The opinion of the court was delivered by: LEVET
The defendants in the above-entitled action have moved to dismiss the complaint on the ground that it does not state a claim on which plaintiffs are entitled to relief and that this court lacks jurisdiction over the subject matter thereof. The complaint alleges taht the court has jurisdiction over this action under Title V of the Labor-Management Reporting and Disclosure Act of 1959 ('LMRDA'), 29 U.S.C. § 501 et seq.
The relevant provision of LMRDA, Section 501(a), 29 U.S.C. § 501(a), provides:
'(a) The officers, agents, shop stewards, and other representatives of a labor organization occupy positions of trust in relation to such organization and its members as a group. It is, therefore, the duty of each such person, taking into account the special problems and functions of a labor organization, 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 adopted thereunder, to refrain from dealing with such organization as an adverse party or in behalf of an adverse party in any matter connected with his duties and from holding or acquiring any pecuniary or personal interest which conflicts with the interests of such organization, and to account to the organization for any profit received by him in whatever capacity in connection with transactions conducted by him or under his direction on behalf of the organization. A general exculpatory provision in the constitution and bylaws of such a labor organization or a general exculpatory resolution of a governing body purporting to relieve any such person of liability for breach of the duties declared by this section shall be void as against public policy.'
The plaintiffs are members of the American Federation of musicians of the United States and canada (hereinafter 'Federation' or 'AFM'). They allege that they are orchestra-leader-employers who regularly employ sidemen who are members of the Federation. (Par. 3 of complaint) The defendants include the Federation and individuals who at present are or who formerly were officers of the Federation.
The complaint alleges in substance:
(1) At the Federation's Sixty-Sixth Annual Convention held in 1963 the attending delegates 'purported to enact' Recommendation No. 11 (Pars. 27-29) which provided in part that
'8. Present provision establishing minimum wages for traveling engagements at 10% In excess of applicable Local scales shall be reaffirmed. 'RESOLVED, that the International Executive Board be and it is hereby authorized and directed to codify the substance, purpose and intent of the foregoing resolution, to eliminate any provisions which conflict herewith, and to incorporate such codification into the Constitution and By-.laws of the Federation with the same force and effect as though such codification were enacted by this Convention.' (italics in complaint).
(2) Pursuant to the authorization contained in Recommendation No. 11, defendants proceeded with the purported codification of Recommendation No. 11. Said codification is contained in a document known as Pamphlet A (Ex. B. annexed to complaint; Par. 31).
(3) Pamphlet A provides in part (Par. 32):
'Section 2: Except as otherwise specifically provided in these By-Laws, the minimum wage to be charged and received by any member (including arrangers, orchestrators and copyists) for services rendered on a traveling engagement shall be the following: '(a) in the case of traveling engagements of one week or more ('steady traveling engagements'), such minimum wage shall be no less than the wage scale of the Local in whose jurisdiction the services are rendered, plus 10% Of such Local wage scale; '(b) in the case of a traveling engagement of less than one week ('miscellaneous traveling engagement') such minimum wage shall be no less than either the wage scale of the Local in whose jurisdiction the services are rendered or the wage scale of the home Local of the member performing such services, whichever is greater, plus 10% Of the wage scale of the Local in whose jurisdiction the engagement takes place.' (italics in complaint).
(4) 'Defendants (except AFM as an organization) dishonestly, fraudulently and, therefore, in violation of their fiduciary responsibility as AFM officers as defined in Section 501 of the Act of 1959, did 'codify' said 'Recommendation No. 11' in such a deliberately mendacious and deceitful fashion as to produce in place of a genuine 'codification' of what the 1963 Convention enacted, what is in fact new legislation inconsistent therewith, and invented by defendants without warrant or ...