CORE TERMS: trusteeship,
organized crime, summary judgment, government control, deprived,
corruption, discipline, leadership, partiality, court upheld, temporary
restraining order, fair and impartial hearing, evidentiary support,
unclean hands, undemocratic, intraunion, appointed, patently, ridding,
evident, expel, ranks
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COUNSEL: For LABORERS' INTERNATIONAL UNION OF NORTH AMERICA,
ROBERT BLOCH, Plaintiffs - Appellees: Robert E. Shapiro, David E.
Gordon, BARACK, FERRAZZANO, KIRSCHBAUM, PERLMAN & NAGELBERG, Chicago, IL
USA.
For JOHN MATASSA, JR., LEO CARUSO, CONSTRUCTION AND GENERAL LABORERS
DISTRICT COUNCIL OF CHICAGO AND VICINITY, Defendants - Appellants: Allan
A. Ackerman, Chicago, IL USA.
JUDGES: Before BAUER, COFFEY and EASTERBROOK, Circuit Judges.
OPINIONBY: COFFEY
OPINION: [*1196]
COFFEY,
Circuit Judge. Since 1994, when they were the subject of
a Department of Justice RICO investigation, the Laborers' International
Union of North America (LIUNA) has attempted to rid itself of organized
crime and stave off direct government control. These efforts culminated
in LIUNA's adoption of a reform program in 1995 designed to root out
mafia influence and corruption. In 1997, these reforms allowed LIUNA to
bring a trusteeship complaint against the Chicago District Council (CDC)
on charges of organized crime corruption, financial wrongdoing, and
undemocratic procedures.
[**2] n1 As a
result of these charges, an Independent Hearing Officer (IHO) concluded
that a trusteeship was necessary because of the overwhelming evidence
that organized crime had infiltrated the top ranks of the existing CDC
leadership and that the CDC had been the continuous victim of
undemocratic process for more than 25 years. Consequently, Robert Bloch
was appointed as the CDC trustee with full power to conduct all of the
CDC's affairs.
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -
n1 The CDC is a subordinate body of LIUNA, located in Chicago, which
functions as the central representative body for 21 affiliated local
unions comprised of approximately 19,000 LIUNA members.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -
Because the CDC refused to allow Bloch to perform his duties without a
federal court order, LIUNA and Bloch filed this action in federal court.
The defendants-appellants (hereinafter "CDC") filed counterclaims
arguing that LIUNA's trusteeship action against CDC was really
"discipline" against them personally. On January %6, 1999, the trial
judge entered summary judgment in favor of LIUNA,
[**3] stating
that the IHO "has heard and read a massive amount of evidence . . . .
Those rulings have evidentiary support. And that is the end of it." We
affirm.
I. BACKGROUND
In 1994, the Department of Justice announced that it was preparing to
file an action against LIUNA under RICO with the intent of taking
control of LIUNA and ridding it of organized crime. As part of LIUNA's
attempts to avoid direct government control, the LIUNA General Executive
Board (GEB) amended the LIUNA Constitution to add a new Ethics and
Disciplinary Procedure ("EDP") and an Ethical Practice Code ("EPC").
LIUNA hoped that it could persuade the DOJ that it had the ability to
expel organized crime from its ranks without the need for direct
government control.
After LIUNA enacted the EDP and EPC, the DOJ entered into an agreement
providing for strict government oversight of, and assistance to, LIUNA's
internal reform process, but stopped short of assuming direct
responsibility or control over LIUNA. Immediately after the agreement
with the DOJ, LIUNA officials and LIUNA-affiliated entities from Chicago
and elsewhere tried to block the reforms and the agreement with the DOJ
through the filing of a number
[**4] of suits
in federal court, all alleging that the EDP, the EPC, and the agreement
with the DOJ, violated the federal labor statutes. n2
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -
n2
See
Serpico v. Laborers' Int'l Union N. Am., 97 F.3d 995 (7th Cir.
1996), for a more detailed account of the initial challenge to the
EDP and EPC.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -
After this court upheld the EDP, EPC, and LIUNA's agreement with the
DOJ, see
Serpico, 97 F.3d at 996-99, the GEB Attorney initiated trusteeship
proceedings against the CDC under the EDP, the LIUNA Constitution, and
Title III of the Labor Management Reporting and Disclosure Act (LMRDA).
The trusteeship complaint alleged that "for at least the past
twenty-five years, the leadership of the Chicago District Council has
had strong, discernible ties to the leadership of organized crime in
Chicago" and that a
[*1197]
trusteeship was necessary to remedy the problem.
On February 7, 1998, after 19 days of hearings involving 45 witnesses
and 200 exhibits, the IHO determined that a trusteeship of the CDC was
necessary
[**5] to expel
the influence of organized crime, restore democratic process and
otherwise carry out the legitimate business of the Union. The CDC and
its former officers sought to appeal the IHO's decision to the Union's
Appellate Officer (AO), an attorney appointed under the EDP to hear
appeals of cases involving member discipline. The AO issued two opinions
in which he ruled that the IHO's opinion was not appealable because it
concerned a trusteeship only and imposed no "discipline" on any of the
defendants within the meaning of the LMRDA.
Still, LIUNA and Bloch could not assume control of the CDC because the
Executive Board of the CDC voted that it would not permit any
trusteeship and refused to allow Bloch access to the CDC facilities.
LIUNA and Bloch, therefore, filed this action in federal court. On
February 28, 1998, after an extensive hearing, the district judge found
the evidence against the CDC "earth shattering" and entered a temporary
restraining order, barring the CDC and its former officers from
interfering with the trusteeship. n3
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -
n3 On March 3, 1998, after another hearing, the judge ruled that the
terms of the temporary restraining order should continue as a
preliminary injunction.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -
[**6]
LIUNA and Bloch filed for summary judgment, and the CDC responded,
claiming that: 1) there was an improper relationship between the United
States and
Arthur Coia, the GEB attorney,
i.e., that the United States government was exercising too much
influence over LIUNA decisions; 2) additional discovery was necessary;
3) the trusteeship was really a disciplinary action against Bruno Caruso
because he had run for the LIUNA presidency on a platform which included
ridding LIUNA of government control; and 4) the allegations of
corruption were "stale" for the purposes of establishing the need for a
trusteeship. The trial judge concluded that the IHO's ruling had
evidentiary support and therefore granted the plaintiffs' motion for
summary judgment. The CDC appeals.
II. ISSUES
On appeal, the CDC contends that: 1) the IHO's "evident partiality"
deprived the CDC of a fair and impartial hearing; 2) LIUNA's "patently
unreasonable" interpretation of its Constitution and the EDP deprived
the CDC of an intraunion appeal; and 3) LIUNA's "bad faith" and "unclean
hands" precluded summary judgment.
III. ANALYSIS
The first two issues the CDC raises on appeal, that the IHO's "evident
partiality"
[**7] deprived
the CDC of a fair and impartial hearing and that LIUNA's "patently
unreasonable" interpretation of its Constitution and the EDP deprived
the CDC of an intraunion appeal, were not raised in the CDC's response
to the motion for summary judgment. "We have long refused to consider
arguments that were not presented to the district court in response to
summary judgment motions."
Arendt v. Vetta Sports, Inc., 99 F.3d 231, 237 (7th Cir. 1996)
(citing
Cooper v. Lane, 969 F.2d 368, 371 (7th Cir. 1992);
Resolution Trust Corp. v. Juergens, 965 F.2d 149, 153 (7th Cir.
1992); and
Manor Healthcare Corp. v. Guzzo, 894 F.2d 919, 922 (7th Cir.
1990)). Accordingly, the CDC has waived any argument concerning the
IHO's partiality and LIUNA's interpretation of its constitution or EDP.
Although the CDC has preserved its arguments concerning LIUNA's "bad
faith" and "unclean hands," they are meritless. In
Serpico, 97 F.3d at 999, this court upheld LIUNA's agreement with
the government stating that "we, too, think that reasonable and honest
interpreters could
[*1198]
have concluded that the steps the Board took were necessary to
[**8] avoid a
RICO complaint, which given the dire consequences of a receivership
could have been deemed an emergency." The CDC's attempts to characterize
its new challenges to the EDP as challenges to how the EDP is
implemented do not alter the fact that the EDP was appropriately enacted
and we are not aware of any compelling reason that warrants concluding
that LIUNA's efforts to establish a trusteeship over the CDC was in bad
faith.
The decision of the district court is
AFFIRMED.