The opinion of the court was delivered by: SWEET
Mason Tenders Local Union 59 ("Local 59") has filed an action ("the Local 59 Action") and moved by order to show cause for a preliminary injunction pursuant to Rule 65, Fed. R. Civ. P., preventing Laborers' International Union of North America, AFL-CIO ("LIUNA") and Steven Hammond, as Trustee of the Mason Tenders District Council from revoking the charters and seizing the assets of Local 59 pursuant to a Reorganization Plan (the ("Reorganization Plan" or "the Plan") approved by LIUNA's General Executive Board ("GEB"). Mason Tenders Local Union 23 ("Local 23") has filed an action ("the Local 23 Action") and a motion seeking the same relief with respect to Local 23.
In a separate action ("the LIUNA action") seeking to implement the Reorganization Plan, LIUNA has moved by order to show cause for a preliminary injunction under Rule 65, Fed. R. Civ. P., pursuant to which the charters of ten local unions, including Local 59 and Local 23, are to be revoked.
Upon the findings and conclusions set forth below, Local 59 and Local 23 are denied injunctive relief, and LIUNA's motion to enforce the Plan is granted.
LIUNA is a national labor organization headquartered in Washington, D.C. that oversees the operations of various local unions and district councils. LIUNA is a Plaintiff in the LIUNA action, and a Defendant in the Local 59 Action and the Local 23 Action. The General Executive Board ("GEB") of LIUNA is the governing body of the international union and a Defendant in the Local 23 Action.
Mason Tenders' District Council of Greater New York (the "District Council") is chartered by LIUNA to oversee the operations of its twelve constituent local unions in the New York City Metropolitan Area. The District Council is a Plaintiff in the LIUNA action, and a Defendant in the Local 23 Action.
Steven Hammond ("Hammond" or "the Trustee") is the Trustee of the District Council. Hammond is a Plaintiff in the LIUNA Action, and a Defendant in the Local 59 Action and the Local 23 Action. Hammond was appointed on November 3, 1995 to succeed David Elbaor as Trustee by Arthur A. Coia ("Coia"), the General President of LIUNA and a Defendant in the Local 23 Action.
Local 23, Local 59, Local 46 and Local 48 (collectively, "the Locals" or "the affected Locals") are unincorporated associations and Mason Tenders Local Unions chartered by LIUNA. All are defendants in the LIUNA Action; Local 23 is a Plaintiff in the Local 23 Action; and Local 59 is a Plaintiff in the Local 59 Action.
Also Defendants in the LIUNA Action are Joseph Giardina, Business Manager of Local 23; Joseph Luciano, Business Manager of Local 46; Anthony Zambordi, Business Manager of Local 48; and Michael Perrone, Business Manager of Local 59. Joseph Giardina is also a Plaintiff in the Local 23 Action.
Richard Ello, Office Manager and Comptroller of the District Council, and Rollin P. Vinall, General Secretary-Treasurer of LIUNA, are Defendants in the Local 23 Action.
The three instant actions were filed on April 4, 1996 and April 10, 1996, and assigned to this Court based on their relation to United States v. Mason Tenders District Council, 94 Civ. 6487 (the "Civil RICO Action"), a civil RICO action filed on September 8, 1994.
On November 9, 1994, Coia proposed and the GEB approved the imposition of a temporary trusteeship on the District Council, the appointment of David Elbaor ("Elbaor") as temporary Trustee, and the appointment of Hammond as Deputy Trustee. On behalf of the District Council, Elbaor entered a consent decree on December 27, 1994 (the "Consent Decree") regarding the Civil RICO Action.
On November 3, 1995, Hammond was appointed to succeed Elbaor as Trustee. On January 9, 1996, Hammond submitted a proposal to reorganize the District Council's constituent Locals ("the Reorganization Proposal") to Coia and Consent Decree Monitor Lawrence Pedowitz. Hammond proposed the consolidation of District Council Local Unions 13, 23, 33, 37, 46, 47, 48, 51, 59 and 104 into two newly-chartered local unions with exclusive craft jurisdictions.
Hammond presented the Reorganization Proposal to the GEB on January 29, 1996. The GEB appointed the Hearings Panel to conduct a hearing to consider the merits of the Proposal. At the Hearing, conducted on February 14-16, 1996, the affected Locals, as well as Hammond, made statements and submitted evidence in favor of and opposed to the Reorganization Proposal.
On April 1, 1996, the Hearings Panel issued its recommendation that Hammond's Reorganization Proposal be adopted in its entirety by the GEB, and the GEB voted to adopt the Hearing Panel's recommendation and implement the Reorganization Proposal immediately. On April 4, 1996, LIUNA officials advised the affected Locals that the GEB had adopted the Reorganization Plan and that it was effective immediately. The same day, Hammond attempted to implement the GEB's order to revoke the charters of the Locals and transfer their assets and property to LIUNA.
Six of the ten Locals complied. The remaining four affected Locals (Locals 23, 46, 48, and 59) refused to turn over their premises to the LIUNA deputies. Local 59 filed an action in this Court on April 4, 1996, alleging that the Reorganization Plan was approved in violation of LIUNA's Constitution and the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185(a), and seeking to enjoin LIUNA and the GEB from implementing the consolidation. LIUNA also filed an action on April 4, 1996, seeking to enforce the implementation of the Reorganization Plan. On April 10, 1996, Local 23 filed an action seeking to enjoin implementation of the Plan. Although no formal order of consolidation has been entered, the hearing on injunctive relief in all three cases was consolidated.
On April 4, 1996, this Court issued a temporary restraining order enjoining the immediate implementation of the Reorganization Plan with respect to the Locals which had not yet complied, but allowing LIUNA representatives access to those Locals' premises, books and records pending this Court's resolution of the parties' motions for injunctive relief.
On April 15 and 16, 1996, this Court held an evidentiary hearing on the parties' pending applications for preliminary relief. At that hearing, counsel for Local 59 represented to the Court that Local 46 and Local 48 sought to be included as parties in the instant proceedings. The Court granted that informal request, but no formal application has been made regarding the inclusion of Locals 46 and 48 as parties. On April 16, 1996, at the close of the hearing, this Court extended the previously issued temporary restraining order until April 26, 1996. The parties presented final arguments and post-hearing memoranda to the Court on April 25, 1996, at which time the motions were considered finally submitted, and the temporary restraint was extended until May 3, 1996.
Union Structure and Governance
LIUNA is an international labor organization representing laborers in the United States and Canada. Pursuant to LIUNA's Constitution, the International Union Constitution ("IUC"), LIUNA has authority over all aspects of the operation and control of the activities of LIUNA's subordinate bodies. IUC Art. II, § 2. LIUNA's supreme authority resides in the Convention, an assembly of delegates from each local union chosen by its members. IUC Art. I, § 2. The convention this year will take place in September. Subject to review by the Convention, the GEB of LIUNA exercises the executive and judicial powers of LIUNA during the interim periods between Conventions. IUC Art. I, § 2. Individual members, locals and district councils have the right to appeal the acts of the GEB to the Convention. It is anticipated that Coia, LIUNA's General President, will appoint a committee to hear appeals and recommend action to the Convention with respect to those appeals.
District councils, such as the Mason Tenders District Council, are the intermediate organizations between LIUNA and the local unions affiliated with LIUNA, and operate under the Uniform District Council Constitution ("UDCC"), as amended by the LIUNA Convention in 1991. The district councils are chartered by LIUNA to maintain uniformity, establish coordination, and avoid competition among local unions in metropolitan areas. Uniform District Council Constitution ("UDCC") Art. II, §§ 1(e)-(h). Under the UDCC, all local unions within the territorial jurisdiction of a district council must affiliate and remain affiliated with that district council. UDCC Art. I, § 2.
Prior to imposition of the trusteeship on the District Council of Greater New York by LIUNA, discussed below, the District Council was a body composed of thirty-nine delegates elected by and representing the twelve affiliated Locals in the New York metropolitan area. The District Council engaged in collective bargaining with employers on behalf of the members of all but two of the Locals. The District Council also managed pension and health insurance funds for its members.
The relationship between LIUNA and its local unions is governed by the IUC and the Uniform Local Union Constitution (herein "ULUC"), as amended by the LIUNA Convention in 1991. Both of these governing documents provide that the local unions are subordinate bodies to LIUNA and that LIUNA retains, at all times, full authority over the structure of the local unions and sole discretion to charter new local unions and revoke, suspend or amalgamate the charters of existing local unions. See IUC Art. II, § 2(b), Art. VII, §§ 2(f), 2(g); ULUC Art. II, § 3(d). The IUC specifically grants LIUNA broad authority to "issue charters to Local Unions, District Councils and other subordinate bodies; and to define their powers and crafts or territorial jurisdiction; to revise, amalgamate or revoke existing charters; and to govern, discipline, regulate or supervise these subordinate bodies. . ." IUC Art. II, § 2(b).
Article VIII, Section 2 of the IUC likewise provides that the GEB has broad power to charter new local unions and to revoke, consolidate or amalgamate the charters of existing local unions. Specifically, IUC Article VIII, Sections 2(f) and 2(g) provide:
(f) [The GEB] shall have the authority to order the issuance of charters to Local Unions, District Councils or other subordinate bodies, specifying the territorial and craft jurisdiction to be allotted, when and where, in its opinion, the issuance of such charter would tend to accomplish, promote, enhance and conserve the welfare and interest of the International Union, its affiliates and members.
(g) Upon notice and after hearing, [the GEB] shall have the authority to revoke, consolidate or amalgamate the charters of the Local Unions, District Councils, or other subordinate bodies and to define or revise their craft or territorial jurisdiction.
IUC Article XVIII sets out the obligations of affiliates, such as the Locals, to LIUNA and further establishes the subordinate nature of the Locals to the international. Section 1 provides that:
Each affiliated Local Union and each affiliated District Council and the officers thereof, shall conform to and comply with all obligations as provided for in the Uniform Local Union Constitution and Uniform District Council Constitution.
IUC Art. XVIII, § 1. See also Art. XVIII, § 6 ("If a Local Union is suspended, dissolved or ceases to exist, all of its property, funds, books, papers and paraphernalia shall immediately revert to and become the property of the International Union and the General President may forthwith, either personally or by deputy, take possession thereof for the International Union. Alternatively, the General President may, in his sole discretion, refrain from taking any or all of the form Local Union's property, funds, books, papers, or paraphernalia."). The ULUC mandates that all local unions "shall recognize and be subject to all of the provisions of the International Union Constitution," and "shall comply with all such rules, regulations, policies, practices and lawful orders and decisions of the International Union, its officers and General Executive Board. . ." ULUC Art. II, § 3(b). The ULUC specifically grants LIUNA the authority to revoke or suspend a local union's charter:
The General Executive Board of the International Union may, upon notice and after hearing, suspend or revoke charters or consolidate or amalgamate subordinate bodies and may define or revise their craft or territorial jurisdiction.
ULUC Art. II, § 3(d). See also ULUC Art. II, § 3(k) (upon dissolution, the property of the former local union becomes the property of the International).
Under the IUC, actions of the GEB must be complied with immediately by local unions. IUC Art. VIII, Section 2(a)(viii) provides that a "decision, direction, ruling, or order by the [GEB] on any matter, is final and binding until and unless it is reversed or modified by the following regular Convention." IUC Art. VIII, § 2(a)(viii).
Prior to the adoption of the Reorganization Plan by the GEB, the LIUNA members in the New York metropolitan area and Long Island, were organized in twelve Locals. The twelve Locals, Locals 13, 23, 30, 33, 37, 46, 47, 48, 51, 59, 66 and 104, exercised jurisdiction over asbestos abatement, demolition, total demolition, interior demolition, mason tenders, plasterer tenders and general building laborers in the New York City Metropolitan area and Long Island. In May of each year, each Local nominated candidates for its President, Secretary-Treasurer, Business Manager and Executive Committee and elected those officers each June. The twelve Locals' combined membership included approximately 6000 individuals, 1400 of whom were affiliated with Local 59 and 1300 of whom were affiliated with Local 23.
The Trusteeship Imposed on the District Council
The facts relating to the imposition of the Trusteeship are set forth in the prior opinion of this Court, Mason Tenders, 884 F. Supp. at 827-29, familiarity with which is assumed. Only the facts necessary to the instant proceedings are set forth herein.
On September 8, 1994, the U.S. Government filed a complaint against the District Council (herein the "Civil RICO Complaint") alleging that the affairs of the District Council had been conducted through a pattern of racketeering with organized crime, in violation of 18 U.S.C. § 1962. See Mason Tenders, 884 F. Supp. at 827-29. The civil RICO suit sought the removal of the elected leaders of the District Council; control by the Government over the election of new officers; appointment of a special investigations officer with power to charge and prosecute union members suspected of wrongdoing; and appointment of a monitor to oversee the administration of the District Council and the management of the trust funds. Id.
On November 7, 1994, Coia received a copy of a second draft civil RICO complaint, this one prepared by the United States Attorney for the Northern District of Illinois, which sought to remove Coia from the presidency and take over LIUNA at the national level. On November 9, 1994, Coia proposed and the GEB approved, pursuant to the IUC, the imposition of a temporary trusteeship over the District Council and the appointment of David Elbaor as temporary Trustee. Although there is no direct evidence linking the two looming government actions to Coia's decision to impose the Trusteeship, "the record compels the inference that avoidance of his own prosecution was at least one motive for Coia's decision. . . ." Mason Tenders, 884 F. Supp. at 828.
On November 15, 1994, Elbaor appeared at the office of the District Council and relieved the District Council's elected delegates and Executive Board of all duties and responsibilities. Shortly thereafter, on December 27, 1994, Elbaor executed a Consent Decree (the "Consent Decree") regarding the Civil RICO Complaint on behalf of the District Council. One of the purposes of the Consent Decree, which binds both the District Council and its constituent Locals, "is to end the [organized crime] involvement, directly or indirectly, in the District Council and its constituent Locals, and that all officers, members and employees of the District Council and its constituent local unions are to assist the officers appointed by the Court pursuant to the Consent Decree to achieve this purpose." Consent Decree, p. 4. In addition, under the Consent Decree, inter alia: (1) a monitor was appointed with autonomous supervisory powers over the District Council; and (2) an investigations officer was appointed with authority to (i) investigate and prosecute misconduct in the District Council in conjunction with the monitor; (ii) to discipline, impose fines upon, and suspend or expel union members, officers, agents, representatives and employees under the procedures set forth in the Consent Decree; and (iii) to bring civil actions on behalf of the District Council to recover for damages. The Consent Decree also provides that the District Council has an obligation to keep the District Council and its constituent Locals free from the influence of organized crime and that the District Council must act in the best interests of its members. Id.
On January 17, 1995, the GEB ratified the imposition of the trusteeship over the District Council. On February 13, 1995, Coia and the GEB entered into an agreement with the government, as a result of which the government agreed, on at least a temporary basis, not to pursue the RICO charges against Coia and other defendants (the "February 1995 Agreement"). On April 17, 1995, this Court, while finding that the GEB did not meet certain procedural requirements for the imposition of the emergency trusteeship, held that the trusteeship was ultimately imposed legally and affirmed its validity. See Mason Tenders, 884 F. Supp. at 835-36. In the course of the injunction hearing before this Court, it was announced that the trusteeship had been extended for an additional 18 months.
The Government/LIUNA Agreement
The government announced on February 1, 1996 that the International had agreed, pursuant to that February 1995 Agreement, to institute significant electoral reforms designed to provide the free, fair, and democratic election of its General Officers for the first time since 1926. Specifically, LIUNA agreed to hold secret ballot elections by the rank-and-file members for the offices of General President and General Secretary-Treasurer later this year. Further, LIUNA agreed to expand the GEB to include the General President, the General Secretary-Treasurer, nine Vice Presidents to be elected by delegates from newly designated election districts, and four Vice Presidents-at-large to be elected by all Convention Delegates. In addition, the International agreed to the appointment of an independent elections officer to oversee the selection of delegates and the election of officers to the GEB.
The Reorganization Plan and Its Adoption
During the summer of 1995, Elbaor's conduct as Trustee had been the subject of criticism. Hammond, as Deputy Trustee, prepared a memorandum to Elbaor dated September 7, 1995 ("the September 7 Memo," also referred to as the "smoking gun memo" in the patois of the hearing) describing the action that had been taken under the Consent Decree but stating: "In our attempt to rid the Locals of corruption, we find the following problems exist." Hammond then detailed various difficulties in the attempt, and cited the particular example of the removal of Joe Giardina as business manager of Local 23, and the lengthy procedures to be followed with respect to his replacement. Hammond noted: "With the amount of time it takes under the Consent Decree to investigate and charge an individual (at the extreme it will be 4-6 months, which can be appealed to the courts, which have no time restraints) it will be a very long time to charge and remove the business managers of the twelve Local Unions." The memorandum stated Hammond's belief that criminal elements controlled not only some union appointments, but contractors as well, and set forth the "need to consider radical changes." Hammond then proposed a restructuring which in large measure became the Reorganization Plan which is the subject of this ...