with the procedure and provisions of the AFTRA Code of Fair Practice for Network. Television Broadcasting."
Even if Snyder were correct in stating that Shaker, Veras, O'Brien, and Musburger are "Artists" within the meaning of P 67,
his argument that these individuals are committed to arbitrate disputes with him pursuant to that provision must fail. Paragraph 67 does not expand the scope of arbitration under the National Code -- by its terms it only requires an AFTRA member to incorporate an agreement to arbitrate contractual disputes with the employer arising under his or her individual employment agreement in accordance with the arbitration provisions of the National Code. The plain language of Paragraph 67 cannot be construed to require arbitration of disputes between anyone other than the parties to the individual employment agreement, i.e., the Producer and the Artist. Nor can Paragraph 95 of the National Code provide Snyder with a basis for proceeding to arbitration against these individuals. Paragraph 95 provides for arbitration of "all disputes and controversies of every kind and nature whatsoever between any Producer and AFTRA or between any Producer and any member of AFTRA, arising out of or in connection with this Code. . . ." Snyder cannot argue that his is a dispute between an AFTRA member and a Producer -- as noted above, none of these individual CBS employees is a "Producer" as that term is used in the National Code.
3. Arbitration Against the CBS Respondents Under Principles of Contract and Agency Law
Relying upon securities law cases and third-party beneficiary concepts, Snyder argues that by agreeing to the broad arbitration provision in P 95, CBS evinced an intent to "protect" its non-signatory employees, thereby binding them to the arbitration provisions of the National Code. In support of his position, Snyder cites Letizia v. Prudential Bache Securities, 802 F.2d 1185 (9th Cir. 1986). That case is inapposite.
The individual registered broker-defendants in Letizia were non-signatories to a brokerage agreement between their employer, Prudential Bache, and a customer, which provided, in pertinent part, for the arbitration of any dispute arising out of or relating to the customer's securities account. On a motion to dismiss a securities action brought by the customer against the company and its employees, the court agreed with the employees that Prudential Bache had clearly indicated its intention to protect its employees through its customer agreement. Accordingly, the employees, as third-party beneficiaries to the contract, were entitled to invoke the customer agreement to require the arbitration of the customer's claims against them.
Snyder asserts that, like the employer in Letizia, CBS has manifested an " intent to benefit" individual CBS employees through Paragraph 95 since it agreed in certain of the Respondents' employment contracts to indemnify the employee for acts committed during the course of employment with CBS. This argument misses the mark. There is no reason to believe that in agreeing to indemnify certain of its employees, CBS was also manifesting an intent to benefit and protect those employees through the arbitration provision in Paragraph 95 of the National Code. In any event, since "arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit," United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 4 L. Ed. 2d 1409, 80 S. Ct. 1347 (1960), Snyder must also show that the CBS Respondents have in some way agreed to be bound by P 95. See, e.g., Flink v. Carlson, 856 F.2d 44, 47 (8th Cir. 1988) (noting that even if Goldman, Sachs and customer intended to bind broker to arbitration provision in customer agreement, they could not bind him without broker manifesting his agreement in some way). Such a showing has not been made. Indeed, in Letizia the third-party beneficiaries were seeking to enforce the agreement, while in the case at bar, Snyder is seeking to bind the putative "beneficiaries" to an arbitration agreement they have never sought to enforce.
In sum, the Court concludes that there is no basis for compelling arbitration of the claims Snyder has asserted against the CBS Respondents.
4. Arbitration Against the WRC-TV Respondents
a. Personal Jurisdiction over the WRC-TV Respondents
The WRC-TV Respondents urge dismissal of this action pursuant to 12(b)(2), Fed. R. Civ. P., on the ground that the Court lacks in personam jurisdiction over them.
"In a motion to dismiss for lack of personal jurisdiction, where the trial court holds no hearing, 'the plaintiff need make only a prima facie showing of jurisdiction through its own affidavits and supporting materials.'" Stone v. Chung Pei Chemical Industry Co. Ltd., 790 F.2d 20, 22 (2d Cir. 1986) (quoting Marine Midland Bank v. Miller, 664 F.2d 899, 904 (2d Cir. 1981)). Even upon reviewing third-party petitioner Snyder's allegations in the light most favorable to him, Painewebber Inc. v. Westgate Group, Inc., 748 F. Supp. 115, 118 (S.D.N.Y. 1990), however, it is apparent that the WRC-TV Respondents do not have sufficient contacts with New York State to give this Court personal jurisdiction over them.
Where, as in the case at bar, federal jurisdiction is founded exclusively on diversity of citizenship, the law of the forum state governs whether a federal court has personal jurisdiction over non-domiciliaries. Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 57 (2d Cir. 1985). Accordingly, the Court must determine whether New York's long-arm jurisdictional statute, CPLR § 302, affords a basis for jurisdiction in this case.
Snyder's petition makes no allegation in support of this Court's exercise of personal jurisdiction over the WRC-TV Respondents. In his Reply Memorandum of Law, Snyder does argue, however, that "jurisdiction is properly asserted against Hotaling pursuant to § 302(a)(2) because Snyder has asserted a claim against him for tortious interference with contract. Jurisdiction over WRC, pursuant to § 302(a)(1), is sufficient because WRC supplies services (e.g., television broadcast segments) into the State." Reply Memo. at 26. Snyder's argument is meritless.
Personal jurisdiction over Hotaling cannot be grounded in CPLR § 302(a)(2). "New York courts have given a strict interpretation to § 302(a)(2), requiring, in effect, that the defendant be physically present in New York when committing the tort." See Lynn v. Cohen, 359 F. Supp. 565, 568 (S.D.N.Y. 1983). See also Paul v. Premier Electrical Constr. Co., 576 F. Supp. 384, 389 (S.D.N.Y. 1983); Longines Wittnauer Watch Co. v. Barnes & Reinecke, Inc., 15 N.Y.2d 443, 460, 209 N.E.2d 68, 77, 261 N.Y.S.2d 8, 21, cert. denied, 382 U.S. 905, 86 S. Ct. 241, 15 L. Ed. 2d 158 (1965). In the case at bar, Hotaling is not alleged to have committed any acts in New York giving rise to Snyder's tortious interference with contract claim -- the claim against Hotaling is predicated upon his acts in connection with the interview he conducted in Washington, D.C.
Similarly, section 301(a)(1) does not afford a basis for asserting personal jurisdiction over WRC-TV. Under section 301(a)(1) it is not enough to allege that WRC-TV supplies television broadcast segments into New York. Rather, it is Snyder's burden to show that the alleged defamation, tort loins interference with the Snyder/CBS contract, and interference with economic advantage arose out of business transacted by WRC-TV in New York, or at least that such claims are closely related to WRC-TV's New York business activities to a degree satisfying § 302(a)(1). See Don King Productions, Inc. v. Douglas, 735 F. Supp. 522, 528 (S.D.N.Y. 1990); see also Hermann v. Sharon Hospital, Inc., 135 A.D.2d 682, 683, 522 N.Y.S.2d 581, 583 (2d Dept. 1987) (for purposes of personal jurisdiction under CPA § 302(a)(1), tort must arise out of defendant's transaction of business in New York). Snyder has not met this burden -- there is no allegation that the claims against WRC-TV arose out of, or were closely connected to, any business WRC-TV conducted in New York. Indeed, the allegation that WRC-TV supplies any television broadcast segments into New York is unsupported.
Nor can Snyder succeed on his assertion that the WRC-TV Respondents have consented to this Court's jurisdiction over them. Snyder's argument is as follows: WRC-TV is subject to the Washington Code since that Code was executed by NBC on WRC-TV's behalf; Hotaling is covered by the Washington Code since he has an employment contract with NBC or WRC-TV which necessarily designates him as an "Artist" as that term is defined in the Washington Code; Paragraph 19 of the Washington Code, to which the WRC-TV Respondents are subject, provides for the incorporation of the provisions of the National Code; and Paragraph 95 of the National Code provides that all disputes are to be "submitted to arbitration . . . under the Voluntary Labor Arbitration Rules then obtaining of the American Arbitration Association. . . ." Finally, relying upon the AAA's Rule 36, Snyder concludes that the WRC-TV Respondents have consented to service of process upon them at any location.
Section 36 of the AAA's rules provides:
Each party to a Submission or other agreement that provides for arbitration under these rules shall be deemed to have consented and shall consent that any papers, notices, or process necessary or proper for the initiation or continuation of an arbitration under these rules; for any court action in connection therewith; or for the entry of judgment on an award made thereunder may be served upon such party by mail addressed to such party or its attorney at the last known address or by personal service, within or without the state wherein the arbitration is to be held.
Assuming arguendo that this rule is intended to confer personal jurisdiction, by its terms it only applies to "each party to a Submission or other agreement that provides for arbitration under these rules." Snyder has no specific agreement to arbitrate with WRC-TV or Hotaling. Rather, he maintains that his claims against the WRC-TV Respondents are arbitrable pursuant to the terms of the Washington Code.
Paragraph 31 of the Washington Code provides for arbitration of
all disputes and controversies of every kind and nature whatsoever between Company or any Producer and AFTRA, or between Company and any member of AFTRA, arising out of or in connection with this Code, and any contract or engagement . . . in the field covered by this Code as to the existence, validity, construction, meaning, interpretation, performance, non-performance, enforcement, operation, breach, continuance, or termination of this Code and/or such contract or engagement. . . .
Paragraph 31 cannot be read to provide, as Snyder would have it, that his claims against the WRC-TV Respondents are arbitrable since this "dispute between a Company (WRC) and an AFTRA member (Snyder)" "arose 'out of or in connection' with Hotaling's employment contract, which the Washington Code governs." See Snyder Memo. at 14, 29. By its plain language, P 31 applies only to disputes between AFTRA and a signatory employer or between an individual AFTRA member and an employer. It does not contemplate that disputes between individual AFTRA members must be submitted to arbitration. Accordingly, Snyder's attempt to compel arbitration against Hotaling pursuant to this provision must fail.
Furthermore, only parties to, or otherwise covered by, the Washington code could be said to have an agreement to arbitrate pursuant to the terms of that Code. See United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 4 L. Ed. 2d 1409, 80 S. Ct. 1347 (1960) ("Arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit."). Even assuming that WRC-TV was a signatory employer to the Washington Code, it is inconceivable that it could have intended that disputes with Snyder, a person admittedly not covered by the Washington Code, would be subjected to arbitration. Because Snyder does not allege that he was a party to any individual agreement requiring arbitration of claims he may have, save his own with CBS, which he does not claim gives him a right to arbitrate against WRC-TV or any AFTRA member, he may not rely on Section 36 of the AAA's rules to argue that the WRC-TV Respondents have consented to in personam jurisdiction.
For the above stated reasons, the WRC-TV Respondents' motion to dismiss for lack of personal jurisdiction is granted. The Court therefore need not and does not address the remaining arguments advanced by the WRC-TV Respondents in support of their motion to dismiss, or in the alternative, for summary judgment.
Rule 11 Sanctions
The CBS Respondents and the WRC-TV Respondents both move for Rule 11 sanctions against Snyder's attorneys, arguing that Snyder's motion to compel arbitration against Respondents is not well grounded in fact and warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law.
After carefully reviewing the parties' submissions on this issue, the Court concludes that Snyder's motion to compel arbitration is not so objectively unreasonable as to support the imposition of Rule 11 sanctions. See McMahon v. Shearson/American Express, Inc., 896 F.2d 17 (2d Cir. 1990). Sanctions must be imposed on the signer of a paper if either (a) the paper is filed for an improper purpose, or (b) the paper is "frivolous." See Zaldivar v. Los Angeles, 780 F.2d 823, 832 (9th Cir. 1986). The term "frivolous" describes a filing that is both baseless and made without a reasonable and competent inquiry.
Third-party petitioner Snyder's action here is not frivolous nor is it evident that his motion is pursued here for an improper purpose. Rule 11 is not a license for the Court to sanction any action by an attorney or party with which it disagrees. See F.H. Krear & Co. v. Nineteen Named Trustees, 810 F.2d 1250, 1268 (2d Cir. 1987). Snyder's motion is not so clearly flawed such that the Court could conclude that it was served for any improper purpose such as to harass or to cause unnecessary delay. Accordingly, the motions for sanctions are denied.
For the foregoing reasons, Snyder's motion to compel arbitration is denied. The motion of the WRC-TV Respondents to dismiss for lack of personal jurisdiction is granted.
Dated: New York, New York
July 29, 1992
William C. Conner
United States District Judge