Snyder v. Freight, Construction, General Drivers, Warehousemen & Helpers, Local No. 287

175 F.3d 680, 1999 WL 228273
CourtCourt of Appeals for the Ninth Circuit
DecidedApril 21, 1999
DocketNos. 96-15267, 96-15274
StatusPublished
Cited by3 cases

This text of 175 F.3d 680 (Snyder v. Freight, Construction, General Drivers, Warehousemen & Helpers, Local No. 287) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Snyder v. Freight, Construction, General Drivers, Warehousemen & Helpers, Local No. 287, 175 F.3d 680, 1999 WL 228273 (9th Cir. 1999).

Opinion

REINHARDT, Circuit Judge:

This case arises out of a bitter internal dispute involving charges of misuse of union funds. The struggle, which occurred twelve years ago, also involved a fight for control of leadership of the local union. At one point, shortly preceding a local union election, the plaintiffs took their charges of financial misconduct to federal court but were quickly disciplined by the union for using union funds to do so. The plaintiffs then filed the present action in the district court under §§ 101(a)(2), (a)(4), and (a)(5) of the Labor Management Reporting and Disclosure Act, 29 U.S.C. §§ 411(a)(2)-(5). They asserted a violation of their free speech rights, their rights to sue, and their right to a fair union hearing, and sought damages on account of the “unlawful” disciplinary action. The plaintiffs won a substantial judgment from a jury on all counts, but lost that victory when the district judge ordered a new trial. The plaintiffs had succeeded earlier in the proceeding, however, in establishing a violation of their procedural rights to a fair union trial under § 101(a)(5). Accordingly, as to that claim, the jury was required to determine only the amount of the damages and the district judge limited the new trial order on that count to damages only. The plaintiffs appeal the new trial order in its entirety, while the defendants cross-appeal the earlier ruling of liability on the procedural claim. We uphold plaintiffs’ appeal and reinstate the jury verdict; we also reject the defendant’s cross-appeal.

I.

Background

Prior to the 1988 union elections, plaintiffs Bill Brooke, Robert Sandoval and Robert Williams were members of the Executive -Board of Teamsters Local 287. Brooke was also vice-president, Sandoval was president, and Williams was a Trustee. During 1988, the plaintiffs and Dave [683]*683Haas1 came to believe that Mario Gullo, the local’s chief executive officer, its secretary-treasurer, was mishandling several of his financial responsibilities. In particular, due to the apparent absence of records that reflected the actual receipt and expenditure of “supplemental dues,” the plaintiffs were concerned about how Gullo was handling that segment of the union’s funds. For other reasons, they were also concerned about his handling of the Sick & Death Benefit Fund. Supplemental dues are paid by certain union members in addition to the standard dues that all members pay. The Sick & Death Benefit Fund, financed through regular dues, provides benefits to a union member who becomes disabled, or to the family of a member who dies.

In 1987, the union increased the share of the monthly dues payments allocated to the Sick and Death Benefit Fund. In early 1988, Sandoval became concerned that despite this increase, there was no corresponding increase in the Fund’s total value. The plaintiffs approached Gullo about the discrepancy between the increased allotment for the fund and the Fund’s actual growth, but did not receive what they felt to be a satisfactory explanation. This, combined with their frustration over their inability to determine the status of the monies paid as “supplemental dues,” caused the plaintiffs to look for help outside the Teamsters union.

After first seeking assistance from the Department of Labor, the plaintiffs sought the advice of a private attorney, Fernando Hernandez, in September 1988. Following an initial meeting with Hernandez, the plaintiffs brought a motion before the local union Executive Board to hire Hernandez to conduct an investigation into the supplemental dues and “other related matters.” The motion passed, and the plaintiffs signed a retainer agreement with Hernandez on behalf of the local union.

In November 1988, as a result of Gullo’s continued refusal to provide information regarding financial matters to the Executive Board, Hernandez filed an action against him in United States District Court on behalf of the individual plaintiffs and the union. The complaint alleged that in September 1987 Sandoval had requested an accounting of funds in Gullo’s possession and that the bylaws of Local 287 require the secretary-treasurer to provide such an accounting, but that Gullo had failed to furnish one. The complaint further alleged that Gullo had diverted union funds to his own personal use. The complaint requested, inter aha, a full accounting and damages equal to the amount of funds misappropriated by Gullo.2

Shortly after the action was filed, Sandoval found a check on his bulletin board made out to the Sick and Death Benefit Fund in the amount of $11,748.28. Sandoval asked Gullo about the check, and Gullo responded that he had just recently “found” the money in his safe. As Sandoval testified:

“I says: Mario, what’s this? ... This check for the Sick and Death Benefit. Where did it come from? And he says: Oh, we found it in the safe. We found that money in the safe.... I told him: You rnean^ — -how convenient. After all this time you find the money in the safe? ... He says: That’s all I could tell you.”

In December 1988, the union held its election for officers and business agents. Haas defeated Gullo in the campaign for the top post, secretary-treasurer, but Gul-lo’s supporters were elected to a majority [684]*684of the positions on the Executive Board. Sandoval was re-elected as president, while Brooke and Williams won positions as business agents.

The new Executive Board discharged attorney Hernandez. Gullo then filed internal union charges against the plaintiffs and Haas relating to the hiring of Hernandez and the institution of the action. . The charges asserted that the plaintiffs’ actions were “politically motivated and intended to harm [Gullo] and defraud the local union funds or credit in the amount of $13,-000.... ” A hearing on the charges was scheduled for August 16, 1989, but on August 15 the meeting was cancelled by Haas, pursuant to his authority as secretary-treasurer. As a result, none of the plaintiffs attended the hearing. A panel of the local union, consisting of the Gullo supporters on the Executive Board and three others chosen by them, held a hearing at the time scheduled, and tried and convicted the plaintiffs in absentia. Each plaintiff was removed from office, fined $5,000, and ordered to reimburse the union for costs incurred by attorney Hernandez. The plaintiffs appealed their convictions to Teamsters Joint Council 7, which subsequently reversed Haas’s conviction, but affirmed the convictions of all plaintiffs here, although it reduced the fines to $500 each.3

On August 22, 1989, the plaintiffs filed a complaint in the United States District Court alleging that the assessment of fines against them and their removal from office constituted discipline in violation of the Labor Management Reporting and Disclosure Act. The complaint further alleged that the discipline was invalid because it was imposed in retaliation for plaintiffs’ filing a legitimate lawsuit, in violation of § 101(a)(2) and (4) of the LMRDA, and that the hearings violated the plaintiffs right to due process in union disciplinary proceedings, in violation of § 101(a)(5).4 In 1993, the plaintiffs and defendants filed summary judgment motions.

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175 F.3d 680, 1999 WL 228273, Counsel Stack Legal Research, https://law.counselstack.com/opinion/snyder-v-freight-construction-general-drivers-warehousemen-helpers-ca9-1999.