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United States District Court, S.D. New York

January 8, 2004.


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


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.


  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.


 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 Maddalone should first have exhausted his internal union remedies by lodging a grievance with the General President of the UBC under § 53(G) of the UBC Constitution.

  District Judge Martin dismissed Maddalone's complaint with prejudice. He held, inter alia. that Maddalone should have exhausted his internal union remedies with respect to his fair representation claims under the LMRA. He also held that Maddalone had no viable claims under the LMRDA, and consequently did not address whether the exhaustion requirement should apply to those claims as well.

  On Maddalone's appeal, the Second Circuit held, as noted supra, that the district court had discretion under both statutes to decide whether Maddalone was required to exhaust internal union Page 6 remedies before filing his action in the district court. "In deciding whether to apply the exhaustion doctrine, a court must balance the right of union members to institute suit against the policy of judicial noninterference in union affairs." 152 F.3d at 186 (citation and internal quotation marks omitted). Three factors are relevant to the inquiry:

First, whether union officials are so hostile to the employee that he could not hope to obtain a fair hearing on his claim; second, whether the internal union appeals procedures would be inadequate either to reactivate the employee's grievance or to award him the full relief he seeks; and third, whether exhaustion of internal procedures would unreasonably delay the employee's opportunity to obtain a judicial hearing on the merits of his claims.
Id. (citing and quoting Clayton v. International Union, UAW, 451 U.S. 679, 689 (1981) (brackets and ellipses omitted). "The union bears the burden of establishing that its procedures meet these requirements." Maddalone, 152 F.3d at 186.

  In Maddalone, the Second Circuit affirmed the district court's determination that the exhaustion requirement applied to Maddalone's fair representation claim under the LMRA. The court of appeals rejected as speculative Maddalone's assertion that the LJBC Constitution § 53(G) procedures were futile "because the General President [of the LJBC] would have been reluctant to expose the wrongdoings of Local 17 and the District Council through arbitration with the employer," reasoning that "[h]ad Maddalone used section 53(G) and found the General President unwilling to pursue or investigate this claim, he would certainly have valid access to the courts," and concluding on this point:

  Since he never gave the International this chance to remedy the alleged misconduct internally, we cannot know that the International would have ignored Maddalone's claim, and therefore find no basis to overrule the district court's determination on this ground. Page 7

 152 F.3d at 187. The Second Circuit made even shorter shrift of Maddalone's arguments that neither the Local nor the District Council informed him of the § 53(G) grievance procedures ("We do not find that the district court abused its discretion in determining that as vice president of Local 17 and a former shop steward, Maddalone reasonably should have been aware of the relatively simple procedures."), and that the General President could not have provided Maddalone with the relief he sought ("As the General President could have reinstated Maddalone's grievance and appointed an independent representative to pursue arbitration [with the employer], the district court correctly found section 53(G) to afford adequate relief for Maddalone's LMRA claims."). Id.

  However, the Second Circuit reached a diametrically opposite conclusion with respect to Maddalone's LMRDA claims. First, the court of appeals reversed the district court's holding that Maddalone had no viable LMRDA claims arising out of his assertions that he was fired and removed from his shop steward position because of his dissident activities. See 152 F.3d at 182-185. Second, and more to the point in the case at bar, the Second Circuit held that Maddalone need not exhaust the § 53(G) procedures before pressing his LMRDA claims in court, reasoning on that point:

  We are not convinced, however, that Maddalone could have received adequate relief on his LMRDA claims through resort to section 53(G). Under the LMRDA, Maddalone may seek both compensatory and punitive damages. Local 17 and the District Council produced no evidence as to what remedies the General President has at his disposal. Accordingly, the union has failed to establish that its procedures could have "fully redressed" Maddalone for his alleged injuries under Title I of the LMRDA. See Barbara v. New York Stock Exchange, Inc., 99 F.3d 49, 57 (2d Cir. 1996) (refusing to require exhaustion where the plaintiff sought primarily monetary damages and administrative remedies could not provide such relief); Achilli v. John J. Nelson Baking Co., 989 F.2d 561, 564 (1st Cir. 1993) (finding exhaustion not required where "the Local failed to prove the existence of an internal damage remedy."). Maddalone is therefore entitled to proceed with his LMRDA claims despite his failure to invoke the Page 8 procedures set out in section 53(G).

 Id. at 187.

  In the case at bar, and in the exercise of my discretion, I will not require Clarke to pursue a UBC Constitution § 53(G) remedy before pressing his motion in this Court.

  Quite clearly, requiring Clarke to pursue a § 53(G) internal union remedy would delay a judicial determination of the merits of his claim that Forde violated the job referral rules with respect to the assignment of shop stewards. Delay of a judicial hearing is a factor which informs a district court's discretion in requiring or excusing exhaustion of internal remedies; and, while its inevitability prevents delay from constituting a per se excuse from exhaustion, in the circumstances of this case delaying a judicial resolution of Clarke's motion would be particularly inappropriate, given the nature and provenance of the charges Clarke makes against Forde.

  Clarke asks this Court to sanction Forde for violation of shop steward job referral rules whose genesis is found in the Consent Decree, a creation of this Court, and whose principal author was IRO Conboy, a creature*fn3 of this Court. It is therefore institutionally appropriate that Clarke seek a remedy in this Court directly, rather than being required first to file a grievance with the General President of the UBC under § 53(G). There is a conceptual difference between the particular sanctions Clarke seeks to obtain against Forde for violating particular job referral rules born of the Consent Decree for the benefit of District Council carpenters, and the generalized rights and remedies conferred upon all the nation's union members by a statute such as the LMRA which, as the Second Circuit held in Maddalone, the General President of the UBC" is competent to enforce. Page 9

  Moreover, a direct appeal by Clarke to this Court is in keeping with the procedural history of this important litigation. First, while IRO Conboy was still in office he brought charges against Forde for violating the Consent Decree's job referral rules. Forde settled those charges in 1998 by agreeing in writing, inter alia, to pay the union a monetary sanction for any future violations of the job referral rules. Those earlier events prompted me to observe in Clarke II, 2003 WL 21035292, at *6 that "the monetary sanction was agreed to by Forde specifically to avoid punishment for violating the Consent Decree, and therefore became a means of enforcing the Decree." The same may be said of Clarke's present motion. Second, Clarke forwarded his present complaints against Forde to the District Council, whose Investigation Committee found them to be without merit, see Clarke I, 2002 WL 31873460, at *3-4. Notwithstanding that conclusion, the District Council and the office of the United States Attorney negotiated a stipulation and order this Court endorsed in December 2002, which amplified and tightened up the job referral rules, and caused the District Council to appoint Walter Mack, a former federal prosecutor, to serve as "Independent Investigator" charged with "investigating allegations of corruption or wrongdoing involving the operation of the job referral system." Id., at *5. The role the government played in negotiating this stipulation and the appointment of Mack is entirely appropriate, since the government commenced the action culminating in the Consent Decree and has held a watching (and sometimes acting) brief in the case ever since. The present significance of this procedural history is that job referral rules and alleged violations of those rules have since the inception of this litigation been treated as a part of the litigation as it evolved. Having Clarke proceed directly to this Court, without first exhausting such Page 10 remedies as UBC Constitution § 53(G) may provide, is consistent with that history.*fn4

  I used the phrase "may provide" in the preceding sentence deliberately because, quite apart from the procedural history just recounted, exhaustion of internal union remedies should be excused in this case for the same reason that in Maddalone the Second Circuit excused exhaustion of the plaintiff union member's LMRDA claims, namely, the failure of the District Council and Forde to bear their burden of showing that the remedies at the disposal of the General President under § 53(G) are sufficient to satisfy all of Clarke's present claims. Clarke asks this court to sanction Forde for his violations of the job referral rules, and also to direct that the District Council be reimbursed (presumably by Forde) for its expenses in investigating Forde's violations, and that Clarke be reimbursed for his attorney's fees and costs in bringing this motion.*fn5 The District Council and Forde Page 11 do not demonstrate that § 53(G) gives the General President the authority to direct those remedies. Exhaustion will be excused for this alternative reason as well.

 B. The Merits

  It remains to consider how this Court will adjudicate the merits of Clarke's charges against Forde. As noted supra, particularly in fn. 5, Clarke accurately regards his motion to "enforce the Consent Decree" as the functional equivalent of a motion to hold Forde in contempt for violating its provisions and the job referral rules promulgated thereunder. In this circuit, a district court may hold a party in contempt of its order only if "the order is clear and ambiguous, the proof of noncompliance is clear and convincing, and the defendant has not been reasonably diligent and energetic in attempting to accomplish what was ordered." Powell v. Ward, 643 F.2d 924, 931 (2d Cir. 1981) (citations and internal quotation marks omitted). Clarke bears the burden of demonstrating each element.

  Although at the hearing counsel for all parties offered the suggestion, perhaps more accurately characterized as a preference, that the Court decide the merits of Clarke's motion on the present record, I adhere to the view I expressed in Clarke I, 2002 WL 31873460, at *9: "If the motion goes forward in this Court, there must be an evidentiary hearing, presumably preceded by discovery."

  What emerges most clearly from the present record is that the propriety of Forde's conduct with respect to shop steward job referrals is hotly contested by the parties. Counsel for the District Council and Forde point with the pride of advocacy to "the breadth and magnitude of the operations of the OWL and the efforts developed by the District Council to police the fair and equitable operation of the job referral system." Main Brief at 12. These efforts are described in the sworn Page 12 declaration of Scott Danielson, the OWL supervisor, which also states that Forde, as EST, "does not have daily interaction with the OWL activity and has never influenced, or attempted to influence, Danielson or his staff in the performance of their duties." Id. (citing to Danielson Declaration at ¶ 5). Forde has not submitted an affidavit or declaration. Counsel for Clarke, arguing principally from documents made available to him, respond that "Forde was directly responsible for at least three improper shop steward referrals" and, "[w]hen confronted with evidence of at least four other improper referrals involving his cronies, Forde, through inaction, chose to ratify and condone the wrongdoing rather than take corrective measures." Reply Brief at 4, 9.

  One cannot cross-examine affidavits or briefs of counsel. It would not be appropriate for the Court to rule for or against Clarke or Forde on the present evidentiary record. The facts must be further developed.

  Counsel are directed to attend a conference on Thursday, January 22, 2004, at 2:00 PM at Room 17C, 500 Pearl Street, in order to consider the next steps to be taken.


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