Lamb v. Carey

• Decision Date: 06 May 1974
• Docket Number: 73-1514.,No. 73-1513,73-1513
• Citation: 498 F.2d 789,162 US App. DC 247
• Parties: Newman A. LAMB v. Edward L. CAREY, Appellant, C. W. Davis, and Paul R. Dean, Trustees, United Mine Workers of America Welfare & Retirement Fund. Willie Ray BLANKENSHIP et al., v. W. A. (Tony) BOYLE et al., and Edward L. Carey, Individually and in their capacities as president, vice president and general counsel, respectively, of the United Mine Workers of America, Appellants, The United Mine Workers of America et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

162 US App. DC 247, 498 F.2d 789 (1974)

Newman A. LAMB v. Edward L. CAREY, Appellant, C. W. Davis, and Paul R. Dean, Trustees, United Mine Workers of America Welfare & Retirement Fund.

Willie Ray BLANKENSHIP et al., v. W. A. (Tony) BOYLE et al., and Edward L. Carey, Individually and in their capacities as president, vice president and general counsel, respectively, of the United Mine Workers of America, Appellants,

The United Mine Workers of America et al.

Nos. 73-1513, 73-1514.

United States Court of Appeals, District of Columbia Circuit.

Argued March 4, 1974.

Decided May 6, 1974.

Ross O'Donoghue, Washington, D. C., with whom George A. Fisher, Washington, D. C., was on the brief, for appellant Carey, etc., in Nos. 73-1513 and 73-1514.

Joseph A. Yablonski, Washington, D. C., with whom Daniel B. Edelman, Washington, D. C., and Lewis D. Sargentich, Washington, D. C., were on the brief, for appellee, United Mine Workers of America.

Fred M. Vinson Jr. and Michael P. Bentzen, Washington, D. C., entered appearances for appellee United Mine Workers of America and Retirement Fund.

Before TAMM and ROBINSON, Circuit Judges, and GEORGE L. HART, Jr.,^* Chief Judge, United States District Court for the District of Columbia.

HART, Chief District Judge:

In June of 1971 appellant, Edward L. Carey, was named a Trustee of the United Mine Workers of America Welfare and Retirement Fund of 1950 (hereinafter the "Fund") to fill the unexpired term of W. A. Boyle who had been removed pursuant to an Order entered in the case of Blankenship v. Boyle, 329 F. Supp. 1089 (D.D.C.1971). By the terms of the National Bituminous Coal Wage Agreement of 1971 between the United Mine Workers of America (hereinafter the "Union") and the coal operators (hereinafter the "Operators"), Carey was named as the Union's representative on the Fund's Board of Trustees, the appointment to expire upon the termination of the Agreement, November 12, 1974. On March 19, 1973, the District Court, after holding a hearing on the matter, entered an Order removing Carey as a Trustee of the Fund. The appeal from that Order raises two questions for decision here:

1. Whether the District Court had jurisdiction to enter an order removing appellant; and

2. Whether the District Court abused its discretion in removing appellant.

BACKGROUND

The Fund is an irrevocable trust originally established in 1950 pursuant to Section 302(c) of the Labor-Management Relations Act of 1947, 29 U.S.C. § 186(c). A detailed discussion of the Fund is provided by the District Court in its opinion in Blankenship v. Boyle, supra. The salient features of the Fund relevant to this appeal are hereinafter set forth. The purpose of the Fund is to pay various benefits "from principal or income or both", to employees of coal operators, their families and dependents. These benefits cover medical and hospital care, pensions, compensation for work-related injuries or illness, death, or disability.

The Fund is administered by three Trustees: one designated by the Union, one designated by the Operators, and the third a "neutral party designated by the other two . . ." Trustees. Each Trustee serves for the duration of a given collective bargaining agreement, subject to termination by resignation, death, or an inability or unwillingness to serve. The Trustees have considerable discretion to determine the types and levels of benefits. The direct income to the Fund is provided by royalty payments made by the Operators as specified in the collective bargaining agreement and based on the tonnage mined.

The operation of the Fund has recently been the subject of complex and far-reaching legal challenges. See Blankenship v. Boyle, supra. The essence of that litigation was a class action on behalf of the coal miner beneficiaries challenging certain Trustees of the Fund for breaches of their fiduciary duty. That lawsuit, which also named the Union as a defendant, was divided into three parts: (1) fiduciary breaches, (2) challenges to Fund regulations, and (3) internal Union issues. The second issue was settled prior to trial, and the third part was consolidated with Yablonski v. UMWA, C.A. 3436-69 (now Weaver v. UMWA). For the purposes of this appeal we are concerned with the history of the litigation involving the fiduciary issues.

After lengthy consideration of the case in Blankenship, the District Court found a variety of breaches of fiduciary duty, some conspiratorially inspired, others not. As part of the equitable relief granted, the Court removed two of the Trustees, including W. A. Boyle, ordered the Fund to cease doing business with the National Bank of Washington, and set a limit on the Fund's non-interest bearing accounts. This Order was appealed, and stays were denied both in the District Court and in this Court.

As a result of Boyle's removal as Trustee, appellant, Carey, who was already serving as the Union's general counsel, was appointed by the Union to fill the vacancy. This appointment was incorporated in the terms of the new agreement signed with the Operators in November 1971.

Meanwhile Boyle's presidency of the Union was challenged in Hodgson and Trbovich v. UMWA, (D.D.C.1972), 344 F.Supp. 17. The plaintiffs there were ultimately successful in requiring a new election, in which the pro-Boyle forces were defeated. Arnold Miller was certified as the new president on December 22, 1972, and thereafter on January 8, 1973, sent a telegram to Carey stating that he was being removed as a Trustee of the Fund. On January 9 the Operator's Trustee and the neutral Trustee, over Carey's objection, directed the Fund's special counsel to seek instructions from the District Court, and the instant litigation resulted.

Appellant contends that the District Court lacked jurisdiction to consider this matter because jurisdiction had vested in this appellate Court by virtue of the Blankenship appeal which is still pending, that in any event the District Court lacked any ancillary jurisdiction to decide the issues raised, and that the District Court abused its discretion in removing appellant. We will respond to each argument in turn.

JURISDICTION

Appellants cite Goldsborough v. Marshall, 100 U.S.App.D.C. 134, 243 F. 2d 240 (1957), to support the proposition that the pending appeal in Blankenship deprived the District Court of any jurisdiction to consider the issues raised in this case. Goldsborough cannot sustain appellant's argument. There the Court had before it co-administrators of a testamentary trust who were continually antagonistic towards each other because of conflicting claims. The court removed both administrators and replaced them with a neutral trustee. While this decision was on appeal, the newly appointed trustee declined to serve, and the District Court appointed a new trustee. In the course of its opinion the Court stated that the general rule was that an appeal suspends the power of the trial court to proceed further in the case. However in support of its actions the Court stated:

"The substantial rights directly involved in the appeal from the first order related to whether appellant should have been allowed to continue to administer the estate. The appointment of a second neutral administrator after the first neutral administrator declined the appointment did not finally adjudicate substantial rights involved in that appeal . . . . In the circumstances the District Court had authority to protect the assets of the estate, and did not abuse its discretion by acting as it did." 243 F.2d at 244.

In the instant case the District Court faced a similar situation. The gravamen of the plaintiffs' claims in Blankenship was that the Trustees of the Fund were engaged in acts of fiduciary indiscretion to the detriment of the beneficiaries and to the detriment of the Fund itself. The trial Court agreed with many of these assertions and ordered that certain Trustees be removed. While the appeal from the trial Court's order was pending, a problem arose concerning one of the "replacement" Trustees, the appellant herein. Following the rule in Goldsborough, the District Court here had the right to determine if the remedial effect of its order in Blankenship was being undermined. The action taken by the District Court to protect the efficacy of its equitable relief was in no way dispositive of the issues raised on the appeal of the main case.

The question has also been raised as to whether the District Court had ancillary jurisdiction to consider the instant case, arising as it did, subsequent to the acts complained of in the original complaint. We hold that it did.

In Morrow v. District of Columbia, 135 U.S.App.D.C. 160, 417 F.2d 728 (1969), this Court held that the proper determination of what ancillary action a court may appropriately take in aid of its original jurisdiction turns on the relationship between the original matter and the ancillary issue. The major purpose of such jurisdiction is to insure that a judgment of a court is given full effect. This Court set forth four guidelines to aid in the determination of proper ancillary jurisdiction:

". . . Ancillary jurisdiction should attach where: (1) the ancillary matter arises from the same transaction which was the basis of the main proceedings, or arises during the course of the main matter, or is an integral part of the main matter; (2) the ancillary matter can be determined without a substantial new factfinding proceeding; (3) determination of the ancillary matter through an ancillary order would not deprive a party of a substantial procedural or substantive right; and (4) the ancillary matter must be settled to protect the integrity of the main proceeding . . ." 417 F.2d at 740

In applying this approach to the matter at hand: (1) the nature of the issues raised in this...