IBB v. LOCAL LODGE D129

• Decision Date: 09 August 1990
• Docket Number: Docket 90-7079.,No. 1269,1269
• Citation: 910 F.2d 1056
• Parties: INTERNATIONAL BROTHERHOOD OF BOILERMAKERS, IRON SHIP BUILDERS, BLACKSMITHS, FORGERS AND HELPERS, AFL-CIO; Robert Simmons, as International Trustee of Local Lodge D129 of the Cement, Lime, Gypsum and Allied Workers Division of the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO, Plaintiffs-Appellees, v. LOCAL LODGE D129 OF the CEMENT, LIME, GYPSUM AND ALLIED WORKERS DIVISION OF THE INTERNATIONAL BROTHERHOOD OF BOILERMAKERS, IRON SHIP BUILDERS, BLACKSMITHS, FORGERS AND HELPERS, AFL-CIO; Gerard M. Sapunarich, Individually, and as President of Local Lodge D129; Vincent A. Notabartolo, Individually, and as Recording Secretary of Local Lodge D129; and Floyd Falk, Individually, and as Secretary/Treasurer of Local Lodge D129, Defendants-Appellants.
• Court: U.S. Court of Appeals — Second Circuit

910 F.2d 1056

INTERNATIONAL BROTHERHOOD OF BOILERMAKERS, IRON SHIP BUILDERS, BLACKSMITHS, FORGERS AND HELPERS, AFL-CIO; Robert Simmons, as International Trustee of Local Lodge D129 of the Cement, Lime, Gypsum and Allied Workers Division of the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO, Plaintiffs-Appellees, v. LOCAL LODGE D129 OF the CEMENT, LIME, GYPSUM AND ALLIED WORKERS DIVISION OF THE INTERNATIONAL BROTHERHOOD OF BOILERMAKERS, IRON SHIP BUILDERS, BLACKSMITHS, FORGERS AND HELPERS, AFL-CIO; Gerard M. Sapunarich, Individually, and as President of Local Lodge D129; Vincent A. Notabartolo, Individually, and as Recording Secretary of Local Lodge D129; and Floyd Falk, Individually, and as Secretary/Treasurer of Local Lodge D129, Defendants-Appellants.

No. 1269, Docket 90-7079.

United States Court of Appeals, Second Circuit.

Argued May 21, 1990.

Decided August 9, 1990.

Bernard N. Katz, Philadelphia, Pa. (Robert G. Rothstein, Meranze and Katz, Philadelphia, Pa., Paul M. Collins, Hinman, Straub, Pigors and Manning, Albany, N.Y., of counsel), for defendants-appellants.

Michael J. Stapp, Kansas City, Kan. (Blake & Uhlig, Kansas City, Kan., Bruce Bramley, Pozefsky, Bramley & Murphy, Albany, N.Y., of counsel), for plaintiffs-appellees.

Before VAN GRAAFEILAND, MESKILL and WALKER, Circuit Judges.

MESKILL, Circuit Judge:

This is an appeal from an order of the United States District Court for the Northern District of New York, Cholakis, J., granting plaintiffs-appellees' motion for a preliminary injunction enforcing trusteeship on Local Lodge D129 pursuant to section 301(a) of the Labor Management Relations Act, 29 U.S.C. § 185(a). The question presented on appeal is whether the trusteeship was established in accordance with Section 302 of the Landrum-Griffin Act, 29 U.S.C. § 462, which mandates that trusteeships be imposed only on "subordinate bodies" of the parent labor union.

We reverse and remand.

BACKGROUND

Following approximately two years of negotiations, the Cement, Lime, Gypsum and Allied Workers International Union (CWI) merged with plaintiff-appellee International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO ("IBB" or "International") on April 1, 1984. Pursuant to the terms of the merger agreement, the IBB Constitution, as amended, was adopted as the governing instrument of the merged organization, and the Local Lodges, previously affiliated with the CWI, became affiliates of the IBB. Defendant-appellant Local Lodge D129, which, at the time of the merger, was composed of workers employed at the Lehigh Portland Cement Company in Alsen, New York, was one of the CWI affiliates affected. The merger agreement also provided that joint officers were to be selected at the biannual convention of the IBB in August 1986 and, specifically, that the CWI was entitled to elect one International vice president.

However, as a result of widespread dissatisfaction with the 1986 election procedures, the officers and members of Local Lodge D129 held a meeting on or about May 1, 1987 and resolved, by vote of 60-0, to disaffiliate from the IBB and to affiliate with a rival international union, the Independent Workers of North America (IWNA).¹ A "Resolution and Petition," which explicitly provided for "total disaffiliation ... from the IBB" and declared the IWNA as the new collective bargaining representative, was promptly circulated to the entire membership of the Local Lodge and, by May 4, 1987, was signed by 117 members of the 121 member local. Formal National Labor Relations Board (NLRB) certification of the IWNA as the employees' bargaining agent has, at all relevant times, been blocked by a pending unfair labor practice charge against the employer, the Lehigh Portland Cement Company, filed by the IBB shortly after the merger; however, the 117 signators have voluntarily paid dues to the newly formed IWNA Local 129 from May 1, 1987.

Several months later, on August 25, 1987, IBB President Charles W. Jones imposed an "Emergency Trusteeship" on Local Lodge D129 pursuant to Article XVIII, Section 3, of the IBB Constitution. The reasons given for imposing the trusteeship were: (1) certain officers and/or members were improperly promoting dual unionism; (2) certain officers and/or members were improperly promoting disaffiliation, secession and dissolution of the local; (3) certain officers were failing to perform their duties and responsibilities; (4) there was possible financial malpractice concerning Local Lodge funds and assets; (5) the Local Lodge had failed to make proper reports and pay per capita tax to the IBB; and (6) a fundamental conflict of interest existed due to certain officers' and/or members' ties with the IWNA. Jones appointed International Representative Robert Simmons as trustee, and suspended from office Local Lodge President defendant-appellant Gerard M. Sapunarich, Local Lodge Recording Secretary defendant-appellant Vincent A. Notabartolo and Local Lodge Financial Secretary/Treasurer defendant-appellant Floyd H. Falk. The suspended officers were directed to "immediately surrender all funds, properties, books and assets of the Local ... pursuant to Article XVIII, Section 2 of the International Constitution."

On June 3, 1988, plaintiffs moved for and were granted a preliminary injunction to enforce the trusteeship under section 301(a) of the Labor Management Relations Act, 29 U.S.C. § 185(a). In commenting on the Local Lodge's attempt to disaffiliate from the International by internal membership vote, the district judge stated: "The Court is not aware of any authority, either statutory, casewise or any authority contained in the contract between the parent and the local, which would allow a disassociation or a disaffiliation proceeding conducted in this manner." The court concluded that the attempted disaffiliation was ineffective, and, consequently, enjoined defendants Sapunarich, Notabartolo and Falk from, inter alia, refusing to turn over monies and assets in the control of the Local Lodge to the International Trustee, and from dissipating, expending or transferring monies from the account of the IBB Local Lodge D129.

The defendants thereafter turned over to the trustee all books and records of Local Lodge D129 and a cashier's check in the amount of $15,898.04, representing the total assets of the Lodge at the time of the disaffiliation vote. The defendants refused, however, to turn over any funds "voluntarily" contributed by the membership subsequent to the May 1987 disaffiliation vote (approximately $60,000) or any post-disaffiliation documentary records.

Consequently, on September 1, 1989, defendants Sapunarich, Notabartolo and Falk were held in civil contempt for failure to comply with the court's June 3, 1989 preliminary injunction order. The defendants purged themselves of contempt by depositing the post-disaffiliation funds with the Clerk of the Court pending clarification or modification of the preliminary injunction order. However, in the clarification order dated December 5, 1989, the district judge adhered to his earlier ruling and ordered that all monies held in escrow be turned over to the IBB trustee. This appeal followed. Defendants' motion for a stay pending appeal and waiver of supersedeas bond was denied on January 23, 1990.

DISCUSSION

Appellants argue, as they did in the district court, that in early May 1987, virtually the entire membership of Local Lodge D129 voted to disaffiliate and resign from the IBB. The bargaining unit contemporaneously formed Local Union 129, an independent, separate and segregable local labor organization affiliated with the IWNA. According to the appellants, as the Local Lodge then had fewer than ten members, it was automatically disbanded pursuant to Article V, Section 6, of the IBB Constitution and therefore no trusteeship could validly be imposed. We agree and, consequently, reverse the grant of preliminary injunctive relief enforcing the trusteeship.

A. Standard of Review

A district court's grant of preliminary injunctive relief enforcing trusteeship is reversible only on a showing of abuse of judicial discretion. See Doran v. Salem Inn, Inc., 422 U.S. 922, 931-32, 95 S.Ct. 2561, 2567-68, 45 L.Ed.2d 648 (1975); AMR Servs. Corp. v. International Brotherhood of Teamsters, 821 F.2d 162, 163 (2d Cir.1987) (per curiam); Coca-Cola Co. v. Tropicana Prods., Inc., 690 F.2d 312, 315 (2d Cir.1982). Such an abuse may consist of either a misapplication of apposite legal standards or a misplaced reliance on clearly erroneous findings of fact. See AMR Servs. Corp., 821 F.2d at 163; see also Reuters Limited v. United Press Int'l, Inc., 903 F.2d 904, 907 (2d Cir.1990); Tropicana Prods., Inc., 690 F.2d at 315-16. See generally 7 J. Moore, J. Lucas & K. Sinclair, Moore's Federal Practice ¶ 65.042 (2d ed. 1989 & Supp.1989-90).

B. Analysis

Section 302 of the Landrum-Griffin Act (formerly, the Labor-Management Reporting and Disclosure Act of 1959) limits the authority of parent unions to impose trusteeships on their local affiliates. It provides:

Trusteeships shall be established and administered by a labor organization over a subordinate body only in accordance with the constitution and bylaws of the organization which has assumed trusteeship over the subordinate body and for the purpose of correcting corruption or financial malpractice, assuring the performance of collective bargaining agreements or other duties of a bargaining representative, restoring democratic procedures, or otherwise carrying out the legitimate objects of such labor organization.

29 U.S.C. § 462 (emphasis added). The plain language of section 302 therefore "envisions a parent union imposing a trusteeship only on a `subordinate body' of that parent and only in conformity with the parent's constitution or bylaws." Tile, Marble, Terrazzo, Finishers, Shopworkers & Granite Cutters...