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UNITED TRANSP. UNION v. BOTTALICO

November 15, 2000

UNITED TRANSPORTATION UNION, PLAINTIFF,
V.
ANTHONY J. BOTTALICO, INDIVIDUALLY AND AS GENERAL CHAIRPERSON OF UTU GENERAL COMMITTEE OF ADJUSTMENT NUMBER GO-532, AND LOCAL 77 COMMITTEE OF ADJUSTMENT, BRYAN J. MARCELLA, INDIVIDUALLY AND AS PRESIDENT OF UTU LOCAL 77, MARK L. AMORELLO, INDIVIDUALLY AND AS TREASURER OF UTU LOCAL 77, AND, PAUL M. HOLLAND, INDIVIDUALLY AND AS SECRETARY OF UTU LOCAL 77, DEFENDANTS.



The opinion of the court was delivered by: Mukasey, District Judge.

OPINION and ORDER

I.

Defendants argue that unions may not sue under 29 U.S.C. § 501. (Def. Mem. at 2-3) Two United States Courts of Appeals have considered whether a union may sue under § 501, and have reached different conclusions. Compare Bldg. Material and Dump Truck Drivers, Local 420 v. Traweek, 867 F.2d 500 (9th Cir. 1989) (unions may not sue), with Int'l Union of Elec., Elec., Salaried, Mach. & Furniture Workers, AFL-CIO v. Statham, 97 F.3d 1416 (11th Cir. 1996) (unions may sue).

Interpretation of § 501 begins with its language. If the language of the statue is clear, the court's inquiry is complete. The language of § 501 creates a claim for union members, but not one for unions. Section 501(a) establishes union officers' fiduciary duty to their union and its members. See 29 U.S.C. § 501(a). Section 501(b) permits union members, but not unions, to sue an officer for breach of that fiduciary duty: "[w]hen any officer . . . is alleged to have violated the duties declared in subsection (a) . . . and [the union] . . . refuse[s] or fail[s] to sue . . . within a reasonable time after being requested to do so by any member of the labor organization, such member may sue . . . for the benefit of the labor organization." Id. at § 501(b). The plain language of § 501 cannot be read to create a claim for unions.

Even when a statute does not expressly provide a particular private right of action, the court may infer one if it determines that Congress intended to create one. See Health Care Plan, Inc. v. Aetna Life Ins. Co., 966 F.2d 738, 740 (2d Cir. 1992). In Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975) the Supreme Court prescribed four factors that a court should consider in determining whether Congress intended to create a private right: (1) whether the plaintiff is one of the class for whose "especial" benefit the statute was enacted; (2) whether there is "any indication of legislative intent, explicit or implicit, either to create such a remedy or to deny one;" (3) whether it is "consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff'; and (4) whether the cause of action is "one traditionally relegated to state law . . . so that it would be inappropriate to infer a cause of action based solely on federal law ." Chan v. City of New York, 1 F.3d 96, 102 (2d Cir. 1993). Since Cort, the Supreme Court has "refocused" its four-part inquiry to "emphasize the centrality of the second factor — congressional intent." McClellan v. Cablevision of Connecticut, Inc., 149 F.3d 161, 164 (2d Cir. 1998). The remaining factors have become merely "proxies" for legislative intent. See id.

It does not appear that Congress intended to create a private right of action for unions under § 501. "[W]here a statute expressly provides a remedy, courts must be especially reluctant to provide additional remedies. In such cases, `[i]n the absence of strong indicia of contrary congressional intent, we are compelled to conclude that Congress provided precisely the remedy it considered appropriate.'" Chan, 1 F.3d 96, 102 (2d Cir. 1993) (quoting Karahalios v. National Federation of Federal Employees, Local 1263, 489 U.S. 527, 533, 109 S.Ct. 1282, 103 L.Ed.2d 539 (1989). Put another way, it appears that the absence of one specific remedy in a statute, when others are provided, creates a presumption that Congress did not intend to provide that remedy. Here, Congress expressly created a right of action for union members, but did not do so for unions.

Plaintiff does not provide any evidence that would overcome the presumption. Plaintiff does cite cases that have found an implied right for unions. (Pl. Mem. at 5-6) The Eleventh Circuit is the only Court of Appeals to find an implied private right for unions under § 501. Int'l Union of Elec., Elec., Salaried, Mach. & Furniture Workers, AFL-CIO 97 F.3d at 1419. That Court found in § 501(b)'s requirement that a union member ask the union to sue on its own behalf before the members can sue an officer for breach of § 501(a) evidence that Congress preferred that unions rather than union members sue for breach of § 501(a). However, the Court continued, if unions could not sue in federal court for breach of § 501(a), § 501(b)'s so-called demand requirement would be futile. See id. However, the International Union Court overstates the consequence of denying unions a federal private right. The demand requirement would not be "futile." Rather, the union could sue the officer under state law in state court.

The Eleventh Circuit also concluded that "relegating" the union to suing under state law in state court would frustrate the purpose of § 501. See id. at 1420. The Court explained that Congress enacted § 501 because the state law remedies for union officials' misconduct were inadequate, and Congress wanted to supplement those remedies by creating new federal protections. See id. The Court supported this reading of the statute's legislative history by citing two statements from committee reports. Wholly apart from the well documented hazards of relying on legislative history, see e.g. Vermont Agency of Natural Resources v. United States, 529 U.S. 1858, 1868 n. 12, 120 S.Ct. 1858, 146 L.Ed.2d 836 (2000) (criticizing the dissent's reliance on a committee report as requiring "even a greater suspension of disbelief than legislative history normally requires."), the Eleventh Circuit's perceived authority is not persuasive for the reasons stated below.

First, the Court cited a minority statement from a Senate report complaining about the Senate bill's lack of a provision creating a fiduciary duty: "Only one state has enacted a statute imposing fiduciary obligations on union officials and giving union members a right to sue in the event of any breach thereof." Id. at 1420. The International Union Court then explained that the statute as passed contained broader fiduciary obligations than the Senate bill about which the minority complained. See id. The cited minority statement is simply not evidence of Congress's specific intent to create a private right for unions. It is the minority's statement about a bill which was not the one passed by both houses and signed into law. Moreover, the statement itself suggests that even the minority was more concerned with enabling suits by union members than by unions. It refers to the scarcity of laws "giving union members a right to sue. . . ."

The second statement the Eleventh Circuit cites is a statement of supplementary views from the House Report:

Id.

This statement shows Congress wanted to create a fiduciary duty under federal law. It does not provide any evidence, however, that Congress had the specific intent to authorize unions, ...


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