Hotel and Restaurant Employees & Bartenders v. Read, Civ. A. No. 81-2630.

• Decision Date: 05 November 1984
• Docket Number: Civ. A. No. 81-2630.
• Citation: 597 F. Supp. 1431
• Parties: HOTEL AND RESTAURANT EMPLOYEES AND BARTENDERS INTERNATIONAL UNION LOCAL 54 and Frank Gerace, President Hotel and Restaurant Employees and Bartenders International Union Local 54 and Frank Materio, Business Agent Hotel and Restaurant Employees and Bartenders International Union Local 54, Plaintiffs, v. Walter N. READ, Chairman, Donald Thomas, Commissioner, Carl Zeitz, Commissioner, Joel Jacobson, Commissioner, and E. Kenneth Burdge, Commissioner, Constituting the New Jersey Casino Control Commission and Thomas O'Brien, Director Department of Law and Public Safety Division of Gaming Enforcement and Department of Law and Public Safety Division of Gaming Enforcement and Thomas Kean, Governor, Defendants.
• Court: U.S. District Court — District of New Jersey

597 F. Supp. 1431

HOTEL AND RESTAURANT EMPLOYEES AND BARTENDERS INTERNATIONAL UNION LOCAL 54 and Frank Gerace, President Hotel and Restaurant Employees and Bartenders International Union Local 54 and Frank Materio, Business Agent Hotel and Restaurant Employees and Bartenders International Union Local 54, Plaintiffs, v. Walter N. READ, Chairman, Donald Thomas, Commissioner, Carl Zeitz, Commissioner, Joel Jacobson, Commissioner, and E. Kenneth Burdge, Commissioner, Constituting the New Jersey Casino Control Commission and Thomas O'Brien, Director Department of Law and Public Safety Division of Gaming Enforcement and Department of Law and Public Safety Division of Gaming Enforcement and Thomas Kean, Governor, Defendants.

Civ. A. No. 81-2630.

United States District Court, D. New Jersey.

November 5, 1984.

COPYRIGHT MATERIAL OMITTED

Bernard N. Katz, N. Michael Katz, Meranze, Katz, Spear & Wilderman, Philadelphia, Pa., for Local 54 and President Frank Gerace.

Harry A. Horwitz, Davis, Reberkenny & Abramowitz, P.C., Cherry Hill, N.J., and Ronald F. Kidd, Duane, Morris & Heckscher, Philadelphia, Pa., for Frank Gerace and Frank Materio, individually.

Robert J. Genatt, John R. Zimmerman, Leonard J. DiGiacomo, New Jersey Casino Control Commission, Trenton, N.J., for New Jersey Casino Control Commission.

Irwin I. Kimmelman, Atty. Gen., of New Jersey by Anthony J. Parrillo, Asst. Atty. Gen., Gary A. Ehrlich, Eugene M. Schwartz, Mitchell A. Schwefel, Deputy Attys. Gen., Trenton, N.J., for New Jersey Division of Gaming Enforcement.

OPINION

BROTMAN, District Judge.

For the second time in several years,¹ this court is asked to restrain application of certain provisions of the New Jersey Casino Control Act, L.1977, c. 110, § 1 et seq., as amended by L.1978, c. 7, § 1 et seq., N.J.Stat.Ann. § 5:12-1 et seq. (West Supp. 1984) ("the Act") to the Hotel and Restaurant Employees and Bartenders International Union Local 54 ("the Union"). The Union and its President, Frank Gerace, seek a preliminary injunction, damages and a declaration that the New Jersey Casino Control Commission ("the Commission") may not enforce sections 93 and 86 of the Act² against them. In their complaint plaintiffs challenge two orders by the Commission, the first of which issued on September 28, 1982 and disqualified Frank Gerace and two others as officers of the Union, and the second of which issued on September 12, 1984 and directed the Union to remove the three individuals from their positions as Union officers. Plaintiffs' amended complaint asserts claims based on the federal labor laws, causes of action under the due process clauses of the Fifth and Fourteenth Amendments, various claims under the First and Fourteenth Amendments and a claim based on 42 U.S.C. § 1983. For the purposes of this motion, plaintiffs allege only that the qualification requirements of Section 86(f) of the Act, as applied to two of the Union's officers, violate the First, Fifth and Fourteenth Amendments.

The defendants in this action include the Casino Control Commission, the chairman and other members of the Commission, the New Jersey Division of Gaming Enforcement ("the Division"),³ the director of the Division and the Governor of the State of New Jersey. Frank Gerace, Frank Materio and Karlos LaSane, the three union officers facing the removal sanction, have petitioned to intervene in this action as plaintiffs in their individual capacity. The intervenor-applicants propose to challenge the validity of section 86(f) of the Act as applied and on its face, on the ground that it violates First Amendment guarantees of freedom of association. The intervenor-applicants also seek to assert claims that section 86(f) is impermissibly vague, in violation of the First, Fifth and Fourteenth Amendments.

I. Procedural History

The history of this litigation is complex. At various times, the case has involved proceedings before the federal courts, the state courts and the Commission, a state regulatory agency. This matter originated with recommendations by the Division of Gaming Enforcement to the Commission to hold hearings as to the Union's compliance with sections 93 and 86 of the Act.⁴ The Union and its President then presented this court with a motion for injunctive and declaratory relief in which plaintiffs sought an order prohibiting the Commission from conducting hearings as to the qualifications of Gerace and others to serve as officers of the Union. Plaintiffs argued that sections 93 and 86 of the Act were preempted by the federal labor laws and in violation of the First, Fifth and Fourteenth Amendments to the United States Constitution.⁵ The court denied plaintiffs' motion. Hotel & Restaurant Employees & Bartenders International Union Local 54 v. Danziger, 536 F.Supp. 317 (D.N.J.1982).

Plaintiffs appealed this court's ruling and then sought a stay pending the outcome of the appeal, pursuant to Fed.R.App. P. 8(a). Initially, they were turned down by this court and the Court of Appeals. As a result, the Commission proceeded with disqualification hearings. Subsequently, the commission declared Frank Gerace, Frank Materio and Karlos LaSane to be disqualified as officers of the Union and decided to bar the Union from collecting dues from its members unless the three individuals left their posts. Plaintiffs returned to this court for a stay of the sanctions imposed by the Commission and received such relief from the court pending resolution of their appeal.⁶

The Court of Appeals ruled that the federal labor laws, in particular section 7 of the National Labor Relations Act ("NLRA") and section 504 of the Labor Management Reporting and Disclosure Act ("LMRDA"), preempt the field of regulation of qualification of union officials. Hotel & Restaurant Employees & Bartenders International Union Local 54 v. Danziger, 709 F.2d 815 (3rd Cir.1983). Accordingly, the court remanded the case for "entry of an order enjoining the Commission and the Division from taking any action, pending final hearing, to enforce section 93 against the casino." 709 F.2d at 833. Having resolved the appeal on federal statutory grounds, the court found it unnecessary to reach plaintiffs' constitutional claims based on vagueness and overbreadth. Id.

The same issues of federal preemption received a different treatment on review in the Supreme Court. Brown v. Hotel & Restaurant Employees & Bartenders International Union Local 54, ___ U.S. ___, 104 S.Ct. 3179, 82 L.Ed.2d 373 (1984). Justice O'Connor, speaking for the majority, held that section 7 of the National Labor Relations Act "does not preclude ... imposition of qualification standards on casino industry union officials." The Court declined to decide, in the absence of a fully developed factual record, whether the specific sanctions imposed by the Commission are permissible.⁷ The Court noted that

even a finding that § 7 prohibits imposition of the dues collection sanction need not imply that New Jersey's disqualification standards are not otherwise enforceable by the Commission. The Act, for example, apparently grants broad powers to the Commission to impose sanctions directly on disqualified persons and to limit or restrict a labor organization's registration. See N.J.Stat.Ann. § 5:12-64 (Supp.1983-1984).⁸

In its instructions to the court below, the Supreme Court ordered this court to consider on remand the factual issue of whether a dues collection ban would seriously conflict with the Union's "statutory functions as bargaining representative." 104 S.Ct. at 3192.

Since the Supreme Court announced its decision in June 1984, the Commission has taken several steps which have altered the posture of the case before this court. First, in its order of September 12, 1984, effective September 28, 1984 ("the 1984 Order"), the Commission withdrew its decision to impose the dues collection sanction. Second, the Commission chose to employ another sanction; that is, it ordered the Union to remove Gerace, Materio and LaSane from their positions. Commission' Brief in Opposition to Application for a Temporary Restraining Order at 7; Appendix to Brief in Opposition at A2-A3, citing transcript of the Commission's 1984 Order.

Plaintiffs have again invoked the jurisdiction of this court after the intervenor-applicants exhausted their opportunities to obtain a stay of the Commission's 1984 Order in the state courts. On September 26, 1984, Judge Robert A. Matthews of the New Jersey Superior Court, Appellate Division, granted a stay of the Commission's 1984 Order as to Frank Gerace and Frank Materio. A stay was denied as to Karlos LaSane. Brief of Commission, Appendix at 10. On October 5, 1984, the Supreme Court of New Jersey dissolved the stay as to Gerace and Materio and denied an application for a stay by LaSane. Commission's Brief in Opposition to Application a Preliminary Injunction, Appendix at A2-A3.

Coincident with the proceedings concerning requests for relief pendente lite, plaintiffs and intervenor-applicants filed pleadings with the Appellate Division appealing the Commission's 1984 Order. Plaintiffs have raised the same claims presented to this court as well as a facial challenge to section 86(f) of the Act on grounds of overbreadth. In addition, plaintiffs have raised the following two claims under state law, according to their notice of appeal: that the Commission lacks authority under section 86(f) "to issue an Order directing labor union officials to vacate their offices"; and that the Commission committed "reversible error by refusing to hear additional testimony" prior to entering its 1984 Order. Defendants' Exhibit 1. According to the intervenor-applicants' notice of appeal, they are alleging the same federal claims presented to this court, the two state claims raised by plaintiffs and two other issues of state law: whether the Commission misconstrued section 86(f) in finding the Union officers disqualified; and whether the Commission had sufficient...