March 8, 1999
EDWARD T. HANLEY, JIM ARNOLD, ROBERT BAKER, WALT ELLIOT, JAMES F. FLANAGAN, DAVID HARTIGAN, JACK KENNEALLY, CANDACE LANDERS, ROBERT W. MAGEE, BOB MCDEVITT, MORTY MILLER, JOHN O'GARA KENNETH PAULSEN, RONALD RICHARDSON, NANCY ROSS, MARTY RUSSO, JOHN WILHELM, PATRICK J. KANE, NICHOLAS AMATO, JAMES ANDERSON, KARL R. BENNETT, JR., JERRY BERNS, RICHARD BETTY, RICHARD W. BUNKER, JOSEPH D'AMATO, EDWARD HEGARTY, ARNOLD KARR, CARL MADDA, BRIAN MCKAY, JACK PENMAN, JOSEPH T. PRIMAVERA, MIKE SLOAN, MICHAEL WALSH, LAWRENCE F. WILKAS, GEORGE WRIGHT AS TRUSTEES OF THE HOTEL EMPLOYEES AND RESTAURANT EMPLOYEES INTERNATIONAL UNION PENSION AND WELFARE FUNDS, PLAINTIFFS,
LOBSTER BOX RESTAURANT, INC., DEFENDANT. LOBSTER BOX RESTAURANT, INC., THIRD-PARTY PLAINTIFF, V. HOTEL EMPLOYEES AND RESTAURANT EMPLOYEES UNION, LOCAL 100, OF THE HOTEL EMPLOYEES AND RESTAURANT EMPLOYEES INTERNATIONAL UNION, AFL &MDASH; CIO, THIRD-PARTY DEFENDANT.
The opinion of the court was delivered by: Berman, District Judge.
Third-party defendant Hotel Employees and Restaurant Employees Union,
Local 100, of the Hotel Employees and Restaurant Employees International
Union, AFL — CIO ("Local 100"), has filed a motion to dismiss the
(Second Amended) Third-Party Complaint of the defendant and third-party
plaintiff Lobster Box Restaurant, Inc. ("Lobster Box"), pursuant to
Federal Rule of Civil Procedure ("Fed.R.Civ.P.") 12(b)(1) and (6), for
lack of subject matter jurisdiction and failure to state a claim upon
which relief can be granted.
Local 100 and Lobster Box both agree that resolution of the instant
motion hinges upon, and is governed by, the recent United States Supreme
Court decision in Textron Lycoming Reciprocating Engine Division, AVCO
Corp. v. United Automobile, Aerospace and Agricultural Implement Workers
of America) International Union, 523 U.S. 653, 118 S.Ct. 1626, 140
L.Ed.2d 863 (1998). The parties disagree, however, as to the
interpretation of the Supreme Court's ruling in Textron.
For the reasons stated below, the Court grants Local 100's motion to
dismiss on the ground that the Court lacks subject matter jurisdiction
with respect to Lobster Box' third-party claims.
Plaintiffs Edward T. Hanley, et al., as Trustees of the Hotel Employees
and Restaurant Employees International Union Pension and Welfare Funds
("Funds"), brought the underlying action, pursuant to the Employee
Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132, and the
Labor Management Relations Act § 301 ("LMRA"), 29 U.S.C. § 185,
against Lobster Box for alleged failure by Lobster Box to pay certain
contributions to the Funds in violation of a collective bargaining
agreement ("Agreement") between Lobster Box and Local 100. After being
sued by the Funds, Lobster Box, in turn, filed a (Second Amended)
Third-Party Complaint against Local 100 seeking, inter alia, a
declaration that the Agreement between Local 100 and Lobster Box is
voidable and that Lobster Box is, in any event, entitled to
indemnification by Local 100 for any judgment or damages against Lobster
Box in the underlying action. In its (Second Amended) Third-Party
Complaint, Lobster Box alleges that, in failing to make contributions to
the Funds, it relied upon advice from
representatives of Local 100 who represented that such contributions were
not required. These representations were presumably made during
negotiations leading to the Agreement. Lobster Box further alleges that
Local 100 engaged in fraud and negligent misrepresentation in the
In the third-party action against Local 100, Lobster Box is asking the
Court to declare that the Agreement between Local 100 and Lobster Box is
invalid. Lobster Box asserts that this Court has subject matter
jurisdiction to make this determination under LMRA § 301. Local 100
counters that the Court lacks subject matter jurisdiction because the
third-party claim is not about a (contract) violation of the Agreement,
but rather is a claim that the Agreement is invalid.
LMRA § 301 provides, in part, that "[s]uits for violation of
contracts between an employer and a labor organization . . . may be
brought in any district court of the United States . . ."
29 U.S.C. § 185(a). By its terms, "this provision confers federal
subject-matter jurisdiction only over '[s]uits for violation of
contracts.'" Textron Lycoming Reciprocating Engine Division, Avco Corp.,
118 S.Ct. at 1629. It does not generally confer jurisdiction on Federal
District Courts in suits concerning contract validity. Id. ("'[s]uits for
violation of contracts' under § 301(a) are not suits that claim a
contract is invalid, but suits that claim a contract has been
Lobster Box argues that because contract violation is in issue in the
"underlying" action by the Funds against Lobster Box, the Court in the
third-party proceeding may adjudicate the validity of the Agreement.
Lobster Box relies upon a quote from Textron for the proposition that the
jurisdictional requirement of a contract violation:
does not mean that a federal court can never
adjudicate the validity of a contract under §
301(a). That provision simply erects a gateway through
which parties may pass into federal court; once they
have entered, it ...
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