author: GLEN M. WILLIAMS, District Judge.

text:
    INTERNATIONAL UNION, UMWA, Plaintiff, v. EASTOVER MINING CO., Eastover Land Co., Duke Power Co. and Virginia City Coal Co., Defendants.
    Civ. A. No. 83-0209-B.
    United States District Court, W.D. Virginia, Big Stone Gap Division.
    Dec. 13, 1985.

      Willard Owens, A. Randall Vehar, Washington, D.C., Stuart B. Campbell, Wytheville, Va., John B. Raycen and E.H. Raycen, Knoxville, Tenn., for plaintiff.
    David D. Johnson, Charles Q. Gage, Charleston, W.Va., James P. Jones, Bristol, Va., and David J. Boyd, Chicago, 111., for Va. City.
   MEMORANDUM OPINION

GLEN M. WILLIAMS, District Judge.

International Union, United Mine Workers of America (UMWA) instituted this action pursuant to § 301 of the National Labor Relations Act, 29 U.S.C. § 185(a), against Eastover Mining Company, East-over Land Company, Duke Power Company (selling defendants) and Virginia City Coal Company (purchasing defendant). The action arose over Virginia City’s purchase of the selling defendants’ Jawbone Mine, located in Wise County, Virginia and operated under a contract with UMWA. UMWA has based its claim against the selling defendants on the contention that they breached Article I of the 1981 Bituminous Coal Operators Association (BCOA) Agreement when they sold the Jawbone operation to Virginia City without requiring Virginia City to assume their obligations under the Agreement. UMWA’s claim against Virginia City is based on the allegation that Virginia City tortiously induced the selling defendants to breach the Agreement.

In International Union, UMWA v. Eastover Mining Co., 603 P.Supp. 1038 (W.D.Va.1985), this court entered partial summary judgment for UMWA against the selling defendants on the issue of liability, holding that the selling defendants did not comply with their part of the BCOA Agreement in that they had not secured the agreement of the successor to the mine, Virginia City, to assume their obligations. The court reserved decision as to Virginia City, however, until the issues regarding Virginia City’s alleged liability could be more fully briefed. Now that the issues have been so briefed, and that UMWA and Virginia City’s cross-motions for summary judgment have been renewed, the court is prepared to rule on the following: (1) whether the action as against Virginia City arises under § 301 of the Labor Management Relations Act, 29 U.S.C. § 185(a) and (2) if so, whether Virginia City is liable for tortious interference with a contractual relation.

I.

A summary of the facts established in the court’s previous opinion in this action is as follows. In 1982, Duke Power Company, the parent corporation of Eastover Mining Company and Eastover Land Company, decided to sell all of its Eastover mines because of a ruling of the North Carolina Utilities Commission concerning the passing on of costs to consumers. By January 1983 ANR Coal Company, the parent corporation of Virginia City, decided to attempt to purchase Eastover’s Jawbone Mine. At that time, the 1981 BCOA Agreement to which Eastover was a signatory was in force and provided in part in Article I that

This agreement shall be binding upon all signatories hereto ... and their successors and assigns. In consideration of the Union’s execution of this Agreement, each Employer promises that its operations covered by this Agreement shall not be sold, conveyed, or otherwise transferred or assigned to any successor without first securing the agreement of the successor to assume the Employer’s obligations under the Agreement.

Negotiations between Eastover and ANR followed, and agreement was reached on the basic terms of the purchase. Eastover, possessing the intention to comply with Article I of the BCOA Agreement, prepared a first draft of the purchase agreement to be presented to Virginia City that included the following paragraph, Section 1.6(a):

Covenants and agreements of buyer. Buyer covenants and agrees: (a) to recognize the United Mine Workers of America as the collective bargaining representative of the bargaining unit employees of the Virginia City mine located at Virginia City, Virginia and to assume EMC’s obligations to those employees under the National Bituminous Coal Wage Agreement of 1981.

Virginia City informed the selling defendants, however, that it would not accept the agreement with the foregoing language and further stated that it would not assume the UMWA contract.

Subsequent drafts of the purchase agreement were then exchanged, resulting in the final contract between the selling defendants and Virginia City Coal Company with the following language, designed as Section 1.7(a):

If buyer is a successor to EMC within the terms of the National Bituminous Coal Wage Agreement of 1981 (the ‘Wage Agreement’), to recognize the United Mine Workers of America as the collective bargaining representative of the bargaining unit employees of Virginia City Mine located in Virginia City, Virginia, and to assume EMC’s obligations to those employees under the Wage Agreement; provided, however, that Buyer reserves the right to contest the question of whether or not it is a successor within the terms of the said Wage Agreement.

In addition, Section 2.1(c) of the purchase agreement was amended so that the final draft, instead of stating that there was a transfer of all “leases, contracts,” provided that there was a transfer of “all leases, contracts (other than the Wage Agreement).” And it was this failure on the part of the selling defendants to secure the obligation of Virginia City to the BCOA Agreement as required by Article I that lead to this court’s conclusion that the selling defendants breached the Agreement following a finding that Virginia City was, in fact, a successor to Eastover’s Jawbone operation. Moreover, it is Virginia City’s alleged role in procuring the inclusion of Section 2.1(c), as well as Section 1.7(a), of the final purchase agreement that gives rise to the claim against Virginia City now before the court.

II.

With the facts above thus established, the court will now address the issue of jurisdiction. As previously stated, UMWA instituted this action against both the selling defendants and Virginia City, the purchasing defendant, pursuant to § 301 of the Labor Management Relations Act. There was no question in the previous decision that the jurisdictional requirements of § 301 were met as to the selling defendants since UMWA’s claim against Eastover was based on an alleged breach of the BCOA Agreement and Eastover was a signatory to the Agreement. Virginia City argues, however, that as a non-signatory to the collective bargaining agreement it is not subject to this court’s jurisdiction under § 301 where the claim against it is for tortious interference with contractual relations.

The issue raised by Virginia City as to whether a party to a labor contract may sue a non-signatory under § 301 has been addressed by a number of courts, resulting in a split of authority. The Third and Eleventh Circuits, addressing the issue in the context here presented, that is, on a claim of tortious interference with contractual relations, have held that such a suit falls within the purview of § 301. Wilkes-Barre Publishing Co. v. Newspaper Guild of Wilkes-Barre, Local 120, 647 F.2d 372 (3rd Cir.1981); Local 472, United Association v. Georgia Power Co., 684 F.2d 721 (11th Cir.1982). The Ninth Circuit also reached the same conclusion in Painting and Decorating Contractors Assoc, v. Painters and Decorators Joint Committee, 707 F.2d 1067 (9th Cir.1983), where the non-signatory defendant’s liability for an alleged breach of contract turned on the court’s interpretation of the labor contract. Other courts, however, applying a narrow interpretation of the scope of § 301 jurisdiction, have held that a § 301 suit may be brought for violation of a labor contract only against those who are parties to the contract or who have rights or duties stated in the terms and conditions of the contract. See, e.g., Carpenters Local Union No. 1846 v. Pratt-Farnsworth, Inc., 690 F.2d 489 (5th Cir.1982); Service Hospital, Local No. 47 v. Commercial Property Services, 755 F.2d 499 (6th Cir.1985).

After reviewing the policy considerations underlying the pre-emptive effect of § 301, as most recently expressed by the Supreme Court in Allis-Chalmers Corp. v. Lueck,—U.S.-, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985), this court concludes that the better reasoned decisions are those that have held that § 301 confers jurisdiction on the federal courts in actions such as the one at bar. In the present case, UMWA’s claim against Virginia City is founded on a violation of a collective bargaining agreement, despite the fact that Virginia City was not a signatory to that agreement. Virginia City’s alleged liability, at least at a threshold level, has hinged on a judicial interpretation of that agreement; only after a holding that the selling defendants breached the BCOA Agreement could UMWA attempt to proceed against Virginia City on its allegation that Virginia City was tortiously involved in bringing about that breach of contract. Consequently, to hold that UMWA must try its case against Virginia City in state court would create the “possibility of conflicting substantive interpretation [of the labor agreement] under competing legal systems,” which is what led the Supreme Court to conclude in Teamsters Local v. Lucas Flour Co., 369 U.S. 95, 104, 82 S.Ct. 571, 577, 7 L.Ed.2d 593 (1964), that by “enacting § 301 Congress intended doctrines of federal labor law uniformly to prevail over inconsistent local rules.” Faced with similar circumstances, the court in Wilkes-Barre took the position that “so long as the obligation sought to be enforced has its source in the provisions of a collective bargaining agreement, remedies for its enforcement may be available under section 301(a) in suits other than on the contract itself.” 646 F.2d at 380. The issue for the court was not the nature of the remedy sought, but rather whether the court from which the remedy was sought would have to interpret the collective bargaining agreement. Id. The court thus determined that it had jurisdiction under § 301 over a non-signatory to a collective-bargaining agreement who was alleged to have tortiously interfered with the contractual relations of the parties to that agreement. Id. at 381. In making that determination, the court reasoned that

The label attached to the remedy as tort or contract is not dispositive of the scope of federal common law which under section 301(a) it is our responsibility to create. A holding that tortious interference with a collective bargaining agreement is not a matter governed by federal law would leave open the possibility of lack of uniformity in scope of obligation which the Court in Lucas Flour sought to prevent____ [Protection against tortious interference does not involve an area traditionally relegated to the states. Rather it involves protection of a property interest—a labor contract—which has its being in and draws its vitality from the federal common law of labor contracts.

Id. (footnote and citations omitted).

Such an analysis of the scope of § 301 jurisdiction can only be viewed as reenforced by Allis-Chalmers v. Lueck. Though the case does not involve a claim against a non-signatory to a labor agreement, the Court’s reasoning as to the scope of § 301’s pre-emptive effect is the same as that in Wilkes-Barre. In Allis-Chalmers, the respondent/employee had brought an action against his employer over his employer’s handling of his disability claim, which was filed under a plan that was part of a collective-bargaining agreement between his employer and his union. The Wisconsin Supreme Court had held that the action was a tort action arising under state law. The Allis-Chalmers Court, relying on the policy considerations set out in Lucas Flour, reversed the state court and held that the action was governed by federal substantive law under § 301. Allis-Chalmers,—U.S.-, 105 S.Ct. at 1916. Building upon the Lucas Flour decision, which held that a suit for an alleged violation of a labor contract must be brought under § 301 and resolved by reference to federal law, the Court stated:

If the policies that animate § 301 are to be given their proper range, however, the pre-emptive effect of § 301 must extend beyond suits alleging contract violations____ The interests in interpretive uniformity and predictability that require that labor-contract disputes be resolved by reference to federal law also require that the meaning given a contract phrase or term be subject to uniform federal interpretation. Thus, questions relating to what the parties to a labor agreement agreed, and what legal consequences were intended to flow from breaches of that agreement, must be resolved by reference to uniform federal law, whether such questions arise in the context of a suit for breach of contract or in a suit alleging liability in tort.

Allis-Chalmers,—U.S. at-, 105 S.Ct. at 1911. The Court then went on to conclude “that 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, that claim must either be treated as a § 301 claim ... or dismissed as pre-empted by federal labor-contract law.” Id. at-, 105 S.Ct. at 1916.

It is thus this court’s opinion that UMWA’s action against Virginia City for tortious interference with a contractual relation constitutes an action arising under § 301, and as such is governed by federal common law.

III.

The court now turns to the merits of UMWA’s action against Virginia City. The elements of an action for tortious interference with contractual relations are generally stated to include (1) the existence of a valid contract, (2) the defendant’s knowledge of the contract, (3) malicious interference by the defendant, (4) a causal relationship between the defendant’s interference and the breach or nonperformance of the contract and (5) resulting damages. McDonough v. Kellogg, 295 F.Supp. 594, 598 (W.D.Va.1969); see generally Anno., 26 A.L.R.2d 1227 (1952). Since the validity of the BCOA Agreement, the selling defendants’ breach of the Agreement, and Virginia City’s knowledge of the Agreement have all previously been established, the only real issue here is whether Virginia City was a moving cause in the breach of the Agreement by way of malicious interference.

The term “malicious interference,” as used in this context, is somewhat misleading. The law does not require proof that the defendant acted with ill will or spite, but only that the interference was intentional and unjustified. McDonough v. Kellogg, 295 F.Supp. at 598. And as Dean Prosser explains, “when interference with the performance of the contract is intended, the manner of the interference itself is not of great importance.” Prosser, Handbook of the Law of Torts 926 (4th Ed.1971). He then goes on to explain that where a breach “is intentionally brought about by the defendant’s inducement, or is even a foreseeable risk which defendant has created, it seems clear that the result is well within the limits of the ‘proximate.’ ” Id. at 928.

As to the manner of interference, it is indicated in the comments to Restatement (Second) of Torts § 766 (1979) that “[tjhere is no technical requirement as to the kind of conduct that may result in interference with the third party’s performance of the contract.” Id. at 12. It is pointed out, however, that the interference is often by inducement. Id. “The word ‘inducing,’ ” it is stated, “refers to the situation in which A causes B to choose one course of conduct rather than another. Whether A causes the choice by persuasion or by intimidation, B is free to choose the other course if he is willing to suffer the consequences.” Id. at 11. Thus, the inducement may take the following forms: “... it may be a simple request or persuasion exerting only moral pressure____ it may be a statement unaccompanied by any specific request but having the same effect as if the request were specifically made____[o]r it may be the promise of a benefit to the third person if he will refrain from dealing with the other.” Id. at 12.

An action for tortious interference with contractual relations being so defined, the court is convinced that UMWA must prevail on its motion for summary judgment against Virginia City on the issue of liability. Based on the record, it appears to the court glaringly clear that Virginia City induced Eastover to breach its contract with UMWA by persuading Eastover to agree to the inclusion of Section 2.1(c) of the final purchase agreement through which Virginia City acquired the Eastover Jawbone Mine without assuming Eastover’s obligations under the BCOA Agreement. Had Eastover first approached Virginia City with an offer to sell the mine that included terms falling short of the requirements of Article I of the Agreement regarding successorship, then Virginia City would not fit within the legal standard for tortious interference with contractual relations. But such was not the case. Here, as was previously pointed out, Eastover began its negotiations with Virginia City with the intention of complying with the requirements of Article I. Virginia City, on the other hand, did not intend from the beginning to become involved with UMWA. International Union, UMWA v. Eastover Mining Co., 603 F.Supp. 1038, 1040 (W.D.Va.1985). Thus, while offering Eastover 22.3 million dollars in cash for its Jawbone operation, Virginia City informed Eastover that it would not assume the UMWA contract as provided for in Section 1.6(a) of the first draft of the purchase agreement, which Eastover had prepared. Id. at 1041. Subsequently, Eastover agreed to conform the terms of the sale to this condition, which is evidenced by the terms of Section 2.1(c) of the final purchase agreement. As a result of this conformity, Eastover, as the selling defendant, has been held liable for breaching its contract with UMWA. The same conformance is now found to be the product of Virginia City’s inducement, which thus establishes Virginia City’s liability as the purchaser of Eastover’s mine.

Virginia City argues that its conduct with respect to the successorship clause in the BCOA Agreement does not satisfy the intent element necessary in establishing tortious interference with a contractual relationship. The contention is that it was simply wrong in its interpretation of the successorship clause, but that its belief was not unreasonable so as to negate its good faith. Pursuing this line of argument, Virginia City states in its supplemental brief:

The language of the Purchase Agreement between Eastover and Virginia City itself testifies to Virginia City’s good faith. [Section 1.7(a)] declares that if Virginia City is Eastover’s successor within the terms of the 1981 agreement, Virginia City will assume all of East-over’s obligations under the agreement. That is, even though Virginia City believed it was not a successor within' the meaning of the 1981 agreement, it agreed to assume all the duties of a successor if it was deemed to be such.

But to the contrary, what in fact is established by Section 1.7(a) is at the very least Virginia City’s awareness of the foreseeable risk that its agreement with Eastover to avoid any obligations to UMWA would violate the terms of Article I of the BCOA Agreement. Thus, by agreeing to the inclusion of Section 1.7(a), Virginia City was simply attempting to preserve its right to “contest the question of whether or not it is a successor within the terms of the said Wage Agreement,” as so stated in Section 1.7(a).

Virginia City’s awareness of the risk involved in purchasing the Jawbone Mine under the terms that it demanded is further evidenced by the fact that Virginia City saw fit to consult with a management consulting firm, Southeastern Employee Service Corporation, SESCO, as to how it might be advised on a way to circumvent the terms of the successorship clause in the BCOA Agreement. See, Eastover Mining Co., 603 F.Supp. at 1041 (outlining the three-point plan that Virginia City was advised to use in trying to achieve its purpose, a plan eventually accepted and implemented by Eastover). This fact is made most evident in the following excerpt from the deposition testimony of Raymond F. Parker, the chief negotiator for Virginia City, regarding his communications with SESCO:

Q. I take it you had called or communicated with SESCO in some way and told them that you were thinking about trying to acquire the Jawbone operation?
A. That is correct.
Q. And I assume you told SESCO that you were attempting to acquire Jawbone in such a way as you would not have to assume the UMWA contract?
A. Yes, sir.
Q. Or have to legally recognize or have anything to do with the UMWA?
A. That is correct.
Q. Or the employees working at the Jawbone Mine?
A. That is also true.

Finally, the court rejects Virginia City’s argument that it was justified in securing the terms of the final purchase agreement between it and Eastover. Justification is sometimes the final consideration in the analysis of a case involving a claim of tortious interference with a contractual relation. It basically involves a balancing process in which the interests of the plaintiff are weighted against the interests of the defendant. See generally, Restatement (Second) of Torts, § 767 (1979). Here, the interests represented by UMWA far outweigh whatever interests Virginia City might have in attempting to acquire the Jawbone Mine free of obligations to UMWA. The interests UMWA seeks to vindicate over Virginia City’s role in procuring the breach of Article I of the BCOA Agreement goes to the core of the right to bargain collectively. In gaining that right, the members of UMWA were able to secure through their bargaining agent the successorship clause in Article I. Having secured that provision, those members that worked at the Jawbone operation had an expectation of certainty, as well as a legal right to such certainty, in matters such as wages, health benefits, seniority, and pensions. Virginia City, on the other hand, had no prior interest in the Jawbone operation. Thus, as a matter of policy, Virginia City’s interest, for example, in negotiating freely as a prospective purchaser wanes when compared to the interests represented by UMWA.

IV.

In summary, it is the opinion of the court that UMWA’s action against Virginia City arises under § 301 of the National Labor Relations Act, 29 U.S.C. § 185(a), giving the court jurisdiction over Virginia City. It is also the court’s opinion that Virginia City tortiously interfered with the contractual relations between UMWA and Eastover by persuading Eastover to breach the 1981 BCOA Agreement. Therefore, Virginia City’s motion for summary judgment is hereby denied while UMWA’s motion for summary judgment on the issue of liability is hereby granted. An appropriate order will be entered granting summary judgment to the plaintiff in this cause.

The Clerk is directed to send certified copies of this Memorandum Opinion to counsel of record.

      . Section 301 of the LMRA states:
      Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce ... may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.

      . It should here be pointed out that Fox v. Mitchell Transport Inc., 506 F.Supp. 1346 (D.Md. 1981) aff'd mem. 671 F.2d 498 (4th Cir.1981), is sometimes cited as holding that an action against a non-signatory may not be maintained under § 301. However, the district court’s decision that it lacked jurisdiction over the non-signatory defendant in that case was based on the alternative ground that when a claim is for breach of the duty of fair representation under the collective-bargaining agreement, only the employee’s collective-bargaining agent can be liable under § 301, and the non-signatory defendant was not such an agent. Thus, as UMWA argues, since the Fourth Circuit’s decision consisted of but one word, "affirmed," it can hardly be said that the Fourth Circuit has spoken to the issue now before this court.

      . For a related case involving § 301 jurisdiction in a breach of contract action, see this court’s recent published opinion, Mallory v. IngersollRand, 621 F.Supp. 1040 (W.D.Va.1985), where the court, relying on Allis-Chalmers, held that the action was pre-empted by federal law under § 301. There, however, the defendant was a signatory to the subject collective-bargaining agreement.

      . Restatement (Second) of Torts § 766 reads as follows:
      § 766. Intentional Interference with Performance of Contract by third Person One who intentionally and improperly interferes with the performance of a contract (except a contract to marry) between another and a third person by inducing or otherwise causing the third person not to perform the contract, is subject to liability to the other for the failure of the third person to perform the contract.


source: Caselaw Access Project

author: EDELSTEIN, District Judge:

license: Public Domain

text:
    UNITED STATES of America v. Donald PAYDEN, Eugene Coleman and Anthony Grant, Defendants.
    No. SS 84 Cr. 566 (DNE).
    United States District Court, S.D. New York.
    Dec. 16, 1985.

      Rudolph W. Giuliani, Asst. U.S. Atty., S.D.N.Y. (John K. Carroll, Asst. U.S. Atty., New York City, of counsel), for U.S.
    Robert L. Herbst, New York City, for defendant Anthony Grant.
   OPINION AND ORDER

EDELSTEIN, District Judge:

The court granted the government’s request to reconsider the decision excluding from evidence statements made by defendant Anthony Grant (“Grant”) to Special Agent Marvin Siegel (“Siegel”). The court’s decision is contained in an Opinion and Order dated November 26, 1985, 622 F.Supp. 915. (“Nov. 26 Opinion”). Familiarity with that opinion is assumed. For the reasons set forth in the Nov. 26 Opinion and herein, Grant’s statements may not be introduced into evidence.

DISCUSSION

After the court granted the government’s request to reconsider the Nov. 26 Opinion, it conducted a hearing outside the presence of the jury on November 29, 1985 to afford itself an opportunity to judge the demeanor of Agent Siegel and also to preserve his testimony. Siegel appeared at the hearing, placing on the record his testimony regarding the meetings with Grant on July 19, 1984 and July 25, 1984.

The government contends that the court should permit Grant’s statements to be introduced into evidence based on three theories. First, that there is sufficient independent non-hearsay evidence linking Payden and Grant to the conspiracy charged in the indictment; second, that the statements which are admissions as to Grant are also admissible as to Payden and Coleman as declarations against interest or under the “catch-all” exception to the hearsay rule; and third, that the court may consider Grant’s statements for purposes of determining whether Grant and Payden were members of the same conspiracy.

1. USE OF GRANT’S STATEMENTS IN MAKING GEANEY DETERMINATION

The government argues that the court can consider Grant’s statements, even if they are hearsay, in making the finding required by United States v. Geaney, 417 F.2d 1116 (2d Cir.1969), cert. denied, 397 U.S. 1028, 90 S.Ct. 1276, 25 L.Ed.2d 539 (1970). Geaney requires the court to find the “participation in the conspiracy, by the defendant against whom the hearsay is offered, by a fair preponderance of the evidence independent of the hearsay utterances” Id. at 1120. This requirement of independent non-hearsay evidence is consistent with a 1942 Supreme Court case which addressed the issue whether the hearsay that is sought to be admitted against alleged co-conspirators may be used in making the Geaney type finding. The Court, in Glasser v. United States, 315 U.S. 60, 62 S.Ct. 457, 86 L.Ed. 680 (1942), stated that the coconspirator declarations “are admissible over the objection of an alleged conspirator, who was not present when they were made, only if there is proof aliunde that he is connected with the conspiracy” because otherwise “hearsay would lift itself by its own bootstraps to the level of competent evidence.” Id. at 74-75, 62 S.Ct. at 467. This was one basis for this court’s original decision. Nov. 26 Opinion at 7 & n. 4.

The government, in essence, argues that Rule 104(a) of the Federal Rules of Evidence overruled Glasser and thus permits the court to consider the hearsay. Rule 104(a) provides that “[preliminary questions concerning ... the admissibility of evidence shall be determined by the court____ In making its determination it is not bound by the rules of evidence except those with respect to privileges.” While conceding that eight circuits reject this argument, the government cites to one footnote in a Second Circuit opinion that merely raises the issue, United States v. Cicale, 691 F.2d 95, 103 n. 3 (2d Cir.1982), cert. denied, 460 U.S. 1082, 103 S.Ct. 1771, 76 L.Ed.2d 344 (1983) (“[w]e need not decide whether Fed.R.Evid. 104(a) permits a Geaney finding based on hearsay which is inadmissible under the Federal Rules.”), definitive support in one circuit, United States v. Vinson, 606 F.2d 149, 153 (6th Cir.1979), cert. denied, 444 U.S. 1074, 100 S.Ct. 1020, 62 L.Ed.2d 756, 445 U.S. 904, 100 S.Ct. 1080, 63 L.Ed.2d 319 (1980), and cases in two circuits which have, according to the government, “indicated some amenabilty to the statement’s use,” United States v. Martorano, 561 F.2d 406, 408 (1st Cir.1977), cert. denied, 435 U.S. 922, 98 S.Ct. 1484, 55 L.Ed.2d 515 (1978); United States v. Cryan, 490 F.Supp. 1234, 1241 (D.N.J.), aff'd, 636 F.2d 1211 (3d Cir.1980).

While all circuits admittedly do not agree on this issue, this court is bound by decisions of the Second Circuit. Although Cicale posed the question as to the use of Rule 104(a), cases both before and after Cicale have consistently held that the court may not consider the hearsay itself in making the Geaney finding. This court will not deviate from this overwhelming precedent.

II. THE GEANEY FINDING

The court in the November 26, 1985 opinion found that the government had not satisfied the Geaney standard as to Payden and Coleman. The government urges the court to reverse itself on this finding, asserting that there has been additional evidence presented at the hearing,

The government introduced evidence at the hearing that was not contained in the materials submitted for the original motion. The additional evidence is essentially that exclusivity of territory is important in street level narcotics operations (Tr. at 2873), that prior to his meeting with Grant, Siegel observed what he believed to be a narcotics transaction involving Payden, and that Grant utilized procedures to sell heroin accepted in the Payden enterprise as evidenced by this previous narcotics transaction.

Grant raises the issue that the government exceeded the scope of reargument by eliciting testimony beyond that ever raised in its offer of proof and its subsequent memoranda. Mr. Grant is correct in noting that additional facts were presented at the hearing. The November 29, 1985 hearing, however, was not limited by the traditional rules relating to motions to reargue because the hearing was conducted simply to afford the court an opportunity to observe the demeanor of Siegel and to preserve his testimony. (Tr. at 2697 & 2703).

In any event, the issue is moot because even when these additional facts are considered, the result would not be any different: the government has not satisfied its burden under Geaney. There was certainly nothing unique about Grant’s procedures or his position in an enterprise that would place him in the Payden organization. Further, Siegel’s testimony regarding the exclusivity of territory, when considered with the other non-hearsay evidence, Nov. 26 Opinion at 11-13, is insufficient to show a “likelihood of an illicit association” between Grant, Payden and Coleman. See cases cited in Nov. 26 Opinion at 12. Again, the court notes that Grant was involved in a narcotics conspiracy, however, the government has not established a “likelihood” that this conspiracy is the one charged in the indictment when Grant’s statements are not considered. See Nov. 26 Opinion at 9 n. 6, 15 n. 7.

III. DECLARATION AGAINST INTEREST AND THE “CATCH ALL”

The government contends that even if the court should determine that the evidence of Grant and Payden’s membership in the same conspiracy is insufficient to satisfy the Geaney standard, the statements are nevertheless admissible because they were against Grant’s interest when made, Fed.R.Evid. 804(b)(3), and because they have “equivalent circumstantial guarantees of trustworthiness,” Fed.R.Evid. 804(b)(5). The court has already rejected most of these arguments in the Nov. 26 Opinion and therefore need not address them again here. The government did raise one case that was omitted from its first memo, United States v. Lieberman, 637 F.2d 95 (2d Cir.1980), and claims that the case is particularly instructive as to the Rule 804(b)(3) component of Grant’s statements.

Viewed in the context of Grant’s narcotics activities, the statements inculpating Payden would “tend to subject” Mr. Grant to criminal liability within the meaning of Lieberman, The statements, however, would not be admissible because there are insufficient corroborating circumstances. Nov. 26 Opinion at 10. The “corroborating circumstances must clearly indicate the trustworthiness of the statements” to admit statements that are against the interest of the declarant and also inculpate the defendant. United States v. Katsougrakis, 715 F.2d at 775. This requirement is mandated by the confrontation clause of the Constitution. United States v. Alvarez, 584 F.2d at 700-01; accord United States v. Riley, 657 F.2d 1377, 1382 (8th Cir.1981); see United States v. Katsougrakis, 715 F.2d at 776. At the very least, a standard comparable to the independent evidence requirement under 801(d)(2)(E) and Geaney must be used to determine corroboration. 4 D. Louisell & C. Mueller, Federal Evidence § 489, at 1181 (1980); see Tague, Perils of the Rule-making Process: The Development, Application, and Unconstitutionality of Rule 804(b)(3)’s Penal Interest Exception, 69 Geo.L.J. 851, 959 (1981); cf. United States v. Stanchich, 550 F.2d 1294, 1298 n. 1 (2d Cir.1977) (the same corroborating evidence is necessary to support admission under state of mind exception and co-conspirator exception). The same factors are applicable to making both the Geaney finding and the corroboration finding. Compare United States v. Lieberman, 637 F.2d at 102 with id. at 104. Thus, for the reasons stated above and in the November 26, 1985 opinion regarding the failure to satisfy the Geaney standard, the statements cannot be admitted pursuant to 804(b)(3).

The government also seeks to admit the statements pursuant to Rule 804(b)(5). The statement cannot be admitted under this rule for two reasons. First, Rule 804(b)(5) requires that there be “equivalent guarantees of trustworthiness.” For the same reasons that the statement is not admissible under Geaney for 801(d)(2)(E) and the corroboration requirment of 804(b)(3), the statement may not be admitted pursuant to the “catch-all” exception in 804(b)(5). United States v. Rodriguez, 706 F.2d 31, 40-41 (2d Cir.1983); United States v. Hoyos, 573 F.2d at 1116. Second, the Rule requires the “proponent of [the statement] make[] known to the adverse party sufficiently in advance of trial ... to provide the adverse party with a fair opportunity to prepare to meet it, his intention to offer the statement and the particulars of it, including the name and address of the declarant.” There is no indication that the government made their intentions known to the defense. See United States v. Rodriguez, 706 F.2d at 40-41.

CONCLUSION

The government’s request that the court vacate the November 26, 1985 Opinion is denied.

SO ORDERED.

      . These meetings were described in two DEA forms which were included in two memoranda submitted by the government as part of its original motion.

      . These statements are set forth in the Nov. 26 Opinion at 5 n. 3.

      . E.g., United States v. Gresko, 632 F.2d 1128, 1131 (4th Cir.1980); United States v. Alvarez, 584 F.2d 694, 696 (5th Cir.1978); United States v. Regilio, 669 F.2d 1169, 1174 (7th Cir.1981), cert. denied, 457 U.S. 1133, 102 S.Ct. 2959, 73 L.Ed.2d 1350 (1982); United States v. Bell, 573 F.2d 1040, 1044 (8th Cir.1978); United States v. Miranda-Uriarte, 649 F.2d 1345, 1349 (9th Cir.1981); United States v. Andrews, 585 F.2d 961, 965 (10th Cir.1978); United States v. Zielie, 734 F.2d 1447, 1457 (11th Cir.1984), cert. denied,—U.S.-, 105 S.Ct. 957, 83 L.Ed.2d 964 (1985); United States v. Slade, 627 F.2d 293, 307 (D.C. Cir.), cert. denied, 449 U.S. 1034, 101 S.Ct. 608, 66 L.Ed.2d 495 (1980).

      . The Third Circuit has eliminated any doubt as to its position on this issue. United States v. Ammar 714 F.2d 238, 246 n. 3 (3d Cir.), cert. denied, 464 U.S. 936, 104 S.Ct. 344, 78 L.Ed.2d 311 (1983) (“Most circuits ..., including this one, have continued to take the position that the preliminary determinations of admissibility must be made on the basis of independent evidence."); accord in re Japanese Electronic Products Antitrust Litig., 723 F.2d 238, 260-61 (3d Cir. 1983). Further, Justice White in dissenting from the denial of certiorari on this issue in-eludes the First Circuit among the majority. Means v. United States,—U.S.-, 105 S.Ct. 541, 542, 83 L.Ed.2d 429 (1984) (White, J., dissenting from denial of certiorari).

      . E.g., United States v. Ginsberg, 758 F.2d 823, 828 (2d Cir.1985) (“Under Geaney, statements made by a co-conspirator are admissible against a defendant when the prosecution proves the defendant's membership in the conspiracy by a fair preponderance of independent evidence."); United States v. Wilkinson, 754 F.2d 1427, 1434 (2d Cir.) (to admit co-conspirator hearsay, trial judge was required to find defendant’s participation in the conspiracy “on the basis of a fair preponderance of the non-hearsay evidence”), cert. denied,—U.S.--, 105 S.Ct. 3482, 87 L.Ed.2d 617 (1985); United States v. Mankani, 738 F.2d 538, 546 (2d Cir.1984) (Geaney requires “that the non-hearsay testimony demonstrate by a fair preponderance of the evidence [defendant’s] participation in the conspiracy"); United States v. Garcia-Duarte, 718 F.2d 42, 45-46 (2d Cir.1983) (stating that "Geaney and its progeny establish that for the statement of an alleged co-conspirator to be used against a defendant, the government must demonstrate by a fair preponderance of the independent non-hearsay evidence that the defendant was in fact a member of the conspiracy” and then concluding that the independent non-hearsay proof of defendant’s participation in the conspiracy was not sufficient to support the admission of customer book which was hearsay); United States v. Terry, 702 F.2d 299, 320-21 (2d Cir.) ("Before a jury may consider against a defendant a conspiracy count that rests in part on hearsay statements of an alleged co-conspirator, the trial judge must be satisfied by a fair preponderance of the independent non-hearsay evidence that the defendant was in fact a member of the conspiracy____ Without this requirement of independent non-hearsay corroboration, co-conspirator hearsay 'would lift itself by its own bootstraps to the level of competent evidence,'") (quoting Glosser v. United States, 315 U.S. 60, 74-75, 62 S.Ct. 457, 467, 86 L.Ed. 680 (1942)), cert. denied, 464 U.S. 992, 104 S.Ct. 482, 78 L.Ed.2d 680, 461 U.S. 931, 103 S.Ct. 2095, 77 L.Ed.2d 304 (1983); United States v. Perez, 702 F.2d 33, 35 (2d Cir.) (Geaney finding as to the existence of a conspiratorial relationship between the declarant and the defendant must be shown aliunde of the hearsay statement itself), cert. denied, 462 U.S. 1108, 103 S.Ct. 2457, 77 L.Ed.2d 336 (1983); United States v. Margiotta, 688 F.2d 108, 136-37 (2d Cir.1982) ("The law is well-settled that declarations that are otherwise hearsay may nonetheless be provisionally admitted pursuant to Rule 801(d)(2)(E), subject of course to ultimate connection of the defendant with the conspiracy alleged in the indictment, if the trial court determines that the defendant and the declarant participated in the conspiracy, by a fair preponderance of the evidence independent of the hearsay utterances.’’), cert. denied, 461 U.S. 913, 103 S.Ct. 1891, 77 L.Ed.2d 282 (1983); accord United States v. Alvarez-Porras, 643 F.2d 54, 57 (2d Cir.), cert. denied, 454 U.S. 839, 102 S.Ct. 146, 70 L.Ed.2d 121 (1981); United States v. Provenzano, 615 F.2d 37, 44 (2d Cir.), cert. denied, 446 U.S. 953, 100 S.Ct. 2921, 64 L.Ed.2d 810 (1980); United States v. Cambindo Valencia, 609 F.2d 603, 635 (2d Cir.1979), cert. denied, 446 U.S. 940, 100 S.Ct. 2163, 64 L.Ed.2d 795 (1980); United States v. Lyles, 593 F.2d 182, 194 (2d Cir.), cert. denied, 444 U.S. 847, 100 S.Ct. 94, 62 L.Ed.2d 61, 440 U.S. 975, 972, 99 S.Ct. 1545, 1537, 59 L.Ed.2d 794, 789 (1979); United States v. DeFillipo, 590 F.2d 1228, 1236 & n. 12 (2d Cir.), cert. denied, 442 U.S. 920, 99 S.Ct. 2844, 61 L.Ed.2d 288 (1979); United States v. Ziegler, 583 F.2d 77, 81 (2d Cir.1978); see Means v. United States, 105 S.Ct. at 541-42 (White, J., dissenting from denial of certiorari) (sixth circuit’s view that court may consider hearsay in making Geaney finding is "inconsistent with the stated position of every other Federal Court of Appeals”).

      . If the government is arguing that the statement should be admissible as to Payden and Coleman because it falls under the admission exemption to the hearsay rule, this would be just as unpersuasive. Admissions are not admissible against persons other than the declarant. Fed.R.Evid. 801(d)(2)(A); e.g., United States v. Morris, 623 F.2d 145, 148 (10th Cir.), cert. denied, 449 U.S. 1065, 101 S.Ct. 793, 66 L.Ed.2d 609 (1980); United States v. Eubanks, 591 F.2d 513, 519 (9th Cir.1979) (per curiam) United States v. Glover, 506 F.2d 291, 294 (2d Cir. 1974); People v. Payne, 35 N.Y.2d 22, 27-28, 358 N.Y.S.2d 701, 315 N.E.2d 762 (1974).

      . The government also implies that the court applied the incorrect standard in making the Geaney finding. The government asserts that once a conspiracy has been established, only "slight evidence” is needed to connect an additional person to the conspiracy. Not only is this not a correct statement of the standard, see United States v. Silverman, 18 Fed.R.Evid.Serv. (Callaghan) 915, 921-22 (9th Cir.1985) (the proper standard is "'substantial evidence’ of a 'slight connection.' ”), it is simply not the law of this circuit. Although the evidence “need not be overwhelming”, United States v. Provenzano, 615 F.2d at 45, "the threshold requirement of admissibility [in this circuit] is satisfied by a showing of a likelihood of an illicit association between the declarant and the defendant." United States v. Ragland, 375 F.2d 471, 477 (2d Cir.1967), cert. denied, 390 U.S. 925, 88 S.Ct. 860, 19 L.Ed.2d 987, (1968); accord United States v. Garcia-Duarte, 718 F.2d at 45; United States v. Terry, 702 F.2d at 320; United States v. Provenzano, 615 F.2d at 44. Recent appellate panels seem to require an even stricter standard than the "likelihood of illicit association” to link a defendant to an already established conspiracy and admit the statements against him. See, e.g., United States v. Wilkinson, 754 F.2d at 1434 (to admit coconspirator hearsay, trial judge was "required to find participation by the [defendant] in the conspiracy on the basis of a fair preponderance of the non-hearsay evidence”); United States v. Mankani, 738 F.2d at 546 ("Before admitting a coconspirator’s statement into evidence against [the defendant] ... it is required ... that the non-hearsay testimony demonstrate by a fair preponderance of the evidence [the defendant’s] participation in the conspiracy.’’).

      . Special Agent Siegel stated that he saw Mr. Payden speaking with a woman in front of Kenny’s. The woman then walked away and met with another man. The woman and the man entered a building and stayed for a period of fifteen minutes. Other people entered the building while the woman and man were inside. When the woman and man left the building, the woman was carrying a wallet with money. The two walked down the street. The man got into his car and the woman then walked over to talk with Payden. The man drove off and was followed by Siegel. Siegel lost contact with the man’s car on the highway and returned to his previous location on Amsterdam Avenue. When he returned, he did not see the woman.

      . The only basis for a motion for reargument in a civil case is that "the court has overlooked ‘matters or controlling decisions’ which, had they been considered, might reasonably have altered the result reached by the court." Wm. Passalacqua Builders, Inc. v. Resnick Developers South, Inc., 611 F.Supp. 281, 284 (S.D.N.Y.1985). The same standard is applicable to motions in criminal cases. United States v. N.V. Nederlandsche Combinatie Voor Chemische Industrie, 75 F.R.D. 473, 475 n. 8 (S.D.N.Y.1977).

      . The facts of this case are in line with the majority of cases where hearsay has been excluded on the grounds of insufficient independent evidence. Comment, Reconstructing the Independent Evidence Requirement of the Co-conspirator Hearsay Exception, 127 U.Pa.L.Rev. 1439, 1465-66 (1979). Specifically, these cases involve the testimony of "an undercover agent who has negotiated or transacted a sale with the coconspirator-declarant. The hearsay declaration of the coconspirator, spoken to or overheard by the agent in the defendant’s absence, implicates the defendant, often as the source of the coconspirator’s drug supply.” Id. (footnotes omitted). See also Tr. at 1943-44 ("The street is a funny place. People switch drugs, they use brand names that are not theirs in order to sell.”) (testimony of Special Agent Siegel).

      . This would be relevant to the second prong of the test for admissibility set forth in United States v. Katsougrakis, 715 F.2d 769, 775 (2d Cir.1983), cert. denied, 464 U.S. 1040, 104 S.Ct. 704, 79 L.Ed.2d 169 (1984). See Nov. 26 Opinion at 9.

      . Corroboration is of the content of the statement as opposed to corroboration of the fact that the statement was made. Comment, Federal Rule of Evidence 804(b)(3) and Inculpatory Statements Against Penal Interest, 66 Calif.L.Rev. 1189, 1205 n. 99 (1978).

      . To admit statements pursuant to 801(d)(2)(E), the court must find the existence of the conspiracy and of the defendant’s complicity therein by a "fair preponderance of the evidence independent of the hearsay utterances.” United States v. Geaney, 417 F.2d at 1120 (emphasis added). To admit statements pursuant to 804(b)(3) the court must find that "corroborating circumstances clearly indicate the trustworthiness of the statement.” United States v. Katsougrakis, 715 F.2d at 775 (emphasis added); see United States v. Satterfield, 572 F.2d 687, 693 (9th Cir.) (corroborating circumstances must do more than tend to indicate the trustworthiness of the statement, they must clearly indicate it), cert. denied, .439 U.S. 840, 99 S.Ct. 128, 58 L.Ed.2d 138 (1978). There must be circumstances solidly indicating trustworthiness; minimal corroboration is not enough. United States v. Hoyos, 573 F.2d 1111, 1115 (9th Cir.1978); United States v. Barrett, 539 F.2d 244, 253 (1st Cir.1976).

      . In Lieberman the court found sufficient evidence to satisfy the Geaney standard as well as the corroboration standard. 637 F.2d 102, 104. The abundance of independent evidence present in Lieberman is absent from this case.

      . To permit a lesser standard to be used to corroborate statements under 804(b)(3) than to satisfy Geaney would result in the declaration against interest exception swallowing up the co-conspirator exception and the various safeguards connected with it. See United States v. Alvarez, 584 F.2d at 701; cf. 4 J. Weinstein & M. Berger, Weinstein’s Evidence ¶ 801(d)(2)(E)[01], at 801-244 (1985) ("Though ingenious in its manipulation of the hearsay rules, the effect of the ruling [admitting statement under Fed.R.Evid. 804(b)(3) even though it was not 'in furtherance' of the conspiracy as required by Fed.R.Evid. 801(d)(2)(E) ] was to deny the defendant the protection supposedly built into ... rule]” 801(d)(2)(E)); Note, Inculpatory Declarations Against Interest and the Confrontation Clause: A Wider Spectrum of Admissible Evidence Against Co-conspirators, 48 Brooklyn L.Rev. 943 (1982) (concluding that too broad an interpretation of whether a statement tends to incriminate a declarant within the meaning of Rule 804(b)(3) would emasculate the “in furtherance” requirement of Rule 801(d)(2)(E) ); see also Note, Federal Rules of Evidence 801(d)(2)(E) and the Confrontation Clause: Closing the Window of Admissibility for Coconspirator Hearsay, 53 Ford-ham L.Rev. 1291, 1298 (1985) (“The pendency and furtherance requirements were intended to limit the admissible class of coconspirator statements indicating Supreme Court disfavor of 'attempts to broaden the already pervasive and wide-sweeping nets of conspiracy prosecutions.’") (quoting Grunewald v. United States, 353 U.S. 391, 404, 77 S.Ct. 963, 973, 1 L.Ed.2d 931 (1957)). The integrity of the "independent evidence" safeguard has been jealously guarded by the courts. See cases cited supra notes 3-5.

      . It should also be noted that there is nothing that makes an admission per se reliable enough to be admissible under 804(b)(5). See Fed.R. Evid. 801 advisory committee note (Admissions are deemed not to be hearsay as to the declarant "as a result of the adversary system rather than satisfaction of the conditions of the hearsay rule____ No guarantee of trustworthiness is required in the case of an admission.”).


author: GENE CARTER, District Judge.

text:
    Robert CUTTLE By and Through Gisele STICKNEY, Guardian and Conservator, Plaintiff, v. FEDERAL EMPLOYEES METAL TRADES COUNCIL, Defendant.
    Civ. No. 85-0019 P.
    United States District Court, D. Maine.
    Dec. 16, 1985.

      Michael Ayotte, Saco, Me., John C. Gall, Preti, Flaherty & Beliveau, Portland, Me., for plaintiff.
    James G. Noucas, Jr., Mulvey & Noucas, Portsmouth, N.H., for defendant.
   ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

GENE CARTER, District Judge.

Plaintiff was employed at the Portsmouth Naval Shipyard until September 29, 1982. While so employed, he was a participant in the Metal Trades Council Health Benefit Plan established by defendant Federal Employees Metal Trades Council. Premiums for coverage in the plan were deducted from plaintiff’s pay and were paid for the period ending October 2, 1982. The Plan provided that “[a] covered member’s coverage will terminate on the earliest of the following dates: ... (b) upon termination of active service____” Exhibit B to Defendant’s Motion at 4. Plaintiff was injured in a motorcycle accident on October 21, 1982. He submitted a proof of loss claim to the Metal Trades Council. The claim was denied on August 23, 1983.

Plaintiff alleges that under both Maine and New Hampshire law, he was entitled to conversion insurance coverage in the period following his termination from employment. He alleges that defendant violated both Maine and New Hampshire law and in so doing also violated the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq. (ERISA).

Defendant has moved for summary judgment on the grounds that both provisions of Maine and New Hampshire insurance law cited by plaintiff are preempted by ERISA and that under the terms of the plan, plaintiff’s insurance coverage ended with his termination. Plaintiff failed to respond to defendant’s notice within ten days as required by Local Rule 19(c). In a summary judgment context, the Court does not automatically grant the motion for lack of objection as it does in other motion practice, see, e.g., Picucci v. Town of Kittery, 101 F.R.D. 767 (D.Me.1984), but instead utilizes the following procedure:

[W]ith summary judgment motions ... an opposing party who fails to object within ten days is to be deemed to have waived his right to controvert facts asserted by the moving party. The Court will accept as true all material facts, supported by appropriate record citations, set forth by the movant. Summary judgment will be granted if upon the Court’s consideration of the pertinent papers, those facts entitle the moving party to judgment as a matter of law.

McDermott v. Lehman, 594 F.Supp. 1315 (D.Me.1984).

In support of its motion, defendant has submitted copies of the plan Trust Agreement, a copy of the Health Benefits Plan, and a copy of the contract between the plan and the plan administrator. It has also submitted the affidavit of Bruce Buchanan, an agent of the plan administrator. These documents show that the plan is self-funded, i.e., that benefits of the plan are paid directly from the monthly contributions collected from the covered members of the plan. Although the plan is not initially funded by an insurance policy, the plan does carry specific aggregate excess insurance or stop-loss insurance. This policy pays the plan for sums paid by the plan in excess of $20,000 per individual claimant, protecting the plan against excessive loss. A copy of this policy was also submitted in support of defendant’s motion.

DISCUSSION

New Hampshire law provides that group accident and health insurance benefits shall be extended to any beneficiary who becomes ineligible for continued participation in a plan for a period of 39 weeks beyond the ordinary termination of the plan. N.H.R.S.A. 415:18 VII(g). See Dawson v. Whaland, 529 F.Supp. 626 (D.N.H. 1982). Subsection (g)(3) makes the provision applicable to employee benefit plans. Maine has a similar provision, applicable to group health insurance policies. 24-A M.R.S.A. § 2809-A. Plaintiff in his complaint has alleged that defendant has violated both these statutes by terminating his insurance. Defendant argues in his motion for summary judgment that both statutes have been preempted by ERISA. The Court agrees.

Section 1144 of Title 29 U.S.C. provides that:

Except as provided in subsection (b) of this section, the provisions of this sub-chapter and subchapter III of this chapter shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in section 1003(a) of this title and not exempt under section 1003(b) of this title____

In examining subsection (b) of section 1144, exception 2 is pertinent:

(2)(A) Except as provided in subparagraph (B), nothing in this subchapter shall be construed to exempt or relieve any person from any law of any State which regulates insurance, banking or securities.

Both of the laws cited by plaintiff are state laws regulating insurance. This insurance savings clause, however, is modified by the so-called “deemer clause” which provides:

Neither an employee benefit plan described in section 1003(a) of this title, which is not exempt under section 1003(b) of this title (other than a plan established primarily for the purpose of providing death benefits), nor any trust established under such a plan, shall be deemed to be an insurance company or other insurer, bank, trust company, or investment company or to be engaged in the business of insurance or banking for purposes of any law of any State purporting to regulate insurance companies, insurance contracts; banks, trust companies or investment companies.

29 U.S.C. § 1144(b)(2)(B).

In a thoughtful discussion of section 1144, a federal district court in California stated: “The rule that emerges from these cases is that any law directly regulating an employee benefit plan is preempted, but laws regulating an insurance company or policy purchased from an insurance company are saved from preemption.” Eversole v. Metropolitan Life Insurance Co., Inc., 500 F.Supp. 1162, 1170 (C.D.Cal.1980). The Eversole construction was recently reaffirmed by the United States Supreme Court in Metropolitan Life Insurance Co. v. Massachusetts,—U.S.-, 105 S.Ct. 2380, 85 L.Ed.2d 728 (1985). In that case, the Court construed the insurance saving and deemer clauses holding that Massachusetts’ mandated benefit law was not preempted by ERISA and applied to insurance policies purchased by benefit plans or employers or unions in Massachusetts. The Court stated:

We are aware that our decision results in a distinction between insured and uninsured plans, leaving the former open to indirect regulation while the latter are not. By so doing we merely give life to a distinction created by Congress in the “deemer clause.”

Id.—U.S. at-, 105 S.Ct. at 2393, 85 L.Ed.2d at 745.

In the instant case, plaintiff seeks to have the New Hampshire and Maine conversion laws applied directly to an employee benefit plan. The District Court for the District of New Hampshire has already determined that the New Hampshire conversion statute may not be applied to plans like the instant one which are self-insured and carry stop-loss insurance. Dawson v. Whaland, 529 F.Supp. 626, 632 (D.N.H.1982):

We here deal not with the conduct of group insurance coverage, which the Court easily concedes falls within the primacy of state regulation of insurance, pursuant to the McCarran Ferguson Act____ What the instant state legislation seeks to do is to determine who shall be eligible under such funds, which the Court finds and rules have “emerge[d] from collective bargaining ... and which, the Court also finds and rules, the state may not do.

Although the record here does not make clear whether the instant plan is the result of collective bargaining, the Court finds enough similarity between this case and Dawson to warrant application of the rule of that case. Despite the fact that the plans in that case and this carry stop-loss insurance, they are still primarily self-funded and should not be deemed regulable insurance companies. Id. at 630. See also General Split Corp. v. Mitchell, 523 F.Supp. 427 (E.D.Wis.1981). Stop-loss insurance is not group health insurance providing insurance to individuals through a sponsor group. Rather, it is insurance obtained to protect self-insurers from risks beyond those upon which the premiums are based.

Plaintiff also has alleged that the Maine conversion statute should be applied to the benefit plan. The Maine statute cited by plaintiff, 24-A M.R.S.A. § 2809-A, provides for conversion benefits for group health insurance policies. For the statute to apply to the instant benefit plan which provides health insurance benefits as a group health insurance policy might, the plan would have to be “deemed” an insurance company in violation of the “deemer clause” of ERISA. 29 U.S.C. § 1144(b)(2)(B).

Neither can the statute be applied to the plan because it carries the stop-loss insurance. That policy is not a group health insurance policy within the meaning of the applicable statutes. 24-A M.R.S.A. §§ 2804-2806. All of those statutes specify that a group policy must be established to insure employees for the benefit of persons other than the union or trustee or employer which has obtained the group policy. The stop-loss policy insures the issuer of the plan for the benefit of the fund or plan. Payment is not made to the individual employees for the claims they make. Such insurance is, of course, indirectly of benefit to the covered employees. The Court finds, however, that the statute intends direct benefits. It appears, therefore, that the conversion requirements under Maine law cannot be applied to the subject benefit plan.

Both the Maine and New Hampshire conversion statutes are preempted by ERISA to the extent that they might be construed to apply to employee benefit plans like the one at issue here. Since the basis of plaintiffs claims is that defendant has violated the New Hampshire and Maine statutes, defendant is entitled to judgment as a matter of law.

Accordingly, it is ORDERED that defendant’s motion for summary judgment is hereby GRANTED..

      . On November 26, 1985, twelve days after response to the motion for summary judgment was due, plaintiffs new co-counsel filed a motion for extension of time in which to file a response. The motion stated as grounds for the relief sought that co-counsel had just entered his appearance on that day and he needed adequate time to oppose the motion adequately. Fed.R. Civ.P. 6(b) provides that the Court may, "upon motion made after the expiration of the specified period permit the act to be done where the failure to act was the result of excusable neglect.” No showing of excusable neglect has been made here. In fact, no reason at all has been given for the failure to file. Co-counsel merely stated that he has recently filed his appearance and needs more time to prepare. Submissions in the file show that plaintiff was represented by the other co-counsel past the required filing date, yet no excuse for his dilatory conduct is provided. The Court must, therefore, deny plaintiffs motion for enlargement of time.


author: TELESCA, District Jbdge.

text:
    James D. WILSON, Plaintiff, v. A. Raymond UTTARO, Individually and as Commissioner of Jurors of Monroe County, and all his agents, employees and successors in interest, Defendant.
    No. CIV-85-1312T.
    United States District Court, W.D. New York.
    Dec. 16, 1985.
    James D. Wilson, pro se.
    Charles R. Valenza, Co. Atty., for Monroe County, Rochester, N.Y., for defendant.
   DECISION and ORDER

TELESCA, District Jbdge.

Plaintiff, James D. Wilson, is an African-American male, and is presently a pre-trial detainee awaiting disposition of a pending Monroe County Grand Jury indictment. In a pro se civil rights complaint filed with this Court, Wilson alleges that the defendant, A. Raymond Uttaro, in his official capacity as Commissioner of Jurors of Monroe County, has engaged in unconstitutional practices resulting in the under representation of certain groups from Monroe County jury pools: namely, “women, native Americans, African-Americans, Hispanic Americans, students and other ethnic minorities.” (Plaintiffs complaint 117.) More specifically, Wilson asserts that defendant Uttaro has developed a policy of allowing members of those groups to obtain “hardship excuses” from jury service “by simply asserting a claim to have an economic hardship.” (Plaintiffs complaint 11 8.) Wilson argues that this practice violates the constitutional rights he enjoys both as a potential juror, and as a criminal defendant.

After a review of the affidavit of poverty submitted by Wilson, I find that plaintiff should be permitted to file his complaint in forma pauperis, pursuant to 28 U.S.C. § 1915(a). For the reasons that follow, however, the complaint is dismissed as frivolous within the meaning of § 1915(d).

DISCUSSION

I.

In his first cause of action, Wilson alleges that he is denied equal protection of the law, in violation of the Thirteenth and Fourteenth Amendments of the United States Constitution, by the fact that he and other ethnic minority members are arbitrarily and systematically excluded from jury service in Monroe County. Accepting the allegations of his complaint as true, that argument is totally frivolous, since the “systematic exclusion” he describes in his complaint is entirely voluntary. Wilson makes no allegation that women and ethnic minorities are less likely to be summoned for jury service, or that they are the “victims” of any discriminatory policy of intentional exclusion. On the contrary, by Wilson’s own admission, those minority groups are under-represented in Monroe County juries because they are the beneficiaries of a policy which allows them more favorable treatment in obtaining “hardship excuses” from jury service. Any minority member who refuses to accept the benefit of this unequal treatment need only refrain from requesting a voluntary exclusion from jury service.

Since Wilson and the other ethnic minority members described in his complaint have not been personally injured by the “unequal” treatment of the law which allegedly makes it easier for them to voluntarily avoid jury duty, Wilson lacks standing to assert an equal protection challenge to the practice. Allen v. Wright, 468 U.S. 737, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984), rehearing denied,—U.S.-, 105 S.Ct. 51, 82 L.Ed. 942 (1984). Nor may Wilson assert standing on behalf of those white males who allegedly face greater difficulty (and are perhaps denied equal protection of the law) in their attempts to obtain excuses from jury duty. In a case such as this, plaintiff “must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties.” Warth v. Seldin, 422 U.S. 490, 499, 95 S.Ct. 2197, 2205, 45 L.Ed.2d 343 (1975).

II.

Wilson’s second cause of action challenges the defendant’s practices from another angle. Wilson argues that the alleged exclusion of women and ethnic minorities from jury service deprives him of the right to have his upcoming criminal trial heard by a jury which is representative of a clear cross-section. of the community. (Complaint ¶ 11.) This claim is surely much more substantial, even if those minorities are voluntarily excluded. In Duren v. Missouri, 439 U.S. 357, 99 S.Ct. 664, 58 L.Ed.2d 579 (1979), the Supreme Court struck down a state statute that exempted women from jury duty upon their request for an exemption. The Court stressed that “the constitutional guarantee to a jury drawn from a fair cross-section of the community requires that States exercise proper caution in exempting broad categories of persons from jury service.” Id., at 370, 99 S.Ct. at 671. Thus, a state is not permitted by the Sixth Amendment to grant exemptions from jury service in a manner which will restrict unreasonably the possibility that the petit jury will comprise a fair cross-section of the community. McCray v. Abrams, 750 F.2d 1113, 1129 (2d Cir.1984) (dictum), rehearing en banc denied, 756 F.2d 277 (2d Cir.1985).

Although Wilson’s second cause of action poses a substantial constitutional question and a live case or controversy for federal adjudication, the circumstances of this case naturally implicate “the principles of equity, comity, and federalism that must restrain a federal court when asked to enjoin a state court proceeding.” Mitchum v. Foster, 407 U.S. 225, 243, 92 S.Ct. 2151, 2162, 32 L.Ed.2d 705 (1972). The Supreme Court has repeatedly stated that, “in view of the fundamental policy against federal interference with state criminal prosecutions”, such injunctive relief may only be granted to avoid irreparable injury which is “both great and immediate.” Younger v. Harris, 401 U.S. 37, 46, 91 S.Ct. 746, 751, 27 L.Ed.2d 669 (1971).

It is clear that the allegations of Wilson’s complaint, liberally construed in his favor, could not possibly establish the irreparable injury required for federal injunctive relief from his pending state criminal proceeding. He does not allege (nor could he) that he or any other party has been, or later may be, inhibited or prevented from engaging in constitutionally protected conduct by their fear of the prospect of being tried before an unrepresentative jury. On the contrary, if federal injunctive relief is denied at this juncture, the only potential injury faced by plaintiff is that he would be required to raise his constitutional claims in his state court trial before returning to federal court. Wilson asserts that this prospect amounts to irreparable injury, since it “would be attended by ... uncertainties and delays.” (Complaint ¶ 12). As the Supreme Court has stated, however,

Certain types of injury, in particular, the cost, anxiety, and inconvenience of having to defend against a single criminal prosecution, could not by themselves be considered “irreparable” in the special legal sense of that term. Instead, the threat to the plaintiff’s federally protected rights must be one that cannot be eliminated by his defense against a single criminal prosecution.

Younger, supra, 401 U.S. at 46, 91 S.Ct. at 751.

Under the facts of this case, the same principle also counsels against the issuance of a federal declaratory judgment while a state proceeding is pending, since the intrusive effect of declaratory relief “will result in precisely the same interference with and disruption of state proceedings that the long-standing policy limiting injunctions was designed to avoid”. Samuels v. Mackell, 401 U.S. 66, 72, 91 S.Ct. 764, 767, 27 L.Ed.2d 688 (1971). Considerations of equity, comity and federalism preserve their vitality as long as state criminal proceedings are still pending against plaintiff, since federal intervention, through either declaratory or injunctive relief, would “result in duplicative legal proceedings or disruption of the state criminal justice system”. Steffel v. Thompson, 415 U.S. 452, 462, 94.S.Ct. 1209, 1217, 39 L.Ed.2d 505 (1974).

Accordingly, Wilson’s request for declaratory and injunctive relief must be denied at this time. Wilson may raise his federal constitutional challenges to the jury panel in the state criminal proceeding, by way of a written objection pursuant to New York Criminal Procedure Law § 270.10. At the conclusion of the state criminal proceedings, Wilson will be entitled to collateral federal habeas review if he brings a timely challenge to the jury panel under C.P.L. § 270.10, as long as his objection “plainly and unambiguously” notified the state courts of his federal constitutional claim. Alburquerque v. Bara, 628 F.2d 767, 774 (2d Cir.1980).

CONCLUSION

This Court is empowered by 28 U.S.C. § 1915(d) to dismiss sua sponte a pro se civil rights complaint which, when liberally construed, is conclusively foreclosed by statute or controlling precedent. Love v. Coughlin, 714 F.2d 207 (2d Cir.1983). Such is the case here. Accordingly, although Wilson is hereby granted leave to file his complaint in forma pauperis, the complaint is dismissed as frivolous.

SO ORDERED.


author: ROBERT L. CARTER, District Judge.

text:
    Vincent W. FERRO, Plaintiff, v. ASSOCIATION OF CATHOLIC SCHOOLS, Roman Catholic Archdiocese of New York, Rev. Edward P. Hauck, St. Thomas of Canterbury Parish, St. Thomas of Canterbury School, Sr. Helen Robert Boyd, O.P. and Dominicans of Sparkill, Defendants.
    No. 85 Civ. 2304 (RLC).
    United States District Court, S.D. New York.
    Dec. 16, 1985.

      Francis E. Ferro, P.C., Milton, N.Y., for plaintiff.
    Edward J. Burke, Clifton Budd Burke & Demaria, New York City (David F. Horan, Michele Costanza Horan, of counsel), for defendants.
   OPINION

ROBERT L. CARTER, District Judge.

Plaintiff brought this civil action in the Supreme Court of the State of New York, New York County in December, 1984, alleging wrongful discharge from his job with defendant St. Thomas of Canterbury School [“St. Thomas”] in violation of a contract between this defendant and plaintiff. Plaintiff sought $975,000 in compensatory damages, $975,000 in exemplary damages for alleged tortious interference with his employment contract, and $975,000 in consequential damages. On March 26, 1985, defendants removed this action to this court. Before the court are defendants’ motion to stay the action pending arbitration, pursuant to an agreement to arbitrate and the Federal Arbitration Act, and plaintiff’s cross-motion to remand the action to state court, pursuant to 28 U.S.C. § 1447(c), on the ground that it was improvidently removed to this court.

FACTS:

Plaintiff Vincent Ferro, a New York state-certified elementary school teacher, was employed for 15 years by defendant St. Thomas. On January 16, 1984, plaintiff was discharged as a result of alleged public statements that “severely interfered with the canonical, ecclesiastical and religious functions of the Association of Schools and its member school, St. Thomas of Canterbury” {Supporting Affidavit on Cross-Motion to Remand to State Court, Exhibit A). Defendant St. Thomas is a member of defendant Association of Catholic Schools [“Association”], an unincorporated educational association, organized and existing under the laws of New York. Defendant Association and the Federation of Catholic Teachers [“Federation”], a labor organization and the exclusive bargaining representative of teachers at St. Thomas, are parties to a collective bargaining agreement governing the terms and conditions of teachers’ employment in a unit that includes St. Thomas. Each year of plaintiff’s employment, he executed an “Annual Agreement of Employment” which made reference to a collective bargaining agreement between Association and Federation (Plaintiffs Supporting Affidavit on Cross-Motion to Remand to State Court, ¶ IV; Burke Affidavit, Exhibit B at 77).

The collective bargaining agreement in effect at the time of plaintiff’s discharge contains a grievance and arbitration provision which states the parties’ intent to arbitrate disputes that arise under the agreement, {Burke Affidavit, Exhibit A, Collective Bargaining Agreement, Art. V), including those disputes that involve canonical, ecclesiastical or religious questions. (Burke Affidavit, Exhibit A at 77). Hence, the Federation’s sole method of contesting a decision by the Association or Archdiocese involving these types of questions is an appeal to the Archdiocesan Committee on Due Process. Any decision reached by the Archdiocesan Committee on Due Process is final and binding on the parties to the agreement. Defendants assert that the decision to discharge plaintiff involved questions of Roman Catholic Church doctrine. (,Memorandum of Law in Support of Defendant’s Motion to Stay Action Pursuant to Agreement to Arbitrate, at 3). Thus, defendants argue that the Archdiocesan Committee is the only appropriate forum to determine the legitimacy of plaintiff’s termination. Following his discharge, plaintiff and the Federation requested a hearing before the Archdiocesan Committee. Plaintiff, instead of appearing at the scheduled arbitration, filed suit in New York State Supreme Court. Removal to this court followed.

DISCUSSION:

According to 28 U.S.C. § 1447(c), “If at any time before final judgment it appears the case was removed improvidently and without jurisdiction, the district court shall remand the case, and may order the payment of just costs.” Under the federal removal statute, 28 U.S.C. § 1441(a), a defendant in a state court civil action founded on a federal claim of right, i.e. within a district court’s original jurisdiction, may remove the action to federal court unless Congress has provided otherwise. Plaintiff contends that the present action is not one over which the federal district courts have original subject matter jurisdiction because plaintiff’s original and amended complaint are pleaded solely in terms of state law, “advancing common law claims ex contractu and ex delicto.” (Plaintiffs Supporting Affidavit on Cross-Motion to Remand to State Court, 11IX).

Although plaintiff characterizes his claim as a state law cause of action, defendants argue that this cause of action falls within the original “federal question” jurisdiction of United States’ district courts, i.e. “aris[es] under” the laws of the United States within the meaning of 28 U.S.C. § 1331 and thus was properly removed as an action under the “laws of the United States” within the meaning of 28 U.S.C. § 1441(b). In support of this contention, defendants allege three possible bases of federal question jurisdiction: plaintiff’s complaint avers facts that state a claim under § 301 of the Labor Managment Relations Act, [“LMRA”], 29 U.S.C. § 185(a), defendants in discharging plaintiff “exercised rights [sic] guaranteed by the Constitution of the United States,” (Memorandum of Law in Support of Defendant’s Motion to Stay Action Pursuant to Agreement to Arbitrate at 1), and the arbitration clause contained in the collective bargaining agreement governing plaintiff’s employment contract is enforceable through the Federal Arbitration Act, 9 U.S.C. § 3. (Defendant’s Notice of Motion For Stay of Action Pursuant to Agreement to Arbitrate and Federal Arbitration Act).

The general rule regarding removal of a non-diversity action to federal court is that on the face of the complaint there must exist a federal question. See Phillips Petroleum Co. v. Texaco Inc., 415 U.S. 125, 127-28, 94 S.Ct. 1002, 1003-04, 39 L.Ed.2d 209 (1974) (per curiam); Gully v. First National Bank, 299 U.S. 109, 113, 57 S.Ct. 96, 97, 81 L.Ed. 70 (1936) (both holding that an action generally does not “aris[e] under” federal law for removal purposes unless the existence of a federal question appears on the face of the complaint). However, contrary to plaintiffs assertion, courts have frequently found removal proper on an “arising under” theory, despite the fact that the complaint fails to mention any federal law. Holder v. Pet Bakery Div., I.C. Industries, Inc., 558 F.Supp. 287, 288 (N.D.Ga.1982) (Murphy, J.) (plaintiffs complaint for wrongful discharge, although not denominated as such, alleged a cause of action under LMRA); Alameda Room, Inc. v. Pitta, 538 F.Supp. 1072 (S.D.N.Y.1982) (Ward, J.) (claim was properly removable as one arising under federal law even though employer’s petition nowhere mentioned federal law, where state contract law relied on in petition had been preempted by federal law). Although plaintiff can restrict the complaint to a state law theory and proceed in state court without fear of removal to federal court when the facts of the case support both a federal and state law claim, The Fair v. Kohler Die & Specialty Co., 228 U.S. 22, 23, 33 S.Ct. 410, 411, 57 L.Ed. 716 (1913), where the allegations of the complaint support only a federal claim, and not a state law claim as well, “arising under” removal is always proper, even where the complaint on its face relies exclusively on state law. Federated Dept. Stores, Inc. v. Moitie, 452 U.S. 394 n. 2, 101 S.Ct. 2424 n. 2, 69 L.Ed.2d 103 (1981).

This limited exception to the “face of the complaint rule” prevents plaintiffs from defeating removal by inadvertently, mistakenly, or fraudulently concealing the federal question that would necessarily have appeared if the complaint had been well-pleaded. 1A Moore’s Federal Practice H 0.160 at 185-87 (2d ed. 1981). One result of this exception to the well-pleaded complaint rule is that “arising under” removal is proper, even when the complaint relies solely on state law, if the state law relied upon by the plaintiff has been preempted by federal law, i.e. where federal law, by definition, provides the only possible legal basis for the relief sought by plaintiff. North American Phillips Corp. v. Emery Air Freight Corp., 579 F.2d 229, 233-34 (2d Cir.1978); Alameda, supra; Palm Beach Co. v. Journeymen’s & Production Allied Services Local 157, 519 F.Supp. 705, 708 (S.D.N.Y.1981) (Ward, J.).

Plaintiff Ferro’s amended complaint relies solely on New York contract law as the substantive basis for relief. Defendants’ primary argument is that the complaint states an action under § 301 of the LMRA and that this statute preempts state law in the enforcement of the collective bargaining agreement at issue despite plaintiff's failure to allege a § 301 cause of action in the complaint. The United States Supreme Court has held that a plaintiff may not defeat removal by omitting to plead necessary federal labor law questions in a complaint. See Avco Corp. v. Aero Lodge No. 735, Int’l Assn, of Machinists, 376 F.2d 337, 340 (6th Cir.1967), aff'd, 390 U.S. 557, 88 S.Ct. 1235, 20 L.Ed.2d 126 (1968) (“State law does not exist as an independent source of private rights to enforce collective bargaining contracts [in an industry affecting interstate commerce]. While state courts may have concurrent jurisdiction, they are bound to apply federal law ... the force of federal preemption in this area of labor law cannot be avoided by failing to mention § 301 in the complaint.”) (emphasis supplied); Local 17f Teamsters, Etc. v. Lucas Flour Co., 369 U.S. 95, 104, 82 S.Ct. 571, 577, 7 L.Ed.2d 593 (1962) (“The ordering and adjusting of competing interests through a process of free and voluntary collective bargaining is the keystone of the federal scheme to promote industrial peace. State law which frustrates the effort of Congress to stimulate the smooth functioning of that process thus strikes at the very core of federal labor policy”).

The federal preemption doctrine espoused in Avco and Lucas Flour, supra, is not applicable here. Plaintiff has not eschewed reliance on the LMRA in favor of an alternate state provision which has been preempted by federal labor law. Although the collective bargaining agreement between Association and Federation was an integral and mutually binding part of plaintiffs employment arrangement with St. Thomas, plaintiffs wrongful discharge claim could not have been brought pursuant to § 301 of the LMRA, which provides a mechanism by which an employee may sue in federal court to enforce a collective bargaining agreement. In NLRB v. Catholic Bishop of Chicago, 440 U.S. 490, 99 S.Ct. 1313, 59 L.Ed.2d 533 (1979), the United States Supreme Court held that parochial school teachers are not within the coverage of the National Labor Relations Act [“NLRA”] since Congress failed to express a clear affirmative intention to extend coverage of the NLRA to teachers in church-operated schools. Thus, in Catholic High School Association of Archdiocese of New York v. Culvert, 753 F.2d 1161, 1171 (2d Cir.1985), this Circuit, noting that the NLRA is non-applicable to parochial schools, held that the NLRA did not preempt the New York State Labor Relations Board’s jurisdiction over labor relations between parochial schools and their lay teachers.

St. Thomas is a “church-operated” school within the meaning of Catholic Bishop. The preamble to the collective bargaining agreement between Association and the Federation states:

The Union and its members recognize the uniqueness of the Association and its member schools in that it is a Roman Catholic school system committed to provide education within the framework of Catholic principles.

(Burke Affidavit, Exhibit A at 2). Furthermore, a rider to the collective bargaining agreement between the Association and the Federation states:

[N]othing in said collective bargaining agreement shall be construed as interfering in any way with the Superintendent of Schools of the Archdiocese of New York or of the officers or directors of the Association in carrying out their functions and duties that are canonical, ecclesiastical or religious in nature.

(Burke Affidavit, Exhibit B at 77). Hence, the holding in Catholic Bishop—that the NLRA does not cover parochial school teachers—applies to the instant case; therefore, whatever claims plaintiff asserts under New York contract or New York labor law are neither covered nor preempted by federal law.

As an alternative basis for this court’s jurisdiction pursuant to 28 U.S.C. § 1331, defendants make a vague allegation that “defendants in discharging plaintiff exercised rights [sic] guaranteed by the Constitution of the United States” (Defendants’ Memorandum of Law in Support of Motion To Stay Action Pursuant to Agreement to Arbitrate). Apparently defendants are attempting to assert First Amendment claims. That attempt cannot succeed. An action may not be removed on the basis of a defense brought under federal law, even if both parties admit that the defense is the only thing truly at issue. Franchise Tax Board of California v. Construction Laborers Vacation Trust for Southern California, 463 U.S. 1, 103 5. Ct. 2841, 77 L.Ed.2d 420 (1983); Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149, 29 S.Ct. 42, 53 L.Ed. 126 (1908).

A third asserted basis for removal is defendants’ claim that the employment contract is covered by the Federal Arbitration Act, 9 U.S.C. § 1, et seq. If applicable, the Federal Arbitration Act would provide an alternate basis for jurisdiction in this court.

The Federal Arbitration Act applies to a provision in “a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract” 9 U.S.C. § 2. The Act provides that arbitration agreements within its scope “shall be valid, irrevocable, and enforceable,” 9 U.S.C. § 2; and that upon application of a party not in default in proceeding with arbitration, the court “shall stay the trial of the action until arbitration is had in accordance with the terms of the parties’ agreement.” 9 U.S.C. § 3.

At the outset, the court is confronted with plaintiff’s assertion that although his employment contract made reference to the collective bargaining agreement containing the arbitration clause, plaintiff did not join the Federation until after his discharge, and thus the collective bargaining agreement should not be binding upon him. The court rejects plaintiff’s disavowal of the collective bargaining agreement. Regardless of plaintiff’s membership in the union, he was a member of the collective bargaining unit on whose behalf the Federation engaged in collective bargaining. A union owes.a duty to represent fairly all members of the collective bargaining unit, Vaca v. Sipes, 386 U.S. 171, 177, 87 S.Ct. 903, 909, 17 L.Ed.2d 842 (1967); Ford Motor Co. v. Huffman, 345 U.S. 330, 338, 73 S.Ct. 681, 686, 97 L.Ed. 1048 (1953), whether or not they are union members, Textile Workers v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957); this duty applies to the initial negotiation of a collective bargaining agreement, Huffman, 345 U.S. at 337-39, 73 S.Ct. at 685-87, and to the subsequent enforcement of the contract for the employees’ benefit. Vaca, 386 U.S. at 177, 87 S.Ct. at 909.

Defendants assert that the Federal Arbitration Act requires this court to stay the trial of an action, upon the application of a party, if the court is satisfied that “at least one of the issues in this suit is within the scope of the relevant arbitration clause.” {Memorandum of Law in Support of Defendants’ Motion to Stay Action Pursuant to Agreement to Arbitrate). The Federal Arbitration Act applies only to maritime transactions and transactions involving interstate or foreign commerce. The employment contract between plaintiff and defendants is not a maritime contract and does not appear to be a “transaction involving commerce,” and thus is not within the scope of Section 3 of the Act.

Accordingly, this federal jurisdiction is lacking. The ease was improvidently removed within the meaning of 28 U.S.C. § 1447(c).

Plaintiffs cross-motion to remand this case to the New York State Supreme Court is granted; defendants’ motion to stay the action pending arbitration is denied. Plaintiff is to recover his costs as well as attorneys’ fees in connection with the proceedings in this court.

IT IS SO ORDERED.

      . The collective bargaining agreement, which provides for arbitration of disputes, was an integral and mutually binding part of plaintiff's employment arrangement with Association as Article VI of the collective bargaining agreement provides that a copy of the agreement in effect between the Federation and the Association should be given to the teacher prior to the teacher’s signing the Annual Agreement of Employment Contract (Burke Affidavit, Exhibit A, Article VI; Exhibit B, Contract). Thus, the duty to arbitrate disputes—although exercizable only by the teachers’ union and not by individual teachers—is binding on plaintiff by virtue of his employment contract. Whether plaintiff is asserting a breach of contract claim, or whether plaintiff is asserting rights that are subject to arbitration under the collective bargaining agreement is not decisive to the court’s determination of its jurisdiction over this case.

      . Section 1441 provides, in pertinent part,
      (a) Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.
      (b) Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties. Any other such action shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.

      . Section 1331 provides, in pertinent part,
      The district courts shall have jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.

      . The New York State Labor Relations Board administers the New York State Labor Relations Act which was amended in 1968 to apply to employees of charitable, educational or religious associations and corporations. In Catholic High School Association of Archdiocese of New York v. Culvert, 753 F.2d 1161, 1171 (2d Cir.1985), the Second Circuit decided the First Amendment issues left unresolved by the Supreme Court in NLRB v. Catholic Bishop, 440 U.S. 490, 99 S.Ct. 1313, 59 L.Ed.2d 533 (1979), which was decided on federal statutory grounds, and held that the First Amendment did not prohibit a state labor relations board from exercising jurisdiction over labor relations between parochial schools and their lay teachers.

      . The NLRA, as amended by the LMRA of 1947 —the Taft-Hartley Act—comprises Title I of the LMRA. The employers, employees, and labor unions covered by the LMRA are set forth in Section 2 of Title I, the amended NLRA. Hence, the Supreme Court holding that Congress did not intend parochial schools to be covered by the NLRA, also applies to § 301 of the LMRA, which provides a mechanism whereby an employee may sue in federal court to enforce, as a matter of federal law, a collective bargaining agreement negotiated pursuant to the practices and procedures of collective bargaining set out in the NLRA.

        . The hallmark of a violation of the free exercise clause is the0 presence of coercion by the state. School District of Abington v. Schempp, 374 U.S. 203, 223, 83 S.Ct. 1560, 1572, 10 L.Ed.2d 844 (1963); Engel v. Vitale, 370 U.S. 421, 430, 82 S.Ct. 1261, 1266, 8 L.Ed.2d 601 (1962). The instant case posits plaintiff, a private citizen, bringing a wrongful discharge action against a religious school and association. This is not a case where a state agency is burdening religion by penalizing particular hiring practices with respect to an individual employed to provide religious instruction and act as a religious role model.

      . Plaintiff asserts that defendants’ aim in removing this action to this court is to employ the Federal Arbitration Act to compel arbitration— which plaintiff admits would be binding and executed before a church tribunal. Yet, if the employment contract at issue falls within the definition of contracts covered by the Federal Arbitration Act, (i.e. a contract involving interstate commerce or a maritime transaction), defendants have a right to enforce the arbitration clause, pursuant to the Federal Arbitration Act, regardless of the particular forum in which it is asserted, since the Federal Arbitration Act is not limited to disputes subject only to federal court jurisdiction. See Southland Corp. v. Keating, 465 U.S. 1, 104 S.Ct. 852, 861, 79 L.Ed.2d 1 (1984) (United States Supreme Court rejected the interpretation of the Federal Arbitration Act as a mere procedural statute, applicable only in federal courts, holding that “in creating a substantive rule applicable in state as well as federal courts, Congress intended to foreclose state legislative attempts to undercut the enforceability of arbitration agreements"); Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983) (Federal Arbitration Act “creates a body of federal substantive law”).

      . "Commerce” as set forth in § 1 of the Federal Arbitration Act means "commerce among the several states."

      . See Bernhardt v. Polygraphic Co. of America, Inc., 350 U.S. 198 at 200-01, 76 S.Ct. 273 at 274-75, 100 L.Ed. 199 (1956) (in a damage action for wrongful dismissal under an employment contract, Court held that the Federal Arbitration Act did not apply to the contract's arbitration clause since there was "no showing that petitioner while performing his duties under the employment contract was working 'in’ commerce, was producing goods for commerce, or was engaging in activity that affected commerce”); Prima Paint Corp. v. Flood & Conklin Manufacturing Corp., 388 U.S. 395, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967) (agreement was a transaction in "commerce” within United States Arbitration Act where defendant sold paint business, serving at least 175 wholesale clients in a number of states, and plaintiff secured defendant’s assistance in arranging transfer of manufacturing and selling operations from New Jersey to Maryland, with defendant to render consultation services).