Harrington v. Chao
| Decision Date | 08 October 2003 |
| Docket Number | CIVIL ACTION NO. 00-CV-11028-RGS. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
| Parties | THOMAS HARRINGTON v. ELAINE L. CHAO. |
Before the court are cross-motions for summary judgment seeking to affirm or overturn a decision of the Secretary of Labor exempting the New England Regional Council of Carpenters (NERC)1 of the United Brotherhood of Carpenters and Joiners of America (UBC) from the obligation to comply with the procedures governing "local" union elections mandated by the Labor Management Reporting and Disclosure Act of 1959 (LMRDA), 29 U.S.C. § 481(b). This issue is not a new one for the court, the case having been remanded by the First Circuit for reconsideration of an earlier decision upholding the Secretary. See Harrington v. Herman, 138 F. Supp. 2d 232 (D. Mass. 2001).2 As suggested, the first round went badly for the plaintiff and the district court. On May 25, 2000, Thomas Harrington (then a business agent and now the chief executive officer of the NERC), together with other UBC members, filed this Complaint seeking to compel the Secretary of Labor to require the NERC to elect its officers by direct secret ballot, rather than indirectly through delegates representing union locals. The Secretary refused, reasoning that the NERC was an "intermediate body," and therefore exempt from the requirements of section 481(b) of the LMRDA.3 On April 10, 2001, this court allowed the Secretary's motion to dismiss, holding that it was "not free to substitute its own judgment for that of the Secretary's, however appealing it might find the substance of petitioners' case." Harrington, 138 F. Supp. 2d at 236. The Court of Appeals disagreed, holding that the Secretary's Statement of Reasons for refusing to initiate a civil enforcement proceeding was "insufficient to permit meaningful judicial review." Harrington, 280 F.3d at 52. The district court was ordered to remand the case to the Secretary for further explanation. Id. at 60. On January 31, 2003, Secretary Chao issued a Supplemental Statement of Reasons reaffirming her predecessor's determination that the NERC was an LMRDA intermediate body. The parties then filed cross-motions for summary judgment. On July 17, 2003, the court heard oral argument.
The standard of review was set out by the First Circuit in Harrington, 280 F.3d at 56.
The Secretary's decision under Title IV of the LMRDA not to bring an action against a labor organization for violation of 29 U.S.C. § 481 is subject to only narrow judicial review. In Dunlop v. Bachowski, 421 U.S. 560 (1975), the Supreme Court held that the Secretary's decision is subject to review under the Administrative Procedure Act for whether her decision is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." Id. at 565 (quoting 5 U.S.C. § 706(2)(A) and citing 5 U.S.C. §§ 702, 704). The Supreme Court said that "[e]xcept 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.
Before attempting to bring this highly deferential standard of review to bear, a review of the First Circuit's criticism of the Secretary's original Statement of Reasons is required. Harrington argued in this court and before the Court of Appeals that the Secretary's refusal to initiate an enforcement proceeding represented a departure from the Department of Labor's position in prior cases, and that the Secretary had given no meaningful explanation for reversing course. The Court of Appeals agreed with Harrington, noting that the Secretary's Statement of Reasons raised two distinct issues.
The first is whether the Secretary has departed from her prior interpretation of the Act, codified at 29 C.F.R. § 452.11 (2001). The second is whether the Secretary, if she is employing the analysis contained in 29 C.F.R. § 452.11, is doing so in a manner consistent with Donovan v. National Transient Division, International Brotherhood of Boilermakers ("Boilermakers"), 736 F.2d 618 (10th Cir.1984), and Schultz v. Employees' Federation of the Humble Oil & Refining Co. ("Humble Oil "), No. 69-C-54, 1970 U.S. Dist. LEXIS 12288 (S.D. Tex. Mar. 31, 1970). As to the first question, the regulation provides that
[t]he "characterization of a particular organizational unit as a `local,' `intermediate,' etc., is determined by its functions and purposes rather than the formal title by which it is known or how it classifies itself.
29 C.F.R. § 452.11.
Id. at 56-57. According to the Court of Appeals, the Secretary's Statement of Reasons appeared oblivious to the "functions and purposes" test of section 452.11 as evidenced by her statement that:
"[t]here is no basis in the statute or in the legislative history for concluding that if intermediate bodies possess certain functions and powers, they may only elect their officers directly by secret ballot vote among the members of the intermediate body."
Id. at 57. As the Court of Appeals noted, the Secretary's statement is inconsistent with the explicit language of section 452.11 which "requires a `functions and purposes' analysis." Id. Moreover, to the extent that the Secretary's Statement of Reasons appeared to advert to a "functions and purposes" test, she did so "without any reference to [her] own precedents, including the precedents discussed in Boilermakers and Humble Oil," id., both of which relied on a functional analysis to uphold the Secretary's determination that the intermediate bodies at issue performed the functions and duties of a local union and were therefore required to hold direct elections.
Given the similarities between this case and Boilermakers and Humble Oil, the Secretary must provide some explanation distinguishing these cases. We cannot now say whether the Secretary has changed her interpretation or departed from the regulation, but we can say with fair assurance that substantial questions have been raised and the Secretary's statement is inadequate to permit us to resolve them. In that sense — the inadequacy of her statement — the statement is arbitrary.
Id. at 58. The Court of Appeals identified the specific shortcomings in the Secretary's Statement of Reasons as follows.
Based on the Secretary's Statement of Reasons, we are unable to determine if the Secretary has changed the policy articulated in 29 C.F.R. § 452.11 or her interpretation of that policy. We are confronted here with a different problem than was faced in Bachowski, created by what appears to be an inconsistency between the Secretary's approach and her regulation and prior decisions, which may represent a volte-face by the Secretary. Her Statement of Reasons fails to explain whether she is departing from her prior course and, if so, the reasons for the change. . . .
Should she again decide not to initiate suit, the Secretary must file a sufficient Statement of Reasons, which addresses both the application of the functions and purposes test of 29 C.F.R. § 452.11, and whether her decision is consistent with her precedents. If there has been a change, she should also explain whether changing labor market economics justify a modification of prior interpretation or a building construction trades exception to it, or what the other reasons for the change are. See Yueh-Shaio Yang, 519 U.S. at 31-32 ().
Id. at 59-60, 61. The Secretary, in other words, was given two choices (or possibly three): (1) to demonstrate that her decision was compatible with the Boilermakers and Humble Oil precedents; or (2) to explain why a change in the interpretation of section 452.11 was supportable; or (possibly) (3) to give reasons why building construction trades unions should be deemed excepted from the regulation and the decisions in Boilermakers and Humble Oil. See id. at 61 ().4
On January 31, 2003, the Secretary submitted a Supplemental Statement of Reasons, essentially arguing that there had been no change in policy and that her decision with respect to NERC was consistent with prior precedent.5 She began her re-analysis by acknowledging the enduring vitality of the section 452.11 functions and purposes test.
[T]he critical inquiry in determining whether an entity designated by the union as an intermediate body should instead be considered a local body is whether the intermediate body has taken on so many of the traditional functions of a local union that it must in actuality itself be considered a local union. Although the Department has never before found an organization at the middle of a union's structure to be a "local" labor organization, at some point the entity at the middle of a union's...
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