the constitution neither expressly nor implicitly requires that the hearing be limited to a snapshot of the facts as they existed at the time the executive reached the decision to impose the trusteeship.
Second, plaintiffs were not prejudiced by this asserted defect. This can be seen in the fact that no request was made for adjournment or for an opportunity to submit additional evident other than the request for the production of Frank Lupo and Roger Levin.
On January 17 the General Executive Board reviewed and adopted the Findings, including the new evidence. Their vote was one to (i) ratify the emergency imposition of the trusteeship, which action is now moot since this Court has found that the emergency trusteeship was improperly imposed, and (ii) to continue the trusteeship. The new evidence, as summarized in the Findings, together with the information that was available on November 9, was sufficient grounds for this vote, and the validity of that vote should not be second-guessed by this Court. To require new notice of a hearing and a rehearing of the information justifying the imposition of a trusteeship would, at this stage, be an empty and expensive exercise given all that is now know about the affairs of the District Council.
Thus, in spite of this Court's finding that the emergency imposition of the hearing was invalid because of procedural defects and because no good faith basis existed for such action, since the December 5 Hearing and the vote of January 17 served the function of a de novo hearing on the continuation of the trusteeship, plaintiffs fail to meet the first step of their burden regarding success on the merits. Since the defect was cured by subsequent proceedings, the presumption of validity required by LMRDA obtains during the second step, in which plaintiffs must show by clear and convincing evidence that Coia and LIUNA acted in bad faith or for an improper purpose in imposing the trusteeship.
(c) Plaintiffs Have Not shown Bad Faith or Improper Purpose
Plaintiffs assert that the trusteeship was imposed because, after learning of the Draft RICO Complaint, Coia sought to avoid his own prosecution and the taking over of LIUNA, both of which are contemplated therein. As set forth above, the imposition of the trusteeship in November of 1994 was not warranted on an emergency basis, yet the trusteeship was justified based upon all the evidence available to the General Executive Board in January of 1995. The question thus remains as to whether or not, after the curative effect of the December 5 Hearing and the January 17 vote by the General Executive Board of LIUNA, the decision to maintain the trusteeship was made in bad faith or for a purpose not authorized by the LIUNA constitution.
By December 5, all parties involved knew of the Civil RICO Complaint and November 1 Motion on the one hand, and the Draft RICO Complaint on the other. As already discussed, the malfeasance and improprieties discovered after the imposition of the trusteeship, together with the information provided by the Government's Civil RICO Complaint and the November 1 Motion papers, comprised sufficient reason to maintain the trusteeship. The most that can be said, then, is that Coia's intent to avoid his own prosecution or LIUNA's, or any similar intent of any other member of the General Executive Board, was an additional motive to that already stated. Without deciding whether plaintiffs have shown by clear and convincing evidence that this motive was present, it must first be noted that this will only invalidate the trusteeship if no other valid motive was present.
One legally permissible purpose is all that is required for a valid trusteeship. See National Assoc. of Letter Carriers v. Sombrotto, 449 F.2d 915 at 920, 923 (2d Cir. 1971); C.A.P.E. Local 1893 v. I.B.P.A.T, 598 F. Supp. 1056, 1075 (D.N.J. 1984). Since the valid purpose of ridding the District Council of the improprieties uncovered after the imposition of the trusteeship was found by the Special Hearing Panel at the December 5 Hearing and subsequently adopted by the General Executive Board at the January 17 meeting, plaintiffs fail to show by clear and convincing evidence that Coia and LIUNA acted to maintain the trusteeship in bad faith or for an unauthorized purpose. Similarly, given that at least one valid motive was present when the General Executive Board voted to continue the trusteeship, plaintiffs have failed to raise sufficiently serious questions going to the merits to make them a fair ground for litigation.
Thus, plaintiffs have failed to show a likelihood of success on the merits and their motion for a preliminary injunction must be denied.
C. Summary Judgment is Denied
Although plaintiffs were unable to prevail under the doubly specific standards applicable to their motion for injunctive relief, it remains to be determined whether plaintiffs are entitled to compensation for damages suffered, if any, arising between the time of the improper emergency imposition of trusteeship and the curative hearing and vote. Since this is an issue for the trier of fact, LIUNA's motion for summary judgment is denied.
D. Res Judicata Does Not Bar Plaintiffs' Motion
LIUNA asserts that plaintiffs' claims regarding the validity of the imposition of the trusteeship are barred by the doctrine of res judicata because the Consent Decree executed in the Civil Rico Action contains a provision whereby the emergency imposition of the trusteeship and the ensuing Special Hearing and meeting of LIUNA's Executive Board are agreed to and validated by the parties to the Civil Rico Action, including the plaintiffs in this action. Although LIUNA has virtually abandoned this argument since submission of their brief on the subject, it need be briefly examined.
The doctrine of res judicata bars re-litigation of the same claims between the same parties after a matter has once been resolved by a court of competent jurisdiction. Stone v. Williams, 970 F.2d 1043, 1054 (2d Cir. 1992). Res judicata also precludes litigation of all claims that could have been raised in the earlier proceeding, whether or not they were actually raised and litigated. Greenberg v. Board of Governors of the Federal Reserve System, 968 F.2d 164, 168 (2d Cir. 1992); Harborside Refrigerated Services, Inc. v. Vogel, 959 F.2d 368, 372 (2d Cir. 1992). Defendant cites Foster v. Hallco Manufacturing Co., 947 F.2d 469, 476 (Fed. Cir. 1991) and In re Medomak Canning, 922 F.2d 895 (1st Cir. 1990) for the proposition that resolution of claims by consent decree has the same res judicata effect as a litigated resolution. This general proposition is uncontroversial, but neither case lends any support to LIUNA's attempt to apply res judicata to a consent decree not executed by the parties against whom the doctrine is sought to be applied. Neither do these cases give any guidance concerning a consent decree in which the issue sought to be precluded is only implicitly resolved.
It is said that a prerequisite to the application of the doctrine of res judicata is that the party against whom the doctrine is sought to be applied must have been provided with a full and fair opportunity in the prior proceeding to litigate the claim sought to be precluded. See Poyner v. Murray, 124 L. Ed. 2d 299, 113 S. Ct. 2397, 2398 (1993); Montana, et al. v. United States, 440 U.S. 147, 153, 59 L. Ed. 2d 210, 99 S. Ct. 970 (1979). The assertion that the plaintiffs in this case consented to the imposition of the trusteeship in the Consent Decree is not supported by a reading of the Decree. Following the recitals, Paragraph 1 of the Decree goes on to state:
Incorporation of Recitals. The foregoing recitals are incorporated by reference as though fully set forth in this paragraph and as so incorporated are agreed to by the Government and the MTDC.
LIUNA's attempt to apply claim preclusion based on this oblique and general language cannot withstand scrutiny.
The traditional view of res judicata held that "a 'right, question or fact distinctly put in issue and directly determined by a court of competent jurisdiction . . . cannot be disputed in a subsequent suit between the same parties or their privies.'" Montana, et al., 440 U.S. at 152 (1979) (quoting Southern Pacific R. Co. v. United States, 168 U.S. 1, 48-49, 42 L. Ed. 355, 18 S. Ct. 18 (1897)) (emphasis added). Although this concept has been expanded by courts over the years to include issues which could have been, but were not raised, clarity and specificity must still concern this Court in the application of claim preclusion to the parties in this proceeding. That the recitals in the Consent Decree were "agreed to" could merely constitute an agreement that the events recited actually happened.
According to LIUNA plaintiffs could have raised the invalidity of the trusteeship in opposition to the Consent Decree, even though that issue was not expressly and specifically resolved by the Decree. But this assertion is not directly supported by law. LIUNA cites cases which hold that res judicata applies to issues not litigated but which could have been litigated in a prior action; and cases which hold that res judicata applies to issues resolved by consent decrees. However, defendant offers no decisions that hold, or even permit the possibility that, res judicata applies to issues not litigated but which could have been litigated prior to resolution of a cause of action by consent decree. The policy of judicial economy well supports the idea that if a trial or dispositive motion practice took place in a prior action, a party may be held responsible, ex post, for those issues which it could have litigated but did not. In those cases, the judicial system has expended substantial time and resources, the parties have had their opportunity to raise all issues arising out of the underlying set of facts and circumstance, and to accord a second opportunity when the first would have and should have sufficed is wasteful. However, judicial economy does not support claim preclusion when the prior proceedings have gone no further than resolution of some issues by consent of some parties, and the system's expenditure of time and resources has been substantially less than in the case of trial or dispositive motion practice.
For all of these reasons, defendant's motion for judgment on the pleadings based on the principle of res judicata must be denied.
Upon the findings and conclusions stated above, plaintiffs' motion for a preliminary injunction is denied. Defendant's motion for judgment on the pleadings is denied, as is its motion for summary judgment.
It is so ordered.
New York, N.Y.
April 17, 1995
ROBERT W. SWEET