Ellis v. Chao
| Decision Date | 17 July 2003 |
| Docket Number | No. 02-6002.,02-6002. |
| Parties | Patrick ELLIS, Plaintiff-Appellant, v. Elaine L. CHAO, Secretary, United States Department of Labor, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Second Circuit |
Joseph P. Carey, Joseph P. Carey, P.C., Fishkill, New York (Annette G. Hasapidis, Law Offices of Annette G. Hasapidis, South Salem, New York, on brief), for Appellant.
Michael Krauss, Assistant United States Attorney (James B. Comey, United States Attorney for the Southern District of New York and Jeffrey S. Oestericher, Assistant
United States Attorney, on brief) New York, New York, for Appellee.
Before: F.I. PARKER, STRAUB, and B.D. PARKER, Circuit Judges.
Appellant, Patrick Ellis ("Ellis"), appeals from a decision of the United States District Court for the Southern District of New York (Sidney H. Stein, Judge) entered on December 10, 2001, denying his motion for summary judgment and his motion to amend his complaint, and granting the cross-motion for summary judgment of appellee, Secretary of Labor Elaine L. Chao (the "Secretary"). Ellis seeks a declaratory judgment invalidating a February 2000 election for Statewide Officers, Region Officers, and Statewide Board of Directors of the Civil Service Employees Association (the "CSEA" or the "union")1, and an injunction compelling the Secretary to file a suit to set aside the election and then conduct and supervise a new one. Ellis also challenges the district court's denial of his motion to amend his complaint. We hold that the Secretary's decision not to initiate suit was not necessarily arbitrary and capricious, but that her Statement of Reasons is not sufficient for this Court to determine whether or not it was arbitrary and capricious within the meaning of the Labor-Management Reporting and Disclosure Act of 1959 (the "LMRDA").2 We further hold that the district court abused its discretion when it denied Ellis' motion to amend. We therefore affirm the denial of summary judgment to Ellis, and vacate and remand both the grant of summary judgment to the Secretary and the district court's denial of Ellis' motion to amend.
Ellis, a self-described "dissident" member of the CSEA, ran for state President of the CSEA against the incumbent president in the union's February 2000 election. Ellis, having lost, challenged the election. After exhausting his internal union remedies, he filed a complaint on June 22, 2000 with the Secretary pursuant to Section 402(a) of the LMRDA, 29 U.S.C. § 482(a). Section 402(a) allows a union member who has exhausted the internal remedies provided by his union to file a complaint with the Secretary alleging that a union election violated his rights under the LMRDA. The Secretary is then required to investigate the union member's complaint. See 29 U.S.C. §§ 482(b), 521.
In his complaint to the Secretary, Ellis alleged a broad range of improprieties in how the election was conducted, including, among other things, that: 1) union rules were violated by the improper listing of another candidate; 2) another candidate accepted improper campaign contributions; 3) an excessive number of ballots were mailed; 4) some members received the wrong ballot, no ballot, multiple ballots, and/or late ballots; 5) True Ballot, the independent balloting agency conducting the election, did not provide meaningful oversight of the election process; 6) voted ballots were not properly handled or secured;3 7) ballots were improperly counted and inaccurately tallied; 8) approximately 2,000 ballots in Ellis' favor were improperly discarded; and 9) the tallying process was not properly managed. In addition, Ellis alleged that his right to observe the ballot-counting process as required by the LMRDA was denied.4 Ellis explained that election observers were restricted to a roped-off area in one corner of the room in which ballots were tallied, he was only allowed one observer, and he was not able to monitor the tallying at the various tables where it was taking place. Ellis also alleged that observers were not permitted to speak to anyone in the room other than the CSEA's general counsel and a True Ballot representative. In addition, he alleged that candidates were not permitted equal numbers of observers.
In a letter dated October 6, 2000, the Department of Labor officially informed Ellis that the Secretary had decided to dismiss his complaint.5 The letter enclosed the Secretary's Statement of Reasons for Dismissing the Complaint (the "Statement of Reasons") which stated that the Secretary had investigated the complaint and decided to dismiss it. The Statement of Reasons explained that the vast majority of Ellis' allegations had not been substantiated, but that the Secretary had substantiated Ellis' allegation that observer rights guaranteed by the LMRDA were violated. Nevertheless, the Statement of Reasons stated that no further action would be taken by the Secretary. Specifically, the Statement of Reasons explained that:
The investigation revealed that the union denied candidates the right to effectively observe the election by adopting rules that allowed a candidate to have only one observer at the tally and restricting observers' view of the process. Observers were not able to see the names of the voters as voter eligibility was checked and were not able to verify the marks on the ballots to determine whether ballots were being tallied correctly. However, the investigation did not disclose evidence that this violation affected the election outcome in any way. There is no evidence of any election impropriety such as ineligible persons voting, ballot fraud or tally irregularities. Consequently, there is no probable cause to believe that this violation had an effect on the outcome of the election.
The Statement of Reasons explained that, therefore, the Department of Labor was "closing our file on this matter."
Ellis contends that the Secretary's refusal to file suit was arbitrary and capricious because the Secretary found that observer rights guaranteed by the LMRDA had been violated but failed to challenge the CSEA election. The Secretary counters that her Statement of Reasons satisfies the requirements of the LMRDA and that her refusal to file suit was not arbitrary and capricious.
Ellis commenced this action on January 12, 2001 seeking an order declaring that the improper restrictions on observers found by the Secretary affected the outcome of the February 2000 election, setting aside the election, and requiring the Secretary to conduct a new election under her supervision. After the Secretary answered the complaint, the parties cross-moved for summary judgment. While the cross-motions were pending, Ellis moved to amend his complaint by adding five paragraphs, each of which stated that the Secretary had failed to substantiate one of his allegations. According to Ellis, this motion to amend was motivated by the Secretary's argument that by failing to challenge the Secretary's findings as to those allegations, Ellis had admitted that the allegations were unfounded.
The district court denied Ellis' motion to amend his complaint as futile because the court determined that under Dunlop v. Bachowski, 421 U.S. 560, 95 S.Ct. 1851, 44 L.Ed.2d 377 (1975),6 it did not have the power to inquire into the factual bases for the Secretary's conclusions. See Ellis v. Chao, No. 01 CIV. 0280(SHS), 2001 WL 1550809, at *3 (S.D.N.Y. Dec.5, 2001).
The district court then considered the parties' competing motions for summary judgment, and found that there was no genuine issue of material fact. The district court found the Statement of Reasons sufficient to show that the Secretary did not act in an arbitrary and capricious manner. It reasoned that improper restrictions on election observers have never been found to per se mandate the Secretary's intervention. Id. at *4.
The district court also rejected Ellis' argument that the Secretary's decision not to challenge the CSEA election violated his right to equal protection as set forth in Bush v. Gore, 531 U.S. 98, 121 S.Ct. 525, 148 L.Ed.2d 388 (2000). It reasoned that there was "no evidence that the Secretary's actions had the effect of `valuing one person's vote over that of another.'" Ellis, 2001 WL 1550809, at *4 (quoting Bush, 531 U.S. at 104-05, 121 S.Ct. 525)(internal formatting omitted). It also questioned whether Bush would apply to internal union elections.7 Based on these conclusions, the district court granted the Secretary's motion for summary judgment and denied Ellis' motion for summary judgment.
Ellis argues that the Secretary's decision not to challenge the CSEA election was arbitrary and capricious. To evaluate this argument, we must first determine under what circumstances the Secretary is required to sue, so that we may evaluate whether or not her decision not to sue may have been arbitrary and capricious under the facts of this case.
The Secretary does not have unlimited discretion to decide whether or not to bring an action challenging a union election. In Heckler v. Chaney, 470 U.S. 821, 105 S.Ct. 1649, 84 L.Ed.2d 714 (1985), the Supreme Court characterized the LMRDA as a statute that "quite clearly withdrew discretion from the agency and provided guidelines for exercise of its enforcement power." Id. at 834, 105 S.Ct. 1649. Thus, the Secretary's decision not to initiate suit is reviewable to determine whether it is arbitrary and capricious. See Dunlop, 421 U.S. at 571-73, 95 S.Ct. 1851.
The language of the LMRDA makes it clear that the Secretary is sometimes required to...
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