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August 24, 1990


The opinion of the court was delivered by: Sifton, District Judge.


Plaintiffs, members of defendant Local 295 of the International Brotherhood of Teamsters ("Local 295"), commenced this action to recover for injuries caused by defendants' alleged bribery, fraud, and extortion, which allegedly resulted in the termination of plaintiffs' employment. The amended complaint alleges causes of action for negligence, breach of contract, tortious interference with contractual agreements, fraud, termination of employment, and violations of the Racketeering Influenced and Corrupt Organizations ("RICO") Act.

This matter is before the Court on the motions of defendants Local 295 of the International Brotherhood of Teamsters ("Local 295"), Local 851 of the International Brotherhood of Teamsters ("Local 851"), and Harry Davidoff to dismiss all of plaintiffs' claims against them pursuant to Rule 56 of the Federal Rules of Civil Procedure. Local 851 and Davidoff both assert that plaintiffs have failed to produce sufficient evidence connecting plaintiffs' injury to the conduct of either party to avoid summary disposition of the cases against them. Defendant Local 295 asserts that plaintiffs cannot maintain a RICO claim which is solely premised upon vicarious liability stemming from the conduct of their former president, defendant Frank Calise. Local 295 has also moved to dismiss the pendent state law claims as preempted by federal labor law.

In 1985, many of the defendants named in the current civil action, including Frank Manzo, Harry Davidoff, and Frank Calise, were indicted for violations of RICO. A trial was subsequently held before Judge Joseph McLaughlin of this Court. Defendant Schenkers International Forwarders, Inc. ("Schenkers") was not named in the indictment, although many of the events described herein were the subject of the transactions described in the criminal proceedings.

The complaint in this action was filed in August 1987 and was amended in October of that year. Defendants Schenkers and Manfred Engst moved in June 1988 and in April 1989 to dismiss plaintiffs' RICO claims upon the grounds that plaintiffs had failed to state a valid claim upon which relief may by granted, that plaintiffs had not suffered a RICO injury, and that the applicable statute of limitations barred the complaint. By oral decision on June 28, 1988, and by Memorandum and Order dated December 27 1989, this Court denied those motions in their entirety.


The following is undisputed except as noted. (Matters described as "alleged, "contended," or "claimed" are the subject of dispute.) Plaintiffs Anthony Amendolare, Laurence Dexter, Frank Rudtner, and Joseph Siano were members of Local 295 and were employed by defendants Hi's Airport Service, Inc. ("Hi's"), Holsten Air Service, Inc. ("Holsten"), and Schenkers. These defendants were at all relevant times involved in the air freight and freight forwarding industry at JFK International Airport. Schenkers is an international air and ocean freight forwarder and customs broker. During the period in question, Schenkers maintained an office at JFK Airport where its services included clearing cargoes being imported into the United States and arranging for the export of cargoes to foreign countries. One of Schenkers' principal clients was IBM. Defendant Manfred Engst was employed by Schenkers and held the position, among others, of vice president of corporate traffic. Defendant Heino Benthin owned and operated both Hi's and Holsten, which plaintiffs claim had intermingled assets and equipment.

Defendant Frank Calise was the president of Local 295 from at least 1980 to 1985. Between approximately 1980 until 1987, defendant Harry Davidoff was the vice president of Teamsters Local 851. The Local 851 welfare and pension funds provide benefits for the members of both Local 851 and Local 295. Sharon Moskowitz, Harry Davidoff's daughter, is the current administrator of these pension and welfare funds.

In 1977 Schenkers contracted out its warehousing work to Sherwood Trucking ("Sherwood"). In order to gain permission to contract out this work, Schenkers entered into a letter agreement with Local 295. This agreement provided that Sherwood be deemed a co-employer for the purpose of all labor relations policies relating to the handling and documenting of its freight with Schenkers.

When Schenkers terminated its contract with Sherwood Trucking in 1980 and arranged to subcontract its warehouse work to Hi's and Holsten, Schenkers entered into another co-employment agreement with Local 295. The agreement with respect to Hi's contained the same terms as the contract formerly entered into regarding Sherwood and specifically stated that Hi's was "for all purposes deemed to be a co-employer" with Schenkers. The agreement further provided that Schenkers would remain as a standby guarantor, that Hi's would perform all of its obligations under the Schenkers-Local 295 contract, and that, in the event the Hi's/Schenkers arrangement was terminated, Hi's employees who previously had been employed by Schenkers would revert to the Schenkers payroll. Plaintiffs claim that Schenkers' relationship with Holsten was also governed by a co-employer agreement.

The complaint further alleges that beginning in late 1982 Schenkers told Benthin and Calise, president of Local 295, and Harry Davidoff, vice president of Local 851, that it wished to reduce its labor force. All of these defendants at that time agreed and conspired to extort, bribe, and pay sums of money in order to release Schenkers from certain contractual rights and to ensure labor peace. ¶¶ 81-83. To further said agreement, Schenkers and Engst are alleged to have made a series of payments through Benthin that resulted in the termination of plaintiffs' employment. Id. This Court's December 1989 decision concluded that "plaintiffs have raised substantial issues of fact over these allegations which if established at trial would constitute a pattern of predicate acts for purposes of RICO." Slip op. at 11.

Although plaintiffs were not members of Local 851 and not party to any collective bargaining agreements involving Local 851, the parties have submitted evidence linking both Davidoff and Local 851 to the RICO payoff scheme that resulted in their termination, as well as similar schemes involving the termination of union workers at other air freight companies. According to a letter sent to Judge Constantino by the U.S. government in regard to the sentencing of Harry Davidoff and submitted by Local 851 in support of its motion, Davidoff has a long and well-documented association with the Luchese crime family and other members of organized crime. According to the letter, Davidoff used his control over Locals 851 and 295 to further his criminal activities and had sold out both unions by permitting union layoffs in return for payoffs. This description is confirmed by the trial deposition of defendant Heino Benthin. According to Benthin, in February 1989, Schenkers made a $50,000 payoff to defendants Frank Manzo and Frank Calise in order to lay off six Local 295 members. Benthin further testified that Frank Manzo told him that Davidoff was to get $35,000 or the "lions share" of that amount. Moreover, there is evidence that this termination payoff was not an isolated incident. Benthin testified that with respect to at least two other air freight companies, Randy International and TAT Airfreight, Davidoff was involved in a payoff arrangement in which top union officials consented to the termination of union members.

The Government's Civil RICO suit

Earlier this year, the United States Attorney for the Eastern District of New York filed a civil RICO suit against Local 295 and Local 851, the executive boards of both unions, Manzo, Calise, Davidoff and a number of other past and current union officials. Among these, the complaint names Anthony Calagna, the president of Local 295 who replaced Calise in 1985 (both men are allegedly members of the Luchese crime family), Michael Urso-Pernice, the vice president of Local 295, and Robert Reinhard, the recording secretary of Local 295. The complaint alleges that the criminal activity of Calise, Manzo, and Davidoff was aided and abetted by both unions and members of the executive boards, who used their positions as officers of the unions to permit, protect, or conceal the conduct.


Davidoff and Local 851 Motions

The summary judgment motions of Harry Davidoff and Local 851, both of whom claim that there is insufficient evidence linking them to the injury suffered by plaintiffs, must be denied. As discussed above, there is sufficient evidence directly linking Davidoff, the vice president of Local 851, with the Schenkers' kickback scheme which resulted in plaintiffs' termination. Contrary to defendants' assertions that this evidence constitutes hearsay, Manzo's statement to Benthin implicating Davidoff in the payoff would be admissible under Fed.R.Evid. 801(d)(2)(E) as a statement by a co-conspirator made during the course of and in furtherance of the conspiracy. See United States v. Salerno, 868 F.2d 524, 535-36 (2d Cir. 1989).*fn1

Moreover, there is considerable evidence that Davidoff and Local 851 played a central role in the larger racketeering scheme to extort bribes and kickbacks from various air freight companies in JFK airport at the expense of union members. Rule 404(b) of the Federal Rules of Evidence permits proof of other crimes or acts to show proof of opportunity, intent preparation, plan or knowledge. Under the "inclusionary" approach followed in this circuit, "evidence of prior crimes, wrongs, or acts is admissible for any purpose other than to show a defendant's criminal propensity . . . as long as it is relevant to some disputed issue in the trial and satisfies the probative-prejudice balancing test of Fed.R.Evid. 403." United States v. Brennan, 798 F.2d 581, 589 (2d Cir. 1986) (citations omitted). Where, as here, there is evidence that a defendant engaged in a pattern or practice of similar crimes that were part of the same conspiracy, the courts in both criminal and civil actions have allowed proof of other ...

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