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OPERATIVE PLASTERERS' INTL. ASSN. OF THE UNITED ST

July 7, 1982

OPERATIVE PLASTERERS' AND CEMENT MASONS' INTERNATIONAL ASSOCIATION OF the UNITED STATES AND CANADA, LOCAL 202, AFL-CIO, and Plastering Industry Local 202 Welfare Fund, Plaintiffs,
v.
METROPOLITAN NEW YORK DRY WALL CONTRACTORS ASSOCIATION, INC., et al., Defendants



The opinion of the court was delivered by: NEAHER

MEMORANDUM AND ORDER

In this action based upon a union jurisdictional dispute, plaintiff Local 202 and its welfare fund sue another union, Local 530, and its welfare fund, which have supplanted Local 202's former jurisdiction over drywall plastering in the metropolitan area. Also joined as defendants are the international labor organization ("International"), with which both Locals 202 and 530 are affiliated, and which is responsible for the change in jurisdiction; the Metropolitan New York Dry Wall Contractors Association ("Metropolitan"), an employers' bargaining association which has agreements with both Local 202 and Local 530 covering drywall plastering; and the individual members of Metropolitan. The action is an offshoot of a complex jurisdictional battle between Local 202 and the painters' unions regarding the performance of drywall plastering work. With the exception of some individual employers, members of Metropolitan, who have not yet appeared, defendants have all moved to dismiss the complaint for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted. Rule 12(b)(1), 12(b)(6), F.R.Civ.P. Because affidavits and other materials outside the pleadings have been submitted by the parties, the Court has treated the motions was ripe for summary judgment under Rule 56. For the following reasons, the defendants' motions are granted and the action is dismissed.

 The relevant and material facts underlying this lawsuit are not in dispute. In 1974, Local 202 and two other plasterers' locals, not parties here, entered into a specialty agreement with Metropolitan which recognized that the three locals had exclusive jurisdiction in their geographic areas (the five counties within New York City and Nassau and Suffolk Counties) to perform the "pointing, taping and filling of joints on drywall surfaces, that are to receive these finishes and/or any other decorative wall finishes." In 1975 the plasterers' and painters' unions began to dispute which of them had jurisdiction over pointing and taping work performed with new nonadhesive compounds that could not definitively be classified as plaster material based upon their composition. After protracted internal union proceedings and the commencement of federal litigation, a national Hearings Panel of the AFL-CIO ruled in March 1978 that regardless of the material used, pointing and taping was painters' work if the drywall surfaces were not to receive plaster or other finishes, but if the surfaces were to receive such finishes, then the work belonged to the plasterers. On the central issue, use of the new compounds, the Hearings Panel also ruled that if the same pointing material was applied to the entire drywall surface "for the purpose of producing a uniform surface compatible with the pointed and taped joints," the surface produced "shall be considered a plaster finish." Levin Aff., Exh. I at 33. This confirmed that the work covered by the 1974 specialty agreement between Metropolitan and Locals 202, 60 and 852 belonged to the plasterers. Nevertheless, jurisdictional disputes between the painters and plasterers over application of this ruling continued. See Levin Aff., PP 43-61.

 The operative events with which this lawsuit is concerned occurred after the Hearings Panel issued its jurisdictional ruling. Responding to renewed pressure by the painters' union, undermining the Hearings Panel's decision, the general officers of the International determined that a new local union, Local 530, should be created with its jurisdiction limited to drywall plastering in the geographic territory covered by Local Unions 202, 60 and 852. John Powers, then the General President of the International, announced this plan to representatives of the three locals in a meeting in July 1978. The locals' representatives expressed approval of the plan, although Local 202's president, Carmine Marotta, insists his understanding was that the changes would not affect existing jurisdiction or contracts. The General Executive Board of the International voted to approve a temporary charter for Local 530 on September 6, 1978, whereupon Local 530 entered into a collective bargaining agreement with Metropolitan covering the same work that was the subject of the 1974 specialty agreement between Metropolitan and Local Unions 202, 852 and 60.

 In November 1978 Powers sent Marotta, Local 202's business agent, a copy of a letter he had written the preceding day to Michael Canuso, a vice-president of the International and business agent of Local 852, and at times a president of Local 530, delineating the territorial and work jurisdiction of the new Local 530. Metropolitan's executive director sent copies of the same letter to all of Metropolitan's members, describing it as "self-explanatory." This was followed at the end of November 1978 by a letter from counsel for Local 530's welfare fund notifying Metropolitan's members that as of September 6, 1978, benefit contributions were owed to Local 530's fund with respect to any member of a local who performed drywall plastering work within Local 530's jurisdiction. Effective October 1, 1978, the welfare and benefit funds of Local 530 and Local 202 entered into an agreement ("reciprocal agreement") pursuant to which each fund agreed to transmit to the other all fringe benefit payments received by that fund on behalf of employees temporarily working in its geographical jurisdiction but who were customarily and primarily represented by the other local union.

 As recounted in the amended complaint, these events and relationships give rise to five claims. The first, against Metropolitan and its members, is for breach of the 1974 specialty agreement, which plaintiff alleges was extended in 1977 until at least November 1980. As amended in 1977, this agreement provided for payment of dues check-offs to the local union of which the employee performing the work was a member, rather than to the local union having geographical jurisdiction of the work. Apparently most of those performing drywall plastering at this time were members of Local 202. In addition, fringe benefit contributions were also payable to the appropriate welfare fund of the local union of which the employee performing the work was a member. Since September 1978 Metropolitan's members have paid amounts owing with respect to drywall plastering not to the plaintiffs but to Local 530 and its benefit fund. The first claim accordingly seeks damages for breach of contract in the amounts of the dues check-offs not paid to Local 202 and the fringe benefit contributions not paid to Local 202's fund, for the period September 1978 through at least November 1980.

 The second claim against the International, Local 530 and the defendant Moscatiello, its current president, alleges that these defendants wrongfully interfered with plaintiffs' contractual rights with Metropolitan and its members under the 1974 specialty agreement, as extended. As damages plaintiffs seek recovery of the dues check-offs and fringe benefit contributions not paid to them.

 The third claim charges all defendants with conspiracy to do the acts of which plaintiffs complain. The fourth and fifth claims are against Local 530 and its welfare and insurance fund for breach of the reciprocal agreement in not transferring to Local 202 the drywall plastering fringe benefit contributions allegedly owed, with the amount of such untransferred contributions claimed as damages, and for restitution of the same sums. Jurisdiction to entertain such claims is invoked under § 301(a) of the Labor Management Relations Act of 1947, 29 U.S.C. § 185(a); § 502(e)(1) of the Employee Retirement Security Act, 29 U.S.C. § 1132(e)(1), and the doctrine of pendent jurisdiction.

 In urging dismissal of this suit, defendants argue first that Local 202 has not exhausted internal union or contractual grievance mechanisms with respect to the claimed breaches of contract by Metropolitan, and for the claimed unlawful interference by International and Local 530 with Local 202's contractual relations with Metropolitan. More fundamentally, International argues that no claim for contractual interference can be stated against it because the constitution binding it, Local 202 and Local 530 authorized the actions taken. By extension, a determination in International's favor on this point would remove all basis for plaintiffs' suit. Metropolitan argues also, and it is expressly joined in this by Local 530, that the intra-union nature of the dispute precludes all judicial intervention. This latter challenge, which Metropolitan has framed as going to subject matter jurisdiction, as well as other questions of jurisdiction, must be considered first.

 Section 301(a) of the LMRA confers upon the federal district courts jurisdiction over "suits for violation of contracts ... between any ... labor organizations (representing employees in an industry affecting commerce)" as defined in § 2 of the Act. 29 U.S.C. § 185(a). Recently, the Supreme Court upheld federal jurisdiction over a suit brought by a local union against its parent international union alleging a violation of the union constitution in ordering consolidation of several local unions, including the plaintiff, confirming that a union constitution can be a contract between labor organizations within the meaning of § 301(a), as this circuit has previously held, e.g., Santos v. District Council of New York City and Vicinity of United Brotherhood of Carpenters and Joiners of America, AFL-CIO, 547 F.2d 197, 199 n.1 (2d Cir. 1977); see also Drywall Tapers, Local 1975 v. Operative Plasterers' International Association, 537 F.2d 669, 672-73 (2d Cir. 1976). United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, AFL-CIO v. Local 334, United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, AFL-CIO, 452 U.S. 615, 101 S. Ct. 2546, 69 L. Ed. 2d 280 (1981). Moreover, the Court ruled that it was unnecessary for § 301(a) jurisdiction that the dispute between local and parent unions involve events which potentially have a significant impact on labor-management relations or industrial peace. 452 U.S. at 623-25, 101 S. Ct. at 2551. "(It) is far too late in the day to deny that Congress intended the Federal Courts to enjoy wide ranging authority to enforce labor contracts under § 301." Id. at 627, 101 S. Ct. at 2553. Accordingly, Metropolitan's contention that jurisdiction is barred because this lawsuit is fundamentally an internal union dispute must be rejected.

 Subject matter jurisdiction exists over Local 202's claim against the International for wrongful interference with Local 202's contract, since this claim is based upon the International's alleged violation of its constitution. Although Metropolitan further argues that the International's action rendered the specialty agreement null and void, by stripping Local 202 of jurisdiction over union members performing the work described in that agreement, and that therefore no contract exists between Local 202 and an employer as § 301(a) requires, subject matter jurisdiction cannot seriously be challenged over plaintiffs' claims resting upon breach of the 1974 specialty agreement. Metropolitan's argument assumes the merits of the suit have been concluded in its favor. For jurisdictional purposes, it is sufficient that plaintiffs allege that such a contract existed and that it was breached. See, e.g., Atkinson v. Sinclair Refining Co., 370 U.S. 238, 241-45, 82 S. Ct. 1318, 1320-22, 8 L. Ed. 2d 462 (1962); Genesco, Inc. v. Joint Council 13, United Shoe Workers of America, 341 F.2d 482, 484 (2d Cir. 1965). It is thus unnecessary to determine whether the present plaintiffs are entitled to sue Metropolitan under § 502(e)(1) of ERISA to collect allegedly unpaid benefit contributions.

 Jurisdiction over the remaining claims, for conspiracy, restitution and breach of the reciprocal agreement, and for the claims against Local 530 and its president Moscatiello for interfering with plaintiffs' contract, may be exercised under the doctrine of pendent jurisdiction, since these claims clearly arise from the same nexus of operative facts as the federal claims.

 The ground for dismissal principally relied upon by Metropolitan and Local 530, and also by the International albeit with less vigor, is that Local 202 has not exhausted the grievance procedures available to it under its specialty agreement with Metropolitan and the International constitution. As Metropolitan points out, it is well established that parties to a collective bargaining agreement must resort to any available non-judicial grievance procedures provided in their agreement before litigating their claims in federal court. E.g., Local 33, International Hod Carriers' Building, and Common Laborers' Union of America v. Mason Tenders District Council of Greater New York, 291 F.2d 496, 498-500 (2d Cir. 1961).

 The 1974 specialty agreement provided in Article 6 that "in the event of a dispute arising out of the interpretation of the Agreement" the parties would use the grievance procedures outlined in their agreement. These included, at step two, a grievance committee specifically "empowered to hear and decide all grievances and disputes which arise between the parties as to the interpretation or application of the agreement." Decisions of the committee were made "final and binding" but in cases of deadlock or other failure to reach a decision, the agreement provided that the parties "may" pursue remedies before a National Joint Grievance Committee.

 Local 202 first seeks to excuse its admitted non-exhaustion of contract remedies by arguing that the grievance process contemplated by the specialty agreement does not encompass the present dispute between it and Metropolitan. This dispute is essentially whether in light of the International's vesting of drywall jurisdiction in Local 530, the 1974 specialty agreement any longer applies to drywall work performed by International members who are also members of Local 202. In Local 202's view, its dispute with Metropolitan arises from the latter's repudiation of the agreement based upon the ...


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