The opinion of the court was delivered by: Wexler, District Judge.
David Raff ("plaintiff") brings this suit to recover fees,
expenses, prejudgment interest and attorneys' fees with respect
to his service as arbitrator in connection with a labor dispute.
Named as defendant is Paul C. Maggio, ("defendant"), who, as the
employer involved with the arbitrated labor dispute, is liable
for half the cost of the arbitrator's fees according to a
collective bargaining agreement. Currently before the Court is
defendant's motion to dismiss, pursuant to Rules 12(b)(1) and
12(h)(3) of the Federal Rules of Civil Procedure, for lack of
federal subject matter jurisdiction. After a brief recitation of
the facts, the Court will address defendant's motion.
Defendant is the sole proprietor of a skilled nursing home
facility in Patchogue, New York. He owns and operates the
facility and is responsible for all management decisions. As
operator of the home, defendant entered into a collective
bargaining agreement with Local 1199 of the Drug Hospital and
Health Care Employees Union ("Local 1199"), which agreement was
in effect in 1987 and 1988. One clause of the agreement stated
that unresolved grievances between the parties were to be
arbitrated pursuant to the Voluntary Labor Arbitration Rules of
the American Arbitration Association ("AAA Rules"). The agreement
further stated that the arbitrator's award would be conclusive
and binding, and that each party would equally bear the fees and
expenses of the arbitrator.
Plaintiff herein was designated to sit as arbitrator for an
unresolved grievance involving defendant's discharge of an
employee. He presided over four hearings before issuing an
opinion and award ordering the reinstatement of the employee.
Each party was billed for half of plaintiff's $5,500 fees and
costs. Local 1199 timely paid its portion, but defendant withheld
his share of the bill.
While plaintiff's demand for payment went unanswered, defendant
appealed to this Court to vacate the arbitrator's award on the
basis that it violated public policy. This Court confirmed the
award. Maggio v. Local 1199, 702 F. Supp. 989 (E.D.N.Y. 1988).
At this point, defendant informed plaintiff that he was
considering further appeal of the matter and would continue to
withhold payment. Following an appeal, the Second Circuit
affirmed this Court's decision without opinion. Maggio v. Local
1199, 880 F.2d 1319 (2nd Cir. 1989). However, Maggio still
refused to pay his share as he appealed the case to the Supreme
Court. Defendant finally attempted to settle his bill by offering
full payment plus interest only when certiorari was denied by the
Supreme Court on October 30, 1989. Maggio v. Local 1199, ___
U.S. ___, 110 S.Ct. 329, 107 L.Ed.2d 319 (1989).
Plaintiff, however, rejected this offer and demanded additional
expenses he had incurred in filing the complaint in the instant
case. Defendant is unwilling to pay the additional expenses.
Suits for violation of contracts between an employer
and a labor organization representing employees in an
industry affecting commerce as defined in this
chapter, or between any such labor organizations, may
be brought in any district court of the United States
having jurisdiction of the parties, without respect
to the amount in controversy or without regard to the
citizenship of the parties.
29 U.S.C. § 185(a) (1978). Plaintiff relies on this section to
enforce a provision of the collective bargaining agreement
between Local 1199, a labor organization, and Patchogue Nursing
Home, an employer.
Although it is clear that the collective bargaining agreement
is the type meant to be covered by § 301, and therefore within
federal subject matter jurisdiction, it is unclear whether a
non-signatory to the agreement may also invoke federal
jurisdiction under § 301. The Supreme Court has not taken a
restrictive view of who may sue under § 301 for violations of
such agreements, but neither has it intimated that any action
relating to a contract within the coverage of § 301 arises under
that section. Franchise Tax Bd. v. Laborers Vacation Trust,
463 U.S. 1, 25 n. 28, 103 S.Ct. 2841, 2854 n. 28, 77 L.Ed.2d 420
Section 301 has been broadly interpreted to permit individuals
in several categories, other than those in direct privity to the
contact, to invoke federal subject matter jurisdiction when the
individual has a beneficial interest in the contract. See, e.g.,
Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 96 S.Ct.
1048, 47 L.Ed.2d 231 (1976); Santos v. District Council of New
York City, 547 F.2d 197 (2nd Cir. 1977).
In the case at bar, defendant admitted in his answer that
plaintiff had third-party beneficiary status yet denied that this
Court had subject matter jurisdiction. Defendant thereafter
informed the Court that the admission was an error. The Court
will not base its analysis of subject matter jurisdiction ...