If Albradco and Strum were arguing in support of a removal petition, their arguments would carry great weight. However, reference to the Union's right of action under ERISA fails to establish that the instant declaratory judgment action states a federal question. While the dispositive inquiry under Franchise Tax Board and Metropolitan Life must focus on whether the case at bar is within the civil enforcement provisions of ERISA, the declaratory plaintiffs have not demonstrated that they have a right of action under ERISA § 502(a).
In fact, to grant a right of action under the civil enforcement mechanisms of ERISA § 502(a) to Albradco and Strum, who are shareholders of an employer that was obligated to make contributions to an ERISA regulated plan, would upset
the policy choices reflected in the inclusion of certain remedies and the exclusion of others under the federal scheme. . . . "The six carefully integrated civil enforcement provisions found in § 502(a) of the statute as finally enacted . . . provide strong evidence that Congress did not intend to authorize other remedies that it simply forgot to incorporate expressly."
Pilot Life, supra, 481 U.S. at 54 (quoting Massachusetts Mutual Life Insurance Co. v. Russell, 473 U.S. 134, 146, 87 L. Ed. 2d 96, 105 S. Ct. 3085 (1985) (emphasis in original)). Because the declaratory plaintiffs' claim does not arise under ERISA, they have not stated a federal question, and this Court does not have subject matter jurisdiction over their declaratory judgment ERISA claim.
C. LMRA Preemption
In addition to the ERISA preemption motion, the parties also have cross-moved for summary judgment on the LMRA preemption claim. LMRA § 301(a), 29 U.S.C. § 185(a), provides that
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 over the parties, without respect of the amount in controversy or without regard to the citizenship of the parties.
Under Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 1 L. Ed. 2d 972, 77 S. Ct. 912 (1957), section 301(a) was deemed to have established a body of federal common law to govern LMRA actions.
We conclude that the substantive law to apply in suits under [LMRA] § 301(a) is federal law, which the courts must fashion from the policy of our national labor laws. . . . Federal interpretation of the federal law will govern, not state law.
Id. at 456-57. The subject matter jurisdiction of the federal courts to hear LMRA actions was addressed in Avco Corp. v. Aero Lodge 735, International Association of Machinists, 390 U.S. 557, 20 L. Ed. 2d 126, 88 S. Ct. 1235 (1968), which upheld the removal of a state court action relating to a collective bargaining agreement to federal court. As explained in Franchise Tax Board, supra, 463 U.S. at 23,
the necessary ground of decision [in Avco] was that the pre-emptive force of § 301 is so powerful as to displace entirely any state cause for action "for violation of contracts between an employer and a labor organization." Any such suit is purely a creature of federal law, notwithstanding the fact that state law would provide a cause of action in the absence of § 301.
In fact, the explicit statutory preemption clause in ERISA § 514(a) is modelled on LMRA § 301(a), and the preemption doctrines under both statutes are similarly, broadly construed and applied. See Metropolitan Life, Supra, 481 U.S. at 65-66; Pilot Life, Supra, 481 U.S. at 55-56. However, as with the ERISA preemption doctrine, there are limits on the preemptive scope of section 301(a). For example, in Caterpillar Inc. v. Williams, 482 U.S. 386, 394-99, 96 L. Ed. 2d 318, 107 S. Ct. 2425 (1987), the Supreme Court rejected an employer's claim that a California cause of action was preempted by the LMRA, because the employee's suit sought enforcement of an individual employment contract rather than a collective bargaining agreement. See also Baldracchi v. Pratt & Whitney Aircraft Division, United Technologies Corp., 814 F.2d 102, 105 (2d Cir. 1987) (wrongful discharge suit held not preempted), cert. denied, 486 U.S. 1054, 100 L. Ed. 2d 920, 108 S. Ct. 2819 (1988).
Having examined the background of the LMRA preemption doctrine, the Court finds that the instant action does not arise under the LMRA, and that the action is not properly before this Court. Pursuant to the explicit language of the LMRA, and under the principles enunciated in Avco, a "suit for violation of a contract between an employer and a labor organization" arises under federal law and is within the subject matter jurisdiction of the federal courts. However, the underlying actions between Bradley and the Union, concerning violation of the collective bargaining agreements, were the subject of earlier federal court actions that were submitted to an arbitrator, whose awards were confirmed by Judge Sand and reduced to judgment in 1984 and 1988.
In contrast, the instant action is brought pursuant to N.Y.B.C.L. § 630, which "imposes personal liability upon the 10 largest shareholders of closely held New York corporations for the payment of wages and salaries due and owing to its employees." Sasso v. Vachris, 66 N.Y.2d 28, 494 N.Y.S.2d 856, 857, 484 N.E.2d 1359 (1985) (emphasis added). Section 630 defines "the scope of shareholder immunity . . . ., [giving employees] a cause of action to recover payments the corporation was already obligated to provide." Id. 494 N.Y.S.2d at 859. Thus, the New York Court of Appeals has authoritatively construed N.Y.B.C.L. § 630 as providing a remedy against shareholders for an employee of a close corporation who is seeking to recover a corporate debt that has already been reduced to judgment. Moreover, this construction is binding on this Court. Cf. Plummer v. Lederle Laboratories, Division of American Cyanamid Co., 819 F.2d 349, 355 (2d Cir.) (in diversity case, federal court "must follow the law directed by the [highest court] of the state whose law is found to be applicable"), cert. denied, 484 U.S. 898, 98 L. Ed. 2d 191, 108 S. Ct. 232 (1987).
So construed, N.Y.B.C.L. § 630 does not fall within the scope of the LMRA preemption doctrine, which applies to "claims founded directly on rights created by collective-bargaining agreements, and also claims 'substantially dependent on analysis of a collective-bargaining agreement.'" Caterpillar, supra, 482 U.S. at 394 (quoting Electrical Workers v. Hechler, 481 U.S. 851, 859, 95 L. Ed. 2d 791, 107 S. Ct. 2161 n.3 (1987)); accord Lingle v. Norge Division of Magic Chef, Inc., 486 U.S. 399, 409-410, 100 L. Ed. 2d 410, 108 S. Ct. 1877 & n.10 (1988); Gulden v. Crown Zellerbach Corp., 890 F.2d 195, 198 (9th Cir. 1989).
Pursuant to LMRA § 301(a), the dispute between Bradley and the Union that was founded directly on the collective bargaining agreement was submitted to arbitration in the first instance. See, e.g., Dougherty v. American Telephone and Telegraph Co., 902 F.2d 201, 204 (2d Cir. 1990) (preempting New York tort claims under LMRA § 301(a) and requiring exhaustion of grievance procedures in collective bargaining agreement). In contrast, the State Court Action, which seeks recovery of a judgment from shareholders under N.Y.B.C.L. § 630, is not founded directly on rights created in, and does not require interpretation of, the collective bargaining agreement. Thus, the Union's action is not preempted by LMRA § 301(a), the declaratory plaintiffs' action does not arise under the LMRA or under federal law, and this Court is without jurisdiction to hear the declaratory judgment action.
For the foregoing reasons, the Court hereby dismisses this declaratory judgment action, pursuant to Fed. R. Civ. P. 12(b)(1), for lack of subject matter jurisdiction.
Dated: April 3, 1992
New York, New York
Peter K. Leisure