Argentine v. United Steelworkers, America, Afl-Cio, 00-3448.

• Decision Date: 18 April 2002
• Docket Number: No. 00-3448.,No. 00-3516.,No. 00-3788.,00-3448.,00-3788.,00-3516.
• Citation: 287 F.3d 476
• Parties: Charles ARGENTINE; John Gooch; Rose Ann Wingo, fiduciary for the estate of Clarence Wingo, Plaintiffs-Appellees/Cross-Appellants, v. UNITED STEELWORKERS OF AMERICA, AFL-CIO, CLC, Defendant-Appellant/Cross-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 476

287 F.3d 476

Charles ARGENTINE; John Gooch; Rose Ann Wingo, fiduciary for the estate of Clarence Wingo, Plaintiffs-Appellees/Cross-Appellants, v. UNITED STEELWORKERS OF AMERICA, AFL-CIO, CLC, Defendant-Appellant/Cross-Appellee.

No. 00-3448.

No. 00-3788.

No. 00-3516.

United States Court of Appeals, Sixth Circuit.

Argued: November 1, 2001.

Decided and Filed: April 18, 2002.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Andrew D. Roth (argued and briefed), Robert Alexander (briefed), Bredhoff & Kaiser, Washington, D.C., Stewart R. Jaffy (briefed), Stewart Jaffy & Associates, Columbus, Ohio, for Appellant.

Ira J. Mirkin (argued and briefed), Barry R. Laine, Robert S. Moore (briefed), Green, Haines, Sgambati Company, Youngstown, Ohio, for Appellees.

Before SUHRHEINRICH and COLE, Circuit Judges; COLLIER, District Judge.^*

COLLIER, D.J., delivered the opinion of the court, in which SUHRHEINRICH, J., joined. COLE, J. (pp. 490-492), delivered a separate dissenting opinion.

OPINION

CURTIS L. COLLIER, District Judge.

Defendant-Appellant United Steelworkers of America ("USWA") appeals judgment for Plaintiffs Appellees on their claim of unlawful removal from their local union offices and imposition of a trusteeship on their local union, Local 5644. Plaintiffs cross-appeal the denial of their motion for summary judgment. For the reasons stated below we AFFIRM judgment for Plaintiffs but REVERSE the district court's award of attorney fees. For jurisdictional reasons we do not reach Plaintiffs' cross-appeal.

BACKGROUND

Defendant United Steelworkers of America ("USWA") is an international labor union with local affiliates. One of those local affiliates, Local 5644, represents workers at Titanium Metals Company ("Timet") in Toronto, Ohio.

USWA is the collective bargaining representative for the unionized employees at Timet. The practice of USWA is to work out a tentative agreement with a company and then submit it to the local union for debate and ratification. The union members then vote on whether to ratify the proposed collective bargaining agreement ("CBA").

Plaintiffs Charles Argentine, Clarence Wingo, and John Gooch were members of Local 5644 who were elected as Local officers in 1994. As part of their campaign Plaintiffs promised not to give any more concessions to Timet in future agreements. When Plaintiffs were elected in 1994 negotiations were underway for a new CBA. The USWA district director overseeing Local 5644, Jim Bowen, was the lead negotiator for USWA and a staff representative, Andrew Powley, assisted him. Plaintiffs appointed themselves and seven other Local members to the negotiating committee of Local 5644 and also took part in the negotiations. They were paid for their time and expenses.

In late July 1994, Timet presented its final contract proposal to USWA. Plaintiffs openly opposed the proposal and the union voted 279-29 to reject it. On July 31, 1994, Local 5644 went on strike. Timet issued a WARN Act¹ notice stating the Company would close most of its operations at the plant and move them to another state unless Local 5644 made substantial contract concessions. Plaintiffs continued to oppose the concessions in the proposal. On October 15, 1994, Bowen and Timet agreed to end the strike and extend the current CBA until at least May 1, 1995.

At Plaintiffs' request, USWA and Timet restarted negotiations on the CBA in May 1995. Plaintiffs participated in those negotiations as members of a committee composed of local union members. Plaintiffs stated in the meeting between USWA and Timet that the current proposal under negotiation by the parties did not meet with their approval and they would not take it back to the local members for a vote. Shortly thereafter talks broke off between USWA and Timet.

At the same time the negotiations were taking place, a financial investigation of Local 5644 was being conducted by USWA auditors. In February 1995, Powley, the USWA staff member working at the Local, said he thought spending at the Local from the time Plaintiffs took office up to the present moment was out of control and he could not rein it in. He suggested USWA conduct an audit. Later that same month Bowen requested an audit of Local 5644. The audit of the Local was completed in May 1995 and revealed substantial expenditures by the Plaintiffs. Bowen and the auditor recommended USWA impose a trust on the Local and remove its officers from their positions. A trusteeship was imposed on June 9, 1995 and Plaintiffs were removed from office. They received a letter from USWA President Becker stating:

To assure the performance of the collective bargaining agreements or other duties of a bargaining representative, you are hereby notified that Local Union 5644 is being placed under a [trusteeship] and all the officers are hereby relieved of their duties.

According to the letter, a hearing would be held later at which they could appear. The letter did not mention any financial irregularities.

Shortly after Plaintiffs were removed from office, USWA and Timet reached a tentative agreement. Bowen sent a letter to Local 5644 members urging ratification. Plaintiffs opposed the agreement. Contrary to usual practice, USWA conducted the ratification vote by mail. Local 5644 ratified the contract by a vote of 149 to 106.

On August 7, 1995, Plaintiffs were notified of a hearing before a USWA fact-finding Commission to be held on August 9, 1995. The notice did not mention financial matters and the Plaintiffs were unaware the hearing would involve financial matters. They requested a postponement of the hearing which was denied. The Commission issued a Commission Report which recommended continuing the trusteeship. USWA conducted two additional hearings. On November 29, 1995, an Appeals Panel held a hearing, adopted the Commission Report, and recommended the Executive Board adopt the Commission report. The Executive Board adopted the Commission report and on August 2, 1996, the Convention Appeals Committee held a hearing and adopted the decision of the Executive Board. The trusteeship was maintained until May 1997, the time for the next regularly scheduled election for officers.

Subsequent to these administrative proceedings, Plaintiffs filed suit in federal court against USWA for Plaintiffs' "unlawful" removal from their Local offices and imposition of a trusteeship on the Local. In the complaint Plaintiffs alleged, inter alia, three different claims. Count I stated USWA violated Plaintiffs' free speech rights contrary to the Labor Management Reporting and Disclosure Act ("LMRDA") § 101(a)(2), 29 U.S.C. § 411(a)(2). Count II alleged USWA imposed the trusteeship for an improper purpose contrary to LMRDA § 302 and § 304, 29 U.S.C. § 462 and § 464. Count III claimed USWA breached its contract with Plaintiffs by imposing the trusteeship in violation of its constitution and bylaws contrary to LMRDA § 301, 29 U.S.C. § 185. The matter went to trial and the jury found for Plaintiffs. The jury awarded each Plaintiff $1 in compensatory damages for count I; awarded Argentine and Gooch each $100,000 and Wingo $200,000 in punitive damages for count I; awarded each plaintiff $1 for compensatory damages on count II; and on count III awarded $3,800 to Argentine and Gooch and $1,800 to Wingo in compensatory damages.

After the trial USWA moved for judgment as a matter of law, a new trial, or a remittitur of punitive damages. The trial court denied USWA's motion. Plaintiffs moved for attorney fees and to amend the judgment to include declaratory and injunctive relief. The district court granted the award of attorney fees but denied the other relief.

DISCUSSION

I. USWA's Claim for Judgment as a Matter of Law

At trial, USWA argued it imposed the trusteeship to correct Plaintiffs' financial mismanagement of Local 5644 which is a permissible purpose under the LMRDA. On appeal USWA now argues even if the court accepted Plaintiffs' theory of the case, that they imposed the trusteeship for the purpose of silencing the Plaintiffs, such a reason would be lawful under the LMRDA. Its argument, in this regard, "which take[s] the jury's findings at face value," presents a "purely legal" question that is subject to de novo appellate review. K & T Enterprises v. Zurich Ins. Co., 97 F.3d 171, 175 (6th Cir.1996).

Section 302 of the LMRDA states one of the purposes a trusteeship can be imposed is for "assuring the performance of collective bargaining agreements or other duties of the bargaining representatives." LMRDA § 302, 29 U.S.C. § 462. USWA argues one of the duties of a bargaining representative is to negotiate collective bargaining agreements, and Plaintiffs' statements that they would not take the current contract under negotiations between USWA and Timet back to the Local for a vote interfered with that duty. Thus, it was lawful for USWA to impose the trusteeship to remove that interference.

USWA is correct in its assertion that the imposition of a trusteeship to prevent local officials from disrupting collective bargaining is a legitimate purpose under the LMRDA. Cascade Local Lodge No. 297 v. Int'l Ass'n of Machinists, 684 F.2d 609, 610 (9th Cir.1982); Gordon v. Laborers' Int'l Union, 490 F.2d 133, 137 (10th Cir.1973). Even if the trusteeship was imposed for a proper purpose, however, this alone would not entitle USWA to judgment as a matter of law on this issue.

A trusteeship is presumed to be valid when it is imposed for a purpose allowable under section 302 and it is imposed in a procedurally correct manner. LMRDA § 304, 29 U.S.C. § 464(c). Parties challenging the lawfulness of a trusteeship therefore can show the trusteeship was being imposed for an unlawful purpose or they can challenge the trusteeship because it was not imposed according to proper procedures. Teamsters Local Union No. 406 v. Crane, 848 F.2d 709, 712 (6th Cir.1988). Thus, a trusteeship can be challenged by a...