UnióN De Empleados De Muelles De P.R., Inc. v. Int'l Longshoremen's Ass'n ( 2018 )

United States Court of Appeals
For the First Circuit
No. 16-1372
UNIÓN DE EMPLEADOS DE MUELLES DE PUERTO RICO, INC.,
Plaintiff, Appellant,
v.
INTERNATIONAL LONGSHOREMEN'S ASSOCIATION, AFL-CIO,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Francisco A. Besosa, U.S. District Judge]
Before
Lynch, Lipez, and Kayatta, Circuit Judges.
Eddie Q. Morales for appellant.
John P. Sheridan, with whom Kevin J. Marrinan and Marrinan &
Mazzola Mardon, P.C. were on brief, for appellee.
February 28, 2018
LIPEZ, Circuit Judge. This case involves a dispute
between an international union -- the International Longshoremen's
Association ("ILA") -- and one of its affiliated local unions in
San Juan, Puerto Rico -- Unión de Empleados de Muelles de Puerto
Rico, Inc. ("UDEM") -- regarding the validity of the ILA's decision
to place UDEM into a trusteeship after UDEM opposed the ILA's plan
to merge it with other local unions. In the proceedings below,
initiated when UDEM filed a lawsuit against the ILA, the district
court held that the trusteeship was lawfully imposed, denied UDEM’s
motion for a preliminary injunction against the trusteeship, and
struck UDEM as a party because it did not have authorization from
the trustee to sue the ILA. Having stricken the sole plaintiff,
the district court dismissed the complaint.
Appealing from the dismissal of its complaint and the
denial of its motion for a preliminary injunction, UDEM contends
that the trusteeship was invalid because UDEM voted to disaffiliate
from the ILA before the trusteeship was imposed and because UDEM
was placed in trusteeship for reasons that are improper under Title
III of the Labor-Management Reporting and Disclosure Act
("LMRDA"), 29 U.S.C. §§ 461-66, which governs the local union's
rights vis-à-vis the international. The ILA responds that UDEM's
disaffiliation vote was ineffective because it did not follow the
procedures in the ILA constitution for disaffiliation, including
providing adequate notice of the vote, and that the trusteeship
- 2 -
was imposed for purposes that were legitimate under the LMRDA.
Because the trusteeship was valid, the ILA asserts, UDEM could not
initiate litigation without authorization of the trustee, and
therefore its complaint was properly dismissed. In addition, the
ILA now argues that UDEM’s appeal is moot because the trusteeship
has ended.
After considering the parties' supplemental briefing on
mootness, we hold that UDEM's appeal from the denial of its motion
for a preliminary injunction is moot due to the termination of the
trusteeship. However, because UDEM's claims for declaratory
relief and damages present a live controversy despite the end of
the trusteeship, the remainder of the appeal is not moot. On the
merits of the remaining appeal, we affirm the order of the district
court. UDEM's vote to disaffiliate before the ILA placed it in
trusteeship was invalid under the ILA constitution, and the
trusteeship was lawfully imposed under the LMRDA, leaving UDEM
without authority to bring this lawsuit absent permission from the
trustee. Because UDEM did not receive authorization from the
trustee, the district court properly struck UDEM as a plaintiff
and dismissed the case.
I.
A. Initial Proceedings in the District Court
On June 3, 2015, UDEM filed suit against the ILA under
Title III of the LMRDA, see 29 U.S.C. § 464, challenging on
- 3 -
numerous grounds the lawfulness of the trusteeship imposed on UDEM
by the ILA. UDEM sought a declaratory judgment that the
trusteeship was invalid, a permanent injunction prohibiting the
ILA from continuing the trusteeship, a permanent injunction
"prohibiting ILA from interfering with its operations and
management," and damages.
After the ILA answered the complaint, UDEM filed a motion
for a preliminary injunction. In the motion, UDEM alleged that it
had disaffiliated from the ILA at a meeting of its membership on
May 9, prior to being informed of the emergency trusteeship on May
12, and thus the ILA could not lawfully impose the trusteeship.
Further, UDEM argued that the trusteeship was imposed for purposes
that were illegitimate under the LMRDA, including preventing
UDEM's disaffiliation, penalizing UDEM for opposing a proposed
merger, and circumventing the grievance and arbitration procedure
in the work-sharing agreement between UDEM and other local unions.
The ILA then filed an opposition to UDEM's motion for a
preliminary injunction and a motion to strike UDEM as a plaintiff,
arguing that UDEM in fact did not disaffiliate before the
trusteeship was imposed because it failed to give notice to its
members that a vote on disaffiliation was being held, as required
for a disaffiliation vote to be effective under the ILA
constitution. Additionally, the ILA argued that the purposes for
which the trusteeship was imposed -- UDEM's opposition to the
- 4 -
merger, financial misconduct, undermining of collective bargaining
relationships with employers, and refusal to cooperate with the
work-sharing agreement -- were all legitimate under the LMRDA.
Because UDEM was under a lawful trusteeship at the time the suit
was filed, the ILA contended, no one could file a complaint in
UDEM's name without the authorization of the trustee. The old
officers of UDEM, who were removed when the trusteeship was put in
place, no longer had authority to initiate this action on behalf
of UDEM, and, if they sued at all, should have done so
individually.
The case was referred to a magistrate judge, who held a
hearing on both motions and issued a report and recommendation.
B. The Magistrate Judge's Findings of Fact
UDEM, which was founded in 1938, represented certain
workers in the Port of San Juan. In 1961, after UDEM affiliated
with the ILA, it became known as Local 1901 of the ILA. René A.
Mercado-Álvarez ("Mercado") was elected president of UDEM in 2012
and was president during the time relevant to this case.
In addition to UDEM, there were three other local ILA
unions in the Port: Local 1575, Local 1740, and Local 1902. The
present dispute began in January 2015 when Horizon Lines, a major
stevedoring company, closed its operations in the Port and was
replaced by another stevedoring company, Luis Ayala Colón
- 5 -
("Ayala").1 Prior to closing, Horizon Lines employed members of
ILA Local 1575 under a collective bargaining agreement ("CBA")
with that union. Following the closure of Horizon Lines, Local
1575 asserted that its members had the right to work for Ayala
because, pursuant to the CBA with Horizon Lines, Ayala was a
successor employer. On the other hand, UDEM and Locals 1902 and
1740 each had existing CBAs with Ayala and believed that they, not
Local 1575, were entitled to work for Ayala in Horizon Lines's
former terminals.
In February and March of 2015, the ILA held a series of
meetings with the four locals involved in the dispute over
bargaining with Ayala. At those meetings, ILA representatives
took the position that the other locals needed to accommodate Local
1575 so that its members would not be out of work, and they proposed
a work-sharing agreement to achieve that goal. UDEM and Local
1902 both opposed the proposed arrangement, and no agreement among
the locals was reached. Subsequently, the ILA's president wrote
a letter to UDEM and Local 1902 directing them to execute the work-
sharing agreement or "more stringent measures" would be taken
against them. Mercado, the president of UDEM, testified that he
understood this threat to mean possible merger of the local unions
or a trusteeship.
1 A chronology of important dates is provided as an appendix
to help make sense of the complex sequence of events in this case.
- 6 -
At the end of March, all four locals consented to a work-
sharing agreement that had been drafted by Mercado. Following the
ratification of that agreement, the ILA informed the locals that,
in order to implement it, UDEM and Locals 1902 and 1740 would have
to accept transfers of some unemployed members of Local 1575 to
jobs held by their members, even though such transfers were not
expressly required in the agreement. The ILA was later informed
that UDEM had not complied with this directive.
On April 14, the leadership of UDEM met with ILA
officials, who told Mercado that the ILA was planning to merge the
locals and that the reason for the merger was the dispute with
Local 1575. After learning of the ILA's intention to merge the
locals, Mercado called a meeting of UDEM's executive board on April
23. The board voted unanimously against a potential merger and in
favor of disaffiliating from the ILA. Following this vote,
however, Mercado continued to refer to UDEM as affiliated with the
ILA.2
On May 1, the ILA sent a letter to members of the four
local unions explaining that it had decided that merging the locals
2
The magistrate judge "harbor[ed] real doubts" about whether
this vote actually occurred, but nonetheless assumed that it did
because she concluded, as we do, that this vote had no legal
significance because it was not a vote of the membership of UDEM.
UDEM does not contend that this vote had the effect of
disaffiliating UDEM from the ILA, a position that is consistent
with Mercado's actions noted above.
- 7 -
was the best course of action and that it would move forward with
that plan. A few days later, it informed the locals that Local
1740's charter would be amended to add job classifications that
were currently included in UDEM's charter. Mercado saw this move
as a first step toward removing those job classifications from
UDEM, as the ILA generally did not permit two locals to cover the
same job classifications.
On May 8, the ILA informed UDEM's membership that a
meeting would be held on May 11 to discuss the merger. The letter
reiterated the reasons that the ILA felt the merger was necessary,
and it alleged that Mercado had spread false information to UDEM's
membership about the merger. On May 9, the day after that letter
was sent, Mercado called an emergency UDEM membership meeting. At
the meeting, a motion was put forth for
the Board of Directors to continue making the
efforts that it understands pertinent as up to
the present and that every effort be made
which is not limited to any action which must
be taken to protect [the] Union and for every
action taken by the Board to be accepted,
including the disaffiliation from the ILA.
The motion was "seconded unanimously."3 A motion was then made to
reject the merger, which was also unanimously approved. The
3 This is the vote that is at the heart of the controversy
between the parties regarding the validity of the trusteeship.
UDEM contends that the adoption by the membership of this motion
constituted a valid vote to disaffiliate from the ILA because it
served to ratify the April vote on disaffiliation by the executive
board. As we explain in detail below, the district court concluded
- 8 -
membership also voted to inform the ILA that UDEM did not accept
the merger, but they did not discuss informing the ILA that they
had voted to disaffiliate.
Few members of UDEM showed up for the ILA's May 11
meeting, and the ILA was informed that Mercado was at a nearby
location attempting to dissuade UDEM members from attending. An
ILA representative tried to convince Mercado to attend the meeting
and air his concerns. Although Mercado testified that, in
declining this invitation, he told the representative that UDEM
had voted to disaffiliate from the ILA, the magistrate judge found
more credible the ILA representative's testimony that Mercado did
not mention disaffiliation.4
That same day, Mercado sent the ILA a letter informing
it that UDEM had unanimously voted to oppose the merger. It did
not mention disaffiliation. The next day, May 12, Mercado sent
another letter to the ILA stating that UDEM had voted to
disaffiliate. Also on May 12, the ILA sent a letter to Mercado
stating that, following an investigation into UDEM's conduct, the
that this vote was invalid because UDEM members were not provided
with sufficient notice that a meeting was being held to vote on
disaffiliation.
4The timing of the ILA's knowledge of UDEM's vote on
disaffiliation is important to the magistrate judge's conclusion,
discussed in section III.B infra, that preventing UDEM's
disaffiliation was not a purpose of the trusteeship because the
ILA did not know of UDEM's plans to disaffiliate.
- 9 -
ILA had decided to place UDEM in an emergency trusteeship.5 Mercado
testified that the trusteeship letter arrived after he sent the
disaffiliation letter to the ILA and that, in fact, he had written
the disaffiliation letter on May 11, 2015, per its dateline, but
had failed to send it that day due to problems with UDEM's fax
machine. The magistrate judge concluded that this testimony was
not credible because the fax machine appeared to be working when
Mercado sent the letter opposing the merger, and there was no
reason why Mercado would write two different letters on the same
day and fax them separately. Instead, the magistrate judge found
that the disaffiliation letter was sent only after Mercado learned
of the emergency trusteeship, and that therefore the ILA did not
know about UDEM's disaffiliation vote prior to imposing the
trusteeship.
5 In relevant part, the letter stated:
After receiving numerous complaints regarding
Local 1901's practices and Local 1901's
refusal to honor its obligations under a work
sharing agreement entered into by Locals 1901,
1902, 1575, and 1740, I conducted an
investigation into these matters. I have
determined that it is necessary to impose an
emergency trusteeship on Local 1901 in
accordance with Article XXI of the ILA
Constitution to correct financial
malpractice, to assure the performance of
collective bargaining agreements, to assure
the performance of the duties of a collective
bargaining representative, to restore
democratic procedures, and to otherwise carry
out the objectives and purposes of the ILA.
- 10 -
On May 14, Mercado again wrote to the ILA, stating that
the imposition of the trusteeship was illegal under the ILA's
constitution and that the ILA and UDEM should "go before the
corresponding forums"6 to resolve the legality of the trusteeship.
The ILA did not respond to the letter. UDEM then held another
membership meeting on May 19, where the membership voted to
"ratify" the previous decision to disaffiliate from the ILA.
The ILA constitution requires that an emergency
trusteeship be ratified by the ILA after it conducts a fair hearing
on the charges against the union and its officers. To that end,
two ILA officers, James H. Paylor and Bernard Dudley, were
appointed to a committee to investigate misconduct by UDEM and
Mercado. On May 26, Paylor filed written charges with the ILA
alleging misconduct by Mercado and UDEM, including breaching
UDEM's commitments under the work-sharing agreement among the
locals, taking action to turn union members against the merger,
and undermining collective bargaining with employers. On June 1,
Paylor amended the charges to allege financial misconduct by
Mercado. Following the receipt of Paylor's recommendation that
the trusteeship be continued, three ILA officers -- John Daggett,
6Although it is not clear from the record what Mercado meant
by "corresponding forums," it appears to be a reference to UDEM’s
position that the grievance and arbitration provisions of the work-
sharing agreement between the locals applied to the ILA’s
imposition of the trusteeship, despite the ILA not being a party
to the agreement.
- 11 -
Peter Clark, and Bernard O'Donnell -- were appointed by the
president of the ILA to conduct a hearing on the charges against
UDEM.7 The hearing was held on June 11 and was attended by Mercado
and UDEM's vice president, Ramón Rodríguez, along with counsel.
At the hearing, counsel for UDEM insisted that UDEM had
disaffiliated and that Mercado was representing UDEM as a separate
entity, not as a local of the ILA. Based on those statements,
Mercado was told that there was no reason for him to be there
unless he would appear as a representative of Local 1901. Mercado
started to leave, but a lawyer for the ILA convinced him to stay.
Mercado continued to identify himself as a representative of a
disaffiliated UDEM, rather than Local 1901, however, causing
someone on the hearing committee to again state that there was
nothing else to discuss, and Mercado left. The ILA sustained the
charges against Mercado and the Union and approved the trusteeship,
removing Mercado as president of UDEM and expelling him from the
ILA.
C. Legal Conclusions of the Magistrate Judge and District Court
Based on these factual findings, the magistrate judge
concluded that UDEM did not successfully disaffiliate from the ILA
7Although the magistrate judge did not make findings
regarding who conducted the investigation and who was on the
hearing committee, we provide this information from the record to
make clear that the hearing committee was made up of different
people than the committee that investigated the charges against
UDEM.
- 12 -
prior to imposition of the trusteeship because its disaffiliation
vote was taken at a meeting that did not comply with the notice
requirements in the ILA constitution, and that the trusteeship was
imposed for lawful reasons, particularly to effectuate the merger
between the locals. She therefore concluded that UDEM had failed
to overcome the presumption of validity applied to trusteeships
under the LMRDA. She recommended that the district court deny the
motion for a preliminary injunction and, because the trusteeship
was lawfully imposed and the lawsuit was not brought by the
trustee, strike UDEM as a party to the case. Given that UDEM was
the only plaintiff, she also recommended dismissal of the action.
In a short opinion addressing UDEM's objections to the
magistrate judge's conclusions, the district court adopted the
magistrate judge's report and recommendation in full and dismissed
UDEM's claims without prejudice.8 See Union de Empleados de
Muelles de P.R., Inc. v. Int'l Longshoremen's Ass'n, 156 F. Supp.
3d 257 (D.P.R. 2016).9
8 Because the district court adopted the magistrate judge's
findings and conclusions in full, the discussion in the remainder
of this opinion uses "district court" to refer to both the district
court's order and the magistrate judge's report and
recommendation.
9 We have provided this short summary of the district court's
legal conclusions as background for the discussion that follows.
We defer describing the detailed legal conclusions of the court
until it is necessary to our legal analysis.
- 13 -
D. Appeal
UDEM appealed both the denial of its motion for a
preliminary injunction and the dismissal of its claims, continuing
to argue that (1) it had disaffiliated prior to the emergency
trusteeship being imposed, (2) the trusteeship was imposed for an
improper purpose, and (3) it should be allowed to proceed as
plaintiff without authorization from the trustee.
In its response, the ILA argued that the appeal was now
moot. We directed the parties to file supplemental briefs on the
issue of mootness, specifically, "whether [the ILA's] mootness
argument applies only to the denial of the injunction as to the
trusteeship or dismissal of the entire suit." In its supplemental
briefing, the ILA informed the court that the trusteeship ended on
November 12, 2016, following the completion of the merger between
the locals. The ILA argued that, because the trusteeship had been
terminated, both UDEM's appeal of the denial of the injunction and
UDEM's appeal from the dismissal of the case were moot. We turn
to the issue of mootness first.
II.
"Article III prohibits federal courts from deciding
'moot' cases or controversies -- that is, those in which the issues
presented are no longer 'live' or the parties lack a legally
cognizable interest in the outcome." United States v. Reid, 369
F.3d 619, 624 (1st Cir. 2004) (quoting U.S. Parole Comm'n v.
- 14 -
Geraghty, 445 U.S. 388, 396 (1980) (internal quotation marks
omitted)). Even after an appeal is filed, a case may become moot
"if changed circumstances eliminate any possibility of effectual
relief." Me. State Bldg. & Constr. Trades Council v. U.S. Dep't
of Labor, 359 F.3d 14, 17 (1st Cir. 2004) (quoting Me. Sch. Admin.
Dist. No. 35 v. Mr. R., 321 F.3d 9, 17 (1st Cir. 2003); see also
Am. Civil Liberties Union of Mass. v. U.S. Conference of Catholic
Bishops, 705 F.3d 44, 52 (1st Cir. 2013) (stating that "an actual
controversy must be extant at all stages of the review, not merely
at the time the complaint is filed" (quoting Mangual v. Rotger–
Sabat, 317 F.3d 45, 60 (1st Cir. 2003))). Thus, if the termination
of the trusteeship extinguished the controversy between UDEM and
the ILA, we must dismiss the appeal in its entirety.
UDEM's appeal from the denial of its motion for a
preliminary injunction is plainly moot. UDEM sought to enjoin the
ILA "from the continuation of the emergency trusteeship." The
trusteeship has already ended. The preliminary injunction sought
by UDEM is therefore no longer needed. See Me. Sch. Admin. Dist.
No. 35, 321 F.3d at 17 (stating that, ordinarily, where a suit
seeks only injunctive relief, "once the act sought to be enjoined
occurs, the suit must be dismissed as moot").10
10In addition to seeking to end the trusteeship, UDEM's motion
for a preliminary injunction also sought to reinstate the officers
who had been removed pursuant to the trusteeship. Although UDEM
has not received this relief, it does not so much as mention the
- 15 -
The ILA goes a step further, however, and argues that
the entire appeal is moot, citing cases from other circuits for
the proposition that an entire case is moot when a trusteeship is
terminated. This argument overlooks the crucial fact that many of
those cases addressed only claims for injunctive relief. See Air
Line Stewards & Stewardesses Ass'n, Local 550 v. Transp. Workers
Union, 334 F.2d 805, 807-08 (7th Cir. 1964) (holding that appeal
from an order enjoining a trusteeship became moot when the
trusteeship was terminated); Vars v. Int'l Bhd. Of Boilermakers,
320 F.2d 576, 577 (2d Cir. 1963) (noting that claim seeking removal
of a trusteeship "had become moot" due to termination of the
trusteeship); Taylor v. Siemens VDO Autom. Corp., 157 F. App'x
557, 563 (4th Cir. 2005) (per curiam) (finding trusteeship claim
moot where trusteeship had ended and "plaintiffs' counsel conceded
at oral argument that the only relief the plaintiffs are seeking
is injunctive relief"). Here, in addition to seeking injunctive
relief, UDEM's complaint sought declaratory relief and damages.
Thus, UDEM's appeal from the dismissal of the case is not moot if
claim for individual reinstatement on appeal and does not advance
any arguments regarding the district court's denial of a
preliminary injunction providing that relief. This omission is
likely because UDEM cannot seek such relief on behalf of its
officers under Title III of the LMRDA, as relief under that section
is "limited to relief on behalf of the union." Gesink v. Grand
Lodge, Int'l Ass'n of Machinists and Aerospace Workers, 831 F.2d
214, 216 (10th Cir. 1987) (stating that "nothing in the legislative
history of Title III indicates an intent to protect the positions
of union officers and employees").
- 16 -
UDEM "retain[s] sufficient interests and injury as to justify the
award of declaratory relief" and damages sought in its complaint.
Super Tire Eng'g Co. v. McCorkle, 416 U.S. 115, 122 (1974).11
To determine whether UDEM's claim for declaratory relief
is moot, we examine whether "there is a substantial
controversy . . . of sufficient immediacy and reality to warrant
the issuance of a declaratory judgment." Am. Civil Liberties Union
of Mass., 705 F.3d at 54 (alteration in original) (emphasis
omitted) (quoting Preiser v. Newkirk, 422 U.S. 395, 402 (1975)).
UDEM's complaint sought a declaration that the trusteeship "is
null and void, ab initio, without any legal effect." UDEM contends
that such a declaration would resolve a real and immediate
controversy because it would have the effect of creating an
opportunity for UDEM to challenge the validity of actions taken by
the trustee during the course of the trusteeship.
A declaratory judgment is often a means to an end rather
than an end in and of itself, as its purpose is to determine the
rights and obligations of the parties so that they can act in
accordance with the law. See Ernst & Young v. Depositors Econ.
11
In addition to declaratory relief and damages, UDEM sought
a permanent injunction against the trusteeship and to stop the ILA
from "interfering" in UDEM's affairs. For the reasons stated above
with regard to the preliminary injunction, UDEM's request for a
permanent injunction against the trusteeship is also moot. To the
extent UDEM sought a permanent injunction against the ILA's actions
more generally, it has not argued that such an injunction is still
viable following the end of the trusteeship.
- 17 -
Prot. Corp., 45 F.3d 530, 534 (1st Cir. 1995) (stating that the
Declaratory Judgment Act "is designed to enable litigants to
clarify legal rights and obligations before acting upon them").
Because "[a] declaratory judgment is binding on the parties before
the court and is res judicata in subsequent proceedings as to the
matters declared," it can be used by a party to later obtain
further relief. Am. Airlines, Inc. v. Cardoza-Rodriguez, 133 F.3d
111, 122 n.11 (1st Cir. 1998) (quoting 10A Wright & Miller, Federal
Practice and Procedure § 2771 (1983)). Indeed, the court issuing
the declaratory judgment has the authority to grant "[f]urther
necessary or proper relief" pursuant to the judgment, even if such
relief was not requested in the complaint. 28 U.S.C. § 2202; see
also Commercial Union Ins. Co. v. Walbrook Ins. Co., 41 F.3d 764,
773 (1st Cir. 1994) (stating that § 2202 "authoriz[es] a district
court to grant additional relief consistent with the underlying
declaration even though the right to the relief may arise long
after the court has entered its declaratory judgment").
If a declaratory judgment were issued by the district
court in favor of UDEM here, the invalidity of the trusteeship
would be established for the purposes of a subsequent challenge to
the merger, and could even be used by UDEM in this action to seek
further relief from the effects of the trusteeship. Such a
challenge by UDEM is not merely hypothetical, as the declaratory
judgment would provide UDEM with opportunities to challenge the
- 18 -
merger that would have been unavailable without it. For example,
on May 19, after the trusteeship had already been put in place but
before the merger occurred, UDEM's membership took a second vote
on disaffiliation that, assuming the vote followed the procedures
set forth in the ILA constitution, would have been effective but
for the trusteeship. If the trusteeship were invalid, therefore,
UDEM would have a colorable challenge to the validity of the merger
based on the argument that, regardless of the procedural invalidity
of its first disaffiliation vote, it took a valid vote to
disaffiliate before the merger occurred. Thus, the controversy
over the validity of the trusteeship is sufficiently real and
immediate to permit UDEM's appeal to go forward. See Powell v.
McCormack, 395 U.S. 486, 499 (1969) (holding that an action for a
declaratory judgment was not moot because, after a declaratory
judgment has been issued, it "can then be used as a predicate to
further relief").12
12
The precedent cited by the ILA in which declaratory judgment
claims were deemed moot does not suggest a contrary conclusion.
In those instances, unlike this case, the declaratory relief could
not have been used prospectively by the local to bring an action
to protect its rights as a union, and hence there was no ongoing
controversy. See, e.g., Bowers v. Pipe Fitters Local Union, No.
4:09-cv-0878, 2010 WL 2303341, at *6 (S.D. Tex. June 7, 2010)
(holding that challenge to the validity of the trusteeship was
moot where "[t]he local union held elections, officers were
installed, and the trusteeship dissolved"); Johnson v. Holway, No.
Civ.A.03-2513 ESH, 2005 WL 3307296, at *11 (D.D.C. Dec. 6, 2004)
(holding that case was moot where "[p]laintiffs seek the
termination of the trusteeship and the return of Local R3-77 to
local control, an outcome that has already been achieved").
- 19 -
Additionally, UDEM's appeal is not moot because it
asserted a claim for damages in its complaint. See, e.g., Thompson
v. Office & Prof'l Emps. Int'l Union, 74 F.3d 1492, 1504 (6th Cir.
1996) (stating that, if lifting a trusteeship mooted a claim for
damages arising from the trusteeship, "national and international
unions could impose trusteeships with impunity . . . and remain
immune from legal scrutiny as long as they lifted the trusteeship
before the plaintiff has his day in court"). The ILA contends
that UDEM's claim for damages is moot because UDEM's complaint did
not elaborate on its basis for seeking damages. That argument
goes to the sufficiency of the complaint, however, not mootness.
Moreover, courts have recognized a cause of action under Title III
of the LMRDA for damages, for example, for costs incurred by the
trustee on behalf of the local while the trusteeship was in place.
See, e.g., Local Union 13410 v. United Mine Workers, 475 F.2d 906,
913 (D.C. Cir. 1973) (stating that "[t]he Local should also be
permitted to recover whatever monetary damages it suffered due to
the wrongful imposition of the trusteeship"). Regardless of
whether UDEM ultimately would prevail in seeking damages,
therefore, the claim for damages is a live controversy that would
confront the district court if we were to reverse the dismissal of
UDEM's claims.
- 20 -
Given these conclusions on mootness, we turn to the
merits of the appeal from the district court's decision granting
the ILA's motion to strike and dismissing the case.
III.
In determining whether the district court erred when it
struck UDEM as a plaintiff and dismissed the case, we must first
decide whether the trusteeship was lawfully imposed. If UDEM was
under a lawful trusteeship at the time it brought this lawsuit, we
must then address whether UDEM nonetheless had standing to bring
this suit without authorization from the trustee.
A. Disaffiliation
As a threshold matter, UDEM contends that it
disaffiliated from the ILA before the ILA placed it in the
emergency trusteeship and thus the ILA lacked authority to impose
the trusteeship. Under the LMRDA, the authority of an
international to impose a trusteeship depends on whether a local
is a "subordinate body" under that statute. See 29 U.S.C. § 462
("Trusteeships shall be established and administered by a labor
organization over a subordinate body . . . ." (emphasis added)).
If UDEM disaffiliated from the ILA prior to imposition of the
trusteeship, it was no longer a "subordinate body" and the ILA had
no authority to impose the trusteeship. See, e.g., Int'l Bhd. of
- 21 -
Boilermakers v. Local Lodge D129, 910 F.2d 1056, 1060 (2d Cir.
1990).13
The dispute over whether UDEM disaffiliated from the ILA prior
to the imposition of the emergency trusteeship on May 12 focuses
on whether the vote taken at the May 9 meeting of UDEM's membership
complied with the disaffiliation provisions of the ILA
constitution. See Int'l Bhd. of Boilermakers v. Local Lodge 714,
845 F.2d 687, 692 (7th Cir. 1988) (looking to international's
constitution to determine whether local had disaffiliated and
therefore whether trusteeship could be imposed).
In reviewing the interpretation of the ILA constitution, we
apply the principle that, "in the absence of bad faith, a labor
organization's interpretation of internal union documents puts an
end to judicial scrutiny so long as the interpretation is 'facially
sufficient' or grounded in 'arguable authority.'" Dow v. United
13 In AFL-CIO Laundry & Dry Cleaning Int'l Union v. AFL-CIO
Laundry, 70 F.3d 717 (1st Cir. 1995), we examined the validity of
a trusteeship even though it was imposed after the local voted to
disaffiliate. However, unlike the circumstances here, that case
involved a dispute over the international's control of assets of
the local that continued to exist following disaffiliation. See
also Int'l Bhd. of Boilermakers v. Olympic Plating Indus., Inc.,
870 F.2d 1085, 1088 (6th Cir. 1989) (explaining under similar
circumstances that disaffiliation did not matter for
jurisdictional purposes because "[e]ven if the appellees and the
local no longer have any relationship to the International, the
International should be authorized to recover its assets through
the mechanics of a trusteeship"). In this case, the parties have
not disputed that the ILA would not have authority to impose the
trusteeship if UDEM disaffiliated before it was imposed.
- 22 -
Bhd. of Carpenters, 1 F.3d 56, 58 (1st Cir. 1993)(quoting Local
No. 48, United Bhd. of Carpenters v. United Bhd. of Carpenters,
920 F.2d 1047, 1052 (1st Cir. 1990)) (footnote omitted); see also
Local No. 48, 920 F.2d at 1052 ("[W]e align ourselves squarely
with those courts that have said judges should refrain from second-
guessing labor organizations in respect to plausible
interpretations of union constitutions."). Thus, we will defer to
the ILA's reading of its own constitution where it has offered a
"facially sufficient" interpretation.
As relevant here, the ILA constitution provides that "no
local shall withdraw or be dissolved so long as at least ten (10)
members in good standing object to its dissolution at a meeting
called to consider the question." UDEM contends that this
provision does not apply to its May 9 disaffiliation vote because
the provision does not use the word "disaffiliation." As the
district court explained, however, the provision does contain the
word "withdraw," which can reasonably be construed as a synonym
for disaffiliate in circumstances where there is no other mechanism
for "withdrawal" from the ILA. Although the second part of the
clause mentions only dissolution, reading both clauses together
suggests that "dissolution" is used as shorthand and that the
requirement that a meeting be held and notice given applies to
both dissolution and withdrawal. We therefore agree with the
district court's conclusion that the ILA has plausibly read this
- 23 -
provision to dictate how a local's disaffiliation vote must be
conducted.
With regard to the procedures required by the
constitution to conduct a valid disaffiliation vote, the district
court adopted the ILA's interpretation of the disaffiliation
provision, holding that the provision's requirement that the
meeting be "called to consider the question" mandated that "prior
notice be given to the membership that a meeting will be held
specifically for the purpose of considering disaffiliation." We
agree that the ILA's interpretation of this provision is plausible
on its face and grounded in the language of the provision. The
fact that the vote must be taken "at a meeting called to consider
the question," suggests both that the meeting must be announced to
the membership in advance and that the purpose of the meeting --
to discuss disaffiliation -- must have been clear in that
announcement. As the district court noted, "only in this manner,
after all, would dissenting members know to show up for the vote."14
14
Additionally, including in the constitution the requirement
that the vote be taken only after the membership is given notice
of the meeting and its purpose is consistent with the LMRDA's due
process provisions, which protect, among other rights, the right
of members to "attend membership meetings, and to participate in
the deliberations and voting upon the business of such meetings."
29 U.S.C. § 411(a)(1); see also Local 450 v. Int'l Union of
Electronic, Elec., Salaried, Mach. & Furniture Workers, 30 F. Supp.
2d 574, 583 (E.D.N.Y. 1998) (holding that a disaffiliation vote
satisfied the due process provisions of the LMRDA where the union
provided "actual notice of the disaffiliation meeting to the entire
membership of Local 450 by mail, by hand and by phone," and the
- 24 -
In sum, the ILA's interpretation of the constitutional provision
at issue here easily meets the deferential standard applied to a
union's interpretation of internal union documents.
Turning to the question of whether UDEM complied with
the requirements of the ILA constitution, we review the district
court's factual findings for clear error. See McDermott v. Marcus,
Errico, Emmer & Brooks, P.C., 775 F.3d 109, 115 (1st Cir. 2014).
UDEM does not dispute the district court's finding that "Mercado
did not inform the membership before the May 9 meeting that
disaffiliation would be considered at that meeting." Union de
Empleados, 156 F. Supp. 3d at 270. Given UDEM's failure to produce
any evidence that the membership was notified of the purpose of
the meeting, that finding was not clearly erroneous. Thus, the
district court was fully justified in concluding that the
disaffiliation vote taken did not comply with the restrictions on
disaffiliation in the ILA constitution,15 and the ILA had authority
notice "promised a 'full discussion' of the disaffiliation issue
and a 'membership vote'"). Indeed, any provision of the ILA's
constitution that was inconsistent with the protection of the
rights provided in the LMRDA bill of rights would be unenforceable.
29 U.S.C. § 411(b).
15We also agree with the district court that there are serious
questions regarding the validity of the vote itself. The less-
than-clear motion presented to the membership frames the question
not as a standalone vote to disaffiliate, but as an authorization
or ratification for many actions by the executive board, one of
which was disaffiliation. It thus may have been unclear to members
whether they were voting to disaffiliate. And the actions taken
by Mercado and UDEM following the vote, such as voting to reject
the merger and notifying the ILA that UDEM had rejected the merger
- 25 -
to impose a trusteeship on UDEM as a "subordinate body" so long as
it complied with the trusteeship provisions of the LMRDA.
B. Validity of the Trusteeship
Under the LMRDA, "a trusteeship established by a labor
organization in conformity with the procedural requirements of its
constitution and bylaws and authorized or ratified after a fair
hearing . . . shall be presumed valid for a period of eighteen
months from the date of its establishment." 29 U.S.C. § 464(c).
UDEM asserts that this presumption does not apply because
imposition of the trusteeship did not meet the procedural
requirements of the ILA constitution and the hearing held by the
ILA was not fair. The ILA constitution prescribes a multi-step
process whereby an investigation is conducted by ILA officials, an
emergency trusteeship is imposed, charges are brought against the
union and/or officers of the union, a hearing is held before a
committee of the ILA to resolve the charges, and a decision is
rendered by the hearing committee whether to continue the
trusteeship.
That process was followed here. The ILA conducted an
investigation, initially imposed an emergency trusteeship, and
then conducted a further investigation, which resulted in charges
but not that it had disaffiliated, suggest that even those involved
in the vote did not believe it had the effect of disaffiliating
UDEM from the ILA.
- 26 -
against UDEM and Mercado. The ILA then held a hearing to resolve
those charges, which resulted in the continuation of the emergency
trusteeship. UDEM asserts that the hearing it received was not
fair because Mercado left the hearing without having an opportunity
to participate. However, there is no requirement in the ILA
constitution that the president of the union participate at the
hearing, and, in any event, Mercado refused to represent the
interests of the local that had been placed in trusteeship, instead
purporting to represent a disaffiliated entity. Thus, the
trusteeship is presumptively valid, and UDEM must show by "clear
and convincing proof that the trusteeship was not established or
maintained in good faith for a purpose allowable under [the
LMRDA]." Id. § 464(c).
UDEM has not met this high burden. Pursuant to section
302 of the LMRDA, an international may impose a trusteeship over
a local
only in accordance with the constitution and
bylaws of [the international] and for the
purpose of correcting corruption or financial
malpractice, assuring the performance of
collective bargaining agreements or other
duties of a bargaining representative,
restoring democratic procedures, or otherwise
carrying out the legitimate objects of such
labor organization.
Id. § 462. The ILA constitution contains substantively identical
language regarding when a trusteeship may be imposed. The ILA
contends that its primary purpose in imposing the trusteeship was
- 27 -
to effectuate the merger of the locals. In addition, it points to
"UDEM's refusal to honor its obligation under the work sharing
agreement," "correcting Mercado's financial malpractice," and
"assuring the successful negotiation of collective bargaining
agreements with UDEM's employers" as additional reasons for
imposing the trusteeship. It argues that each one of these
purposes, standing alone, is sufficient to warrant imposition of
a trusteeship.
The district court credited the ILA's claim that the
primary purpose for the trusteeship was to "neutralize local 1901's
resistance to the proposed merger." Union de Empleados, 156 F.
Supp. 3d at 271. That finding was not clearly erroneous.16 The
ILA made its intention to merge the unions known prior to imposing
the trusteeship, attempted to convince the members of UDEM to
accept the merger, and then imposed the trusteeship the day after
UDEM informed the ILA in writing that its members had unanimously
rejected the merger. In sum, the ILA threatened to impose a
trusteeship if UDEM continued to oppose the merger. When UDEM did
oppose the merger, the ILA followed through on its threat.
Moreover, we agree with the district court's conclusion
that effectuating the merger was a proper purpose for imposing the
16 We review for clear error the district court's factual
findings in support of its conclusion that UDEM did not muster
sufficient proof to rebut the presumption of validity. See AFL-
CIO Laundry, 70 F.3d at 719.
- 28 -
trusteeship under the LMRDA. The ILA's constitution gives the ILA
"authority to merge or consolidate two or more locals on such terms
and conditions as it deems necessary or appropriate when such
action is deemed to be in the best interest of the International
and its members." Prior to imposing the trusteeship, the ILA
thoroughly documented the likely benefits to its members from the
merger, including increased bargaining power and unity during
collective bargaining with employers, uniformity in benefits that
could lead to financial savings, and more effectively promoting
cargo growth for San Juan. As these benefits relate to improving
the performance of core union functions, realizing them is a
"legitimate object[]" of the ILA. 29 U.S.C. § 462; see also Serv.
Emps. Int'l Union, Local 87 v. Serv. Emps. Int'l Union, Local No.
1877, 230 F. Supp. 2d 1099, 1105 (N.D. Cal. 2002) ("Imposing a
trusteeship to effectuate a planned merger is valid under the
LMRDA.").
UDEM nonetheless contends that the trusteeship was
unlawful because it was motivated by additional improper reasons,
chiefly, preventing UDEM's disaffiliation and unlawfully
circumventing the grievance and arbitration procedure in the work-
sharing agreement between the locals in an effort to punish UDEM
for failing to comply with the agreement. UDEM argues that if the
ILA was concerned with UDEM's failure to comply with the work-
- 29 -
sharing agreement, its only recourse was to file a grievance, not
impose a trusteeship.17
Contrary to UDEM's contention, the ILA was not required
to initiate a grievance under the work-sharing agreement if it
believed that UDEM was not following the agreement. As the
district court explained, the ILA was not a party to the agreement
and therefore was not bound by its provisions. See Union de
Empleados, 156 F. Supp. 3d at 261. The ILA's actions were governed
only by the LMRDA and its constitution. Under the LMRDA, ensuring
compliance with the agreement was a lawful reason to impose a
trusteeship because the ILA had a strong interest in ensuring
harmony among the locals in San Juan and preserving collective
bargaining agreements between the locals and employers.
17 Implicit in UDEM's argument is the proposition that a
trusteeship is invalid if the motivations of the international
include any improper purpose. UDEM has not cited any case law to
that effect, but other courts have held that a trusteeship is valid
so long as it is imposed for at least one proper purpose, see Nat'l
Ass'n of Letter Carriers v. Sombrotto, 449 F.2d 915, 923 (2d Cir.
1971), even if it was also motivated by an improper purpose, see,
e.g., Keenan v. Int'l Ass'n of Machinists, 632 F. Supp. 2d 63, 69
(D. Me. 2009); Morris v. Hoffa, No. Civ. A. 99-5749, 2001 WL
1231741, at *7 (E.D. Pa. Oct. 12, 2001). We need not decide
whether to adopt the holdings of those cases, however, because
none of the purposes for which the trusteeship at issue here was
imposed is unlawful under the LMRDA. In addition to the reasons
for the trusteeship that we discuss in detail above, the district
court found that there were other valid reasons for imposing the
trusteeship, including UDEM's attempt to undermine collective
bargaining agreements with employers and Mercado's engaging in
financial misconduct in an effort to shelter UDEM's assets from
trusteeship.
- 30 -
UDEM's contention that the trusteeship was imposed for
the purpose of preventing disaffiliation fares no better. Although
"courts have widely recognized that preventing disaffiliation is
not a proper purpose under § 462 for the imposition of a trustee,"
AFL-CIO Laundry, 70 F.3d at 719, the district court here found
that "at the time the ILA imposed the trusteeship, it had no
knowledge of UDEM's intent to [disaffiliate] or attempt at
disaffiliation," 156 F. Supp. 3d at 271. That determination is
supported by the district court's finding that the fax informing
the ILA of disaffiliation was sent only after Mercado received the
letter stating that UDEM had been placed in an emergency
trusteeship. Although Mercado asserted that he had told ILA
officials of UDEM's disaffiliation sooner, the district court
found that evidence not to be credible. The speculation in UDEM's
brief that UDEM members present at the meeting where the
disaffiliation vote was taken would have told ILA officials that
UDEM had voted to disaffiliate is insufficient to overturn these
reasoned credibility determinations by the district court.
UDEM has therefore failed to overcome the presumption of
validity in 29 U.S.C. § 464(c), and we affirm the holding of the
district court that the trusteeship was valid.
C. Motion to Strike UDEM as a Party
Under the ILA constitution, the only entity with
authority to bring suit on behalf of UDEM was the trustee, and the
- 31 -
trustee did not authorize this suit. The ILA constitution provides
that the powers of the trustee are set forth at the time of his
appointment. As relevant here, the trustee was given the power to
"take control of all . . . affairs of Local 1901." Thus, only the
trustee, not Mercado or any other former officials, had the power
to authorize a suit on behalf of UDEM. See Cty., Mun. Emps.'
Supervisors' & Foremen's Union Local 1001 v. Laborers' Int'l Union,
365 F.3d 576, 580 (7th Cir. 2004)(holding that lawyers acting
without authorization from the trustee could not act as
representatives of the local in lawsuit against international).
Nor does UDEM have standing to bring this suit as its
own entity, rather than as an affiliate of the ILA, as UDEM
suggests. As explained above, the LMRDA limits suits challenging
a trusteeship under Title III to those by a member or "subordinate
body." 29 U.S.C. § 464(a). If UDEM is bringing this case as an
organization not affiliated with the ILA, then, as the district
court correctly held, it is neither a subordinate body nor a member
of the ILA and cannot sue under the LMRDA. See Union de Empleados,
156 F. Supp. 3d at 273.
UDEM contends that holding that a union in a trusteeship
cannot sue to challenge that trusteeship without permission from
the trustee would leave local unions that are placed in a
trusteeship without a mechanism for challenging the trusteeship's
legality. The travel of this case undermines UDEM's argument.
- 32 -
UDEM was able to file a lawsuit challenging the trusteeship and to
obtain a ruling on the merits of the validity of the trusteeship.
That is because the question of whether the local is the proper
party to file the lawsuit challenging the trusteeship necessarily
turns on the validity of the trusteeship. If we had held that the
trusteeship here was unlawful, UDEM would not have needed
permission from the trustee to bring this suit, and it would be a
proper plaintiff to obtain relief. Only where a court first finds
that a trusteeship was lawfully imposed will a union be unable to
continue to challenge the legality of the trusteeship without the
trustee's permission. At that point, such a challenge would be
futile.
Furthermore, individual members of the union who wish to
challenge a trusteeship imposed for purposes that violate their
individual rights have a cause of action under Title I of the
LMRDA. See 29 U.S.C. § 412. If Mercado believed, for example,
that the trusteeship was imposed for the purpose of removing him
from the union as retaliation for his opposition to the work-
sharing agreement and the merger, he could have brought a lawsuit
under Title I. See id. § 411(a)(2) (giving labor union members
the right "to express any views, arguments, or opinions" without
retaliation from the union); Sheet Metal Workers' Int'l Ass'n v.
Lynn, 488 U.S. 347, 358 (1989) (holding that removal of an elected
union official by a trustee because the official opposed a proposed
- 33 -
dues increase was a violation of Title I of the LMRDA). Such a
lawsuit would likely involve consideration by the court of the
purposes for which the trusteeship was imposed. Thus, rather than
leaving unions and their members without recourse when an illegal
trusteeship is imposed, the statutory scheme provides multiple
avenues through which a trusteeship may be challenged.
IV.
In summary, for the reasons set forth herein, we dismiss
as moot that portion of UDEM's appeal challenging the denial of
its motion for a preliminary injunction. We affirm that portion
of the district court order striking UDEM as a plaintiff and
dismissing the case without prejudice.
So ordered.
- 34 -
Chronology of Events
January 2015 Horizon Lines closes operations in San Juan,
leading to dispute about which local unions could
bargain with its successor.
End of March 2015 Locals, including UDEM, consent to a work-sharing
agreement.
April 14, 2015 ILA officials inform Mercado that the ILA plans
to merge the locals.
April 23, 2015 UDEM's executive board meets and allegedly votes
in favor of disaffiliating from the ILA.
May 8, 2015 ILA informs UDEM's membership that a meeting will
be held on May 11 to discuss the merger.
May 9, 2015 Mercado calls an emergency meeting of UDEM's
membership, and members present at the meeting
vote to "accept" the board's decision to
disaffiliate from the ILA and to reject the
merger.
May 11, 2015 ILA meeting regarding the merger is held and
Mercado sends ILA a letter stating that UDEM's
membership has voted to reject the merger.
May 12, 2015 ILA sends a letter to UDEM imposing an emergency
trusteeship.
Mercado sends the ILA a letter stating that UDEM
had voted on May 9 to disaffiliate.
May 19, 2015 UDEM holds another membership meeting where
members again vote to disaffiliate from the ILA.
May 26, 2015 ILA officer James Paylor files written charges
against UDEM with the ILA and requests that the
trusteeship be continued.
June 1, 2015 Paylor amends the charges to allege additional
misconduct by Mercado and UDEM.
June 3, 2015 UDEM files this lawsuit.
June 11, 2015 The ILA holds a hearing on the charges against
UDEM and the charges are sustained. The
trusteeship is continued.
November 12, 2016 UDEM merges with local 1740, and the trusteeship
is terminated.
- 35 -