UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
June 20, 1984
RAYMOND T. McKAY as President of DISTRICT 2, MARINE ENGINEERS BENEFICIAL ASSOCIATION - ASSOCIATED MARITIME OFFICERS, AFL-CIO, Petitioner, against POINT SHIPPING CORPORATION and POINT VAIL COMPANY, Respondents.
The opinion of the court was delivered by: WEINFELD
EDWARD WEINFELD, D.J.
This is a motion by petitioner Marine Engineers Beneficial Association ("Union") pursuant to 28 U.S.C. § 1447(c) (1982), to remand the action, which seeks confirmation of an arbitrator's award entered May 9, 1984, against respondents Point Vail Company ("Point Vail") and Point Shipping Corporation ("Point Shipping"). The Union asserts the petition for removal is defective ab initio because it is made by only one of the named respondents in the state court action, Point Vail, whereas the removal statute, 28 U.S.C. § 1441(a) (1982), expressly conditions the right to removal upon the agreement of all respondents. Point Vail opposes the motion, asserting the general rule set forth in the removal statute is inapplicable because of "fraudulent joinder" of Point Shipping in the state court action.
The record discloses that on April 6, 1984, the Union invoked the arbitration clause of its collective bargaining agreement with Point Shipping, as managing agent, and Point Vail, as owner, of the vessel "Point Vail" ("vessel"), following protests by the Union to Point Shipping that non-union employees were performing work on the vessel reserved by the collective bargaining agreement for Union members.
Both Point Vail and Point Shipping were joined in the arbitration proceeding, which resulted in an award in favor of the Union of damages in excess of $150,000 and a mandate that respondents, referred to by the arbitrator as, collectively, "Company[,]"
cease and desist from violating the collective bargaining agreement with respect to the performance of work aboard the vessel by non-union members. Petitioner moved to confirm the award in the Supreme Court of the State of New York,
leading to the petition for removal, and the instant motion for remand.
In Bradford v. Harding,4 Judge Friendly, tracing the language of 28 U.S.C. § 1441(a) to its origins in The Judiciary Act of 1887,
stated that thereunder "all the defendants must join in seeking removal,"
or the petition to remove is defective. This interpretation of § 1441(a) is still the law.
Point Vail concedes that Point Shipping has not joined in the petition for removal.
Point Vail contends, in opposing remand, that pursuant to rulings that permit an exception to the statutory requirement, Point Shipping's joinder in the petition for removal is unnecessary. It relies on decisions holding that when there is "fraudulent joinder" in the state court action, the agreement of the fraudulently joined party to removal is not necessary to the assertion of removal jurisdiction.
A brief examination of these decisions, however, reveals that they are wholly inapplicable to the instant case. For the District Court to retain jurisdiction pursuant to the "fraudulent joinder" doctrine, it must be shown that the litigant seeking remand "claimed no relief" against a defendant who failed to join in the petition for removal,
and that, accordingly, realignment of the parties would be permitted in order to obtain compliance with the rule that all defendants join in the petition for removal.
Point Vail, which had the burden of proof on this issue,
has not made this showing. Judgment in the arbitration proceeding was sought against Point Shipping. Point Vail's contention that "Point Shipping has no real monetary interest in this litigation"
because of an indemnity provision in the management agreement between respondents whereby Point Vail is liable over to Point Shipping for "any losses, claims or damages . . . arising out of the management or operations of the Vessel . . .,"
only strengthens the Union's position, for it recognizes that Point Shipping might be held initially liable for damages under the collective bargaining agreement.
Whether the Union will ultimately collect from Point Shipping is immaterial to this motion; it is sufficient to note that the likelihood that the Union will do so is not insubstantial.
There being no basis for a finding of fraudulent joinder, the petition for removal is defective, and the action must be remanded to the Supreme Court of the State of New York. The Union's request for fees pursuant to 28 U.S.C. §§ 1447(c) and 1927 (1982), however, is not supported by the record and is, accordingly, denied.