United States v. International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America

948 F.2d 1338
Court of Appeals for the Second Circuit·Decided November 8, 1991·No. Nos. 1994, 1995, Dockets 91-6100, 91-6102 and 91-6104·Published·Cited by 137 cases

Opinion

McLAUGHLIN, Circuit Judge:

We are called on by appellants — Joint Council 73, an affiliate of the International Brotherhood of Teamsters; Frank Carraci-no, the president of Joint Council 73; Joint Council 73’s attorneys Caesar Guazzo, Mark Rushfield, and Delia Guazzo; and the law firm of Guazzo, Perelson, Rushfield & Guazzo — to review the imposition of sanctions by the United States District Court for the Southern District of New York (Edelstein, Judge). For the reasons set forth below, we vacate the order imposing sanctions and remand to the district court for further proceedings.

BACKGROUND

The tortuous — not to say Byzantine— path of the Teamsters Litigation need not be recounted here. In March, 1989, the government entered into a court-approved settlement agreement (the “Consent Decree”) with the International Brotherhood of Teamsters (“IBT”) and its General Executive Board (“GEB”) in full settlement of a civil RICO action brought to purge the IBT and its GEB of the pernicious influence of organized crime. The Consent Decree explicitly stated that the district court will maintain exclusive jurisdiction over the case.

The Consent Decree required the district court to appoint three supervisory officials — an Independent Administrator, an Investigations Officer, and an Elections Officer. The Investigations Officer, an appel-lee here, was commissioned to investigate and bring charges against allegedly corrupt IBT members. The Consent Decree expressly authorized the Investigations Officer to examine the books and records of the IBT and its affiliates, and to take sworn, in-person examinations of “any officer, member, or employee of the IBT.”

Joint Council 73’s First Action

In December, 1989, the Investigations [1341] Officer notified, among others 1 Joint Council 73, an IBT affiliate located in New Jersey, that he wanted to examine its books and records. Uneager to comply with this demand, Joint Council 73 sued in the United States District Court for the District of New Jersey to enjoin the Investigations Officer from executing his document demand. Joint Council 73 argued that it was not bound by the Consent Decree because it was not a party to the underlying action that was settled by the Consent Decree, and that the authority asserted by the Investigations Officer amounted to a violation of the IBT Constitution. One month earlier, in a separate action filed by Harold Friedman and Anthony Hughes, two elected officials of an IBT affiliate, Judge Edelstein had rejected a similar challenge to the Consent Decree’s disciplinary mechanism, holding that the IBT had represented its entire membership, including affiliates, in negotiating the Consent Decree. See United States v. International Brotherhood of Teamsters, 725 F.Supp. 162, 168 (S.D.N.Y.1989), aff'd, 905 F.2d 610 (2d Cir.1990) [hereafter Friedman and Hughes].

In January, 1990, in response to a number of actions challenging the Consent Decree, Judge Edelstein, pursuant to the All Writs Act, 28 U.S.C. § 1651, ordered that all future actions challenging the Consent Decree be filed in the Southern District of New York. See United States v. International Brotherhood of Teamsters, 728 F.Supp. 1032, 1045 (S.D.N.Y.), aff'd, 907 F.2d 277 (2d Cir.1990). Judge Edelstein then directed Joint Council 73 either to dismiss its New Jersey lawsuit or to transfer it to the Southern District of New York. Joint Council 73 objected to either course of action. Thereafter, the district court in New Jersey ordered Joint Council 73’s action transferred to the Southern District of New York.

After the transfer, Judge Edelstein held a status conference, at which he granted the Investigations Officer leave to file a motion to dismiss Joint Council 73’s action, and granted the government leave to intervene. The Investigations Officer filed his motion in March, 1990. Joint Council 73 opposed the motion and cross-moved for the recusal of Judge Edelstein, alleging that because his prior rulings demonstrated bias against Joint Council 73, he was unwilling to entertain their arguments. Judge Edelstein denied the recusal motion. Joint Council 73 v. International Brotherhood of Teamsters, 734 F.Supp. 626 (S.D.N.Y.1990).

In June, 1990, this Court affirmed the Friedman and Hughes decision. Friedman and Hughes, 905 F.2d 610 (2d Cir.1990). Hughes had argued to us that he was not bound by the disciplinary mechanism of the Consent Decree because he was not a signatory to the decree, and because the IBT and the GEB lacked the authority to amend the disciplinary mechanism of the IBT Constitution in any consent decree. We rejected this argument, holding that Hughes was bound by the disciplinary mechanism of the Consent Decree

because the investigatory and disciplinary powers of the court-appointed officers are proper delegations of the powers of the IBT General President and the GEB within the scope of the IBT Constitution that binds all members of the IBT, and because the IBT Constitution, in Article XXVI, section 2, contemplates amendment by the GEB, under the circumstances of this case, as a result of judicial direction.

Id. at 622.

In July, 1990, the district court, relying in large measure on this Court’s decision in Friedman and Hughes, as well as our affirmance of the district court’s order pursuant to the All Writs Act, see 907 F.2d 277 (2d Cir.1990), dismissed Joint Council 73’s action and dissolved the previously-entered stay of the Investigations Officer’s document demand. Joint Council 73 v. International Brotherhood of Teamsters, 741 F.Supp. 491 (S.D.N.Y.1990). Joint Council [1342]*134273 immediately moved the district court to stay its dismissal order. The district court reserved decision on the motion for a stay.

In August, 1990, the Investigations Officer renewed his demand to examine the books and records of Joint Council 73. On August 8, 1990, appellant Delia Guazzo, attorney for Joint Council 73, wrote to the Investigations Officer, informing him that her client would refuse to comply with the document demand, ostensibly because the stay application was still pending before Judge Edelstein. The Investigations Officer responded by letter, dated August 9, 1990, that no stay was actually in place and that he intended to commence his inspection on August 16, 1990.

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United States v. International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, 948 F.2d 1338 (2d Cir. 1991).

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