McGinnis v. Local Union No. 710, International Brotherhood of Teamsters

664 F. Supp. 1212, 127 L.R.R.M. (BNA) 2184, 1987 U.S. Dist. LEXIS 6960
CourtDistrict Court, N.D. Illinois
DecidedJuly 24, 1987
DocketNo. 85 C 9168
StatusPublished
Cited by3 cases

This text of 664 F. Supp. 1212 (McGinnis v. Local Union No. 710, International Brotherhood of Teamsters) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McGinnis v. Local Union No. 710, International Brotherhood of Teamsters, 664 F. Supp. 1212, 127 L.R.R.M. (BNA) 2184, 1987 U.S. Dist. LEXIS 6960 (N.D. Ill. 1987).

Opinion

MEMORANDUM ORDER

BUA, District Judge.

Plaintiff is a member of Local 710, International Brotherhood of Teamsters (“Local 710”). He brought this action pursuant to 29 U.S.C. § 431(c) seeking access to certain financial records maintained by Local 710. On May 15, 1987, Magistrate Balog issued a Report and Recommendation directing Local 710 to provide McGinnis access to the relevant financial documents and to allow McGinnis to copy and publish them. The Magistrate also recommended imposing Rule 11 sanctions against Local 710’s counsel. Local 710 objects to the magistrate’s [1213]*1213report. For the reasons stated herein, this court adopts Magistrate Balog’s Report and Recommendation in part and rejects it in part.

FACTS

McGinnis first sought access to Local 710’s financial records in February of 1985. Plaintiff formally requested permission to inspect Local 710’s financial records to verify the union’s LM-2 annual reports. In particular, plaintiff sought to verify the reports which had been filed with the United States Department of Labor for fiscal years 1982 and 1983. Local 710 refused plaintiff’s request.

On October 30, 1985, McGinnis initiated an action to compel Local 710 to permit inspection of those books and records relating to the LM-2 reports filed by the union with the Secretary of Labor. The union made an offer of judgment which McGinnis accepted; judgment was entered on August 12,1986. The judgment order allowed McGinnis to examine the union’s books, records, and accounts relating to proscribed misconduct. The acts of misconduct were set forth in detail.

McGinnis attempted to inspect Local 710’s books pursuant to the August 1986 judgment. A dispute arose over which documents were to be made available for inspection. Local 710 refused to display any documents until the dispute was resolved. McGinnis sought judicial enforcement of the August 12, 1986 judgment. On January 13, 1987, Magistrate Balog issued his Report and Recommendation enforcing the judgment order. On February 3,1987, that Report and Recommendation was adopted by this court.

With this order in hand, McGinnis once again attempted to inspect Local 710’s financial records on February 27, 1987. However, Local 710 refused to comply with the settlement order unless McGinnis agreed not to publish or distribute any of the financial records. McGinnis refused to agree to this unilaterally imposed limitation. McGinnis was forced once again to return to this court to seek an order enforcing his right to inspect Local 710’s financial records. On May 15, 1987, Magistrate Ba-log issued another Report and Recommendation. He recommended that McGinnis be allowed to obtain the documents sought without any limitation on publication. In addition, the magistrate recommended that Rule 11 sanctions be imposed against counsel for Local 710. Local 710 objects to this May 15, 1987 Report and Recommendation. This court, will now address Local 710’s objections.

II. DISCUSSION

A. Inspect, Copy and Publish Union’s Financial Records

Section 201(c) of the Labor-Management Reporting and Disclosure Act of 1958 states:

Every labor organization required to submit a report under this subchapter shall make available the information required to be contained in such report to all of its members, and every such labor organization and its officers shall be under a duty enforceable at the suit of any member of such organization in any State court of competent jurisdiction or in the district court of the United States for the district in which such labor organization maintains its principal office, to permit such member for just cause to examine any books, records, and accounts necessary to verify such report. The court in such action may, in its discretion, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney’s fee to be paid by the defendant, and costs of the action.

29 U.S.C. § 431(c).

The primary purpose of § 201 is to make full information related to the financial affairs of unions available to union members to strengthen their efforts to rid their unions of unworthy or corrupt officers. Conley v. United Steelworkers of America, 549 F.2d 1122, 1124 (7th Cir.1977). However, Congress was also concerned that an unqualified right to inspect a union’s financial records would result in harassment to unions. In order to prevent vexatious forays into a union’s financial records, Con[1214]*1214gress inserted language into § 201 requiring a union member to show “just cause” before examining a union’s records. Mallick v. International Brotherhood of Electrical Workers, 749 F.2d 771, 778-779 (D.C.Cir.1984). A union member has just cause to examine a union’s records “if a reasonable union member would be put to further inquiry.” Johnson v. Hospital Employees Local 1199, 121 LRRM 2889, 2890 (S.D.N.Y.1986) [Available on WEST-LAW, DCT database]; Mallick v. International Brotherhood of Electrical Workers, 749 F.2d 771, 781-83 (D.C.Cir.1984).

A union member also has the right to inspect and photocopy the union’s financial records relating to LM-2 reports once the union member establishes “just cause” to inspect the records. Conley v. United Steelworkers of America, 549 F.2d 1122 (7th Cir.1977). Extending the right to union members to copy financial records is necessary to further the purpose of the Act, to make full information concerning a union’s financial affairs available to its members. Verification of detailed financial records requires technical expertise and painstaking analysis. A lawyer or certified public accountant cannot perform a proper analysis by memory. An analyist probably needs to conduct his analysis away from the union’s premises. This can only be done if the financial records can be photocopied.

The final issue is what use may a union member make of the financial records he has inspected and photocopied. This issue was addressed and resolved in Johnson v. Hospital Employees Local 1199, 121 LRRM 2889 (U.S.Dist., S.D.N.Y.1986) [Available on WESTLAW, DCT database]. In Johnson, the court held that a union member is free to publish those financial records he inspects and photocopies. Moreover, the court ordered the union to refrain from imposing any limitation upon the use the union member may make of the financial records examined and copied. The court expressly dismissed the union’s concern about what employers or other anti-union interest may discover as the result of disclosure.

In the instant case, Local 710 expressly admits that McGinnis satisfied the “just cause” requirement. First, Local 710 entered into a consent order allowing McGinnis to view the financial records.

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664 F. Supp. 1212, 127 L.R.R.M. (BNA) 2184, 1987 U.S. Dist. LEXIS 6960, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcginnis-v-local-union-no-710-international-brotherhood-of-teamsters-ilnd-1987.