US v. International Broth. of Teamsters

• Decision Date: 06 March 1989
• Docket Number: No. 88 Civ. 4486 (DNE).,88 Civ. 4486 (DNE).
• Citation: 708 F. Supp. 1388
• Parties: UNITED STATES of America, Plaintiff, v. INTERNATIONAL BROTHERHOOD OF TEAMSTERS, et al., Defendants.
• Court: U.S. District Court — Southern District of New York

708 F. Supp. 1388

UNITED STATES of America, Plaintiff, v. INTERNATIONAL BROTHERHOOD OF TEAMSTERS, et al., Defendants.

No. 88 Civ. 4486 (DNE).

United States District Court, S.D. New York.

March 6, 1989.

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Rudolph W. Giuliani, U.S. Atty., S.D.N.Y. (Randy M. Mastro, Marla Alhadeff, Richard W. Mark, Allan N. Taffet, Asst. U.S. Attys., and Peter C. Sprung, Sp. Asst. U.S. Atty., New York City, of counsel), for U.S.

Mudge Rose Guthrie Alexander & Ferndon (Jed S. Rakoff, Audrey Strauss, Bart Timothy Schectman, and Ralph P. DeSanto, New York City, of counsel), for defendant Intern. Broth. of Teamsters.

OPINION & ORDER

EDELSTEIN, District Judge:

BACKGROUND

The United States Government has filed a civil complaint alleging a massive racketeering enterprise and a conspiracy to participate in such an enterprise, pursuant to provisions of the Racketeering Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq. The complaint names as defendants the International Brotherhood of Teamsters ("IBT" or "Union"), its General Executive Board ("GEB" or "Board"), the individual members of the Board, the Commission of La Cosa Nostra ("LCN")¹, and 26 alleged members of La Cosa Nostra. The Government seeks sweeping relief, including the ouster of the members of the Board, the appointment of a "court liaison officer" to oversee reforms in the Union's supervision of its subordinate entities as well as in its election procedures, and orders permanently enjoining the Board members and the LCN defendants from participating in the affairs of any labor organization.

By order to show cause, the Government sought a preliminary injunction. Upon hearing the parties, and in light of the unprecedented nature and scope of this action, the court denied the application and ordered expedited discovery and an early trial date that would consolidate the hearing for permanent and preliminary relief. The Union, the Board, and several individual defendants² filed motions to dismiss the complaint, which the court now addresses.

The Union contends that the Government's complaint should be dismissed on three grounds: (1) the complaint violates the defendants' first amendment right to association; (2) federal labor law preempts RICO in the context of labor unions; (3) the complaint fails to state a RICO claim. Individual defendants have also moved to dismiss the complaint for lack of jurisdiction and for lack of timeliness. Defendant Joseph Massino has also moved for dismissal on grounds of comity. The Union also moves for an order requiring the joinder of indispensable parties and an order transferring this action to the District of Columbia. For the reasons stated below, the motions are denied.

The Government has also moved for (1) entry of default judgments against certain individual defendants and the Commission of La Cosa Nostra; (2) orders granting summary judgment against certain individual defendants; (3) leave to amend the complaint; and (4) an order striking the jury demands filed by some of the individual defendants. For the reasons stated below, the motions are granted except for the motion for summary judgment.

I. THE MOTIONS TO DISMISS

A. First Amendment Challenge to RICO Claim Against IBT

The IBT contends that the Government's complaint attacks activity protected by the first amendment as well as acts that may be constitutionally proscribed. The IBT has identified five types of such conduct attacked by the complaint: (1) Association by IBT officers with persons having known criminal histories or criminal records, see IBT Memo at 10; (2) IBT officers meeting with and giving approval and support to former candidates for various union offices, who were supported by the LCN, id. at 11; (3) failure by the Union to accept charges made by the United States in various criminal indictments, id.; (4) statements made by the Union in its official publication, the International Journal, id. at 12-13; (5) association of IBT officers with certain individuals named in the complaint or any LCN member or associate.

The Union contends that intermingling activity protected by the first amendment with alleged activity properly proscribed by RICO is constitutionally impermissible, and therefore, the complaint should be dismissed. The Union relies primarily on the case of NAACP v. Claiborne Hardware Co., 458 U.S. 886, 102 S.Ct. 3409, 73 L.Ed. 2d 1215 (1982).

Claiborne arose out of a boycott of white merchants in Claiborne County, Mississippi organized in 1966 by the local NAACP leaders. The boycott was organized to secure compliance with a long list of demands for equality and justice. Although the boycott was primarily enforced by speeches and nonviolent picketing, some threats, as well as acts, of violence occurred. The white merchants filed suit to recover profits lost over a seven year period. The Mississippi Supreme Court upheld liability on the theory of common law tort on the ground that NAACP had agreed to use violence and threats of violence to enforce the boycott.

The United States Supreme Court reversed the Mississippi court's ruling. The Court first concluded that the nonviolent aspects of the boycott were clearly protected by the first amendment. Claiborne, supra, 458 U.S. at 911, 102 S.Ct. at 3424. Moreover, as a primarily political activity, the boycott was not within the scope of activity properly subject to state regulation. Accordingly, the court reasoned, liability could not be imposed on all coconspirators for violent acts by some individuals, when the "conspiracy" was largely nonviolent and involved constitutionally protected association.

The IBT contends that the Government complaint in this case seeks to accomplish what Claiborne has prohibited, namely, attacking protected and unprotected activity, intertwined by RICO and conspiracy theories. The analogy, however, is less than compelling. At the heart of the IBT's argument lies the notion that the Government seeks a remedy that may impinge on putative first amendment rights, such as the right of union officers to associate with whomever they please, including alleged or proven organized crime figures. The issue of the appropriate scope for relief, if any is warranted by the proof adduced at a trial, should be determined by court in its discretion after a hearing.

The usual question presented by a motion to dismiss is whether the plaintiff, in this case the Government, can prove any set of facts that would entitle it to relief. In some cases, the threat to first amendment rights is so clear and so immediate that a dismissal of the complaint is deemed appropriate. See Franchise Realty Interstate Corp v. San Francisco Local Joint Executive Board of Culinary Workers, 542 F.2d 1076, 1082 (9th Cir.1976), cert. denied, 430 U.S. 940, 97 S.Ct. 1571, 51 L.Ed.2d 787 (1977). In the case before this court, however, it is not clear from the face of the complaint that any relief granted upon proof of the allegations of the complaint would necessarily violate the first amendment.

It is also clear that the Government complaint does not seek to proscribe lawful union activity such as honestly representing workers and providing union benefits. The complaint addresses itself only to alleged violations of RICO, which are not protected by the first amendment. The categories of allegedly protected activity challenged by the complaint cannot be analyzed in a vacuum. Purely political association, even with individuals who have a criminal history, is protected by the first amendment. Nevertheless, when such association is part of a plan to commit a crime it no longer is protected. Otherwise, it is apparent that any RICO enterprise or conspiracy could never be prosecuted because they all involve "association." "Freedom of association" is not, however, a talisman that will ward off all government attempts to proscribe or regulate activity. It is only lawful association that is protected, not association for a criminal or unlawful purpose. The IBT argument begs the question by asserting that the association alleged in the complaint is protected by the first amendment. If such association was innocent, and for the lawful, and laudable, purpose of political discussion, advancement of labor issues, or any other cognizable, protected purpose, the IBT will have ample opportunity to demonstrate that at trial. In the meantime, such an argument does not persuade the court that the allegations of the complaint offend first amendment principles.

B. Preemption of RICO by Federal Labor Law

The IBT contends that the federal labor laws preclude the application of RICO to the allegations in the complaint citing the history of labor law in the United States, and the scope of the Labor-Management Reporting and Disclosure Act, 29 U.S.C. § 401 et seq. ("LMRDA") and the National Labor Relations Act, 29 U.S.C. § 151 et seq. ("NLRA"), to support its argument. The Union characterizes the allegations in the complaint as falling in two groups: (1) a challenge to IBT elections, and (2) unfair labor practices depriving IBT members of their rights to organize and bargain collectively. After such characterization, the Union concludes that the LMRDA and NLRA created those rights and provide exclusive mechanisms for their protection.

Section 481 of the LMRDA set forth the procedures and rules governing union elections. Section 482 provides a procedure to challenge the results of an already conducted union election. This procedure requires a complaint to the Secretary of Labor, after exhausting remedies provided by the union. The Secretary is then required to conduct an investigation. After such investigation, the Secretary must determine whether there is probable cause to proceed with further legal action. Only after such a determination may a lawsuit be instituted to challenge election results, and then only by the Secretary. Section 482 provides that this...