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
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 amended complaint alleges that beginning in 1978 various
defendants combined and conspired to commit a pattern of
racketeering activity in violation of 18 U.S.C. § 1951 and
1952, and 29 U.S.C. § 186. Plaintiffs further contend that
defendants Schenkers, Engst, Benthin, Calise, Davidoff, and the
union defendants formed an enterprise that conducted criminal
activities including bribery, extortion, attempts to extort
money and valuable contractual rights from the air freight
business at JFK Airport, and illegal payments to arrange the
termination of plaintiffs' employment. See, e.g., ¶ 74.
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
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 ...