Holton v. McFarland

215 F. Supp. 372, 52 L.R.R.M. (BNA) 2842, 1963 U.S. Dist. LEXIS 10234
CourtDistrict Court, D. Alaska
DecidedMarch 27, 1963
DocketCiv. A-16687
StatusPublished
Cited by16 cases

This text of 215 F. Supp. 372 (Holton v. McFarland) is published on Counsel Stack Legal Research, covering District Court, D. Alaska primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Holton v. McFarland, 215 F. Supp. 372, 52 L.R.R.M. (BNA) 2842, 1963 U.S. Dist. LEXIS 10234 (D. Alaska 1963).

Opinion

HODGE, Chief Judge.

Plaintiffs brought this action for an injunction, damages and other relief, challenging the right and authority of the defendants as trustees of the “Alaska Laborers-Construction Industry Health and Security Fund,” which offices they have held continuously since 1953, alleging that the defendants have usurped said offices in that they were not elected by the employees or the membership of the local unions participating in such trust, in claimed violation of the provisions of Section 302 of the Labor Management Relations Act of 1947 (Taft-Hartley Act), 29 U.S.C.A. § 186, and Section 501 of the Labor-Management Reporting and Disclosure Act of 1959, 29 U.S.C.A. § 501, the pertinent parts of which are set forth in the margin. 1 Pursuant to issues submitted at a pretrial conference raising questions of jurisdiction, the Court found that the original complaint did not allege grounds upon which the Court’s jurisdiction depends, in accordance with Rule 8(a) F.R.Civ.P., and dismissed the complaint with leave to plaintiffs to file an application for leave to file an amended complaint, setting forth the jurisdictional grounds, and if the cause of action depends on the provisions of the Labor-Management Reporting and Disclosure Act, to comply with the provisions of section 501 (b). Such amended complaint was lodged and upon hearing, the Court, although expressing some doubt as to whether sufficient jurisdictional grounds *374 were alleged, permitted the amended complaint to be filed with the understanding that defendants’ challenge to the sufficiency of the complaint to constitute a claim for relief would be more properly presented by a motion to dismiss upon such grounds, which motion has been filed.

The amended complaint alleges that the union trustees are “representatives” of employees within the meaning of section 186, that one or more of the plaintiffs is a member of one of the local unions which is a party to the trust and is a beneficiary thereof, that plaintiffs “fairly insure adequate representation of the interests of the members of the class” involved, and that:

“Approximately 10 years ago the Defendants, respectively, assumed or seized the offices of union trustees on the Board of Trustees of The Trust. These fiduciary offices were usurped and acquired in a manner unknown to Plaintiffs but it was not by being elected or legally authorized thereto by the employees * * * or by the beneficiaries of The Trust, or by the membership of the local unions then or subsequently participating in The Trust, * * * ”

With reference to section 501 the complaint further alleges that the defendants have committed a breach of trust and a misfeasance in office by “subjecting to jeopardy the tax-exempt status of the fund belonging to The Trust.”

The complaint prays that (1) the offices of the defendants as trustees of the trust be declared vacant and their appointments void (although allowed to temporarily continue in office pending designation of their successors); (2) that an election to select the successor trustees be ordered by the Court, under the supervision of a court-appointed monitor; (S) that defendants be enjoined from standing as trustee candidates at such election; (4) for a personal judgment in favor of the trust against the defendants jointly and severally “for any pecuniary loss to the trust incurred by loss of tax-exempt status” and against the defendants severally for “the total amount received by each defendant qua trustee of the trust”; (5) for an allowance to plaintiffs out of such recovery of reasonable compensation; and for other relief relating to costs and expenses-

No claim is made that the constitution or bylaws of the unions involved make any reference to the manner of selection of the trustees of the fund. The trust, agreement in question, executed in September of 1953, between the Alaska Chapter, Associated General Contractors,, and four local unions of the International Hodcarriers’, Building and Common Laborers’ Union of America, contains the-following provision with reference to the selection of trustees of the fund:

“The Fund shall be administered by a Board of Trustees which shall consist of three Trustees representing the employers and three Trustees representing the employees. The Trustees representing the employers shall be appointed by the' Employer and such appointment shall be in writing signed by a duly authorized officer of the Employer. The Trustees representing the employees shall be appointed by the joint action of the Local Unions-signatory hereto evidenced by an instrument in writing signed by the-executive officers of the Local Unions. The Trustees so appointed shall sign this Trust Agreement or a duplicate thereof and such signatures shall constitute an acceptance of their office and agreement to act under and be subject to all of the terms and conditions of this Trust Agreement.” (emphasis supplied.)

. Plaintiffs’ position with regard to their first contention as to violation of section 186 is succinctly stated in their brief' as follows:

“The nut-shell of the theory of plaintiffs as to Sec. 186 jurisdiction is that Congress has by means of Sec. 186 created T-H Act trusts, and fostered and promoted them, and. *375 hence Sec. 186 implicitly confers jurisdictional power to prevent the frustration of the Congressional will hy the usurpation of trustee office hy trustees illegally designated to ■office.”

It will be observed that section 186 contains no provision whatever with respect to the method of selection of the trustees of the fund and that the only restriction placed by the Act as to the establishment of said fund is that the basis upon which payments are to be made shall be specified in a written agreement with the employer, and that the employees and employers are equally represented in the administration of such fund. There is no allegation in the amended complaint of any violation of this Act other than the theory of the plaintiffs expressed above, that is, that the trustees were “illegally designated to office,” as they were not elected by the membership of the unions.

It is held in an action seeking termination of a union welfare fund and the distribution of proceeds to former members that where the complaint no-where alleges that payments had been made by the employer to the employees’ representatives in violation of section 186 the complaint failed to state a cause of .action; and that in order to invoke the jurisdiction and powers of the district ■courts under subsection (e) there must be a violation of subsections (a) or (b). Moses v. Ammond, (D.C.N.Y.) 162 F. Supp. 866; Sanders v. Birthright, (D.C. Ind.) 172 F.Supp. 895. Both of these -cases expressly hold that the statute does not confer jurisdiction on the federal •courts for the administration of union welfare funds, as Congress did not intend •such.

Plaintiffs cite in support of their position the following cases holding that the district courts have power to enjoin violations of section 186: Upholsterers’ Inter. Union, etc. v. Leathercraft Furniture Co., (D.C.Penn.) 82 F.Supp. 570; American Bakeries Company v. Barrick, (D.C. Ohio) 162 F.Supp. 882; Barbot v. Frack-man, (D.C.N.Y.) 191 F.Supp. 171. These cases clearly limit such relief to conduct constituting a violation of the Act. In the Upholsterers’ Inter.

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Bluebook (online)
215 F. Supp. 372, 52 L.R.R.M. (BNA) 2842, 1963 U.S. Dist. LEXIS 10234, Counsel Stack Legal Research, https://law.counselstack.com/opinion/holton-v-mcfarland-akd-1963.