Purcell v. Keane

54 F.R.D. 455, 80 L.R.R.M. (BNA) 2566, 1972 U.S. Dist. LEXIS 15080
CourtDistrict Court, E.D. Pennsylvania
DecidedFebruary 16, 1972
DocketCiv. A. No. 41497
StatusPublished
Cited by6 cases

This text of 54 F.R.D. 455 (Purcell v. Keane) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Purcell v. Keane, 54 F.R.D. 455, 80 L.R.R.M. (BNA) 2566, 1972 U.S. Dist. LEXIS 15080 (E.D. Pa. 1972).

Opinion

OPINION AND ORDER

MASTERSON, District Judge.

This case began over five years ago when the plaintiffs filed this class action under Rule 23 on behalf of all members of Local 169, Warehouse Employees Union, International Brotherhood of Teamsters. The complaint charges the defendants, who are present or former officers of the Local1 with numerous violations of certain fiduciary duties imposed upon them by the Labor-Management Reporting and Disclosure Act of 1959, 29 U.S.C. § 501.2

In a nutshell, it is alleged that the defendants improperly spent union funds on food, drinks, travel and entertainment for their own personal benefit. And Section 501 of the Act clearly forbids such expenditures since they do not directly benefit the labor organization. See, e. g., Morrissey v. Curran, 423 F.2d 393 (2nd Cir. 1970). To support their assertions, plaintiffs have introduced 283 cancelled checks as exhibits and filed thousands of pages of depositions. By way of relief, plaintiffs seek (1) an accounting; (2) restitution of all improperly spent funds; and (3) such other relief as this Court deems appropriate.

On the other hand, the defendants steadfastly deny any wrongdoing. They assert that each of the plaintiffs’ exhibits represents a proper expenditure for union purposes. In addition, they urge that the plaintiffs have initiated an unfounded political suit in an effort to embarrass the defendants and thereby unseat them as union officers.

Presently, there are three settlement proposals before this Court. The first, [457]*457submitted by counsel for Gregory Horan, one of the plaintiffs, and agreed to by all of the defendants provides for stricter methods of control and accounting which would help insure against any impropriety in the future. However, this proposal does not include any provision for restitution to the union treasury. The second agreement, also proferred by plaintiff Horan and all of the defendants contains provisions similar to those in the first with one important difference. This agreement calls for $3,000 restitution by the defendants. The third proposal, submitted by four of the named plaintiffs, all of whom object to the first two agreements, calls for restitution in an unspecified amount and an admission of wrongdoing by the defendants as well as a requirement that the defendants publish detailed quarterly reports of union expenditures. However, since none of the defendants has agreed to the third proposal, it is not properly before this court for consideration.

After long and careful reflection, it is the judgment of this court that the second settlement agreement should be accepted over the objections of four of the named plaintiffs.3 To fully appreciate why the second proposal is both fair and reasonable to the entire class, one must first understand the chronology of this litigation as well as the nature of the plaintiffs’ objections to the settlement.

I.

From the beginning of this suit on November 8, 1966 until May 22, 1970, all of the named plaintiffs were represented by Edward B. Bergman, Esq., a distinguished and experienced labor lawyer. Unfortunately, during those 3% years, the parties made little effort to prepare for trial.4

On three occasions, February 13, 1968, June 12 and August 29, 1969, plaintiffs filed notices of depositions of the defendants. But each time, with two exceptions, defendants failed to appear for the depositions; instead they petitioned for protective orders prohibiting such actions.5 In response, the plaintiffs also filed a protective order which this court signed on August 29, 1969.6 Despite these three attempts and the Court’s order, the depositions of only two of the defendants were taken. Moreover, according to the docket, the defendants did not even attempt to take any depositions of the plaintiffs.

Although very little discovery took place during the first 3% years of litigation, Mr. Bergman’s efforts ultimately produced the first settlement agreement [458]*458which we outlined above. For several reasons, Mr. Bergman thought that this proposal represented a good settlement and recommended its acceptance to his clients. First, and perhaps most importantly, he felt that the agreement would prevent a re-occurrence of the types of alleged expenditures which originally led to his clients’ complaint. Secondly, since the Union’s election had been held in 1968, any political benefit which might be gained from the suit had already been accomplished. And finally, he concluded that the expense of proceeding to trial could not be justified in terms of the potential monetary recovery.7

But Mr. Bergman was able to convince only two of the named plaintiffs that they ought to go along with this settlement.8 The other four plaintiffs stated they would accept nothing less than an admission of guilt from the defendants. As a result of this serious difference in strategy, the non-assenting plaintiffs lost confidence in Mr. Bergman. Subsequently, he petitioned this court for permission to withdraw as their attorney. On May 22, 1970, we granted that petition.

Several weeks later, James A. Burgess, Jr., Esq. entered an appearance on behalf of the four dissatisfied plaintiffs. On September 9, 1970, plaintiffs’ new attorney filed a fourth notice of Frank Keane’s deposition. Once again, however, instead of appearing, the defendant requested another protective order.

Shortly thereafter, five of the six defendants moved to switch counsel. We also granted their petition, and on December 8th, 1970, their new attorney at last filed notice that he intended to take depositions of some of the plaintiffs. But these depositions were not actually taken until more than one year later.

Because of the extreme lack of diligence on the part of counsel, this court filed an order requiring that all discovery be completed by March 2, 1971. But counsel could not agree on relatively routine matters such as sequestration of witnesses, and the order for the taking of depositions. Moreover, counsel constantly advised the various deponents not to answer certain questions and this caused needless delays. It took many conferences and two additional orders from this court to get discovery moving again, or so we thought.

On February 24, 1971, plaintiffs filed the fifth notice of the taking of defendant Keane’s deposition. Still no deposition was taken. Next, on March 8, 1971, six days after we had ordered all discovery to be completed, plaintiffs moved for an extension of time in which to take the remaining defendants’ depositions. Although this motion clearly violated our prior order, in order to afford every element of fairness to the plaintiffs, we granted an extension of 60 days. In the interim between February 24, 1971 and our order, depositions of three plaintiffs were taken and filed.

Just 17 days before our first extension for completing discovery was to expire, plaintiffs sought permission to switch lawyers again. Due to a conflict of interest, the Philadelphia Bar Association advised Mr. Burgess that he should not represent the class of union members. Consequently, on September 9, 1971, plaintiffs’ third attorney, Stanley E. Gever, Esq. entered the case.

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54 F.R.D. 455, 80 L.R.R.M. (BNA) 2566, 1972 U.S. Dist. LEXIS 15080, Counsel Stack Legal Research, https://law.counselstack.com/opinion/purcell-v-keane-paed-1972.