CORE TERMS: membership,
deference, consent decree, emergency existed, negotiations, emergency,
organized crime, emergency situation, breached, ninety, voted,
reasonable likelihood, own constitution, union membership, summary
judgment, material fact, redressable, non-movant, favorable, concrete,
constitutional authority, legislative action, legislative power,
credible evidence, fiduciary duties, new procedure, legal action, first
draft, two weeks, file suit
LexisNexis(R) Headnotes
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Headnotes
COUNSEL: [*1] For JOHN
SERPICO, individually as member of Local 8, Laborers' International
Union of North America in his official capacity as Second Vice President
of the Laborers International Union of North America 1950 W. Erie
Street, Chicago, Illinois, plaintiff: Matthias A. Lyndon, Howard Michael
Pearl, Dan K. Webb, Brian Mason Montgomery, Winston & Strawn, Chicago,
IL. For LOCAL 210 LABORERS' INTERNATIONAL UNION OF NORTH AMERICA,
plaintiff: Sherman M. Carmell, Carmell, Charone, Widmer Mathews & Moss,
Chicago, IL. Richard Lipsitz, William M. Feigenbaum, Robert L. Boreanaz,
Paul J. Cambria, Jr., Lipsitz, Green, Fahringer, Roll, Salisbury &
Cambria, Buffalo, NY. For CHARLES PUSATERI, Individually, and as a
Member of and in his official capacity as Vice President of Local 210,
Laborers' International Union of North America, plaintiff: Sherman M.
Carmell, Carmell, Charone, Widmer, Mathews & Moss, Chicago, IL. Richard
Lipsitz, William M. Feigenbaum, Robert L. Boreanaz, Lipsitz, Green,
Fahringer, Roll, Salisbury & Cambria, Buffalo, NY. For LOCAL 1 LABORERS'
INTERNATIONAL UNION OF NORTH AMERICA, FRANK COLAIANNI, President &
Business Manager, LOCAL 2 LABORERS INTL UN NA, MICHAEL CHRISTOPHER,
Secretary-Treasurer,
[*2] LOCAL 5
LABORERS' INTERNATIONAL UNION OF NORTH AMERICA, FRANK ZEUBERIS,
President and Business Manager, LOCAL 1001 LABORERS' INTERNATIONAL UNION
OF NORTH AMERICA, SAM DECHRISTOPHER, Sergeant-At-Arms, LOCAL 1006
LABORERS' INTERNATIONAL UNION OF NORTH AMERICA, DONALD FRANK, Recording
Secretary, plaintiffs: Sherman M. Carmell, Suzanne M. Law, Carmell,
Charone, Widmer, Mathews & Moss, Chicago, IL.
For LABORERS INTERNATIONAL UNION OF NORTH AMERICA,
ARTHUR
A
COIA,
in his official capacity as General President of the Laborers'
International Union of North America, 905 16th Street, NW, Washington,
DC 20006, ROLLIN P VINALL, in his official capacity as General
Secretary-Treasurer of the Laborers' International Union, 700 NE Loop
820, Suite 210, Hurst, TX 76053, MASON M WARREN, in his official
capacity of First Vice President of the Laborers' International Union of
North America, 620 Sunbeam Avenue, Sacramento, CA 95314, VERE O HAYNES,
in his official capacity as Third Vice President of the Laborers'
International Union of North America, 475 Ledyard Street, Hartford,
Connecticut U06114, ENRICO MANCINELLI, in his official capacity as Fifth
Vice President of the Laborers' International Union
[*3] of North
America, 44 Hughson Street, South, Hamilton, Ontario, Canada L8N 2A7,
CHUCK BARNES, in his official capacity as Sixth Vice President of the
Laborers' International Union of North America, Plaza 600, Room 1302,
Sixth & Steward Streets, Seattle, Washington 98101, JACK WILKINSON, in
his official capacity as Seventh Vice President of the Laborers'
International Union of North America 10521-C Braddock Road, Fairfax,
Virginia 22032, MICHAEL QUEVEDO, in his official capacity as Eight Vice
President of the Laborers' International Union of North America, 4399
Santa Anita Avenue, Suite 204, El Monte, California 91731, ARMAND E
SABITONI, in his official capacity as Tenth Vice President of the
Laborers' International Union of North America, 226 South Main Street,
Providence, Rhode Island 02903 Who Constitute the General Executive
Board of the Laborers' International Union of North America, GEORGE R
GUDGER, in his official capacity as Eighth Vice President of the
Laborers' International Union of North America 5845 Live Oak Parkway,
Suite B1 Norcross, George 33093, defendants (95-CV-614): Robert Eliot
Shapiro, Gayle L. Yeatman, Barack, Ferrazzano, Kirschbaum & Perlman,
Chicago, IL. For
[*4] LABORERS
INTERNATIONAL UNION OF NORTH AMERICA,
ARTHUR A
COIA,
in his official capacity as General President of the Laborers'
International Union of North America, ROLLIN P VINALL, in his official
capacity as General Secretary-Treasurer of the Laborers' International
Union, MASON M WARREN, in his official capacity as First Vice President
of the Laborers' International Union of North America, VERE O HAYNES, in
his official capacity as Third Vice President of the Laborers'
International Union of North America, ENRICO MANCINELLI, in his official
capacity as Fifth Vice President of the Laborers' International Union of
North America, CHUCK BARNES, in his official capacity as Sixth Vice
President of the Laborers' International Union of North America, JACK
WILKINSON, in his official capacity as Seventh Vice President of the
Laborers' International Union of North America, GEORGE R GUDGER, in his
official capacity as Eighth Vice President of the Laborers'
International Union of North America, MICHAEL QUEVEDO, JR, in his
official capacity as Ninth Vice President of the Laborers' International
Union of North America, ARMAND E SABITONI, in his official capacity as
Tenth Vice President of the Laborers'
[*5]
International Union of North America, GENERAL EXECUTIVE BOARD MEMBERS OF
THE LABORERS' INTERNATIONAL UNION OF NORTH AMERICA, defendants
(95-CV-1573): Robert Eliot Shapiro, Gayle L. Yeatman, Barack,
Ferrazzano, Kirschbaum & Perlman, Chicago, IL. For
ARTHUR
A
COIA,
as General President, ROLLIN P VINALL, as General Secretary-Treasurer,
MASON M WARREN, as First Vice President, VERE O HAYNES, as Third Vice
President, ENRICO MANCINELLI, as Fifth Vice President, CHUCK BARNES, as
Sixth Vice President, JACK WILKINSON, as Seventh Vice President, GEORGE
R GUDGER, as Eighth Vice President, MICHAEL QUEVEDO, JR, as Ninth Vice
President, ARMAND E SABITONI, as Tenth Vice President of the Laborers'
International Union of North America, LABORERS INTERNATIONAL UNION OF
NORTH AMERICA, defendants (95-CV-1725): Robert Eliot Shapiro, Gayle L.
Yeatman, Barack, Ferrazzano, Kirschbaum & Perlman, Chicago, IL.
JUDGES: James B. Zagel, United States District Judge
OPINIONBY: James B. Zagel
OPINION: MEMORANDUM OPINION
AND ORDER
Plaintiffs allege that the General Executive Board (Board) of the
Laborers' International Union of North America (LIUNA) acted in excess
of its authority under the union constitution when it adopted
[*6] the
Disciplinary Procedure on January 18, 1995 and entered into the February
13, 1995 agreement with the government, thereby violating the
Labor-Management Relations Act,
29 U.S.C. § 185. Plaintiffs also claim the Board violated its
fiduciary responsibilities to the union membership, in violation of the
Labor-Management Reporting and Disclosure Act,
29 U.S.C. § 501. Defendants move for summary judgment on both
counts.
On November 4, 1994 the LIUNA general counsel received a letter from the
Department of Justice (DOJ), informing LIUNA that the DOJ was
considering initiating a civil RICO action against it and that the union
had two weeks to bring any matters it deemed pertinent to the decision
to file suit to the government's attention. Accompanying the letter was
a copy of the draft complaint. The draft complaint requested a broad
range of preliminary and permanent injunctive relief against LIUNA
including the appointment of one or more court liaison officers to
discharge the duties of the General President and Board of LIUNA. After
receipt of the letter and draft complaint, negotiations began between
LIUNA and the DOJ. The government had credible evidence that certain
officers of
[*7] LIUNA and
its subordinate bodies had allowed members and associates of the La Cosa
Nostra syndicate to influence and control the affairs of the union.
On December 14, 1994 the DOJ sent LIUNA its proposed consent decree
which sought a permanent bar of Vice Presidents Caivano and Serpico
among others from the affairs of LIUNA. The first draft complaint sought
relief against General President
Coia personally, but the proposed
consent decree no longer sought relief against him personally. The
government and LIUNA continued negotiations. On January 12, 1995 the
government formally notified LIUNA that settlement discussions were no
longer productive because the parties were moving farther apart and
informed LIUNA that it was now ready to take formal legal action. On
January 18, 1995 the Board adopted, by a 10-2 vote, a constitutional
amendment entitled the LIUNA Ethics and Disciplinary Procedure
(Disciplinary Procedure). In adopting the new procedure, the Board made
express findings that it had great concern for the welfare of the union
membership, that it believed an emergency situation had developed, and
that to comply with the law an ethics code and disciplinary procedure
needed to be
[*8] adopted.
The Disciplinary Procedure created four new positions that would be
responsible for investigating, prosecuting, and adjudicating charges of
wrongdoing. The Board appointed four persons with no association to
LIUNA and with backgrounds that would indicate they would vigorously
enforce the new procedure. Thereafter, Caivano and Serpico were
suspended from their positions.
On February 13, 1995 the Board and the DOJ entered into an agreement
which provided that the union would undertake a period of internal
reform lasting at least ninety days. At the end of this period, the
agreement stipulated that if the government believed it was necessary or
desirable, the complaint would be filed and the consent decree
implemented.
Discussion
Summary judgment should be granted when there is no genuine issue as to
any material fact and the moving party is entitled to judgment as a
matter of law.
Fed. R. Civ. P. 56(c);
Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S.
Ct. 2548 (1986). All reasonable inferences must be drawn in the
light most favorable to the non-movant.
Anderson v. Stauffer Chemical Co., 965 F.2d 397, 400 (7th Cir. 1992).
However, the party
[*9] who bears
the burden of proof on a particular issue may not rest on its pleadings,
but must affirmatively demonstrate, by specific factual allegations,
that there is a genuine issue of material fact remaining for trial.
Celotex, 477 U.S. at 324 (1986);
Schroeder v. Copley Newspaper, 879 F.2d 266, 269 (7th Cir. 1989). A
dispute about a material fact is genuine only if the evidence presented
is such that a reasonable jury could return a verdict for the
non-movant.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202,
106 S. Ct. 2505 (1986).
(I)
A. Plaintiffs contend that the Board exceeded its constitutional
authority when it adopted the Disciplinary Procedure on January 18
without submitting the issue to a membership vote. The LIUNA
constitution specifically allows the Board to amend the constitution if,
in its opinion, it deems an emergency exists. Article II Section 2(e) of
the LIUNA constitution states:
The General Executive Board may exercise legislative power when, in
its opinion, it deems it necessary to conform to or comply with the
law; or when, in its judgment, the exercise of such power is deemed
necessary, proper and appropriate in an [*10]
emergency. It may exercise this power for the purpose of new
legislation or to amend the Constitution of the International
Union...
A union is entitled to deference in the interpretation of its own
constitution so long as that interpretation is not unreasonable.
Maher v. International Broth. of Elec. Workers, 15 F.3d 711, 714 (7th
Cir. 1994);
Air Wisconsin Pilots Protection Com. v. Sanderson, 909 F.2d 213, 218
(7th Cir. 1990), cert. denied,
498 U.S. 1085, 112 L. Ed. 2d 1045, 111 S. Ct. 958 (1991). "[A]
union's interpretation of its own constitution, by-laws, and other
promulgations is entitled to judicial deference; we must be able to call
the interpretation unreasonable, perhaps even patently unreasonable,
before we can set it aside."
Air Wisconsin, 909 F.2d at 218 (internal quotations omitted). The
underlying purpose for this deference is the policy against judicial
interference in internal union affairs.
Local Union No. 657, Etc. v. Sidell, 552 F.2d 1250, 1254 (7th Cir.
1977).
The LIUNA constitution has also built in a mechanism of deference to
Board decisions as it grants the Board authority to exercise legislative
power when it determines "in its opinion
[*11] " or
"in its judgment" that certain conditions exist. Thus, according the
Board due deference as both the law and the LIUNA constitution require,
this Court finds that the Board's action in amending the constitution
was reasonable.
The Department of Justice threatened the Board with a 212-page draft
civil RICO complaint that alleged the union was influenced by organized
crime and that the Board had breached its legal and fiduciary duties by
failing to take steps to discipline and remove members who were
connected with organized crime. The complaint sought to have the elected
leadership of the union replaced by court-appointed officers. The Board
reasonably believed the filing of the suit would have disastrous
consequences on LIUNA due to negative publicity, debilitating litigation
costs, and the possibility of a government takeover of the union.
Believing such events posed an emergency situation for the union, the
Board voted to adopt the Disciplinary Procedure. In the Court's view,
the Board's perception that these events constituted an emergency are
reasonable under the circumstances, and are entitled to due deference.
B. Even if deference is not given to the Board's decision
[*12] and
this Court reviews the Board's decision that an emergency existed de
novo, I still find the Board did not exceed its constitutional authority
in adopting the Disciplinary Procedure.
Plaintiffs argue that no emergency existed because the threat that a
RICO complaint would be filed against the union did not develop suddenly
since Board members knew of the complaint on November 4 and thus had
plenty of time to call a membership vote before taking legislative
action on January 18. While it is true that the Board knew about the
threatened suit for a period of time before taking action, this fact
does not preclude a finding that an emergency existed. The government
informed LIUNA on November 4 that the union had two weeks to bring any
matters it deemed pertinent regarding the decision to file suit to the
government's attention, indicating that the union needed to act quickly.
LIUNA then met with the government on a number of occasions over the
next two months in an effort to avert the filing of the complaint.
However, these negotiations broke down on January 12 when the government
formally notified the union in writing that further discussions were
unproductive and the government was
[*13] ready
to proceed with formal legal action. While it is arguable the Board
should have had the foresight to recognize that negotiations would
eventually break down, and thus the Board should have called a
membership vote early on, this Court's role is not to judge in hindsight
whether the Board took the most appropriate action. At most, it might be
this Court's job to determine if, on January 18, the Board properly
concluded that an emergency existed that necessitated immediate action.
It is clear to this Court that a breakdown in negotiations and a formal
threat to file the complaint within a short period of time created an
emergency situation entitling the Board to take legislative action at
its January 18 meeting. Because I have determined that the Board's
action was appropriate based on its power to amend the constitution in
an emergency, it is unnecessary to examine whether the action was also
appropriate under its authority to comply with the law.
C. Plaintiffs next argue that even if the Board's action was authorized
and was not unreasonable this Court may still block the action if it was
undertaken in bad faith.
Local No. 48, United Broth. of Carpenters & Joiners of America [*14] v. United
Broth. of Carpenters & Joiners of America, 920 F.2d 1047, 1053 (1st Cir.
1990). Plaintiffs allege that the Board's unilateral amendment of
the LIUNA constitution was in bad faith because this act was a desperate
attempt to appease the DOJ and dissuade it from filing its RICO suit in
order to protect the positions and prestige of General President
Coia
and other Board members. As support for this theory, plaintiffs detail
evidence that links
Coia to organized crime and point
to the fact that despite these links
Coia was not targeted by the
government in any complaint or consent decree in his personal capacity
after the first draft complaint. Plaintiffs draw the conclusion that the
change in government targets from
Coia to Serpico could only have
occurred through Board members' efforts to protect themselves, thereby
constituting bad faith.
Plaintiffs' argument fails. Any evidence the government may have had
against
Coia is irrelevant here. It is for
the government to decide who it will prosecute and what deals it is
willing to make. The government decided it was willing to live with
Coia and not Serpico. In the long
run this choice may or may not prove to be just, but it
[*15] is the
reality with which the Board was faced. To call into question the deal
that was made would be to find the government negotiated with LIUNA in
bad faith. The government is not a defendant here. The assertion that
the Board acted in bad faith is not sustainable.
(II)
Plaintiffs also claim the Board exceeded its authority when it entered
into the February 13 agreement with the government. The agreement
authorized the union to undertake a period of internal reform for ninety
days, at the conclusion of such time the government would have the sole
discretion to file the complaint and implement the consent decree if it
believed it necessary or desirable to do so. Defendants assert this
claim is not ripe for adjudication because the agreement does not affect
the LIUNA constitution.
Standing requirements guarantee that courts do not decide abstract
principles of law, but rather concrete cases and controversies.
Sierra Club v. Marita, 46 F.3d 606, 613 (7th Cir. 1995). The
constitutional minimum for Article III standing requires an actual or
imminent invasion of a concrete and particularized legally protected
interest, a causal connection between the defendants' actions and the
[*16] injury,
and a likelihood that the injury is redressable by a favorable court
decision.
Id. at 611, citing
Lujan v. Defenders of Wildlife, 504 U.S. 555, 112 S. Ct. 2130, 2136, 119
L. Ed. 2d 351 (1992). This claim is based on the same grounds as
plaintiffs' first claim already dealt with above, whether the Board had
the authority to take particular action without a membership vote.
Defendants claim the agreement the Board voted on has no impact on
plaintiffs' rights since it the filing of the complaint and
implementation of the consent decree are contingent and thus there is no
actual injury. However, the issue before the Court is not the
implementation of the agreement, but the right of the Board to enter
into the agreement itself. The Board did not seek a membership vote
before entering into the agreement thus a cognizable injury exists,
caused by the actions of the Board, which is redressable by a court. The
February 13 agreement is thus justiciable.
Turning to whether the Board properly entered into the February 13
agreement, I find the Board's action was appropriate based on its power
to act in an emergency.
Following the adoption of the Disciplinary Procedure, Caivano
[*17] and
Serpico were ousted and the Board appointed and gave positions of great
power to four persons not associated with the union who, given their
backgrounds, could be expected to be vigorous and unforgiving of
irregularities let alone corruption. Despite these actions, the
government continued to insist on filing the complaint unless the union
achieved sufficient success in ridding the union of organized crime
influence within ninety days. The government was not satisfied with the
mere setting up of procedures, it wanted success. The union was under
tremendous government pressure to act from the time it was given the
draft complaint on November 4. This pressure did not let up with the
adoption of the Disciplinary Procedure. It was thus reasonable for the
Board to conclude that an emergency existed, necessitating entering into
the agreement without submitting the act to a membership vote.
(III)
Plaintiffs finally allege that the Board members breached their
fiduciary duty to the membership in violation of
29 U.S.C. § 501 by adopting and implementing the Disciplinary
Procedure on January 18 and by entering into the agreement with the
government on February 13. A party must obtain
[*18] leave
of the court upon verified application and for good cause shown to
proceed with a claim under this section.
29 U.S.C. § 501(b). "It is not enough that the complaint state a
claim upon which relief might be granted. Rather, the good cause
requirement should be construed to mean that 'plaintiff must show a
reasonable likelihood of success and, with regard to any material facts
he alleges, must have a reasonable ground for belief in their
existence.'"
Frantz v. Sheet Metal Workers Union Local No. 73, 470 F. Supp. 223, 228
(N.D. Ill. 1979), citing
Dinko v. Wall, 531 F.2d 68, 75 (2d Cir. 1976).
Plaintiffs' argument claims the Board members breached their fiduciary
duties to the union because they acted to preserve their own positions
for their own sake and not for the sake of the union when they voted for
the Disciplinary Procedure and the February 13 agreement. Plaintiffs
have submitted no credible evidence to support their theory of the
Board's self-motivation. The Board took the government's best offer.
There is not even evidence that if
Coia had to go this would have
meant that Serpico would stay. As such, plaintiffs are unable to show a
reasonable likelihood of success
[*19] and are
thus not given leave to proceed with the § 501 claim.
Conclusion
The motion for summary judgment is granted.
Enter:
James B. Zagel
United States District Judge
Date: Jan. 30, 1996