The opinion of the court was delivered by: Edward R. Korman United States District Judge
This action is one of a number of separate pending actions which arise from the alleged misconduct of former leaders of local road builders unions of the Laborer's International Union of North America ("LIUNA"). Plaintiffs here are the Rammers and Pavers Union, Local 1010 of LIUNA ("Local 1010"), the Asphalt Workers Union Local 1018 of LIUNA ("Local 1018"), the Pavers and Road Builders District Council ("District Council"), and Vincent R. Masino, Trustee of Locals 1010 and 1018 and the District Council ("Masino").
In their First Amended Complaint, plaintiffs allege twenty-three causes of action -- both federal and state -- against their former union leaders and two local unions not affiliated with LIUNA. Defendants, who are described below, have moved for summary judgment on all twenty-three causes of action. Plaintiffs have conceded that all but their first eleven claims (counts 1 through 11) are either moot (counts 12 through 17 and count 23), preempted by the National Labor Relations Act ("NLRB") (counts 18 through 21), or otherwise withdrawn (count 22). Pls.' Opp'n Mem. at 1 n.1.
Defendants argue that counts 9 through 11 are also moot. In those counts plaintiffs seek injunctive relief, or, in the alternative, declaratory relief directing defendants to recognize the validity of the trusteeships imposed by LIUNA over, respectively, Locals 1018 and 1010 and the District Council and to cooperate with the Trustee. Count 10 is moot because the trusteeship of Local 1010 ended in December 2008. See Santo v. LIUNA, Local 1018, No. 07-cv-4735, Rep. & Rec., at 6 (E.D.N.Y. March 27, 2009), adopted April 28, 2009. As to Counts 9 and 11, defendants concede the validity of the Local 1018 and District Council trusteeships for purposes of this motion, Def.'s Reply Mem. at 14 n.30, and the continued validity of those trusteeships is the subject of another matter pending in this District. See Santo v. LIUNA, Local 1018, supra (suit by individual members of Locals 1010 and 1018 against plaintiffs here, seeking to terminate those trusteeships).
In the remaining counts -- counts 1 through 8 -- plaintiffs allege that defendants breached their obligations under the LIUNA Constitutions in violation of section 301 of the Labor Management and Relations Act, 29 U.S.C. § 185 (counts 1 and 2), breached their fiduciary duties in violation of N.Y. Labor Law § 722 (counts 3 through 6), and breached their common law duty of loyalty (counts 7 and 8). Plaintiffs argue that these various breaches resulted from defendants' efforts to preserve their union leadership positions and their control over the union entities' funds by thwarting LIUNA's efforts to rid itself of the corrupting influence of organized crime. Briefly, when it became clear that LIUNA would place Locals 1010 and 1018 and the District Council under trusteeship, plaintiffs argue that defendants encouraged and made no effort to prevent their members from resigning from Locals 1010 and 1018 and joining unions not affiliated with LIUNA: defendants United Plant and Production Workers Local 175 ("Local 175") and Amalgamated Local Union 450A ("Local 450A"). Plaintiffs allege these breaches against two groups of defendants.
The first group of defendants held leadership positions within Local 1018. They include Luciano Falzone ("Falzone'), former Business Manager and Executive Board member of Local 1018, and President of the District Council; and other former members of the Executive Board of Local 1018 ("Local 1018 defendants"). The other group of defendants were leaders of Local 1010 and officers and Executive Board members of the District Council. They include David Montelle ("Montelle"), former Business Manager and Executive Board member of both Local 1010 and the District Council; and other former members of the Executive Boards of Local 1010 and the District Council ("Local 1010 defendants").
Beginning in the mid-1990s, the Department of Justice began investigating the corrupting influence organized crime had over LIUNA and its affiliates. Locals 1010 and 1018 are subordinate locals of LIUNA and represent workers who maintain the streets and highways of New York City. Pls.' R. 56.1 Counter Stmt. ¶¶ 1, 4. The Locals are constituent entities of the District Council, which is also a subordinate entity of LIUNA. Id. ¶ 2. In 1995, LIUNA and the United States entered an agreement under which the United States agreed to forbear filing any civil complaint while LIUNA implemented an internal reform program. It is not necessary to lay out in detail this reform program or the nature of the corrupt influences exerted by organized crime on LIUNA and its affiliate here. Nevertheless, LIUNA's ongoing efforts to investigate and rid itself of organize crime form the backdrop of this action, as well as a number of related actions.
In 2002, LIUNA determined that Anthony Franco, who then served as the President of the District Council, Secretary-Treasurer of Local 1018, and the Administrator of the District Council Benefit Fund, was a Gambino crime family associate and had, among other things, extorted $25,000 from a contractor. LIUNA ordered Franco expelled from all positions and membership in LIUNA or any affiliated entity and fund. See id. ¶¶ 47-50. Franco resigned his union positions but refused to resign as Administrator of the Benefit Fund. Id. ¶ 51. LIUNA sought the cooperation of Falzone, Montelle, and Rocco Ciancio, one of the Local 1010 defendants, to affect Franco's expulsion. See id. ¶ 53. Subsequently, in 2003, LIUNA informed Falzone and Montelle, who were trustees of the Benefit Fund administered by Franco, that if they did not cooperate to seek Franco's removal they were at risk of being relieved of their leadership positions at Locals 1018 and 1010 by trusteeship. Id. ¶ 57. "When . . . action is necessary for the purpose of correcting corruption," LIUNA may appoint a temporary trustee "to take charge and control of the affairs of . . . subordinate bod[ies]. . . . During the period of trusteeship all the officers and delegates of the subordinate body are relieved of their particular trust." International Union Constitution, Art. IX § 7 (attached as Ex. 16A to Dec. of Barbara S. Mehlsack ("Mehlsack Dec.")).
Rather than aid in removing Franco from his post as fund administrator, however, Falzone and Montelle, along with other Fund trustees, amended the agreements governing the Benefit Fund to prevent the LIUNA Trustee, Vincent Masino, from removing Franco and the Fund trustees. Pls.' R. 56.1 Counter Stmt. ¶ 60. In May 2004, Falzone, Montelle and the entire Executive Boards of Locals 1018 and 1010 were summoned by LIUNA officials to Washington, D.C., where it was made clear that the trustees had an obligation under the LIUNA Constitutions to seek Franco's removal and that their failure to do so would result in the imposition of a trusteeship. Id. ¶ 68. Instead of seeking Franco's removal, however, Falzone sought and obtained authorization from Local 1018's membership to spend $100,000 to defeat a possible trusteeship. Id. ¶ 69. When it became clear that he could not defeat a trusteeship, Falzone, along with others, established the Death Benefit Trust Fund, the purpose of which was "'to prevent the trustee from having access to the funds of the Local Union . . . ' in the event of a trusteeship." Id. ¶ 71.*fn1
In April 2005, in anticipation of the trusteeship, Falzone recommended to the Local 1018 Executive Board that Local 1018 secede from LIUNA and join with another union unaffiliated with LIUNA to avoid a trusteeship. Id. ¶ 74. In late April or early May 2005, Masino asked Falzone about rumours he had heard that Local 175, which was not affiliated with LIUNA, was attempting to raid Local 1018 membership. Id. ¶ 92. Masino asked Falzone to protect Local 1018's jurisdiction by soliciting Local 1018 members to sign cards authorizing Local 1018 to represent its members as a collective bargaining unit. Id. ¶ 92. Falzone refused because he was told that Local 1018 would be put under trusteeship, which would result in his being relieved from his position as Business Manager. Id. ¶ 96. Instead, on May 2, 2005, he wrote to the National Labor Relations Board ("NLRB") Regional Director, that, in light of "the fact that Local 175 has obtained representation authorization from a substantial majority of the persons our Local has represented in that unit," "Local 1018 hereby withdraws, and rescinds, its interest in representing the bargaining unit in question." Dec. of Eric B. Chaikin ("Chaikin Dec."), Ex. F.
On May 4, 2005, the New York Independent Contractors Alliance, Inc. ("NYICA"), an association of independent contractors specializing in, among other things, paving and road building work, which is the collective bargaining agent for it members, sent a letter to Local 175 (copying Falzone) formally recognizing "Local Union 175 as the exclusive bargaining representative of those unit members formally represented by Local Union 1018." Chaikin Dec., Ex. H. NYICA recognized Local 175 only after it had reviewed the authorization cards Falzone had brought it, which showed that a majority of Local 1018 members had authorized Local 175 to be their representative. Id.; Pls.' R. 56.1 Counter Stmt. ¶ 102. Local 1018 and the District Council sought to invalidate Local 175's status as the exclusive bargaining agent by filing unfair labor practice charges against Local 175. Mehlsack Dec., Exs. 29A, 29B; Chaikin Dec., Exs. L, M.
With the membership transferred from Local 1018 to Local 175 and the impending trusteeship, on May 6, 2005, Falzone and the entire Executive Board of Local 1018, including all of the Local 1018 defendants, resigned their respective positions within Local 1018 and the District Council. Dec. of Benjamin A. Karfunkel ("Karfunkel Dec."), Ex. B. Within three days of resigning from Local 1018, Falzone became Business Manager of Local 175. Pls.' R. 56.1 Counter Stmt. ¶ 107. Once he became Local 175's Business Manager, Falzone, using membership lists he had obtained while Business Manager of Local 1018, sent letters to former Local 1018 members advising them that Local 1018 had merged with Local 175. Id. ¶¶ 108-10; Karfunkel Dec., Exs. M & N.
On May 9, 2005, LIUNA appointed Masino Trustee of Local 1018. Id. ¶ 104. Around that time, Masino spoke with Montelle, and Montelle's son, Local 1010 defendant Joseph Montelle, about Falzone's involvement in the raiding of Local 1018. Deposition of Vincent R. Masino ("Masino Dep.") 115 (attached as Ex. 5 to Mehlsack Dec.) Montelle, as Business Manager of the District Council, was responsible for knowing what was happening with his affiliates, including Local 1018. Id. at 117; Mehlsack Dec., Ex. 16B, Art. VII § 4(b)(3). Masino also asked Montelle to obtain authorization cards from Local 1010 membership to protect the local from being raided. Masino Dep. 116. Montelle, however, "refused. He said . . . it would be an indication of weakness, or his membership would have a lack of confidence" because "lots of his members were Portuguese-speaking immigrants and they wouldn't understand why they were being asked to sign a card." Id.; Pls.' R. 56.1 Counter Stmt. ¶ 114.
Shortly thereafter, on May 11, 2005, Montelle surrendered the lease for Local 1010's headquarters, Pls.' R. 56.1 Stmt. ¶ 117, and, on that same day, Montelle, along with the entire Executive Board of Local 1010, resigned from their positions with Local 1010 and the District Council. Karfunkel Dec., Exs. D, E. Almost immediately upon resigning from Local 1010, Montelle started a new union unaffiliated with LIUNA, the construction Local 450A, and appointed himself Business Manager. See Deposition of David Montelle ("Montelle Dep.") 60-61 (attached as Ex. 10 to Mehlsack Dec.). He created the construction local within Local 450A because he wanted to ensure that his members' (former Local 1010 members) benefits would be protected and under the control of the District Council Benefit Fund, which was administered by Franco and of which Montelle was a trustee. Id. at 12. The Benefit Fund and Local 450A, which already represented the office staff of the Fund, had negotiated a participation agreement sometime in 2004. Montelle believed that because of the participant agreement, "[former Local 1010] members would still have their benefits if they went to 450A." Id.
On May 12, 2005, LIUNA appointed Masino Trustee of Local 1010 and the District Council, citing Montelle's failure to "take necessary and lawful steps to protect the Local Union's collective bargaining and representation rights" despite "repeated requests from representatives of [LIUNA] to do so." Karfunkel Dec., Ex. F; see also id. at Ex. G. When Masino, now Trustee of Locals 1018 and 1010 and the District Council, sought to gain access to the offices of those entities to take possession of their books and records, Franco, who administered the holding company that owned the building, barred Masino's entry and threatened to call the police. Pls.' R. 56.1 Counter Stmt. ¶¶ 117-18, 124. Franco told Masino that the offices had been rented to Locals 175 and 450A. Masino Dep. 64; see also Deposition of John Peters ("Peters Dep.") 116 (attached as Ex. 6 to Mehlsack Dec.).
Without access to the offices, records, or computers of Locals 1010 and 1018 and the District Council, those entities, now under Masino's control, incurred costs paying for temporary office space, purchasing a new computer system, and ultimately, finding and fixing up a new office space. Peters Dep. 115-117. While Locals 1010 and 1018 and the District Council were struggling to recreate their infrastructure, it appears that Falzone and Montelle were actively soliciting members of Locals 1010 and 1018 to transfer their representation rights to Locals 450A and 175 respectively. Peters Dep. 117-18. To prevent Local 450A from obtaining representation rights within its jurisdiction, Local 1010 incurred costs organizing its members and petitioning for elections to retain its right to represent Local 1010 members in collective bargaining negotiations. Peters Dep. 118-19; Masino Dep. 66.
Plaintiffs filed their complaint on May 13, 2005 and amended it on June 12, 2006. Defendants now move for summary judgment.
As discussed above, plaintiffs' complaint alleges twenty-three causes of action against the various defendants. Of those twenty three, however, only the first eight counts remain in dispute. Counts 1 and 2 allege violations of federal law, while counts 3 through 8 are based on New York law. I address the federal claims first.
In counts 1 and 2, plaintiffs allege that defendants breached their obligations under various LIUNA Constitutions in violation of § 301 of the Labor Management Relations Act, 29 U.S.C. § 185. Defendants press two arguments in support of their motion for summary judgment. First, they argue that plaintiffs' federal claims must be dismissed because they seek monetary relief, which is not available against individual defendants under § 301(b). Second, defendants argue that plaintiffs have not produced sufficient evidence from ...