Transcript of proceedings before Judge Bucklo in LIUNA and Schippers v John Matassa, Jr. and local 2

CLERK'S FILE COPY

             IN THE UNITED STATES DISTRICT COURT
                NORTHERN DISTRICT OF ILLINOIS
                 EASTERN DIVISION

THE LABORERS' INTERNATIONAL UNION         )
OF NORTH AMERICA and DAVID SCHIPPERS,     )

                                                                                      )
Plaintiffs,                                                                         )

                                                                                      ) No.99 C 3478

v.                                                                                  ) Chicago, Illinois
LABORERS' LOCAL 2 and.                                         )

JOHN MATASSA JR.,                                                 ) May 27, 1999
                                                                                       ) 4:00 p.m.
Defendants.                                                                    )

TRANSCRIPT OF PROCEEDINGS - MOTION

BEFORE THE HONORABLE ELAINE E. BUCKLO

APPEARANCES:

For the plaintiffs: MR. DWIGHT P. BOSTWICK
1025 Thomas Jefferson Street, N.W.
Suite 420 East
Washington, D.C. 20007-5243
(202) 625-1200

MR. DAVID E. GORDON

BARRACK, FERRAZZANO, KIRSCHBAUM, PERLMAN.
& NAGELBERG

333 West Wacker Drive, Suite 2700
Chicago, Illinois 60606.
(312) 629-7312

For the Defendants: MR. JAMES D. MONTGOMERY

MR. RANDALL W. SCHWARTZ
JAMES D. MONTGOMERY AND ASSOCIATES
111 West Washington Street, Suite 823
Chicago, Illinois 60602
(312) 977-0200

PROCEEDINGS RECORDED BY MECHANICAL STENOGRAPHY
TRANSCRIPT PREPARED BY COMPUTER
MICHAEL P. SNYDER, CSR
Official Reporter
United States District Court
219 South Dearborn Street, Room 1728
Chicago, Illinois 60604
Telephone (312) 435-5563

THE CLERK: 99 C 3478, Laborers International versus Laborers Local; for motion.

MR. BOSTWICK: Good afternoon, Your Honor. Dwight Bostwick on behalf of the plaintiffs.

THE COURT: Good afternoon.

MR. MONTGOMERY: Good afternoon, Judge. James Montgomery on behalf of the defendants and on behalf of George Leighton on behalf of one of the defendants.

THE COURT: Good afternoon, Mr. Montgomery.

MR. MONTGOMERY: How are you?

MR. GORDON: Good afternoon. I am David Gordon, co-counsel with Mr. Bostwick, for the plaintiffs.

THE COURT: Good afternoon.

MR. MONTGOMERY: Joining me momentarily will be Mr. Randall Schwartz, one of my associates, who is bringing down papers that he is filing with the clerk's office at this time in response to this pleading as well as a motion to dismiss.

THE COURT: Okay. I thought you people were going to agree, so I -- I thought that until 5 minutes ago was what my understanding had been, so I have been trying to figure out other things.

MR. MONTGOMERY: Some of us have agreed. Some of us don't.

THE COURT: All right. Anyway, so tell me where you

are. I certainly wasn't contemplating having a hearing, nor have I prepared for it. I'll just have to take all the stuff and read it, because I thought you had agreed.

MR. BOSTWICK: Well, we have not been able to reach an agreement, and I am virtually certain we will not be. We had hoped to do that, but there is a number of -

THE COURT: All right. Well, I assume whatever it is is all on the papers in terms of what the union contract says and whatever authority there is, right?

MR. MONTGOMERY: Yes, Your Honor.

THE COURT: I mean, there isn't anything about which there is any reason to have an evidentiary hearing, is there?

MR. BOSTWICK: Well, I would prefer to have some argument for the Court's consideration. There have been some intervening events that I think we would highlight some of the problems that are, require emergency intervention and emergency measures. This was imposed on Monday, and we still have equivocation about exactly who is controlling the situation, and we have employers, banks, stewards, 1200 members affected by this, and I do think that we need a resolution on it, and I would like to have the opportunity to speak to the issue, but if we want to simply do it on the papers, that's Your Honor's decision.

MR. MONTGOMERY: Let me suggest on behalf of the defendants that the Local Union 2 offices have been in the

possession and control of the trustee at least two days. All of the -

THE COURT: All right. Maybe I better find out if there are any disputed facts.

MR. MONTGOMERY: Right.

THE COURT: Okay. The trustee has the offices. Agreed?

MR. BOSTWICK: That's agreed.

THE COURT: Okay.

MR. MONTGOMERY: The other thing I would represent is that the, as of I believe two days ago, I communicated with counsel and advised them that none of the defendants would hold themselves out as legitimate officers of the union, and, two, that none of them would issue checks or agreements to bind the local, and I also indicated that they had simply to provide me with the paper documentation for signature of the appropriate officers and that we would have them sign them to turn over the checking accounts of the local to the trustee. Where we have been disputing is that the plaintiffs appear to want to get an injunction -- to get an injunction,and it is our position that there is nothing that is threatened, and that there is nothing that is occurring, nor is there anything they have alleged is threatened or is occurring that would cause irreparable harm to the local or anybody else.

THE COURT: Okay. As I remember it from the other

day when I did look at it, there were issues of turning over the keys - Have you turned over the keys?

MR. MONTGOMERY: Everything is turned over, and besides they have changed the locks on the door.

THE COURT: Okay. Books and records?

MR. MONTGOMERY: All of those are in the office.

THE COURT: The money? You say you are turning that over?

MR. MONTGOMERY: The checkbook is in the office, and if they want us to sign a transition of it from the current signatories to the trustee, simply give me the form.

THE COURT: So what's left?

MR. BOSTWICK: I can explain the gravamen or our concern very briefly this way. On Monday when we requested these items, they were not provided. On -- we have just learned within the last two hours that within the last few days an $18,000 check has been cut, which is against the LMRDA, it's against our union constitution, it's potentially criminal conduct. It's exactly what we were discussing.

THE COURT: Well, it can be all that, but it was before any injunction. If you could get the stuff, then what would I be enjoining?

MR. BOSTWICK: The injunction is -- what we had asked for and what we thought we were going to agree to is the letter

which is Exhibit L, which I think we just provided to the Court. I can provide an extra copy. But that is the virtually identical language to the language that was imposed at a TRO hearing in front of Judge Castillo --

THE COURT: I was going to ask why this case wasn't back in front of him.

MR. BOSTWICK: Because of the relatedness rules of this, it is not the same entity, specifically. The Chicago District Council and Local 2 are different entities.

MR. MONTGOMERY: And I am sure in that case, there were justiciable issues. There are none here.

MR. BOSTWICK: This was the exact, this is virtually the exact same fact pattern. We went in before Judge Castillo __

THE COURT: Okay. I don't want to reargue that case. If you want to, somehow think it should be here instead of in front of him, which I question, then I want to know why you need an injunction here if they have turned over everything, are turning over everything or doing whatever you are asking.

MR. BOSTWICK: Well, this is what Mr. Montgomery has repeatedly said to us the last few days.

THE COURT: Okay, so give him the things to sign the checks or, you know, Mr. Schippers or whoever can sign them, whoever you want.

MR. BOSTWICK: Well, the problem has been that the

two items that they will not sign off on go to the very heart of what this trusteeship is all about. One is that they will not interfere with the operations of Local 2, and the second is that they will provide a complete accounting of the financial conditions of the union. He cannot get the executive board's approval to that, the former executive board's approval to that, and in the absence of that we feel a complete necessity to do what was done in the Chicago District Council case, and I can explain my reasoning behind it this way. I can only explain it this way. I understand Your Honor appears to have some reluctance to do this.
We have done this twice in Chicago in the last few years. The first time we tried to have a negotiated agreement with lawyers from the other side in the Local 8 situation, we had repeated violations including burglaries and other items that happened. We never got a firm agreement, there was constantly misunderstandings about who is running the local and who is authorized to run the local when they were dealing with employers, when they were dealing with pension fund matters, when they were dealing with welfare matters. These are
critical issues to the membership of Local 2.

THE COURT: Yes, but there can't be much question. Everybody will know that.

MR. BOSTWICK: The individuals who are ousted --

MR. MONTGOMERY: That is not applicable to this case.

THE COURT: People who run pension funds and welfare funds I don't think are going to be careless in terms of who they are dealing with.

MR. BOSTWICK: Well, these people, employers, stewards, pension funds, these people have been dealing with other, with the current, with the recently ousted executive board for a significant period of - All I can tell you is in this, in the Chicago District Council case, when both Judge Castillo and Judge Moran saw fit to sign these agreements, we had zero problems from then on in. We have not had one problem in a year and a half. In this specific case, we have already encountered a problem. An $18,000 check was cut after we had imposed this trusteeship, after it was clear that the authority had
transferred, and we have no assurance that that is not going on now, and this is the specific reason that we are requesting a firm order that clarifies for individuals what the nature of the circumstance is, who is in charge of these items, and it's, it is a -- it is a situation that. is absolutely as critical as a union can have. The union's membership, this relates to organized crime corruption and undemocratic practices, the inability of the general membership to have their voice heard and to have the votes that they cast be ratified and executed by the

executive board. We have a direct violation of -- the last, the very last meeting that was held of that general membership, 40 to 10 the membership voted that they could not pay another dime until they got a financial accounting from the current executive board. When we brought the emergency trusteeship action, they immediately -- and I specifically talked to Mr. Montgomery, and we specifically served these items on the executive board, we specifically told them under the LMRDA and under union law there is absolutely no authority, and under the last vote of the membership meeting, you cannot sign checks. There was an $18,000 check signed after that point in time.

THE COURT: Who did it go to?

MR. BOSTWICK: Mr. Montgomery.

MR. MONTGOMERY: For legal fees, Judge.

MR. BOSTWICK: Mr. Montgomery.

THE COURT: Oh.

MR. BOSTWICK: And I am, I am extremely disturbed about the -- there was an executive board, the general membership was cut off, a meeting was canceled -

MR. MONTGOMERY: May I just interrupt on this note, because this is not relevant. What is relevant -- that's relevant to the fact that they had a basis under their constitution to take it over. They have taken it over. The issue now becomes what is it that is threatened, what is it that is going on, what is it that they don't have that they,

that they are entitled to, that entitles them to this Court's attention, the highest trial court in the land. Secondly, it is, it seems to me that the constitution of LIUNA specifically mandates that every member of the union cooperate with the trustee in the turnover of the union. It's right there in the book. So what they are asking you to do is to enforce on individuals an obligation that is already theirs in accordance with their constitution and duties under the Constitution. Federal courts are not open to do that kind of thing. The next point I think, and probably most important point, is Mr. Matassa, Mr. -- all those other guys have gone away in the night. They are gone. They are no longer involved in Local 2 affairs. Three of them work every day as laborers. They are going about their business as laborers.
They have indicated to us that we wouldn't. agree to two things. To be very frank with you, that was language and a perception by these people that they were just playing with them and toying with them and treating them like kids, and that's why they didn't agree to those two terms, which they are obligated to anyway and are going to conform to anyway. But it's not the subject, it seems to me, of the imposition of this Court's jurisdiction and what is not a justiciable case or controversy.

THE COURT: Well, I guess part of it may -- the only

place I hear that there is any issue about is whether they are writing checks. Well, I certainly don't want to keep you from being paid your money, if there wasn't any authority to do it, the issue is will it be done again? I can't do much -

MR. MONTGOMERY: The issue there is, is there an adequate remedy at law if something was done wrong at that time?

THE COURT: Well, but what they are asking, what an injunction does is cut off so that, you know, the power of the Court can be used retroactively in the future if there is any more done. Now, if they no longer have the ability -

MR. MONTGOMERY: They don't.

THE COURT: -- the physical ability to pay you or anybody else any money because they don't have the checkbook -

MR. MONTGOMERY: Trust me, Judge. They will admit to you they have those things.

THE COURT: Then -

MR. BOSTWICK: Your Honor -

THE COURT: -- it seems to me -

MR. BOSTWICK: Your Honor, I can only speak from experience. We have been dealing with proven organized crime
figures in this case. We have been dealing with a pattern over 25 years that has spanned a number of federal court suits and a number of other suits.

THE COURT: See, I don't know what the circumstances

are when an injunction was entered, so I guess I'll just look at the law on it.

MR. MONTGOMERY: They had a different situation.

THE COURT: I realize it's much more liberal in these kind of cases, but I think we still have to have something to enjoin.

MR. BOSTWICK: The burdens are exactly reversed, but you are absolutely right, you have to have something to enjoin. I can tell you from the, from experience in this field for the last three years that these, the individuals who were in charge of dealing with the contractors, who were in charge of day-to-day decisions on who gets their jobs, who were in charge of directing the job stewards, have all the authority and power over these union members to intimidate them -

THE COURT: Still?

MR. MONTGOMERY: Oh, no.

MR. BOSTWICK: Absolutely.

MR. MONTGOMERY: Not with the publicity he's brought out to this city.

MR. BOSTWICK: Absolutely they have the ability to do that, Your Honor, and they are doing it. They -- we have a specific instance of them paying a check two days ago which is absolutely, it cannot be more against the law. You have -

MR. MONTGOMERY: And they were in the office two days ago, and that was the last time they were in the office was two

days ago, and when they left, they left the checkbook and everything else in there including the safe.

MR. BOSTWICK: These people are still on the job, they are still on the job site.

MR. MONTGOMERY: That is simply not true. On what job site?

MR. BOSTWICK: These people are still out in the field working.

THE COURT: Nobody said they can't work.

MR. BOSTWICK: That's correct, which is exactly why we need an injunction to make sure that they don't intimidate, that they don't, they don't interfere.

MR. MONTGOMERY: Who can't work?

MR. BOSTWICK: I urge Your Honor to look at that exhibit.

THE COURT: I will read all this.

MR. BOSTWICK: Exhibit 11. I hate to burden Your Honor with the papers on this matter. It's just that there is a history to this, and, quite frankly, Mr., you know, Mr. Montgomery has done an artful job of making me punch a wet paper bag for four days, but the fact of the matter is, Your Honor, that we need some judicial assurance, and if we don't get that, we will be running in here day to day in dribs and drabs. We never had one problem -

THE COURT: Oh, it won't happen a second time.

MR. BOSTWICK: We never had one problem in a year and a half once the federal court issued an order over 21,000 members. We never had one problem. It was the same defendant. This person knows the rules. On Monday, on Monday I called up and I said, all we need from you, Mr. Montgomery and the executive board, is an assurance that you will give one set of keys over by the end of the day and that you will assure us that you won't sign checks. Can't do it, call me tomorrow.

MR. MONTGOMERY: The next day they had a policeman out there intimidating the little lady and took her key.

MR. BOSTWICK: You know, this is -

MR. MONTGOMERY: John Deneen.

MR. BOSTWICK: -- Twilight Zone. We have the ultimate authority under the law. It's as clear as the brightest line. We have the ultimate authority to be in possession of the local. I gave --

MR. MONTGOMERY: And you are.

MR. BOSTWICK: -- Mr. Montgomery until the close of business that day in order to fulfill that obligation. Every single union member has an obligation to completely cooperate with the trustee. An individual was asked at the close of business to give her key, which she did, and Mr. Montgomery seems to have a problem with that. There are 1200 members of this local union. Some of them are trying to do the right thing, are trying to cooperate,

and I can -- as sure as I am standing here today, I knew it on Monday, I knew it on Tuesday, I am giving them an opportunity on these things, but we will be back in here because there will be problems, and there won't be if there is an order, and we had an order in the last case. The judges in the last case saw fit to do this. They -- it was the exact same fact pattern. We walked in with simply their refusal on the first day to hand over the keys. That was the only thing that was done incorrectly on the, in the other case. A TRO was entered, and a preliminary injunction and summary judgment was entered in our favor with a permanent injunction, and we have not had one
problem. In the other case where we didn't do this, where we tried to do it day-to-day decision-making on who exactly is in charge, is somebody actually harassing somebody, the organized
crime members took advantage of it.

THE COURT: Tell me what the situation was in the case before Judge Moran at the time he entered a TRO, if you are saying he did.

MR. BOSTWICK: The exact same fact pattern occurred with this exception. There was an order in the other case. There are two different ways to have a trusteeship. It's not particularly relevant here, it's kind of a footnote point, but there was an -- there was a trusteeship effectuated. We don't have that dispute today about whether there is a trusteeship

effectuated. We have a dispute over whether or not we need some judicial intervention to make sure or a judicial statement to -

MR. MONTGOMERY: To make sure.

MR. BOSTWICK: -- absolutely in order to affirm and make certain that there is no interference, no continued interference. The only thing we had in the other case was before Judge Castillo on the first day, he was the emergency judge, the only thing that we told that individual on the record and in the pleadings was that they refused to hand over the keys. We said, first day, they refuse to hand over the keys, we need an order. He signed an order that's virtually identical to the order I am presenting to you, and we never had any other problems. Since, since this has not happened on the first day, we have had an $18,000 check against the will of the membership.

THE COURT: You didn't come in here before that and say they were refusing to do something, so it does sound like it's different. They are not refusing anything.

MR. BOSTWICK: Well, they are refusing -

THE COURT: At the time, I take it Judge Castillo needed to give you an order in order to get the keys.

MR. BOSTWICK: In an effort to be accommodating and

to not go through what we are going through here and to not waste the Court's time and have the Court have to read all these papers -

THE COURT: If you are telling me there was anything that they haven't done that they should do, you know, I would assume that. you are right, that you should have the injunction. I just don't know that I -

MR. BOSTWICK: They are refusing to recognize that they have the duty to provide an accounting to the trustee and not to interfere with the operations. What we did was we simply gave -

THE COURT: Well, they probably do have to give an accounting.

MR. BOSTWICK: Under the law, under labor law and under the LIUNA constitution, it is absolutely, firmly clear.

MR. MONTGOMERY: Judge, this union, by the way, in terms of an accounting, has certified public accountants who have an ongoing audit and report that's available to them in the office right now. To the extent that these people have an obligation to advise them of any information that they have, they are there, they can do it. That's not a problem.

MR. BOSTWICK: Here is the essence of the disconnect. The essence of the disconnect, from my vantage point at any rate, is that Mr. Montgomery has been treating this as a negotiation since Monday, and I have simply been trying to

apply the rules of the LMRDA and the union constitution. The LMRDA specifically does not allow for negotiation of these various factors, when the keys will be turned over, what will happen, when and if financial accountings will happen, having to deal with a lawyer for certain former executive board members in order to get what we need. The LMRDA and the LIUNA constitution specifically require that immediate and unequivocal authority is passed directly to the trustee, to the temporary trustee. Within 30 days they will have a hearing, they will be able to contest it. If they win, we won't be back here; the executive board will be back in.

THE COURT: What is it you want them to do in the next 30 days, though, in terms of, if -- I guess that is the way it works. So in terms of an accounting?

MR. BOSTWICK: In order to, in order to get these individuals to come give a financial accounting, to not interfere on job sites with employers, with the stewards in ways that they can and do constantly, we need an order, and that will prevent this, and what we will do with that is we'll say you have to come in, and we will -- let us, you know, describe to us where the money has gone, describe to us what is happening, and if we don't get that order, we are going to be fighting with Mr. Montgomery every single day about exactly the ramifications.

MR. MONTGOMERY: You won't be fighting with me

because I am going to go away in the night also.

MR. BOSTWICK: I would like to believe that.

THE COURT: Not before you were in here for $18,000, I trust.

MR. MONTGOMERY: Well, I'll be after the rest of the money that they owe me, and they will fight me like tooth and nail, I am sure.

MR. BOSTWICK: I simply. can't, I simply cannot overemphasize that --

MR. MONTGOMERY: I'll go after Mr. Schippers, not my former clients.

MR. BOSTWICK: I cannot overemphasize that we need a noninterference order, which is specifically what -- and an order that says that they cannot sign and execute checks or deal with the union's assets. And it is, you know, the proof is in the pudding. That has already happened.

MR. MONTGOMERY: Judge, ask them if they don't already have access to all of the checks and check books of that local. The answer is yes.

MR. BOSTWICK: Without a financial accounting, we don't know. We don't know.

THE COURT: Well, I think you do have to give them a financial accounting.

MR. MONTGOMERY: That's not a problem. But that accounting on all those records are in the office, and we don't

even have access to the office. These guys were not Ph.D.'s or accountants, and they operated through professionals in the office.

MR. BOSTWICK: Here's an example, Your Honor. Today, we have been out there for half a day, okay? We found one check that shouldn't have been issued that is potentially, the person who signed it could be subject to criminal violations. It's the only portion of the LMRDA --

MR. MONTGOMERY: So there is an adequate remedy at law.

MR. BOSTWICK: Okay.

THE COURT: Who signed it?

MR. BOSTWICK: Evidently Michael Christopher, the ex-secretary/treasurer. We -- the other item we found today --

THE COURT: Did you put a stop payment on it?

MR. BOSTWICK: This is in two hours. The other item we found today was a $100,000 account that we can find no use for. We don't know what it's for, we have no idea what's going on.
Now, I simply do not -

THE COURT: What is it you want in terms of an accounting?

MR. BOSTWICK: What I, what I, from experience, what experience tells me in these cases, we do this -- I am the attorney for approximately 500,000 laborers. We do this across

the country and Canada. We have dealt with mob control situations in New York, New Jersey, Chicago. My experience tells me that without a judicial order, this will be a disaster, that every single day we will be fighting with --

MR. MONTGOMERY: Let me assure you. If there is an accounting that they need and if they need one of the guys or who is in charge of accounting to sit down and explain to them what's in the books, I can assure you I'11 walk over to that office with them and do that.

THE COURT: Okay. Tell me.

MR. BOSTWICK: If this was IBM, I'd say -

MR. MONTGOMERY: I'm not a member of the mob yet.

THE COURT: I don't think he is.

MR. BOSTWICK: That's, like I say, I have no -- I told you this over the phone too. I do not have a problem with his sincerity. I do not trust his clients. I, you know, I have just worked too long in this specific field.

THE COURT: Okay. I just want to -- I want to know what -- just tell me practically what the difference will be in terms of getting your accounting if you have an order or if you don't have an order. I just want to know what it does. Does it require them to come in?

MR. BOSTWICK: If they have an order, they won't mess around. That's the difference. That's the difference, and we have, we have specific, in terms of your authority to enter one

and the necessity to enter one, we have demonstrated problems since the imposition of the trusteeship.

THE COURT: Well, I understand that's what you are saying, and I don't think that's being disputed, that you have at least got this one issue. But as you are standing here today, the only thing I am hearing is that you need this accounting, and I didn't know whether -- I mean, are you going to get any more information about this $100,000 accounts?

MR. BOSTWICK: We certainly need that.

THE COURT: With an order as opposed to not having one?

MR. BOSTWICK: I absolutely believe that that is true.

MR. MONTGOMERY: But they are not entitled to injunctive orders.

THE COURT: What will it do?

MR. BOSTWICK: It will put somebody on notice beforehand that if they don't come in and answer questions about it or if they don't cooperate, that they will have to face a federal judicial forum.

MR. MONTGOMERY: Judge, may I suggest -

THE COURT: Well, they will anyway.

MR. MONTGOMERY: May I suggest that you review the papers, and then let's come back in the morning or Monday. Or Tuesday, not Monday.

THE COURT: Not Tuesday. I go back on this trial.

MR. MONTGOMERY: And then -

THE COURT: Plus I have several sentencings.

MR. MONTGOMERY: And in the meantime, if they have specific requests in terms of information, I will do my darndest to get it for them.

THE COURT: I'll read all this. I am just trying to understand where, what, make sure I know what the facts are, at least as argued, and I will go see if it looks like it should be entered or not.

MR. BOSTWICK: My best view -

THE COURT: I understand you would like it because you think things would be better. I don't know if that's -- I have never known that that was the basis for an injunction. I do understand that the law is different on this.

MR. BOSTWICK: You asked me as a practical matter -

THE COURT: Yes.

MR. BOSTWICK: -- what would help.

THE COURT: Well, that's true, but I was trying to figure out in terms of getting an accounting exactly how you go
about getting it or what that means in terms of, I mean --

MR. GORDON: Your Honor, what I understand that the accounting means is that we need these former executive members to cooperate with us and explain. what the financial records mean. There is an investment account which we believe has

$100,000 in it. We need someone to cooperate, come over and explain what the purpose of this fund is for, to show us what ledgers and records are used to track what's put into it and what's taken out of it, and we need that done quickly. We have investigators who are going out there to look at these records, but it will certainly be a whole lot easier if we have the cooperation of these former executive board members.

MR. BOSTWICK: At a minimum today, what I would highlight and request --

THE COURT: I was going to say, why don't you people just agree on this thing?

MR. MONTGOMERY: I have been saying that for three days.

THE COURT: All right.

MR. BOSTWICK: That's why we sent this letter and what -- the letter --

THE COURT: This is the letter under Schippers & Bailey?

MR. BOSTWICK: Exhibit L, that is correct.

MR. MONTGOMERY: And that letter was suggested by me in lieu of this lawsuit.

MR. BOSTWICK: Right, and the two items that specifically are most important to us that they have not agreed to are items 6 and 8, and that's what we need. We need their commitment that they will not interfere.

MR. MONTGOMERY: I am not suggesting that they disagree with it. There are seven people involved, and I think I have talked to six, and of the seven, one clearly said: I have, whatever I know, you can, you can know. And the other said: I don't like the way that these guys are nit-picking with me. I mean, I have given them everything I got. I'll sign whatever I have to sign. We are dealing with people who have a little machismo, and --

MR. BOSTWICK: Well, more than that.

MR. MONTGOMERY: I think I can get beyond that to get them what they need.

MR. BOSTWICK: Got a lot more than a little machismo.

MR. MONTGOMERY: Well, maybe a little more than I indicated.

MR. BOSTWICK: As you will read, but the, you know, these specific items --

THE COURT: 6 and what?

MR. BOSTWICK: 6 and 8 are the ones that they have failed to accept, and those are the two that are the most important to us.

MR. MONTGOMERY: And that's not true that we failed to accept them. I said that you can stop 6 at "trustee," and everybody said, "I'll sign." You can stop, you can stop 8 at --

MR. BOSTWICK: That's -- before we even go there, why, why would we, why would we --

MR. MONTGOMERY: I just wanted you to speak the truth that's all. I can't figure out what the other part was on the other one.

THE COURT: Well, I assume -

MR. MONTGOMERY: Oh.

THE COURT: Why won't they sign it as it is?

MR. MONTGOMERY: Pardon me?

THE COURT: Why won't they sign it as it is?

MR. BOSTWICK: That's our question.

MR. MONTGOMERY: Judge, all I can tell you is that I am dealing with people who feel that they are being used as a publicity stunt by the international union in bringing this lawsuit, and they are ticked off about it, to be candid with you. And also, you know, there is nothing here that I can't get for them, you know, within a reasonable time, tomorrow, if I can get the people there, if they tell me what they want. But they are not in a mood to negotiate; they are of a mood to beat over the head with a court order to which they are not entitled.

THE COURT: Okay. I'll look at it and see. It seems to me I -

MR. BOSTWICK: When Mr. Montgomery says that he can

provide things quickly to us, I would only note that on the very first day, the most, the easiest conceivable action that we could possibly ask for, the least controversial, the least public, the least dramatic was to require one and only one executive board member to provide their keys by close of business and to give me the written representation that checks wouldn't be signed. And you know what he said? "I can't do it." And you know what happened the next day? $18,000 was gone. We are dealing with an organized crime infiltrated organization for the past 25 years. It's been demonstrated in court cases, both internal union, and it has been the subject of these disputes. The only thing we asked for was what was already an order in the other case which avoided --

MR. MONTGOMERY: This has nothing to do with this case.

MR. BOSTWICK: It's the exact same fact pattern. It would have avoided all of this if it -- and we are requesting that and only that. Mr. -- he called me up yesterday, said, "We want to do anything to avoid a hearing." I said, "That's reasonable." He said, "Send over any piece of paper and we'll sign it." I said, "Fine, we'll send an order."

MR. MONTGOMERY: I didn't say, "Send any piece of paper." I said, "Send over what it is that you want." And out

of the ten things he has got on there, I only quarreled with parts of two, and I didn't quarrel with them myself, the clients quarreled with them.

MR. BOSTWICK: Why don't we -- I'll tell you what. Your Honor, I understand that this is not a wonderful display of two attorneys. We are trying our best, I think, for our clients. I honestly do not have a problem with -- I believe, you know, Mr. Montgomery has been sincere in attempting this. I just think we have a disconnect in terms of what's required. If we could agree today to all of the items on this list and he could sign this for, on behalf of his individuals, and put No. 6, that they will not interfere with the operations of LIUNA, and No. 8, they will provide a complete accounting, we could at least get through the weekend. But without, without some assurance, the problem is I believe, quite, frankly that Mr. Montgomery may be used by his clients a little bit in this situation.

MR. MONTGOMERY: They can't speculate on all kinds of dangers and things that may happen. They have got to bring you an allegation. The best allegation they have brought you is that we did not turn over the key quickly enough.

MR. BOSTWICK: Or Exhibit M.

MR. MONTGOMERY: Or we did not give them the office quickly enough. That's all they have said. They didn't say they don't have the office.

THE COURT: You don't deny that they are entitled to an accounting -

MR. MONTGOMERY: Oh, no question about it.

THE COURT: -- and they are entitled to have --

MR. MONTGOMERY: All of the above.

THE COURT: -- your people not interfere with the operations of, the temporary trustee.

MR. MONTGOMERY: All of the above.

THE COURT: Including interference with the -

MR. MONTGOMERY: It says so in their constitution. There is no question.

THE COURT: Okay. So why not just sign it?

MR. MONTGOMERY: I have no quarrel with signing it, but I am saying to you --

THE COURT: But if they won't sign it -

MR. MONTGOMERY: No, no. If you want me to sign it, I'll sign it. But I want them to sit down and say, "Hey, Jim, here's what I need tomorrow" so we can get this behind us, and I am glad to do it.

MR. BOSTWICK: It sounds as though you have served a very important function. It sounds as though what we are ready to do is sign this piece of paper with 6 and 8 being slightly modified to simply say, "not interfere with the operations, and we'll provide a complete accounting."

MR. MONTGOMERY. . Fine. Change it, and I will sign it

and then we'll -- and then, but you follow up with getting it, let's get it done and get out of the courthouse. I have been trying to get out of the courthouse since before I got in, because I don't like arguing in courthouses anymore.

THE COURT: You don't?

MR. MONTGOMERY: No. Juries I like.

MR. BOSTWICK: I hope you enjoy a vigorous debate.

THE COURT: Both' Mr. Montgomery and Mr. Schippers have been in here in the last couple two or three years, not in successful ventures, but --

MR. MONTGOMERY: That's true. That's true, and I can --

THE COURT: Mr. Schippers has a neater beard now that he has been to Washington.

MR. MONTGOMERY: But you know he promised not to say , anything, Judge, but I told him he wouldn't get away with it.

MR. BOSTWICK: I have an over/under on his making a comment.

THE COURT: All right. Sign it. I don't want to distract you.

MR. BOSTWICK: Okay.

MR. MONTGOMERY: Even gave another foot.

THE COURT: Okay.

MR. BOSTWICK: What we have done here is this is a little inartful because we have an S slashed for a prior

signature, but I guess I can have the temporary trustee,

Mr. Schippers, sign it as well, and then we can simply hand it up to the Court and enter it, is what I would propose.

THE COURT: All right.

MR. MONTGOMERY: We don't need to enter it. We do not want any injunction entered, Judge.

MR. BOSTWICK: Well--

MR. MONTGOMERY: we want this

MR. BOSTWICK: It's not an injunction.

MR. MONTGOMERY: We want this case dismissed. That is an agreed resolution of the case. I am not agreeing to an injunction.

MR. BOSTWICK: I'll tell you what. How about if we have it as Exhibit 0?

MR. MONTGOMERY: That's fine, Exhibit 0 is fine.

THE COURT: All right. So shall I just continue this case for a while?

MR. MONTGOMERY: But what I would like Your Honor to do is to --

MR. BOSTWICK: Why don't we?

THE COURT: I'll tell you, I have seven sentencings and a criminal case that has more difficult evidentiary issues than I have ever faced going on right now. So if I can avoid doing this right now --

MR. MONTGOMERY: I don't think there is a rush, and I

think if you give us your most convenient date, we may have all of this done if they, if they act precipitously and are specific with what they want.-

THE COURT: All right.

MR. BOSTWICK: All right. We'll work with your court personnel here to get adequate copies, I guess, of this, if that's all right, unless you want me to hand this up now.

THE COURT: No, that's' fine. You can do that. That will take care of it.

MR. BOSTWICK: Well, this is now actually Exhibit L.

THE COURT: To?

MR. BOSTWICK: Or actually, let's make this Exhibit 0 to our memorandum of law in support of plaintiff's application for a temporary restraining order. And then we have an agreement, we have it on the record that we have an agreement that these items will be done, and then we will leave it to Mr. Schippers or his personnel and whoever they designate to get these accountings done.

THE COURT: Okay. Now, what do I do with the motion for temporary restraining order? Just deny it as moot, continue it?

MR. MONTGOMERY: I think we can deny that.

MR. BOSTWICK: I would say we should continue that, and we can, we can meet again or at least set a status date for sometime next week.

MR. MONTGOMERY: Next week?

THE COURT: Let's make it after next week, unless you run into a problem.

MR. MONTGOMERY: I mean -

MR. BOSTWICK: Okay. That's fine.

MR. MONTGOMERY: I think we should put it at your earliest convenience, and at that point we'd like you to be prepared to have read the pleadings and take our view that-this whole proceeding ought to be dismissed, and we are going to do our best to make them happy too.

THE COURT: What is your basis for wanting it dismissed, on the ground that there is no emergency?

MR. MONTGOMERY: No on the ground that there is no case or controversy and that the allegations that they have made of irreparable harm are insufficient as a matter of law to entitle them to not only a temporary restraining order but a preliminary or permanent injunction, and we've cited our cases.

THE COURT: Doesn't that depend on whether, what happens? I mean, are you still saying that, what if the people say, "No, I am not going to give them an accounting"?

MR. MONTGOMERY: Then I would come back and argue to you that these people have an obligation under the LIUNA constitution to do exactly what these people want them to do, and they have their own remedies within the LIUNA constitution for disobeying people who violate the Constitution, and I would be prepared

say if everybody who had a voluntary organization with their own disciplinary mechanisms and duties set forth could come in and get the federal District -Court to give attention to it, the courts would be bogged down unbelievably.

MR. BOSTWICK: Here is the fallacy to that argument, which is that it would take us a half a year to go through a disciplinary hearing on a specific issue, and the case law that we have cited in our brief and in our memorandum of law; which we'd urge your consideration of, all says that the lifeblood of the union is its reputation and what is happening on the ground and on the field, and if something happens that's improper within the next five days, I understand Mr. Montgomery thinks nothing wrong --

MR. MONTGOMERY: But even if it does, then that would be a basis for making an application.

THE COURT: I thought we just solved this.

MR. BOSTWICK: The only thing I am opposing -

THE COURT: I'm sorry. I have got, I don't have time to read tons of pleadings if there is no need to read them.

MR. BOSTWICK: I guess the only thing I would oppose is the dismissal of the case, which is what I thought he was arguing for.

THE COURT: Well, did I understand from what you were saying that the whole thing becomes moot in 30 days anyway?

MR. BOSTWICK: Yes.

MR. MONTGOMERY: Realistically -

MR. BOSTWICK: Well, I'm sorry. The hearing must be held within 30 days. A decision must be rendered within 60 days, so it's 60 days.

THE COURT: Okay. In 60 days the whole thing becomes moot anyway?

MR. MONTGOMERY: Yes, but, Judge, keep in mind that by my signing this document--

THE COURT: Assuming you don't have any problems, why shouldn't I just continue this for 60 days?

MR. BOSTWICK: Well --

MR. MONTGOMERY: I agree.

MR. BOSTWICK: We can do that and then request the hearing if we have further problems or if we would like a preliminary injunction hearing because something has gone wrong. The only caveat I would state on the record is that in the event that we prevail on the hearing in 60 days --

THE COURT: Yes, then what happens?

MR. BOSTWICK: The trusteeship would go on for 18 months. And as I said, I simply can't overemphasize that in the other case, we have just had two experiences with this, in the other case, once we had an order imposed, we never had one problem, 21,000 members.

MR. MONTGOMERY: Let me just -

THE COURT: Well, I sure hope you are not going to

come back with any problems.

MR. BOSTWICK: I do too.

MR. MONTGOMERY: Let me assure you, Judge, that in all likelihood, while the Local 2 has a right to a hearing in 30 days, I am almost positive that we are not going to undertake that. We are not opposing the trusteeship of this local.

THE COURT: Okay.

MR. MONTGOMERY: All right? Simple as that.

MR. BOSTWICK: Except that the LMRDA actually requires a hearing, because all the members have to --

MR. MONTGOMERY: We don't have to participate.

MR. BOSTWICK: That's right. They don't have to oppose it. But a status conference in 60 days is fine if that's what we are looking at.

THE COURT: Okay.

MR. BOSTWICK: And we'll just come in if there is a problem, only if there is a problem.

THE COURT: Well, all right. Why don't I set a status for 10 o'clock on July 30th.

MR. MONTGOMERY: That's okay. I won't be here, but someone will be here from my office.

MR. BOSTWICK: And we may be able to remove it before that.

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