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SACCO v. PATAKI

October 10, 1997

THOMAS SACCO, et al., Plaintiffs, against GEORGE E. PATAKI, et al., Defendants. JUDITH ABRAMSON, et al., Plaintiffs, -against- GEORGE E. PATAKI, et al., Defendants.


The opinion of the court was delivered by: CEDARBAUM

 CEDARBAUM, J.

 These two related actions are brought by union members who worked for many years at the Jacob Javits Center but could not obtain employment there after a highly publicized effort to eradicate corruption and ties to organized crime from the Javits Center. Plaintiffs in Thomas Sacco, et al. v. George E. Pataki, et al., 95 Civ. 8627 (MGC). ("Sacco Plaintiffs" and "Sacco Action"), are sixty-two members of the Truck Drivers Local Union 807 ("Local 807") of the International Brotherhood of Teamsters ("IBT") who worked at the Javits Center until June of 1995. They sue Local 807, IBT, George A. Pataki, the Governor of New York, the New York Convention Center Operating Corporation ("Operating Corporation"), a public benefit corporation operating the Javits Center, Robert E. Boyle, President and CEO of the Operating Corporation and Special Assistant to the Governor, William L. Mack, Chairman of the Board of Directors of the Operating Corporation, Ronald Carey, President of IBT, Johnnie Brown, the Trustee of Local 807, and the New York Trade Show Contractors' Association ("TSA"). The Sacco Plaintiffs assert claims under 42 U.S.C. § 1983 and § 1985 for violations of the United States Constitution and the Labor Management Relations Act, as well as state law claims. The Sacco Plaintiffs were permitted to file an amended complaint (hereafter simply the "Sacco Complaint") because the initial complaint made vague and conclusory allegations. The Sacco Complaint, therefore, represents the best factual allegations that they can make in this case.

 Plaintiffs in Judith Abramson, et al. v. George E. Pataki, et al., 96 Civ. 9291 (MGC) ("Abramson Plaintiffs," "Abramson Action," and "Abramson Complaint"), are members of Local 829 of the Exposition Worker's Union who worked at the Javits Center moving exhibits, displays, and merchandise, as well as building and setting up exhibits prior to June of 1995. They sue Pataki, the Operating Corporation, and Boyle under 42 U.S.C. § 1983. *fn1"

 The defendants move to dismiss both complaints pursuant to Fed. R. Civ. P. 12(b)(6). For the reasons that follow, the motions are granted in part and denied in part.

 Allegations of the Complaints

 The Javits Center, which is used for the presentation of various trade show exhibitions, was created by New York Public Authorities Law §§ 2560-2572 as a public benefit corporation. From the Javits Center's opening on April 3, 1986 until June 30, 1995, workers from various unions were employed to move exhibits, displays, and merchandise into the Javits Center and to set up and dismantle exhibits. The shows at the Javits Center were organized and labor was provided by various trade show contracting companies. The TSA is the largest association of trade show contractors that provided workers to the Javits Center. (Sacco Compl. P 33; Abramson Compl. P 16.) Until June of 1995, workers were selected by the trade show company which organized the particular show in accordance with the procedures established in written collective bargaining agreements between the individual unions and the TSA. (Sacco Compl. P 33; Abramson Compl. P 24.)

 On November 7, 1985, prior to the Javits Center's opening, the Operating Corporation entered into a Memorandum of Understanding ("MOU") with a number of unions including Local 807 and Local 829. The MOU provided that collective bargaining agreements must contain "no-strike" provisions and that disputes concerning the MOU and jurisdiction of the unions would be resolved by "an Impartial Chairman." (Sacco Compl. Ex. B; Abramson Compl. Ex. A.) The MOU also provided that freight handling at the Javits Center would be performed by workers represented by the unions that had jurisdiction over work at the New York Coliseum, which included Local 807 and Local 829. (Id.)

 Both Local 807 and Local 829 had collective bargaining agreements with the trade show contractors. The Operating Corporation was not a party to any of the collective bargaining agreements, and the agreements contemplated providing work to other locations in addition to the Javits Center. In October of 1994, the TSA and Local 807 entered into a collective bargaining agreement covering the period from October 1, 1994 to September 30, 1998. (Id.) Local 807's collective bargaining agreement included a seniority provision under which a seniority list of forty-seven people was to be maintained and those on this list were to have preference for the highest paying jobs. (Id.) The agreement also prohibited sub-contracting, (id.), and conflicting agreements with individual employees, (id.). Section 23(A) of the agreement provided that it was binding on all the successors of the parties. Thirty-four of the workers on the seniority list are plaintiffs in the Sacco Action, and the remaining Sacco Plaintiffs would have been eligible to be on the list. (Sacco Compl. PP 37-38).

 Local 829, the Abramson Plaintiffs' union, entered into identical collective bargaining agreements with various trade show contractors. (Abramson Compl. P 37). Their collective bargaining agreements provided that Local 829 was to be the exclusive representative of employees who installed exhibits and booths at trade shows and expositions. (Id. P 39). The most recent of such agreements covered the period from September 1, 1993 to August 31, 1996. (Id. P 38).

 Until June 30, 1995, the TSA provided much of the labor for the various trade shows held in the Javits Center, and the workers were hired under the provisions of the various collective bargaining agreements between the unions and the trade show contractors. In early 1995, there was growing publicity concerning corruption at the Javits Center and alleged ties of the workers to organized crime. In response, Pataki, Boyle, and Carey made several public statements about eradicating inefficiency and mob corruption at the Javits Center. (Sacco Compl. PP 52-54; Abramson Compl. PP 51-54.) Pataki allegedly stated that he would "take back control" of the Javits Center and rid it of its mob taint. (Id.)

 On or about June 30, 1995, Pataki, Boyle, and the Operating Corporation abrogated the collective bargaining agreements between the TSA and the various unions and took direct control of hiring at the Javits Center. They informed the TSA and the workers then employed at the trade shows, including the Sacco and Abramson Plaintiffs, that the collective bargaining agreements were no longer valid and that workers needed to apply directly to the Operating Corporation for employment at the Javits Center. (Sacco Compl. P 55; Abramson Compl. P 47.)

 In a letter dated June 28, 1995 addressed generally to "Labor Leaders," Boyle wrote as the President and CEO of the Operating Corporation that "although we do not believe that the Javits Center is legally bound by the November 7, 1985 Memorandum, this letter will as a matter of courtesy to the union signatories, serve as notice that we formally disavow and terminate that document." (Sacco Compl. Ex. C; Abramson Compl. Ex. B). The letter was signed only by Boyle, but made references to the "Governor's firm commitment to do whatever is necessary" and stated that the "Governor, the Board of Directors, and [Boyle]" were grateful to the honest and productive union members. (Id.)

 Both the Sacco and Abramson Plaintiffs allege that on June 29, 1995, the Operating Corporation, through Boyle, Mack, and Brown, entered into secret agreements with Local 807 and Local 829 respectively. According to the Sacco Complaint, the secret agreement with Local 807 provided that a prearranged collective bargaining agreement was to be executed immediately after Local 807 obtained recognition as one of the bargaining representatives of the Javits Center's workers. (Sacco Com5pl. P 58). Pursuant to this secret agreement, a new collective bargaining agreement was entered into between the Operating Corporation and Local 807, the terms of which were never presented to the rank and file members of Local 807. (Id. P 59).

 The Abramson Plaintiffs allege upon information and belief that in negotiating the June 29 secret agreement, Local 829 officials sought and received assurances from the Operating Corporation that Local 829 members would be rehired. (Abramson Compl. P 67). Furthermore, during the negotiations, the Javits Center officials allegedly confirmed that members of the public would be hired only if jobs remained after all the available and eligible union members were hired. (Id. P 73). The content of the negotiations and the provisions of the June 29 agreement between the Operating Corporation and Local 829 were not divulged to the rank and file members of Local 829. (Id. P 80).

 On June 30, 1995, both the Sacco and Abramson Plaintiffs filled out applications for employment at the Javits Center. Each of the Sacco Plaintiffs wrote on the back of the application that he reserved his rights under the Agreement. (Sacco Compl. P 106). Members of the general public were permitted to apply for jobs on June 30, 1995 despite the assurances allegedly provided to Local 829. (Abramson Compl. P 85). The Javits Center hired very few members of Local 829 and Local 807 despite their substantial experience working at the Javits Center and in the trade show industry. (Sacco Compl. P 61; Abramson Compl. P 96).

 Only seven of the sixty-two Sacco Plaintiffs have been offered employment by the Javits Center, and none of the Sacco Plaintiffs on the forty-seven person seniority list has been offered employment since June 30, 1995. Those who have been offered work have allegedly lost their seniority status, been offered pay below the hourly rate agreed upon in the old collective bargaining agreement, and have been hired on a probationary basis subject to possible fingerprinting, photographing, and provision of references and information concerning members of the immediate family. (Sacco Compl. PP 64-65). By July 7, 1995, only fifteen to twenty of the approximately 200 members of Local 829 who had applied had been offered employment at the Javits Center. (Abramson Compl. PP 84, 97). Fewer than ten Local 829 members are presently employed at the Javits Center. (Id. P 98.) Both the Sacco and Abramson Plaintiffs allege that they generally have not been able to find similar employment and some have had difficulty finding any employment since June of 1995. (Sacco Compl. PP 120-21, 155; Abramson Compl. PP 109-10.) New York State troopers prevented the entrance to the Javits Center of the Abramson and Sacco Plaintiffs who were not offered employment. (Sacco Compl. P 61; Abramson Compl. P 94).

 Discussion

 On a motion to dismiss a complaint for failure to state a claim upon which relief can be granted, the factual allegations of the complaint must be accepted as true, Leatherman v. Tarrant County Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 164, 122 L. Ed. 2d 517, 113 S. Ct. 1160 (1993), and all reasonable inferences must be drawn in favor of the plaintiff, Bolt Electric, Inc. v. City of New York, 53 F.3d 465, 469 (2d Cir. 1995). A complaint should not be dismissed "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957).

 I. § 1983

 Both the Sacco and Abramson Plaintiffs assert several claims under 42 U.S.C. § 1983. Section 1983 provides in relevant part that:

 
Every person who, under color of any statute, ordinance, regulation, custom, or usage of any State ... subjects or causes to be subjected, any citizen of the United States ... to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress....

 To assert a claim under § 1983, plaintiffs must allege the deprivation of a federal right under color of state law. Gomez v. Toledo, 446 U.S. 635, 640, 64 L. Ed. 2d 572, 100 S. Ct. 1920 (1980). Defendants argue that plaintiffs fail to allege the deprivation of any federally protected right.

 For the reasons that follow, all the § 1983 claims are dismissed except the claim that plaintiffs were deprived of liberty without due process of law.

 A. Liberty

 Plaintiffs contend that they were deprived of liberty without due process of law in violation of the Fourteenth Amendment. The Fourteenth Amendment protects against state action which removes or significantly alters constitutionally protected property or liberty interests without a hearing which comports with due process requirements. Board of Regents of State Colleges v. Roth, 408 U.S. 564, 569-70, 33 L. Ed. 2d 548, 92 S. Ct. 2701 (1972). Plaintiffs argue that the public statements made about mob corruption immediately prior to their loss of employment at the Javits Center impugned their reputations and damaged their standing in the community. Plaintiffs allege that they have had difficulty obtaining other employment because of the stigma of the statements. (Sacco Compl. PP 120-21, 155; Abramson Compl. PP 109-10.)

 In certain circumstances, defamation by a public official can cause deprivation of liberty. See Roth, 408 U.S. at 573. Defamatory statements by themselves, however, cannot deprive an individual of a constitutionally protected liberty interest. Paul v. Davis, 424 U.S. 693, 701, 47 L. Ed. 2d 405, 96 S. Ct. 1155 (1976). There must be some tangible injury in addition to the defamation, a "stigma plus" requirement. Id. at 700-01; Valmonte v. Bane, 18 F.3d 992, 999-1000 (2d Cir. 1994); Neu v. Corcoran, 869 F.2d 662, 667 (2d Cir. 1989). To satisfy this "stigma plus" requirement, a defamation must be coupled with "dismissal from a government job or deprivation of some other legal right or status." Neu, 869 F.2d at 667.

 Defendants argue that plaintiffs fail to allege even defamation. They argue that because hiring decisions are based on a number of factors such as skill, experience, and attitude, the Javits Center's decision not to hire any particular individual cannot be viewed as a statement that such individual is corrupt or tied to organized crime. Although defendants are correct in the abstract, their argument is less persuasive when all inferences are drawn in favor of plaintiffs. Plaintiffs worked at the Javits Center for many years before the Operating Corporation decided to take direct control of hiring. Pataki and officials of the Operating Corporation publicly stated that the reason for taking direct control of hiring was to end "the stranglehold of organized crime" at the Javits Center. (Sacco Compl. P 52(e); Abramson Compl. P 56.) In addition, after taking direct control of hiring and refusing to hire plaintiffs, Pataki claimed victory over the evils that had plagued the Javits Center. (Sacco Compl. P 52(e); Abramson Compl. P 57.) Considering that plaintiffs were experienced and skilled workers who were apparently satisfactory workers until Pataki and the Operating Corporation decided to eliminate corrupt and mob-tied employees from the Javits Center, plaintiffs may be able to establish that the refusal to hire them was in effect a public declaration that they were corrupt and had ties to the mob. Although it is an extremely close question, when all reasonable inferences are drawn in favor of plaintiffs, plaintiffs' claim cannot be dismissed on the face of the complaint for failing to allege defamation.

 Defendants argue that even if plaintiffs sufficiently allege damage to reputation, they do not satisfy the "stigma plus" requirement. Dismissal from government employment incident to defamation satisfies the "stigma plus" requirement. Neu, 869 F.2d at 667. In certain circumstances, the government's refusal to rehire an employee can also satisfy the "stigma plus" requirement if "in declining to re-employ [an employee, the state] impose[s] on him a stigma or other disability that foreclose[s] his freedom to take advantage of other employment opportunities." Roth, 408 U.S. at 573. Even without termination from government employment or a refusal to rehire, in certain very limited circumstances, defamation can implicate liberty interests if it effectively deprives an individual of the opportunity to obtain employment in his chosen field of employment. Valmonte, 18 F.3d at 1001-1004 (recognized deprivation of liberty interest when defamation did not occur in conjunction with termination of government employment or failure to rehire but when a statute required prospective employers to justify the hiring of plaintiff).

 Plaintiffs were not technically terminated from government employment or refused re-employment by the government since they were employed by the TSA and not directly by the Operating Corporation. Plaintiffs allege, however, that the Operating Corporation "exercised control of hiring and work rules at the Javits Center," (Abramson Compl. P 36), and was in effect a co-employer even prior to June of 1995, (Sacco Compl. P 47; Abramson Compl. PP 36, 44). Plaintiffs also allege that in 1991, Governor Mario Cuomo appointed an Inspector General, Henry Flinter, to oversee the operation of the Javits Center. The Inspector General screened union members hired at the Javits Center and took over the function of distributing paychecks and generally exercised direct control over the workers. (Sacco Compl. PP 48-51; Abramson Compl. PP 41-44.)

 Although plaintiffs' legal status appears to fall short of official government employment, drawing all inferences in favor of plaintiffs, the complaints allege a close and extended relationship with the Javits Center that approaches direct employment. Accordingly, plaintiffs may be able to show that they were in effect terminated or refused re-employment by the government in satisfaction of the "stigma plus" requirement. Furthermore, the complaints allege that plaintiffs have had difficulty obtaining alternative employment in the trade show industry following the takeover of the Javits Center. (Sacco Compl. PP 120-21; Abramson Compl. PP 137-39.) Plaintiffs argue that because New York State is the largest employer and dominant force in the trade show ...


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