The opinion of the court was delivered by: FRANKEL
The defendant Brotherhood of Painters, Decorators and Paperhangers of America provides in its Constitution for a network of regional district councils exercising a broad range of executive and legislative power over local unions within their jurisdiction. Defendant District Council No. 9 functions in this capacity in New York City. On October 19, 1966, after a turbulent history to be outlined below, S. Frank Raftery, General President of the Brotherhood, placed the District Council under a special trusteeship, naming John Damery, one of the Brotherhood's general representatives, as Special Trustee.
On April 6, 1967, the plaintiffs, members (in most or all cases, for many years) of local unions affiliated with defendant District Council, filed this action to enjoin the continued functioning of the trusteeship, to prevent the Trustee from indefinitely postponing a scheduled election for the post of District Council Secretary-Treasurer, and for related relief. Invoking the court's jurisdiction under Sections 302 and 304 of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA), 29 U.S.C. §§ 462 and 464, and under Section 301 of the Labor Management Relations Act of 1947, 29 U.S.C. § 185, they charged that the trusteeship had not been imposed for a lawful purpose, but had been "established in fact for the purposes of consolidating the power of certain corrupt union officers, of dissipating the power and resources of the Council, and of preventing the growth of competing political elements within the Council, and of preventing the rank-and-file members of local unions composing the Council from cleaning up the corrupt conditions and practices that exist in the affairs of the Council."
Within a week after bringing the suit, plaintiffs moved on lengthy and detailed affidavits for a preliminary injunction. To sketch them only briefly here, the affidavits made, and documented, allegations that there had been long years of corruption in the District Council; a long tenure of tyrannical repression by the Council's Secretary-Treasurer, Martin Rarback; management of the Council's affairs over many years for the personal interests of Rarback and his allies at the expense of the working membership; and a steady pattern of indifference or collusion by the Brotherhood despite numerous appeals by dissident individual members. The trusteeship had been imposed, plaintiffs asserted, only after Rarback had been indicted in New York the day before for bribery and collusion of the kind alleged here. Furthermore, plaintiffs undertook to show, the Trustee had done nothing to correct the evils in the District Council's affairs or to investigate the widespread charges of corruption and autocratic rule by its officers. Instead, it was charged, while he had suspended all the officers upon assuming the trusteeship, he had re-installed all of them except Rarback immediately, and had named Rarback shortly afterwards to a post of power and importance. It was alleged, in sum, that the trusteeship amounted to a "front" or "cover" for retaining control by the discredited - or at least seriously suspect - Rarback regime.
In a long opposing affidavit by the Trustee and a briefer one (incorporating the Trustee's) by General President Raftery, defendants denied stoutly that the trusteeship was anything but a good-faith and lawful measure to repair the parlous condition of the District Council. The Trustee reported a series of achievements during his tenure - revision of Council by-laws, an educational program, revitalized organizing efforts, a new (and impartial) Council newsletter, among other things. He swore to his own good faith and that of the Brotherhood in installing him. But the opposing affidavits left wholly or partly unanswered questions of a serious nature. What, if anything, had the Trustee done about the alleged problems of corruption? What investigation, if any, had he made before reinstating all the members of Rarback's administration other than Rarback himself? What had led to the new role of Rarback and how important was that role? How did it happen that after years of inaction, the indictment of Rarback had led to the instantaneous imposition of the trusteeship? To what extent had the procedures required by law been followed in declaring and continuing the trusteeship?
These and other unanswered questions to be noticed below posed issues of substance. It became clear that an evidentiary hearing would be required, and the court ordered one. With the acquiescence of the parties, the court invited the Secretary of Labor, through his Solicitor, to appear as amicus curiae. The invitation was accepted. Counsel for the Secretary attended the hearing, extending over seven court days, supplied some pertinent documentation, and have filed a post-hearing brief, for which the court is grateful although the Department's ultimate submission in favor of defendants is rejected.
Since it was apparent that the ruling on the motion for a preliminary injunction was likely to be in effect the ultimate decision in the case, the court proposed for discussion that we proceed directly to the final adjudication in accordance with Fed. R. Civ. P., Rule 65(a)(2). Plaintiffs favored that course. Defendants opposed it. Recognizing its power under the cited Rule to order a final hearing on the merits, the court perceived no prospect of substantial gain in doing so over defendants' objection. Accordingly, whether or not it makes a real difference, the hearing was held solely for the purpose of the preliminary injunction application. Now, having studied the extensive record of factual and legal submissions, the court reaches the following findings, conclusions, and decision.
1. The pre-trusteeship situation
Since at least 1960, probably for a number of years before that, and up to the imposition of the trusteeship on October 19, 1966 (to stop there for the moment), District Council No. 9 was repressively governed, and the interests of its constituent union membership poorly served and frequently betrayed, under the dominance of Martin Rarback, its Secretary-Treasurer and chief officer,
and those allied with him in positions of power. Democratic procedures were ignored. The Council bylaws, of little moment to a dictatorial regime, were in a state of scattered disarray. Dissident members, seeking a voice in the management of Council affairs or an opportunity to vie for Rarback's office, were fought ruthlessly with all the power available to entrenched officials.
The Council's publication, the "District Council 9 News," served as Rarback's personal organ and propaganda outlet. It was used to vilify his opponents and trumpet his virtues at all (especially election) times. Opposition views were not seen in it except as Rarback purported to state, in order to refute, them. Appeals to the Brotherhood on this, as on many other subjects, were constant, and uniformly futile.
From 1953 on there was only a single election year, 1961, in which a candidate (plaintiff Schonfeld) managed to run the nomination gauntlet and stand as a candidate against Rarback. In order to be a candidate in the District Council election, an aspirant must win nomination by a vote in his local union. Among the devices employed by the Rarback forces to perpetuate his dynasty was the practice of having people in his camp compete for the nomination in their local unions. When such people obtained the nomination, as they did from time to time, they would obligingly announce that they were declining to run against the esteemed incumbent. Another Rarback stratagem was the use of transfers from local to local on the eve of elections to organize a favorable electorate.
When Rarback did for once face opposition, in the 1961 election, his opponent, Schonfeld, was confronted with a long, and probably critical, delay in obtaining the mailing list so that he might distribute campaign literature. Finally, eight days before the election, he was permitted to go to the offices of the Painting Industry Insurance Fund and copy the list there by hand. Not surprisingly, Rarback's mailings, in envelopes typed probably (though not certainly) by Council personnel,
were sent to the membership before Schonfeld's.
Following the 1961 vote, and on numerous other occasions, Schonfeld and other dissidents appealed to the Brotherhood for correction or discipline based upon election and other irregularities. With rare and trivial exceptions, the appeals were rejected.
The aftermath of the 1961 election presented one of the repeated occasions when Rarback and his colleagues used the machinery of union discipline to wreak punishment upon dissenters. Schonfeld and some twenty of his supporters were charged with such offenses as unlawful resort to extra-union remedies and blemishing the union's good name. Denied the right of cross-examination and the right to produce witnesses (or testify) in their own behalf, they were convicted and ordered to pay substantial fines ($250 in Schonfeld's case). Appeals to the Brotherhood's General Executive Board were characteristically unavailing. On appeal to this court, as an incident of one of the numerous lawsuits members have brought to seek justice in the affairs of the District Council,
Schonfeld fared better. Enjoining enforcement of the punishments - in a decision later obeyed, and never questioned, by the District Council - Judge Murphy observed: "We are compelled to agree with plaintiffs' statement in its affidavit that 'if this be due process the moon is made of green cheese.'" Yochim and Schonfeld v. Caputo, 61 Civ. 2223, p. 3 (Oct. 24, 1962).
Apparently as a further response to the unaccustomed burden of a contested election in 1961, Rarback engineered a bylaw amendment before the 1964 election abolishing the long-standing requirement that members have their photographs in their union books, an obviously sensible and convenient means for checking questioned identity at the polling place. The result has been to facilitate the practice, vividly demonstrated to have continued into the Trustee's era, of stuffing the ballot boxes with fictitious votes. In June of 1965, in anticipation of pending local union elections, anti-Rarback candidates pressed for a system of control cards and a requirement that voters sign a register at the time of balloting. General Representative Altman, to whom the Brotherhood has steadily referred appeals and disputes from the District Council for supposedly impartial disposition, undertook to mediate on this occasion. The pro-Rarback people finally stated they would relent to the point of agreeing to either control cards or signatures. The dissidents, a number of whom believed that either device alone would be futile, retired to caucus. Agreeing to accept only signatures, they returned to take that offered alternative. The Rarback forces reneged. Altman, announcing that the dissidents were not really entitled to anything after all, walked out and left the situation unchanged.
The incident is illuminating in itself, but it is also illustrative. As noted above, General Representative Altman has functioned for some years as the ostensible giver of justice and voice of higher authority from the Brotherhood to District Council 9. Grievances have been "resolved" by reference to him from the Brotherhood's national headquarters. He has played his role repeatedly in one of two ways: (1) mostly, by passionate and intimidating support of the Rarback group, or (2) by professed inability to do anything about anything. And this gamut, from strident partisanship to ostensibly impotent "neutrality," has typified the Brotherhood's position over the years.
Among the incidents Altman has witnessed with apparent indifference have been at least one beating of a member attempting to be heard at a local meeting; the repeated silencing of opposition views at meetings; and blatant improprieties in local balloting. More positively, he has supported Rarback's objectives; attacked dissidents like the plaintiffs for such alleged subversion as making criminal charges (resulting in indictments) against the leadership; and personally engaged in intimidation, at the very time of voting, to insure an electorate favorable to Rarback.
While it has dealt harshly with members who are not compliant, the Rarback administration appears to have been an amiable one for at least many employers who have not been zealous to honor the rights of union members. Contract provisions governing hours, safety and other working conditions have been violated on a wide scale. Inspection and enforcement measures have lain fallow. Members who complained and protested have been "blacklisted" by employers, with no defensive or retaliatory measures being taken by the union. The prevalence of these conditions led the Trustee to concede that the District Council's officials could not have been performing effectively on behalf of the membership.
One particularly disadvantaged group has been the hardwood finishers, of whom there are some 100 to 120 scattered through various locals of the District Council. The members of this group were unable under Rarback even to see the contract under which they worked. Complaints about their pay and working conditions were met with the rejoinder, among others, that they could join the carpenters' union, in which similar workers receive lower pay.
The whole pattern of lax and faithless representation has culminated in recent years in civil and criminal charges against Rarback that he was taking bribes and making collusive agreements with employers. The evidence in the present record goes far in the direction of supporting such charges. But there is no need to conclude now - and the court does not conclude - that they have been sustained. What is important and sufficient here has been the reaction - i.e., non-action - of the Brotherhood and the Trustee to a subject which should obviously be among the most profoundly disturbing ones a union can encounter.
In September 1965, upon leave granted in the preceding month by Judge Cooper, Frank Schonfeld, plaintiff here, and others brought suit in this court (65 Civ. 2695) against Rarback and his appointed Assistant Secretary-Treasurer, Morris Arber, charging that, by conspiracy and collusion with employers, they had agreed to overlook contract violations relating to members' pay and other conditions - in a current word, had entered into "sweetheart contracts." The suit has engaged the attentions of several judges here. Despite the detailed allegations of the complaint, defendants moved to dismiss it for its asserted failure to state a claim. Denying that motion on October 27, 1965, 52 Lab. Cas. P16,722, Judge MacMahon wrote:
"* * * These allegations are detailed by supporting allegations of facts and acts and, therefore, constitute a sufficient showing of good cause for the issuance of Judge Cooper's ex parte order, lay an adequate basis for jurisdiction, and state a claim upon which relief may be granted. Nor do we find merit in defendants' contention that the complaint contains nothing but conclusions. On the contrary, the complaint alleges a wealth of facts and acts which plainly support a charge of conspiracy. The issues of fact raised by the complaint, however, are numerous and cannot, and should not, be determined upon a motion for summary judgment but must await full development of the facts upon a trial."
Since then, as the undersigned has had occasion to rule and may judicially notice from our files, Rarback has used every conceivable means, including violation of elementary procedural rules, to delay and obstruct preparation of the case for trial. When Rarback, on deposition, claimed his privilege against self-incrimination in response to questions about anything beyond his name - including questions as to his age and employment, although in his affidavit on file here in another action he asserts his role as Secretary-Treasurer of the Council - George Meany, AFL-CIO President, suggested an investigation by the Painters International President, Raftery, concerning possible violations of the AFL-CIO Ethical Practices Code.
General President Raftery proceeded to call a meeting - to which was invited none of the 21 plaintiffs who had filed the complaint of "sweetheart" dealings, held by this court to state a valid claim - at the end of which he concluded that "the complaint involved no charges of misuse of union funds or corruption in any form."
In the meantime, both before and after the filing of the foregoing complaint, widespread charges of corruption against Rarback and other officers in his administration continued to be aired - in the public press, in publications printed and distributed by plaintiff Schonfeld and those allied with him, and in a flood of other litigation to which the Trustee refers as a disruptive factor justifying his assumption of control. Hearings held by a Senate Committee, with which defendants were familiar, developed evidence of "loans" totalling nearly $200,000 in 1960-1961 from one Jack McCarthy, a labor consultant and former union official, to Rarback and former District Council officer Frank Grattano. Whether properly or not, extensive publicity was given to the grand jury inquiries leading to Rarback's indictment on October 18, 1966.
It bears emphasis that the civil and criminal charges against Rarback, the publicity, and the testimony reported in Senate hearings are not treated by this court as proof of the charges against him. They are significant here, to repeat a point of some consequence, because of the demonstration in the record that the International did nothing to explore these vital subjects before the indictment and because the Trustee has done substantially nothing about them since his assumption of office except to suspend Rarback, then give him a key post with a trivial salary cut, and keep in office the whole of Rarback's team without investigating or pretending to judge their accountability for the Council's plight. These are circumstances, in the court's view, casting a glaring light both backward and forward - to the asserted good faith in ordering the trusteeship and to the validity of maintaining it and postponing indefinitely the election of a new Secretary-Treasurer. As has appeared and will appear, however, there is much more in the record to guide judgment on these matters.
2. The indictment and ordering of the trusteeship
As noted earlier, General President Raftery moved swiftly upon Rarback's indictment, ordering the trusteeship on the following day, October 19, 1966. Members of the Brotherhood's General Executive Board telegraphed (or, in one case, telephoned) their concurrence in this action. In a telegram to the District Council's officers - President Louis Caputo, Vice President Frank Bona, Nathan Flax, Senior Trustee, and Secretary-Treasurer Rarback - Raftery announced and explained this action as follows:
"Pursuant to Section 47 of the Brotherhood Constitution, after careful investigation and with the approval of the General Executive Board, I am hereby placing District Council No. 9, New York, New York, under special Trusteeship effective immediately. In making this decision I have considered the following circumstances.
"Beginning about September 1964 and continuing to date, repeated complaints have been lodged alleging collusive bidding, bribery of public officials and other irregularities in connection with the painting of public housing projects in the area coming within the jurisdiction of District Council No. 9, New York, New York.
"These complaints and allegations received widespread publicity in the daily press of the area which has tended to create an atmosphere of dissension and controversy among the membership of the District Council and has adversely affected the good name, reputation and image of the Brotherhood, The District Council, the Affiliated Local Unions and the industry.
"Reports have been received that the Secretary of District Council No. 9 has been indicted by a New York County Grand Jury for conspiring to rig bids on Housing Authority contracts, that various contractors and Housing Authority officials have been indicted on one count of conspiracy, 42 counts of collusive bidding and 7 allegations of bribing public officials.
"It is the obligation of the Brotherhood under the provisions of the AFL-CIO Constitution and Codes of Ethical Practices to take appropriate action whenever such serious charges are made against any of the officers of one of its subordinate bodies.
"Without passing on the guilt or innocence of the Secretary of District Council No. 9 with respect to the charges contained in the indictments, it is my considered opinion that the foregoing circumstances have made it difficult if not impossible for the District Council to properly and effectively conduct its affairs and that the rights and interests of the members of District Council No. 9 and its affiliated local unions and the Brotherhood are likely to be placed in jeopardy unless immediate action is taken.
"Accordingly I have appointed General Representative John Damery, 335 Savin Hill, Dorchester, Massachusetts, as Special Trustee to take immediate charge and control of District Council No. 9 and its affairs in accordance with the provisions of Section 47 of the Brotherhood Constitution.
"Pursuant to the requirements of Section 47(G) of the Constitution, a hearing will be held within twenty days at which interested parties may be heard on the subject of continuing the special trusteeship."
The LMRDA, Section 301, 29 U.S.C. § 461, requires a report to the Secretary of Labor within thirty days after a trusteeship has been imposed, and semiannually thereafter. President Raftery signed such a report on November 19, 1966, and filed it with the Secretary.
The Secretary's form, to be supplied subject to criminal penalties for perjury, calls in item "7" for "applicable reasons for establishing or continuing the trusteeship." Four boxes are given, with the applicable one or ones to be checked as follows:
" () A. To correct corruption or financial malpractice
" () B. To assure the performance of collective bargaining agreements or other duties of a ...