Lewis v. Tuscan Dairy Farms, Inc.

752 F. Supp. 116, 140 L.R.R.M. (BNA) 2845, 1990 U.S. Dist. LEXIS 15809, 1990 WL 191522
CourtDistrict Court, S.D. New York
DecidedNovember 26, 1990
Docket87 Civ. 7607 (MBM)
StatusPublished
Cited by9 cases

This text of 752 F. Supp. 116 (Lewis v. Tuscan Dairy Farms, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lewis v. Tuscan Dairy Farms, Inc., 752 F. Supp. 116, 140 L.R.R.M. (BNA) 2845, 1990 U.S. Dist. LEXIS 15809, 1990 WL 191522 (S.D.N.Y. 1990).

Opinion

OPINION AND ORDER

MUKASEY, District Judge.

Plaintiffs are former utility workers at the Ozone Park, New York plant of Liberty Farms, Inc., a milk processor and distributor. Utility workers work in the milk processing plant and deliver milk to schools or to customers who need supplemental deliveries or who order milk irregularly; they are distinguished from route workers, who deliver milk along regular routes. Plaintiffs claim that defendant William Whelan, sued here as Willie Whelan, president of the local union they belonged to, violated his and the union’s duty to represent them fairly in connection with defendant Tuscan Dairy Farms, Inc.’s purchase of the assets of Liberty Farms. In particular, they claim that they were unfairly denied the contractual right to be hired at Tuscan’s Linden-hurst and Woodside, New York plants with their seniority determined based on their tenure at Liberty Farms, a right they assert is guaranteed by the terms of the collective bargaining agreement. As a result, they seek recovery against both Whe-lan and Tuscan under § 301 of the National Labor Relations Act, 29 U.S.C. § 185. 1 Following denial of Tuscan’s summary judgment motion in June 1989, the case was tried to the court as to liability only from July 30 to August 3, 1990, with post-trial submissions received thereafter.

After evaluating all the evidence, including but not limited to the credibility of the witnesses, I find for the reasons set forth below that plaintiffs have proved liability, and accordingly will recover such damages as may be either determined in a later proceeding or agreed to among the parties.

I.

Liberty Farms was one of 11 affiliated companies owned or controlled by Jules Kotcher that were the subject of a series of purchase contracts signed on June 22, 1987. These contracts gave Tuscan the exclusive right to the output of the Kotcher companies, referred to herein collectively as Liberty Farms, and obligated Tuscan to buy Liberty Farms within 18 months or when Tuscan terminated the output contract, whichever came first. In addition, Kotcher and other owners and principals of Liberty Farms signed non-competition agreements which Tuscan could enforce even if the output agreement was abrogated. Tuscan also agreed to indemnify Liberty Farms for all liability arising under the Employee Retirement Income Security Act of 1974, known as ERISA. Tuscan exercised the option to buy Liberty Farms on July 20, 1987. (PX 2-9, 33, 34, 45; see also, PX 35, 38, 40 reflecting payment of ERISA liability)

That acquisition occurred during a period of upheaval in the milk business in New York State following a court decision declaring unconstitutional New York laws that had restricted distribution of milk originating outside the state. Farmland Dairies v. Commissioner of New York State Department of Agriculture and Markets, 650 F.Supp. 939 (E.D.N.Y.1987). After that decision, the unions representing milk industry workers in New York agreed -to and did renegotiate their contracts in order to help in-state milk processors try to meet the price competition from out-of-state employers with lower labor costs. (Tr. 357- *118 62) Beginning in January 1987, soon after the Farmland opinion, Whelan, president of Teamsters Local 584, began meeting with Kotcher and with Tuscan president Louis Caiola to discuss Tuscan’s possible acquisition of Kotcher’s companies, a move Whelan welcomed because he believed Kotcher did not have the resources or the will to compete with Farmland. (Tr. 374-88)

Among the entities related to Liberty Farms was Queens Farms, Inc., which operated a milk processing plant in Ozone Park. In February 1987, soon after Whe-lan commenced his discussions with Caiola and Kotcher, rumors of a possible sale began to circulate at the Ozone Park plant, and grew more persistent by the spring. Eventually, the rumors were discussed at general membership meetings of the local, but Whelan provided no definite information to the members as to whether a sale was imminent. (Tr. 81-84, 89-90) Of particular concern to the employees at Ozone Park was what rights they would have if Tuscan bought the plant, closed it, and then switched production to other Tuscan facilities. General Rule IV C of Schedule C of the master agreement between Local 584 and the milk producers, including Liberty Farms, provided in pertinent part as follows:

C. Consolidations and Mergers

In all consolidations of branches or plants, company craft group seniority shall prevail for the purpose of layoffs, vacations, bidding and in all other usual respects.
If thé [ejmployer acquires all or any part of a milk business or all or any part of a route in any milk business and merges or consolidates the same with its own business, or handles the same in any other manner, ... the [ejmployer shall be required to assume responsibility for the employment of the employees who elect to or who are transferred to the new [ejmployer as provided herein who shall enjoy craft group seniority, on the basis of the period of employment in the business acquired for the purpose of layoffs, vacations, bidding and in all other usual respects.

(PX 1, p. 30)

Whelan was up for reelection in 1987 and the potential shutdown of Ozone Park and the insistence of the workers at that plant that their seniority be honored presented him with a political problem, as he acknowledged at trial. (Tr. 415) Indeed, one Ozone Park employee testified that Whelan told him explicitly that because it was a political year, Whelan could not risk the wrath of the more than 200 men at Tuscan’s Lindenhurst and Woodside plants, which would pick up most of the production capacity and distribution functions of the Ozone Park plant after the acquisition, simply to please the 100 or so utility workers at the Ozone Park plant, who were relatively senior and would displace workers at Lindenhurst and Woodside if allowed to take their Ozone Park seniority to those plants. (Tr. 335-36, 407-08) Another testified to a similar conversation on the day the Ozone Park plant closed. (Tr. 297-98)

How Whelan responded to the concerns of the Ozone Park employees, and what position he took publicly as to the applicability of the clause quoted above, was sharply disputed at trial.

Whelan conceded at trial that although General Rule IV C applied as a general matter to utility employees (Tr. 449), he made no attempt to determine how the Tuscan — Liberty Farms transaction was structured or to examine the documents underlying that transaction. (Tr. 451-52) Union counsel John Driscoll testified that in late May or early June Whelan told him that the men at Ozone Park were beginning to ask about their seniority rights and about the applicability of Section IV C, and that he then did what he considered to be sufficient legal research and reported to Whelan as follows:

“The result of all of this is I came to the conclusion what Willie had to do is to make a determination what is in the best interest of the general membership? Not what is in the best interest of Ozone Park. Not what is in the best interest of Willie Whelan. But what is in the best *119

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Related

Lewis v. Whelan
99 F.3d 542 (Second Circuit, 1996)
Lewis v. Tuscan Dairy Farms, Inc.
829 F. Supp. 665 (S.D. New York, 1993)
Alier v. Tuscan Dairy Farms, Inc.
979 F.2d 946 (Second Circuit, 1992)
Jose Alier v. Tuscan Dairy Farms, Inc.
979 F.2d 946 (Second Circuit, 1992)
Guzman v. Bevona
810 F. Supp. 509 (S.D. New York, 1992)

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Bluebook (online)
752 F. Supp. 116, 140 L.R.R.M. (BNA) 2845, 1990 U.S. Dist. LEXIS 15809, 1990 WL 191522, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lewis-v-tuscan-dairy-farms-inc-nysd-1990.