UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
September 14, 1995
GENE MORIARTY, as Chairman of the Trustees of the 966 Health Plan and the 966 Pension Plan, Plaintiff, against STEVEN SMITH, JOSEPH PASQUALONE, EDWIN GONZALEZ, STEPHEN ZACCHERIO, VINCENT SOMBROTTO, and BRYAN McCARTHY, personally and in their capacities as plan fiduciaries, Defendants.
The opinion of the court was delivered by: HAROLD BAER, JR.
MEMORANDUM AND ORDER
HAROLD BAER, JR., District Judge
An unrelated lawsuit brought by the United States resulted in the International Brotherhood of Teamsters placing its Local 966 under temporary trusteeship. Plaintiff, who was appointed Trustee of the Local, appointed himself and another individual to replace the two union trustees then sitting on the Local's Health and Pension Funds. These funds are administered by boards that consist of two union trustees and two employer trustees. After assuming his position as a union trustee on the funds' boards in 1994, plaintiff discovered what he alleges are horrendous practices perpetrated by the employer trustees sitting on those boards. He brings the instant suit against the individual employer trustees, among others, to obtain damages and to end the various practices complained of, e.g. failing to pursue delinquent contributions, failing to monitor solvency of the pension fund, and negotiating an illegal insurance contract.
This case was filed in February of 1995. While the suit was pending, plaintiff relates that he encountered difficulty in trying to repair the funds, because he and his union co-trustee continually deadlocked with the employer trustees. The funds' trust agreements that were in existence from before the time plaintiff replaced the previous union trustees provide for a mechanism to resolve trustee deadlocks. Plaintiff does not approve of the arbitrator selected under that mechanism and moves by Order to Show Cause to appoint a new neutral, arguing in part that plaintiff and his union co-trustee never assented to the existing trust agreements, and therefore, the arbitrator specified in the agreements is not one that is "agreed" upon as required by law. See 29 U.S.C. § 186(c)(5)(b). In addition, plaintiff states that even if the named arbitrator had been agreed to, that individual cannot decide the question of whether he will continue serving as the named arbitrator, which is another matter that has resulted in deadlock. Unfortunately, additional briefing of several issues must be completed before any ruling can be made.
Defendants state that
the plaintiff's procedural deficiencies with respect to this motion are egregious. The plaintiff has not served or filed a summons and complaint with respect to the relief which is sought on this motion. This motion is entirely outside of the context of the lawsuit in which it was filed. . . . We urge that it is a violation of due process to request . . . relief [that] . . . is entirely outside the scope of the lawsuit.
Defs.' Mem. L. Opp'n at 4-5 (citation omitted). Defendants, however, fail to cite case law that supports their proposition. Plaintiff's response, meanwhile, is of even less help, as he feebly provides,
To the extent it may be procedurally required, the plaintiff . . . respectfully requests that the underlying complaint be deemed amended to include a cause of action for the invalidation of the trust amendment and that summary judgment on that cause of action be granted in plaintiff's favor.
Pl.'s Rep. Mem. L. at 10 n.6. Plaintiff fails to cite a statute, rule, or case that authorizes such an amendment. Rather, plaintiff first points out that the statute at issue permits a party to petition a United States District Court for the appointment of an arbitrator. Then, plaintiff engages in what he must consider logical reasoning, and states, "Plaintiff could . . . have petitioned the court for the requested relief, without ever having filed a complaint in the first place. Defendants have therefore not been prejudiced whatsoever by plaintiff's decision to bring this as a motion in connection with the underlying complaint, instead of as a separate petition." Id. at 8. In so arguing, plaintiff completely misses defendants' apparent contention that due process requires plaintiff to obtain personal jurisdiction over them in connection with all the relief he seeks.
As for plaintiff's dubious contention that he is not restricted to the arbitrator named in the agreement due to plaintiff not having served as a trustee at the time the arbitrator was so named, plaintiff again fails to put any meat on the bones of his skeletal argument. Defendants' opposing assertion might sound persuasive in the classroom of a first-year Contracts course, but does not suffice in this Court and hardly improves on plaintiff's questionable efforts, as it also constitutes a conclusory statement:
This is an outrageous assertion which is totally contrary to the law. The plaintiff succeeds in interest to prior union trustees and, as such, is bound by their actions, whether he benefits from it or whether he believes the actions are to his detriment. The plaintiff cannot pick and choose which prior actions will be binding and which will not.
Defs.' Mem. L. Opp'n at 3.
Similarly, plaintiff's apparently viable argument that the named arbitrator is prohibited by law from resolving the deadlock over his own ability to serve fails to state affirmatively the prerequisite that the agreements permit the parties to name a new arbitrator. Moreover, one Circuit at least seems to cast doubt on whether such a modification is subject to resolution by any arbitrator. See. e.g., Employee Trustees of Eighth Dist. Elec. Pension Fund v. Employer Trustees of Eighth Dist. Elec. Pension Fund, 959 F.2d 176 (10th Cir. 1992). Finally, plaintiff raises for the first time in his reply papers the argument that the agreement provision naming the arbitrator is void because (1) the arbitrator constitutes a fiduciary, and (2) the agreement does not provide for his removal. Needless to say, this prevented defendants from providing a written response.
Because the parties' papers fail to adequately address the relevant issues, I order additional briefing. In case I have not made it clear enough above, I will again specify the issues that each party must address. First, let me take this opportunity to remind the parties--and their attorneys--that it is not the function of the Court to substantiate points of law that very well may be settled, particularly where the litigants are reputedly represented by able counsel. As Civil Rule 3(b) of the United States District Courts for the Southern and Eastern Districts of New York clearly states, "Upon any motion, the moving party shall serve and file with the motion papers a memorandum setting forth the points and authorities relied upon in support . . . . Failure to comply may be deemed sufficient cause for the denial of the motion . . . ." Observing quid pro quo, Rule 3(b) also requires "the opposing party [to] serve and file with the papers in opposition to the motion . . . an answering memorandum . . . setting forth the points and authorities relied upon in opposition. Failure to comply may be deemed sufficient cause for . . . the granting of the motion by default."
Plaintiff must provide authority for his position that due process has been satisfied notwithstanding the failure of his complaint to encompass the requested relief that a new neutral replace Mr. Pierson. Alternatively, plaintiff must provide support for the requested amendment of his complaint. Plaintiff then must provide authority for his assertion that he is not bound by the provisions of the trust agreements naming the existing arbitrator. And last, plaintiff must demonstrate that the trust agreements and the law permit the trustees or the District Court to replace the named arbitrator, and that, on this record, I can simply remove Mr. Pierson and appoint another "neutral" in his place. Defendants, meanwhile, in addition to responding to the plaintiff's arguments on these issues, must respond to the issue that was raised for the first time in plaintiff's prior reply papers, as indicated above.
In connection with this briefing, I will make the bold overture that the parties adhere to the applicable sections of my Individual Rules. If the parties have misplaced their copies, they can obtain additional ones from the Southern District of New York Clerk of Court in Room 120 at 500 Pearl Street. In the first round, plaintiffs violated the Rules by submitting reply papers that were 50% longer than the Rules permit. I am looking forward to concise, relevant argument.
It is hereby
ORDERED that the plaintiff will serve his moving papers on the defendants by September 21, 1995; the defendants will serve their opposition papers on plaintiff by September 29, 1995; and the plaintiff will serve his reply papers on the defendants, as well as, in accordance with my Rules, originals and copies of all papers with the Southern District Clerk and Chambers, respectively, by October 6, 1995. Oral argument and a hearing if necessary is scheduled for October 12, 1995 at 10:00 a.m. At the completion thereof, the parties' pretrial conference, originally scheduled for September 27, 1995 at 4:45 p.m., will ensue.
New York, New York.
September 14, 1995
Harold Baer, Jr.
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