The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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UNITED METRO ENERGY CORP.,
MEMORANDUM AND ORDER
Plaintiff,
Case No. 1:22-cv-00151-FB-RLM
-against-
LOCAL 553, I.B.T.,
Defendant.
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Appearances:
For the Plaintiffs: For the Defendants:
JONATHAN D. FARRELL JAY W. CHUN
LARRY R. MARTINEZ Friedman & Anspach
RICHARD M. HOWARD 1500 Broadway, 23rd Floor
ANA GETIASHVILI New York, New York
Meltzer Lippe Goldstein & Breitstone LLP 10036
190 Willis Avenue
Mineola, New York 11501
BLOCK, Senior District Judge:
Defendant Local 553, I.B.T. (the “Union”) moves for dismissal of plaintiff
United Metro Energy Corp.’s (“UMEC”) complaint pursuant to Rule 12(b)(6),
arguing that the matter must be arbitrated. This Court grants the motion.
I.
UMEC provides various fuels and heating oils to the New York metro area.
The Union is a Teamsters local representing, among others, drivers who deliver
UMEC’s fuels.
The tangled relationship between UMEC and the Union includes at least three
contracts relevant to the dispute before this Court. Each contract has been appended
to the Complaint, and therefore may be considered on a motion to dismiss.1 First,
the parties were bound by what they refer to as the “Bulk Contract.” While
negotiating the Bulk Contract’s extension, the Union proposed that five senior
drivers be governed by a separate, multi-employer collective bargaining agreement
called the “Master Contract.” Ultimately, the parties executed a Memorandum of
Agreement (the “MOA”) extending the Bulk Contract to an expiration date of
February 28, 2021. The MOA also provided that the Union’s five most senior drivers
would be covered by the Master Contract, and that UMEC would “honor and be
bound by” the Master Contract.
Both the Bulk Contract and the Master Contract include arbitration clauses.
The Bulk Contract provides that:
Should any difference or dispute arise during the life of this Agreement
regarding the meaning, interpretation, or application of any of the
provisions of this Agreement, . . . . then the matter shall be submitted
to arbitration, upon forty eight (48) hours written notice by either party
to the other to an arbitrator who is mutually acceptable to the Union and
the Employer, or in the event the parties are unable to agree on a
mutually acceptable arbitrator, to an arbitrator designated by the New
1 A complaint is “deemed to include any written instrument attached to it as an
exhibit, materials incorporated in it by reference, and documents that, although not
incorporated by reference, are ‘integral’ to the complaint.” Sierra Club v. Con-Strux,
LLC, 911 F.3d 85, 88 (2d Cir. 2018) (quoting Sira v. Morton, 380 F.3d 57, 67 (2d
Cir. 2004)).
York State Employment Relations Board, or to the American
Arbitration Association under its rules and regulations. The decision of
the Arbitrator shall be final and binding upon both parties and shall be
fully enforceable in law, or in equity . . . .
Complaint, Ex. C at Article VIII.
The Master Contract, meanwhile, provides that:
Should any difference or dispute arise during the life of this Agreement
regarding the meaning, interpretation, or application of any of the
provisions of this agreement, or regarding any other grievance which
may arise between the parties, which cannot be adjusted by the
representatives of Local 553, I.B.T., and the concerned Employer
and/or the concerned Employer association, the same is to be submitted
to arbitration . . . .
Complaint, Ex. A at § 35.
In or about February 2020, the Union demanded arbitration to determine
issues relating to the compensation and benefits of its senior drivers. The UMEC
refused to arbitrate, instead initiating this lawsuit to enjoin arbitration.
II.
“To survive a motion to dismiss [under Rule 12(b)(6)], a complaint must
contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is
plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible when
“the plaintiff pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Id. (citing
Twombly, 550 U.S. at 556). The pleading must offer more than “bare assertions,”
“conclusory” allegations, and a “formulaic recitation of the elements of a cause of
action.” Iqbal, 556 U.S. at 678.
“Federal policy strongly favors arbitration as an alternative dispute resolution
process.” David L. Threlkeld & Co. v. Metallgesellschaft Ltd., 923 F.2d 245, 248 (2d
Cir. 1991). Where a contract contains an arbitration clause “there is a presumption
of arbitrability in the sense that 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.” AT & T
Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 650, 106 S.Ct. 1415, 89
L.Ed.2d 648 (1986) (internal quotations omitted). “This presumption is particularly
applicable where . . . the arbitration clause is broad.” United Steel, Paper & Forestry,
Rubber, Mfg., Energy, Allied Indus. & Serv. Workers Local 4-5025 v. E.I. DuPont
de Nemours & Co., 565 F.3d 99, 102 (2d Cir. 2009) (internal quotation marks and
citation omitted).
III.
Here, the Bulk Contract’s arbitration clause must be enforced. “[P]arties to a
contract are plainly free to incorporate by reference, and bind themselves . . . to,
terms that may be found in other agreements.” Aceros Prefabricados, S. A. v.
TradeArbed, Inc., 282 F.3d 92, 97 (2d Cir. 2002). That is what the parties have done
here. The MOA provides that Bulk Contract “shall continue in full force and effect
. . . except for the modifications below.” Compl. Ex. D at 2. None of the
modifications in the MOA pertained to the arbitration clause; thus, the arbitration
clause remained in effect. It provides that any dispute about the “the meaning,
interpretation, or application of any of the provisions of [the Bulk Contract]” must
be submitted to arbitration. That is what the dispute at hand is: whether certain
drivers receive the benefit of the Bulk Contract or of the Master Contract. Moreover,
the MOA requires UMEC to “honor and be bound by and execute [the Master
Contract],” which also includes an arbitration clause. UMEC’s argument that the
MOA itself must contain an arbitration clause itself is meritless.
The Union’s motion is granted, and the matter must be submitted to
arbitration, pursuant to the agreements between UMEC and the Union.
SO ORDERED.
/s/ Frederic Block
FREDERIC BLOCK
Senior United States District Judge
Brooklyn, New York
July 1, 2022