Balanoff v. Donovan

• Citation: 549 F. Supp. 102
• Decision Date: 09 September 1982
• Docket Number: No. 82 C 2466.,82 C 2466.
• Parties: James BALANOFF, Plaintiff, v. Raymond J. DONOVAN, Secretary of Labor, Defendant.
• Court: U.S. District Court — Northern District of Illinois

549 F. Supp. 102

James BALANOFF, Plaintiff, v. Raymond J. DONOVAN, Secretary of Labor, Defendant.

No. 82 C 2466.

United States District Court, N.D. Illinois, E.D.

September 9, 1982.

Leon M. Despres, Thomas Geoghegan, Despres, Schwartz & Geoghegan, Chicago, Ill., for plaintiff.

Edward J. Moran, Asst. U.S. Atty., Chicago, Ill., for defendant.

MEMORANDUM OPINION AND ORDER

GETZENDANNER, District Judge.

On May 28, 1981 an election was held for the Directorship of District 31, United Steelworkers of America ("USWA"). Plaintiff James Balanoff, the incumbent, lost by a vote of 24,381 to 22,237. The winner was Jack Parton. Parton had previously served as President of Local 1014, a sub-unit within the jurisdiction of District 31.

It is Balanoff's belief that the May 28 election was tainted by numerous violations of federal law. Balanoff alleges that he is a "leader of dissidents within the USWA" and that his re-election bid "was opposed by all the principal" officers of the International USWA. (Complaint, ¶ 6). His substantive charges boil down to the following accusation:

Determined to eliminate plaintiff as an elected official, the International Union directly used official union resources and assets to promote the candidacy of plaintiff's opponent, Jack Parton, or approved their use for that purpose.

(Id.)

Soon after the May 28 ballotting plaintiff invoked internal union remedies by filing an election protest with the appropriate USWA authorities. This protest was denied. Plaintiff then filed a timely complaint with the defendant Secretary of Labor under section 402 of the Labor-Management Reporting and Disclosure Act ("LMRDA"), 29 U.S.C. § 482. Plaintiff petitioned the Secretary to initiate suit to void the May 28 election. The Secretary denied plaintiff's request and ruled that no action would be filed. The Secretary's reasoning was spelled out in a thirteen page "Statement of Reasons."

The instant lawsuit challenges the Secretary's refusal to initiate suit. Plaintiff argues that the Secretary's decision is arbitrary and capricious, and amounts to an illegal condonation of serious election irregularities. The Secretary responds with a motion to dismiss, or in the alternative for summary judgment, arguing that he properly rejected each of the numerous allegations Balanoff raised in his administrative complaint. Balanoff's reply consists of a cross-motion for summary judgment in which he challenges the Secretary's disposition of only two of his claims.¹ The Court will now rule on the legality of the Secretary's handling of these two charges.

I. Plaintiff's Rights under the LMRDA

The LMRDA does not permit a defeated candidate such as Balanoff to sue directly to overturn the results of the election he lost. Only the Secretary of Labor is empowered to bring such an action. Trbovich v. Mine Workers, 404 U.S. 528, 92 S.Ct. 630, 30 L.Ed.2d 686 (1972). Individuals in Balanoff's position can merely file with the Secretary (as Balanoff did here) a complaint requesting that litigation commence. The Secretary's obligations upon receipt of the complaint are two-fold: He "shall investigate" the complaint's allegations and he "shall" file suit against the offending union if his investigation discloses probable cause to believe that a violation of the LMRDA occurred which "may have affected the outcome of the election." 29 U.S.C. § 482(b); see Wirtz v. Bottle Blowers, Assn., 389 U.S. 463, 88 S.Ct. 643, 19 L.Ed.2d 705 (1968); Howard v. Hodgson, 490 F.2d 1194, 1197 (8th Cir. 1973).

Prior to the Supreme Court's decision in Dunlop v. Bachowski, 421 U.S. 560, 95 S.Ct. 1851, 44 L.Ed.2d 377 (1975), it was unclear whether the courts had jurisdiction to examine a refusal by the Secretary to sue. The Secretary's position was that his decision was unreviewable; any other result, he argued, would undercut the Congressional scheme which places primary reliance on the Secretary's expertise in determining which post-election suits should go forward. The Bachowski Court rejected this claim as overbroad, holding that the Secretary had "failed to make a showing of `clear and convincing evidence' that Congress meant to prohibit all judicial review of his decision." Id. at 568, 95 S.Ct. at 1858.² The Court agreed, however, that "a congressional purpose narrowly to limit the scope of judicial review of the Secretary's decision can, and should, be inferred in order to carry out congressional objective in enacting the LMRDA." Id.

The Bachowski Court narrowed the allowable "scope of review" in two ways. First, it adopted the deferential "arbitrary and capricious" standard under which the Secretary's action can be set aside only if shown to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). Second, the Court restricted the form of inquiry which can be made during an examination into the Secretary's behavior:

Except in what must be the rare case, the court's review should be confined to examination of the "reasons" statement, and the determination whether the statement, without more, evinces that the Secretary's decision is so irrational as to constitute the decision arbitrary and capricious. Thus, review may not extend to cognizance or trial of a complaining member's challenge to the factual bases for the Secretary's conclusion either that no violation occurred or that they did not affect the outcome of the election.

Dunlop v. Bachowski, supra, 421 U.S. at 572-73, 95 S.Ct. at 1860-61.

The Court also gave some indication of the type of "rare" case in which a more sweeping inquiry would be appropriate:

The Secretary himself suggests that the rare case that might justify review beyond the confines of the reasons statement might arise, for example, "if the Secretary were to declare that he no longer would enforce Title IV, or otherwise completely abrogate his enforcement responsibilities ... or if the Secretary prosecuted complaints in a constitutionally discriminatory manner ...." Other cases might be imagined where the Secretary's decision would be "plainly beyond the bounds of the Act or clearly defiant of the Act."

Id. at 574, 95 S.Ct. at 1861 (citations omitted). The exact contours of the "rare" case concept remain unknown. However, one point is settled: A determination by the Secretary can never be upheld unless a sufficient statement of reasons is offered in support of his position. The Secretary must issue "a statement of reasons which is adequate to enable the court to determine whether the Secretary's decision was reached for an impermissible reason or no reason at all." Id. at 573, 95 S.Ct. at 1860.

II. The alleged misuse of Steelabor

Steelabor is the official journal of the USWA. Plaintiff charges that the union's hierarchy violated 29 U.S.C. § 481(g)³ by using Steelabor in an allegedly partisan manner to plaintiff's detriment. Plaintiff's charge is basically twofold:

(1) The editors of Steelabor afforded Parton "at least $20,000 to $40,000 in free publicity" (Plaintiff's Memorandum at 1) by running three stories in three different issues on the same subject — the opening of Local 1014's new union hall. In each story, Parton's name appeared several times. In two of them, he was pictured, once with Lloyd McBride, International President of the USWA.

(2) The editors of Steelabor imposed a virtual news blackout on plaintiff's activities.

In his Statement of Reasons denying plaintiff's complaint, the Secretary made several findings and conclusions with regard to the initial charge detailed above. The Secretary's ultimate conclusion was that the challenged articles did not evidence a violation of 29 U.S.C. § 481(g). However, with regard to plaintiff's second point, the Secretary made absolutely no findings whatsoever, though Balanoff had clearly raised the allegation in his petition to the Secretary.⁴ For this reason, I believe that a remand to the Secretary for further findings is warranted. One of the very rationales for judicial review in this context is to "assure that the Secretary will consider each and every allegation of the complaint and will state a rational reason for not filing suit." Hall v. Marshall, 476 F.Supp. 262, 274 (E.D.Pa.1979), aff'd. mem., 622 F.2d 578 (3d Cir. 1980); see also id. at 270-71; Fletcher v. Dunlop, 91 L.R.R.M. 2113 (N.D.Ill.1975). The Bachowski Court, in fact, expressly endorsed the remand approach in circumstances such as these:

When the district court determines that the Secretary's statement of reasons adequately demonstrates that his decision not to sue is not contrary to law, the complaint union member's suit fails and should be dismissed. Where the statement inadequately discloses his reasons, the Secretary may be afforded opportunity to supplement his statement.

Dunlop v. Bachowski, supra, 421 U.S. at 574, 95 S.Ct. at 1861. (Citation omitted)

The Seventh Circuit has similarly acknowledged, albeit in a different context, that agency action cannot be upheld — even under the "arbitrary and capricious" standard—when it is apparent that significant claims have gone unanswered:

In some circumstances, however, the record before an agency shows that significant questions were seriously contested. If the agency decision does not address these issues, even a restrained exercise of judicial review is impossible, and a remand for clarification is necessary.

City Fed. Sav. & Loan Assn. v. Fed. Home Loan Bank, 600 F.2d 681, 689 (7th Cir. 1979). It may very well be that the Secretary viewed Balanoff's "blackout" claim as so insubstantial that no response was needed. Cf. Sumner v. Mata, 449 U.S. 539, 101 S.Ct. 764, 770, 66 L.Ed.2d 722 (1981). Yet it is not at all clear from the materials properly before this court why such a conclusion, assuming it was made, was proper. Compare Central Bank v. Smith, 532 F.2d 37, 40 (7th Cir.) cert. denied, 429 U.S. 895, 97 S.Ct. 257, 50 L.Ed.2d 179 (1976). Under these circumstances, "courts do not...