Saunders v. Hankerson, CIV.A.02-2536(EGS).

• Decision Date: 08 April 2004
• Docket Number: No. CIV.A.02-2536(EGS).,CIV.A.02-2536(EGS).
• Citation: 312 F.Supp.2d 46
• Parties: Nathan A. SAUNDERS, Plaintiff, v. Ester HANKERSON, et al. Defendants.
• Court: U.S. District Court — District of Columbia

312 F.Supp.2d 46

Nathan A. SAUNDERS, Plaintiff, v. Ester HANKERSON, et al. Defendants.

No. CIV.A.02-2536(EGS).

United States District Court, District of Columbia.

April 8, 2004.

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Nathan A. Saunders, Washington, DC, pro se.

Christopher J. Herrling, Patricia Mary Byrne, Wilmer Cutler & Pickering, Washington, DC, for Plaintiff.

Shaun Michael Gehan, Stanley McKennett Brand, Brand & Frulla, James Michael Cole, Rebecca A. Ford, Bryan Cave LLP, Aitan Dror Goelman, Michael R Smith, Zuckerman Spaeder LLP, Alan Scott Bolden, Staci E. Patterson, Reed Smith LLP, Kenneth M. Robinson, Washington, DC, Charles E. Wilson, III, McCarthy Wilson, Rockville, MD, for Defendants.

MEMORANDUM OPINION

SULLIVAN, District Judge.

This case arises from the alleged embezzlement of approximately five million dollars in union funds by officials of the Washington Teachers' Union ("WTU"). Plaintiff in Civil Action No. 02-2536, Nathan Saunders, is a teacher of History and Government at Anacostia Senior Public High School and a member in good standing of the WTU. Mr. Saunders commenced this action on December 27, 2002, seeking compensatory and injunctive relief from officials of both the WTU and the American Federation of Teachers ("AFT"), the national union with which the WTU is affiliated. The AFT, in turn, initiated Civil Action No. 03-79 against officials of the WTU on January 17, 2003. Finally, a group of D.C. public school teachers now seek certification as a class to bring a separate action against officials of the WTU in Civil Action No. 03-261.

The following motions are currently pending in Civil Action No. 02-2536:(1) plaintiff's Motion for Preliminary Injunction and Appointment of an Independent Monitor; (2) defendant AFT's Motion to Dismiss; (3) defendant WTU Executive Board's Motion to Dismiss; (4) defendant WTU Trustees' Motion to Dismiss; and (5) renewed motion to intervene as plaintiffs filed by Mary Baird Currie et al. Proceedings are stayed as to all other defendants. There are currently no pending motions in the related case of American Federation of Teachers v. Bullock et al., 03-79. Pending motions in Civil Action 03-261 have been denied without prejudice pending resolution of the issues before the Court in the present case. Accordingly, this memorandum opinion focuses exclusively on the motions pending in Saunders v. Hankerson, Civil Action 02-2356.

I. BACKGROUND

The Washington Teachers' Union ("WTU") is a five-thousand-member local union representing public school teachers and professionals employed by the Board of Education of the District of Columbia. First Am. Compl. ¶¶ 29, 81. The WTU is affiliated with the American Federation of Teachers ("AFT"), a national union representing education professionals across the country. Id. ¶ 82. The WTU, also known as Local # 6 of the AFT, is governed by the AFT Constitution and is expected to make "per capita" dues payments of approximately $700,000 per annum to the AFT. Id. ¶ 72. Members of the WTU, including plaintiff, are also members of the AFT. Id. ¶ 82.

Between 1995 and July 2002, Barbara Bullock served as the elected President of the WTU. First Am. Compl. ¶¶ 1, 5, 106. Ms. Bullock was also elected to the position of Vice President of the AFT, and she served in that capacity from at least July 2000 to July 2002. Id. ¶¶ 15, 69. She has since resigned from both her Presidency of the WTU and her post on the AFT's Executive Council. Id. ¶¶ 15, 106-107. During the time frame relevant to these actions, defendant Gwendolyn Hemphill served both as Ms. Bullock's Special Assistant and as Legislative Representative for the WTU. Id. ¶¶ 1, 4, 122-23. Defendant Leroy Holmes was employed as Ms. Bullock's personal chauffeur. Id. ¶¶ 1, 4. Defendant James Baxter served as the WTU's elected Treasurer from July 1994 until he took a leave of absence as of September 2002. Id. ¶¶ 1, 17, 136.

Defendants Bullock, Baxter, Hemphill, and Holmes are alleged to have participated in a scheme to defraud the WTU to the tune of $5 million dollars, utilizing union funds to purchase luxury items for personal use.¹ Ms. Hemphill's daughter and son-in-law, defendants Cheryl and Michael Martin, along with Mr. Martin's business associate, defendant Errol Alderman, are also alleged to have participated in and benefited from the scheme both as individuals and through Expressions Unlimited, Michael Martin's business.² Id. ¶ 4. Similarly, Ms. Bullock's sister, Gwendolyn Clark, is alleged to have participated in and benefited from the scheme individually through a joint bank account shared with Ms. Bullock, as well as through her business, "Gwen's of Columbia." Id. Collectively, these defendants (Bullock, Baxter, Hemphill, Holmes, C. Martin, M. Martin, Errol Alderman, Gwendolyn Clark) are hereinafter referred to as "individual defendants." The remaining organizational and institutional defendants³ are alleged either to have acted in concert with these defendants, or to have been negligent in their responsibility to exercise oversight with respect to the activities of the WTU and its officials. Id. ¶¶ 2, 3.

In April 2002, Ms. Bullock, without the approval of the WTU Executive Board, and without complying with the requirements of the WTU bylaws, authorized the District of Columbia Public Schools ("DCPS") to deduct dues in the amount of $160.00 from each WTU member's paycheck. Id. ¶ 31. As a result, $160.00 was deducted from plaintiff Nathan Saunders' paycheck in July 2002. Id. ¶¶ 31, 33. Mr. Saunders subsequently contacted the WTU to inquire as to why his dues deduction was larger than usual, and was told that the DCPS was responsible for the improper deduction. Id. ¶¶ 34-35. He was also told that a faxed request for a refund to the WTU offices would result in a refund. Id. ¶¶ 34-35. Although plaintiff complied with these instructions, he was not refunded the amount of the deduction over and above his usual union dues until January 21, 2003, almost one month after he commenced this action. Id. ¶ 35. The Complaint also alleges that several other union members lodged complaints with the AFT in July 2002 regarding the unauthorized dues deduction. Based in part on these complaints by WTU members, as well as on a significant arrearage in per capita dues payments owed by the WTU to the AFT, in September 2002 the AFT initiated an investigation into the July 2002 dues deductions and the WTU's finances.

On October 23, 2002, "formal requests were made to Bullock, Baxter, and Hemphill to repay the WTU all of the Union funds expended by or caused to be expended by them for personal and otherwise unauthorized and/or non-Union purposes." Id. ¶ 103. A second demand for payment was made on December 23, 2002. Id. ¶ 104. None of the individual defendants complied with these demands. Id. ¶ 106.

In November 2002, plaintiff participated in drafting a letter to the WTU Executive Board and Board of Trustees requesting detailed information regarding the WTU's financial status, as well as specific information regarding the processes through which the unauthorized July 2002 dues deduction took place, and by which teachers would be refunded excess deductions. Id. ¶¶ 40-42. On November 21, 2002, plaintiff organized and attended simultaneous demonstrations and pickets at the offices of the WTU and the AFT, through which he demanded full disclosure of the facts surrounding the unauthorized dues deduction and the resignation of Ms. Bullock, as well as an immediate election to fill the positions of WTU President, Vice President, and Treasurer. Id. ¶¶ 43-44, 46. Significantly, the press release issued in conjunction with the demonstrations demanded that the AFT account for its failure to detect financial improprieties within the WTU. Id. ¶ 45. These actions did not prompt refund of the improper dues deductions to WTU members.

At a WTU General Membership Meeting held in or about November or December 2002, plaintiff introduced a motion to require repayment of all improperly deducted funds to union members, as well as an accounting of the local union's current financial status. Id. ¶¶ 47-52. Although those motions were overwhelmingly approved by the general membership, the WTU Executive failed to comply within the time frames set forth therein. Id.

On December 27, 2002, plaintiff, proceeding pro se, commenced Civil Action 02-2356 and filed a motion for a temporary restraining order or preliminary injunction, seeking immediate dissolution of the WTU Executive Board and Board of Trustees, as well as the immediate appointment of an independent monitor to (1) secure the WTU's remaining assets and records, (2) provide full cooperation to law enforcement authorities in ongoing criminal investigations into the activities of Bullock, Baxter, Holmes and Hemphill, (3) complete audits of the WTU's financial records as necessary, and (4) hold immediate elections for all offices. Id. ¶ 53. Additionally, plaintiff asked the Court to (1) impose fines on each of the responsible defendants, (2) mandate complete restitution, and (3) order the AFT to repay all per capita payments made by the WTU to the AFT during the period in which the embezzlement was taking place. At that time, neither the WTU Executive nor the AFT had initiated any legal action against any of the individual or institutional defendants.⁴ Id. ¶ 54.

Upon defendant AFT's representations through counsel at the first status hearing held in Civil Action 02-2356 that the AFT had taken over the management of the WTU's assets and finances, was fully cooperating with law enforcement agencies, and had dissolved the existing Executive Board, plaintiff's motion for injunctive relief was withdrawn.⁵ 1/07/03 Status Hearing, Civil Action No. 02-2356.

The Court appointed counsel to represent plaintiff Saunders on January 21, 2003, and an Amended Complaint was filed with leave of the Court on February 5, 2003. A renewed ...