Laborers' International Union of North America v. National Post Office Mail Handlers, Watchmen, Messengers & Group Leaders Division of the Laborers' International Union of North America

880 F.2d 1388, 279 U.S. App. D.C. 315
CourtCourt of Appeals for the D.C. Circuit
DecidedJuly 28, 1989
DocketNos. 89-7013, 89-7049 and 88-7207
StatusPublished
Cited by5 cases

This text of 880 F.2d 1388 (Laborers' International Union of North America v. National Post Office Mail Handlers, Watchmen, Messengers & Group Leaders Division of the Laborers' International Union of North America) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Laborers' International Union of North America v. National Post Office Mail Handlers, Watchmen, Messengers & Group Leaders Division of the Laborers' International Union of North America, 880 F.2d 1388, 279 U.S. App. D.C. 315 (D.C. Cir. 1989).

Opinion

MIKVA, Circuit Judge:

These consolidated cases arise out of a dispute between an international labor union and its affiliate over the power of the international to impose a supervision or trusteeship on the affiliate. The question presented is whether a federal district judge has the statutory power to enjoin the international union from conducting a hearing that, in the absence of an emergency, is required by its constitution before it may impose a trusteeship on its affiliate. We hold that Title III of the Labor-Management Reporting and Disclosure Act of 1959 (“LMRDA”), 29 U.S.C. §§ 462, 464, does not authorize the enjoining of such a pretrusteeship hearing. In addition, we vacate as moot certain other aspects of the district court’s rulings, as required by United States v. Munsingwear, Inc., 340 U.S. 36, 41, 71 S.Ct. 104, 107, 95 L.Ed. 36 (1950). All told, we vacate completely the orders of July 28, 1988 and January 17, 1989.

I. Background

On December 16, 1985, the Laborers’ International Union of North America, AFL-CIO (“LIUNA”) imposed a trusteeship on its affiliate the Mail Handlers, Watchmen, Messengers and Group Leaders Division (“Division”). Louis D. Elesie was appointed trustee of the Division by LIUNA President Angelo Fosco. The trusteeship ended on February 1, 1988, and is the subject of a lawsuit pending before the district court, see National Post Office Mail Handlers Division v. Laborers’ International, 880 F.2d 1388 (D.D.C.).

On February 1, 1988, a slate of candidates critical of LIUNA was elected to positions of leadership within the Division, including Herbert Walker as president. Almost immediately, according to Walker, the two unions disagreed over the appropriate term of office for the Division’s new leaders. LIUNA insisted that the officers elected in February should serve only seven months, to fill out the remainder of the term of the former officials who had been removed by the trusteeship in 1985. The Division’s officials replied that they had been elected to full four-year terms. On March 30, 1988, the Division notified Fosco that it planned to hold a National Conference in August, in order to update and amend its constitution, but advised Fosco that it did not plan to hold new elections at that time.

On June 20, 1988, LIUNA President Angelo Fosco declared an emergency supervision over the Division, claiming that the move was “necessary to correct and guard against corruption and financial malpractice, assure the performance of the Division’s collective bargaining agreement and responsibilities, and in general carry out the Division’s legitimate objectives.” Laborers’ International v. Mail Handlers Division, 128 L.R.R.M. (BNA) 3178, 3179, 1988 WL 83091 (1988). The supervision was imposed prior to notice and a hearing, pursuant to Article IX, section 7 of LIU-NA’s constitution, which empowers LIU-NA’s president to impose a trusteeship or supervision without a hearing when, in his judgment, “an emergency situation exists,” see Laborers’ International v. Mail Handlers Division, 130 L.R.R.M. (BNA) 2426, 2427 n. 3 (1989).

Fosco determined that for several reasons an emergency situation existed in this case. First, he noted that on June 16,1988, a federal grand jury in Columbus, Ohio, had issued a fifty-count indictment of Herbert Walker, alleging that he had embezzled approximately $100,000 while serving as the president of a Mail Handlers local. Walker later pled guilty to some of the charges, and is currently in prison. Members of the Division’s Policy and Steering Committee assert that on the morning of June 20th they resolved informally that Mr. Walker should take a leave of absence and that they should appoint an Acting Director to fill his vacancy. Later that day the emergency supervision was declared. On the evening of the 20th, the Committee adopted a resolution accepting a leave of absence from Walker pending the outcome of his criminal proceeding.

As the second factor justifying the supervision, Fosco asserted that the Division had committed fraud with respect to the [318]*318Mail Handlers Health Benefit Plan (“Health Plan”), a government procurement contract between the Division and the federal Office of Personnel Management (“OPM”) that provides health insurance to approximately 517,000 federal employees as well as to the 40,000 members of the Division. The Health Plan is underwritten by the CNA Insurance Company. LIUNA contends that Mail Handlers Local No. 300 in New York attempted to force the Health Plan to pressure CNA to pay false and fraudulent claims submitted by a consortium of medical providers known as the Federal Plaza Medical Associates (“Federal Plaza”). The OPM ordered the Health Plan to conduct an audit, which revealed that a number of fraudulent claims had been paid, many during the 26-month period when LIUNA’s trusteeship was in effect, see Laborers’ International, 128 L.R.R.M. at 3183. When OPM instructed CNA to cease payment on questionable claims, Federal Plaza, supported by several Local No. 300 officials, filed suit to force payment. See Federal Plaza Medical Associates v. Palermino, No. 87-6777 (S.D.N.Y.). LIUNA charges that instead of protecting the Division against further illegal conduct by Federal Plaza, the affiliate’s leadership pressured CNA to pay the disputed sums to Federal Plaza.

As the third factor creating the “emergency,” Fosco cited a dispute concerning money paid by the Division to LIUNA for collective bargaining and contract administration costs. LIUNA receives for this purpose $2.75 per Division member per year, and rebates money not spent on bargaining costs. On June 10, 1988, Walker sent Fosco a letter complaining that the Division had been forced to absorb many of LIUNA’s bargaining expenses beyond the $2.75 per capita tax, and that LIUNA had overbilled the Division for $664,335.75 since January 1987. The letter advised that if LIUNA believed any of the Division’s figures to be incorrect, the Division expected it to discuss and resolve any discrepancies. Walker also stated, “I wish formally to advise you that the Division cannot continue to advance any financial support to LIU-NA, particularly if it is unwilling to reimburse the Division.” LIUNA maintains that no money is owed to the Division and that Walker’s letter failed to subtract all the sums expended by LIUNA as bargaining costs. Fosco cited Walker’s threatened cutoff of funds as a factor in creating the emergency that led to the imposition of the supervision.

Fosco installed Louis Elesie as supervisor and ordered him to begin an immediate audit of the Division’s finances since the end of the trusteeship on February 1, 1988. Fosco directed the Division to allow Elesie complete access to its financial records, and not to make any expenditures of Division funds without express authorization from Elesie. On June 24, 1988, LIUNA obtained a temporary restraining order from the district court preventing the Division from interfering with the supervision. The Division was restrained from denying Elesie unrestricted access to and control of the books and records of the Division, from violating or impeding any of Elesie’s directives, and from executing any checks or otherwise exercising control of its funds.

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880 F.2d 1388, 279 U.S. App. D.C. 315, Counsel Stack Legal Research, https://law.counselstack.com/opinion/laborers-international-union-of-north-america-v-national-post-office-mail-cadc-1989.