Appeal from a summary judgment, per Judge Sand, Southern District of New York, declaring that Local 3, International Brotherhood of Electrical Workers, is not entitled to any award for contribution, indemnification or otherwise with respect to monies paid, or to be paid, to plaintiff classes in an antecedent employment discrimination litigation against Madison Square Garden Center, Inc.
Lumbard, Meskill, and Pierce, Circuit Judges.
Local Union No. 3, International Brotherhood of Electrical Workers, AFL-CIO ("Local 3"), which represents laborers employed at Madison Square Garden, appeals from an order of the District Court for the Southern District declaring that Local 3 can assert no claim sounding in contribution, indemnification, or otherwise in connection with a judgment entered against it for violation of the civil rights laws.
Individual plaintiffs and plaintiffs Madison Square Garden Center, Inc. and Madison Square Garden Corporation ("the Garden entities") commenced this action for declaratory relief soon after defendant Local 3 announced that it would seek contribution or indemnification for amounts awarded to the individual plaintiffs in an antecedent litigation, under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. (1970), and Section 1981 of the Civil Rights Act of 1866, 42 U.S.C. § 1981 (1970), brought by classes of black and hispanic individuals who were or would be employed as cleaners at Madison Square Garden See Ingram v. Madison Square Garden Center, 482 F. Supp. 414; 482 F. Supp. 918 (S.D.N.Y. 1979); 535 F. Supp. 1082 (S.D.N.Y. 1982), modified, 709 F.2d 807 (2d Cir.), cert. denied, 464 U.S. 937, 104 S. Ct. 346, 78 L. Ed. 2d 313 (1983). Judge Sand, finding no factual question to be tried, granted plaintiffs' summary judgment motion and declared them not liable to Local 3 for any monies associated with the antecedent litigation. 582 F. Supp. 627 (S.D.N.Y. 1984). For reasons substantially in agreement with those of the district court, we affirm.
The consolidated employment discrimination suits, from which the present declaratory judgment action stems, named, as defendants, the Garden entities, Local 3, and others. The suits alleged that the defendants had violated the civil rights laws by engaging in a pattern of hiring and employment practices which made it impossible for class members to secure higher paying and generally more desirable positions as laborers at Madison Square Garden. Prior to the trial of these antecedent suits, which commenced in 1976 and 1978, the plaintiff classes entered into a consent decree with all defendants other than Local 3. By the terms of the decree, which was approved by the district court in October 1979, see 482 F. Supp. 426 (S.D.N.Y. 1979), the settling defendants agreed to undertake remedial measures, including the immediate hiring of class members and the setting of employment goals for minorities, and to pay a monetary award and attorney's fees. The plaintiff classes withdrew their claims against the settling defendants, with prejudice, and agreed to indemnify them from claims by Local 3.
Litigation against Local 3 proceeded to trial and resulted in a finding that the union had violated both Title VII and § 1981. 482 F. Supp. at 424. Judge Sand found that Local 3, which referred applicants to the Garden to fill positions in its permanent laborer work force, had engaged in a pattern of "subjective and standardless" referrals and that the union had frustrated the attempts of minorities to gain information about becoming laborers at the Garden. Id. at 420-21. The court entered judgment against Local 3 for injunctive and monetary relief, specifically accounting for payments received by the plaintiff classes from the settling defendants and reducing Local 3's liability accordingly. 535 F. Supp. at 1095. On appeal, the award against Local 3 was upheld, as modified by a panel of this court. 709 F.2d 807 (2d Cir.), cert. denied, 464 U.S. 937, 104 S. Ct. 346, 78 L. Ed. 2d 313 (1983). Local 3 has paid a total of $684,514, including interest, into an escrow account that will be used to satisfy the judgment, subject to determination of the issues here.
The plaintiffs herein, settling parties in the prior litigation, brought this action seeking a judgment "declaring that Local 3 has no claim and is not entitled to any award for contribution, indemnification or otherwise with respect to the amounts paid (or to be paid) to the plaintiff classes in the antecedent litigation." Local 3 denied the material allegations of the complaint and asserted claims seeking to recoup all or part of the monies awarded. Upon plaintiffs' motion for summary judgment, Judge Sand determined that, even accepting Local 3's factual allegations as true, the union, estopped from denying its own intentionally wrongful conduct by virtue of the prior litigation, could not, as a matter of law, state a claim to contribution, indemnification, or other relief from plaintiffs. The district court found that contribution is not available to a defendant found to be in violation of Title VII of the Civil Rights Act of 1964, by virtue of the Supreme Court's holding in Northwest Airlines Inc. v. Transport Workers, 451 U.S. 77, 67 L. Ed. 2d 750, 101 S. Ct. 1571 (1981). The rationale of this case, the district court asserted, extends to claims for indemnification, as well as to claims for contribution or indemnification under § 1981, at least in the circumstances presented here. The court concluded that, even accepting the union's contentions that Local 3 acted as an employment agency for the Garden and that the Garden directed Local 3's discriminatory actions, Local 3 has no entitlement to recovery from its former co-defendants, or their indemnitors, of any monies paid (or to be paid) to the individual plaintiffs in the antecedent litigation.
On appeal, Local 3 contends that the district court erred in holding that the union can assert no right to contribution or indemnification under either Title VII or § 1981. The union argues that the holding in Northwest Airlines should be read narrowly, to bar the assertion of a claim to contribution under Title VII only in circumstances in which no charge of discrimination was ever filed against the party from whom contribution is sought. Local 3 relies on the following language in the Court's opinion:
A court's broad power. . . to fashion relief against all respondents named in a properly filed charge is not, of course, at issue in this litigation since no charge was filed against either of the respondent unions.
451 U.S. at 93 n.28. In addition, the union contends that the decision in Northwest Airlines should not be construed to frustrate claims to contribution or indemnification under § 1981. Local 3 contends that the holding in Northwest Airlines hinged on the concern that a judicially-fashioned right to contribution under Title VII would upset a comprehensive administrative scheme -- a scheme not legislated in the context of § 1981 actions. Finally, Local 3 contends that the holding in Northwest Airlines does not extend to claims for contribution or indemnification by agents against their principals and that Local 3 acted at the direction of the Garden entities in the perpetration of its discriminatory practices.
Local 3's first argument -- that the holding in Northwest Airlines does not bar actions for contribution among the named respondents in a Title VII litigation -- was rightly rejected by the district court. The Supreme Court's language at 451 U.S. at 93 n.28, addresses only a court's power to apportion damages among Title VII defendants in a judgment. The issue of whether a party found in violation of Title VII is entitled to bring a later suit ...