Opinion
November 1, 1999.
Eisner Hubbard, New York City, defendant, pro se.
Tadeusz Niezbecki, plaintiff, pro se.
OPINION OF THE COURT
This action seeks damages for alleged fraud and malpractice arising from defendant's representation of plaintiff in his grievance proceedings before the National Labor Relations Board (NLRB). Defendant has moved for summary judgment dismissing the complaint. For the reasons discussed below, the court grants the motion.
I. THE UNDISPUTED FACTS
The following material facts are conceded or are supported by admissible evidence, uncontroverted, and therefore treated as conceded.Kuchne Napel v. Baiden, 36 N.Y.2d 539, 544 (1975); Costello v. Standard Metals, 99 A.D.2d 227, 229 (1st Dep't 1984); Schneider Fuel Oil v. De Gennaro, 238 A.D.2d 495, 496 (2d Dep't 1997).
In January 1991, Eagle Electric Manufacturing Company laid off plaintiff and other members of his union. Plaintiff filed a grievance pursuant to his collective bargaining agreement. On February 1, 1991, Eagle rejected the grievance as meritless. On February 22, 1991, the union, represented by Eisner, Levy, Pollack and Ratner, P.C., filed a grievance on behalf of the class of laid off workers and demanded arbitration before the NLRB. The NLRB held arbitration hearings on this grievance extending through April 1992. On February 12, 1992, Eagle recalled plaintiff, ending his layoff.
On May 29, 1992, Eagle fired plaintiff for reasons unrelated to the prior grievance. The union, still represented by the Eisner firm, filed a grievance against the termination. Hearings on the layoff grievance continued. The first hearing on plaintiff's termination grievance was held in May 1993.
In September 1993, K. Dean Hubbard joined the Eisner firm, then constituted as Eisner, Goldfeder Hubbard, P.C., but continuing as union counsel. On November 5, 1993, the union president notified the NLRB that several grievances had been settled and requested they be withdrawn from arbitration "without prejudice." Aff. of Tadeusz Niezbecki, Ex. B; Aff. of K. Dean Hubbard, Ex. C. Among the withdrawn grievances was the class grievance arising from the February 1991 layoffs. A copy of the letter was directed to Mr. Hubbard.
Plaintiff insists that the grievance was not settled and that the union sent the letter "without prior consultation" with him. Id. ¶ 25. Defendant does not deny that the layoff grievance was withdrawn from arbitration without plaintiff's knowledge or consent; defendant maintains it was unaware of plaintiff's status as a member of the class of grievants in that proceeding. Defendant further concedes that upon receipt of the union president's letter of November 5, 1993, defendant took no action regarding the grievances presented as settled and withdrawn. In a letter to union counsel dated November 8, 1993, the American Arbitration Association (AAA) acknowledged receipt of the union president's letter, canceled further proceedings in the layoff grievance, and stated that unless otherwise advised, "within seven days," the AAA would "consider the matter settled." Niezbecki Aff., Ex. C.
Defendant learned of plaintiff's participation in the layoff grievance and his desire to pursue the matter while preparing for a February 1994 hearing on plaintiff's termination grievance. On February 28, 1994, Mr. Hubbard wrote the AAA that "the Union had erroneously included (the layoff grievance] in a list of cases to be withdrawn without prejudice" and asked that the case be restored for arbitration. Id., Ex. D; Hubbard Aff., Ex. D. Eagle opposed, claiming that because the AAA, at the union's request, had considered the matter settled: "The arbitrator and the AAA no longer have jurisdiction over this matter." Niezbecki Aff., Ex. E. On October 3, 1994, the AAA "determined that this is an issue as to arbitrability which could be determined by an arbitrator." Id., Ex. F(a); Hubbard Aff., Ex. E.
Following several hearings, the arbitrator on January 9, 1995, rejected plaintiff's termination grievance, plaintiff then filed a complaint with the NLRB in April 1996, claiming unfair labor practices. 29 U.S.C. § 158 (b)(1)(A). He alleged specifically that the union "failed and refused to represent [him] regarding his 1991 layoff and 1992 discharge . . . for reasons that are arbitrary, capricious and invidious." Hubbard Aff., Ex. H. On October 30, 1996, the NLRB, found the union did not unlawfully fail to represent plaintiff regarding his 1991 layoff or 1992 discharge. After a hearing on the arbitrability of the layoff grievance, the AAA on December 9, 1996, rejecting the union's claim that the layoff grievance was withdrawn inadvertently, concluded it could not be reinstated and was unarbitrable.
II. THIS ACTION
On July 16, 1998, plaintiff filed his complaint in this action, alleging:
Failure to provide proper services. Mr. D. Hubbard was union councel [sic] during all time in American Arbitration Association for two cases. He lied that he did not know about union decision to withdraw my case, and that is why I lost my two cases.
On August 20, 1998, defendant filed a notice of removal to the United States District Court for the Southern District of New York, 28 U.S.C. § 1441, 1446, claiming plaintiff's action "is completely preempted" by federal law. Hubbard Aff., Ex. R at 3. On March 15, 1999, the federal court determined that because the preemption by federal law is raised only as a defense, and the complaint is not based on any federal law, the complaint fails to state a federal claim, requiring remand to state court. 28 U.S.C. § 1447 (c). Defendant now moves in this court for summary judgment dismissing the complaint on the grounds that (1) it fails to state a cause of action, (2) the claims are time-barred, and (3) they are preempted by federal law, which immunizes defendant from relief.
III. THE CLAIM
Although plaintiff fails to state any claim concerning the termination grievance, he does articulate a claim for malpractice as to the layoff grievance. Any fraud or misrepresentation, assuming it to be adequately pleaded, is a basis of the alleged malpractice. CPLR §§ 3013, 3016 PLR (b). See N.Y.C. Civ. Ct. Act §§ 902 (a), 903; 22 N.Y.C.R.R. § 208.7 (a). Plaintiff alleges he lost his layoff grievance because the union withdrew the grievance, and the attorney, whether he knew about the withdrawal or not, allowed it to occur; did not inform plaintiff; and did not seek to rectify it until months later. Mr. Hubbard's obligation to communicate candidly with a client about his case was well within the scope of the attorney's professional responsibility to the client. See, e.g., Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 216-18 (1985);Dougherty v. ATT, 902 F.2d 201, 204 (2d Cir. 1990).
Although plaintiff alleges no facts on which to assess the merits of the layoff grievance, defendant does not contend that the grievance lacked merit or that the union withdrew the grievance with plaintiff's consent or knowledge. Defendant's admissions, by themselves, raise material issues as to whether the firm, as counsel for the union, negligently included plaintiff's layoff grievance in the list of grievances withdrawn by the union in its letter of November 5, 1993, or failed to review and object to the inclusion of plaintiff's grievance in the list, which had been forwarded to defendant.
IV. PREEMPTION
The United States District Court's decision, which is not appealable, that the defense of federal preemption of plaintiff's malpractice claim did not state a federal claim, leaves this court to determine whether plaintiff has alleged a malpractice claim under state law that is not preempted. 28 U.S.C. § 1447 (d). See Martin v. City of Cohoes, 37 N.Y.2d 162, 165 (1975); Post v. Post, 141 A.D.2d 518, 519 (2d Dep't 1988); Forbush v. Forbush, 115 A.D.2d 335, 336 (4th Dep't 1985). See also People v. TWA, 171 A.D.2d 76, 83 (1st Dep't 1991); Freer v. Mayer, 223 A.D.2d 667, 667-68 (2d Dep't 1996); Meneely v. Hitachi Seiki USA, 175 A.D.2d 111, 112 — 13 (2d Dep't 1991). The federal district court's decision relied on the absence of any express determination by the Second Circuit court of Appeals that malpractice claims based on state law, against attorneys acting as agents for a union in grievance proceedings arising from a collective bargaining agreement, are completely preempted by federal law. Mem. Order at 4 (Mar. 15, 1999). As that decision recognizes, a claim that is not completely preempted still may be preempted.
The "well-pleaded complaint rule" ordinarily confers federal jurisdiction only when a complaint on its face, unlike the complaint here, presents a federal claim. Cateroillar Inc. v. Williams, 482 U.S. 386, 392 — 93, 398-99 (1987). The complete preemption doctrine applies when a statute's preemptive force is so extraordinary that it "converts an ordinary state common law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule." Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 65 (1987). See Caterpillar Inc. v. Williams, 482 U.S. at 392-93, 398-99. Preemption, rather than transforming a claim under state law into a claim under federal law, simply applies federal law to the pleading. Caterpillar Inc. v. Williams, 482 U.S. at 391, 397-98; Allis-Chalmers Corp. v. Lueck, 471 U.S. at 209-210. The federal district court only decided that plaintiff's claim was not completely preempted by federal law for purposes of conferring federal jurisdiction. That court did not decide whether his claim was preempted by federal law in the state court.
Moreover, since the federal district court's decision, the Second Circuit has ruled further that federal law preempts a claim for legal malpractice on state law grounds against attorneys representing union members in grievance proceedings arising from a collective bargaining agreement. Waterman v. Transport Workers' Union Local 100, 176 F.3d 150 (2d Cir. 1999). See Atkinson v. Sinclair Ref ining Co., 370 U.S. 238, 248-49 (1962). In light of Waterman, whether or not its holding amounts to complete preemption, the court now must determine whether plaintiff's claim of professional malpractice and misrepresentation by counsel, hired by the union to represent members in grievance proceedings, is grounded on the collective bargaining agreement and therefore preempted by federal law. Frontier Pilots Litigation Steering Committee, Inc. v. Cohen, Weiss Simon, 227 A.D.2d 130, 131 (1st Dep't 1996). See Best v. Rome, 858 F. Supp. 271, 274-75 (D. Mass. 1994).
While plaintiff's attempt to frame his complaint in state law is not dispositive of the preemption question, id., neither does federal law preempt "every dispute concerning employment, or tangentially involving a provision of a collective-bargaining agreement." Allis-Chalmers Corp. v. Lueck, 471 U.S. at 211. Preemption is required "when resolution of a state-law claim is substantially dependent upon analysis of the terms of an agreement made between the parties in a labor contract." Id. at 220.Accord Lingle v. Norge Division, Magic Chef, 486 U.S. 399, 405 — 406 (1988); Caterpillar Inc. v. Williams, 482 U.S. at 394; Cruz v. Presbyterian Hospital in the City of New York, N.Y.L.J., Sept. 20, 1999, at 38 (E.D.N.Y.).
Plaintiff's theory, whether of malpractice or of fraud, is independent of the collective bargaining agreement only to the extent that defendant's conduct deprived him of a determination on the merits of his claim under the agreement's grievance procedures. Under this view, the terms of the bargaining agreement governed only whether the grievance was arbitrable. But for defendant's conduct, whether constituting malpractice or fraud, plaintiff's claim regarding an illegal layoff would have been arbitrable.
Even construing plaintiff's theory in the light most favorable to him, his loss of arbitration rights owing to defendant's alleged conduct is not entirely independent of the collective bargaining agreement. Waterman v. Transport Workers' Union Local 100, 176 F.3d 150; Dougherty v. ATT, 902 F.2d at 204. Grievance procedures constitute an essential part of the collective bargaining process. E.g., Breda v. Scott, 1 F.3d 908, 909 (9th Cir. 1993); Best v. Rome, 858 F. Supp. at 274 n. 3.
Moreover, to prevail on the merits, plaintiff must demonstrate that defendant's malpractice or fraud barred a claim that was both meritorious and amenable to resolution through the grievance process established by the collective bargaining agreement. Kerson Co. v. Shayne, Dachs, Weiss, Kolbrenner, Levy Levine, 45 N.Y.2d 730, 732 (1978). To prevail on a malpractice theory, he also must demonstrate that the union's withdrawal of his grievance substantially deviated from the procedures and standards for representing union members in the grievance process. Gray v. Wallman Kramer, 184 A.D.2d 409, 413 (1st Dep't 1992); Lavin Kleiman v. Heinike Assocs., 221 A.D.2d 919 (4th Dep't 1995); Zeithn v. Greenberg, Margolis, Ziegler, Schwartz, Dratch, Fishman, Franzblau Falkin, 209 A.D.2d 510 (2d Dep't 1994); L.I.C. Commercial Corp. v. Rosenthal, 202 A.D.2d 644, 644-45 (2d Dep't 1994). Claims of fraud or negligent misrepresentation also would be measured by the standards of conduct and responsibility imposed on attorneys in their practice. These determinations cannot be made without resort to the terms of the bargaining agreement. E.g., Dougherty v. ATT, 902 F.2d at 204; Schuver v. Midamerican Energy Co., 154 F.3d 795, 799 (8th Cir. 1998). However framed, in contract or tort, plaintiff's cause of action is preempted by federal law. Atkinson v. Sinclair Refining Co., 370 U.S. at 249; Frontier Pnots Litigation Steering Committee, Inc. v. Cohen, Weiss Simon, 227 A.D.2d at 131.
V. IMMUNITY
A consequence of preemption, where rights and obligations under the pertiment collective bargaining agreement are inextricably involved in a claim under state law, is that union counsel are immune from suit under federal law. 29 U.S.C.S. 185 (b); Arnold v. Air Midwest, Inc., 100 F.3d 857, 862-63 (10th Cir. 1996); Montplaisir v. Leighton, 875 F.2d 1, 4, 6 (1st Cir. 1989); Peterson v. Kennedy, 771 F.2d 1244, 1258-59 (9th Cir. 1985). See Dougherty v. ATT, 902 F.2d at 203-204. "When the union is providing the services, it is the union, rather than the individual business agent or attorney, that represents and is ultimately responsible to the member." Peterson v. Kennedy, 771 F.2d at 1258. This doctrine flows from the union's duty to fairly represent its membership. While the union may provide legal services by employing in-house counsel or hiring an outside attorney for a specific proceeding, no attorney-client relationship between counsel and members results. Arnold v. Air Midwest. Inc., 100 F.3d at 862-63; Peterson v. Kennedy, 771 F.2d at 1258; Brown v. Maine State Emplrs. Assn., 690 A.2d 956, 959-60 (Me. 1997). Without this relationship between defendant and plaintiff, even if federal preemption did not mandate defendant's immunity from suit, a fundamental element of a malpractice claim under state law is absent.
VI. NEGLIGENCE AND BREACH OF THE DUTY OF FAIR REPRESENTATION
For purposes of this motion, the court considers that plaintiff has satisfactorily pleaded that (1) defendant failed either to properly determine plaintiff's interest and objectives in pursuing the layoff grievance, before the union withdrew his grievance, or to review the list of grievances to be withdrawn for unsettled, viable claims, and (2) defendant's failure proximately caused the dismissal of plaintiff's layoff grievance. A well pleaded malpractice claim under state law is grounded on negligence. Parker Durvee Rosoff Haft v. Ariss, 250 A.D.2d 414 (1st Dep't 1998); Kozmol v. Law Firm of Allen L. Rothenberg, 241 A.D.2d 484, 485-86 (2d Dep't 1997).
Another consequence of federal preemption, however, is that plaintiff's allegations must amount to a breach of the duty of fair representation claim against the union, under federal law. Legal malpractice, grounded on negligence, is insufficient to support a breach of the duty of fair representation. "To support the latter claim, a union's conduct must be arbitrary, discriminatory, or in bad faith." Waterman v. Transport Workers' Union Local 100, 8 F. Supp.2d 363, 371 (S.D.N.Y. 1998), aff'd, 176 F.3d 150. Because a union's agents may not reasonably be held to a higher standard than their principal, id.; Montplaisir v. Leighton, 875 F.2d at 6-7, even if immunity did not apply, a union member may not sue the union attorney for acts amounting only to good faith, nondiscriminatory errors of judgment in processing a grievance. Peterson v. Kennedy, 771 F.2d at 1254, 1259.
A union member, such as plaintiff, is not without a remedy, if an attorney's conduct in arbitration proceedings or other situations arising out of the collective bargaining agreement are in fact arbitrary, discriminatory, or in bad faith. The union member may sue the union for breach of the duty of fair representation. Waterman v. Transport Workers' Union Local 100, 8 F. Supp. 2d at 371, aff'd, 176 F.3d 150; Arnold v. Air Midwest, Inc., 100 F.3d at 862; Peterson v. Kennedy, 771 F.2d at 1259. The union collectively also may sue its attorney for malpractice or breach of contract and compensate any individual member out of the recovery for any damages he may have incurred. Waterman v. Transport Workers' Union Local 100, 8 F. Supp. 2d at 371, aff'd, 176 F.3d 150;Peterson v. Kennedy, 771 F.2d at 1259. Similarly, if the union attorney or another attorney agreed specifically to represent a union member directly as an individual client, not as a union member, the member could sue the attorney for malpractice or breach of contract. Arnold v. Air Midwest, Inc., 100 F.3d at 862-63; Peterson v. Kennedy, 771 F.2d at 1259.
Here, even if the immunity bar were avoided and an attorneyclient relationship recognized, plaintiff's allegations of negligence and malpractice do not support a cognizable claim against defendant, who cannot be held to a higher standard than the principal, the union, for whom the attorney acted. Although neither the immunity bar nor the requirement for an attorneyclient relationship would apply to a claim for breach of the union's duty of fair representation, no such claim may be read into plaintiff's complaint. Tantillo v. McDonald, 223 A.D.2d 168, 173 (1st Dep't 1996). Even if the claim were pleaded, it would be barred by the applicable six month statute of limitations. 29 U.S.C. § 160 (b); DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151, 169-72 (1983); Tantillo v. McDonald, 223 A.D.2d at 173.
VII. CONCLUSION
Federal law preempts plaintiff's claims for legal malpractice, misrepresentation, and fraud under state law, even if colorable. Defendant was legal counsel hired by a union to represent plaintiff in grievance proceedings pursuant to a collective bargaining agreement. In such cases, counsel enjoys unqualified immunity from personal liability for malpractice and related misconduct. Therefore the court grants summary judgment dismissing the complaint.