Weaver v. United Mine Workers of America

• Decision Date: 13 December 1973
• Docket Number: No. 72-1747,72-1748.,72-1747
• Parties: Richard WEAVER et al. v. UNITED MINE WORKERS OF AMERICA et al., Appellants. W. A. BOYLE et al., Appellants, v. Richard WEAVER et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

492 F.2d 580 (1973)

Richard WEAVER et al. v. UNITED MINE WORKERS OF AMERICA et al., Appellants.

W. A. BOYLE et al., Appellants, v. Richard WEAVER et al.

Nos. 72-1747, 72-1748.

United States Court of Appeals, District of Columbia Circuit.

December 13, 1973.

Joseph A. Yablonski, Clarice R. Feldman, Lewis D. Sargentich and Daniel B. Edelman, Washington, D.C., were on the motion, for United Mine Workers of America in No. 72-1747.

J. Gordon Forester, Jr., Washington, D.C., was on the opposition to the motion for appellants in No. 72-1748.

Al Philip Kane and Matthew A. Kane, Washington, D.C., filed a Report of Independent Counsel with Respect to the Motion.

Before McGOWAN, ROBINSON and WILKEY, Circuit Judges.

PER CURIAM:

The action which gives rise to these consolidated interlocutory appeals¹ was instituted in 1969 by Joseph A. Yablonski and other members of the United Mine Workers of America² against its president, W. A. Boyle, and two other officers, George J. Titler and John Owens, for alleged violation of their fiduciary duties to the UMWA and its members. On two prior occasions we considered motions to disqualify UMWA's counsel in the action and held that neither the UMWA's retained counsel nor its house counsel could be permitted to represent its interests in the controversy because of their previous and continuing affiliations with the defendant officials in this and other UMWA litigation.³ Since those decisions, the leadership of the UMWA has changed and the issue of representation is again before this court.

Our previous opinions delineate the legal principles which govern this issue. However, in view of the different context in which the question is now presented, and because additional issues are raised concerning the realignment of the UMWA as party-plaintiff and the mootness of the underlying appeal, we believe it helpful to recount the salient facts and to state the reasons for the action we take.

I

Yablonski and other UMWA members brought suit under Section 501(b) of the Labor-Management Reporting and Disclosure Act of 1959⁴ for damages and for an accounting and restitution of UMWA funds allegedly misappropriated and misspent by the defendant officers. The UMWA was also made a party-defendant and was represented originally by retained counsel who simultaneously represented Boyle in other cases in which he was charged with misconduct in office. We reversed the District Court's refusal to disqualify the UMWA's retained counsel because of the potential conflict of interest we found present.⁵

After remand to the District Court, the UMWA's general counsel and his staff entered their appearance on behalf of the UMWA. Plaintiffs' motion to disqualify these attorneys as well was denied by the District Court. We held that the UMWA's general counsel and his associates were similarly precluded from representing the UMWA because of their close association with and representation of individual defendants in other litigation.⁶ In response to these decisions, the UMWA engaged counsel who are unaffiliated with any other party to the action.

Yablonski was murdered in December 1969. Of the plaintiffs, only Yablonski had requested the UMWA to sue the officers before he instituted the derivative suit as required by Section 501(b).⁷ For this reason, the individual defendants and the UMWA moved to dismiss the action on the ground that the remaining plaintiffs, by failing to comply with Section 501(b), lacked standing to maintain the action. The instant interlocutory appeals were granted to review the District Court's denial of these motions to dismiss.⁸

Subsequent to the filing of UMWA's brief on appeal, new UMWA elections were held⁹ and a slate of officers led by Arnold Miller replaced the incumbents. Mike Trbovich and Harry Patrick, two of the plaintiffs, were elected vice-president and secretary-treasurer, respectively. Plaintiff Yablonski's son and his staff, who formerly were counsel to plaintiffs Trbovich and Patrick, became general counsel and associate counsel of the UMWA and withdrew from representation of Trbovich and Patrick. Independent counsel for the UMWA were then advised that the new general counsel would pursue the litigation for the UMWA and were requested to withdraw their appearances.

At a status call, the District Court was informed of UMWA's wish to realign as party-plaintiff in the action and to be represented by its general counsel. Independent counsel contended that representation of UMWA by the general counsel's staff would entail the same difficulty presented in the earlier appeals because of their earlier appearance on behalf of Trbovich and Patrick. The District Court concluded that since an interlocutory appeal brought by the UMWA was pending, motions for leave to realign the UMWA as plaintiff and for leave of Yablonski's staff to appear on the UMWA's behalf should be directed to this court.

In response to the District Court's ruling, the present motions were filed. The UMWA seeks (1) leave to withdraw the appeal it brought; (2) to intervene as appellee in the appeal brought by the officer-defendants; (3) leave for its new general counsel and staff to appear on its behalf; and (4) to dismiss the appeal brought by the officer-defendants as moot in view of the UMWA's presence as plaintiff-appellee.

II

We consider first the UMWA's motion for leave of its general and associate counsel to represent the UMWA in this litigation. The officer-appellants contend that only objective counsel — counsel without bias toward either the plaintiffs or the defendant officers — can satisfy the standards established by our earlier decisions in this case.¹⁰ As the UMWA emphasizes, however, our earlier decisions concerned situations wherein the UMWA had selected as its counsel close affiliates of the very officers who were the targets of derivative actions charging breach of their fiduciary duties to the UMWA and its members.¹¹ We deemed "critical" the fact that counsel in each case were representing or had "represented to some extent union officers who are accused of wrongdoing in this case."¹² What primarily concerned us was the strong possibility of a conflict of interest created by those affiliations,¹³ and it was in that context that we imposed on the UMWA the requirement of retaining "unquestionably independent counsel":¹⁴

Where, as here, union officials are charged with breach of fiduciary duty, the organization is entitled to an evaluation and representation of its institutional interests by independent counsel, unencumbered by potentially conflicting obligations to any defendant officer.¹⁵

The potential for a conflict existed because of the possibility that in defending the UMWA's interests, counsel might have had to assert positions antagonistic to those dutifully urged or to be urged in defense of the individual officers. Conversely, counsel might have been deterred from aggressively representing the interests of the UMWA and its members because of a lingering allegiance to these officers.¹⁶ The latter obstacle would have directly frustrated a primary purpose of the LMRDA to insure that labor unions be guided by the highest standards of ethical conduct.¹⁷

It is essential to emphasize, however, as we did in our first opinion, that "separate counsel is required only in a situation where there is a potential conflict between the interests of the union and those of its officers."¹⁸ Our previous decisions were not intended to bar the UMWA from being represented by counsel of its own choice if that representation does not generate the possibility of discordant obligations.¹⁹ We perceive no chance of such a conflict in the present effort of UMWA's new general counsel to appear on the UMWA's behalf.

Counsel's former clients, Trbovich and Patrick, together with other UMWA members, initiated this litigation as a derivative action for the benefit of the UMWA, not for the benefit of themselves individually. The UMWA possesses exclusively the financial interest at stake because any recovery in the action belongs to it. Thus, although under its former leadership the UMWA was aligned as a defendant in the controversy, the litigation since its commencement has in reality been its own.

The UMWA now seeks to reverse its stance and to align itself as plaintiff-appellee. We see no reason whatever to doubt that in view of the change occasioned by the recent UMWA elections, the UMWA's position will in fact remain consistent with that which the original plaintiff-appellees have assumed from the beginning.²⁰ Since the two positions coincide, counsel will undoubtedly be able to represent the UMWA without impinging on interests or confidences of their former clients.²¹

Furthermore, unlike the officer clients of the counsel we earlier disqualified, Trbovich and Patrick have never been accused of misconduct in union matters. Consequently, the risk of conflict which existed in the earlier cases — where counsel may have been duty bound to shield the officers to the detriment of the UMWA whose interests they were also obligated to protect — simply does not exist in the circumstances presented here.

Because we find no potential conflict of interest in the representation of the UMWA by its present general counsel in this litigation,²² there is no ground for a denial of UMWA's request. Permitting the UMWA to select its own counsel in this matter, where no likelihood of conflict is apparent, advances the policy of the LMRDA to accord unions as much independence as possible in Section 501(b) actions.²³ We accordingly grant the motion by appellant UMWA for leave of its general counsel and his staff to appear on its behalf.

III

The District Court declined to rule on the UMWA's motion to realign from party-defendant to party-plaintiff because these appeals were pending. The UMWA now moves this court for leave to withdraw its own appeal, to intervene in the appeal brought by the individual defendants, and to...