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TUVIA CONVALESCENT CTR., INC. v. NATIONAL UNION OF

December 21, 1982

TUVIA CONVALESCENT CENTER, INC., d/b/a HILLDALE CONVALESCENT HOME, Plaintiff,
v.
NATIONAL UNION OF HOSPITAL AND HEALTH CARE EMPLOYEES, A Division of RWDSU, AFL-CIO; TRUSTEES, "1199" NATIONAL BENEFIT FUND FOR HOSPITAL AND HEALTH CARE EMPLOYEES; TRUSTEES, "1199" NATIONAL PENSION FUND FOR HOSPITAL AND HEALTH CARE EMPLOYEES, Defendants



The opinion of the court was delivered by: POLLACK

MEMORANDUM

 MILTON POLLACK, District Judge.

 The defendants have moved to dismiss the amended complaint pursuant to Rule 12 (b)(1) of the Federal Rules of Civil Procedure contending: (1) that complete diversity between the parties is lacking and that there is no jurisdiction under 28 U.S.C. § 1332; and (2) that the antitrust claims asserted in the Seventh and Eighth counts of the complaint are precluded by the labor exemption to the antitrust laws, contained in 15 U.S.C. § 17. Defendant National Union of Hospital and Health Care Employees, a Division of RWDSU, AFL-CIO (National Union) contends further that claims asserted against it under LMRA § 301, 29 U.S.C. § 185 are improperly raised since the National Union was not a party to the collective bargaining agreement. Defendant National Union states that if it were a party the claims in the first Six counts would be arbitrable and that in any event the claims are within the exclusive jurisdiction of the National Labor Relations Board. Defendants Trustees "1199" National Benefit Fund for Hospital and Health Care Employees and Trustees "1199" National Pension Fund for Hospital and Health Care Employees (Funds) further contend that plaintiff has no standing to bring claims arising under E.R.I.S.A., 29 U.S.C. § 1132 and that the Ninth claim should therefore be dismissed.

 For the reasons appearing hereafter, based on the memoranda from all the parties and a hearing before the Court, the claims against the National Union and the Funds are dismissed in all respects.

 I. The Underlying Dispute.

 The amended complaint asserts nine claims for relief. The first six claims seek compensatory and punitive damages from the defendant National Union for various labor practices, accusations of false imprisonment and withholding of information necessary for good faith bargaining. The Seventh and Eighth claims accuse the National Union and the Funds of engaging in restraint of trade, suppression of competition and causing an anti-competitive impact in violation of the antitrust laws. Finally, the Ninth claim charges the Funds with violating their fiduciary responsibilities under E.R.I.S.A.

 The plaintiff, Tuvia Convalescent Center, Inc. (Tuvia), was a Connecticut corporation which did business under the name Hilldale Convalescent Home, until it terminated its operations, allegedly due to a strike by its employees. Defendant National Union is an unincorporated association and labor organization with its principal place of business in the Southern District of New York. The Funds are jointly trusteed labor management benefit funds within the meaning of 29 U.S.C. § 186 (c)(5) and are employee benefit plans within the meaning of 29 U.S.C. §§ 1002 & 1132(d)(1).

 The collective bargaining agreement between plaintiff and the New England Health Care Employees Union, District 1199, RWDSU, AFL-CIO (Local Union) was made on November 12, 1979 to expire on September 30, 1980. The Local Union is not named as a defendant in this action. The National Union was not a signatory to the November 12, 1979 agreement.

 On the expiry date of the first agreement, the plaintiff entered into an interim agreement with "(DISTRICT) 1199 N.E., NATIONAL UNION OF HOSPITAL AND HEALTH CARE EMPLOYEES, RWDSU, AFL-CIO ('Union')". The interim agreement was to have effect during the period of negotiations over a new contract after October 1, 1980. The sole substantive content of the interim agreement was to make provision for the continuation of employer contributions into the National Benefit Fund while negotiations continued. The interim agreement has no terms that limit the bargaining tactics of the parties.

 Ultimately, negotiations failed and a strike ensued. Plaintiff complains that the strike was improper, that its bargaining agents were falsely imprisoned by union negotiators and that there were threats of violence. Plaintiff alleges that these activities caused its financial ruin and the eventual closing of the facility. Plaintiff also complains that the Funds failed to provide information that was needed in the bargaining process and that this failure was the result of a conspiracy between the Funds and the National Union.

 II. Preliminary Issues.

 Plaintiff conceded on oral argument that the absence of complete diversity precluded jurisdiction under 28 U.S.C. § 1332. Plaintiff is a resident and citizen of Connecticut and defendant National Union is an unincorporated labor association with Connecticut members. The Funds are managed by trustees, some of whom are citizens of Connecticut. Thus complete diversity is absent. See Green v. Santa Fe Indus., 391 F. Supp. 849, 853 (S.D.N.Y. 1975), aff'd, 533 F.2d 1283 (2d Cir. 1976), rev'd on other grounds, 430 U.S. 462, 97 S. Ct. 1292, 51 L. Ed. 2d 480 (1977).

 In their memorandum in support of the motion to dismiss, Defendant National Union argues that the first six causes of action concerning breach of the collective bargaining agreement are arbitrable under the contract and that they are not properly before the District Court. It was conceded upon oral argument that the absence of the Local Union from this suit eliminates the question of the exclusivity of the arbitration remedy from consideration.

 The initial collective bargaining agreement between the plaintiff and the Local Union contained a broad based grievance and arbitration procedure that applies to a "dispute or complaint arising between the parties hereto under or out of this Agreement or the interpretation, application, performance, termination, or any alleged breach thereof". Were the Local Union a party it could demand arbitration, even though the contract terminated before the strike. See Nolde Brothers, Inc., v. Local 358, Bakery & Confectionery Workers, 430 U.S. 243, 51 L. Ed. 2d 300, 97 S. Ct. 1067 (1977). See also ITT World Communications, Inc. v. Communications ...


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