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International Union, United Automobile Aerospace & Agricultural Implement Workers of America v. Goodrich Pump & Engine Control Systems, Inc.

United States District Court, D. Connecticut

September 29, 2017

INTERNATIONAL UNION, UNITED AUTOMOBILE AEROSPACE & AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, and its AMALGAMATED LOCAL 405, Plaintiffs,
v.
GOODRICH PUMP & ENGINE CONTROL SYSTEMS, INC., Defendant.

          OMNIBUS RULING ON DEFENDANT'S MOTION TO DISMISS AND PLAINTIFFS' CROSS-MOTION FOR SUMMARY JUDGMENT

          Charles S. Haight, Jr. Senior United States District Judge

         This case, brought under § 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, alleges a violation of a contract between Defendant employer and Plaintiff labor organizations representing employees in an industry affecting commerce. Specifically, Plaintiffs seek an order compelling Defendant to accept and process certain grievances, including submitting those grievances to binding arbitration if they cannot be otherwise resolved.

         Before the Court is a Motion to Dismiss [Doc. 10] filed by Defendant Goodrich Pump & Engine Control Systems, Inc. ("Defendant, " or "Goodrich"), and the Cross-Motion for Summary Judgment [Doc. 15] filed by Plaintiffs International Union United Automobile Aerospace & Agricultural Implement Workers of America and its Amalgamated Local 405 ("Plaintiffs, " "Union, " or "UAW").

         Defendant included, with its Motion to Dismiss, a number of exhibits not filed with Plaintiffs' Complaint [Doc. 1]. While Plaintiffs concede that the majority of these exhibits were incorporated into their Complaint by reference, and are therefore appropriate to consider on a motion to dismiss, they object to the Defendant's reliance on Exhibit A, the Goodrich Pension Plan ("Pension Plan" or "the Plan"), a document Plaintiffs believe to be extrinsic to the pleadings, and urge the Court to convert the Motion to Dismiss to a motion for summary judgment, as provided for by Federal Rule of Civil Procedure 12(d). Pl. Br. 8. Defendant resists this suggestion in its Reply Brief [Doc. 26].

         While this Ruling will address both pending motions, it will start with a consideration of Plaintiffs' suggestion that the Motion to Dismiss must be converted to a motion for summary judgment. The initial factual background will thus exclude some facts and issues not relevant or appropriate to consider at this time.

         I. BACKGROUND

         Plaintiff unions are the international and local labor organizations which represent employees at a West Hartford factory formerly operated by Defendant, an employer engaged in an industry affecting commerce. The Parties entered into a collective bargaining agreement ("CBA") which, by its terms, was to be in effect from February 27, 2011 to February 27, 2016.[1] See Compl. Ex. A. The CBA contains, in Article XVII § 1, provisions relating to the calculation of retirement benefits for employees who retire early. Article IV § 1of the CBA contains a clause, common to many labor agreements, providing a grievance procedure for the resolution of disputes as to "the interpretation or application of any provision of this Agreement." Article V provides for mandatory arbitration of grievances, with some limited exceptions not relevant here.

         In March 2013 Defendant Goodrich sold its West Hartford facilities, where Plaintiff union members were employed, to non-party Triumph Corporation ("Triumph"), an unrelated entity ("the March 2013 sale").[2] Compl. ¶ 2. Plaintiffs' members' employment transferred from Goodrich to successor Triumph in March 2013.

         In September 2015, 25 members of Plaintiff labor organizations, who believed themselves to be eligible for the reduced pension benefits as described by Article XVII, wrote identical letters to Defendant, requesting a pension benefit estimate and pension application forms. See Compl. 4; Def. Br. 2.

         On January 18, 2016, Tom Nemec, Director of Industrial Relations for UTC Aerospace Systems ("UTAS") responded to these inquiries in a letter addressed to Plaintiff's counsel ("the Nemec Letter"). See Compl. 4-5; Mot. to Dismiss Ex. C. The Nemec Letter includes a description of the respective pension responsibilities of Triumph and the United Technologies Corporation (UTC), a successor organization to Defendant Goodrich. Nemec's interpretation of the pension obligations under Article XVII differs somewhat from the interpretation put forward by the union members.[3] The Nemec Letter directs the union letter writers, if they "are seeking more specific figures based on their own personal factors, " to contact the UTC Pension Center "[f]or information on their UTC Plan pension benefit, " and refers further questions to Marc Yahl, UTAS Benefits Rep.

         Plaintiffs then brought this case, under the authority of § 301 of the LMRA, to enforce the CBA and obtain an order compelling Goodrich to accept and process certain grievances concerning the interruption of seniority and early retirement provisions of the CBA. Compl. 7. Defendant resists this effort, and filed a Motion to Dismiss [Doc. 10].

         Defendant urges the Court to dismiss the Complaint, arguing that the dispute is not subject to arbitration because the CBA, through incorporation of the pension plan by reference, requires that pension benefit claims and calculations be resolved by the Employee Retirement Income Security Act ("ERISA") plan administrator. Def. Br. 2. Defendant includes, as Exhibit A to its brief, the Pension Plan, dated January 1, 2002.

         Plaintiffs in turn filed a Cross Motion for Summary Judgment [Doc. 15], which asserts, inter alia, that the Plan is outside the pleadings, and therefore inappropriate to consider on a motion to dismiss. Pl. Br. 8. Plaintiffs state that they have no objection to the conversion of Defendant's Motion into a motion for summary judgment, as provided for by Rule 12(d) of the Federal Rules of Civil Procedure. Id. at 9. Plaintiffs further move for summary judgment on their own behalf. Id.

         Defendant, by a brief filed in opposition [Doc. 26], asserts that, since the Complaint [Doc. 1] undisputedly relied upon the CBA, and because the CBA (by Defendant's interpretation) incorporates the Plan by reference, the Court may properly consider the Plan on a motion to dismiss under Rule 12(b)(6). Def. Reply Br. 3-4. Defendant's Reply Brief also argues, in the alternative, that, even if the Court finds (against Defendant's urging) that Plaintiffs' dispute is subject to the CBA's arbitration clause, Plaintiffs' Cross Motion for Summary Judgment should not be granted because Defendant's obligations under the CBA terminated with the completion of the sale of the plant to Triumph in March 2013. Id. at 9-11.

         Plaintiffs have filed a further brief in opposition [Doc. 27], resisting Defendant's contentions as to the Complaint's reliance on the Plan, and asserting that, contrary to Defendant's claim of termination, the CBA was still in effect at the time Defendant refused to arbitrate. Pl. Reply Br. at 2-5. Even if the CBA had been terminated by the March 2013 sale, as asserted by Defendant, Plaintiffs maintain that the CBA would nonetheless oblige Defendant to arbitrate Plaintiffs' underlying dispute, as it concerns, by Plaintiffs' estimation, benefits earned while the CBA was in effect. Id. at 9-10.

         Thus, the Court must first consider whether to convert Defendant's Motion to Dismiss [Doc. 10] to a motion for summary judgment, as urged in the affirmative by the Plaintiffs, and resisted by Defendant.

         II. RULE 12(d) STANDARD FOR CONVERSION TO SUMMARY JUDGMENT

         Federal Rule of Civil Procedure 12(b)(6) allows a party to defend itself by asserting its opponent's "failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6).

         Rule 12(d) provides that, if, on a Rule 12(b)(6) motion, "matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56. All parties must be given a reasonable opportunity to present all the material that is pertinent to the motion." Fed.R.Civ.P. 12(d).

When matters outside the pleadings are presented in response to a 12(b)(6) motion, a district court must either exclude the additional material and decide the motion on the complaint alone or convert the motion to one for summary judgment under Rule 56 and afford all parties the opportunity to present supporting material. This conversion requirement is strictly enforced whenever there is a legitimate possibility that the district court relied on material outside the complaint in ruling on the motion.

Friedl v. City of N.Y., 210 F.3d 79, 83 (2d Cir. 2000) (citation and internal quotation marks omitted). See also Calcutti v. SBU, Inc., 273 F.Supp.2d 488, 498 (S.D.N.Y. 2003) ("This conversion requirement is 'strictly enforced' in the Second Circuit, " quoting Friedl, 210 F.3d at 83).

         As noted supra, UAW argues that Exhibit A to Goodrich's Motion to Dismiss, the Pension Plan, was not cited or relied upon by the Complaint, and may not, therefore, be introduced in support of a motion to dismiss. Pl. Br. 8. Plaintiffs therefore urge that Defendant's Motion to Dismiss be converted to a motion for summary judgment, a suggestion that Goodrich objects to.

         III. DISCUSSION AS TO CONVERSION UNDER RULE 12(d)

         Plaintiffs aver that "all relevant provisions of the CBA" were appended to the Complaint, as Exhibit A. Compl. ¶ 10. This inclusion, and the Complaint's undisputed reliance on terms of the CBA, incorporate the CBA into the Complaint by reference. See San Leandro Emergency Medical Group Profit Sharing Plan v. Philip Morris Cos., Inc., 75 F.3d 801, 808 (2d Cir. 1996).

         The closer question is whether the Plan may be considered on a motion to dismiss. Here, Defendant contends that, because the Plan is incorporated into the CBA by reference, the Plan is part of the "full text" of the CBA, and may properly be considered on a motion to dismiss. See Def. Br. 5 n.3. Plaintiffs resist this interpretation, and emphasize that the Complaint did not rely on the Plan, and that, if the Court is to consider the Plan, Defendant's Motion must be converted to one for summary judgment. See Pl. Br. 8.

         "Under general principles of contract law, a contract may incorporate another document by making clear reference to it and describing it in such terms that its identity may be ascertained beyond doubt." New Moon Shipping Co. v. MAN B & W Diesel AG, 121 F.3d 24, 30 (2d Cir. 1997) (citing 4 Williston on Contracts § 628, at 903-04 (3d ed. 1961)). The CBA identifies the Plan, at Article XVII § 1: "The Company has established a pension plan, Goodrich Corporation Employees' Pension Plan, (EIN 34-0252680, PN 001) . . . . [T]he annual funding of the Pension Plan shall be in accordance with the with the minimum funding standards of [ERISA]." This language is both a clear reference to the Plan, and a description such that the Plan's identity may be ascertained beyond doubt. Therefore, under general principles of contract law as applied in this Circuit, the CBA incorporates the Plan by reference. See New Moon Shipping, 121 F.3d at 30. The question then, is whether, by incorporating the CBA into the Complaint, Plaintiffs have incorporated any document (like the Plan) that was itself incorporated by reference into the CBA.

         Defendant urges the Court to consider the Plan, at the motion to dismiss stage, as part of the "full text" of the CBA. Def. Reply Br. 3. Defendant relies chiefly on two cases: Stratte-Mcclure v. Stanley, 776 F.3d 94, 100 (2d Cir. 2015), which states the general rule as to which materials may be considered on a motion to dismiss, but makes no mention of considering the "full text" of a document included or quoted in part; and McGown v. City of New York, No. 09 Civ. 8646(CM) 2010 WL 3911458, *4, 2010 U.S. Dist. LEXIS 96595, *13 (S.D.N.Y. Sept. 9, 2010) (McMahon, J.). In McGown, Judge McMahon wrote, "this Court may consider the full text of documents that are quoted in or attached to the complaint, " but she does not explain what constitutes the "full text" or engage in any further analysis - it appears that the documents at issue in McGown were documents, such as a related state court opinion, which were integral to the complaint but, because they were not favorable to his case, pro se plaintiff had failed to mention or attach.

         The "full text" standard mentioned, if not applied, in McGown was derived from San Leandro Emergency Medical Group Profit Sharing Plan v. Philip Morris Cos., Inc., 75 F.3d 801, 808 (2d Cir. 1996), where

[t]he allegedly actionable statements set forth in the Complaint were culled from press releases, wire service reports, newspaper articles, and annual company reports. In dismissing the Complaint the District Court did not limit its consideration to plaintiffs' selected quotations, but also considered the full text of the documents relied on in the Complaint.

San Leandro Emergency Med. Grp., 75 F.3d at 808. After "acknowledg[ing] that our Circuit has pursued a somewhat uneven course in determining the extent to which the full text of documents partially quoted in a complaint may be considered in ruling on a 12(b)(6) motion, " the Second Circuit endorsed the district judge's approach, holding that, "the documents partially quoted in the Complaint are . . . integral . . .and we therefore conclude that the District Court was entitled to consider the full text of those documents in ruling on the motion to dismiss." Id. at 808-09 (internal quotation marks and citation omitted). The holding of San Leandro Emergency Medical Group is that, on a 12(b)(6) motion, a district court may consider the full text of documents partially quoted in a complaint and integral to that complaint. See, e.g., Pehlivanian v. China Gerui Advanced Materials Grp., Ltd., 153 F.Supp.3d 628, 643 (S.D.N.Y. 2015) (Ramos, J.); In re NTL, Inc. Sec. Litig., 347 F.Supp.2d 15, 21 n.17 (S.D.N.Y. 2004) (Kaplan, J.); In re Livent, Inc. Sec. Litig., 148 F.Supp.2d 331, 367 (S.D.N.Y. 2001) (Marrerro, J.) ("According to the emerging rule in this Circuit, a district court may consider the full text of a document partially quoted in the complaint where Plaintiffs have notice of the document's contents and the document is integral in drafting the complaint" (internal quotation marks omitted) (quoting Bartley v. Artuz, No. 95 CIV. 10161 (DAB), 1999 WL 942425, at *4 (S.D.N.Y. Oct. 19, 1999) (Batts, J.) and citing San Leandro Emergency Med. Grp., 75 F.3d at 808-09)); In re Livent, Inc. Sec. Litig., 78 F.Supp.2d 194, 218 n. 6 (S.D.N.Y. 1999) (Sweet, J.).

         As the CBA is undisputedly "integral" to the Complaint, the question remains: is the Plan properly considered under a Rule 12(b)(6) motion, as part of the "full text" of the CBA?[4]

         Plaintiffs, as noted, strongly object to the consideration of the Plan on a Rule 12(b)(6) motion, and asks the Court to convert the Motion to Dismiss to a motion for summary judgment, arguing that Plaintiffs did not quote, cite, or rely on the Plan in bringing this action. Pl. Br. 8.

         The Court agrees that Plaintiffs did not rely on the Plan in drafting the Complaint. Plaintiffs did rely on, quote, and cite the CBA in bringing this action. Id. As the Plan was incorporated by reference into the CBA, and is therefore part of the "full text" of the CBA, it is properly considered on a motion to dismiss. Even were the Court to reach a contrary conclusion as to the "full text" question, consideration of the Plan would still not be forestalled, as it works none of the injustice contemplated by the Rules in excluding extrinsic documents from the decision of Rule 12(b)(6) motions. See, e.g., Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 48 (2d Cir. 1991) ("the problem that arises when a court reviews statements extraneous to a complaint generally is the lack of notice to the plaintiff that they may be so considered; it is for that reason - requiring notice so that the party against whom the motion to dismiss is made may respond - that Rule 12(b)(6) motions are ordinarily converted into summary judgment motions").

         Finally, it is settled law and common sense that "arbitration is a matter of contract." AT & T Technologies, Inc. v. Communications Workers of Am., 475 U.S. 643, 648 (1986) (quoting United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582 (1960)). “Like other contracts, [a CBA] must be read as a whole . . . .” Mastro Plastics Corp. v. NLRB, 350 U.S. 270, 279 (1956). "When courts interpret CBAs, traditional rules of contract interpretation apply as long as they are consistent with federal labor policies." Aeronautical Indus. Dist. Lodge 91 v. United Techs. Corp., 230 F.3d 569, 576 (2d Cir. 2000). In short, Defendant's Motion to Dismiss presents the Court with a question of contract interpretation, and it would be a perverse and pointless exercise to exclude the Plan, incorporated by reference into that contract, from the Court's reading of the CBA's contractual language.

         Accordingly, the Court rejects Plaintiffs' suggestion that the Defense Motion be converted to one for summary judgment, and will proceed to resolve it on the Rule 12(b)(6) standard, taking into account the documents attached to that Motion, as incorporated into the pleadings by reference.

         IV. STANDARD FOR MOTION TO DISMISS

         A plaintiff must set forth sufficient factual allegations, which accepted as true, "state a claim to relief that is plausible on its face" in order to survive a Rule 12(b)(6) motion to dismiss. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, (2007)) (internal quotation marks omitted). In applying this standard, the Court is guided by "'[t]wo working principles.'" Harris v. Mills, 572 F.3d 66, 72 (2d Cir. 2009) (quoting Iqbal, 556 U.S. at 678). First, all factual allegations in the complaint must be accepted as true and all reasonable inferences must be drawn in the plaintiff's favor although the Court need not accept "legal conclusions" or similar conclusory statements. See Id. Second, "[d]etermining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense" and only if a complaint states a plausible claim for relief will it survive a motion to dismiss. Id. (quoting Iqbal, 556 U.S. at 679) (internal quotation marks omitted).

         V. STANDARD FOR COMPELLING ARBITRATION UNDER THE LMRA

         Plaintiffs brought this action under § 301 of the Labor-Management Relations Act (LMRA), 29 U.S.C. § 185. See Compl. 1. § 301 creates a federal cause of action for violation of collective bargaining agreements (CBAs). 29 U.S.C. § 185. Like many prior suits brought under this statute, this matter concerns the refusal of one party to enter into binding arbitration.

         In a series of cases known as the "Steelworkers Trilogy, " the Supreme Court established the baseline principles which courts apply when considering a suit to compel arbitration under the LMRA. See United Steelworkers of Am. v. Enter. Wheel & Car Corp., 363 U.S. 593 (1960); Warrior & Gulf Navigation Co., 363 U.S. 574; Am. Mfg. Co., 363 U.S. 564.

[A]rbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit. Yet, to be consistent with congressional policy in favor of settlement of disputes by the parties through the machinery of arbitration, the judicial inquiry under § 301 must be strictly confined to the question whether the reluctant party did agree to arbitrate the grievance or did agree to give the arbitrator power to make the award he made. An order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage.

Warrior & Gulf Nav. Co., 363 U.S. at 582-83. So strong is the presumption of arbitrability, that, with a "broad" arbitration clause in place, "[i]n the absence of any express provision excluding a particular grievance from arbitration, we think only the most forceful evidence of a purpose to exclude the claim ...


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