Teamsters Union Local 340 v. Guignard

STATE OF MAINE SUPERIOR COURT

CUMBERLAND, ss CIVIL ACTION

Do,cket No. ~~-13-393 , ../

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TEAMSTERS UNION / 17'--

LOCAL340,

Plaintiff

ORDER ON MOTIONS

v. TO DISMISS

CARL GUIGNARD and

KENNETH EATON,

Defendants

Before the court are (1) defendant Eaton's motion to dismiss plaintiff's

complaint for improper venue or for a stay of the case while defendant Eaton

pursues organizational remedies; and (2) defendant Guignard' s motion to

dismiss plaintiff's complaint for improper venue or for a stay of the case while

defendant Guignard pursues organizational remedies. See M.R. Civ. P. 12(b)(3).

For the following reasons, the motions are denied.

BACKGROUND

The plaintiff alleges the following in its complaint. The plaintiff is a local

branch of a labor organization associated with the International Brotherhood of

Teamsters (IBT). (Compl. ~ 1.) Plaintiff's principal place of business is in South

Portland, Maine. (Compl. ~ 1.) Defendant Guignard lives in Lewiston, Maine

and served as the Secretary-Treasurer of plaintiff from September 2007 to

December 31, 2012. (Compl. ~ 2.) Defendant Eaton lives in Waterville, Maine and

served as President of plaintiff from approximately December 2010 to December

31, 2012 and as Recording Secretary and Business Agent prior to December 2010.

(Compl. ~ 3.)

Prior to 2008, employees who also served as officers of the plaintiff

received, in addition to their salaries, "Executive Board hourly wages" for

attending union meetings. (Compl. <[ 9.) According to a 2007 memo from the

President of IBT, amendments to the IBT Constitution required mandatory

changes to all local union by-laws that prohibited full time salaried employees

who were union officers from receiving additional hourly wages for attending

meetings. (Compl. <[<[ 10-11.) These changes were never fully incorporated into

plaintiff's by-laws, and the defendants continued to disburse Executive Board

hourly wages to themselves and others. (Compl. <[<[ 12-15.)

Plaintiff's members trusted that defendants, as union officers, would

disburse funds only as authorized by the IBT Constitution. (Compl. <[ 8.)

Plaintiff alleges defendants Carl Guignard and Kenneth Eaton breached their

fiduciary duties to the union when they served as officers of Local 340. (Compl.

<[<[ 3-4, 18.) Plaintiff seeks damages from defendants for these disbursements.

(Compl. <[ 18.)

PROCEDURAL HISTORY

Plaintiff filed its complaint on September 5, 2013. Defendant Eaton filed a

motion to dismiss on September 27, 2013 and defendant Guignard filed a nearly

identical motion on October 7, 2013.

DISCUSSION

1. Venue

Venue is proper "in the county where any plaintiff or defendant lives" or

"in the county where the cause of action took place." 14 M.R.S. § 501 (2013).

Defendants cite two cases to support their argument that venue is improper in

2

Cumberland County. 1 The first case, Leete and Lemieux, P.A. v. Horowitz, 2012

ME 71, was withdrawn and superseded. The subsequent opinion does not

include any discussion regarding venue. See Leete & Lemieux, P.A. v. Horowitz

2012 ME 115, 53 A.3d 1106. The second case, Gaeth v. Deacon, concerned

whether an in-state plaintiff was required to bring an action against an out-of-

state defendant in the county where the cause of action arose. The Law Court

concluded that venue was proper in the county where the plaintiff resided.

Gaeth v. Deacon, 2009 ME 9, <JI 13, 964 A.2d 621.

In this case, the alleged cause of action took place at the plaintiff's

principal place of business, which is in South Portland in Cumberland County.

Venue is proper in Cumberland County.

2. Whether the Union's By-Laws Require Exhaustion of Internal Remedies

Defendants also argue that the plaintiff's by-laws require this dispute to

be submitted under the plaintiff's disciplinary proceedings before suit can be

filed in this court. Section 20 of plaintiff's by-laws, relied on by the defendants in

their motion to dismiss, establishes a disciplinary hearing and appeals system for

those accused of a breach of the by-laws. See Def.'s Ex. A, 53-58. Nothing in

section 20, however, suggests that plaintiff must use the by-laws process before

filing suit. Defendants cite no authority to support their argument.

Federal law provides that individual union members may sue union

officers and representatives who have breached fiduciary duties to the union and

its members. 29 U.S.C. § 501(b) (2012). This cause of action arises only when the

union itself fails to initiate suit. Id. The statute, however, does not explicitly

1

Although not stated, the court assumes the defendants believe venue is proper in

Androscoggin County or Kennebec County.

3

provide a cause of action to the union. Guidry v. Sheet Metal Workers Nat'l

Pension Fund, 493 U.S. 365, 374 n.16 (1990). Federal courts differ regarding

whether the union itself may initiate a suit under 29 U.S.C. § 501. See id. Courts

that have held unions do not have an implied cause of action have been

persuaded, at least in part, by the fact that unions can sue in state court. See

Local 1150 Int'l Bhd. of Teamsters v. SantaMaria, 162 F. Supp. 2d 68, 77-78 (D.

Conn. 2001) ("[T]he Court finds that Congress contemplated that the unions

could bring suit in state court."); United Transp. Union v. Bottalico, 120 F. Supp.

2d 407, 409 (S.D.N.Y. 2000) ("[T]he union could sue the officer under state law in

state court."). Nothing in these cases suggests that a local branch of a union is

obligated to follow its own internal disciplinary procedures before suing in state

court.

The entry is

Defendants' Motions to Dismiss are DENIED.

'

Dated: March 6, 2014

cy Mills

Justice, Superior

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