Monzillo v. Biller

735 F.2d 1456, 237 U.S. App. D.C. 20, 116 L.R.R.M. (BNA) 2587, 1984 U.S. App. LEXIS 21968
CourtCourt of Appeals for the D.C. Circuit
DecidedJune 1, 1984
DocketNos. 82-1937, 82-2035
StatusPublished
Cited by92 cases

This text of 735 F.2d 1456 (Monzillo v. Biller) 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
Monzillo v. Biller, 735 F.2d 1456, 237 U.S. App. D.C. 20, 116 L.R.R.M. (BNA) 2587, 1984 U.S. App. LEXIS 21968 (D.C. Cir. 1984).

Opinion

Opinion for the Court filed by Circuit Judge MIKVA.

MIKVA, Circuit Judge:

In March, 1982, members of the American Postal Workers Union (APWU or the Union) were informed that the Union’s National Executive Board (the Board) had decided to purchase a new national headquarters. Appellees, individual members of the Union, and an association of Union affiliates brought this action under section 501 of the Labor Management Reporting and Disclosure Act of 1959, 29 U.S.C. § 501 (1982), to prevent the Board from proceeding with the headquarters project until the Union membership had an opportunity to consider the transactions. Appellees claimed that the Board lacked authority under the Union’s constitution to commit the Union to the announced transactions without bringing the matters before the membership at the National Convention. The district court entered judgment for appellees and enjoined the Board members from committing the Union to the sale or purchase of a headquarters “until the August 1982 Convention convenes, has the opportunity to consider [these issues], and adjourns.” 96 Lab.Cas. (CCH) ¶ 14,177 (D.D.C.1982). Because the court’s order has expired on its own terms, we dismiss these appeals as moot.

Background

On February 11, 1982, the Union’s National Executive Board voted unanimously to finalize the acquisition of a new national headquarters. The Board had been considering various relocation options for several months. Contrary to the Board’s usual practice, however, this February meeting was not publicized and was held in closed executive session. The president and general secretary-treasurer of the Union intended to commit the Union to the new building by July, 1982, one month before the Union’s National Convention. The decision was announced to the membership in an article that appeared in the March 1982 edition of the Union’s magazine, the American Postal Worker. Following publication of the article, appellees, individual officers of state and local Union affiliates, and the Trine Council, an informal association of Union affiliates, filed this lawsuit in district court to prevent the Board from proceeding with the headquarters project.

Appellees brought the lawsuit pursuant to the Labor Management Reporting and Disclosure Act (LMRDA or the Act), 29 U.S.C. § 501 (1982), claiming that the [22]*22Board members had breached their fiduciary duties to the Union. Among the responsibilities of labor organization officials, which are set forth in section 501(a) of the Act, is “the duty ... to manage, invest, and expend [the money and property of the labor organization] in accordance with [the labor organization’s] constitution and bylaws and any resolutions of the governing bodies adopted thereunder____” 29 U.S.C. § 501(a).

Appellees brought this suit under section 501(b) of the Act, which authorizes members of a labor organization to sue on behalf of the organization when an officer is alleged to have violated any of the duties set forth in section 501(a). 29 U.S.C. § 501(b). Before a member can file such a suit, however, a demand must have been placed on the labor organization to do so, and the organization must have failed to bring the suit within a reasonable period of time after that request had been made. Id. In their complaint, appellees alleged, inter alia, that the Board was without authority under the Union’s constitution to commit the Union to the headquarters project. They sought “declaratory and injunctive relief” to prevent the Board members from selling the Union’s current headquarters or committing the Union to acquire a new headquarters “until these issues can be considered and decided by the members of the APWU at the August 1982 National Convention of the APWU.” Complaint H 1.

The district court consolidated the hearing on appellees’ application for a preliminary injunction with the trial on the merits. Testimony at the one-day hearing focused on the section of the constitution which provides that the Board “shall be the highest ranking governing body of the [Union] in between conventions.” APWU Constitution, art. X, § 18. One of appellees’ witnesses testified that section 18 was added to the constitution in 1980 to force the Board to follow membership resolutions between conventions and that it was designed to limit, not enlarge, the Board’s powers. Appellants’ witness, the general secretary-treasurer of the Union, testified that section 18 gave the Board the full authority, in between conventions, to engage in any business which it deems necessary or proper to protect the interests of the Union and its members.

An interpretation of a union constitution rendered by officials of a labor organization is entitled to considerable deference by a reviewing court and should not be overruled unless the court finds that the interpretation was unreasonable or made in bad faith. See Local 334, United Association of Journeymen and Apprentices v. United Association of Journeymen and Apprentices, 669 F.2d 129, 131 (3d Cir. 1982); Busch v. Givens, 627 F.2d 978, 981 (9th Cir.1980); Stelling v. International Brotherhood of Electrical Workers, Local 1547, 587 F.2d 1379, 1388-89 (9th Cir.1978), cert, denied, 442 U.S. 944, 99 S.Ct. 2890, 61 L.Ed.2d 315 (1979); English v. Cunningham, 282 F.2d 848, 850 (D.C.Cir.1960). Although appellants’ construction of the disputed section seems reasonable on its face, the district court held for the appellees. The court appeared to be swayed by the specific circumstances surrounding the February vote. In a memorandum opinion and order issued two days after the trial, the court found that “[i]t [was] apparent from the secrecy and timing and from the testimony at trial that defendants intend[ed] to prevent the membership from considering the. project.” 96 Lab.Cas. (CCH) at 24,094. The court held that the Board members’ interpretation of the Union’s constitution was neither reasonable nor made in good faith, id. at 24,095, and concluded that appellants were “constitutionally unauthorized to commit the APWU to this project absent approval by the National Convention.” Id. at 24,096 (emphasis added).

The court’s two page order enjoined the appellants from committing the Union to the “sale or other disposition” of the current headquarters or to the “purchase or other acquisition” of a new headquarters “until the August 1982 APWU National Convention convenes, has the opportunity to consider the [transactions], and ad[23]*23journs ...” (emphasis added). In addition, the court dismissed the Trine Council as a plaintiff, denied the Union’s motion to intervene as a defendant, and set bond in the amount of $250.

One week after the district court issued its order, appellants filed a motion for a new trial. While that motion was pending, the Board adhered to the court’s injunction by formally withdrawing from the proposed headquarters project. The district court denied the motion for a new trial on July 19, 1982 on the ground that the case had become moot. The court stated that, as a result of the withdrawal, “there is no longer a live controversy.

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735 F.2d 1456, 237 U.S. App. D.C. 20, 116 L.R.R.M. (BNA) 2587, 1984 U.S. App. LEXIS 21968, Counsel Stack Legal Research, https://law.counselstack.com/opinion/monzillo-v-biller-cadc-1984.