Noble v. Dunn, 17-7024
| Decision Date | 17 July 2018 |
| Docket Number | No. 17-7024,17-7024 |
| Citation | 895 F.3d 807 |
| Parties | David W. NOBLE, Jr., Appellant v. William M. DUNN, Jr., et al., Appellees |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Virginia W. Hoptman argued the cause for appellant. With her on the briefs was Jerome A. Madden.
Peter D. DeChiara argued the cause for appellees. With him on the brief were Nicholas R. Femia, Keith R. Bolek, and Victoria L. Bor. Brian Powers and Bruce H. Simon entered appearances.
Before: Henderson and Katsas, Circuit Judges, and Randolph, Senior Circuit Judge.
For nearly twenty-five years David W. Noble, Jr. has pressed his claims against the now-former leadership of the National Association of Letter Carriers (NALC or Union). A decade ago one of our colleagues urged an end to "this 14-year litigation odyssey." Noble v. Sombrotto (Sombrotto II ), 525 F.3d 1230, 1242 (D.C. Cir. 2008) (per curiam ) (Kavanaugh, J., concurring in part and dissenting in part). But as in the original Odyssey , there was still a ten-year ordeal to endure—and Noble’s arguments, like Penelope’s tapestry, have tended to unravel.
Federal law requires labor unions to operate transparently and as fiduciaries of their members. This litigation is about Noble’s claims that his Union has violated those requirements by failing to comply with document requests and by permitting its officers to enrich themselves beyond the salaries permitted by the Union constitution. Even after our 2008 remand, however, Noble failed to give the district court reason to rule for him; he meets with no greater success on appeal.
Noble was a letter carrier and NALC member for many years before he became an employee at the Union’s Washington, D.C. headquarters. He became troubled by the senior leadership’s use of Union resources: they collected per diem pay during the Union’s annual D.C. convention even though they lived in the area year-round; they also collected monthly reimbursements for undocumented expenses; and the Union reimbursed them for Medicare and Social Security withholdings.
In February 1994, after unsuccessfully asserting his claims through the Union’s internal procedures, Noble filed a complaint in district court against NALC’s then-president and nine other officers under the Labor-Management Reporting and Disclosure Act ("LMRDA"), 29 U.S.C. § 401 et seq. Noble later added the Union itself as a defendant. Noble alleged that the officers had breached their fiduciary duties by granting themselves tax reimbursements, unjustified per diem payments and undocumented expense allowances, all in violation of section 501 of the LMRDA. Noble further alleged that the officers had wrongly refused his requests to inspect certain Union financial records, in violation of section 201 of the LMRDA. After more than a decade of litigation, the district court held a bench trial and entered judgment for the Union and its officers. Noble v. Sombrotto (Sombrotto I ), No. 94-302, 2006 WL 2708796, at *1 (D.D.C. Sept. 20, 2006).
Noble appealed and, in May 2008, we affirmed in part and vacated in part. See Sombrotto II , 525 F.3d at 1242. We upheld the judgment for NALC on Noble’s claims regarding the officers’ per diem payments and tax-withholding reimbursements. At the same time, however, we held that the district court had erred in two ways.
First, we concluded that the district court erroneously dismissed Noble’s section 501 fiduciary duty claim related to the officers’ undocumented expense reimbursements. The district court’s dismissal of that claim was based on the clearly erroneous finding that there was "no evidence" to support Noble’s allegations of impropriety. But "Noble presented ample circumstantial evidence that officers were using the allowance for personal use," that is, the officers were foregoing significant tax savings by failing to document their claimed expenses. Id. at 1236. When officers submitted receipts to document their spending, they were entitled to reimbursement; when they simply requested reimbursement without documentation, they were credited up to $500 a month in taxable income. Id. The record evidence showed that most of the officers did not substantiate their expenses, preferring, they claimed, to avoid the hassle of keeping track of receipts and itemizing their reimbursement requests. Id. We concluded that the district court had given short shrift to Noble’s argument that the officers would have submitted receipts and received reimbursement—instead of taxable income—had their expenses been legitimate. Id. ().
Second, we could not determine the factual basis for the district court’s finding that Noble’s section 201 claim was moot. According to the district court, Noble had already been given access to all Union documents he had requested, there were no outstanding section 201 issues to resolve and the claim was therefore moot. Id. at 1241. Noble argued that holding was clearly erroneous. Id. Because we concluded the district court had failed to explain how it had resolved Noble’s document requests, we vacated the mootness dismissal and remanded for further proceedings. Id. at 1241–42.
On remand the district court issued two orders, one on Noble’s remaining section 501 claim and the other on his section 201 claim. The district court carefully explained its factfinding and analysis, but, as before, Noble lost on both claims. On the section 501 claim, the district court evaluated Noble’s circumstantial evidence of malfeasance resulting from the officers’ use of the in-town expense allowance. After evaluating the testimony of many officers, however, the district court concluded that the circumstantial evidence was outweighed by the officers’ plausible explanations for not documenting their expenses: that it was simply too much trouble to keep track of every expense and that they preferred to pay tax on their reimbursements rather than take the time to prepare an expense report. Moreover, several officers presented expense reports for months in which they did document their expenses; the reports appeared to show at least $500 of legitimate expenses for each month for which they submitted receipts. Because Noble offered no direct rebuttal evidence of wrongdoing and because the circumstantial evidence he offered inadequately rebutted the officers’ testimony and evidence, the district court dismissed the section 501 claim. See Noble v. Sombrotto (Sombrotto III ), 84 F.Supp.3d 11, 30 (D.D.C. 2015) ().
On the section 201 claim, Noble greatly expanded his document request on remand, insisting that he needed access to "the entirety" of the Union’s records in order to complete his investigation. The district court rejected that request as well as a narrower request for all documents related to an alleged Union account in a Minneapolis bank. The court found that Noble had given no explanation of how a review of documents related to such an account would help him "verify [the Union’s] report" to the Secretary of Labor, as required by section 201. 29 U.S.C. § 431(c). Accordingly, the district court again dismissed the section 201 claim.
Noble timely appealed both of the district court’s orders on remand; we have jurisdiction of his appeal under 28 U.S.C. § 1291.
We review the district court’s interpretation of the LMRDA de novo . Sombrotto II , 525 F.3d at 1235. We defer to "an interpretation of a union constitution rendered by officials of a labor organization ... unless the court finds the interpretation was unreasonable or made in bad faith." Id. at 1236 (quoting Monzillo v. Biller , 735 F.2d 1456, 1458 (D.C. Cir. 1984) ). We review the district court’s factual findings for clear error.
Section 501 of the LMRDA imposes a fiduciary duty on all union officers. 29 U.S.C. § 501(a) ; see George v. Local 639, Int’l Brotherhood of Teamsters , 98 F.3d 1419, 1422 (D.C. Cir. 1996). A union-member plaintiff may recover damages and obtain injunctive relief based on a union officer’s breach of his statutory duty. 29 U.S.C. § 501(b) ; see George , 98 F.3d at 1423.
Noble alleged that NALC officers violated their fiduciary duty by accepting in-town expense allowances without documenting the expenses for which they sought reimbursement. Although officers were encouraged to document their expenses by submitting receipts along with their reimbursement requests, they often did not, notwithstanding undocumented reimbursement was taxed as regular income. According to Noble, the officers used the $500 per month allowance to increase their salaries by routinely requesting "reimbursement" for personal or nonexistent expenses. Noble argued that this practice is forbidden not only by the fiduciary duty imposed by section 501 but also by the Union constitution, which specifies the amount of officers’ salaries and allows officers discretion only with regard to "benefits."
Earlier in this case we concluded that the district court had "relied on a clearly erroneous factual finding" in dismissing this section 501 claim. Although the district court had decided that "Noble produced ‘[n]o evidence’ that officers had used the allowance for ‘purely personal reasons, unrelated to union business,’ " we found "[t]o the contrary, Noble presented ample circumstantial evidence that officers were using the allowance for personal use." Sombrotto II , 525 F.3d at 1236 (quoting Sombrotto I , 2006 WL 2708796 at *9 ). As Noble argued, "each officer could easily have avoided a substantial additional tax...
To continue reading
Request your trial