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CITRIN v. O'HARA

January 10, 1996

YALE CITRIN, in his capacity as an Association Trustee for the Joint Apprentice and Training Program of the Elevator Industry, and on behalf of all of the Association Trustees, Petitioners, against CHRISTOPHER ERIKSON and JAMES O'HARA, as Union Trustees of the Joint Apprentice and Training Program of the Elevator Industry, Respondents.


The opinion of the court was delivered by: EDELSTEIN

 EDELSTEIN, District Judge :

 The instant petition arises under the provisions of section 502 of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132, and section 302(c) of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 186(c). The parties to this action are the two groups of trustees who jointly administer a multi-employer and union apprentice plan to provide training for the exclusive benefit of individuals interested in working in the elevator industry. Petitioners *fn1" are the trustees appointed by the employers ("Petitioners" or "Association Trustees"), and Respondents are the trustees appointed by the union ("Respondents" or "Unions Trustees"). The instant petition arises because of a disagreement between the Association Trustees and the Union Trustees over whether to approve a new apprenticeship class.

 Petitioner Yale Citrin ("Citrin"), in his capacity as an Association Trustee for the Joint Apprentice and Training Program ("the JATP") of the Elevator Industry, and on behalf of all JATP Association Trustees, requests this Court to appoint an impartial trustee to resolve a dispute between Petitioners Association Trustees and Respondents Union Trustees of the JATP. Petitioners request that this Court: (1) issue an immediate order appointing an impartial trustee to break the deadlock and directing the impartial trustee to vote on the issue on which the JATP Trustees are deadlocked; (2) direct the parties to submit their dispute regarding the selection of an impartial trustee to the American Arbitration Association ("AAA"), or, alternatively, direct the parties to exchange lists of names of neutral individuals from which a neutral trustee will be chosen; (3) award Petitioners attorneys' fees, costs, and disbursements; and (4) direct that JATP funds be used to reimburse Petitioners for their reasonable attorneys' fees and costs.

 Respondents Union Trustees raise several claims in opposition to Petitioners' requests. The Union Trustees argue that: (1) this Court should not grant the Association Trustees' petition; (2) an impartial umpire appointed pursuant to this petition would lack power to resolve the dispute between the two groups of Trustees; (3) that Petitioners' claims of injury lack merit; and (4) that this Court should not submit any matter arising from this dispute to the AAA. Respondents move this Court for summary judgment, pursuant to Federal Rule of Civil Procedure 56 ("Rule 56"), to dismiss the petition.

 Because Petitioners have satisfied the prerequisites for requesting a court-appointed impartial trustee, and because Respondents have failed to demonstrate that they are entitled to a judgement as a matter of law, the instant petition is granted. and Respondents' Rule 56 motion is denied. In addition, this Court orders further procedures for counsel to follow in resolving this dispute.

 BACKGROUND

 The instant petition concerns the administration of a trust fund established pursuant to the LMRA and ERISA. This trust fund was created and is jointly administered by the Elevator Industries Association, Inc. ("the Association") and Local Union No. 3 International Brotherhood of Electrical Workers ("the Union"). The Association is a not-for-profit corporation that performs various services for its employer-members, who service, repair, and modernize elevators. (Petition to Appoint an Impartial Trustee Pursuant to 29 U.S.C. § 185(c), 95 Civ. 9004 ("Pet.") at 3.) These services include negotiating collective bargaining agreements with local unions on behalf of the Association's members. Id. The Union is one of these local unions. Id.

 The Union is a labor organization within the meaning of 29 U.S.C. § 152(5) *fn2" and is the exclusive bargaining representative of certain employees employed by the Association's constituent members. Id. For an unspecified number of years, the Association and the Union have been parties to successive collective bargaining agreements. (Petitioners' Memorandum of Law in Support of the Association Trustees' Petition to Appoint an Impartial Trustee Pursuant to 29 U.S.C. § 186(c) ("Pets. Memo") at 2.)

 Pursuant to the collective bargaining agreement between the Association and the Union, (Agreement and Working Rules Between Elevator Industries Association, Inc. and Local Union No. 3 International Brotherhood of Electrical Workers, 1993-1996 Art. XXIX(a) ("the Collective Bargaining Agreement" or "CBA")), the parties entered into a trust agreement in 1976 that created the Joint Apprenticeship Training Program. (Trust Agreement Creating the Apprenticeship and Training Program for the Elevator Industry 1 ("the Trust Agreement").) "The basic idea of an apprenticeship program is to allow on-the-job training for apprentices who work under the supervision of journeymen and thus encourage and assist persons to enter the skilled work force throughout the nation." Electrical Joint Apprenticeship Comm. v. MacDonald, 949 F.2d 270, 274 (9th Cir. 1991); see Joint Apprenticeship, and Training Council of Local 363, International Brotherhood of Teamsters, 829 F. Supp. 101, 103 (S.D.N.Y. 1993). As set forth in the Trust Agreement in this case, the JATP established an apprentice school

 
for the benefit of the elevator industry and to help meet its staffing needs by providing and maintaining training and/or retraining programs for the benefit of Employees, or persons who wish to become Employees, . . . and to devise and implement such programs as may be necessary from time to time to fulfill these objectives.

 (Trust Agreement Art. III, P 3.1.) The JATP is supported by a trust fund to which the Association's employer-members contribute a percentage of their gross weekly production payroll. (CBA Art. XXIX(b)); (Trust Agreement Art. IV, P 4.1.)

 The disagreement underlying the instant petition concerns a dispute between the Association Trustees and the Union Trustees over the commencement of a new JATP apprenticeship class. (Pets. Memo at 4); (Respondents' Memorandum of Law in Support of Respondents' Motion for Summary Judgment Dismissing the Petition ("Resps. Memo") at 2.) Petitioners claim that "for about a year, the Union Trustees have adamantly refused to permit a first-year apprenticeship class to begin unless and until a longstanding provision of the collective bargaining agreement between the Union Trustees and the Association is changed." (Letter from Yale Citrin, Association Trustee of the JATP, to Christopher Erikson 1 (Sept. 26, 1995) ("Citrin Letter")); see (Pet. at 5.) On September 6, 1995, Petitioners submitted a resolution to the Union Trustees "to take the necessary steps to commence a first-year apprentice class" of at least twenty-five individuals by September 1995. (Citrin Letter at 1); see (Pet. at 4.) Along with this resolution, the Association Trustees presented a preliminary list of individuals to be enrolled in this class and proposed that the Trustees as a group consider other qualified individuals who applied to the JATP by September 1995. (Citrin Letter at 2.)

 Petitioners claim that the Union Trustees refused to agree to this resolution. (Pet. at 4.) They assert that, as a result of this refusal, "the apprenticeship program has not been able to fulfill its function and mission of training individuals to work in the elevator industry." (Pets. Memo at 2-3.) In an effort to resolve this dilemma, Petitioner Citrin wrote to Union Trustee Christopher Erikson on September 26, 1995, outlining the history of the dispute, repeating the text of the September 6, 1995, resolution, and alerting the Union Trustees that their "action constitutes a breach of their fiduciary responsibility under the Trust Agreement" and a violation a ERISA that could expose the Trust and its trustees to "significant liability." (Citrin Letter at 1.) Citrin concluded this letter by informing Erikson that the Association Trustees "strongly suggested that the parties use the services of the American Arbitration Association to seek an arbitrator to serve as the impartial trustee," and by advising Erikson that if the Union Trustees did not respond to the September 26, 1995, letter by October 4, 1995, the Association Trustees intended to petition this Court to appoint an impartial arbitrator. Id. at 2.

 Petitioners claim that the Union Trustees have refused to cooperate with the Association Trustees in appointing a neutral arbitrator to break this deadlock. (Pet. at 5.) They contend that this lack of cooperation has caused serious harm to individuals seeking admission to the JATP, has prevented the JATP from fulfilling its mission, and has subjected the Trustees to potential liability for breaching their fiduciary obligations under the Trust. Id. at 5-6; (Pets. Memo at 3.) Accordingly, Petitioners request that this Court appoint an impartial trustee to break the deadlock on this issue. (Pet. at 6); (Pets. Memo at 3.) They assert that this Court has jurisdiction over their petition under section 302 of the LMRA, 29 U.S.C. § 186(c), section 502 of ERISA, 29 U.S.C. § 1132, and 28 U.S.C. § 1337. (Pet. at 2.)

 In response to the Petition, Respondents Union Trustees move for summary judgement, pursuant to Rule 56, arguing that this Court should dismiss the petition. Unfortunately, it has been very difficult for this Court to ascertain the basis on which Respondents seek summary judgment because Respondents' papers are so poorly drafted that they are in turn ambiguous, cryptic, and unintelligible. Despite these deficiencies in Respondents' papers, this Court patiently, painstakingly, and persistently examined Respondents' papers in order to extract their version of the facts.

 As an initial matter, Respondents do not dispute the facts set forth in Petitioners' papers. Moreover, Respondents admit to the existence of a dispute between the Association Trustees and the Union Trustees regarding the appointment of a new apprenticeship class. (Resps. Memo at 2, 6-7.) They also concede that the two groups of trustees have been unable to agree to appoint an impartial umpire, and Respondents confirm the absence of an agreed-upon neutral person to break the deadlock. Id. at 8. Respondents, however, allege additional facts that they claim are both relevant to this dispute and fatal to Petitioners' case.

 First, Respondents assert that the parties' dispute concerns an issue beyond the appointment of a new JATP apprenticeship class--the interpretation of the Collective Bargaining Agreement regarding the amount of wages paid to Union members. Id. at 2, 4. They assert that Association employers hired forty-five employees at the "wage rate applicable to beginning apprentices" under the CBA "instead of the higher wage rate payable to 'A' Elevator Helpers," and Respondents contend that Petitioners now seek to have these employees appointed as JATP apprentices by the impartial umpire. Id. at 2. Respondents allege that Petitioners' are improperly attempting to select all the JATP apprentices without input from the Union Trustees. Id. at 2-3. Respondents further claim that Petitioners justify their actions on the grounds "that depriving them of the right to select all the apprentices would require a change in the collective bargaining agreement," and Respondents assert that Petitioners' defense is untenable because "the CBA provision relating to the hiring of employees makes no reference . . . to the selection of persons as apprentices." Id. at 3. Consequently, Respondents characterize the instant petition as an attempt by Petitioners to impede the Union's lawful efforts to resolve the CBA dispute through contract arbitration. Id. at 2, 4.

 Second, Respondents claim that the parties' dispute also concerns affirmative action. They assert that the New York State Department of Labor ("NYSDOL") "halted the appointment of any more apprentices unless and until the employers and the Union agree upon and submit an Affirmative Action program." Id. at 2-3. They also allege that the JATP as currently organized violates NYSDOL regulations and that although Petitioners can conduct apprentice classes without NYSDOL approval, Petitioners "cannot compel the Respondents to agree to them." Id. at 6. Respondents contend that they reject an affirmative-action program proposed by Petitioners because the program empowers Petitioners to make all decisions regarding the appointment of apprentices, including decisions to reject "any and all of the unemployed union members on the roster of the elevator industry's hiring hall, and also to reject any and all minority and female applicants. . . ." Id. Respondents maintain that their refusal to appoint a new JATP class until Petitioners agree to correct these violations is appropriate because Respondents have "50% of the responsibility for complying with Federal and State Civil Rights laws with respect to the [JATP]. . . ." Id. at 3.

 Finally, Respondents accuse the Association of wrongdoing that justifies Respondents' refusal to appoint a new JATP class. Respondents contend that Association members are not funding the JATP as required by the CBA and the Trust Agreement because "employers' contributions fund primarily the Joint Employment Office, with no segregated fund for their apprentice training program." Id. at 7. In addition, Respondents charge that Petitioners are discriminating against, and "seriously harming," unemployed Union members, women, and minorities who are eligible for the JATP. Id.

 The parties do not contest the fact that the JATP was created in accordance with section 302(c)(5)-(6) of the LMRA, 29 U.S.C. § 186(c)(5)-(6). (Pet. at 2.) Congress enacted the LMRA in 1947 "to prescribe the legitimate rights of both employees and employers in their relations affecting commerce," and "to protect the rights of individual employees in their relations with labor organizations whose activities affect commerce. . . ." 29 U.S.C. § 141(b). The LMRA reflected congressional "concern[] with corruption of collective bargaining through bribery of employee representatives by employers, with extortion by employee representatives, and with the possible abuse by union officers of the power they might achieve if welfare funds were left to their sole control." Arroyo v. United States, 359 U.S. 419, 425-26, 3 L. Ed. 2d 915, 79 S. Ct. 864 (1959). Some of the LMRA's drafters focused particularly on the latter problem because they feared that without specific statutory protections, employee benefit and welfare trust funds would become "war chests" to support particular union programs, political factions, or the private interests of union leaders. United Mine Workers of America Health and Retirement Funds v. Robinson, 455 U.S. 562, 571 n.9, 572, 71 L. Ed. 2d 419, 102 S. Ct. 1226 (1982). To prevent such abuses, Congress adopted LMRA section 302. National Labor Rel. Bd. v. Amax Coal Co., 453 U.S. 322, 331, 101 S. Ct. 2789, 69 L. Ed. 2d 672 (1981).

 Section 302(c)(5) authorizes an employer to contribute to certain types of employee benefit and welfare plans. Under section 302(c)(5)(B) of the LMRA, an employer may contribute money to such a fund provided that

 
the detailed basis on which such payments are to be made is specified in a written agreement with the employer, and employees and employers are equally represented in the administration of such fund, together with such neutral persons as the representatives of the employers and the representatives of employees may agree upon and in the event the employer and employee groups deadlock on the administration of such fund and there are no neutral persons empowered to break such deadlock, such agreement provides that the two groups shall agree on an impartial umpire to decide such dispute, or in the event of their failure to agree within a reasonable length of time, an impartial umpire to decide such dispute shall, on petition of either group, be appointed by the district court of the United States for the district where the trust fund has its principal office. . . .

 29 U.S.C. § 186(c)(5)(B); see Amax Coal, 453 U.S. at 328; Joseph, 422 N.Y.S.2d at 987. The LMRA specifically authorizes trust funds established for the purpose of "defraying costs of apprenticeship or other training programs." 29 U.S.C. § 186(c)(6). Moreover, the Employee Retirement Income Security Act in part defines an "employee welfare benefit plan" as any plan, fund, or program established or maintained by an employer, an employee organization, or by both, for the purpose of providing its participants or their beneficiaries with "apprenticeship or other training programs, . . . or . . . any benefit described in section 302(c) of the Labor Management Relations Act. . . ." 29 U.S.C. § 1002(1)(A)-(B).

 In keeping with both Congressional intent and statutory language, the JATP is memorialized in a written agreement between the Association and the Union, see generally (CBA); (Trust Agreement), and sets forth the specific basis on which Association members contribute to the Trust. (CBA Art. xxix(b)); (Trust Agreement Art. IV, P 4.1.) The JATP is administered by six Trustees, three appointed by the Association and three appointed by the Union. (Trust Agreement Art. II, P 2.8; Art. VII, P 7.1.)

 DISCUSSION

 As an initial matter, this Court must establish that it has subject matter jurisdiction to hear the instant dispute. If this Court has jurisdiction over this dispute, this Court must examine the substantive law on which Petitioners' claim is based, evaluate the facts of the case and the parties' respective claims, and review the standard for summary judgement by which Respondents' motion is judged. ...


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