National Ass'n of Basketball Referees v. Middleton

• Decision Date: 18 July 1988
• Docket Number: No. 87 CIV. 4421 (PKL).,87 CIV. 4421 (PKL).
• Citation: 688 F. Supp. 131
• Parties: NATIONAL ASSOCIATION OF BASKETBALL REFEREES, Plaintiff, v. Ed MIDDLETON, Michael Mathis, and Jack Nies, Defendants.
• Court: U.S. District Court — Southern District of New York

688 F. Supp. 131

NATIONAL ASSOCIATION OF BASKETBALL REFEREES, Plaintiff, v. Ed MIDDLETON, Michael Mathis, and Jack Nies, Defendants.

No. 87 CIV. 4421 (PKL).

United States District Court, S.D. New York.

July 18, 1988.

Markowitz & Richman, New York City (Richard H. Markowitz, of counsel), for plaintiff.

Frederick K. Brewington, New York City, for defendants.

OPINION AND ORDER

LEISURE, District Judge:

This is a consolidated action brought by the National Association of Basketball Referees ("NABR"), a union representing the referees employed by the National Basketball Association ("NBA"). The three defendants are NBA referees, and all are union members. In this suit, the union is seeking to collect the defendants' share of a special assessment which was levied against all union members following a referendum of the union membership. The union claims that the assessment was levied in accordance with the NABR Constitution and Bylaws, and that the defendants are bound in contract to pay the monies owed. The union has moved for summary judgment. Defendants have cross-moved to dismiss the complaint, claiming that the Court lacks subject matter jurisdiction because no attempt has been made to use internal union procedures to resolve this dispute.

I.

Most of the facts in this case are undisputed. In March 1984, the NABR membership voted to discharge the union's attorney, Richard G. Phillips, Esq. During the next two years, Phillips initiated four separate lawsuits against the NABR and its members. Several members of the NABR filed a fifth suit against the union, which sought, among other things, an injunction to restrain Phillips' discharge. The total claims against the union in the five lawsuits exceeded $600,000.¹ In the fall of 1986, Phillips and the Executive Board of the NABR began negotiations aimed at global settlement of all five pending lawsuits. At about the same time, Michael Mathis, a defendant in this action, resigned from his position as NABR Executive Director, and in September 1986, Hugh Evans assumed that position. A tentative settlement of the pending litigations was reached in December 1986, which provided for dismissal of all five actions. By the settlement's terms, the NABR agreed to pay Phillips a total of $510,000 in three installments. The union paid $150,000 to Phillips when the settlement was entered, and the parties agreed that the remaining $360,000 would be disbursed in installments of $150,000, $110,000 and $100,000.

The NABR Executive Board determined that the $360,000 should be raised by using $33,000 earned from an NABR contract with Converse, Inc.; $37,000 of membership dues owed from the 1986-87 season; and $290,000 from a special assessment of union members. Under the Executive Board's proposed special assessment, each individual union member's obligations would equal 5.4% of his NBA salary from 1983 to 1986. On December 19, 1986, the Executive Board sent each union member a notice labelled "Settlement of Pending Litigation and Notice of Referendum." Each member was also sent a ballot to vote on the proposed special assessment. Article XVI of the union's Constitution, in Sections 16.3 and 16.5, states that special assessments for extraordinary expenses are permitted.² Article XIII, in Section 13.2, allows referendum mail ballots to serve as a form of the secret ballot the Constitution requires for votes on such assessments. The ballots stated, in clearly visible capital letters, "DO NOT SIGN THIS BALLOT," and required immediate return to NABR Executive Director Evans at his home address. Of the thirty union members eligible to vote, twenty-one of the members voted for the assessment, seven voted against, and two did not cast ballots. Three members wrote comments on their ballots, and two of those three signed their first names. The twenty-five other ballots had no indication of name on them.

After the mail ballots were counted, members were notified of the assessment's approval. The Executive Board warned all union members at this time that the union would institute legal action to collect any unpaid assessments. Members' payments were due in three installments on the fifteenth day of March, April and June, 1987, dates which corresponded to the dates set for settlement payments by the NABR to Phillips.

In March, the defendants failed to pay their first installments. The NABR Executive Board sent letters to the defendants, advising that legal action would be instituted if payments were not made within ten days. By June, defendants had still not made any payments, and defendants were the only members of the union not to have paid their assessments. Defendants Mathis, Middleton and Nies owed $10,039, $12,773 and $7,247 respectively. Following defendants' failure to pay their assessments, the NABR borrowed $40,000 to meet that portion of the union's litigation settlement obligations.

On June 24, 1987, the NABR commenced this action, and the NABR has now moved for summary judgment. Defendants, however, contend that the membership referendum approving the assessment was invalid because it violated the NABR Constitution's requirement that such a referendum be conducted by secret ballot. According to defendants, the ballot was not "secret" because the Executive Board conducted a telephone poll prior to the mailing of the ballots to union members, and because members' identities were revealed by return addresses on the envelopes in which the ballots were sent back to the Director of the Executive Board.

Defendants have also cross-moved to dismiss the complaint on grounds that even if the assessment is valid, the union has not pursued, nor have defendants been afforded the opportunity to pursue, resolution of the issues in this suit through internal union remedies. Article XII, Section 12.3(i), of the NABR Constitution provides that after a member has been charged with violating a provision of the Constitution, the member is entitled to a hearing before the Executive Board or before a Board appointed committee. If the member is not satisfied with the result of that hearing, he can appeal the Executive Board's decision to the general membership.³

II.

Section 301(a) of the Labor Management Relations Act, 29 U.S.C. § 185(a), provides jurisdiction to federal courts to hear cases alleging violations of contracts between employers and labor organizations, or of contracts between labor organizations.⁴ The Supreme Court has recognized that a union constitution is a "contract" as defined in § 301(a). United Ass'n of Journeymen v. Local 334, 452 U.S. 615, 621, 101 S.Ct. 2546, 2549-50, 69 L.Ed.2d 280 (1981) ("Journeymen"). Although the Supreme Court has held that § 301(a) provides a basis for jurisdiction in an action, brought by a local union against its parent international union, alleging a violation of the international union's constitution, the Supreme Court has not yet addressed whether an individual union member can sue his own union under § 301(a). Id.

Several lower courts, however, have extended the underlying rationale of the Supreme Court's opinion in Journeymen to grant § 301(a) jurisdiction in suits brought by a union member against his or her union. For example, the Third Circuit has explained that "the congressional interests in insuring union accountability and achievement of labor stability, which were the bases for the holding in Journeymen that a local union could enforce the terms of a union constitution under section 301(a), are similarly furthered when an individual union member sues for enforcement of those terms." Lewis v. International Broth. of Teamsters, 826 F.2d 1310, 1313 (3rd Cir.1987). See also Kinney v. International Broth. of Electrical Workers, 669 F.2d 1222 (9th Cir.1987); Grasty v. Amalgamated Clothing and Textile Workers, 828 F.2d 123 (3rd Cir.1987); Rodonich v. House Wreckers Union Local 95, 624 F.Supp. 678 (S.D.N.Y.1985).

This case presents an uncommon situation where a plaintiff union has brought a suit against defendant union members under § 301(a). The alignment of the parties, though, is not determinative of whether jurisdiction exists under § 301(a), because the underlying issue of whether or not the union members breached the NABR's constitution, and owe the NABR money, could also have been raised in a suit by the union members themselves. Cf. International Union v. Local Union No. 589, 693 F.2d 666, 671 (7th Cir.1982) (since local union can bring suit under § 301(a) against international union, alleging violations of international union's constitution, it follows that § 301(a) affords jurisdiction over the international union's suit against the local union, alleging violations of the international union's constitution). Thus, because this Court agrees that § 301(a) creates federal jurisdiction when a union member sues his or her union for breach of the union's constitution, it follows that § 301(a) jurisdiction exists in this suit by the NABR.

III.

Defendants claim that plaintiff lacks standing because the NABR had not alleged an injury in fact.⁵ Defendant is correct to assert that standing requires "demanding an injury in fact that has been caused by the challenged conduct and that can be remedied by a judicial decree." 13A C. Wright, A. Miller, E. Cooper, Federal Practice and Procedure § 3531 (1984). When applying this standard to this case, plaintiff clearly has standing. The NABR alleged, in the complaints against the three defendants, that the union and general membership had become liable for the specific assessment amounts due, because of defendants failure to pay. The union alleges that it was, in fact, forced to take a $40,000 loan to meet its settlement obligations with Phillips. See Affidavit of Hugh Evans, sworn to on December 16, 1987 at ¶ 28. Plaintiff has alleged an injury which can be remedied by the Court, and, thus, has standing before this Court.

IV.

Defendants have argued that even if jurisdiction exists under §...