Decision Date20 November 1974
Docket NumberNo. C-1-74-336.,C-1-74-336.
Citation389 F. Supp. 903
PartiesSAFE WORKERS' ORGANIZATION, CHAPTER NO. 2, et al., Plaintiffs, v. Curt BALLINGER, President, et al., Defendants.
CourtU.S. District Court — Southern District of Ohio


Jacques J. Fiehrer, Hamilton, Ohio, for plaintiffs.

Bernard C. Fox, Cincinnati, Ohio, for defendants.

DAVID S. PORTER, District Judge:


A. This removal action purports to be brought, at least in part, under the Labor-Management Reporting and Disclosure Act of 1959, Sections 101 and 102.

This matter is before the Court on the Court's inquiry, sua sponte, as to the basis of its jurisdiction.

Plaintiffs filed their complaint in the Court of Common Pleas, Butler County, Ohio. Briefly stated, plaintiffs allege that the defendants, officers of Safe Workers' Organization, Chapter No. 2, have been conducting that labor organization's business as Local # 1862 U.A. W. despite the refusal of the National Labor Relations Board to amend the Safeworker's certification to show the purported U.A.W. affiliation.1

Plaintiffs further allege that the bank accounts of the Safe Workers' Organization have been closed and the funds co-mingled with the Local # 1862 U.A.W. funds; and that the officers of the Safe Workers' Organization, as such, are no longer bonded as required by law; Title V, LMRDA § 502, 29 U.S.C. § 502; and that the "defendants have coerced and intimidated members of plaintiff labor organization to accept affiliation with said Local # 1862 U.A.W." Complaint, para. 3 (Doc. 4).

Plaintiffs were granted a temporary restraining order by the Court of Common Pleas, whereupon the case was removed to this Court by defendants. The temporary restraining order was continued on agreement among counsel and with the approval of this Court, (Doc. 8) pending hearing on defendants' motion to dissolve the restraining order. That motion came to be heard on the basis of the professional statements of counsel and oral arguments, at which time the restraining order expired and the cause was set for an evidentiary hearing on plaintiffs' motion for preliminary injunction. (Doc. 11) During the course of the evidentiary hearing, it became apparent that a serious question existed as to whether or not this court had jurisdiction. Briefs were requested and submitted on this point. (Docs. 12 and 14).

In their removal petition (Doc. 1), defendants allege:

"2. This controversy arises under the laws of the United States and particularly under Title 29 U.S.C. Sec. 411(a)(2)(4) sic, and is a civil action over which this Federal District Court has original jurisdiction under Title 29 U.S.C. Sec. 412."

Plaintiffs too maintain that this Court has jurisdiction under the Labor-Management Reporting and Disclosure Act of 1959, Title I, Secs. 101(a)(2) and (4), 29 U.S.C. Secs. 411(a)(2) and (4) and Sec. 412.2 Plaintiffs also rely on Title V of that Act, Secs. 501 and 502, 29 U.S.C. Secs. 501 and 502.3

Defendants now deny jurisdiction. In their written brief, defendants argue that plaintiffs have failed to establish the conditions precedent to jurisdiction under Title V, but do not address themselves directly to plaintiffs' assertion of jurisdiction under Title I, 29 U.S.C. Secs. 411 and 412. Defendants do claim, however, that this suit falls within the exclusive jurisdiction of the National Labor Relations Board either because the case actually involves a representation question, 29 U.S.C. Sec. 159; or because the action involves an unfair labor practice, 29 U.S.C. Sec. 158.

We deal first with our jurisdiction or lack of jurisdiction under LMRDA, Title V. Thereafter, we will discuss the somewhat more difficult jurisdictional question associated with Title I of that Act. For reasons that will appear, we do not reach the issue of the possible exclusive jurisdiction of the National Labor Relations Board.

A. The Safe Workers' Organization Is Not A Proper Plaintiff under LMRDA § 501 As That Section Does Not Give District Court Jurisdiction Over Action By Labor Organization Against Its Officers:

Title V of the Labor-Management Reporting and Disclosure Act of 1959, 29 U.S.C. §§ 501-504, is a legislative declaration of the fiduciary relationship in which labor organization agents and officers stand with respect to the unions and labor associations which they serve. Section 501 of Title V creates a federal cause of action, albeit a somewhat circumscribed action, for breach of this fiduciary relationship which the members of the labor organization themselves may pursue. LMRDA § 501, 29 U.S.C. § 501. An action under this provision is in the nature of, or at least analogous to, a shareholders' derivative action. See, e. g., Nelson v. Johnson, 212 F.Supp. 233, 297-298 (D.Minn 1963), aff'd 325 F.2d 646 (8th Cir. 1963); Phillips v. Osborne, 403 F.2d 826, 831 (9th Cir. 1968).

The instant suit purports to have been brought by the Safe Workers' Organization, Chapter No. 2, as well as by two individual plaintiffs who claim to be members of that organization, under Title V of the LMRDA, and specifically under § 501(b) thereunder, 29 U.S.C. § 501(b), which is set out in the margin.4 Nine individual defendants are named, in their official capacities, and are designated as "being all of the OFFICERS and SHOP COMMITTEEMEN of SAFE WORKERS' ORGANIZATION, CHAPTER NO. 2." Complaint, page 2 (Doc. 1). Neither the Complaint nor its attached affidavit suggest how this suit came to be authorized by the Safe Workers' Local to be brought in its name. But see Rule 9(a) and Rule 17(b), F.R. Civ.P.

However, on its face Section 501(b) authorizes only suits by labor organization members against the allegedly misfeasant "officer, agent, shop steward, or other representative of a labor organization." This language has been stringently construed as not reaching actions against the labor organizations themselves. See: Sabolsky v. Budzanoski, 457 F.2d 1245 (3rd Cir. 1972), cert. den. 409 U.S. 853, 93 S.Ct. 65, 34 L.Ed.2d 96 (1972); Woody v. Sterling Aluminum Products, Inc., 244 F.Supp. 84, 88-89 (D.Mo.1965), aff'd 365 F.2d 448 (8th Cir. 1966), cert. den. 386 U.S. 957, 87 S. Ct. 1026, 18 L.Ed.2d 105, reh. den. 386 U.S. 1027, 87 S.Ct. 1371, 18 L.Ed.2d 471 (1967); Aho v. Bintz, 290 F.Supp. 577, 579 (D.Minn.1968); also see Pignotti v. Local # 3 Sheet Metal Workers' Int. Assoc., 343 F.Supp. 236 (D.Neb. 1972) (neither 29 U.S.C. § 411 nor § 501 authorizes claim against employer or union pension fund). But compare: Holdeman v. Sheldon, 204 F.Supp. 890 (S.D.N.Y.1962), aff'd 311 F.2d 2 (2d Cir. 1962) (denying union motion to intervene as party defendant on ground that union's interests were adverse to individual defendants); and International Broth. of Teamsters, Etc. v. Hoffa, 242 F.Supp. 246 (D.D.C.1965) (labor union appearing in complaint as plaintiff denied right to intervene as defendant, the court also refusing to realign union as a defendant, but retaining union as a party exclusively to defend its own institutional interests).

While no reported case has yet held that § 501 does not reach suits by a labor organization against its officers, no reason appears why this should not be so. The labor organization may avail itself directly of the pertinent remedies under the applicable state law. LMRDA § 603, 29 U.S.C. § 523(a); Gilbert v. Hoisting & Portable Engineers, etc., 237 Or. 130, 384 P.2d 136 (1963), cert. den. 376 U.S. 963, 84 S.Ct. 1125, 11 L.Ed.2d 981 (1964); also see Tomko v. Hilbert, 288 F.2d 625 (3rd Cir. 1961), and Holdeman v. Sheldon, 204 F.Supp. 890 (D.N.Y.1962), aff'd 311 F.2d 2 (2d Cir. 1962). As to Ohio law, see generally: 33 O.Jur.2d 107, 122-124 (and 1974 P.P. at 73), Labor §§ 11 Affiliation or Disaffiliation with National or International Union; § 12 Existence of Local Union Notwithstanding Withdrawal of Majority. Also see: O.R.C. § 1715.17 as amended by 131 O.L. (H 505), eff. Oct. 30, 1965, and as amended by 132 O.L. (H 1, § 1), eff. Feb. 21, 1967.

Thus, the Safe Workers' Organization does not appear to be a proper plaintiff under § 501, and absent other jurisdictional grounds, should be dismissed.

B. Individual Plaintiffs Have Failed To Establish Compliance With The Statutory Conditions Precedent To Maintenance Of A § 501 Action:

As in the case of shareholders' derivative suits, potential abuses were foreseen. Accordingly, to protect union officials from unjust harassment, safeguards were incorporated into the Act which require as prerequisites to commencement of a member's action that the member must first request the union or its governing board or its officers to bring the suit, and secondly, that the member must secure, upon a showing of good cause, court permission to proceed with the action. See § 501(b), 29 U.S.C. 501(b). In the instant case, the complaint does not allege that the prerequisite demand has been made upon the union or its officers.5 Nor is there any indication in this record that plaintiffs sought leave of court to commence this action, showing good cause, before proceeding in the state court, and no such request has been made here.

The following cases support the proposition that a request by the plaintiff-members that the "labor organization or its governing board or its officers" undertake the action is a condition precedent to maintenance of a Title V action:

"Coleman v. Brotherhood of Railway & S. S. Clerks, etc. (1965 C.A.2 N.Y.) 340 F.2d 206, 15 A.L.R.3d 933 (allegation of futility of such a request will not suffice); Horner v. Ferron (1966, C.A.9 Cal.) 362 F.2d 224, cert. den. 385 U.S. 958, 87 S.Ct. 397, 17 L.Ed.2d 305; Penuelas v. Moreno (1961, D.C. Cal.) 198 F.Supp. 441 (request must be for court action); Persico v. Daley (1965, D.C.N.Y.) 239 F.Supp. 629 (allegation of futility of request not sufficient); International Brotherhood of Teamsters, etc. v. Hoffa (1965, D.

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