Nakanelua v. United Pub. Workers

Decision Date05 November 2021
Docket NumberCIVIL 20-00442 JAO-KJM
PartiesDAYTON NAKANELUA, JEANNE ENDO, Plaintiffs, v. UNITED PUBLIC WORKERS, AFSCME, LOCAL 646, AFL-CIO, AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES, Defendants.
CourtUnited States District Courts. 9th Circuit. United States District Court (Hawaii)

ORDER DENYING PLAINTIFFS' PARTIAL MOTION FOR SUMMARY JUDGMENT AS TO LIABILITY FOR COUNTS I AND II OF THE COMPLAINT

Jill A. Otake United States District Judge

Plaintiffs Dayton Nakanelua (Nakanelua) and Jeanne Endo (Endo) (collectively, Plaintiffs) bring this Labor Management Relations Act (LMRA) (Count I), Labor-Management Reporting and Disclosure Act (“LMRDA”) (Count II), and conversion (Count III) action against Defendants the United Public Workers, AFSCME, Local 646, AFL-CIO (UPW) and its parent organization the American Federation of State, County and Municipal Workers (“AFSCME”) (collectively Defendants).[1]

Nakanelua is the former State Director and Endo is the former Administrator of Fiscal and Membership Services (“FMS Administrator”) of UPW. In March 2020, they faced trial before the AFSCME Judicial Panel for alleged violations of Defendants' Constitutions and policies. The Judicial Panel found them guilty and removed Nakanelua from office and terminated Endo from employment with UPW.

Plaintiffs now move for partial summary judgment on liability for Counts I and II only. See ECF No. 55 (“Motion” or Motion for Summary Judgment). They argue that the Judicial Panel found them guilty of conduct for which they were not charged in violation of the LMRDA's full and fair hearing provision and the AFSCME Constitution's guarantee of due process. They also assert that the charges they face were not sufficiently specific under the requirements of the AFSCME Constitution.

For the following reasons, the Court concludes that there are material issues of disputed fact that preclude summary judgment. The Court thus DENIES Plaintiffs' Motion.

I. BACKGROUND

A. Facts

Unless otherwise indicated, the following facts are undisputed.

UPW is a labor union that represents approximately 13, 000 members across the State of Hawai‘i, most of whom are state county, and city employees. ECF No. 1 ¶ 7; ECF No. 44 ¶ 4. AFSCME is an international labor union and is UPW's parent organization. See ECF No. 56 ¶¶ 1-2; ECF No. 63 ¶¶ 1-2. UPW is governed by its Constitution, which does not contain any substantive provisions governing discipline or charges. ECF No. 56 ¶ 3; ECF No. 63 ¶ 3. Instead, the UPW Constitution incorporates by reference the AFSCME Constitution. ECF No. 56 ¶ 3; ECF No. 63 ¶ 3.

As relevant to the instant proceedings, the AFSCME Constitution contains a Bill of Rights for Members, which states that [c]harges against a member or officer shall be specific and shall be only on grounds provided in this Constitution. Accused members or officers shall have the right to a fair trial with strict adherence to due process.” ECF No. 56-4 at 6); see ECF No. 56 ¶ 4. Additionally, Article X - which relates to Judicial Procedure - Section 6 provides:

Charges shall be in writing and shall be signed by the member or members bringing the charges. The charges shall be specific, citing in detail the nature, the date, and the circumstances of the alleged offense and, where a violation of a constitutional provision is alleged, the specific Section shall be cited, along with the specific act or failure to act which constitutes the alleged violation.

ECF No. 56-4 at 12; see ECF No. 56 ¶ 5.

Nakanelua assumed the position of State Director of UPW in 2004. ECF No. 1 ¶ 9; ECF No. 44 ¶ 4. Endo was appointed as UPW's FMS Administrator in 2004. ECF No. 1 ¶ 12; ECF No. 44 ¶ 7. As the FMS Administrator, Endo was also UPW's sole procurement officer; managed UPW's computer and communications systems; managed UPW's Human Resources department; served as food and beverage coordinator, special events coordinator, and mailing coordinator; and was responsible for coordinating the repairs and maintenance of UPW's offices across the State. ECF No. 1 ¶ 13; ECF No. 44 ¶ 7.

Beginning in April 2019, Alton Nosaka (“Nosaka”), the Vice President of the UPW Division for Hawai‘i Island, filed a series of charges against Plaintiffs. ECF No. 56-11. First, Nosaka filed charges against Endo, alleging that she misused “the Corporate Hawaiian Miles Points for personal gain without proper approval.” ECF No. 56 ¶ 6. A few weeks later, the first charge against Nakanelua alleged that he had misappropriated funds and failed to obtain approval for using the funds of the UPW's political action committee (“PAC”). ECF No. 56 ¶ 9. In a second charging document directed to Nakanelua, Nosaka accused Nakanelua of submitting hours of work when he was in fact at home. Id. ¶ 12. The third charge against Nakanelua alleged that he had sent too many UPW staff to the AFSCME convention and that Nakanelua had hired two law firms without proper authorization. Id. ¶ 14.

After this first round of charges, AFSCME's president determined an audit of UPW's financial books and records was appropriate before the charges could be considered further since [a]ll charges generally allege financial mismanagement and improper or unauthorized expenditures.” ECF No. 63 ¶ 53; see ECF No. 72 ¶ 53. The audit took place in August 2019 and the auditors produced a draft report that identified “significant deficiencies in the accounting procedures” and “serious failings in accountability in the expenditure of [UPW's] funds.” ECF No. 63 ¶¶ 55-56. Plaintiffs received the draft report and submitted a 14-page response detailing Nakanelua's “corrections and clarifications.” Id. ¶ 57; see ECF No. 63-14 at 34. On December 19, 2019, the auditor - Selma Golding - replied to Nakanelua's response to inform him that she would not be changing the draft and to provide him a copy of the final audit report (“Final Report”). ECF No. 63 ¶ 58; ECF No. 63-14 at 50-51. In addition to the Final Report, the auditor explained to Nakanelua in the cover letter that [i]n situations where receipts could not be provided you included a document titled ‘Certification' where the signer certified the purchase, reimbursement and/or credit card charge was a valid union expenditure. All these ‘Certifications' were dated after our visit and cannot be treated as adequate support documentation.” ECF No. 63-14 at 50.

On January 21, 2020, Nosaka filed amended charges against Nakanelua and Endo. ECF No. 63 ¶ 60. Both amended charging documents state: “Based on the AFSCME Final Audit report dated December 19, 2019 . . . amended charges are as follows[.] See ECF No. 56-9 (Nakanelua); ECF No. 56-12 (Endo). Nosaka charged Nakanelua with:

(1) misusing union funds for Thanksgiving and Christmas luncheons without authorization;
(2) submitting “certification” documents as receipts for illegal reimbursements; and
(3) violating the UPW Constitution and the Financial Standards Code.

ECF No. 56-9; ECF No. 56 ¶ 17. As to Endo, Nosaka charged her with six offenses:

(1) misappropriation for using personal credit cards to gain points;
(2) paying for gift cards and Christmas luncheons without proper authorization;
(3) submitting false financial reports;
(4) providing “certification” documents as receipts for illegal reimbursements;
(5) giving away gift cards to former State Executive Board members without proper approval; and
(6) receiving per diem payments without the required overnight stay.

ECF No. 56-12; ECF No. 56 ¶ 21.

Ahead of trial before the Judicial Panel, both Plaintiffs submitted written answers to the charges. ECF No. 63 ¶ 61. In their written answers, Plaintiffs cited and responded to allegations of misconduct described in the Final Report. See ECF No. 63-14 at 99-107 (Nakanelua); ECF No. 63-15 at 18-45 (Endo). For example, Nakanelua provided [i]n response to the above-cited finding of the Final [Report], ” an explanation about his use of certifications in lieu of receipts. ECF No. 63-14 at 100. Likewise, Endo included in her written answers “a full and complete response to 19 of 20 bullets directly affecting [her] in the [Final Report].” ECF No. 63-15 at 23.

Trial occurred on March 5 and 6, 2020 and the Judicial Panel released its decision on April 30, 2020 (“Decision”). ECF No. 63 ¶¶ 66-67; ECF No. 56-10. As to Endo, the Decision dismissed the charges laid out in the first charging document that she misused the Corporate Hawaiian Miles Points for personal gain. ECF No. 56 ¶ 8; ECF No. 56-10 at 39. As to Nakanelua, the Judicial Panel either dismissed or only issued a reprimand on the charges set forth in the first round of charging documents. See ECF No. 56 ¶¶ 11, 13, 15-16; ECF No. 56-10.

But the Judicial Panel found both Plaintiffs guilty for some conduct. See id. ¶¶ 24-27. The parties dispute whether that conduct was alleged in the January 2020 amended charging documents. See Id. ¶ 28; ECF No. 63 ¶ 28. First, the Judicial Panel found Endo guilty of:

[V]iolating Article X, Section 2(B) of the International Constitution for her wholesale failure to manage UPW's finances, including her mishandling of cash (shown by the failure to account for cash related to a canceled event); inability to maintain and file receipts and prepare expense reports on a timely basis in conformance with the Financial Standards Code; paying credit card bills without adequate documentation; neglecting to maintain an inventory for UPW property including gift cards and office equipment; not maintaining leave records; failing to reconcile bank accounts on a timely basis; and obtaining reimbursement for her own expenses before State Director Nakanelua approved them.

ECF No. 56-10 at 44. As punishment, the Judicial Panel terminated Endo's employment with UPW and prohibited her from “holding any...

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