Levin, et al v. Raynor, et al, No. 1:2003cv04697 - Document 124 (S.D.N.Y. 2010)

Court Description: MEMORANDUM OPINION AND ORDER #98988 re: 116 MOTION to Substitute Party. Old Party: UNITE HERE and WORKERS UNITED, New Party: UNITE, filed by Ethel Vick, Frank Longo, J. Christopher Keogan, Israel E. Charne, Philip Leviton, Evelyn G. Smith, Joseph G ood, Rinaldo A. Panetta, Barbara Laufman, Fred Kushel, Cornelius Wall, Gerard Levine, Mavous Speegle, John B. Montgomery, Max Wolf, Jose F. Gonzalez, Eugenia Bonanno, Raymond Lee, Seymour Rubinstein, Elvira Franqui, Joseph Giardina, Palma Young, Anne tte Scuito D'Ercole, Delores Tutson, Rosetta Lyons, Joseph Ingegneri, Felicita Vargas, Ruth Feldman, Robert Fontaine, Joseph Delli Carpini, Patricia A. Rains, Marie Vitale, Belle Horenstein, Maria Banta, Albert Josefsberg, Stanley Gross, Enrique ta Andrade, Joseph A. De Angeles, Anita Robbins, Ellen Goodman, Peter Nadash, Lawrence Kahn, Lois Hartel, Suey K. Sang, George Pishko, Joseph Rosa, Mattie J. Jackson, Martin A. Gonzalez, Irwin Solomon, Beverly Shulman, Max Zimny, John Lo Monaco, Juan Muniz, Saul Rosen, Jonathan Vitale, Billy Andrews, Evelyn Dubrow, Karl Blumenthal, Robert H. Hostetter, James D'Arrigo, Jerry Schoen, Maria D'Arrigo, Martin Bader, Harold V. Burkholder, John di Girolamo, Mary McMahon, Louis F. Sharpe, Doug las Levin, Israel Camacho Montalvo, Simon Cooper, Connie Ling, William P. McMahon, Nicholas Roussos, Samuel Eisenberg, Mary Ruggiero, Joseph P. Raia, Yip On Wong, George Levenberg, Gloria Byer, Miriam Micelli, Emanuel Leventhal, Violeta Putterman, Li aping Sciuto, Mildred A. Lippman, Maurice Seller, John B. Fodera, Anthony Lespier, Stanley Leong, Ruth Groenveldt, Salvatore Giardina, Marie Belasco, Sol Goldberg, Corrine D. Watts, Shirley Rose, Nick Trajano, David Wells, Jay Mazur, James R. Goldber g, Jonathan Smalls, Sally Eisenberg, Julius Sippen, Murray Kaner, Earl Laub, Ralph R. Reuter, Robert J. Mitchell, Tomasita Cruz, Linda L. Mitchell, David Ko, Aaron Adler, Luz M. D'Agostino, Frank Rossi, Jr., Carmen O. Finnegan, Burl C. Robinson, Melvin H. Parker, Jack Schlesinger, Bert Obrentz, Joseph Longo, Sr., Israel Berkenwald, Michael F. Grimaldi, Shirley Bernstein, Theodore Bernstein, Thomas B. Mathews, Sidney Gerstein, Nancy Cameron, Clemente Lyons, Robert Pignatelli, Ben Dansavage, Isidore Linzer, Anthony Piccione, Dorothy Ney, Dorothy M. McCormick, Teresa Strianese, Lester Kushner, Norma Pluskie, Anthoney Claudino, Amador Santiago, Samuel Nemaizer, Glenwood Clay, Shelly Appleton, Yvonne Patz. UNITE HERE be substituted for UNIT E as a Defendant in this action. Counsel for current Defendants and counsel for new Defendant UNITE HERE are to meet and confer with counsel for Plaintiffs to coordinate discovery in this action moving forward, including but not limited to, a plan to complete the depositions of Plaintiffs, which may be conducted by telephone, if necessary. (Signed by Magistrate Judge Theodore H. Katz on 5/25/10) Copies sent by chambers.(cd) Modified on 5/26/2010 (ajc).
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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ............................... DOUGLAS LEVIN, et al., Plaintiffs, 4697 (GBD)(THK) v. MORANDUM AND ORDER BRUCE RAYNOR, et al., ........................ Defendants. .----- ------ .X 6. THEODORE H. KATZ, UNITED STATES MAGISTRATE JUDG f1 Plaintiffs in this action, 139 retired off cers and staff of the International Ladies1 Garment Workers1 Un'on ("ILGWU"), or i beneficiaries of those individuals, filed th's action in 2003 against ILGWU's successor-in-interest the ~ n i o b Needletrades, , of Industrial & t Textile Employees ("UNITE"),as we1 as UNITE'S Health Benefits Committee, UNITE' s formal and ' n oqal" benefit plans if 1 I (the "Plans"), and four individuals who served as fiduciaries of the Plans (collectively, "Defendants"). 7 Plai tiffs allege that UNITE1s decision to decrease what Plaintiffs believe was their "vested" life insurance benefit violated, am ng other things, various statutory provisions of the Employee Retirement Income t Security Act of 1974 ("ERISA"). The case has be n referred to this Court for general pretrial supervision.' 1 i The case was previously referred to this Court for a Report and Recommendation on the parties1 moti ns for partial summary judgment. After the District Court (H n. George B. Daniels) adopted this Court's Report and Recom endation, granting partial summary judgment in favor of Defendant , only Plaintiffs' claims for breach of fiduciary duty and estopp 1 remain. See ., , COT' IES MAILED , ,. , rL~~ij,l I , I y Plaintiffs for Presently before the Court is a motion substitution of UNITE HERE and Workers Unite , as the alleged or the following successors-in-interest to Defendant UNITE. reasons, the Court grants the motion in part. BACKGROUND The Complaint in this action was filed on une 25, 2003. On July 8, 2004, Defendant UNITE merged with the H Restaurant Employees International Union HERE. el Employees and ( "HE ) to form UNITE itution of UNITE Plaintiffs, however, did not request su HERE as a party in this lawsuit immediately af the merger. In February 2009, a dispute arose within UNITE HERE between members of the two predecessor unions. As a result, several former UNITE members, some of whom are the individual Defendar,.tsin this action, filed multiple lawsuits in the Southern District of New York seeking declaratory and injunctive relief regarfing the assets of the now-defunct UNITE (the "Gillis Actions") .' i" n March 21, 2009, a a faction of UNITE HERE'S regional joint boardjmembers and three Canadian units officially disaffiliated from UN TE HERE to form a new union, Workers United. In light of this internal dispute a o ! mn attorneys for Defendants in this action have the unions, the P urported to cease Levin v. Ravnor, No. 03 Civ. 4697 (GBD) (THK), 2008 WL 4449457, at *3 (S.D.N.Y. Sept. 30, 2008). ' - Gillis v. Wilhelm, No. 09 Civ. See Wilhelm, No. 09 Civ. 1374; Romnev v. 2 I i representation of UNITE, and the case has effe tively come to a grinding halt. Plaintiffs, therefore, have move this Court for an tii order substituting UNITE HERE and Workers Uni ed for Defendant + UNITE, pursuant to Rule 25 (c)(3) of the Feder 1 Rules of Civil Procedure. are the Plaintiffs contend that UNITE HERE nd Workers United successors-in-interest to UNITE, aqd presence, the case cannot proceed. (See without their fs' Memorandum of Law in Support of Motion for Feb. 8, 2010 ("Pis.' Mem."), at 6-8.) The individual Defendants oppose the tion, and request that the Court stay this action pending of the Gillis Actions, at which time the appropriate nment of UNITE'S assets and liabilities will be known, UNITE HERE or Workers United (or both) , as the UNITE, can be properly substituted as Defendants. Memorandum of I= Law in Opposition to Motion for Substitution, d ted Feb. 25, 2010 (Df. 'es' Mem."), at 2-4.) UNITE HERE substitution, arguing that (1) substituting new parties will only exacerbate the parties and create case management untimely.' Further, UNITE HERE Defendants continue with that, ultimately, the in the Gillis opposes the unions as potential judgment in this case. 4 I (See UNITE HE Is Memorandum of Law in Opposition to Motion for Substitution, da ed Mar. 25, 2010 (U' s Mem.") , at 6-9. 'H ) Workers United has not t ken a position on substitution, although according to UNITE HERE, Workers United's interests are aligned with those of the individua Defendants, some of whom are now officers of Workers United and laintiffs in the Gillis Actions. DISCUSSION Pursuant to Fed. R. Civ. P. 25(c) (31, '[ilf an interest is transferred, the action may be continued by or against the original party unless the court, on motion, orders the transferee to be substituted in the action or joined with the orig-.rial party." Fed. R. Civ. P. 25 (c)(3). The decision whether to sub titute a party as a successor-in-interest ' s generally within i of the trial court." sound discretion Orqanic Cow, LLC v. Ctr. for New Enqland Dairy Compact Research, 335 F.3d 66, 71 (2d Cir. 12003). If a court believes 'that the transferee's presence would facilitate the conduct of the litigation," it may order substitution. See 7C +- Charles Allan Wright, Arthur R. Miller, and Mary Kay Kane, Federal Practice and Procedure 5 1958 (3d ed. 2007) ; see lso Luxliner P.L. Ex~ort, Co. v. RDI/Luxliner, Inc., 13 F.3d 69, 7 (3d Cir. 1993). On the other hand, a court may permit the case t proceed against the original party, although the successor wil be bound by any judgment. Luxliner, 13 F.3d at 72. There is no ime limitation on when a party may move for substitution follow: ~g a transfer of interest. See FDIC v. A. Suna & Co., Inc., 935 p. Supp. 184, 190 (E.D.N.Y. 1995). In considering a motion for substitution, a ( xrt' s discretion "may not be abused by allowing substitution in the absence of a transfer of interest." State Bank of India v. C lalasani, 92 F.3d 1300, 1312 (2d Cir. 1996). In other words, a del ?mination that a party is, in fact, a successor-in-interest is prerequisite to Finally, the substitution under Fed. R. Civ. P. 25(c) (3) determination of whether an entity is a succ tssor-in-interest "involves 'appl[icationl of law to facts.'" Ors; nic Cow, 335 F.3d at 71 (quoting Luxliner, 13 F.3d at 72) . Here, Plaintiffs, Defendants, and non-party NITE HERE are all in agreement that following the 2004 merger, UNI' E HERE became the successor-in-interestto UNITE. (See Pls.' Mem. .t2 ("As a result of the merger, UNITE HERE became UNITE'S succ ssor Defs . Mem. at 2 HERE." ) HERE ; ( . . . . I J ) ; "UNITE and [HERE] were consolid ted to form UNITE UH Mem. at 3 ( "When U [NITE] H [ERE] was formed, UNITE and combined reservation.").) all their assets and liab lities, Although Plaintiffs did not, i without t the time of the merger, seek to substitute UNITE HERE for 1 HITE, there was previously no need to do so. Throughout this lj :igation, counsel for Defendants have acted on behalf of UNITE HER1 . (See Exhibit B to Declaration of Janet E. Brown, dated Feb. 8, 2010 ("Brown 13 Decl."), Defendants' 56.1 Statement ("UNITE HE E is referred to herein as \UNITE.1").) And, from July 2004 though March 2009, there was no doubt that UNITE HERE was UNIT 's successor-ininterest. Therefore, Plaintiffs continued t proceed against UNITE, knowing both that UNITE HERE would be bou d by any judgment obtained against UNITE, and that counsel for UNI E spoke on behalf of UNITE HERE. In early 2009, the landscape of the changed I I dramatically. After a dispute arose within UNIT HERE, the Gillis Actions were filed, in which former UNITE members alleged ownership over certain UNITE HERE assets previously be onging to UNITE. Thereafter, a faction of union members formally isaffiliated from UNITE HERE to form Workers United. Given th uncertainty over UNITE'S assets (and presumably its liabilities as well), counsel for UNITE indicated that they could no longer litigate on UNITE HERE'S behalf. As a result, this action was eff ctively left at a standstill. The over 100 depositions scheduled to be taken of the octogenarian Plaintiffs could not proceed withou representation on behalf of UNITE - whether it be counsel for UNI E HERE or Workers United. And settlement talks were stymie as counsel for Defendants no longer had any authority to sett e the case. Exhibit C to Brown Decl., Email from Plaintiffs t counsel, dated May 6, 2009 maker.") . ) ( (See ants' counsel to is the decision 1 In the Court's view, UNITE HERE must be sub tituted for UNITE in order to 'facilitate the conduct of the litiga ion." Plaintiffs have demonstrated, and both Defendants and UNIT HERE admit, that ", t UNITE HERE is the successor-in-interestto UNITE s a result of the 2004 merger, despite the existence of a dispute etween UNITE HERE f and Workers United arising in 2009. Without UNI E HERE'S presence in this litigation, the case cannot proceed. I The Court cannot adopt Defendants' proposal to stay this litig tion pending the outcome of the Gillis Actions. This action w s filed nearly a 4 decade ago, and progress has already been delaye by the imposition of two discovery stays. To stall this case P P y further, while Plaintiffs await the outcome of other cases fi ed barely a year ago, would be a disservice to the aging Plaint4ffs. The need to preserve their testimony is crucial, and so lo/ng as counsel for Defendants refuse to move forward representing tqe union Defendant, its successor-in-interestmust be substituted. i Despite UNITE HERE'S contention that substipution will create nntiffs to proceed cannot overcome the interest in permitting Pla "yet another battleground" for the feuding u ions, this claim t with this action againstUNITE1ssuccessor-in-inerest - UNITE HERE - irrespective of whether or not Workers bnited e ultimately establishes any right to UNITE'S assets and liabilities. As an initial matter, it is not uncommon to have c -defendants whose interests are not directly aligned. Furt er, in ordering 4 substitution, the Court is not making any dete allocation of assets and liabilities between ination as to the UNIT^ HERE and Workers f United. That question remains to be decided in t e Gillis Actions. Finally, UNITE HERE undermines its own argument, by proposing that I counsel for Defendants proceed with this case, hile at the same c time arguing that counsel for Defendants ' o Id not represent U [NITE] H [ERE]." (See UH Mem. at 7.) As the present, and potentially future, successor-in-interest to ITE, UNITE HERE would be bound by any judgment against Defendants; certainly, UNITE HERE does not propose having counsel for the ind vidual Defendants - whose interests are now adverse to UNITE H RE in the Gillis Actions - defending this case on its behalf.3 h The Court does not, however, find that subst'tution of Workers United is appropriate at this time. ted, UNITE HERE indisputably became the the 2004 merger. UNITE following It was only after the Gillis 4ctions were filed in 2009, and Workers United was formed, that dispute arose as to the ownership of UNITE'S assets and But, until the plaintiffs in the Gillis Actions is the only successor-in-interest to UNITE. Because the Court cannot yet definitively conclude that Workers United is Defendant UNITE'S 1 UNITE HERE'S proposal is more likely dri to deflect the pre-trial costs of defending Court has no doubt that if UNITE were a would be actively requesting substitution. The successor-in-interest, substitution of workere United is not I warranted at this time. See Chalasani, 92 F. 3d/at 1312 (holding that a court cannot "allow[] substitution in the absence of a transfer of interest"). Nonetheless, the Court is confident that Workers United's interests will be represen ed here as the 4 individual Defendants are former UNITE officers ho "have all moved to 'Workers United, I" some of whom are plainti fs in the Gillis 1 Actions, the assets and liabilities is determined in the G'llis 4 Actions. (See UH Mem. at 9.) Once the a110 ation of UNITE'S Court may, on motion, reconsider substitution of Workers United as a Defendant in this action. CONCLUSION For the foregoing reasons, IT IS HEREBY Ci RDERED that UNITE 4 HERE be substituted for UNITE as a Defendan in this action. Counsel for current Defendants and counsel for new Defendant UNITE HERE are to meet and confer with counsel jor Plaintiffs to coordinate discovery in this action moving forwbrd, including but not limited to, a plan to complete the depositibns of Plaintiffs, 7M q which may be conducted by telephone, if necessaky. So Ordered. THEODORE H. KATZ Dated: May 25, 2010 New York, New York