USCA4 Appeal: 24-2089 Doc: 37 Filed: 08/11/2025 Pg: 1 of 20
PUBLISHED
UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT
No. 24-2089
SANDRA GARDNER,
Plaintiff - Appellant,
v.
INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS; DORA CERVANTES; ROBERT MARTINEZ; MARK BLONDIN; GARY R. ALLEN; RICKY WALLACE; BRIAN BRYANT; STEVEN GALLOWAY; RICHARD JOHNSEN,
Defendants – Appellees.
Appeal from the United States District Court for the District of Maryland, at Greenbelt. Deborah K. Chasanow, Senior District Judge. (8:24-cv-00454-DKC)
Argued: May 9, 2025 Decided: August 11, 2025
Before WILKINSON, GREGORY, and RICHARDSON, Circuit Judges.
Reversed and remanded by published opinion. Judge Gregory wrote the opinion, in which Judge Richardson joined. Judge Wilkinson wrote a dissenting opinion.
ARGUED: Steven Paul Schneck, STEVEN SCHNECK, ATTORNEY AT LAW, LLC, Chicago, Illinois, for Appellant. Evan Randall Hudson-Plush, COHEN, WEISS AND SIMON LLP, New York, New York, for Appellees. ON BRIEF: Thomas H. Geoghegan, DESPRES, SCHWARTZ, & GEOGHEGAN, LTD., Chicago, Illinois, for Appellant. Daniel M. Nesbitt, COHEN, WEISS AND SIMON LLP, New York, New York; Jacob Karabell, BREDHOFF & KAISER PLLC, Washington, D.C., for Appellees. USCA4 Appeal: 24-2089 Doc: 37 Filed: 08/11/2025 Pg: 2 of 20
GREGORY, Circuit Judge:
This case concerns whether Sandra Gardner, as a union member, can sue her union
and the union’s officers for breach of fiduciary duty under 29 U.S.C. § 501. Unlike most
causes of action, union members must satisfy two conditions before bringing a § 501 claim:
They must (1) demand that their union take action to correct the alleged wrong (the
“demand requirement”) and (2) demonstrate that there is “good cause” to bring suit (the
“good cause requirement”). 29 U.S.C. § 501(b).
The district court found that Gardner failed to satisfy the demand requirement and
therefore could not pursue her case. We disagree. We hold that Gardner properly
demanded that her union bring suit, and we therefore reverse and remand for further
proceedings. We decline to make any ruling on the good cause requirement and instruct
the district court to consider that question in the first instance.
I.
Gardner, a member of the International Association of Machinists (“IAM” or “the
union”), filed a verified application for leave to file suit for breach of fiduciary duty under
29 U.S.C. § 501(a)-(b). J.A. 7–14. She sought to sue the union and several of its officers:
Dora Cervantes, Robert Martinez, Mark Blondin, Gary Allen, Rickey Wallace, Brian Bryant,
Steven Galloway, and Richard Johnsen (collectively, “Defendants”). J.A. 16–17. Gardner
claims that Cervantes, the IAM General Secretary-Treasurer (“GST”), routinely misused union
funds for personal travel in violation of her fiduciary obligations to the union. J.A. 29–30.
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Before filing suit, Gardner, along with another union member, sent a letter to the
union International President (“IP”) and the IAM Executive Council. J.A. 91–92.
“Pursuant to 29 U.S.C. § 501 (b),” they “wr[o]te to demand an accounting of the funds
misappropriated by IAM[] International President Robert Martinez and IAM[] General
Secretary-Treasurer Dora Cervantes and that the IAM[] International President and Grand
Lodge bring suit against IP Martinez and GST Cervantes to recover such monies.” J.A. 91.
They also requested Cervantes’ travel reports. Id. The letter concluded: “the undersigned
request you authorize and take any and all necessary legal action against Dora Cervantes and
Robert Martinez to obtain an accounting and restitution of lost funds to the IAM.” J.A. 92.
A week later, the IAM General Counsel, Carla M. Siegel, wrote back stating that
“IAM intends to conduct an investigation and analysis of your claims.” J.A. 94. The union
members promptly responded, stating that “[w]e expect more than a cursory audit or
superficial investigation.” J.A. 96. They also asserted that Siegel had ignored their request
“for certain expense records for Martinez and Cervantes.” J.A. 96.
Once again, Siegel wrote to the pair, informing them that WithumSmith+Brown, PC
(“Withum”), an outside accounting firm, would carry out the investigation. J.A. 101. Siegel
provided them with the independent auditor’s contact information and stated “[i]t is
incumbent on you to provide [the auditor] with all documentation and information you have
to assist him in his investigation of your claims.” J.A. 101. The union members responded
to Siegel, reiterating their request for Cervantes’ travel documents. J.A. 103. Siegel, in turn,
asked that they provide “more specificity with respect” to their allegations. J.A. 105–06.
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Gardner, this time joined by two union members, wrote yet again to Siegel. J.A.
108. They “demanded that the IAM International President and Grand Lodge bring suit
against IP Martinez and GST Cervantes to recover [the misappropriated union funds].”
J.A. 108. They also asked the union to expand the accounting of funds to IAM’s General
Vice President, Mark Blondin, for records relating to his travel expenses, and for the union
to “take any and all necessary legal action against Dora Cervantes, Robert Martinez and
Mark Blondin.” J.A. 108.
After this latest epistle, Siegel responded to Gardner and the other union member
with whom she had sent the original letter. J.A. 113–14. Siegel explained that, in response
to their request, “IAM . . . hired . . . [an] independent accounting firm, Withum to
investigate your allegations [concerning Cervantez and Martinez].” J.A. 113. “Withum
concluded that there was no evidence of wrongdoing, misappropriation or abuse.” J.A.
114 (emphasis removed); see also J.A. 118–23 (Withum report). Siegel’s letter concluded:
The Executive Council reviewed [Withum’s] report and [the union members’] demand. Based on the report, the Executive Council determined that there was simply no support for your unfounded allegations . . . . [T]he IAM has determined there is no basis for taking any further action with respect to your meritless allegations.
J.A. 114.
Despite Siegel and Withum’s assertions to the contrary, Gardner claims that “a
genuine investigation of [her] claims was never done.” J.A. 297. Unsatisfied with the
IAM’s response, she turned to federal court. Pursuant to 29 U.S.C. § 501(b), she filed the
aforementioned Verified Application for leave to file a breach of fiduciary duty claim
against Cervantes. J.A. 7–14.
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As an exhibit to the Verified Application, she attached a Proposed Complaint. J.A.
15–34. In her Proposed Complaint, Gardner outlined two claims. First, she alleged that
Cervantes breached her fiduciary duty to the union by misusing union funds for personal
travel, in violation of 29 U.S.C. § 501(a) (Count I). J.A. 29–30. Second, she brought a
claim for failure to provide requested union financial records under § 201 of the Labor-
Management Reporting and Disclosure Act of 1959, 29 U.S.C. § 431(c) (Count II). J.A.
30–32. Both parties and the district court agreed that, pursuant to 29 U.S.C. § 501(b),
Gardner needed the court’s permission to file Count I but not for Count II. J.A. 13;
Proposed Defendants’ Preliminary Response to Plaintiff’s Application for Leave to File
Proposed Complaint Pursuant to 29 U.S.C. § 501 (“Defs. Response to Application”) at 2–
3, ECF No. 4; 1 J.A. 980 n.2.
In response to Gardner’s Application, Defendants stated that Gardner had yet to file
her Proposed Complaint and suggested that Gardner do so before the district court decided
on whether she could proceed with her § 501 claim. Defs. Response to Application at 2–
3. The district court rejected the Defendants’ proposal, instead ordering the parties to first
brief the question of whether Gardner could proceed on Count I before Gardner filed any
complaint. Briefing Order, ECF No. 14.
In a written order, the district court denied Gardner’s “verified application for leave
to file a complaint pursuant to 29 U.S.C. § 501(b).” J.A. 987. The district court held that
Gardner failed to properly demand that the IAM bring suit. As it explained, “[w]hile
All ECF citations are to the district court record, Gardner v. Internat’l. Assoc. of 1
Machinists et al., No. 8:24-cv-00454 (D. Md.). 5 USCA4 Appeal: 24-2089 Doc: 37 Filed: 08/11/2025 Pg: 6 of 20
Plaintiff disagreed with the accounting conducted by Withum, she has not shown that IAM
failed or refused to act on her . . . demand. IAM secured an accounting showing that no
other relief was necessary.” J.A. 985. Because it found that Gardner failed to satisfy the
demand requirement, the district court made no findings as to whether Gardner
demonstrated that she had satisfied the good cause requirement. Id.
Gardner filed a notice of appeal without any further action from the district court.
See J.A. 988. She never filed her Proposed Complaint in its entirety or for just the second
claim that did not require the court’s permission.
II.
Before considering the merits of this appeal, we must first fulfill our independent
obligation of determining whether we have jurisdiction. Est. of Cunningham v. Mayor of
Balt., 128 F.4th 238, 242 (4th Cir. 2025); see also Steel Co. v. Citizens for a Better Env’t,
523 U.S. 83, 94–95 (1998). As we have oft repeated, “[t]his Court has ‘jurisdiction of
appeals from all final decisions of the district courts of the United States.’” Est. of
Cunningham, 128 F.4th at 242 (quoting 28 U.S.C. § 1291) (emphasis in Cunningham).
And, as has become our refrain, “[o]rdinarily, a district court order is not ‘final’ until it has
resolved all claims as to all parties.” Id. (cleaned up).
This case is peculiar because, at this stage, technically, there are no claims. 2 If
Gardner had filed her Proposed Complaint, this case would present two claims. J.A. 29–
2 Our duty to ascertain jurisdiction is complicated by the procedural oddities that this case presents. By moving forward without a filed complaint, the district court elected (Continued) 6 USCA4 Appeal: 24-2089 Doc: 37 Filed: 08/11/2025 Pg: 7 of 20
30. The district court only declined to grant Gardner permission to proceed on Count I,
J.A. 980 n.2, 987, and therefore, Count II would remain live and unresolved, depriving us
of jurisdiction. See, e.g., Kausler v. Campey, 989 F.2d 296, 298–99 (8th Cir. 1993)
(holding that it lacked jurisdiction to consider an appeal of a district court’s finding that
the plaintiff lacked good cause to bring a § 501 claim when an additional count remained
pending); 22A Fed. Proc., L. Ed. § 52:1239. But that is not what happened. Per the district
court’s instruction, see Briefing Order, ECF No. 14, Gardner never filed her Proposed
Complaint and therefore there never were any “live” claims. So, by denying Gardner’s
application to file her § 501 claim, the district court disposed of all questions before it,
rendering the district court’s denial of Gardner’s application a “final decision” for purposes
of § 1291. We, therefore, have jurisdiction.
III.
Having satisfied ourselves of our jurisdiction, we now turn to the merits of the
parties’ dispute: whether Gardner may bring her § 501(a) claim. Section 501(a) states that
union officials “occupy positions of trust in relation to [their union] and its members as a
group,” and owe the union a duty “to hold its money and property solely for the benefit of
the organization and its members and to manage, invest, and expend the same in
accordance with its constitution and bylaws and any resolutions of the governing bodies
to follow a rather peculiar procedure in this case. Neither of the parties challenged the district court’s decision on appeal, so we neither endorse nor condemn its chosen approach. We merely find that, given the district court’s procedural decisions, we have jurisdiction over this appeal. 7 USCA4 Appeal: 24-2089 Doc: 37 Filed: 08/11/2025 Pg: 8 of 20
adopted thereunder.” 29 U.S.C. § 501(a). To enforce § 501(a), federal law creates a
limited right of action for union members, but this “right to sue . . . arises only after certain
condition precedents have been met.” Cowger v. Rohrbach, 868 F.2d 1064, 1066 (9th Cir.
1989). Section 501(b) sets forth these condition precedents:
When any officer . . . of any labor organization is alleged to have violated the duties declared in subsection (a) and the labor organization or its governing board or officers refuse or fail to sue or recover damages or secure an accounting or other appropriate relief within a reasonable time after being requested to do so by any member of the labor organization [the demand requirement], such member may sue such officer . . . . No such proceeding shall be brought except upon leave of the court obtained upon verified application and for good cause shown [the good cause requirement], which application may be made ex parte.
29 U.S.C. § 501(b) (emphasis added).
The Defendants argue that Gardner has not satisfied either of § 501(b)’s two
preconditions to suit—the demand and good cause requirements. Gardner argues that she
has. We hold that Gardner has satisfied the demand requirement but reserve the question
of the good cause requirement for the district court to consider in the first instance.
The demand requirement states that a union member may only sue if “the labor
organization or its governing board or officers refuse or fail to sue or recover damages or
secure an accounting or other appropriate relief within a reasonable time after being
requested to do so by any member of the labor organization.” 29 U.S.C. § 501(b)
(emphasis added).
We have yet to consider what constitutes a proper demand but several of our sister
circuits have. They agree that § 501(b) is designed to protect two often conflicting
interests: those of union members and those of union officials. On the one hand, “the Act
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is designed to protect union members, who may be of limited education and are rarely
represented by counsel when sending letters to their union.” Dinko v. Wall, 531 F.2d 68,
73 (2d Cir. 1976); see also Adams-Lundy v. Ass’n of Pro. Flight Attendants, 844 F.2d 245,
249 (5th Cir. 1988). On the other, Congress put in place § 501(b)’s threshold requirement
“to discourage misuse of litigation and to minimize judicial interference in the management
of labor organizations.” Hoffman v. Kramer, 362 F.3d 308, 314 (5th Cir. 2004); Gould on
behalf of St. Louis - Kansas City Carpenters Reg’l Council v. Bond, 1 F.4th 583, 589 (8th
Cir. 2021) (“the purpose of the § 501(b) demand requirement is to afford union leaders an
opportunity to exercise their reasonable business judgment.”) (cleaned up). Thus, § 501(b)
also serves to “‘to protect union officials from unjust harassment.’” Adams-Lundy, 844
F.2d at 249 (quoting Dinko, 531 F.2d at 73).
Courts have cautioned against taking an overly technical reading of the demand
requirement. For example, the Second Circuit held that a letter demanding “‘a complete
accounting’ and ‘a true and accurate accounting’” satisfies the demand requirement.
Dinko, 531 F.2d at 72–73. The Third Circuit has also broadly read demand letters. That
court held that a union member’s letter requesting that the union take specific corrective
action to comply with its constitution satisfied the demand requirement. Sabolsky v.
Budzanoski, 457 F.2d 1245, 1251–53 (3d Cir. 1972). As the court explained, “[t]he letter
of request addressed to [the union president], although not a request of the officer to sue,
did seek internal relief, and in the circumstances then existing, . . . cannot be deemed
insufficient.” Id. at 1252. Likewise, the Fifth Circuit held that even when a complaint
“does not explicitly allege that appellants requested the union to take legal action to correct
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breaches of fiduciary duties” but does “imply some form of request was made,” it satisfies
the demand requirement. Adams-Lundy, 844 F.2d at 249. We agree that, in evaluating
whether the demand requirement is met, courts should not impose any formalistic
requirements. Rather, courts should read demands as a whole and in the context in which
they were issued. We hold that the demand requirement is satisfied if a reasonable union
would be put on notice of what corrective action the union member demands.
Defendants attempt to analogize this case to the Eighth Circuit’s decision in Gould
but, in doing so, they misread the demands. In Gould, the would-be plaintiff demanded
that their union “take one or more of the following actions”: “(1) sue to recover damages;
(2) secure an accounting; and/or (3) seek other appropriate relief.” 1 F.4th at 590
(emphasis added). The union proceeded to “take one” of the suggested actions and secured
an accounting but—as permitted by the demand—declined to take any further action. Id.
Unhappy with the audit report, the union member went to court, demanding that the union
sue. Id. The Eighth Circuit held that the union member did not satisfy the demand
requirement, holding that “an additional request . . . was first required, stating precisely
what legal action the Council was now required to take . . . that the accounting had not
remedied.” Id.
But here, unlike the Gould disjunctive request (to conduct an accounting “and/or”
sue), Gardner’s demand is unequivocally in the conjunctive: Gardner wanted “an
accounting of the funds . . . and . . . [for IAM to] bring suit,” J.A. 91 (emphasis added), and
“demanded that the IAM International President and Grand Lodge bring suit against . . .
Cervantes,” J.A. 108. Gardner’s letters made clear that she wanted both done, not one or 10 USCA4 Appeal: 24-2089 Doc: 37 Filed: 08/11/2025 Pg: 11 of 20
the other. So, by failing to bring suit, the union did not carry out Gardner’s demand. We
hold that Gardner satisfied the demand requirement.
IV.
Because we find that Gardner satisfied the demand requirement, we reverse the
district court’s denial of Gardner’s application for leave to file her § 501 claim. We remand
for further consideration on whether Gardner satisfied the good cause requirement. The
district court’s order is
REVERSED AND REMANDED.
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WILKINSON, Circuit Judge, dissenting:
I would affirm the denial of Sandra Gardner’s application for leave to file her
complaint. The record makes perfectly clear that no good cause exists to bring a derivative
lawsuit against Dora Cervantes. By opting instead to string this claim along, the majority
encourages a spate of sore loser lawsuits from union members upset with bygone elections.
Such litigation undermines the ability of a union electorate to choose its leaders and
effectively creates a second forum for resuscitating lost races, all to the detriment of union
democracy. This runs counter to the Labor-Management Reporting and Disclosure Act’s
(“LMRDA”) “primary objective of ensuring that unions would be democratically governed
and responsive to the will of their memberships.” Finnegan v. Leu, 456 U.S. 431, 436
(1982).
Gardner, for her part, seizes the chance to swat union leaders in the International
Association of Machinists (“IAM”). Union officials admittedly are not always the most
popular folks in Dodge. And no one is unaware of the history of union corruption. There
are plenty of instances where union officials either swindle funds from union treasuries or
are otherwise corrupt in ways that would be appalling to the idea of union self-governance.
See, e.g., United States v. Seidman, 156 F.3d 542, 544 (4th Cir. 1998); Guidry v. Sheet
Metal Workers Nat. Pension Fund, 493 U.S. 365, 367 (1990). No one wants to whitewash
union corruption in any way. But that is not what happened here.
This case is, at bottom, an election dispute. Today’s allegations against Cervantes
were first levied not in a court of law, but in IAM’s 2021 officer elections. The union
electorate, either unconvinced of her guilt or pleased with her stewardship, reelected
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Cervantes with more than sixty percent of the vote. Gardner, who supported Cervantes’s
opponent in the election, now asks a court to do what union voters would not. There is no
basis for our doing so.
Section 501(a) of the LMRDA imposes fiduciary duties on union officials to
manage the union’s funds “solely for the benefit of the organization and its members.” 29
U.S.C. § 501(a). If a union official is alleged to have breached her fiduciary duties and the
union’s governing board “refuse[s] or fail[s] to sue or recover damages or secure an
accounting or other appropriate relief within a reasonable time after” a member requests it
to do so, § 501(b) permits that member to sue the official in federal court “for the benefit
of the labor organization.” Id. § 501(b). But “[n]o such proceeding,” the statute continues,
“shall be brought except upon leave of the court obtained upon verified application and for
good cause shown.” Id.
This text should immediately give us pause. The statute’s preconditions are pretty
nearly unique. For a district court to exercise jurisdiction in a typical federal suit, neither
of the above preconditions need be met. And nothing about union governance disputes
intrinsically involves diverse parties or federal questions. Section 501, then, is a carefully
circumscribed extension of federal question jurisdiction and must be “narrowly
construe[d]” as such. Bldg. Material & Dump Truck Drivers, Loc. 420 v. Traweek, 867
F.2d 500, 506 (9th Cir. 1989) (citation omitted). This reminder bears special emphasis in
the context of the LMRDA, considering “the federal policy of noninterference in the
internal affairs of unions.” Id. By giving “full effect” to § 501(b)’s preconditions, we honor
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the provision’s “clear[] design[] to protect union officials from unjust harassment.”
Coleman v. Bhd. of Ry. & S.S. Clerks, Freight Handlers, Exp. & Station Emps., 340 F.2d
206, 208 (2d Cir. 1965).
Without mentioning these background principles, the majority boils § 501(b) down
into two requirements: the member-plaintiff must (1) demand that the union take corrective
action and (2) demonstrate “good cause” to bring the lawsuit. According to the majority,
the district court misapplied the former and declined to address the latter, warranting
remand. Whatever the propriety of this formalistic distinction, it makes no difference here.
We “may affirm on any grounds apparent from the record,” United States v. Ali, 991 F.3d
561, 571 (4th Cir. 2021) (quotation omitted), and the record here makes apparent that
Gardner lacks good cause.
In prolonging this lawsuit, the majority overlooks two ready grounds to end it. First,
IAM’s response to Gardner’s demand was objectively reasonable. Second, Gardner’s
nearly three-year delay in bringing her lawsuit renders it barred by laches. Both grounds
for denying Gardner’s application find clear support in the record, and each independently
warrants affirming the district court’s decision to reject Gardner’s request for leave to file
her complaint.
A.
Where a union’s response to a member’s demand is “objectively reasonable,” there
can be no good cause to bring suit. Hoffman v. Kramer, 362 F.3d 308, 316 (5th Cir. 2004).
This standard prevents federal courts from micromanaging internal union grievances as a
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“super review” board, instead reserving our involvement only upon some demonstration of
“impropriety in the [union’s] proceedings.” Corea v. Welo, 937 F.2d 1132, 1143 (6th Cir.
1991). Absent some indication that union officials acted in an unreasonable, arbitrary, or
biased manner, they should be able to exercise their “reasonable business judgment”
without our interference. Gould ex rel. St. Louis-Kan. City Carpenters Reg’l Council v.
Bond, 1 F.4th 583, 589 (8th Cir. 2021) (quoting Kamen v. Kemper Fin. Servs., Inc., 500
U.S. 90, 96 (1991)). After all, they are better-informed about their own union’s affairs, and
any perceived missteps can be hashed out in future elections. See Hoffman, 362 F.3d at 317
n.4 (analogizing § 501(b) to shareholder derivative lawsuits).
With this standard in mind, it is clear the union leadership did nothing wrong here.
In fact, it did a good deal that was right. When Gardner made her demand, IAM hired an
independent accounting firm, WithumSmith+Brown, PC (“Withum”), to investigate her
allegations against Cervantes. After Withum completed its investigation, it issued a report
concluding there was no evidence that Cervantes misappropriated union funds or abused
union resources. J.A. 122–23. In light of Withum’s findings, the Executive Council
decided, without Cervantes present, not to proceed further. J.A. 42. IAM then sent Gardner
a letter detailing Withum’s investigation and informed her that it would not be taking any
additional steps. J.A. 113–14.
The union’s reliance on Withum’s independent investigation was an objectively
reasonable response to Gardner’s demand. There was no reason for IAM to believe Withum
was anything but a reputable accounting firm. It is one of the twenty-five largest accounting
firms in the United States. And the Withum partner who oversaw the investigation is both
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a certified public accountant and certified fraud examiner, with over twenty years of
experience assisting labor organizations with fraud prevention and investigation. Nor was
there any reason for IAM to believe the investigation was a sham. Withum reviewed the
documentation Cervantes provided for each of her expense reports. Where more
substantiation was needed to verify the business purpose of an expense, Withum sought
and reviewed additional corroborating evidence. J.A. 119. That evidence included pictures,
invitations, agendas, and the records of other employees. Withum also interviewed
Cervantes and conducted independent research online to verify Cervantes’s attendance at
events. While Withum tried to speak with Gardner several times, it was unable to reach
her. J.A. 119, 297–98. Nonetheless, Withum’s report addressed and refuted each of
Gardner’s allegations. J.A. 119–23. The good cause requirement permits unions to
reasonably rely on independent assessments, like the one Withum provided here, without
having federal courts second-guess their judgment. See Hoffman, 362 F.3d at 316–17.
Although Gardner now challenges certain aspects of Withum’s investigation, she
did not raise any of these concerns with IAM before seeking leave from the district court
to bring her action. The primary purpose of § 501 is to give unions, not their individual
members, the ability to take corrective action when a union official breaches her fiduciary
obligations. See Int’l Union of Elec., Elec., Salaried, Mach. & Furniture Workers, AFL-
CIO v. Statham, 97 F.3d 1416, 1421 (11th Cir. 1996). Section 501(b) establishes an
exception to this general rule, but only where there is good cause to believe the union’s
failure to act does not reflect a reasoned business judgment about the best use of union
resources. Hoffman, 362 F.3d at 316–17.
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If union members don’t indicate what corrective action is needed, then union
officials don’t have an opportunity to bring their judgment to bear in the first instance. As
Judge Chasanow aptly observed, we can only evaluate IAM’s response to issues it was
made aware of. Because Gardner did not give IAM an opportunity to address any perceived
deficiencies in Withum’s report, J.A. 985 n.6, she lacks good cause to bring a derivative
action under § 501(b), see Gould, 1 F.4th at 590.
The concern for union democracy is particularly salient here given that Cervantes’s
expenses were already brought to the union’s attention in the last election by an opposing
candidate—one who was supported by Gardner. But Cervantes won reelection anyway.
Without more, Gardner’s belated criticism of the thoroughness Withum’s investigation
does not warrant casting aside the views of IAM’s membership and the reasoned business
judgment of its elected officials.
It is a natural temptation for those who did not back the winning candidate to indulge
in payback—if not to overturn the results of the election, then at least to embarrass and
harass the winner. But the good cause requirement ensures that § 501(b) does not become
an avenue for the indulgence of such desires. Instead, it reserves derivative actions for
instances where unions have responded in an objectively unreasonable manner, or not
responded altogether, to alleged misconduct. See, e.g., Cowger v. Rohrbach, 868 F.2d
1064, 1065, 1068 (9th Cir. 1989) (finding good cause where a union declined to investigate
accusation that an official was improperly reimbursing himself); Brink v. DaLesio, 453 F.
Supp. 272, 275–76 (D. Md. 1978) (finding good cause where a union did not investigate
allegations that an official was collecting multiple salaries and was due to receive a quarter
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of a million dollars in severance). But when unions adequately investigate allegations of
misconduct, the proper forum for expressing discontent with union leadership is the next
election—not district court.
B.
The majority’s refusal to consider Gardner’s lack of good cause is especially
surprising considering that it enjoyed another route to affirm. Not only did Gardner fail to
bring her concerns to IAM, but she also delayed seeking leave to bring her claim in the
district court for eighteen months. That delay was compounded by the fact that Gardner
did not demand the union take action for over a year after she first learned of Cervantes’s
allegedly improper travel expenses, totaling nearly three years of delay. While some of
Gardner’s tardiness can be excused by her husband’s illness, that does not explain why she
slept on her rights for nearly two years before he took ill. IAM, by contrast, worked with
some dispatch. Within a month of receiving Gardner’s demand, it hired Withum. The firm
then spent the next two months investigating Gardner’s allegations. Once Withum issued
its report to IAM, the Executive Council promptly decided not to proceed against Cervantes
and notified Gardner of the reasoning behind its decision. J.A. 42, 113–14.
Absent a more persuasive justification for her “apparent laggardness,” Gardner’s
lack of vigilance renders her claim untimely under the doctrine of laches. White v. Daniel,
909 F.2d 99, 102 (4th Cir. 1990) (quotation omitted); see also Petrella v. Metro-Goldwyn-
Mayer, Inc., 572 U.S. 663, 678 (2014) (stating that the “principal application” of laches
“was, and remains, to claims of an equitable cast for which the Legislature has provided
no fixed time limitation”). Indeed, it would be “difficult” for IAM and Cervantes “to locate
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witnesses, produce pertinent records, and overcome the effect of dimmed memories” given
that the expenses at issue here were incurred between 2015 and 2019. Riddick v. Balt. Steam
Packet Co., 374 F.2d 870, 871 (4th Cir. 1967) (per curiam). Because Gardner was not
timely in pursuing her claim, she lacks good cause to bring it. See Horner v. Ferron, 362
F.2d 224, 229 (9th Cir. 1966).
Rather than apply laches, however, Gardner proposes that we borrow Maryland’s
statute of limitations for breach of fiduciary duty claims, which the parties agree to be three
years. See Md. Code Ann., Cts. & Jud. Proc. § 5-101. Yet nothing in the statute’s text
requires such a generous limitations period. True enough, courts often look to analogous
state law for a limitations period when federal law is silent. See, e.g., City of Rancho Palos
Verdes v. Abrams, 544 U.S. 113, 124 (2005) (emphasizing this practice for § 1983 claims).
But doing so is inappropriate if it would “frustrate or interfere with the implementation of
national policies.” Occidental Life Ins. Co. v. EEOC, 432 U.S. 355, 367 (1977); see also
Belmora LLC v. Bayer Consumer Care AG, 987 F.3d 284, 293–94 (4th Cir. 2021)
(choosing to apply laches rather than a state statute of limitations because of the equitable
character of the claim). That is the case here. Effectuating the democratic governance of
unions is a primary objective of the LMRDA. Finnegan, 456 U.S. at 436. To permit union
democracy to function effectively and prevent the ongoing harassment of officials who
have been legitimately elected, we cannot allow disgruntled union members to sit on their
rights for years, casting uncertainty over nearly the entirety of a union official’s term of
office. The very purpose of the good cause requirement is to prevent such “harassing and
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vexatious litigation” and “unwarranted judicial intrusion[s] in the processes of union
democracy.” Cowger, 868 F.2d at 1068 (citations omitted).
* * *
In enacting § 501, Congress certainly had a desire to hold union leadership
accountable. But it had no desire to countenance what happened here: sniping at those who
won an election fair and square.
Of course, federal law contains all sorts of provisions designed to protect union
democracy. See, e.g., 29 C.F.R. § 102.69(a)(8) (permitting objections to electoral conduct
within five business days of tallying ballots). And derivative actions under § 501(b) can,
in the right setting, do so too. There must be, after all, some outlet to bring misconduct to
light when union leadership refuses to do so. But speculative derivative actions, brought
after a union’s reasonable investigation and without notice to union leadership of the
investigation’s alleged deficiencies, are not that outlet. Disagreements between Gardner
and IAM should have been aired in the electoral arena. And by and large, they were.
By entertaining this derivative lawsuit, the majority extends our jurisdiction beyond
what § 501(b) provides. Such an extension both oversteps judicial authority and offers
federal courts as a second forum to replay displeasing electoral outcomes. By electing to
remand this claim when the record amply justifies its disposition here, the majority
prolongs the very uncertainty and harassment that the LMRDA intended to avoid. Because
union democracy is best protected when we respect the voices of members and the verdicts
of fair elections, I would affirm the district court’s denial of Gardner’s application for leave
to file a verified complaint.