Ferrer v. Intern. Longshoremen's Ass'n

• Decision Date: 04 November 2009
• Docket Number: Civil No. 08-1505 (JP).
• Citation: 671 F.Supp.2d 276
• Court: U.S. District Court — District of Puerto Rico
• Parties: Víctor FERRER, et al., Plaintiffs v. INTERNATIONAL LONGSHOREMEN'S ASSOCIATION (ILA) AFL-CIO, et al., Defendants.

671 F.Supp.2d 276

Víctor FERRER, et al., Plaintiffs v. INTERNATIONAL LONGSHOREMEN'S ASSOCIATION (ILA) AFL-CIO, et al., Defendants.

Civil No. 08-1505 (JP).

United States District Court, D. Puerto Rico.

November 4, 2009.

Julio Cesar Alejandro-Serrano, Nicolas Nogueras-Cartagena, Nicolas Nogueras Law Offices, San Juan, PR, for Plaintiffs.

Luis N. Blanco-Matos, Matos Robles & Blanco, Kenneth Colon, San Juan, PR, Kevin John Marrinan, Vincent Torregiano, Marrinan & Mazzola Mardon, PC, New York, NY, Kenneth Colon, San Juan, PR, for Defendants.

OPINION AND ORDER

JAIME PIERAS, JR., Senior District Judge.

Before the Court is Defendants International Longshoremen's Association AFL-CIO ("ILA"), Local 1740, and Julián Cepero's ("Cepero") motion for summary judgment (No. 79), and Plaintiffs Víctor Ferrer ("Ferrer") and Sonia Santiago's opposition thereto (No. 90). Plaintiffs brought the instant action pursuant to the Labor Management Reporting and Disclosure Act ("LMRDA"), 29 U.S.C. § 411, and the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962 et seq. Plaintiffs also bring claims arising under Puerto Rico law, specifically Article 1802 of Puerto Rico's Civil Code, P.R. Laws Ann. tit. 31, § 5141; and Article II of the Constitution of the Commonwealth of Puerto Rico. For the reasons stated herein, Defendants' motion for summary judgment is hereby GRANTED.

I. MATERIAL FACTS NOT IN GENUINE ISSUE OR DISPUTE

The following material facts were deemed uncontested by all parties hereto at the May 20, 2009, Initial Scheduling Conference (No. 66).

1. Plaintiff Ferrer was eligible, according to Local 1740 bylaws, to run for office, including the presidency of Local 1740, prior to October 2007.

2. A Committee by the Atlantic Coast District ("ACD") issued the following recommendations which were approved by the ACD and affirmed by the ILA on appeal:

a. That Brother Ferrer be removed from the position of Financial Secretary of Local 1740.

b. That Brother Ferrer is barred from running for any ILA office for a period of one (1) year from the date of the issuance of this Report.

c. That Brother Ferrer provide any and all financial books and records of Local 1740 kept on paper, electronically or otherwise including any computer passwords to Interim President Cepero immediately upon receipt of this Report.

d. That Brother Ferrer restrain himself from any obstruction or interference with the administrative business of Local 1740.

e. That Interim President Cepero is directed to immediately hire a qualified Certified Public Accountant to conduct an audit of Local 1740's finances subject to the provisions contained in Article XIII, Section 9 of the ILA Constitution and Rules of Order.

f. That Local 1740 submit its by-laws for review by the ILA to ensure compliance with the ILA Constitution and Federal law.

3. The ILA is governed by a Constitution that establishes the relationship between the ILA and its subordinate bodies, including the ACD, local unions, and members.

4. The ACD is an intermediate body of the ILA having jurisdiction over locals operating within Puerto Rico. The ACD Constitution governs its relationship

between the ILA and its constituent locals and their members.

5. By the terms of the ILA Constitution, local unions are self governing. They adopt their own by-laws; the locals' members elect their own officers, Executive Boards and committees that they deem proper for the conduct of the local's affairs; the salaries of local officers are fixed by the local's membership. Local 1740 is a separate and distinct entity from the ILA.

6. Defendant Local 1740 is an affiliated local of the ILA. Local 1740 represents longshoremen in the port of San Juan, Puerto Rico. Plaintiff Ferrer was the elected Financial Secretary of that local until his removal from office after a union disciplinary hearing. Defendant Cepero was the elected Vice President and interim President of Local 1740 at all times relevant hereto.

7. The ILA Constitution contains a Code of Ethics that is binding upon all ILA and ILA local officers. Article VIII, Section 2 of the ILA Code of Ethics states: "Upon receipt of notice that any officer, representative, employee or labor trustee of the I.L.A., District or Local union has been criminally charged with any felony violation of a federal or state law, or for any violation of a federal or state law relating to the conduct of the affairs of a labor organization or employee benefit plan, the I.L.A. President shall place the accused individual on a temporary leave of absence with pay. The Ethical Practices Counsel shall then promptly institute an investigation regarding the allegations, and within sixty (60) days provide a written report of his investigation."

8. The ILA Code of Ethics establishes the position of Ethical Practices Counsel and the Honorable Milton Mollen has been continuously retained as the Ethical Practices Counsel to the ILA since 2004.

9. In July 2005 Jorge Aponte ("Aponte") held office as President of ILA Local 1740. At that time, Cepero was the Vice-President of Local 1740 and Ferrer was the local's Financial Secretary. On July 19, 2005, Aponte was indicted by the United States Attorney's Office for the District of Puerto Rico on charges of: (a) conspiracy to embezzle almost $2 million from Local 1740; (b) conspiring to embezzle over $8 million from the Plan de Bienestar, a benefit plan for ILA members in Puerto Rico; (c) money laundering; and (d) making false entries on Local 1740's LM-2 and LM-3 forms.

10. By letter dated July 22, 2005, ILA President Bowers informed Aponte that in accordance with the ILA Code of Ethics, Aponte was placed on a temporary leave of absence from all ILA offices, including his position as President of Local 1740.

11. Upon investigation by the Ethical Practices Counsel, Aponte's suspension from union office was ordered to continue without pay.

12. Article VII, Section 2 of Local 1740's by-laws provides that: "The Vice-President shall replace the President in cases of extended illness, death, or in cases indicated by the rule of debate, or in cases of abandonment, treason, on-the-spot resignation, or in any other necessary or urgent cases."

13. Pursuant to Article VII, Section 2 of Local 1740's by-laws, Cepero assumed the presidency of Local 1740 on an interim basis.

14. Cepero testified as a witness during the trial of Aponte and was subject to cross-examination. Cepero was not named as a conspirator in the trial.

15. On April 2, 2007, Aponte was convicted by a jury on 12 felony counts and, as a result, is barred from holding union office pursuant to 29 U.S.C. § 504 for a period of thirteen years.

16. Article VII, Section 2 of the Local 1740 by-laws further states: "In any event in which the Vice-President replaces the President due to death, resignation, or permanent and total disability, his position shall be subject to ratification or rejection by all of the members at the next scheduled General Assembly."

17. Article VIII, Section 1 of Local 1740's by-laws states: "Regular Meetings: members shall meet at a Regular Meeting four times a year: during the first two weeks of April, the first two weeks of July, the first two weeks of October, and the first two weeks of January of each coming year. The regular meetings shall be held at the place, date and time Chairman orders, within the time stipulated by the constitution."

18. A ratification assembly was convened on October 17, 2007 for the purposes of affirming Cepero's occupation of the presidency. The ratification, conducted by secret-ballot, was observed by representatives from the Puerto Rico Department of Labor.

19. A majority of those members of Local 1740 voting at the ratification assembly voted in favor of ratifying Cepero's occupation of the office of president.

20. Richard P. Hughes, Jr. was elected to succeed John Bowers as President of the ILA during the National Convention in July 2007.

21. Ferrer did not file charges with the ILA regarding either Cepero's occupation of the Presidency of Local 1740 or the ratification assembly.

22. Article XVIII, Section 1(b) of the ILA Constitution provides: "Any member, officer, or representative of the ILA or any of its subdivisions, shall be subject to discipline who is found guilty, after notice of and opportunity for hearing upon charges, as provided for in this Article, of violating any provision of this Constitution, or a decision of the Executive Council or of his local union, district council, or district organization, or of dishonesty, misconduct, or conduct detrimental to the welfare of the ILA."

23. By letter dated September 1, 2007, Cepero filed charges with the ILA pursuant to Article XVIII of the ILA Constitution against Ferrer in his capacity as Financial Secretary of ILA Local 1740 alleging: (1) that Ferrer failed to perform his duties as Financial Secretary timely, to wit that he failed to promptly pay bills; (2) that Ferrer's failure to pay taxes and bills caused the local to incur penalties and fines; (3) that Ferrer failed to work cooperatively with Cepero; (4) that Ferrer opposed Cepero's efforts to hire a CPA; and (5) that Ferrer made disparaging comments towards Cepero to employers.

24. By letter dated September 6, 2007, Cepero filed amended union disciplinary charges against Ferrer with the ILA.

25. The ILA referred the charges filed by Cepero against Ferrer to the ACD for further proceedings consistent with Article XVIII.

26. ACD President Stephen Knott appointed ACD Vice-Presidents Robert Gladden, Jr. and Felipe García as a committee to hear the charges filed by Cepero against Ferrer.

27. The hearing on the charges against Ferrer took place on September 25 and 26, 2007 at the Hilton Caribe in San Juan, Puerto Rico.

28. Ferrer was represented by legal counsel, Ada Pérez, Esq., at the hearing.

29. The ACD hearing was conducted in Spanish with translation into English for the benefit of Gladden.

30. All parties...