Lorentangeli v. Critelli

692 F. Supp. 380, 127 L.R.R.M. (BNA) 2520, 1987 U.S. Dist. LEXIS 13837, 1987 WL 47801
CourtDistrict Court, D. New Jersey
DecidedNovember 20, 1987
DocketCiv. A. No. 87-3405
StatusPublished
Cited by1 cases

This text of 692 F. Supp. 380 (Lorentangeli v. Critelli) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lorentangeli v. Critelli, 692 F. Supp. 380, 127 L.R.R.M. (BNA) 2520, 1987 U.S. Dist. LEXIS 13837, 1987 WL 47801 (D.N.J. 1987).

Opinion

OPINION AND ORDER

LECHNER, District Judge.

This is an action brought by Local 194 and three of its members suing nine officers, in their individual capacity, who constitute the Executive Council of the International Federation of Professional and Technical Engineers, AFL-CIO (the “Federation”). The action is brought under the Labor-Management Reporting and Disclosure Act, 29 U.S.C. §§ 401-531 (“LMRDA”), specifically 29 U.S.C. § 501(b), which allows a member of a labor organization to sue an officer who is allegedly violating his/her fiduciary duties, after the labor organization or its governing board refuses to bring the action, and after obtaining leave to sue from the district court. Plaintiffs claim defendants have been providing financial assistance to five locals in violation of the Federation’s constitution and personally benefitting from these payments, all in violation of their fiduciary duties under 29 U.S.C. § 501(a). Defendants assert plaintiffs’ claims are legally and factually unsupportable.

Plaintiffs moved for a preliminary injunction to enjoin defendants from making payments to locals 17, 21, 66, 121 and 195. In their reply brief plaintiffs withdrew their request with respect to locals 21, 66 and 121.1 Defendants, in addition to opposing the motion for a preliminary injunction, have filed two cross-motions: a motion to dismiss for lack of service of process, and a motion to vacate the order granting plaintiffs leave to sue under section 501(b).

Facts

Plaintiffs in this case are Local 194, the New Jersey Turnpike Employees’ Union,2 and three of its members: Dino Loretangeli, Frank Forst, and Thomas Stiglic. Local 194 has been affiliated with the Federation since 1968 and is in good standing.3

Defendants are sued in their individual capacities and are the nine members constituting the Executive Council of the Federation. Rodney Bower is the Acting President of the Federation, John H. Dunne is the Secretary-Treasurer, Vincent Cacciotti is the Executive Vice President, and Michael Waske is a Vice President of the Federation and the Business Manager of Local 17. Dominick Critelli, Rudolph Thomas, Ralph McElfresh, Desmond Cupid, and Gregory Junemann are Vice Presidents of the Federation. (Bower Aff., 8/27/87, 115.)

The Federation is governed by a written constitution. (Plaintiffs’ Ex. A; Defendants’ Ex. 1.) The constitution prescribes the manner in which the affairs of the Federation shall be conducted and the persons who may conduct those affairs. According to Article V of the constitution, the Convention of the Federation, which meets on even-numbered years, is “the supreme legislative, judicial and reviewing authority.” 4 The Federation’s policies and prac[383]*383tices are to be determined by Convention action, except that between conventions, policies and practices are determined by the Executive Council.5

The constitution vests certain power in the Executive Council. Article X, section one of the constitution provides: “The Executive Council shall be empowered to authorize such expenditures of the funds of the Federation as in its judgment are necessary to carry out and fulfill the purposes and objectives of the Federation.” In particular, Article X, section ten authorizes the Executive Council “to grant strike, lockout or victimization benefits to members and local unions from the funds of the Federation upon terms and conditions established by the Executive Council.” The Secretary-Treasurer is given independent appropriation authority with respect to organizing activity.6

Article XVIII, section 2, which was added to the constitution in 1933, limits the otherwise plenary appropriation power of the Executive Council. It provides that: “The President and the Executive Council are denied any and all authority to grant special financial assistance in the form of rebates, refunds, etc., to any local union which special concession is not at the same time uniformly accorded all of the other local unions.” A recent dispute over the proper interpretation and application of this provision led to the filing of this action.

Plaintiffs point to the language of this provision and argue that while assistance may be given to particular locals for emergency aid or for organizing activities, this provision explicitly prohibits rebates which are not uniformly accorded. Plaintiffs contend the financial assistance received by Locals 17 and 195 following 1984 were rebates, given in violation of this provision. {See Transcript of Proceedings, 9/14/87, pp. 11-13.) Defendants point to the practices of the Federation over the years and contend the provision was only intended to ensure all assistance was granted in an even handed manner for legitimate union activities. Defendants assert the assistance given to Locals 17 and 195 in recent years is in accord with the Federation’s long-standing practices, which reflect the proper interpretation of this constitutional provision.

Over the years the Federation has provided assistance to locals in various forms. The officers of the Executive Council assert all local unions are dealt with fairly and equally. Decisions on what form of assistance, if any, will be provided by the Federation are based on factors such as the specific needs of the requesting local union, the availability of the Federation’s officers and staff, the geographic distance and expense involved, and the legitimate union objectives which can be accomplished. (Bower Aff., 8/27/87, ÍÍ11.)

The Council officers and staff members provide direct services such as guidance during contract negotiations, strikes, and other facets of the collective bargaining process. The Federation also assists the local unions in organizing drives. It conducts legal and legislative research for the local unions, and publishes several newsletters and bulletins. (Bower Aff., 8/27/87, ¶11.)

The Federation has also provided financial assistance to local unions, either in conjunction with or in lieu of direct servicing assistance. For example, the Secretary-Treasurer has set up organizing programs with local unions and, with Execu[384]*384tive Council approval, has offered financial assistance agreements under which the Federation has subsidized a portion of the related expenses. The Federation has made emergency assistance grants to individual locals to defray the costs of arbitration, administrative hearings, strike activity, and similar activity pursued on behalf of the membership. The Executive Council has also rendered financial assistance to newly affiliated local unions, to defray the legal costs associated with the affiliation process. (Bower Aff., 8/27/87, ¶¶ 12-13.)

Defendants contend the assistance agreements at issue in this case are consistent with the constitution because they have been based on the unique needs and the legitimate union goals and activities of the local unions involved.

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692 F. Supp. 380, 127 L.R.R.M. (BNA) 2520, 1987 U.S. Dist. LEXIS 13837, 1987 WL 47801, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lorentangeli-v-critelli-njd-1987.