U.S. v. International Broth. of Teamsters, Chauffeurs, Warehousemen and Helpers of America, AFL-CIO

• Decision Date: 01 June 1990
• Docket Number: 1439,1440,Nos. 896,AFL-CIO,D,1505,897,s. 896
• Parties: 134 L.R.R.M. (BNA) 3161, 117 Lab.Cas. P 10,463 UNITED STATES of America, Plaintiff-Appellee, v. INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA,, et al., Defendants. Appeal of Harold FRIEDMAN, Eleventh Vice President, Defendant. Appeal of Anthony HUGHES, Respondent-Movant. ockets 89-6248, 89-6250, 90-6136, 90-6138, 90-6142.
• Court: U.S. Court of Appeals — Second Circuit

Page 610

905 F.2d 610

134 L.R.R.M. (BNA) 3161, 117 Lab.Cas. P 10,463

UNITED STATES of America, Plaintiff-Appellee, v. INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS,

WAREHOUSEMEN AND HELPERS OF AMERICA, AFL-CIO, et

al., Defendants.

Appeal of Harold FRIEDMAN, Eleventh Vice President, Defendant.

Appeal of Anthony HUGHES, Respondent-Movant.

Nos. 896, 897, 1439, 1440, 1505, Dockets 89-6248, 89-6250,

90-6136, 90-6138, 90-6142.

United States Court of Appeals, Second Circuit.

Argued April 30, 1990.

Decided June 1, 1990.

Walter P. Loughlin, New York City (Mudge Rose Guthrie Alexander & Ferdon, James T. Grady, Washington, D.C., Gen. Counsel, IBT, Jed S. Rakoff, Robert P. Knapp III, Ralph P. DeSanto, Vincent P. Esposito, Jr., of counsel), for defendants Intern. Broth. of Teamsters, Chauffeurs, Warehousemen and Helpers of America, AFL-CIO.

Paul J. Cambria, Jr., Buffalo, N.Y. (Lipsitz, Green, Fahringer, Roll, Schuller & James, William M. Feigenbaum, Richard P. Weisbeck, Jr., of counsel), for defendant Harold Friedman.

Moses Krislov, Cleveland, Ohio (Daniel Markewich, New York City, of counsel), for respondent-movant Anthony Hughes.

Randy M. Mastro, New York City, Asst. U.S. Atty. for the S.D. of N.Y. (Otto G. Obermaier, U.S. Atty. for the S.D. of N.Y., Edward T. Ferguson, III, Richard W. Mark, Asst. U.S. Attys., of counsel), for plaintiff-appellee.

Charles M. Carberry, Investigations Officer, New York City (Robert W. Gaffey, New York City, of counsel), for plaintiff-appellee.

Before FEINBERG, MESKILL and WINTER, Circuit Judges.

FEINBERG, Circuit Judge:

These appeals challenge the implementation in particular respects of a voluntary settlement effected in March 14, 1989 (the Consent Decree) in an action brought by plaintiff-appellee United States of America (the government) in the United States District Court for the Southern District of New York against defendants-appellants International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, AFL-CIO (the IBT), the IBT's General Executive Board (the GEB), individual members of the GEB, including Harold Friedman, and various reputed members and associates of La Cosa Nostra, an alleged criminal organization.

Harold Friedman and Anthony Hughes appeal from a March 13, 1990 opinion and order of Judge David N. Edelstein, upholding the decision of an Independent Administrator (the Administrator), appointed pursuant to the Consent Decree, that imposed a one-year suspension from union office upon Friedman and Hughes. The basis of the suspension was their 1989 criminal convictions in a federal district court in Ohio. These two appeals have been consolidated with prior appeals by Friedman and Hughes from a November 2, 1989 memorandum and order of the district court, reported at 725 F.Supp. 162, which upheld the authority of the Administrator, pursuant to the Consent Decree, to hear charges against them. Defendant-appellant IBT appeals from that part of the March 13, 1990 order that upheld the power of the Administrator to invalidate a Resolution passed by the GEB.

For reasons given below, we affirm the orders of the district court.

Background

These appeals have a complex procedural history. In June 1988, the government brought this suit under the civil remedies provision of the Racketeer Influenced and Corrupt Organizations Act (RICO). See 18 U.S.C. Sec. 1964. The complaint alleged that the IBT was controlled by La Cosa Nostra and sought sweeping reforms of the IBT, including the appointment of trustees to conduct the affairs of the IBT, wide-ranging electoral reforms and permanent injunctions against the commission of racketeering within the union.

In March 1989, on the eve of trial, the government, the IBT and most of the members of the GEB including appellant Friedman entered into the Consent Decree, which is a comprehensive document covering 31 double-spaced typewritten pages. In the preface to the Consent Decree, the union defendants, including Friedman, acknowledged that "there have been allegations, sworn testimony and judicial findings of past problems with La Cosa Nostra corruption of various elements of the IBT" and agreed that "there should be no criminal element or La Cosa Nostra corruption of any part of the IBT." The Consent Decree put the RICO claims in abeyance, replacing that litigation with a systematic mechanism to achieve reforms throughout the IBT over the next few years, including direct rank-and-file elections of the union leadership and enhanced procedures for investigation and discipline of corrupt union officials. The Consent Decree stated that the district court would retain jurisdiction "over this case" until "satisfactory completion and implementation of the terms and conditions" of the Consent Decree, which, with some exceptions, is apparently contemplated to occur in 1992.

The specific terms of the Consent Decree are as follows. Under the Consent Decree, three court officers are appointed to oversee certain aspects of the affairs of the IBT: an Election Officer, an Investigations Officer and an Administrator. The Election Officer is to supervise the 1991 election of IBT officers. The Investigations Officer is granted authority to investigate corruption and prosecute disciplinary charges against any officer, member or employee of the IBT or any of its affiliates. The Administrator oversees the implementation of the remedial provisions of the Consent Decree. For example, the Administrator sits as an impartial decisionmaker in disciplinary cases brought by the Investigations Officer, conducts the disciplinary hearings and decides them. The Administrator may also apply to the district court to facilitate implementation of the Consent Decree, and the other parties to the Decree may make such applications as well. Furthermore, the district court is vested with "exclusive jurisdiction" to decide any issues relating to the actions or authority of the Administrator. And the IBT Constitution is amended to incorporate and conform with all of the terms of the Consent Decree.

Friedman and Hughes are the first two IBT officials charged and tried under the remedial scheme created by the Consent Decree. Friedman was a named defendant in the underlying civil RICO lawsuit in the Southern District and a signatory to the Consent Decree. At that time, Friedman was a member of the GEB, being the Eleventh Vice-President of the IBT. In addition, he was President of Local 507 located in Cleveland, Ohio, and President of the Ohio Conference of Teamsters. Friedman subsequently resigned from the GEB, but remained as President of Local 507 and the Ohio Conference of Teamsters until the time of his suspension. Hughes was until the time of his suspension the Recording Secretary of Local 507 in Cleveland.

In 1986, Friedman, Hughes and the late Jackie Presser (former IBT General President) were named as co-defendants in a criminal indictment in the United States District Court for the Northern District of Ohio. United States v. Friedman et al., Cr. 86-114 (N.D.Ohio) (White, J.). The indictment charged, among other things, that the defendants had committed various RICO offenses and had embezzled from certain unions through a "ghost employee" scheme. After the indictment was filed, Friedman was re-elected as President of Teamster Local 507, and Hughes was re-elected as Recording Secretary of Teamster Local 507. Subsequently, in May 1989, Friedman and Hughes were convicted of various charges contained in the indictment, and each was sentenced to a four-year term of probation and separation from all IBT-related activity for concurrent four-year periods. Judge White stayed the sentences pending the outcome of appeals by Friedman and Hughes to the United States Court of Appeals for the Sixth Circuit. The appeals are scheduled to be heard on June 4, 1990.

In July 1989, the Investigations Officer filed separate union disciplinary charges before the Administrator, seeking to remove Friedman and Hughes from office (Charge I). Specifically, the Investigations Officer charged Friedman and Hughes with conducting themselves in a manner that brought reproach on the IBT, in violation of Article II, section 2(a), of the IBT Constitution. That section requires all IBT members to subscribe to an oath of loyalty; the oath obligates each member, among other things, "to conduct himself or herself at all times in such a manner as not to bring reproach upon the Union." ¹ Article XIX, section 6(b)(2), of the IBT Constitution provides that violation of the oath of loyalty constitutes a specific basis for union disciplinary charges. The charges against Friedman and Hughes treated their criminal convictions as the underlying conduct that formed the basis of their violations of Article II, section 2(a). In September 1989, the Investigations Officer filed a second charge against Friedman alone, alleging that he had brought reproach upon the IBT by knowingly associating with members of La Cosa Nostra (Charge II).

In mid-August 1989, Friedman and Hughes challenged the Administrator's authority to hear the disciplinary charges against them. In September 1989, the Administrator rejected the challenges in a written opinion, and shortly thereafter applied to the district court for review of his decision. Friedman and Hughes in turn moved the district court for a preliminary injunction to prevent the charges from going forward.

On November 1, 1989, the GEB enacted a resolution (the Resolution) interpreting the term "reproach upon the Union" of the IBT Constitution in a manner, explained more fully below, that would apparently preclude the disciplinary charges against Friedman and Hughes.

On November 2, 1989, the district court granted the Administrator's application and denied the motions of Friedman and Hughes, thus allowing the disciplinary hearings before the Administrator to proceed. Friedman and Hughes then appealed to this court and sought a stay of their...