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CATALANO v. BROTHERHOOD OF RY.

September 11, 1972

Gloria Catalano et al., Petitioners
v.
Brotherhood of Railway, Airline and Steamship Clerks, Freight Handlers, Express And Station Employees et al., Respondents


Gagliardi, District Judge


The opinion of the court was delivered by: GAGLIARDI

MEMORANDUM DECISION

GAGLIARDI, DISTRICT JUDGE:

 On July 26, 1972, petitioners Gloria Catalano, Elena A. Marino and Frank E. Masterson instituted proceedings on behalf of themselves and all others similarly situated to impeach an arbitration award dated February 4, 1972. On August 25, 1972, respondent BRAC filed a cross-claim against respondent REA seeking to permanently enjoin the proposed consolidation of REA facilities in New York with facilities in Chattanooga and Chicago.

 The matter comes before the court on a total of eight motions. *fn1" For the purposes of this decision we concern ourselves with two of these motions: (1) respondent BRAC's motion in which REA joins to dismiss the petition and (2) respondent BRAC's motion for a preliminary injunction pending a final determination of its cross-claim.

 I. The Motion to Dismiss the Petition.

 Respondent BRAC moves to dismiss the petition as barred by the statute of limitations. Several other grounds for dismissing the petition are put forth; however, having decided that the petition is barred by the statute of limitations, we do not reach these other grounds.

 Section 9 of the Railway Labor Act sets forth the time limits for instituting an action to impeach an arbitration award.

 The statute provides that:

 
An award . . . shall be conclusive . . . unless, within ten days after the filing of the award, a petition to impeach the award is filed . . . . 45 U.S.C. § 159(2) (1970).

 The award under attack was filed with the Court on February 7, 1972; the petition before the Court was filed on July 26, 1972. Respondent BRAC contends that the time within which to file a petition to impeach the award expired on February 17, 1972; and that, therefore, the instant petition is time barred.

 Petitioners admit the applicability of the ten-day limitation but argue that because the petition to impeach is based upon fraud, the action did not accrue until the fraud was actually discovered on July 17, 1972 and that, therefore, the petition is timely. Petitioners base their argument upon general equity principles governing the accrual of actions in fraud actions. See Holmberg v. Armbrecht, 327 U.S. 392, 90 L. Ed. 743, 66 S. Ct. 582 (1946). However, in the instant case, these general principles must be subordinated to the congressional intent expressed in the language of the statutes governing arbitration procedures. It is evident that in enacting these provisions the Congress sought to ensure the speedy and conclusive settlement of disputes submitted to arbitration. Brotherhood of Railway and Steamship Clerks v. Norfolk Southern Ry., 143 F.2d 1015 (4th Cir. 1944). Thus Section 8 of the Act requires that the agreement to arbitrate specify the time within which hearings must be commenced and the time within which the award must be filed. In the light of the underlying congressional concern with speed and finality and of the clear language of the specific section, we must reject petitioners' argument and hold that the ten-day period is absolute and runs from the date of filing.

 Moreover, assuming arguendo, that the petitioners are correct in their contention that the statute is tolled where the petition alleges fraud, petitioners are incorrect in their interpretation of when an action accrues in fraud cases. Actual discovery of an alleged fraud is not the sole test for the determination of accrual. In general, statutes of limitations begin to run when the fraud was discovered or should have been discovered with due diligence.

 In the instant case, the petition alleges that not only was the award tainted by the arbitrators' acts of fraud and collusion but, in addition, that the BRAC official who signed the agreement to arbitrate lacked authority to do so and that the arbitrators exceeded the terms of the agreement. These alleged defects in the award were readily discoverable on the day it was filed in February of 1972. Presumably alerted to the possibility of irregularity, the petitioners allowed five months to pass before ...


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