Chao v. Local 743, International Brotherhood of Teamsters ( 2006 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 05-2478
ELAINE L. CHAO, Secretary of Labor,
Plaintiff-Appellee,
v.
LOCAL 743, INTERNATIONAL
BROTHERHOOD OF TEAMSTERS,
AFL-CIO,
Defendant-Appellant.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 05 C 1749—Robert W. Gettleman, Judge.
____________
ARGUED NOVEMBER 10, 2005—DECIDED OCTOBER 31, 2006
____________
Before FLAUM, Chief Judge, and RIPPLE and SYKES,
Circuit Judges.
SYKES, Circuit Judge. The Secretary of the United States
Department of Labor commenced this action seeking
enforcement of a subpoena duces tecum served upon the
respondent labor union, Teamsters Local 743 (“the Union”).
The Union refused to comply with the subpoena, arguing
that the Secretary’s request was not authorized under the
Labor Management Reporting and Disclosure Act
(“LMRDA”), 29 U.S.C. §§ 401 et seq. The district court
2 No. 05-2478
granted the Secretary’s petition for enforcement. The Union
appeals, and we affirm.
I. Background
In October 2004 the Union scheduled and attempted to
conduct the triennial election of its officers required by
29 U.S.C. § 481(b). One of the candidates for Union presi-
dent was Richard Berg. On October 16, the day the mail
ballots were in the process of being counted, a written
protest from Berg, dated October 14, arrived at the Union’s
offices. It was Berg’s thirteenth election protest. In it Berg
sought to have the election voided on the ground that not
all Union voters requesting ballots had received them, and
he called for a new election. By the end of the day on
October 16, the election officer overseeing the tally had set
aside and challenged approximately 180 ballots for a
variety of reasons. At this point, Berg allegedly led the
incumbent presidential candidate, Robert Walston, by seven
votes. It was the election officer’s intention to complete the
final vote count and resolve the challenges to the suspect
ballots on October 19, three days later.
During the intervening three-day period, the Union’s
executive board met and decided to void the election on
the basis of Berg’s preelection protest number thirteen. The
issue of the challenged ballots was not resolved, the original
election officer was removed from his position, and the
Union retained a different election officer to oversee and
conduct a new election. The second election was held two
months later, in December 2004, and there was a 63%
increase in the number of ballots received compared to the
total received in the October election. Berg lost his bid for
the presidency to Walston by a total of 394 votes.
Berg then filed a complaint with the Secretary of the
Department of Labor, requesting that the Department
investigate the October 2004 tally, finish counting the
No. 05-2478 3
ballots from the original election, certify the winner of that
election as the president, and void the December 2004
election. Despite his original protest to the October election,
it was now apparently Berg’s contention that the October
election was halted only because the incomplete vote totals
of October 16 gave rise to fear among the incumbent officers
that Berg might actually win the presidency.
The Department of Labor opened an investigation in
response to Berg’s complaint and issued a subpoena duces
tecum to the Union, pursuant to 29 U.S.C. § 521, seeking
certain records related to the October election.1 The Union
refused to comply, arguing that because the October
election had never been completed, any investigation
concerning it properly fell within Title I of the LMRDA, 29
U.S.C. §§ 411-415, which is enforced by individual union
members and not the Department of Labor. The Secretary
disagreed, and this action for enforcement of the subpoena
followed. The district court ordered the subpoena enforced.
The Union appealed, unsuccessfully moving for a stay
in district court and in this court.
II. Discussion
A. Structure of the LMRDA and the Department’s
Investigatory Power
The LMRDA was enacted to “protect the rights of rank-
and-file members to participate fully in the operation of
their union through processes of democratic self-govern-
ment, and, through the election process, to keep the union
1
The subpoena sought the Union’s records relating to visits by a
trustee/business agent of Local 743 to one of its worksites during
the time preceding the October election, dues payment history
information used to determine Union member eligibility to vote in
the October election, and current contact information for 348
members of the Union.
4 No. 05-2478
leadership responsive to the membership.” Wirtz v. Hotel,
Motel & Club Employees Union, Local 6, 391 U.S. 492, 497
(1968). To this end, the LMRDA contains several subdivi-
sions dealing with numerous facets of both internal union
affairs and labor-management relations. Wirtz v. Local 153,
Glass Bottle Blowers Assoc., AFL-CIO, 389 U.S. 463, 469
(1968). Three sections of the LMRDA are particu-
larly relevant to the issue on appeal.
1. Title I of the LMRDA
Title I of the LMRDA, also referred to as subchapter II of
the Act, is entitled “Bill of Rights of Members of Labor
Organizations,” and is found at 29 U.S.C. §§ 411-415. It
provides in pertinent part that every member of a labor
organization shall have the right “to nominate can-
didates, to vote in elections or referendums of the labor
organization, to attend membership meetings, and to
participate in the deliberations and voting upon the busi-
ness of such meetings, subject to reasonable rules” con-
tained in the organization’s constitution and bylaws. 29
U.S.C. § 411(a)(1). Union members also have the right
under Title I to meet and assemble freely with other
members, support candidates of their choice, and express
their opinions concerning candidates for union office. 29
U.S.C. § 411(a)(2). Title I also prohibits a union from
disciplining a member (except for nonpayment of dues)
without service of written charges and the provision of a full
and fair hearing after reasonable notice. 29 U.S.C.
§ 411(a)(5). With respect to enforcement of these rights,
Title I provides in part as follows: “Any person whose rights
secured by the provisions of this subchapter have been
infringed by any violation of this subchapter may bring a
civil action in a district court of the United States for such
relief (including injunctions) as may be appropriate.” 29
U.S.C. § 412.
No. 05-2478 5
2. Title IV of the LMRDA
Title IV (also known as subchapter V) of the LMRDA, 29
U.S.C. §§ 481-483, is entitled “Elections.” Title IV’s function
in furthering the overall goals of the LMRDA is “to insure
‘free and democratic elections’ ” for union officers. Glass
Bottle Blowers Assoc., 389 U.S. at 469. Among the require-
ments of Title IV are that every local labor organization
must hold an election of officers at least once every three
years; that the union must permit the distribution of
campaign literature without discrimination for or against
any candidate; that every bona fide candidate shall have
the right to inspect a union’s mailing list of members; that
“adequate safeguards to ensure a fair election” be provided,
including the right of any candidate to have an observer at
the polls and at the counting of ballots; that every member
in good standing shall have the right to vote, to hold office,
and to support the candidate of his or her choice without
fear of discipline or reprisal; and that the union and the
employer are generally prohibited from spending money to
promote the candidacy of any particular person. 29 U.S.C.
§ 481(c), (e), (g).
Title IV contains a civil enforcement provision that
outlines the following procedures as relevant to the issue
here: (1) any member of a union who believes that Title IV
has been violated, and who has first exhausted the reme-
dies available to him or her under the labor organiza-
tion’s constitution or bylaws may file a complaint with
the Secretary; (2) the “challenged election” shall be pre-
sumed valid pending investigation by the Secretary; (3) the
Secretary shall investigate the complaint, and “if he finds
probable cause to believe that a violation of this subchapter
has occurred and has not been remedied, he shall . . . bring
a civil action against the labor organization . . . to set aside
the invalid election . . .”; and (4) if a court finds that a
violation of § 481 “may have affected the outcome of an
election,” the court “shall declare the election, if any, to be
6 No. 05-2478
void and direct the conduct of a new election . . . .” 29 U.S.C.
§ 482. Finally, Title IV also contains a provision, relied
upon by the Union in this case, stating that “[t]he remedy
provided by this subchapter for challenging an election
already conducted shall be exclusive.” 29 U.S.C. § 483.
3. The Secretary’s Investigative Powers under
29 U.S.C. § 521
The subpoena power of the Secretary of Labor derives
from 29 U.S.C. § 521(a) (also commonly referred to as § 601
of the LMRDA), which provides in relevant part as follows:
The Secretary shall have power when he believes it
necessary in order to determine whether any person has
violated or is about to violate any provision of this
chapter (except subchapter II of this chapter) to make an
investigation and in connection therewith he may enter
such places and inspect such records and accounts and
question such persons as he may deem necessary to
enable him to determine the facts relative thereto.
(Emphasis added.)
In general, an administrative agency’s subpoena meets
the requirements for enforcement if (1) the inquiry is within
the authority of the agency, (2) the demand is not too
indefinite, and (3) the information sought is reason-
ably relevant to the investigation. United States v. Morton
Salt Co., 338 U.S. 632, 653 (1950); EEOC v. Quad/
Graphics, Inc., 63 F.3d 642, 645 (7th Cir. 1995). An admin-
istrative agency’s subpoena power is intended to permit the
agency to “investigate merely on suspicion that the law is
being violated, or even just because it wants assurance that
it is not.” Morton Salt Co., 338 U.S. at 642-43. In the
statute quoted above, the only relevant limitation on the
otherwise broad powers conferred by § 521 is that the power
to investigate possible violations of the LMRDA does not
No. 05-2478 7
extend to violations of “subchapter II,” i.e., Title I, of the
Act.
B. Analysis
1. The Distinction Between Investigations and
Enforcement Actions
The Union’s principal argument against enforcement of
the subpoena is that the investigation into Berg’s com-
plaint, and the subpoena issued in furtherance of it, is an
investigation into possible violations of Title I and thus
beyond the authority conferred upon the Secretary by § 521.
In attempting to draw a definitional boundary around the
concept of a “Title I violation” as it pertains to the limita-
tion on investigatory power contained in § 521, the Union
relies on the statutory language describing
the circumstances under which the Secretary is au-
thorized to bring a Title IV enforcement action. Proceed-
ing from this premise, the Union concentrates its argument
on whether the October election was “completed” or not. In
essence, the Union claims that any possible violation of the
LMRDA that is related to an election that is “never com-
pleted” is necessarily and exclusively a Title I violation that
lies beyond the investigatory power conferred by § 521. To
support this position, the Union relies on language in § 483
stating that the civil enforcement action by the Secretary
for violations of Title IV shall be the “exclusive” remedy as
to an election “already conducted.” Thus, the argument
goes, if an election has not been “already conducted,”
enforcement power rests exclusively with union members
pursuant to Title I, and the Secretary not only has no
authority to bring a civil enforcement action seeking
nullification of the election results, but also has no author-
ity to investigate pursuant to § 521.
The first and principal answer to the Union’s argument is
that it confuses the Secretary’s broad power to investigate
8 No. 05-2478
with her more limited authority to bring an action
in federal court seeking redress for violations of Title IV
of the LMRDA. The present case is not a civil enforcement
action, and we need not concern ourselves with whether the
remedy of an enforcement suit (hypothetical at this point in
the investigation) would properly rest with the Secretary or
an individual union member. In the absence of a civil
enforcement action, there is no inherent textual reason to
resort to § 483, or any other provision of Title IV, as a
means to define the limitation on the Secretary’s investiga-
tory power contained in § 521. The present suit is an action
for enforcement of a subpoena duces tecum that is, at least
at this point, unrelated to any enforcement action that
might possibly be brought under §§ 482 and 483.2
Section 521 contains one—and only one—limitation on
the Secretary’s power to launch an investigation (including
issuing subpoenas), and that limitation excludes possible
violations of Title I. Indeed, the power to investigate
conferred by § 521 is not limited to Title IV violations, is not
limited to elections, and certainly is not limited to elections
“already conducted.” It is also not limited to investigations
into conduct that could possibly form the basis for a civil
enforcement action in federal court. The Union would like
us to read the powers of § 521 as coterminous with those of
§ 482 and hold that a subpoena issued pursuant to § 521 is
2
Because this is not a § 482 enforcement action, we have no
occasion to express an opinion as to whether such actions are
limited to Title IV violations relating to elections that have
been “already conducted.” See 29 U.S.C. § 483. Neither do we
express an opinion as to the Union’s implied premise that the
October election does not qualify as being “already conducted” for
purposes of § 483. Compare McDonough v. Local 825, Int’l Union
of Operating Eng’rs, 470 F.2d 261, 264 (3d Cir. 1972), with
Crowley v. Local No. 82, Furniture & Piano Moving, 679 F.2d 978,
992-93 (1st Cir. 1982), rev’d on other grounds, 467 U.S. 526 (1984).
No. 05-2478 9
valid only if the Secretary simultaneously has statutory
authority to bring an action under § 482 stemming from the
same conduct. But such a construction would be to render
§ 521 largely superfluous as redundant of the power to
investigate member complaints of Title IV violations
conferred by 29 U.S.C. § 482.
Instead, § 521 grants the Secretary broad authority
to investigate “whether any person has violated or is about
to violate any provision of this chapter” (meaning any
provision of the LMRDA) other than Title I, regardless of
whether a civil action in federal court is expected or even
authorized. There is simply nothing in § 521 that requires
the Secretary to demonstrate a basis for federal court
jurisdiction over a hypothetical Title IV enforcement
action in order to commence and pursue an investiga-
tion into possible non-Title I violations of the LMRDA. In
short, the statutory limitations on an enforcement action
pursuant to §§ 482 and 483 are not the measuring stick
by which the Secretary’s § 521 power to investigate (and
subpoena) is evaluated, and the limiting reference to Title I
made in § 521 is not defined by the enforcement power
conferred by §§ 482 and 483. The scope of the investiga-
tive authority bestowed by 29 U.S.C. § 521 is consequently
not limited to elections “already conducted.” Indeed, we note
that § 521 expressly extends investigatory power to situa-
tions in which any person “is about to” violate any provision
of the LMRDA. With respect to the investigation of elec-
tions, the quoted language clearly presupposes an incom-
plete election process, as it would be difficult to envision a
situation in which a person “is about to” violate the LMRDA
in connection with an election that is fully complete.
This distinction between the broad investigatory
power conferred by § 521 and the more narrowly circum-
scribed enforcement power conferred by § 482 has been
recognized in the decisions of several of our sister circuits.
10 No. 05-2478
In Marshall v. Stevens People & Friends for Freedom, 669
F.2d 171, 176 (4th Cir. 1981), the Fourth Circuit described
the distinction as follows:
Congress granted the Secretary broad powers of investi-
gation [in § 521] in order to facilitate enforcement of the
Act without resort to unnecessary litigation. Conse-
quently, the Secretary may initiate an investigation
without probable cause to believe that the Act has been
violated. . . . The Secretary’s administrative powers of
investigation have been likened to a grand jury, which
unlike a court, ‘does not depend on a case or controversy
for power to get evidence but can investigate merely on
suspicion that the law is being violated, or even just
because it wants assurance that it is not.’ United States
v. Morton Salt Co., 338 U.S. 632, 642-43, 70 S. Ct. 357,
363-64, 94 L. Ed. 401 (1950).
In Wirtz v. Local 191, International Brotherhood of
Teamsters, 321 F.2d 445, 447-48 (2d Cir. 1963), the Second
Circuit held that while the Secretary’s power to bring
an enforcement action pursuant to § 482 may be limited
to those cases in which an individual union member has
filed a complaint and done so in compliance with the
exhaustion requirements of that section, the power to
investigate possible LMRDA violations conferred by § 521
is not so limited. In other words, the Secretary’s investiga-
tive power is in no manner restricted to cases in which
statutory authority to bring a Title IV enforcement ac-
tion exists:
It may be that some or all of the limitations of [29
U.S.C. § 482], such as the exhaustion of internal
remedies, are relevant to the suit which that section
authorizes; there is in [29 U.S.C. § 521] no similar
limitation on the Secretary’s power to investigate
and report. Presumably the Secretary can bring an
action only when a complaint has been filed by an
No. 05-2478 11
individual member [Section 482]. But he can investigate
and report without such a complaint.
Id. at 448.
A similar conclusion was reached in Holmes v. Donovan,
796 F.2d 173, 178 (6th Cir. 1986) (citation omitted), where
the Sixth Circuit held that in the LMRDA:
[T]he Secretary was empowered to sue only under
specific conditions, but the Secretary was at the same
time given broad investigatory powers. See 29 U.S.C. §
521. That power to investigate election complaints has
been held not to be subject to the exhaustion require-
ment of 29 U.S.C. § 482. . . . Furthermore, the Secretary
may pursue violations without the issuance of a com-
plaint by a union member.
Finally, in Local 57, International Union of Operating
Engineers v. Wirtz, 346 F.2d 552, 554 (1st Cir. 1965), the
First Circuit explained the enforcement/investigatory
distinction as follows:
Section 402 [29 U.S.C. § 482] provides for the Secre-
tary’s instituting a court action to set aside an election;
his power to do so is conditioned upon the filing of a
complaint by an individual union member who has
exhausted his internal union remedies. Section 601 [29
U.S.C. § 521], on the other hand, authorizes the Secre-
tary to investigate an election; his power to do so is not
conditioned upon receipt of a complaint from an individ-
ual member of the union. We perceive no conflict which
is created by thus reading Section 601 as permitting the
Secretary to investigate in circumstances where he could
not bring suit under Section 402. (Emphasis added.)
Section 521 thus requires that we focus on whether the
Secretary’s subpoena was issued in furtherance of an
investigation into a Title I violation, excluded under § 521,
not on whether the election was “completed” or voided prior
12 No. 05-2478
to completion. If the investigation is not strictly concerned
with a possible Title I violation, then an investigatory
subpoena is authorized by the text of 29 U.S.C. § 521,
regardless of whether the activity being investigated is
related to an election “already conducted” and without
regard to the identity of the person or entity that might
have authority to bring a hypothetical enforcement action
relating to the same conduct.3
2. The Present Investigation
The impetus for the Secretary’s investigation and the
issuance of the subpoena was a complaint filed by Richard
Berg. The complaint purports to allege “violations of
Title IV of the [LMRDA]” stemming from the October 16,
2004 election that was cancelled prior to completion and
requests that the Secretary “investigate our complaint
under Title IV. . . .” The complaint alleges that when Berg
mailed campaign literature to the addresses on the Union’s
mailing list, approximately 750 such mailings were re-
turned by the postal service as undeliverable. Berg claimed
that when ballots were mailed to the same addresses by the
Union prior to the October election, 90 ballots sent to the
previously undeliverable addresses were returned fully
executed. These 90 ballots, and approximately 98 others,
were set aside and challenged by the election officer, and
were not included in the initial incomplete tally made on
October 16, 2004, at which point Berg claims that he led the
incumbent president by seven votes. The election officer
proposed to rule on the challenged ballots and complete the
vote count on October 19, 2004. At this point, Berg alleged,
the incumbent officers realized for the first time that Berg
3
We again emphasize that the issue of whether the Secretary
may bring a § 482 action under the present circumstances is
not properly before us and we express no opinion on the matter.
No. 05-2478 13
might actually win the election when the tally was com-
pleted.4 Berg believes that during the intervening two days
the incumbent officers fired the election officer and voided
the entire election, not because of any preelection complaint
Berg may have filed, but because they feared the result of
the election. He alleged that the officers’ purported reliance
on his protest as a vehicle for voiding the October election
was only a pretext for their true intention to stave off his
inevitable victory.
The subpoena duces tecum at issue here sought Union
records relating to visits by a Union business agent to one
of its worksites during the time preceding the October
election, dues payment history information used to deter-
mine Union member eligibility to vote in the October
election, and current contact information for 348 mem-
bers of the Union.
With respect to whether this subpoena is directed toward
the investigation of a possible LMRDA violation lying
wholly within the ambit of Title I, we first note that the
rights enumerated in Titles I and IV of the LMRDA are
not neatly compartmentalized into separate and distinct
categories. Instead, it is well recognized that Title I and
Title IV “protect many of the same rights” with respect to
union elections. Local No. 82, Furniture & Piano Moving v.
Crowley, 467 U.S. 526, 539 (1984); Local 57, 346 F.2d
at 555. Thus, in the context of this case, the pertinent
question is whether the conduct being investigated poten-
tially implicates a Title IV violation (and therefore is within
the Secretary’s grant of investigatory power), and not upon
4
It was Berg’s view that the election officer would likely have
sustained the challenge to the 90 ballots received from suspicious
addresses and denied the incumbent officers’ challenge to at
least another 35 ballots that Berg is certain would have gone
his way.
14 No. 05-2478
whether such conduct might also give rise to a Title I
violation. This overlap between the rights protected by
Titles I and IV and the Secretary’s power to investigate in
cases potentially implicating both Titles was persuasively
analyzed by the First Circuit in Local 57:
Appellant’s second new argument is that, in view of the
express exclusion of Title I violations from Section 601
[29 U.S.C. § 521], the Secretary’s power to investigate
the election for Title IV violations was preempted by
the fact that a suspended union member . . . apparently
has commenced an action in the District Court based on
an alleged violation of his rights under Title I of the
Act. We must reject this argument also. It rests on the
false premise that union misconduct which deprives an
individual of rights guaranteed to union members by
Title I may not also constitute a violation of duties
imposed upon the union by Title IV.
Local 57, 346 F.2d at 555 (citation omitted) (emphasis
added).
We have no difficulty concluding that the allegations of
Berg’s complaint, and the Secretary’s subsequent investiga-
tion of the October election, fall within the permissible
boundaries of the investigatory power conferred by § 521.
The allegation that October ballots may have been marked
and returned by individuals other than those to whom they
were mailed clearly implicates Title IV’s requirements
that “[e]ach [union] member in good standing shall be
entitled to one vote,” 29 U.S.C. § 481(e), and that the union
is required to institute “adequate safeguards to insure a fair
election,” 29 U.S.C. § 481(c). The Secretary’s demand for
member contact information and records concerning
the manner in which the union determined voter eligibility
is reasonably relevant to this aspect of the investigation.
Title IV also generally prohibits the expenditure of union
money to promote the candidacy of any person in an
No. 05-2478 15
election subject to regulation under the LMRDA. 29 U.S.C.
§ 481(g). The Secretary’s subpoena, requesting records
relating to a union employee’s visits to a worksite in the
period immediately preceding the October election, is
relevant to an inquiry into a possible violation of that
section.
For the foregoing reasons, the judgment of the district
court is AFFIRMED.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—10-31-06