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Donohue v. Madison

United States District Court, N.D. New York

April 14, 2017

DANNY DONOHUE, as President of the Service Employees Association, Inc., Local 1000, AFSCME, AFL-CIO; SERVICE EMPLOYEES ASSOCIATION, INC., LOCAL 1000, AFSCME, AFL-CIO; WILLIAM COLEMAN, individually and on behalf of all others similarly situated; WILLIAM MILLER, individually and on behalf of all others similarly situated; JOHN METZGIER, individually and on behalf of all others similarly situated; and JACK WIEDEMAN, individually and on behalf of all others similarly situated, Plaintiffs,
v.
THOMAS J. MADISON, JR., individually and in his official capacity as Executive Director of the New York State Thruway Authority and the New York State Canal Corporation; CARLOS MILAN, in his official capacity as Director of Employee Relations and Employee Safety, New York State Thruway Authority and New York State Canal Corporation; BRIAN U.STRATTON, in his official capacity as Director of the New York State Canal Corporation; HOWARD P. MILSTEIN, individually and in his official capacity as Chairman of New York State Thruway/Canal Corporation Board of Directors; E. VIRGIL CONWAY, in his official capacity as Board Member of the New York State Thruway/Canal Corporation Board of Directors; NEW YORK STATE THRUWAY AUTHORITY; NEW YORK STATE CANAL CORPORATION; DONNA J. LUH, in her official capacity as Vice-Chairman of New York State Thruway/Canal Corporation Board of Directors; RICHARD N. SIMBERG, in his official capacity as Board Member of the New York State Thruway/Canal Corporation Board of Directors; BRANDON R. SALL, in his official capacity as Board Member of the New York State Thruway/ Canal Corporation Board of Directors; J. DONALD RICE, JR., in his official capacity as board Member of the New York State Thruway/Canal Corporation Board of Directors; and JOSE HOLGUIN-VERAS, in his official capacity as Board Member of the New York State Thruway/Canal Corporation Board of Directors, Defendants. DANNY DONOHUE, as President of the Civil Service Employees Association, Inc., Local 1000, AFSCME, AFL-CIO; CIVIL SERVICE EMPLOYEES ASSOCIATION, INC., LOCAL 1000, AFSCME, AFL-CIO; JOHN DELLIO, individually and on behalf of all others similarly situated; MICHAEL BOULERIS, individually and on behalf of all others similarly situated; MAUREEN ALONZO, individually and on behalf of all others similarly situated; and MARCOS DIAMANTATOS, individually and on behalf of all others similarly situated, Plaintiffs,
v.
THOMAS J. MADISON, JR., individually and in his official capacity as Executive Director of the New York State Thruway Authority and the New York State Canal Corporation; CARLOS MILAN, in his official capacity as Director of Employee Relations and Employee Safety, New York State Thruway Authority and New York State Canal Corporation; HOWARD P. MILSTEIN, individually and in his official capacity as Chairman of New York State Thruway/Canal Corporation Board of Directors; E. VIRGIL CONWAY, in his official capacity as Board Member of the New York State Thruway/Canal Corporation Board of Directors; NEW YORK STATE THRUWAY AUTHORITY; JOSE HOLGUIN-VERAS, in his official capacity as Board Member of the New York State Thruway/ Canal Corporation Board of Directors; DONNA J. LUH, in her official capacity as Vice-Chairman New York State Thruway/Canal Corporation Board of Directors; J. DONALD RICE, JR., in his official capacity as Board Member of New York State Thruway/Canal Corporation Board of Directors; BRANDON R. SALL, in his official capacity as Board Member of New York State Thruway/Canal Corporation Board of Directors; and RICHARD N. SIMBERG, in his official capacity as Board Member of New York State Thruway/Canal Corporation Board of Directors, Defendants. NEW YORK STATE THRUWAY EMPLOYEES LOCAL 72; JOSEPH E. COLOMBO; GEORGE E. SAVOIE; and DAVID M. MAZZEO, individually and on behalf of all others similarly-situated, Plaintiffs,
v.
NEW YORK STATE THRUWAY AUTHORITY; HOWARD P. MILSTEIN, individually and in his official capacity as Chairman of the New York State Thruway Authority; THOMAS J. MADISON, JR., individually and in his official capacity as Executive Director of the New York State Thruway Authority; THOMAS RYAN, in his official capacity; E. VIRGIL CONWAY, in his official capacity as Board Member of the New York State Thruway Authority; JOHN F. BARR, in his official capacity as Director of Administrative Services of the New York State Thruway Authority; JOHN M. BRYAN, in official capacity as Chief Financial Officer and Treasurer of the New York State Thruway Authority; DONNA J. LUH, in her official capacity as Vice-Chair of the New York State Thruway/Canal Corporation Board of Directors; J. DONALD RICE, JR., in his official capacity as Board Member of the New York State Thruway Authority; BRANDON R. SALL, in his official capacity as Board Member of the New York State Thruway Authority; RICHARD N. SIMBERG, in his official capacity as Board Member of the New York State Thruway Authority; and JOSE HOLGUIN-VERAS, in his official capacity as Board Member of the New York State Thruway Authority, Defendants.

          CIVIL SERVICE EMPLOYEES ASSOCIATION, INC. Attorneys for Plaintiffs.

          LIVINGSTON ADLER PULDA MEIKLEJOHN & KELLY Attorneys for Plaintiffs.

          DREYER, BOYAJIAN LLP Attorneys for Defendant Madison.

          WHITEMAN, OSTERMAN & HANNA Attorneys for all Defendants except Defendants Madison and Bryan.

          E. STEWART JONES HACKLER MURPHY, LLP Attorneys for Defendant Bryan.

          OF COUNSEL AARON E. KAPLAN, ESQ. JENNIFER C. ZEGARELLI, ESQ. GREGG D. ADLER, ESQ. NICOLE M. ROTHBERG, ESQ. BENJAMIN W. HILL, ESQ. WILLIAM J. DRYER, ESQ. BETH A. BOURASSA, ESQ. CHRISTOPHER W. MEYER, ESQ. MONICA R. SKANES, ESQ. NORMA G. MEACHAM, ESQ., E. STEWART JONES, JR., ESQ. THOMAS J. HIGGS, ESQ.

          MEMORANDUM-DECISION AND ORDER

          FREDERICK J. SCULLIN, JR. SENIOR UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         These consolidated actions involve constitutional challenges to an April 3, 2013 reduction in force ("RIF"), whereby the New York State Thruway Authority and New York State Canal Corporation (collectively "Defendants") eliminated approximately 198 employees represented by New York State Thruway Employees Local 72 and the Civil Service Employees Association, Inc., Local 1000, AFSCME, AFL-CIO (collectively "Plaintiffs"). Pending before the Court are Defendants' joint motion for summary judgment under Rule 56 of the Federal Rules of Civil Procedure, see Dkt. No. 114;[1] Defendant Madison's motion for summary judgment under Rule 56 of the Federal Rules of Civil Procedure based on qualified immunity, see Dkt. No. 116; and Plaintiffs' joint motion for partial summary judgment against Defendants New York State Thruway Authority, New York State Canal Corporation, and all individual Defendants in their official capacities only based on their First Amendment targeting theory in the first count of their complaint under Rule 56 of the Federal Rules of Civil Procedure, see Dkt. No 120.[2]

         II. BACKGROUND

         Defendant New York State Thruway Authority is a statutorily created public corporation, see N.Y. Pub. Auth. L. § 352, with the "power to finance, construct, reconstruct, improve, develop, maintain [and] operate" the New York State Thruway, see N.Y. Pub. Auth. L. at § 353. Defendant New York State Canal Corporation is a subsidiary corporation of Defendant New York State Thruway Authority. See N.Y. Pub. Auth. L. § 1005-b.

         In the decade preceding the RIF at issue in this case, Defendants faced significant financial pressure that increased their debt burden from $1.3 billion to $3.2 billion. See Dkt. No 114-78 at 3. The continuing need for reconstructing the aging thruway and canal system, declining traffic and toll revenues due to the 2008 recession and high fuel prices, and spiraling health insurance costs for employees worsened Defendants' financial situation. See id. In response, Defendants implemented several cost-saving measures, including withholding a series of salary increases for managerial/confidential ("M/C") employees who are not affiliated with the Plaintiff unions. See Id. at 4-5. Defendants estimate that these steps saved approximately $6.4 million. See Id. at 4.

         Despite the savings recognized through these cost-saving measures, Defendants determined that they needed to reduce labor costs further. See id. Salaries and benefits made up approximately 95% of Defendants' operating budget. See Id. Defendants thus sought concessions from unionized workers when the collective bargaining agreements ("CBAs") with Plaintiffs expired on June 30, 2012. See id. at 5. In conjunction with the start of negotiating a new CBA, Defendants announced that they were planning an RIF for April, 2013 to achieve savings if negotiations were unsuccessful. See id. Defendants' strategy was to leverage the layoffs to encourage the unions to agree to a new CBA that would require unionized employees to pay a portion of their health insurance costs. See Dkt. No. 120-8 at 5-6.

         Plaintiffs and Defendants could not agree on a new CBA, and thus Defendants executed the RIF as planned. See Id. at 7. "The Thruway Authority identified positions targeted for layoff under the RIF plan by allocating costs amongst each of the bargaining units in proportion to the savings that the [Defendants were] looking to achieve in the unionized workforce." See Dkt. No. 129 at ¶ 146. Originally the RIF was supposed to save approximately $20 million annually; however, Defendants calculated that the RIF resulted in only $9 million in savings for 2013. See Dkt. No. 114-78 at 5. If Defendants had achieved their most important objective in bargaining --namely, getting all employees to pay a percentage of their health insurance costs -- the savings would have been approximately $6.69 million. See Dkt. No. 120-8 at 7.

         Following the RIF, Plaintiff Civil Service Employees Association, Inc., Local 1000, AFSCME, AFL-CIO filed two actions against Defendant Authorities and a number of executives and board members in their individual and official capacities on August 2, 2013. Almost a year later, Plaintiff New York State Thruway Employees Local 72 filed an action against Defendant Thruway Authority and a number of the same individuals in their individual and official capacities on June 17, 2014. The Court consolidated these three actions on October 2, 2014.[3]See Dkt. No 45.

         In these consolidated cases, Plaintiffs assert causes of action pursuant to 42 U.S.C. § 1983 and New York law. First, Plaintiffs allege that Defendants coerced Plaintiff CSEA into giving up its rights to negotiate a CBA by threatening layoffs and that Defendants intentionally directed their demands for concessions and threats of termination to union-represented employees only. Therefore, according to Plaintiffs, Defendants' action in terminating union-represented employees violated those employees' right to associate with their union in violation of the First Amendment to the United States Constitution by retaliating against Plaintiffs for engaging in union activity and by targeting Plaintiffs for layoffs because of their union affiliation.

         Second, Plaintiffs allege that Defendants violated the Fourteenth Amendment's Equal Protection Clause by illegally targeting Plaintiffs for layoffs based on their status as union-represented employees. Further, they contend that Defendants' actions were arbitrary, irrational, and deprived Plaintiffs of their rights to substantive due process.

         Third, Plaintiffs allege that Defendants acted under color of state law to impair the contractual rights of Plaintiff CSEA, which violated the Contract Clause of the United States Constitution.[4]

         Finally, Plaintiffs allege that Defendants violated Article I, § 17 of the New York State Constitution by depriving employees of their right to organize.

         Plaintiffs have indicated that, "[t]o streamline these cases, and because the First Amendment and Equal Protection claims will provide the plaintiffs and the class with full relief, plaintiffs have decided not to further pursue the Due Process, the Contract Clause or the New York State Law claims." See Dkt. No. 132-6 at 8 n.1. In light of this statement, the Court dismisses these claims. Therefore, Plaintiffs' remaining claims are those they assert under the First Amendment and under the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution.[5]

         Plaintiffs' Fourteenth Amendment Equal Protection Clause claim and their First Amendment targeting claim raise identical issues, i.e., whether Defendants unconstitutionally singled out Plaintiffs for inclusion in the RIF because of their status as union-represented employees. To resolve these claims, the Court must answer two questions: (1) Are Plaintiffs members of a protected class? and (2) Can Defendants justify their actions under the applicable level of judicial scrutiny?

         III. DISCUSSION

         A. Standard of review

         A court must grant summary judgment "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). In other words, an entry of summary judgment is appropriate "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). "[I]n ruling on a motion for summary judgment, the district court is not to weigh the evidence but is instead required to view the evidence in the light most favorable to the party opposing summary judgment, to draw ...


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