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William Duffy, Gene Panessa and James Mascarella v. International Union of Operating Engineers Local 14-14b

June 29, 2011


The opinion of the court was delivered by: Johnson, Senior District Judge:


Presently before the Court are the following motions:

(1) Plaintiffs' William Duffy, Gene Panessa, and James Mascarella (collectively, "Plaintiffs") motion for a preliminary injunction staying Defendant International Union of Operating Engineers Local 14-14B ("the Union" or "Local 14"); Defendants Edwin L. Christian, Walter J. McKenna, Christopher T. Confrey, John R. Powers, and Daniel Noesges (collectively, with the Union, "Union Defendants"); any members or agents of the Union; and Defendant George Stamboulidis, Ethical Practices Attorney ("the EPA"), from suspending or revoking Plaintiffs' membership in the Union, commencing disciplinary proceedings against the Plaintiffs, or taking any other actions that could affect the Plaintiffs' membership in the Union (Docket No. 2);

(2) motions to dismiss the Complaint by the EPA (Docket No. 35); the Union Defendants (Docket No. 21); and Defendants the New York City Department of Buildings and Robert LiMandri (collectively, "the City Defendants") (Docket No. 28).

In March 2011, the Court issued an oral order denying Plaintiffs' motion for injunctive relief against the EPA and Union Defendants and granting the EPA and Union Defendants' motions to dismiss, but reserving decision on the City Defendants' motion to dismiss. The Court now reaffirms these rulings and further GRANTS the City Defendants' motion to dismiss.


I.Factual Background

Local 14, a labor organization, represents heavy construction equipment operators throughout the five boroughs of New York City. Plaintiffs are members of Local 14 who hold Hoisting Machine Operator licenses. Defendants Christian, McKenna, Confrey, Powers, and Noesges are elected officials of Local 14.

Between 2003 and 2005, Plaintiffs and several other members and officers of Local 14 were indicted on criminal charges pursuant to the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961, et seq. ("RICO") in the Eastern and Southern Districts of New York. In total, twenty-nine officers and members of Local 14 each pleaded guilty to various crimes including labor racketeering, extortion, mail fraud, embezzlement, and conspiracy. Following the indictments, Local 14 took steps internally to combat corruption, including the introduction of amendments to the Union's by-laws and a new Ethical Practices Code.

In July 2008, the Government commenced a civil RICO action, pursuant to 18 U.S.C. § 1964 to further combat corruption and organized crime influence in the Union's operations. United States v. Local 14-14B of the International Union of Operating Engineers, 08-CV-3046 (SJ) (JMA) (E.D.N.Y.) ("United States v. Local 14"). To settle the action, the Union and the Government entered into a Consent Decree, which was entered as Order and Judgment on August 11, 2008. (See Consent Decree and Judgment ("Consent Decree"), Compl. Ex. 1.)

The Consent Decree states that its purpose is to "eradicate corruption . . . and any organized crime influence within Local 14 while preserving the Local's strength and autonomy . . . ." (See Consent Decree at 2.) Accordingly, relevant to the pending motions, the Consent Decree enjoins Local 14 and all of its current and future officers, agents, representatives, employees, and members from engaging in acts of corruption. (See Consent Decree § III.) The Consent Decree ordered the appointment of an Ethical Practices Attorney (the "EPA") to, inter alia, investigate corruption concerning Local 14 and institute disciplinary proceedings against union leaders and/or members who engaged in corrupt practices. (See Consent Decree §§ II.D, IV.B.) The Consent Decree also authorized a Hearing Officer to preside over any disciplinary hearings and to suspend from Union membership any officer or member who the Hearing Officer has determined engaged in corruption concerning Local 14. (See Consent Decree § V.) The Decree further provides for notice and appeal procedures for any determinations made by the EPA or the Hearing Officer. (See Consent Decree § VII.). Defendant Stamboulidis was appointed as the EPA and Steven C. Bennett was appointed as the Hearing Officer. (See Compl. ¶ 33.)

In February 2010, the EPA mailed notices ("Advisory Notices") to Plaintiffs advising them of potential disciplinary charges based on the acts which formed the basis for their convictions. (See Compl. ¶ 37.) In the Advisory Notices, the EPA invited the members to advocate as to why charges should not be filed against them. (See id.) Meanwhile, in May 2010, the City Defendants filed petitions against each Plaintiff at the New York City Office of Administrative Trials and Hearings ("OATH"), an independent agency that conducts administrative hearings for other City agencies, alleging that Plaintiffs violated the section 28-401.19 of the New York City Construction Code ("the Code") requiring carriers of the licenses to be "of good moral character." (See Compl. ¶¶ 69, 78, 85.) The bases of the charges were Plaintiffs' guilty pleas to federal criminal charges involving the construction industry. (See id.)

II.Procedural Background

In July 2010, the EPA filed a Motion to Enforce Judgment ("the Petition") in United States v. Local 14; Plaintiffs entered an appearance in that action to oppose. Plaintiffs then filed this action*fn1 alleging: (1) claims pursuant to 42 U.S.C. ยง 1983 against the City Defendants for deprivation of due process rights and against the EPA and the Union Defendants for acting outside the scope of the Consent Decree; and (2) claims pursuant to New York State and New York City anti-discrimination law against all defendants. Plaintiffs also moved for a temporary restraining order ("TRO") and for preliminary and permanent injunctive ...

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