The opinion of the court was delivered by: Stewart, District Judge:
Plaintiff Harry J. Diduck brought this action to recover
monies allegedly owed to certain union employee benefit funds
of which Diduck is a beneficiary. Defendants Trump-Equitable
Fifth Avenue Company, the Trump Organization, Inc., Donald J.
Trump, Donald J. Trump d/b/a The Trump Organization, and the
Equitable Life Assurance Society of the United States (the
"Trump Defendants") move pursuant to Rule 56(b) of the Federal
Rules of Civil Procedure for summary judgment dismissing
plaintiff's causes of action against them. Defendant John
Senyshyn moves pursuant to Fed.R.Civ.P. 56(b) for an order
granting him partial summary judgment as to plaintiff's third
and fourth causes of action. Plaintiff cross-moves for leave
to file a second amended complaint pursuant to Fed.R.Civ.P. 15
and to have the action certified as a class action pursuant to
The factual background to this action has been recited by
both this court in Diduck v. Kaszycki, No. 83 Civ.
6346 (S.D.N.Y. July 18, 1988) (the "July 18th Decision"), and
the Second Circuit in Diduck v. Kaszycki,
874 F.2d 912 (2d Cir. 1989). We will therefore only briefly summarize
the relevant facts.
The Trump defendants hired William Kaszycki and his company
Kaszycki and Sons Contractors, Inc. ("Kaszycki Corporation"
and collectively the "Kaszycki defendants") to demolish the
Bonwit Teller Building in midtown Manhattan pursuant to a
written agreement signed January 30, 1980. To obtain workers
for the demolition Kaszycki entered into a collective
bargaining agreement on behalf of the Kaszycki Corporation
with the House Wreckers Local 95 (the "Union") for the period
from January 1, 1980 through June 30, 1981. The Trump
defendants were not signatories to this agreement.
During the course of the demolition project the Kaszycki
Corporation employed a number of non-union laborers from
Poland ("Polish workers") who were paid less than the Union
workers. Under the terms of the collective bargaining
agreement, Kaszycki Corporation was obligated to make
contributions of specified amounts into the Union's pension
and insurance funds (the "Funds"). These contributions were
calculated from percentages of the total wages of both the
Union and non-union workers. To facilitate this calculation
the collective bargaining agreement provided that the Union's
shop steward and the Kaszycki Corporation file weekly reports
listing the workers on the job, the numbers of hours worked
and their wages.
Defendant Senyshyn served as the Union's shop steward
beginning in March 25, 1980 and filed three weekly reports. It
is alleged that during his tenure as shop steward he submitted
false shop steward reports in which he failed to document the
use of the non-union Polish laborers. Indeed, throughout the
demolition project neither the shop steward's nor the Kaszycki
Corporation's weekly reports listed the Polish workers.
In June of 1980 the Union notified the Trump defendants that
contributions to the Funds were in arrears because of the
financial insolvency of the Kaszycki Corporation. In response
to a threatened work stoppage by the Union, the Trump
defendants made a number of payments to the Funds on behalf of
the Kaszycki Corporation and advised Kaszycki by letter of his
responsibilities for the Fund payments and his
responsibilities under the demolition project agreement.
However, neither Kaszycki nor the Trump defendants made any
contributions to the Funds on behalf of the Polish workers.
On August 25, 1983, Diduck sued Kaszycki, the Kaszycki
Corporation and Senyshyn to recover an estimated $600,000 owed
to the Funds for the Polish workers. On June 24, 1984, Diduck
filed a motion to amend his complaint, which we granted on
August 9, 1984, and added the Trump defendants and the
Trustees as nominal defendants. The amended complaint sought
relief derivatively and as a class action.*fn1
In our July 18th Decision we granted Senyshyn's and the
Trump defendants' motions for summary judgment and denied the
plaintiff's motion for class certification. We held that
Diduck lacked standing to sue derivatively because the
trustees of the Funds had not breached a fiduciary duty, that
Diduck could not maintain an action under RICO because no
criminal enterprise existed and that the statute of
limitations under ERISA barred his claims against Senyshyn.
This decision was reversed and remanded by the Second Circuit
which mandated that on remand the amended complaint's second,
third, fourth, fifth, sixth and seventh claims remained for
consideration on the merits by this court. Diduck,
874 F.2d at 920. The instant motions followed.
Plaintiff's Renewed Motion for Class Certification
In our July 18, 1988 Memorandum Decision we held that since
any recovery from the action would go to the Funds, the
instant action was a derivative suit. Accordingly, we denied
plaintiff's motion for class certification. Diduck v.
Kaszycki & Sons Contractors, Inc., No. 83 Civ. 6346, slip
op. at 4 (S.D.N.Y. July 18, 1988).
Plaintiff now argues that in light of our reversal by the
Second Circuit the issue of class certification should now be
reconsidered. Defendants argue that we are barred from
reconsidering the issue on "law of the case" grounds.
We begin by briefly summarizing "law of the case"
principles. Under the "law of the case" doctrine when an
appellate court has decided an issue, the trial court is under
a duty at a later stage in the litigation to follow the
appellate court's ruling on that issue. United States v.
Cirami, 563 F.2d 26, 32 (2d Cir. 1977). However, upon
remand the trial court may consider matters not expressly or
implicitly part of the decision of the higher court.
Id. at 33. Further, in a circumstance
in which the mandate of the appellate court does
not address a particular issue, the appellate
judgment, on this issue, does not establish law
of the case. . . . It remains, however, that the
issue was decided by the district court in an
earlier case and was not disapproved by the
appellate court. It is, therefore, the law of the
case, but within the more flexible branch of the
doctrine applicable to successive ruling of the
1B J. Moore, W. Taggart & J. Wicker, Moore's Federal Practice
¶ 0.404[4-3] (2d ed. 1988).
The "law of the case" applicable to successive rulings of
the same court is a discretionary doctrine which "merely
expresses the general practice of refusing to open what has
been decided." Lasky v. American Broadcasting Companies,
Inc., 631 F. Supp. 962, 964 (S.D.N.Y. 1986) (quoting
United States v. Birney, 686 F.2d 102, 107 (2d Cir.
1982)). Therefore, pursuant to the more "flexible branch" of
the doctrine, a court may reconsider its own prior rulings
when convinced that its previous ruling was substantially
erroneous or when reconsideration is necessary to avoid
injustice. See Moll v. U.S. Life Title Insurance Co. of
New York, 700 F. Supp. 1284, 1286 (S.D.N.Y. 1988). The
jurisprudential concerns underlying the "law of the case"
doctrine counsel against reconsideration of
issues absent compelling circumstances such as an intervening
change of law, the availability of new evidence, the need to
correct a clear error, or to prevent manifest injustice.
See Wilder v. Bernstein, 645 F. Supp. 1292, 1310
(S.D.N.Y. 1986), aff'd, 848 F.2d 1338 (2d Cir. 1988).
We believe the law of the case doctrine applicable to
successive rulings is the correct approach here since the
Second Circuit did not and was not required to rule on the
issue of class certification.
It is our view that our original denial of class
certification was generally correct in the first instance.
When it reversed this court's summary judgment determinations,
the Second Circuit did not explicitly address our denial of
class certification. Indeed, plaintiff did not specifically
raise the issue as one that he wished to appeal.*fn2 However,
in spite of the fact that the Second Circuit expressly
recognized that the complaint originally sought relief
derivatively and as a class action, Diduck, 874 F.2d
at 916, the decision nevertheless is replete with references
to the instant action as a derivative one. See, e.g.,
Diduck, 874 F.2d at 920. Indeed, in explicit reference to
our holding denying class certification Judge Van
Graafeiland's dissent expressly stated that he "and his
colleagues" agreed with our holding that plaintiff was suing
solely in a derivative capacity. Diduck, 874 F.2d at
923 (Van Graafeiland, J., dissenting). Thus, even if the
Second Circuit was not required to reach the issue of our
denial of class certification, we note that its decision
implicitly approved of our holding.
Second, as we stated in our previous decision, "[o]ne of the
few things that plaintiff, Trump defendants and the Funds
agree on is that any recovery from this action will go to the
Funds and not to the plaintiff." Accordingly, as we also
stated in our earlier decision, "the suit clearly has been
brought derivatively" on behalf of the Funds.*fn3 Moreover,
"enforcement of contributions obligations is the function, at
least in the first instance, of the trustees." Struble v.
N.J. Brewery Employees' Welfare Trust Fund, 732 F.2d 325,
337 (3d Cir. 1984) (construing section 502(g)(2)).*fn4 We are
persuaded by the Struble court's analysis concluding
that beneficiaries do not have a direct action for damages for
unpaid contributions. Id. at 338.*fn5 This approach
is consistent with the Second Circuit's determination that an
or participant has standing to bring a civil action under
ERISA only to recover benefits due him or her, to enforce
personal rights, or seek injunctive or equitable relief.*fn6
See Alfarone v. Bernie Wolff Construction Corp.,
788 F.2d 76, 79 (2d Cir. 1986) (construing
29 U.S.C. § 1132(a)(1)(B) and 1132(a)(3)), cert. denied,
479 U.S. 915, 107 S.Ct. 316, 93 L.Ed.2d 289 (1986).*fn7 Therefore,
plaintiff's instant ERISA damage claims for unpaid
contributions may only be brought derivatively. See
Struble, 732 F.2d at 337 (beneficiaries do not have a
direct action for damages for unpaid contributions).
Consequently, since plaintiff seeks to vindicate rights
accruing to the Funds, he has no individual standing to sue
for unpaid contributions under ERISA. Thus, he also has no
right to bring a class action. See Akerman v. Oryx
Communication, Inc., 609 F. Supp. 363, 376 (S.D.N.Y.)
(predicate to plaintiff's right to represent a class is
eligibility to sue in own right), aff'd, 810 F.2d 336
(2d Cir. 1984). In sum, we affirm our previous holding that
plaintiff's claim for unpaid contributions must be brought
derivatively. We also affirm our previous holding denying
class certification as to those claims brought derivatively.
We also agree with Judge Van Graafeiland that since any
relief obtained will accrue solely to the Funds and that the
primary right to seek redress for damages to the Funds
belonged to the Trustees, plaintiff lacks individual standing
to bring his RICO claim. See Diduck, 874 F.2d at 924
(Van Graafeiland, J., dissenting); cf. Rand v.
Anaconda-Ericsson, Inc., 794 F.2d 843, 849 (2d Cir. 1986)
(shareholders cannot bring RICO claim in their own names if
legal injury was to corporation), cert. denied,
479 U.S. 987, 107 S.Ct. 579, 93 L.Ed.2d 582 (1986); Warren v.
Manufacturers National Bank of Detroit, 759 F.2d 542, 544
(6th Cir. 1985) (RICO action to redress injuries to
corporation cannot be maintained by shareholder in own name
but must be brought derivatively); Sound Video Unlimited,
Inc. v. Video Shack Inc., 700 F. Supp. 127, 136 (S.D.N Y
1988) (shareholders cannot bring a RICO action in their
individual capacity to redress injuries inflicted upon their
corporation); Nordberg v. ...