Noble v. Sombrotto, Civil Action No. 94-302 (EGS) [126-1], [127-1], [128-1], [144] (D. D.C. 4/28/2003), Civil Action No. 94-302 (EGS) [126-1], [127-1], [128-1], [144].

• Court: United States District Courts. United States District Court (Columbia)
• Writing for the Court: Emmet G. Sullivan
• Parties: DAVID W. NOBLE, JR., Plaintiff, v. VINCENT R. SOMBROTTO, et al., and NATIONAL ASSOCIATION OF LETTER CARRIERS, AFL-CIO, Defendants.
• Decision Date: 28 April 2003
• Docket Number: Civil Action No. 94-302 (EGS) [126-1], [127-1], [128-1], [144].

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DAVID W. NOBLE, JR., Plaintiff,
v.
VINCENT R. SOMBROTTO, et al., and NATIONAL ASSOCIATION OF LETTER CARRIERS, AFL-CIO, Defendants. Civil Action No. 94-302 (EGS) [126-1], [127-1], [128-1], [144]. United States District Court, District of Columbia. April 28, 2003. MEMORANDUM OPINION

EMMET G. SULLIVAN, District Judge.

This Memorandum Opinion is issued pursuant to this Court's Order of September 30, 2002.

Plaintiff David Noble, Jr., proceeding pro se, brings this action pursuant to 29 U.S.C. § 501(b), alleging that individual defendants, high-ranking officers of the National Association of Letter Carriers, AFL-CIO (NALC), violated their fiduciary duties under the Labor Management Reporting and Disclosure Act of 1959 (LMRDA) (codified as amended at 29 U.S.C. § 401 et seq. (2003)) by making unauthorized payments to themselves from union funds. Presently pending before the Court are defendants' motions for summary judgment, plaintiff's cross-motion for partial summary judgment, and plaintiff's motion to strike individual defendants' declarations, and all responsive pleadings related to those motions.

Upon consideration of these pleadings, and for the following reasons, defendant NALC's motion for summary judgment [126-1] is DENIED, individually named defendants' motion for summary judgment [128-1] is DENIED, and plaintiff's cross-motion for summary judgment [127-1] is DENIED.

I. BACKGROUND

NALC is a labor union representing employees of the U.S. Postal Service, with a membership of approximately 300,000 workers. Def. NALC Statement of Facts (NALC Stmt.) ¶ 1, Pl.'s February 26, 2002 Decl. ¶ 3 (Pl.'s Decl.). The individually-named defendants represent the entire membership of the Executive Council, the union's governing body, from at least January 1, 1989 to the date this action was filed.¹ NALC Stmt. ¶ 3. First Am. Compl. ¶ 8.

Plaintiff has been a member of NALC for almost thirty years. Pl.'s Decl. ¶ 1. Over the course of this period he has served in several official capacities within the union, and was employed at the NALC headquarters from 1981 to 1993 as an assistant to NALC President Vincent R. Sombrotto, one of the individual defendants in this case. Id.; Pl.'s Decl. ¶ 2.

The facts at the heart of plaintiff's claims are undisputed. NALC is governed by a constitution, as amended by National Conventions. Def. NALC's Mem. in Supp. Mot. Summ. J. ("NALC Mem."), Ex. A ("Const."). The NALC constitution establishes a twenty-eight member Executive Council charged with carrying out the daily business of the union. Const. art. 9, § 11. The Executive Council is second only to the National Convention in policy-making and legislative authority for the union. Id. The NALC constitution also provides for payment of an annual "sum" to each member of the Executive Council "for faithful performance" of duties outlined therein. Const. art. 9, §§ 1-10, MBA Constitution art. 6, § 18, Health Plan art. 7, § 18. This "sum" may only be adjusted upward by the same percentage increase received by "top grade" letter carriers. Const. art. 9, §§ 1-10, MBA Constitution art. 6, § 18, Health Plan art. 7, § 18. Any increase in this "sum" must be approved by a majority vote of the National Convention. Const. Art. 19, § 1.

Members of the NALC Executive Council were paid money from union funds over and above this annual "sum." Specifically, individual defendants were paid 1) $500 per month for "in-town expenses," for which they were not required to provide receipts, 2) the equivalent of their employee contributions to Social Security and Medicare, and 3) the per diem paid to delegates during the week-long National Convention, held biennially. NALC Stmt. ¶ 5, 10, 13; Pl.'s Nov. 19 Stmt. of Mat. Facts ("Pl.'s Stmt."), ¶ 17-20, 23-25, 34.

The parties' versions of the facts diverge significantly at this point. While defendants concede that the challenged payments were made and accepted by all relevant parties, they maintain that the payments were made in accordance and conformity with the NALC constitution. NALC Mem. at 25. Defendants further allege that the payments were disclosed to the membership as early as 1986, and that the membership has consistently ratified the payments as appropriate under the constitution. Id. at 34-35; Sombrotto Decl., Ex. A, ¶ 75-81; NALC Stmt. ¶ 28-32. Plaintiff counters that individual defendants have concealed the payment and acceptance of these sums, and argues that defendants' conduct violated the union constitution and breached their fiduciary duties under Section 501(a) the LMRDA. 29 U.S.C. § 501(a); Pl.'s Decl. ¶ 28, 46.

Plaintiff brought internal union charges against all individual defendants in August of 1993, alleging that members of the Executive Council had violated the union constitution by, inter alia, accepting the "in town" expense allowance, the per diem paid during the National Convention, and payment of the employee share of Social Security and Medicare contributions from union funds. Def. NALC Mem., Ex. N. Although the union constitution sets out a procedure for resolution of such matters, it was not followed with respect to plaintiff's charges. Const. art. 10, Def. NALC Mem., Ex. O. Instead, NALC President Vincent Sombrotto established a five-member investigative committee for the purpose of investigating the charges. Def. NALC Mem, Ex. O, "Presidential Ruling". The committee was directed to prepare a written report to a Special Meeting of the NALC to be held in October of 1993 summarizing its findings. Id. After delegates at the Special Meeting voted to reject the charges, plaintiff brought this suit under the LMRDA.

II. MOTIONS FOR SUMMARY JUDGMENT

A. Standard of Review

Summary judgment should be granted pursuant to Fed.R.Civ.P. 56 only if the moving party has demonstrated that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548 (1986). Likewise, when ruling on cross-motions for summary judgment, the court shall grant summary judgment only if one of the moving parties is entitled to judgment as a matter of law upon material facts that are not genuinely disputed. See Rhoads v. McFerran, 517 F.2d 66, 67 (2d Cir. 1975). When determining whether either party has met its burden of establishing the absence of any genuine issues of material fact, factual inferences are considered in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348 (1986).

B. Breach of Fiduciary Duty Claims

Counts II through VIII of the First Amended Complaint assert claims under Section 501(a) of the LMRDA, 29, U.S.C. § 501(a), which provides in relevant part:

The officers, agents, shop stewards and other representatives of a labor organization occupy positions of trust in relation to such organization and its members as a group. It is therefore, the duty of each such person . . . to hold its money and property solely for the benefit of the organization and to manage, invest, and expend the same in accordance with its constitution and by-laws.

Plaintiff specifically alleges that, by authorizing and accepting the "in town" expense payments of $500 per month over and above the annual remuneration levels stipulated in the NALC constitution without itemizing alleged expenses or submitting receipts, authorizing and accepting payment of per diem during biennial NALC National Conventions when a full salary, complimentary meals, and lodging were provided to Executive Council during convention periods, and by authorizing and accepting payment of the employee share of their Social Security and Medicare contributions from union funds, individual defendants violated Section 501(a) by expending union funds in a manner not permitted by the NALC constitution. Defendants do not dispute that the challenged payments were made, or that individual defendants were "officers" within the meaning of the LMRDA,² but maintain that the expenditures were permissible under the NALC constitution.

Proof that a union constitution has been violated on its face by union officials is not enough, without more, to establish a violation of Section 501(a). See Rogers v. Lucassen, 777 F. Supp. 997, 999 (D.D.C. 1997). Federal courts "do not possess jurisdiction to enforce union constitutions and by-laws where there has been no violation of a specific right enunciated" in the LMRDA. Bunz v. Moving Picture Mach. Operators' Protective Union Local 224, 567 F.2d 1117, 1120 (D.C. Cir. 1977). However, where a violation of a union constitution through unauthorized expenditure of union funds is established, "courts are free to determine whether an expenditure was so unreasonable as to constitute a breach of fiduciary duty under section 501." Council 49 v. Reach, 843 F.2d 1343, 1347 (11th Cir. 1988). Such unauthorized expenditures are subject to the strictest judicial scrutiny. See id.

It is often the case that the issue of whether an expenditure is proper under a union constitution cannot be determined from the document's plain language. Where relevant provisions are ambiguous, it is well-settled that "an interpretation of a union constitution rendered by officials of a labor organization is entitled to considerable deference by a reviewing court, and should not be overruled unless the court finds that the interpretation was unreasonable or made in bad faith." Monzillo v. Biller, 735 F.2d 1456, 1458 (D.C. Cir. 1984); Fahy v. Haas, Civil Action No. 87-1936, 1987 WL 15932 at *4 (D.D.C. Aug. 14, 1987); see also American Postal Workers v. American Postal Workers, 665 F.2d 1096, 1101 (D.C. Cir. 1981); English v. Cunningham, 282 F.2d 848, 850 (D.C. Cir. 1960); Herman v. International Union of Bricklayers and Allied Craftsmen, 160 L.R.R.M. 2999 (D.D.C. 1998). "Accordingly, courts are loathe to substitute their judgment for that of union officials...