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U.S. v. DISTRICT COUNCIL OF NEW YORK CITY

January 8, 2004.

UNITED STATES OF AMERICA, Plaintiff, against DISTRICT COUNCIL OF NEW YORK CITY AND VICINITY OF THE UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA, et. al, Defendants


The opinion of the court was delivered by: CHARLES HAIGHT, District Judge

MEMORANDUM OPINION AND ORDER

Eugene Clarke is a rank-and-file member of Local Union No. 608, United Brotherhood of Carpenters and Joiners of America, AFL-CIO ("Local 608"), a constituent local union of the District Council of New York City and Vicinity of the United Brotherhood of Carpenters and Joiners of America (the "District Council"). Clarke moves, first, to enforce a consent decree (the "Consent Decree") this Court entered on March 4, 1994 in this civil RICO action commenced by the government against the District Council and certain of its former officers, and, second, to impose monetary sanctions upon Michael J. Forde, the Executive secretary-Treasurer ("EST") of the District Council, for violating the Consent Decree.

I. BACKGROUND

  Clarke's motion has been the subject of two prior opinions by this Court, reported at 2002 WL 3 1873460 (S.D.N.Y. Dec. 24, 2002) ("Clarke I") and 2003 WL 21035292 (S.D.N.Y. May 7, 2003) ("Clarke II"), familiarity with which is assumed. The gravamen of Clarke's motion is that Forde Page 2 "committed ten violations of the job referral rules relating to shop stewards in connection with the appointment of six individual carpenters" as shop stewards. Clarke I, 2002 WL 31873460, at *5. The shop steward rules in question are found in Decision No. 1, dated March 30, 1994, issued by Kenneth Conboy, at that time the Investigations and Review Officer ("IRQ") appointed under the Consent Decree, as further amplified by § 16 of the District Council By-Laws. The relevant language from those sources may be found in Clarke I, 2002 WL 31873460, at **2-3. The salient features of the shop steward rules are that "shop stewards must be selected from the individuals referred from the out-of-list work list to a given job," and that stewards will be appointed by the EST "in a fair and equitable manner consistent with the job referral rules and the Consent Decree, . . . according to their skills and position on the out-of-work list." Id.

  The main thrust of Clarke's complaint, first addressed to the District Council and then to this Court through the vehicle of the present motion, is that Forde, in violation of the job referral rules relating to shop stewards, improperly permitted certain individual carpenters "to add skills to their names as they appeared on the OWL,*fn1 thereby enhancing their eligibility for a steward's assignment." Clarke I, 2002 WL 31873460, at *3. The case for Clarke is that Forde engaged in or condoned these violations of the shop steward job referral rules because the individuals in question were his cronies and/or participated in efforts to raise funds for Forde to campaign for union office.

  The relief for which Clarke prays, asset forth in his Notice of Motion, is that this Court enter an Order

  pursuant to the Consent Decree in this action, imposing upon Michael Forde, the District Council's Executive Secretary-Treasurer, a sanction of $50,000 for violating the Consent Decree's referral rules, Page 3 and for such other relief as is just and proper, including but not limited to, reimbursing (1) the District Council for the cost of its investigation of Forde's violations and (2) Mr. Clarke for attorney's fees and costs incurred in bringing this motion.

  The District Council and Forde, represented by the same law firm, opposed Clarke's motion on three grounds: (1) Clarke lacked standing to seek this relief because he was not a party to the action resulting in the Consent Decree; (2) Clarke had failed to exhaust internal union remedies; and (3) his motion lacked merit. In Clarke I, I held that under the Second Circuit's ruling in Berger v. Heckler, 771 F.2d 1556 (2d Cir. 1985), the fact that Clarke was not a party to the action did not deprive him of standing to make the present motion, but raised sua sponte a question not addressed by the parties in their briefs, namely, "whether, in the absence of any claim that [Clarke] should be compensated for a personal loss (in contrast to the SSI benefit-deprived intervenor/plaintiffs in Berger) he has standing to ask this Court to impose monetary sanctions on Forde." 2002 WL 31873460, at *9. As directed, the parties submitted further briefs on that question. In Clarke II following a further analysis, I concluded that "[b]ecause petitioner Eugene Clarke has demonstrated an injury in fact, caused by Michael Forde's alleged misconduct, which can be redressed though the imposition of a monetary sanction, Clarke has standing to bring this motion." 2003 WL 21035292, at *7. Oral argument was scheduled on the remaining issues of exhausting internal remedies and the merits of Clarke's motion. That argument has been held, with counsel for Clarke, the District Council and Forde (the same firm), and the government participating. This Opinion addresses those issues.

  II. DISCUSSION

 A. Exhaustion of Internal Union Remedies Page 4

  The District Council and Forde contend that Clarke's motion should be denied "because he has failed to exhaust the union's internal remedies available to him under the District Council By-Laws and the UBC Constitution." Main Brief at 10.*fn2 Specifically, they say that if Clarke was not satisfied with the District Council's response to his complaints about Forde (and he most certainly was not), Clarke should have invoked § 53(G) of the UBC Constitution, which provides in pertinent part:
Any member . . . having any grievance may appeal to the General President within thirty (30) days from the date the grievance occurred. . . . All grievances . . . shall be in writing and shall contain a brief statement of the grounds relied upon.
§ 53(J) of the UBC Constitution provides that "all members . . . are required to exhaust the administrative remedies provided in this Section before commencing any proceedings in court . . ." § 28 of the District Council By-Laws provides that "[t]he charges and trial procedures shall be as set forth in the Constitution of the United Brotherhood." Clarke responds that in the circumstances of this case, such exhaustion should not be required of him.

  When a union member sues as plaintiff in a federal district court on a union-related claim, "the requirement that a plaintiff exhaust internal union remedies lies within the court's discretion" Maddalone v. Local 17, United Brotherhood of Carpenters and Joiners of America, 152 F.3d 178, 186 (2d Cir. 1998). The Second Circuit made that ruling in the context of a union member's claims under § 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, and §§ 2 et seq. of the Labor-Management Reporting and Disclosure Act ("LMRDA"), 29 U.S.C. § 401 et seq., but no principled basis exists for treating Clarke's claim under Consent Decree any differently, and the Page 5 briefs and arguments of all counsel acknowledge that this Court has discretion to decide whether or not Clarke should be required to exhaust internal union remedies before pressing his present motion.

  Maddalone is the leading case in this circuit on a union member's need to exhaust internal union remedies. With respect to the contentions of the present parties, Maddalone is very much a mixed bag; and the briefs of counsel cite the case for the rulings favorable to them, while disregarding those that are not. It is useful and instructive to examine the case in detail.

  Plaintiff Peter Maddalone, a member of Local 17, United Brotherhood of Carpenters, sued the local and the District Council in this Court, alleging that he had been dismissed as a shop steward and fired from a job in violation of (1) the union's duty of fair representation under § 301 of the LMRA, 29 U.S.C. § 185, and (2) his free speech and due process rights protected by §§ 101 and 609 of the LMRDA, 29 U.S.C. § 411 and 529. Maddalone sought injunctive relief, including reinstatement, damages, and attorney's fees. Among other contentions, the District Council and Local 1 7 argued, as do the District Council and Forde in the case at bar, that ...


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