584 F.2d 308 (9th Cir. 1978), 77-3997, Benda v. Grand Lodge of Intern. Ass'n of Machinists and Aerospace Workers

Docket Nº77-3997.
Citation584 F.2d 308
Party NameKenneth W. BENDA, William H. Henderson, Swinton L. Corley, Individually and on behalf of all class members; Local Lodge 228, International Association of Machinists & Aerospace Workers, an Unincorporated Association; and Santa Cruz Missile & Space Test Base Local Lodge 2230, International Association of Machinists & Aerospace Workers, an unincorpor
Case DateAugust 28, 1978
CourtUnited States Courts of Appeals, Court of Appeals for the Ninth Circuit

Page 308

584 F.2d 308 (9th Cir. 1978)

Kenneth W. BENDA, William H. Henderson, Swinton L. Corley,

Individually and on behalf of all class members; Local Lodge

228, International Association of Machinists & Aerospace

Workers, an Unincorporated Association; and Santa Cruz

Missile & Space Test Base Local Lodge 2230, International

Association of Machinists & Aerospace Workers, an

unincorporated association, Plaintiffs-Appellees,

v.

GRAND LODGE OF the INTERNATIONAL ASSOCIATION OF MACHINISTS &

AEROSPACE WORKERS, an unincorporated association,

Defendant-Appellant.

No. 77-3997.

United States Court of Appeals, Ninth Circuit

August 28, 1978

Rehearing and Rehearing En Banc Denied Oct. 19, 1978.

Page 309

[Copyrighted Material Omitted]

Page 310

John F. Henning, Jr. (argued), of Henning & Walsh, San Francisco, Cal., for defendant-appellant.

Richard Harding (argued), of Littler, Mendelson, Fastiff & Tichy, San Francisco, Cal., for plaintiffs-appellees.

Appeal from the United States District Court for the Northern District of California.

Before TRASK and SNEED, Circuit Judges, and SKOPIL [*], District Judge.

SNEED, Circuit Judge:

Appellant Grand Lodge of the International Association of Machinists & Aerospace Workers (hereinafter the International) challenges a preliminary injunction entered by the district court rescinding the trusteeship imposed by the International on District Lodge 508 and enjoining any further action by the International to take over the District Lodge or to punish any

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member of that group. Appellant questions whether the district court had jurisdiction to hear this case, arguing that the exclusive jurisdiction of the National Labor Relations Board (NLRB) over unfair labor practice charges preempts the jurisdiction given to the district courts by the Labor-Management Reporting and Disclosure Act of 1959, 29 U.S.C. § 401 Et seq. The appellant International also argues that, even if jurisdiction was proper, the district court's conclusions are contrary to existing case law and to the factual record in this case. The appellant also challenges the award of attorney's fees entered against it. We affirm the preliminary injunction, but reverse the grant of attorney's fees.

To explicate our holding we shall first set forth the pertinent facts. Then we shall direct our attention to the statute that governs trusteeships of locals and the necessary accommodation between district court jurisdiction provided thereunder and the jurisdiction of the NLRB. Next follows a review of the propriety of the district court's action in granting the preliminary injunction. In doing this we shall first determine and then apply the proper standard of review to the facts of this case. Finally, we shall address the attorney's fees issue.

I. Facts

Appellee Benda is the president of District Lodge 508 of the Machinists Union. This lodge is composed of representatives from all the local lodges in California's Santa Clara and Santa Cruz counties. The members of these locals are all employees of Lockheed Missile & Space Company (LMSC), a wholly-owned subsidiary of Lockheed Aircraft Corporation.

The trouble out of which this case arose began in the summer of 1977 when negotiations commenced on a contract to replace the one due to expire in October, 1977. Contract negotiations between the union and LMSC in the past had been coordinated with those involving Lockheed Georgia Company (GELAC), Lockheed California Company (CALAC), and Lockheed Aircraft Services Company (LAS), all of which are also wholly-owned subsidiaries of Lockheed Aircraft. Notwithstanding this coordinated bargaining, the employees of each company previously had always voted separately on whether to accept or reject a contract; acceptance of a contract by employees of one company did not preclude its rejection by employees of another. Acceptance or rejection was a decision by the employees of each individual company.

The 1977 negotiations resulted in both LMSC and CALAC employees rejecting contract proposals and going on strike on October 10, 1977. GELAC employees, following an independent course, did not go on strike until October 19. On November 10 negotiations resumed. The International then informed the district and local union representatives that it had decided to engage in corporate-wide joint unified bargaining. This new bargaining plan included a requirement that there be a majority vote of the Combined membership working for All Lockheed subsidiaries before any proposal could be accepted. Authority for this action was derived, the International asserted, from International Circular No. 596, published in 1958, which provides that the International President or an authorized committee shall determine whether all the bargaining units affected by multi-unit agreements with the same employer, company or corporation shall be combined for voting purposes or shall be permitted to vote separately or in what combination.

Three of the companies presented their "last, best and final offers" on November 22. The LMSC union representatives voted to present the LMSC proposal to their membership for a vote. GELAC and CALAC union negotiators were dissatisfied with the proposals made to them and voted not to take the contracts to their memberships. The International representatives ruled that, on the basis of these developments, all the Lockheed companies would be informed that the contract proposals had been rejected. The LMSC union representatives voiced their dissatisfaction with this procedure and decided to seek the advice of their local delegate bodies. These delegate

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bodies, including District Lodge 508, voted to place the contract proposal before the members.

On November 25 all officers of District Lodge 508 were suspended by the International President. An International official was designated to take charge of the affairs of District Lodge 508. On November 30 a show cause hearing was conducted as required by the union constitution to determine whether the suspensions should continue. It was the decision of the International's hearing officer to continue the suspensions. In the meantime, two days after the suspension of District Lodge 508's officers, November 27, LMSC employees voted overwhelmingly to accept this contract. Despite this acceptance, the International attempted to continue the strike against LMSC. This presented the LMSC employees with a dilemma. One horn thereof was union discipline if they returned to work, and the other was employer discipline if they failed to do so.

This suit was filed in district court on December 6, 1977, alleging that the trusteeship had been imposed in violation of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA). Following a hearing, the district court entered a preliminary injunction against the International on December 15. The injunction prohibited appellant from maintaining a trusteeship over District Lodge 508 and from suspending officers and in any other way interfering with those LMSC employees who desired to return to work.

The International during this period was not inactive, however. On December 5, 1977, one day prior to the filing of the complaint in this action, it filed an unfair labor practice charge with the NLRB against LMSC. On February 8, 1978, the NLRB issued a complaint based on this charge, the basis of which was LMSC's action in bypassing the International and dealing directly with the district lodge. This was alleged to be a violation of LMSC's duty to bargain collectively with the union. No further action has been taken on this unfair labor practice charge.

The International, however, did request that the NLRB intervene in this appeal. The response came on April 7, 1978 in which the General Counsel of the NLRB stated that the NLRB would not intervene and that all NLRB proceedings involving these parties would be stayed pending resolution of this appeal. The response noted that the district court had jurisdiction to consider National Labor Relations Act issues germane to the resolution of the issues properly before it and that in the proceedings before it the district court had not clearly misapplied Board precedents. A subsequent letter further clarified the General Counsel's position, noting that he was neither approving nor disapproving the specific result reached by the district court, but merely was finding that the district court procedures were not so inappropriate as to require Board intervention in this action.

II. Statute That Governs Trusteeships

Title IV of the LMRDA regulates the imposition by labor unions of trusteeships 1 on subordinate union groups. The trusteeship provisions were incorporated into the LMRDA to deal with the abuses of the trusteeship process which had been uncovered by the McClellan Committee. Slovenko, Symposium on the Labor-Management Reporting and Disclosure Act of 1959, 443-47 (1961). The primary approach of the federal legislation is to limit the purposes for which a trusteeship can be established. The LMRDA provides that

(t)rusteeships shall be established and administered by a labor organization over a subordinate body only in accordance with the constitution and bylaws of the

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organization which has assumed trusteeship over the subordinate body 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.

29 U.S.C. § 462.

These requirements may be enforced both by the Secretary of Labor and "any member or subordinate body of a labor Union." 29...

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