as the collective-bargaining representative for several groups of
Metro-North Commuter Railroad employees. The employees in these
groups were represented at the local level by two subsidiaries —
the General Committee of Adjustment GO-532 ("GO-532"), which was
responsible for "making and interpreting the
collective-bargaining agreement with Metro-North," and Local 77,
which was responsible for "handling claims and grievances at the
first level of the contractual grievance-handling process."
Defendant Anthony J. Bottalico is an officer of GO-532.
Defendants Bryan J. Marcella, Mark L. Amorello, and Paul B.
Holland are officers of Local 77. Plaintiff sues defendants for
breach of their fiduciary duty to Local 77 under 29 U.S.C. § 501
(a) (1994). Plaintiff also sues defendants Marcella, Amorello,
and Holland for breach of several duties under the UTU
constitution. Defendants move to dismiss pursuant to Fed. Rule
Civ. P. 12(b)(1) for lack of subject matter jurisdiction and, in
the alternative, pursuant to Fed. Rule Civ. P. 12(b)(6) for
failure to state a claim upon which relief may be granted. For
the reasons stated below, defendants' motion to dismiss
plaintiff's first claim under 19 U.S.C. § 501 for lack of subject
matter jurisdiction is granted. Defendants' motion to dismiss
plaintiff's second claim is denied.
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:
We affirm that the committee bill is broader and
stronger than the provisions of [the Senate bill]
which relate to fiduciary responsibilities. [The
bill] applied the fiduciary principle to union
officials only in their handling of `money or other
property,' apparently leaving other questions to the
common law of the several States. Although the common
law covers the matter, we considered it important to
write the fiduciary principle explicitly into Federal
labor legislation. Accordingly the committee bill
extends the fiduciary principle to all the activities
of union officials and other union agents or
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, in
addition to their members, to enforce that duty.
The remaining three Cort factors also do not overcome the
presumption that Congress did not intend to create a private
right for unions. The first factor requires a court to consider
whether the plaintiff is one of the class for whose "especial"
benefit the statute was enacted. Section 501 may benefit unions,
but this first factor requires that the party claiming a private
right must be more than a beneficiary; that party must be an
"intended beneficiary." Health Care Plan, Inc., 966 F.2d at
740-41. Here, the statute's "Congressional declaration of
findings, purposes, and policy" makes union members the intended
beneficiaries: "The Congress finds that . . . it continues to be
the responsibility of the Federal Government to protect
employees' rights to organize, choose their own representative,
bargain collectively, and otherwise engage in concerted
activities for their mutual aid or protection. . . ."
29 U.S.C. § 401. Similarly, "[t]he Congress further finds . . . that there
have been a number of instances of breach of trust, corruption,
disregard of the rights of individual employees . . . which
require further and supplementary legislation that will afford
necessary protection of the rights and interests of employees and
the public generally. . . ." Id. In both instances, it is the
individual employee, not the union, that is mentioned explicitly
as the focus of congressional solicitude. Because the first two
Cort factors fail to show that Congress intended to provide a
private right, it is unnecessary to consider the third and
fourth, because alone they would not constitute sufficient
evidence of Congressional intent. See Health Care Plan, Inc.,
966 F.2d at 742.
Congress's inclusion of a private action for union members but
not for unions is strong evidence that Congress did not intend to
create one for unions. Moreover, the Cort factors do not
provide any evidence that would overcome the presumption created
by Congress's inclusion of a private action only for union
I conclude, therefore, that Congress did not intend to create a
right of action for unions. Although the decisions of other
Courts of Appeals can be useful sources of persuasive reasoning,
I am not bound by the Eleventh Circuit's decision to the
contrary. See Volin v. Civil Court, 1992 WL 295968 (S.D.N Y
1992); see also Menowitz v. Brown, 991 F.2d 36 (2d Cir. 1993)
("If a federal court simply accepts the interpretation of another
circuit without [independently] addressing the merits, it is not
doing its job.") (quoting In re Korean Air Lines Disaster,
829 F.2d 1171 (D.C.Cir. 1987). For the reasons explained below, I
agree, instead, with the result reached by the Ninth Circuit in
Bldg. Material and Dump Truck Drivers, Local 420, 867 F.2d at
Plaintiff alleges that the court has subject matter
jurisdiction over this action pursuant to 29 U.S.C. § 501,
28 U.S.C. § 1331 and 1337, and 29 U.S.C. § 185(a). (Comp. at ¶ 1)
As to plaintiff's first claim, for which I have found no basis
under § 501, plaintiff obviously is incorrect. This court lacks
subject matter jurisdiction under § 501 because § 501(b), which
authorizes suits in federal courts for violations of § 501(a),
applies only to union
members. The court also lacks subject matter jurisdiction under
28 U.S.C. § 1331 and 1333 because both statutes require that
federal law create the claim, and for the reasons stated above, §
501 does not create a claim for unions. Finally, the court lacks
subject matter jurisdiction also under 29 U.S.C. § 185(a). That
statute authorizes suits in federal court for violation of
contracts between labor organizations. Plaintiff's first claim
alleges a violation of a statutorily created fiduciary duty. It
does not allege a violation of any contract. Accordingly,
plaintiff's first claim is dismissed for lack of subject matter
Plaintiff's second claim alleges that defendants violated the
UTU constitution as officers of Local 77 and the GO-532. The
court does have subject matter jurisdiction over this claim under
29 U.S.C. § 185(a). The UTU constitution is a contract between
two labor organizations, the UTU and both Local 77 and GO-532.
See Wooddell v. Int'l Brotherhood of Elec. Workers, Local 71,
502 U.S. 93, 99, 112 S.Ct. 494, 116 L.Ed.2d 419 (1991).
Accordingly, plaintiff's second claim should not be dismissed for
lack of subject matter jurisdiction. I do not reach the issue of
whether the second claim should be dismissed under Rule 12(b)(6)
for failure to state a claim because defendants have failed argue
that point in their papers.
For the reasons stated above, defendants' motion to dismiss
plaintiff's first claim under 29 U.S.C. § 501 is granted based on
lack of subject matter jurisdiction. Defendants' motion to
dismiss plaintiff's second claim is denied.
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