The opinion of the court was delivered by: WARD
This is a motion by plaintiffs for a preliminary injunction pursuant to Rule 65, Fed. R. Civ. P., restraining defendant trustees from paying legal fees due in another action with funds of a certain trust, and restraining defendant Amalgamated Bank of New York from honoring checks drawn on the account of the trust. Defendant trustees have moved for an order pursuant to Rule 12(b), Fed. R. Civ. P. to dismiss the complaint on the ground, inter alia, that the Court does not have jurisdiction of the subject matter. For the reasons hereinafter stated, plaintiffs' motion for a preliminary injunction is denied and defendants' motion to dismiss the complaint is granted.
Plaintiff Schonfeld is Secretary-Treasurer and plaintiff Giraldo is a business representative of the International Brotherhood of Painters & Allied Trades, District Council No. 9 ("DC 9"). The individual defendants are the trustees (along with Schonfeld) of a trust dated February 1, 1965, which established the DC 9 Staff Pension Plan ("Plan") for the officers and employees of the union, under which DC 9 made weekly contributions of 10% of the wages of the participants in the Plan.
In 1968 certain moneys belonging to the Plan were deposited in an escrow bank account. Plaintiffs and defendants differ on the reasons and responsibilities for this action. Legal proceedings were instituted against Schonfeld, individually and as trustee, by the defendant trustees on August 9, 1972, in the Supreme Court, Queens County, for diverting these funds. Plaintiffs argue that the state court action was instituted in bad faith and in pursuit of personal interests.
The instant action seeks to enjoin defendants from violating their positions of trust by wasting the Plan's assets. Plaintiffs ask that the defendant trustees be restrained from proceeding with their state court action against Schonfeld, and that defendant Amalgamated Bank of New York be enjoined from paying out any funds for attorneys fees.
Jurisdiction is alleged to exist under Section 302(e) of the Labor Management Relations Act, 29 U.S.C. § 186(e), and under Section 501(b) of the Labor Management Reporting and Disclosure Act, 29 U.S.C. § 501(b).
Prior to bringing this action, Giraldo and DC 9 brought another action in this Court for substantially equivalent relief. Jurisdiction was alleged under Section 302(e) of the Labor Management Relations Act. Judge Lasker dismissed the complaint for lack of jurisdiction and found that the action was without merit. International Brotherhood of Painters & Allied Trades, Dist. Council No. 9 v. Rosen, Civil No. 72-3021 (S.D.N.Y. July 28, 1972). He suggested that any claims of plaintiffs could be interposed as counterclaims in the state court action.
Jurisdiction under Section 302(e) of the Labor Management Relations Act.
Section 302(e), 29 U.S.C. § 186(e) confers jurisdiction upon district courts to restrain violations of Section 186 relating to the administration of pension plans for the benefit of employees. Paragraph III(A) of the declaration of trust of the Plan provides:
"The Trustees shall have the power to . . . collect . . . contributions . . . and . . . may take such steps including the institution and prosecution of or the intervention in any proceeding at law . . . as may be necessary or desirable to effectuate the collection of such contributions."
As Judge Lasker correctly pointed out in his decision,
"These provisions of the trust instrument seem clearly to authorize the Trustees who are defendants here to retain attorneys for the purpose of collecting the $50,000 now undisputedly held in escrow, and to do so by any appropriate means, including a suit against the Union's secretary-treasurer. Accordingly, there appears to be no violation of the terms of the Pension Trust."
On this basis Judge Lasker dismissed the action for lack of jurisdiction over the subject matter.
In order to meet the jurisdictional requirements of Section 302(e), plaintiffs add to the complaint dismissed by Judge Lasker the allegation that one of the defendant trustees is ineligible to be a trustee representing DC 9 because he is an employee of DC 9. Thus, plaintiffs argue, the equal representation requirement of Section 302(c) (5) is violated.
Assuming arguendo that the equal representation requirement of Section 302(c) (5) is applicable and is violated here this court still need not entertain plaintiffs' suit on the authority of Bell v. Hood, 327 U.S. 678, 90 L. Ed. 939, 66 S. Ct. 773 (1946). In Insley v. Joyce, 330 F. Supp. ...