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New York City District Council of v. Star Intercom & Construction

October 27, 2011


The opinion of the court was delivered by: Richard J. Holwell, District Judge:


On May 3, 2011, the plaintiffs-four benefit funds (the "Funds") under the auspices of the District Council of New York City and Vicinity of the United Brotherhood of Carpenters and Joiners of America (the "Council"), by and through their trustees-commenced this action by filing a complaint seeking confirmation of a default arbitration award against Star Intercom & Construction, Inc. ("Star," or the "Employer"). The plaintiffs subsequently filed an amended complaint on June 3, 2011, effecting service of the amended summons and amended complaint on the defendant on July 14, 2011. The defendant did not answer the amended complaint or otherwise move with respect to the petition, and on September 13, 2011, the plaintiffs moved before the Court for the entry of a default judgment confirming the arbitration award.

The Court has examined the record on which the arbitration award was based, and, for the reasons stated herein, GRANTS the petition to confirm the arbitration award, and further GRANTS the plaintiffs' request for reasonable attorneys' fees and costs.


The parties' dispute stems from a construction project at P.S. 175 in Queens, New York governed by a collective-bargaining agreement-the Project Labor Agreement (the "PLA")-between the Council and its affiliated local unions and members, and the New York City School Construction Authority (the "Authority"). The PLA, signed by representatives of the Council and the Authority on November 10, 2004, sets forth conditions of employment for rehabilitation and renovation work at various New York City public schools to be performed pursuant to a previously agreed-upon public-works contract (the "Contract") won by the Council and its affiliated unions. See generally PLA, Exh. A to the Declaration of Charles R. Virginia in Support of Plaintiffs' Motion for Default Judgment ("Virginia Decl."), ECF No. 8-1. By its terms, the PLA binds both the Council-affiliated unions and the contractors and sub-contractors performing work for the Authority under the Contract. See PLA, art. 1 § 1, art. 2 §§ 1, 3.

Star, a New York corporation and the defendant in this action, entered into a sub-contractor agreement on August 20, 2009, committing itself to the terms of the Agreement. See Sub-Contractor Affidavit of PLA, Exh. A to Virginia Decl., ECF No. 8-1. The PLA states that contractors performing work under the Contract "agree[] to be bound by the written terms of the legally-established jointly trusteed Trust Agreements specifying the detailed basis on which payments are to be paid into, and benefits paid out of, [certain] Trust Funds" with regard to work and employees covered under the PLA.*fn1

See PLA, art. 11 § 2.B. The incorporated Trust Agreements require that contractors make certain payments to the Trust Funds on behalf of unionized employees; further, the TrustAgreements authorize the Trust Funds to conduct audits of employers' books and records in order to verify that all required contributions were properly made.*fn2 See Default Arbitration Award at 4, Exh. B to Virginia Decl., ECF No. 8-2; see also Amended Complaint ¶ 11, ECF No. 3. In addition, the PLA sets out a grievance procedure governing disputes under the PLA, which procedure culminates in a mandatory arbitration hearing conducted under the local arbitration rules of the American Arbitration Association before an impartial arbitrator. See PLA art. 9, § 1.

According to the plaintiffs, "[a] dispute arose during the period of the [PLA] between the parties when the Employer failed to comply with the [plaintiff] Funds' demands to furnish its books and records for the purpose of conducting an audit." Amended Complaint ¶ 12. Pursuant to the PLA's grievance procedure and arbitration clause, the Funds submitted the dispute to arbitration before the designated impartial arbitrator, Robert Herzog, by filing a November 30, 2010 Notice of Intention to Arbitrate. See Default Arbitration Award at 2. The arbitrator determined that Star was properly served with the Funds' notice, and on January 14, 2011, a hearing was held at which only a representative for the Funds, and no representative of Star, appeared. Id. at 2--3. As a result, the arbitrator conducted the arbitration as a "Default Hearing." Id. at 3.

On February 7, 2011, Arbitrator Herzog issued a written award determining that the Funds had "uncontroverted[ly]" established that: (1) Star was bound by the terms of the Trust Agreements governing the Funds; (2) by the terms of both the PLA and the Trust Agreements, Star was required to make contributions to the Funds on behalf of unionized employees performing work for Star under the Contract; (3) the Trust Agreements authorized the Funds to conduct an audit of Star's records in order to ensure compliance with the Trust Agreements' terms; and (4) Star violated the terms of the auditing provisions of the Trust Agreements by failing to consent to an audit of its books. Id. at 3--4. The arbitrator therefore issued a default arbitration award ordering Star "to permit and facilitate the Funds conducting an audit of its books and records for the period of August 31, 2009 through to date to determine whether it is in compliance with its obligations to contribute to the Funds" and requiring Start to pay the Funds' attorneys' fees, the arbitrator's fee, and arbitration costs. Id. at 4--5. The arbitrator calculated those fees and costs to be $2,350.00, with interest to accrue at a rate of 5.25% from the date of the arbitration award. Id. at 5.

When Star failed to abide by the arbitrator's award, the Funds filed a complaint in the District Court for the Southern District of New York seeking judicial confirmation of the arbitration award's injunctive and financial components, attorneys' fees and costs associated with the federal-court action, and such other and further relief deemed proper by the Court. The Funds filed an amended complaint on June 3, 2011, and filed the instant motion for the entry of a default judgment confirming the arbitration award on September 13, 2011. Star has failed to appear in this action or otherwise oppose the plaintiffs' motion.


A. Jurisdiction "It is a fundamental precept that federal courts are courts of limited jurisdiction" and lack the power to disregard such limits as have been imposed by the Constitution or Congress. Owen Equip.& Erection Co. v. Kroger, 437 U.S. 365, 374 (1978). If subject- matter jurisdiction is lacking and no party has called the matter to the court's attention, the court has the duty to dismiss the action sua sponte. See Durant, Nichols, Houston, Hodgson & Cortese-Costa P.C. v. Dupont, 565 F.3d 56, 62 (2d Cir. 2009).

Although the Federal Arbitration Act provides the substantive law for the confirmation of arbitration awards, see 9 U.S.C. § 9, "that Act in fact does not independently confer subject matter jurisdiction on the federal courts." Durant, 565 F.3d at 63. Therefore, "[t]here must be an independent basis of jurisdiction before a district court may entertain petitions under the Act." Harry Hoffman Printing, Inc. v. Graphic Commc'ns, Int'l Union, Local 261, 912 F.2d 608, 611 (2d Cir. 1990).

Here, that independent basis of subject-matter jurisdiction is found in two distinct sources. First, section 301(a) of the Labor Management Relations Act of 1947, 29 U.S.C.§ 185(a), provides in relevant part that "[s]uits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce . . . may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties." Id.; see Westerbeke Corp. v. Daihatsu Motor Co., 304 F.3d 200, 221 (2d Cir. 2002) (explaining that section 301(a) "grant[s] federal courts jurisdiction to enforce arbitration awards issued under collective bargaining agreements"). Second, section 502(e)(1) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(e)(1), grants "the district courts of the United States . . . exclusive jurisdiction of civil actions under this subchapter brought by the Secretary or by a participant, beneficiary, [or] fiduciary" of retirement plans covered by ERISA. See also id. § 1132(f) ("The district courts of the United States shall have jurisdiction, without respect to the amount in controversy or ...

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