text:
    Ariel SHARON, Plaintiff, v. TIME, INC., Defendant.
    No. 83 Civ. 4660 (ADS).
    United States District Court, S.D. New York.
    Nov. 26, 1984.

      Shea & Gould, New York City (Milton S. Gould, Bernard D. Fischman, Arnold Forster, Richard M. Goldstein, Adam B. Gilbert, and Andrea B. Feller, New York City, of counsel), for plaintiff.
    Cravath, Swaine & Moore, New York City (Thomas D. Barr, Robert S. Rifkind, Paul C. Saunders, Stuart W. Gold, Ronald K. Chen, Kathleen L. Beggs, Israel Leshem, Stephen S. Madsen, Ellen S. Oran and Anne E. Verdón, New York City, of counsel) and Time, Inc., New York City (William M. Guttman, Harry M. Johnston, III, and Robert P. Marshall, Jr., New York City, of counsel), for defendant.
   MEMORANDUM OPINION AND ORDER

SOFAER, District Judge:

The plaintiff, Minister Ariel Sharon, has moved to strike from defendant’s witness list the names of several persons whom the defendant, Time, Inc., may wish to call at trial. Defendant has described these witnesses as “experts”; they include scholars, writers, a journalist, a diplomat, and a retired general. Time’s response to plaintiff’s interrogatories provided no specific information as to how any of these witnesses would testify if called. Instead, Time has set out in general the subjects on which all the witnesses would testify. In essence, these witnesses would testify to such matters as the modern history of Lebanon, Israeli-Lebanese relations, and information about massacres which was available to Minister Sharon. Time’s purpose in calling these witnesses is to support its defense of “substantial truth” of the alleged libel by establishing that Sharon’s decision to allow the Phalangists to enter the camps represented encouragement or approval of the ensuing massacre:

The experts will testify about the relationships among nations and parties in the Mideast and in particular about the relationships between Israel and its representatives and the Phalangists, other Lebanese factions, the PLO and other Palestinians and the historical and social patterns of “blood revenge” in Arab society and in Lebanon. The expert testimony will show that anyone with as much knowledge of the Mideast and the parties involved as Minister Sharon had could be reasonably certain that, given the chance, the Phalangists would not only avenge the assassination of Bashir Gemayel but that bloodshed of innocents would be the predictable result. Our experts will testify in substance that letting the Phalange into the camps was just like throwing a poisonous snake into a bed. As one writer said:
“For anyone with the slightest understanding of Lebanon, the massacre was a foregone conclusion once the Lebanese Forces were authorized to enter the camps. It was just as natural as cats chasing rats.” J. Randal, Going All the Way, Christian War lords, Israeli Adventurers, and the War in Lebanon, Random House 1983, p. 16.
The expert testimony relates directly to the issues of plaintiffs intent and knowledge at the time he permitted the Phalangists to enter the camps. Certainly no one can know for certain what was in Minister Sharon’s head. But from this evidence of the type to be elicited from the experts it is at least possible to draw an inference to the ultimate issue; that plaintiff’s decision to order the Phalange into the camps, in light of such knowledge, amounted to encouragement or condonation of the massacre at Sabra and Shatilla.

Memorandum of Time Incorporated in Opposition to Plaintiff’s Motion in Limine To Strike the Experts From Defendant’s Trial Witness List at 3-4 (Oct. 17,1984) (footnote omitted).

Plaintiff objects to Time’s proposed evidence and witnesses on several grounds. Most fundamentally, he claims the evidence is irrelevant, since even if Time proved that plaintiff’s actions “amounted to” encouraging or condoning the Phalangists’ massacre of noncombatants, such proof would not constitute “substantial truth” of the alleged libel Time actually published. In addition, plaintiff claims that Time’s proposed evidence is cumulative to the evidence in the Kahan Commission Report and therefore unnecessary, that the witnesses proposed could not give proper expert testimony, and that the prejudicial effects of the evidence far outweigh its probative value.

Plaintiff is correct in arguing that Time cannot establish “substantial truth” by proving that plaintiff “should” or “must” have known that a massacre would occur. That proposition would be linguistically indistinguishable from, and the moral equivalent of, the Kahan Commission’s conclusions. Thus, for example, the Commission found that the danger of acts of slaughter “should have been in the consciousness of every knowledgeable person who was close to this subject, and certainly in the consciousness of the Defense Minister, who took an active part in everything relating to the war.” Report at 68. If Time had stated in its article that Sharon “should” or “must” have known a massacre would occur, its statement would have been protected either as fair comment, neutral reportage, or opinion. See Sharon v. Time, Inc., 599 F.Supp. 538, 554, 555 (1984). If Time’s statement is defamatory, it must be because it alleges something more. See Sharon v. Time, Inc., 575 F.Supp. 1162, 1168-72 (1983).

At a recent conference, however, Time’s counsel made clear that Time’s proposed version of substantial truth goes beyond and contradicts the conclusions of the Kahan Commission. The Commission was strongly critical of Minister Sharon’s decision to allow the Phalangists to enter Sabra and Shatilla; it found that he “made a grave mistake when he ignored the danger of acts of revenge and bloodshed by the Phalangists against the population in the refugee camps,” Report at 69, and that his “blunders” in “not ordering appropriate measures for preventing or reducing the danger of massacre as a condition for the Phalangists’ entry into the camps____eonstitute[d] the non-fulfillment of a duty with which the Defense Minister was charged,” id. at 71. But the Commission also concluded that there was no evidence that Minister Sharon had intended that harm befall the noncombatant population and that the Phalangists’ acts were not concurred in or assented to by any Israeli official:

[I]n having the Phalangists enter the camps, no intention existed on the part of anyone who acted on behalf of Israel to harm the non-combatant population, and ... the events that followed did not have the concurrence or assent of anyone from the political or civilian echelon who was active regarding the Phalangists’ entry into the camps.

Id. at 52. Time’s attorneys have now clearly indicated that they intend to prove about Sharon precisely what the Commission found was not true — that he intended to harm noncombatants and concurred in and assented to the massacre. See Trial Tr. at 715-16, 722-24 (Nov. 21, 1984).

Plaintiff claims that even Time’s argument that Minister Sharon intended to harm noncombatants fails to amount to a “substantial truth” of the very concrete libel alleged. But Time’s argument is sufficiently related to the “sting” or “gist” of the alleged libel to justify its full and fair presentation to the jury. The jury can find that Time’s published statement was defamatory only if it finds that Time suggested that plaintiff knew in advance that acts of revenge would occur in Sabra and Shatilla, and that he lied to the Commission in claiming otherwise. Defendant is permitted to prove the substantial truth of this statement by establishing any other proposition that has the same “gist” or “sting” as the original libel, that is, the same effect on the mind of the reader. Fleckenstein v. Friedman, 266 N.Y. 19, 23, 193 N.E. 537, 538 (1934); see Lawlor v. Gallagher Presidents’ Report, Inc., 394 F.Supp. 721, 730 (S.D.N.Y.1975), remanded, 538 F.2d 311 (2d Cir.1976). The gist or sting of the published libel is that, contrary to the Commission’s explicit findings, Sharon did intend to harm noncombatants by sending the Phalangists into the camps, that he concurred and assented in the events that followed, and that he thereafter lied about his intentions. Time has now made clear that it wishes to prove precisely this gist which, although more explicitly defamatory than Time’s original statement, represents the only construction of that statement legally sufficient to justify plaintiff’s suit. Furthermore, even if this broadened and more explicit defamation fails technically to fit within a narrow version of the “substantial truth” doctrine, Time would be entitled to prove its present claim for the purpose of mitigating damages. See Crane v. New York World Telegram Corp., 308 N.Y. 470, 479, 126 N.E. 753, 759 (1955). If Time succeeded in establishing its claim that Minister Sharon intended to harm noncombatants and acted to give effect to his intentions, then no award of damages could be tolerated; its argument in the special circumstances of this litigation thus amounts to the practical as well as the moral equivalent of substantial truth. Accordingly, . Time must be permitted to present testimony on appropriate subjects to prove this claim.

Plaintiff’s claims that the testimony proposed is cumulative, improper, and potentially prejudicial have considerable merit. Excessive exposure to cumulative evidence of the prior history of massacres among Lebanese groups, for example, could unfairly prejudice the jury (because of its inflammatory nature), could confuse the issues and mislead the jury (because those actions were taken without IDF supervision), and could waste time (bécause the Report contains sufficient evidence on this point and plaintiff has admitted that he knew of the prior massacres). Fed.R.Evid. 403. Time should not attempt to present evidence already in the Report through time-consuming witnesses. It should pick one witness to summarize the points it seeks to emphasize, and should add other witnesses only if they can present noncumulative, admissible evidence concerning Sharon’s activities or statements, and only then if plaintiff is unwilling to stipulate to the facts proposed to be proved. The witness or witnesses called by Time will be limited to testifying about historical fact, and may not speculate about plaintiff’s subjective state of mind. Counsel must argue to the jury as to what inferences should be drawn from the testimony presented. Evidence that allegedly proves that Sharon is a murderer will tend to be “prejudicial” in the everyday sense of the word. Nevertheless, any proper evidence helpful to Time in establishing its contention will be allowed, as the prejudice caused by proper evidence will not be “unfair.” But the grave nature of the allegation against Sharon requires that Time be prevented from using inflammatory and improper hearsay, including other newspaper articles, to establish its claim of substantial truth. Time must be careful to avoid reading inadmissible material to the jury, as almost occurred in connection with Israel’s Lebanon War, a book by two reporters that Time wrongly attempted to place before the jury as a “learned treatise.” References to articles that are admissible for purposes of proving reputation or actual malice must only occur in proper context, that is, when defendant’s line of questioning or argument pertains to these issues, and will be accompanied with proper cautionary instructions from the court.

The broad version of substantial truth that Time seeks to establish also raises a question as to who properly bears the burden of proof on the issue. The parties agree, under the circumstances of this case, that a public-figure plaintiff must bear the burden of proving the falsity of the published libel by clear and convincing evidence. See Cianci v. New Times Publishing Co., 639 F.2d 54, 59 (2d Cir.1980); Buckley v. Littell, 539 F.2d 882, 889 (2d Cir.1976), cert, denied, 429 U.S. 1062, 97 S.Ct. 785, 50 L.Ed.2d 777 (1977). Plaintiff will be required to prove both that he had no conversation with the Gemayels at Bikfaya about the need to avenge the assassination of Bashir, and that no details of such a conversation are present in Appendix B of the Commission Report. Furthermore, plaintiff will also be required to prove that he had no conversation about revenge at any other meeting with the Phalangist leadership after Bashir’s assassination and before they entered Sabra and Shatilla, and that Appendix B contains no references to any such conversation.

Plaintiff cannot fairly be required, however, to bear the burden of proof on Time’s broad claim of substantial truth. This claim has no factual similarity to the story Time printed. The “substantial truth” doctrine arose in the common-law context, where truth was an affirmative defense on which the defendant had the burden of proof. While that allocation of the burden of proof must be reconsidered after New York Times v. Sullivan with respect to the truth of the story actually printed, including any minor or insignificant variations on the published story, it need not, and should not, enable a defendant at trial to allege substantially different facts than were printed and thus impose upon a plaintiff the burden of disproving factual statements that were not made. Indeed, in this case Time claims that, when it printed the story at issue, it did not even ■intend to suggest what it now seeks to prove. In these circumstances, Time must bear the burden of proving its expansive version of substantial truth by a preponderance of the evidence. Finally, in order to prevent confusion, given the many confusing verbal variants by which the issue of substantial truth could be placed before the jury, the parties will be required to argue this matter to the jury in one consistent form which takes as its point of departure the findings in the Commission Report. Thus, Time may attempt to prove that “in having the Phalangists enter the camps,” Sharon did have an “intention ... to harm the non-combatant population,” and that the events that followed did have Sharon’s “concurrence and assent.”

* * sis

Time’s strategy concerning substantial truth — to prove in its own defense that plaintiff is a murderer of noncombatants— cannot be treated as simply an alternative, argument to justify a verdict in its favor. At the most mundane level, because Time is affirmatively advancing its claim of substantial truth, Time represents that “to the best of [its] knowledge, information and belief formed after reasonable inquiry [its claim] is well grounded in fact ... and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.” Fed.R.Civ.P. 11. If Time’s argument of substantial truth not only fails, but the jury also concludes, by way of special interrogatory, that the contention that Sharon knowingly concurred in and assented to the massacre lacked any substantial basis in the evidence, then the costs, including attorneys’ fees, caused by this claim may be imposed upon Time or upon its attorneys. Id.

The court is not privy to all the evidence Time has accumulated on this issue. Thus far, Time appears to be relying on the Report, which is in evidence, and upon some writings by journalists which are inadmissible on the issue of truth. Unless other evidence becomes available, the record could lead a jury to conclude that Time’s substantial truth argument was made without any substantial basis or even in bad faith. The jury will no doubt be made aware, as plaintiff has repeatedly noted, that every one of Time’s employees had read the Report before the article at issue was published, and that each of them has testified that he or she had no reason to believe that Sharon knew in advance that the massacre would take place. Implicitly, therefore, Time’s employees have thus far testified that they do not believe that the Report supports a claim that Sharon intended to harm noncombatants. See, e.g., Halevy Tr. at 669-70, 675; Kelly Tr. at 226-28; Smith Tr. at 448-49; Doyle Tr. at 184; Gonzalez-Alfonso Tr. at 147. The Report in fact contains strong evidence to supports its conclusion that Sharon did not intend to harm noncombatants and did not concur in or assent to the massacre. If this case were being tried without a jury, as Time has sought, the court would entertain Time’s present effort to prove substantial truth only if Time represented that it had substantial evidence beyond that contained in the Commission Report.

Time may have even more to lose through the strategy it has adopted than an adverse jury finding on substantial truth, and the costs of litigating the issue. First, its argument on substantial truth could undermine its position on whether the statement at issue was defamatory. The jury may well be unimpressed by the claims of Time’s reporters that they did not mean to defame Sharon, when Time’s attorneys are simultaneously arguing that Sharon is a murderer largely on the basis of the same evidence its reporters possessed when they wrote the article. Second, Time’s arguments on substantial truth could adversely affect its position on the issue of actual malice. The Supreme Court has given Time extraordinary protection. Time is able to assume the posture that it may have made a mistake but that, however negligently or even spitefully its reporters acted, they believed their story was true. This powerful protection, which requires plaintiff to prove Time’s actual malice by clear and convincing evidence, is still available to Time. But the credibility of Time’s employees as to their state of mind may be affected by what they say — and by what Time’s other witnesses say and its lawyers argue — on the substantial truth issue. Instead of arguing simply that Time’s reporters are honest people who had nothing defamatory to say about plaintiff, Time apparently intends to present an incongruously ambivalent and aggressive posture, that may in both obvious and subtle ways undermine its credibility: that, although Time’s reporters originally had nothing defamatory to say about plaintiff, they have now discovered that he was in fact the murderer they did not mean to say he was. The potential impact of this difference in posture on the actual malice issue cannot be fully anticipated, but it is likely to be great. It is likely to be aggravated, moreover, if Time is ultimately compelled to acknowledge that its original story was incorrect. If such a concession is ever required in the course of its present strategy, Time may have lost the opportunity simply to acknowledge its error and to use that acknowledgement as evidence of a continuing lack of actual malice; instead, it will be acknowledging one error while attempting to prove that the gist or sting of what it claims it never said is nevertheless true. The jury may give less credence to Time’s claim of honest error under such circumstances than it would if Time simply conceded its story was wrong and relied on its constitutional defense.

Finally, and perhaps most significantly, Time’s argument on “substantial truth” — if it is rejected by the jury — could have a profound impact on the damages potentially recoverable in this case. Plaintiff has no special ór pecuniary damages. He claims only damage to his reputation, including the humiliation and loss of stature he has allegedly suffered as a result of Time’s story. This claim is sufficient to go to the jury. But as a member of the Israeli Cabinet with a huge following of supporters, and as a person whose reputation is highly controversial and has been scarred by the Commission Report and other, less respectable commentary, plaintiff faces formidable obstacles to recovering substantial compensatory damages. Time’s argument of substantial truth, however, in which it makes the gravest possible charges one can level at a professional soldier, may well lead the jury to give greater credence and weight to plaintiff’s claims of reputational injury and personal humiliation than might otherwise be the case. Furthermore, if the jury rejects Time’s defenses, Time’s efforts to prove substantial truth through inflammatory claims about the plaintiff may lead the jury to award punitive damages, and Time Inc.’s great assets may lead the jury to conclude that only a very substantial award would serve the deterrent purposes intended by the award of punitive damages in New York. See Goldwater v. Ginzburg, 414 F.2d 324, 341-42 & n. 29 (2d Cir.1969), cert, denied, 396 U.S. 1049, 90 S.Ct. 701, 24 L.Ed.2d 695 (1970); Toomey v. Farley, 2 N.Y.2d 71, 83, 138 N.E.2d 221, 228, 156 N.Y.S.2d 840, 849 (1956). If these developments occur, Time will have largely brought them upon itself, and may not be able convincingly to blame the law or the jury for its plight.

Time should be aware that its strategy of broadening and making explicit the alleged libel is a tactic that has traditionally been recognized as a possible basis for aggravating damages. The law protects parties to a judicial proceeding from damages caused by all reasonably justifiable, good-faith arguments made in the course of the litigation. See Ann-Margret v. High Society Magazine, Inc., 498 F.Supp. 401, 408 (S.D.N.Y.1980); The Savage Is Loose Co. v. United Artists Theatre Circuit, 413 F.Supp. 555, 560-61 (S.D.N.Y.1976); Schulman v. Anderson Russell Kill & Olick, P.C., 117 Misc.2d 162, 166-67, 458 N.Y.S.2d 448, 452-53 (Spec.Term 1982). Here, although Time’s substantial truth argument is conceptually defensible, the jury may conclude that Time had so little evidence to support this claim that its assertion unjustifiably aggravated the injury to plaintiff’s reputation and feelings. The law of New York — and the common law generally — has long recognized that under appropriate circumstances a recovery in damages for an unjustifiable aggravation of injury to reputation during litigation is appropriate. See Holmes v. Jones, 121 N.Y. 461, 466-67, 24 N.E. 701 (1890) (proper for judge to charge jury that if defendant “failed to establish the justification of the libel set up in the answer ... and ... they found it was set up in bad faith they could take that into consideration in estimating the damages to be awarded by them”); Distin v. Rose, 69 N.Y. 122, 127-28 (1877) (if jury “believed that [a reiteration of the libel ‘in express terms’] was inserted in the answer wantonly or maliciously, and without probable cause for believing it true, they might consider it upon the question of damages”); 35 N.Y.Jur., Libel and Slander § 187, at 105 (1964) (repetition of libel in pleadings, if done in bad faith, may be considered by jury in determining damages).

Indeed, in Reynolds v. Pegler, 123 F.Supp. 36, 40 (S.D.N.Y.1954), affd, 223 F.2d 429 (2d Cir.), cert, denied, 350 U.S. 846, 76 S.Ct. 80, 100 L.Ed. 754 (1955), Judge Wienfeld upheld an award of substantial punitive damages due to the defendants “malevolence and ill-will” in part because the defendants’ amended answer, filed after plaintiff had denounced the alleged libel as false, “not only repeated' but expanded upon the charges. Thus, instead of a retraction, there was a reiteration and broadening of the original charges.” In affirming this decision, the Second Circuit explicitly approved Judge Wienfeld’s reasoning:

There is always a certain risk involved in the pleading of truth as a defense, since in proper cases and under proper instructions the jury may infer [common-law] malice from the fact that a defendant repeats the defamatory matter, which is later found to be false. But here answers were served on behalf of each defendant, which not only repeated but elaborated upon the matters set forth in the original defamatory publication; even the tone and characteristics of the pleading are reminiscent of the style of the column in suit____

223 F.2d at 434.

Nothing in the doctrine of New York Times v. Sullivan requires that these seldom-used but sound principles be jettisoned. The favorable treatment accorded to the judgments of reporters in their reportorial function provides no support for deferring to an excessively aggressive and hence unnecessarily costly litigation strategy adopted by the press at trial. The press, in short, has no more right than any other litigant — and far less reason in light of its constitutional defenses — to turn a libel litigation into an unlimited war. If Time loses this case, the jury will be asked whether Time had any basis for making its claim of substantial truth and whether the plaintiffs damages were aggravated by the explicit contention at this widely publicized trial that Sharon intentionally authorized the murder of noncombatants.

Plaintiff has argued throughout this litigation that Time’s conduct, and now its litigation strategy, is the product of bias in various forms. Apart from the actual malice claim, these contentions have been rejected as a matter of law. Time is a vigorous, critical journal that strives to express its point of view in reporting the weekly news-. As far as the existing record indicates, and without commenting on the specific story in dispute, Time is no less and no more in character with respect to the general subjects at issue in this case than it is in its writings on any other subject.

The impetus for Time’s decision to expand the issues in this case — and thereby to raise the stakes at risk — appears to stem from the trauma of the libel litigation process itself, rather than from ad hominem considerations. While the rule in New York Times v. Sullivan has conferred a powerful defense upon the press, it has opened the minds of reporters as well as their newsrooms to unfriendly searches and public scrutiny. See Herbert v. Lando, 441 U.S. 153, 169-75, 99 S.Ct. 1635, 1645-48, 60 L.Ed.2d 115 (1979). The “actual malice” discovery process has in this case, as it must in other similar cases, forced Time to cooperate in costly and disruptive proceedings, consuming material and human resources that Time exists to devote to more constructive ends. It has led to the development of a case against Time based in part on revelations made by Time during its own internal scrutiny of a reporter, and in unprivileged but nonetheless private communications among Time personnel. One cannot escape the impression that Time, like other libel defendants who can afford to fight, has concluded that its best defense is to inflict as much damage upon plaintiffs in the litigation process as plaintiffs are able to inflict on Time. This is an untenable and unhealthy situation, but its remedy lies in adjusting the existing law to enhance conciliation and respect for opposing views and human feelings, rather than in heightening conflict and escalating defamatory attacks within the litigation process.

The court has made clear the benefits to Time of a limited litigation strategy that relies on its constitutional defense. In the event that Time becomes convinced its original story was wrong, it will be able to enhance the credibility of its claim of good faith by simply saying so, and leaving the ultimate issue of Minister Sharon’s morality to the arena of public debate, where it belongs. In applying New York Times v. Sullivan, courts should permit the press to demonstrate good faith by subsequent acts and declarations, just as plaintiff here has to an extent successfully claimed he should be able to demonstrate actual malice by such acts and declarations. Time is of course free to behave as it chooses, and to litigate all relevant issues aggressively. It will not be required to issue retractions or to behave moderately in the face of attacks on its good faith. But if the courts have special responsibilities in reviewing the evidence in libel cases, they must also have the responsibility to make clear the potential risks of a strategy enough in advance so as to avoid the kinds of findings and verdicts that the Supreme Court has ordered scrutinized after the fact. This memorandum will serve to put both sides on notice of the risks they run in this litigation. Plaintiff runs the risk of losing on the basis of substantial truth, even if he succeeds in proving the story actually printed about him was false. Defendant runs the hazards involved in converting the litigation from a low-risk dispute primarily over its reporters’ actual malice into a potentially high-stakes venture in which a substantial recovery will be a real possibility. In reviewing the verdict that results, neither this court nor any other is likely to disregard the parties’ conscious decisions to accept these risks.

In conclusion, the parties should avoid the temptation to vent their increasingly inflamed views of each other in a drama whose conclusion could be a major disaster for at least one of them. A detached view of the evidence suggests that neither side deserves to suffer such a disaster; and any realistic view of the litigation process recognizes that the verdict ultimately rendered will be the product of inexpert and unscientific judgments, made on the basis only of the available and admissible evidence.

The motion to strike witnesses on the issue of “substantial truth” is denied, but defendant is ordered to limit both the extent and nature of such testimony as described above. Although publication of this Memorandum would be unlikely to affect the jury in any respect, its disclosure is hereby ordered limited to the parties and their attorneys so as to avoid any possible disclosure to the finders of fact.

SO ORDERED.


source: Caselaw Access Project

author: MENTZ, District Judge.

license: Public Domain

text:
    CARPENTERS LOCAL UNION NO. 1846 OF the UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA, AFL-CIO, et al. v. PRATT-FARNSWORTH, INC., et al.
    Civ. A. No. 80-1570.
    United States District Court, E.D. Louisiana.
    Dec. 6, 1984.
    See also, 609 F.Supp. 1302.

      Marie Healey, Gardner, Robein & Healey, Metairie, La., for plaintiffs.
    James D. Carriere, Kullman, Inman, Bee & Downing, New Orleans, La., for defendants.
   MEMORANDUM OPINION

MENTZ, District Judge.

Pratt-Farnsworth, Inc., a defendant in this case, has moved for summary judgment against the above-captioned plaintiffs. The mover asserts that it is entitled to summary judgment, contending that all claims under Section 301 of the Labor Management Relations Act should be dismissed because plaintiff unions have failed to first exhaust the grievance and arbitration provisions of the collective bargaining agreement.

The United States Supreme Court has steadfastly held that contract grievance procedures, i.e. arbitration, is the preferred method for settling labor disputes. United Steelworkers v. Enterprise Wheel and Car Corporation, 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960); Republic Steel Corp. v. Maddox, 379 U.S. 650, 85 S.Ct. 614, 13 L.Ed.2d 580 (1965); Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967). Generally, an employee is bound by the collective bargaining agreement’s terms governing the enforcement of contractual rights and he must exhaust the contract’s remedies before seeking a judicial remedy. Republic Steel Corp., supra; Vaca, supra; Rabalais v. Dresser Industries, Inc., 566 F.2d 518 (5th Cir.1978). The duty to exhaust contractual remedies prior to bringing a Section 301 suit applies to unions as well. National Post Office Mail Handlers Local No. 305, LIUNA, AFL-CIO v. United States Postal Service, 594 F.2d 988, 991 (4th Cir.1979). In the case at bar, the defendant claims that the unions have violated the exhaustion doctrine by their failure to exhaust the grievance and arbitration provision of the contract prior to their seeking a judicial remedy.

Usually for every general rule there is at least one exception and this is the case here. In fact, the Supreme Court has delineated three exceptions to the general rule that plaintiffs must exhaust all contractual remedies before seeking judicial intervention:

(1) When conduct of the employer indicates he repudiates the contract;
(2) When the union wrongfully refuses to process an employee’s grievance; and
(3) When resort to arbitration would be futile.

Vaca, supra; Glover v. St. Louis-San Francisco R. Co., 393 U.S. 324, 89 S.Ct. 548, 21 L.Ed.2d 519 (1969); Clayton v. International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America, 451 U.S. 679, 101 S.Ct. 2088, 68 L.Ed.2d 538 (1981). Plaintiffs submit that exceptions one and three are applicable to the case at bar.

After reviewing the collective bargaining agreement’s contractual grievance and arbitration procedure, it is apparent that it would have been futile for the plaintiffs to have attempted utilization of the arbitration mechanism. Article XXIV, the “Disputes and Grievance Procedure”, states clearly that any time there is a dispute “involving an alleged claim of a particular provision of this Agreement ” [emphasis added] the parties should make a serious effort to settle the dispute. In the case at bar, there is no provision in the collective bargaining agreement that directly addresses the issue in dispute, that it, the issue concerning related entities of a signatory employer. Specifically, there is no clause present in the agreement allowing claims seeking to bind related entities of a signatory employer under the alter ego or the single employer theory.

It logically follows that certain controversies between parties to an agreement will not be arbitrable if the controversy in question is not included in the agreement. Lodge No. 12 District No. 37 International Association of Machinists v. Cameron Iron Works, 257 F.2d 467 (5th Cir.1958). The policy of federal labor law is to restrict arbitration under the collective bargaining agreement to matters which the parties have agreed voluntarily to arbitrate. See Refinery Employees’ Union of Lake Charles Area v. Continental Oil Co., 160 F.Supp. 723 (W.D.La.1958), affirmed 268 F.2d 447 (5th Cir.), cert, denied, 361 U.S. 896, 80 S.Ct. 199, 4 L.Ed.2d 152 (1959). Therefore, it would have been futile for plaintiffs to pursue the contractual grievance and arbitration procedures outlined in the collective bargaining agreement because the issue in dispute is not covered by arbitration since the parties did not agree to arbitrate such matters. Thus, plaintiffs are excused from exhausting the grievance-arbitration procedures since it would have been a futile or unduly protracted procedure. Vaca, supra. See also United Protective Workers of America v. Ford Motor Co., 194 F.2d 997, 1002 (7th Cir.1952); United Protective Workers of America, Local No. 2 v. Ford Motor Co., 223 F.2d 49, 51, 48 A.L.R.2d 1285 (7th Cir.1955); Southern Pacific Co. v. Brotherhood of Locomotive Firemen and Enginemen, 393 F.2d 345 (D.C.Cir.1967); Calagaz v. Calhoon, 309 F.2d 248 (5th Cir. 1962).

The defendant Pratt-Farnsworth, also argues that it is entitled to summary judgment because prescription has run on plaintiffs’ claims. Here, it is suggested by defendant that this union suit is a “hybrid” Section 301 suit to which the federal six month statute of limitations applies. A “hybrid” Section 301 suit is an action where the claims include both a breach of fair labor practices and a breach of contract. The Supreme Court, in hopes of fostering quicker resolutions to such hybrid disputes, has decided that the federal six-month statute of limitations would be applicable. Del Costello v. International Brotherhood of Teamsters, 462 U.S. 151, 167, 103 S.Ct. 2281, 2292, 76 L.Ed.2d 476, 491 (1983). Plaintiffs’ claims are not time-barred since Del Costello, supra, held that the federal six-month statute of limitations would only apply to “hybrid” § 301 actions, not to straightforward breach of contract actions as we have in the instant .case. Therefore, the most analogous Louisiana state statute of limitations must be applied to determine if this § 301 suit has been timely filed.

Accordingly, the mover’s motion for summary judgment must be denied.

      . The plaintiff unions claim that in 1971 they proposed in ongoing negotiations to reach a contract a provision dealing with disputes concerning related entities of the signatory employer but the employer participants rejected inclusion of such provision in the collective bargaining agreement. This information would support the position taken by the Court, however, the Court did not base its decision on said information due to the plaintiffs’ failure to substantiate such claim by. affidavit or other appropriate documentation.

      . Since the Court has determined that the plaintiffs were not bound to exhaust the arbitration procedure prior to filing suit in federal court on the basis of the futility exception, it is not necessary for the Court to address whether the plaintiffs also met the repudiation exception set out in Vaca, supra.

      . For a full discussion on the applicable Louisiana prescriptive statute to this action, see the companion memorandum opinion entered in this suit on the same date as this opinion was entered. 609 F.Supp. 1302 (D.C.La.1985).


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    CARPENTERS LOCAL UNION NO. 1846 OF the UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA, AFL-CIO, et al. v. PRATT-FARNSWORTH, INC., et al.
    Civ. A. No. 80-1570.
    United States District Court, E.D. Louisiana.
    Dec. 6, 1984.
    See also 609 F.Supp. 1299.

      Marie Healey, Gardner, Robein & Healey, Metairie, La., for plaintiff.
    James D. Carriere, Kullman, Inman, Bee & Downing, New Orleans, La., for defendants.
   MEMORANDUM OPINION

MENTZ, District Judge.

Pending before this Court are two motions, one of defendant, Pratt-Farnsworth, Inc., and one of defendant, Halmar, Inc., for summary judgment on the ground that plaintiff’s claims have prescribed by the applicable statute of limitations and thus the suit must be dismissed. The above-captioned action is brought under Section 301 of the Labor Management Relations Act of 1947 by the carpenters unions against two employers for damages arising from an alleged breach of the collective bargaining agreement.

Generally, the timeliness of a § 301 suit is to be determined, as a matter of federal law, “by reference to the appropriate state statute of limitations.” International Union, United Automobile Aerospace and Agricultural Workers of America (UAW), AFL-CIO v. Hoosier Cardinal Corp., 383 U.S. 696, 86 S.Ct. 1107, 16 L.Ed.2d 192 (1966). In straightforward breach of contract actions, as we have in this action, the appropriate state statute of limitations should apply. Del Costello v. International Brotherhood of Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983). Here, the Court is obligated to use the prescriptive period applicable to breach of written contracts as it is the “most appropriate” statute in this situation. The defendants argue that the Louisiana one-year prescriptive article § 3534 is applicable in this case since it involves the unions seeking recovery of wage differentials for its members Mine v. Ormet Corp., 371 So.2d 1209 (La.App. 1st Cir.1979). However, the plaintiffs’ complaint lists four different demands they have made as a result of the defendants’ alleged breach of the terms and conditions of the collective bargaining agreement. The plaintiffs are seeking (1) declaratory and injunctive relief; (2) all sums due as fringe benefit contributions; (3) all lost working dues; and (4) all sums due as wage differentials. The plaintiffs thus argue that the Louisiana ten year prescriptive article 3544 is applicable since this action is a straightforward breach of contract suit. Although this action is predominantly characterized as a breach of contract action, Louisiana law provides one or three year prescriptive periods for certain specified actions. Therefore, this Court will analyze each claim made by the plaintiffs to see whether the one year, three year or ten year prescriptive article applies.

The plaintiffs claim they are entitled to a Declaratory Judgment that both defendants are obligated in contract to the plaintiff unions and an injunction prohibiting the defendants from failing to abide by all the terms and conditions of the collective bargaining agreements. Louisiana case law clearly states that the residuary prescriptive period of ten years controls the claims for declaratory and injunctive relief. La.Civil Code Article 3544; Hines v. Olinkraft, Inc., 413 F.Supp. 1360, 1364 (W.D. La.1976); See also Boudreaux v. Baton Rouge Marine Contracting Co., 437 F.2d 1011, 1017 at n. 16 (5th Cir.1971); Johnson v. Goodyear Tire & Rubber Co., 491 F.2d 1364, 1378 at n. 48 (5th Cir.1974); Smith v. Olin Kraft, Inc., 404 F.Supp. 1360 (W.D. La.1975). Thus, this claim is not time barred.

The plaintiffs also claim that the defendants have caused damage to the Fringe Benefit Funds by their failure to pay contributions as agreed to under the terms of the collective bargaining agreement. A fringe benefit fund is analogous to a pension plan fund and should be treated similarly. Thus, under Louisiana law, a suit to recover pension [fringe] benefits is not an action for wages; it is a personal action, subject to the prescriptive period of ten years. State ex rel Spann v. Board of Trustees of Police Pension Fund, 283 So.2d 294 (La.App. 4th Cir.1973); Mire v. Ormet Corp., 371 So.2d 1209 (La.App. 1st Cir.1979); Forrest Bugher et al v. Monk T. Salley, d/b/a Salley Transport Co., Civil Action No. 76-0627, (W.D.La.1978); Reese v. Lynn’s Construction, Inc., Civil Action No. 78-442-B (M.D.La.1981). Therefore, this claim has not prescribed.

Plaintiffs’ third claim is for lost union working dues. The Fifth Circuit has held that the Louisiana ten year prescriptive article 3544 governs suits to recover dues. Dantagnan v. I.L.A. Local 1418, AFL-CIO, 496 F.2d 400 (5th Cir.1974). Again, this claim of plaintiffs has been timely filed.

As to the wage differential claim, it is not so clear cut as the aforementioned claims which Louisiana statute of limitations applies. The prescription period of one year applies to claims by workmen for wages and back pay. La.Civil Code Art. 3584; Devillier v. City of Opelousas, 247 So.2d 412 (La.App. 3rd Cir.1971); Hines v. Olinkraft, Inc., supra; Nabors v. N.L. R.B., 323 F.2d 686 (5th Cir.1963), cert, denied, 376 U.S. 911, 84 S.Ct. 666, 11 L.Ed.2d 609 (1964). However, there are a number of cases that apply the ten year prescriptive period to claims for wages due where the claimant is working under a written contract to provide certain services. Salvatore v. Covenant Broadcasting Corp. of Louisiana, 359 So.2d 325 (La.App. 4th Cir.), writ denied 362 So.2d 777 (La.1978) [Radio newsman]; McCoy v. Tangipahoa Parish School Board, 308 So.2d 382 (La. App. 1st Cir.) writ denied 310 So.2d 856 (La.1975), [School principal]; Tillman v. New Orleans Saints Football Club, 265 So.2d 284 (La.App. 4th Cir.1972), 57 A.L. R.3d 251, [Football player]. Although Louisiana Civil Code Article 3534 provides an exception to the general rule governing contracts (See Article 3544), it does not purport to provide a general rule governing claims for wages. This special exception should be strictly construed, and when such exception is not expressly and clearly applicable to a particular claim, the exception should yield to the general rule. Salvatore, 359 So.2d at 327.

In reviewing past civil codes for guidance, it is apparent that the term “workmen” includes craftsmen. 5 Civil Law Translations, Baudry-LaCantinerie & Tissier, Prescription H 716 (La.St.L.Inst. Trans.1972); Salvatore, 359 So.2d at 326. Traditionally, carpenters have always been considered craftsmen, thus, they would meet the definition of “workmen” as contemplated by C.C. Art. 3534, and the special prescriptive rule applicable to workmen claims for wages would apply to any carpenter’s claim for wages as well.

The next issue the Court must address is whether wage differentials constitute wages. Here, the defendant, Pratt-Farnsworth, is alleged to have breached its union collective bargaining agreement by failing or refusing to pay wage differentials. The term “wages” has been interpreted to include “all types of renumeration for personal services, such as salaries, commissions, bonuses, expense allowances for which the employee does not have to account, ____” Mire, 371 So.2d at 1210; See also St. Paul Fire & Marine Insurance Co. v. Richard, 208 So.2d 35 (La.App. 3rd Cir.1967), writ denied 252 La. 171, 210 So.2d 54 (La.1968); American Sugar Company v. Doyal, 237 So.2d 415 (La.App. 4th Cir.1970). In the case at bar, the plaintiffs are attempting to recover the difference between the amount the union workers were actually paid and the amount they should have been paid as bargained for in the collective agreement. The wage differentials, in essence, are part of the salary owed to the union workers as renumeration for services and, as such, should be treated as unpaid wages. Therefore, the special prescriptive period of La.Civil Code Art. 3534 is applicable to the wage claim in this case.

Effective January 1, 1984, La.Civil Code Art. 3534 was vacated and in its place La.Civil Code Art. 3494 was enacted. Article 3494 lengthens the period of time to file an action to recover salaries and wages to three years instead of one year. Thus, this Court must determine whether the former one year prescriptive period applies to this action filed in March of 1980 or the new three year prescriptive statute is applicable; in other words, is Louisiana Civil Code Article 8494 retroactive in its application.

It is well settled in Louisiana that statutes of prescription are procedural and remedial in nature and as such are generally accorded retroactive application in absence of language showing a contrary intention. LSA-R.S. 1:2. Lott v. Haley, 370 So.2d 521 (La.1979); Fust v. Arnar-Stone Laboratories, Inc., 736 F.2d 1098 (5th Cir. 1984). This jurisprudential rule is subject to the exception that procedural and remedial laws are not accorded effect where such retroactivity would operate unconstitutionally to disturb vested rights. Lott, supra; Orleans Parish School Board v. Pittman Construction Co., 261 La. 665, 260 So.2d 661 (1972). Here, the 1984 statute extending the prescriptive period from one to three years does not disturb or eliminate the vested rights of those affected by the act to assert their rights. Usually, the only time the court might find vested rights disturbed or eliminated is in the situation where a newly-created statute of limitation or one which shortens the existing periods of limitation is enacted which violates the constitutional prohibition against divesting a vested right. Article 3494 extends not shortens the period of time that the plaintiffs can sue for wage differentials. Moreover, the new statute does not forbid it being retroactively applied. Therefore, the three year prescriptive period is applicable to the case at bar.

The collective bargaining agreement is currently in existence and as such, a cause of action for payment of wages exists. Thus, the final issue that this Court needs to resolve is whether the plaintiffs filed their wage claim within the three year prescriptive period. Liberative prescription commences to run from the day a cause of action arises and its judicial enforcement is possible. See La.Civil Code Article 3495, See also 2M. Planiol, Traite elementaire de droit civil 3 Pt. 2, at 358 (Louisiana State Law Institute trans. 1959).

Further, various circuit courts have held that prescription begins to run when the plaintiffs either were or should have been aware of the injury itself, not when the plaintiffs became aware of one of the injury’s many manifestations. See Benson v. General Motors Corp., 716 F.2d 862, 864 (11th Cir.1983); Farr v. H.K. Porter Co., Inc., 727 F.2d 502, 505-06 (5th Cir.1984). Here, the earliest that the plaintiffs may have been aware of the injury to the unions was 1978 or 1979 when the plaintiffs started investigating “the operations” of the defendants; however, the Court need not make an exact determination since the filing of the suit in March 1980 clearly falls within the three year prescriptive period for wage claims and the ten year prescriptive period for breach of contract and specific performance claims. Therefore, the plaintiffs have filed their wage claim timely.

It is clear to this Court that the plaintiffs’ claims are not time barred and thus, the suit should be allowed to proceed to trial. Accordingly, defendants’ motions for summary judgment are DENIED.

      . For a complete discussion of when the federal six-month statute of limitations is applicable, see page 1305 of the companion memorandum opinion entered on the same date as this opinion. 609 F.Supp. 1299 (D.C.La.1985).

      . Art. 3534. Actions prescribed by one year The following actions are prescribed by one year:
      That of workmen, laborers and servants, for the payment of their wages.

      . Art. 3544. Personal actions, general rule
      In general, all personal actions, except those before enumerated, are prescribed by ten years.

      . The court is admittedly puzzled over the distinction between a football player under contract who has ten years to bring a suit for wages and a union worker who may only have one year to bring a suit for wages. It is obvious from reviewing the case law and the relevant prescriptive articles for wage and salary claims that the prescriptive articles need legislative updating and clarification. Yet, these considerations are not presently before us.

      . Art. 3494. Actions subject to a three year prescription
      The following actions are subject to a liberative prescription of three years:
      An action for recovery of compensation for services rendered, including payment of salaries, wages, commissions, tuition fees, professional fees, fees and emoluments of public officials, freight, passage, money, lodging and board;

      . Art. 3495. Commencement and accrual of prescription
      This prescription commences to run from the day payment is exigible. It accrues as to past due payments even if there is a continuation of labor, supplied, or other services. Acts 1983, No. 173, § 1, eff. Jan. 1, 1984.