges that the BCTC and Mr. LaBarbera pressured its own affiliated-member
unions in order to prevent Plaintiff from entering into agreements with those unions for labor on
the non-ERY portions of the HYD. That conduct is not secondary activity within the meaning of
§ 303. In order for conduct to qualify as secondary, it must target a neutral party. Defendant has
failed to identify any “helpless victims of [this] quarrel[]” that are “not concerned” with its outcome.
Int’l Longshoremen’s Ass’n AFL-CIO, 456 U.S. at 225. Therefore, as no neutral-secondary parties have
been identified, the conduct alleged is not secondary within the meaning of § 303, and preemption is
not warranted.
In an attempt to ward off this inevitable conclusion, Defendant makes the novel argument
that its own affiliated-member unions are the neutral-secondary parties allegedly targeted in this
dispute. Defs.’ Opp. at 17. That position is without support in the law. The BCTC’s affiliatedmember unions, who participate in the BCTC through their elected delegates, cannot be considered
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neutral. BCTC’s Byaws art. III §§ 1, 6. The preamble of the BCTC’s Bylaws makes it clear that one
of the goals of the BCTC is “to coordinate and harmonize the activities, functions and interests of
the affiliated Local Unions.” Id., preamble ¶ 6. Indeed, Defendants have argued that the “BCTC is
a labor organization [because] employees [from the affiliated-member unions] participate in the
BCTC through elected delegates.” Defs.’ Opp. 12. Given that coordination of its affiliated-member
unions is one of the stated purposes of the BCTC, and that the BCTC’s membership is composed of
delegates from such unions, it is simply implausible that those unions are somehow “neutral” in one
of the BCTC’s ongoing labor disputes.
The Court rejects the position that the BCTC’s own affiliated-member unions are neutralsecondary actors in this dispute, and therefore, as no secondary activity has been identified, finds
that § 303 is not applicable, and that preemption is not warranted. 3
3. The Court Need Not Determine Whether the BCTC Is a Labor
Organization
A perquisite to the applicability of both § 301 and § 303 is that Defendant must be a “labor
organization” as defined in 29 U.S.C. § 152. 29 U.S.C. §§ 185, 187. As the Court has determined
that neither § 301 or § 303 warrants removal, it need not determine whether Defendant is a labor
organization. The Court notes, however, the contradictory positions taken by Defendant in regards
to this issue, which sing of gamesmanship.
As recently as 2015, in an attempt to avoid liability under § 303, the BCTC has claimed it was
not a labor origination. Bus. Asset Relocation, Inc. v. Teamsters Local 814, 14-cv-0098-RRM VMS, 2015
WL 1443267, at *5 n.6 (E.D.N.Y. Mar. 27, 2015) (“BCTC contends that it is not a proper defendant
3 In dicta, the Court cautions Defendants against raising speculative arguments purely for the sake of ephemeral
advantage in the present litigation, especially when those arguments, if accepted, might have far reaching consequences.
In the hope of avoiding remand to state court, Defendants have essentially taken the position that when they mobilize or
influence the BCTC’s affiliated-member unions, that activity constitutes a prima facie violation of § 303. While that may
appear, in the short term, strategically advantageous to Defendants, a holding that supported Defendants’ position on
this issue could prove impactful on future labor disputes involving umbrella organizations such as the BCTC.

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because it is not a ‘labor organization.’”). Today, Defendant claims it is a labor organization in an
effort to avoid remand. Defendant’s principal evidence supporting its status as a labor organization
is its bylaws. Defs.’ Opp. at 15. Defendants also cite to National Labor Relations Board decisions
which have previously found BCTC to be a labor organization. Id. at 14; see Bus. Asset Relocation, Inc.
v. Teamsters Local 814, 2015 WL 1443267, at *5 n.6 (collecting cases). Counsel for Defendants has
further proffered that BCTC files “LM-2 reports with the Department of Labor [and] . . . files all
reports required of labor organizations,” March 30, 2018 Tr. (ECF. No. 26-1) at 7:3-4, a contention
Plaintiff corroborates noting that Defendant has “filed LM-2 reports since at least 2000.” Pl.’s Mot.
at 13 n.6 (emphasis in original). Disconcertingly, that evidence, cited to prove that BCTC is a labor
organization, existed prior to BCTC claiming it was not a labor organization in 2015, begging the
question as to BCTC’s dramatic change in position. Ultimately, however, the Court need not take a
position on whether Defendant is a labor organization to resolve this motion, and therefore declines
to do so.
III.

CONCLUSION
For the reasons stated above, Plaintiff’s motion to remand is GRANTED. The Clerk of

Court is directed to remand this case to New York State Supreme Court, County of New York.
SO ORDERED.
Dated: January 15, 2019
New York, New York

_____________________________________
GREGORY H. WOODS
United States District Judge

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