# Opposition — Gabauer v. Woodcock > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_0343%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Opposition - **Published:** January 1, 1979 - **Citation:** 444 U.S. 841 ## Text preme Gove, U.g,->y } ‘EILED 7 1 JUL 17 1970 _MICHAEL alelol f aan), we IN THE Supreme Court of the United States OCTOBER TERM, 1978 No. 78-1873 ERNEST GABAUER, et al., Petitioners, Vv. LEONARD WOODCOCK, et al., Respondents. On Petition for Writ of Certiorari to the United States Court of Appeals for the Eighth Circuit BRIEF IN OPPOSITION FOR RESPONDENTS Morris J. LEVIN JOHN A. FILLION LEVIN & WEINHAUS M. JAY WHITMAN 1602 Executive Office Bldg. 8000 East Jefferson Ave. 515 Olive Street Detroit, Michigan 48214 St. Louis, Missouri 63101 Counsel for Respondents WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001 Er 00 TABLE OF CONTENTS Page Tater: OC Amt «i Aenea II Cppplantah TI ia ne 1 Counterstatement of Questions Presented ...................... 2 Counterstatement of the Case 22.2.2... eee ene eee 2 pT REROSERSAR Say borane nis OU nen SSRN TIe ANSI Pica oe. a ot 6 CII siccctsinioticsnnsiopnniphnccdeicstacbesepassetdam ti aticatacea is 8 II INDEX TO AUTHORITIES Cases Page Bright v. Taylor, 544 F.2d 854 (8th Cir. 1977) _..... 6 Gabauer et al. v. Woodcock et al., 425 F. Supp. 1 COED. FEO. BIR hs worncnpieieitiineiergabh hear eac tks, 1 Gabauer et al. v. Woodcock et al., 594 F.2d 662 (Oim Cir. SRT) SO ON a a passim Gabauer Vv. Woodcock, 520 F.2d 1084 (8th Cir. 1975), cert. den. 423 U.S. 1061 (1976) _........ 5 Huskey v. Woodcock, 520 F.2d 1096 (8th Cir. 1975), cert. den. 423 U.S. 1061 (1976) ........... 5 Johnson V. Nelson, 325 F.2d 646 (8th Cir. 1963)... 6 McNamara V. Johnston, 522 F.2d 1157 (7th Cir. 1975), cert. den. 425 U.S. 911 (1976) ................ passim Pignotti v. Sheet Metal Workers, 477 F.2d 825 (8th Cir. 1973), cert. den. 414 U.S. 1067 (1973).. 6 UAW Vv. Nat. Right to Work Legal Defense & Ed. Foundation,—F. Supp.—(D.D.C. 1978), 95 L.R.R.M. 2584, aff’d in part, vacated in part & remanded, 590 F.2d 1139 (D.C. Cir. 1978) ........ 2 Statutes Federal Election Campaign Act, as amended, 2 UE. SR OCREO CEOTOD once 4 Internal Revenue Code, as amended, 26 U.S.C. rae i) ) GERRI Ree RMT Se Rest cee 4 Labor-Management Reporting & Disclosure Act of 1959, commonly known as “Landrum-Griffin”, 29 U.S.C. § 401-581 (1975) oo 2 § 201(c), 29 U.S.C. § 461(e) ......................... 2,4,5,8 §501(a) & (b), 29 U.S.C. §501(a) & (b).... 2,3, 4, 5, 6, 7 IN THE Siprenw Court of the United States OCTOBER TERM, 1978 No. 78-1873 ERNEST GABAUER, et al., j Petitioners, LEONARD WOODCOCK, et al., Respondents. On Petition for Writ of Certiorari to the United States Court of Appeals for the Eighth Circuit BRIEF IN OPPOSITION FOR RESPONDENTS Respondents Woodcock, Mazey, Worley, Mattix, Lavin, Webster, Hartzell and Young, by counsel, respectfully pray that the Court deny the Petition for Writ of Cer- tiorari. OPINION BELOW The opinion below is reported at: Gabauer et al. V. Woodcock et al., 594 F.2d 662 (8th Cir. 1979) (en banc),' affirming in part and reversing in part, 425 F. Supp. 1 (E.D. Mo. 1976). 1 The unpublished panel opinion was withdrawn. 594 F.2d 662, 664 n.l. (Pet. App. at 30) The Appendices to the Petition will be cited in the form “Pet. App. at ——.” 2 COUNTERSTATEMENT OF QUESTIONS PRESENTED I Petitioners urge the expansion of federal jurisdiction by transmuting § 501(a) & (b) of the LMRDA®? into a vehicle by which an individual union member can impose derivative damages on, and secure injunctive relief against officers for certain expenditures, even though those expenditures were authorized by the governing bodies of the organization. Did the Eighth Circuit, en bane, following the Seventh Circuit’s McNamara v. Johnston, 522 F. 2d 1157 (7th Cir. 1975) cert. den. 425 U.S. 911 (1976), correctly refuse such an expansion of federal jurisdiction? II . International Union officials are sued, under § 201( ¢) of the LMRDA,? in St. Louis, far from Detroit, where the International Union “maintains its principal office.” Various officials of St. Louis Local Unions are also sued. All object to venue. Did the Court below properly re- mand as to records in the control of the St. Louis offi- cials, while affirming dismissal as to those in the control of the Detroit officials? COUNTERSTATEMENT OF THE CASE This is the last of two companion cases, sponsored by the same group,‘ premised on the same theory, and di- * Labor-Management Reporting and Disclosure Act of 1959 (LMRDA), 29 U.S.C. §§ 401-531, § 501(a) & (b), commonly known as “Landrum-Griffin.” (Pet. App. at 77-8). %29 U.S.C. § 431(c) (1975). (Pet. App. at 72). Ry See: UAW v. Nat. Right to Work Legal Defense & Ed. Founda- tion,—F. Supp—(D.D.C. 1978), 95 L.R.R.M. 2584, 2586-7, aff'd in part, vacated in part & remanded, 590 F.2d 1139 (D.C. Cir. 1978). a 3 rected at the same end. The theory is that federal juris- diction should be expanded by transmuting § 501(a) & (b) of the LMRDA into a vehicle by which an individual union member can impose derivative damages on, and secure injunctive relief against officers for certain ex- penditures, even though those expenditures were author- ized by the governing bodies of the organization. The target of this effort is the UAW’s Community Action Program (CAP). McNamara v. Johnston, 522 F.2d 1157, 1163 (7th Cir. 1975), cert. den. 425 U.S. 911 (1976), was directed against the Illinois CAP. The iustant case is directed against Missouri CAP. The Seventh and Eighth Circuits reached the same conclusion. Facts The 1968 UAW Convention gave the International Executive Board (IEB) authority to establish a national, state and local CAP structure to replace the soon-to-be- terminated relationship with the AFL-CIO’s COPE pro- gram. The IEB thereafter established a CAP structure, which has since been ratified by the UAW Convention. 594 F.2d at 668-9 (Pet. App. 42) See: UAW Constitu- tion (1977), Art. 23. Under this structure, state and local CAP Councils were established in, among other places, Illinois and Missouri. The defendants-respondents here are the various elected officials of the St. Louis and Missouri CAP Councils, as well as of the International Union. (Pet. at 4 n.3). In McNamara, the defendants held analogous positions. 522 F.2d at 1158-9. The regular UAW CAP structure is financed by 3% of monthly dues. Expenditures are made by vote of elected delegates to each CAP Council, or, between meet- ings, by the elected executive bodies of the Council. Any UAW member who dissents from this use of his dues has a right under Article 16 § 7 of the UAW Constitu- tion to ubtain a pro-rata rebate which includes the 3% 4d of dues alloted to CAP, as well as other expenditures for political or ideological purposes. 594 F.2d at 668-669, incl. n.4 (Pet. App. at 42), compare McNamara, 522 F.2d at 1164, 1166 n.11. The regular CAP structure deals with community serv- ice, as well as state and local political issues. A separate, segregated fund—UAW Voluntary CAP—handles federal elections. 594 F.2d at 673-4 (Pet. App. at 52-4).° Proceedings Below Disagreeing with the UAW Constitution and Conven- tion, the petitioners filed suit under § 501(a) & (b) of the LMRDA, 29 U.S.C. § 501(a) & (b), seeking injunc- tive relief forbidding the organization’s officers from spending funds for “partisan political activities or .. . ideological causes” with which these particular plaintiffs disagree, and derivative damages from these officials for expenditures of this sort. 594 F.2d at 667-8 (Pet. App. at 39-40). Compare: McNamara, 522 F.2d at 1162. This is Count II of the Complaint. Count I prays for the inspection of certain records, some in Detroit and some in St. Louis. Count I is premised on § 201(c) of the LMRDA, 29 U.S.C. § 461(c) (1975).° 5 This is to comply with the Federal Election Campaign Act, as amended, 2 U.S.C. §§ 431-455 (1976), esp., § 441b. While this case has been in litigation, Congress also passed 26 U.S.C. § 527 (1975), adjusting the taxability of entities like CAP, even where their activities are exclusively non-federal. In response, the UAW, like many organizations, has further segregated community service ex- penditures from state/local “exempt function” (i.¢., political) expenditures. The former continue to be handled by CAP. For the latter, a similar, but segregated “PAC” structure has been estab- lished. During the time in question in this case, however, CAP handled both community service and state/local political expendi- tures. ® We need not discuss the welter of collateral claims mentioned in the Petition, as none are of significance or relevance. The short answer is in the Eighth Circuit’s own recitation, 594 F.2d at 664-6 5 The District Court dismissed the § 501 claim (Count II) for failure to state a claim, following McNamara v. Johnston, 522 F.2d 1157 (7th Cir. 1975), cert. den. 425 U.S. 911 (1976). Recognizing the venue problem as to Detroit records, the District Court dismissed Count I with leave to refile as to the St. Louis records. 425 F. Supp. 1, 5 (E.D. Mo. 1976). (Pet. App. at 64-6). Peti- tioners refused to refile the § 201(c) claim (Count I). On appeal, the panel affirmed as to the § 501 claim, agreeing that McNamara should be followed. As to the § 201(c) claim, it affirmed as to the Detroit records, since the International Union’s “principal office” was there. However, it reversed as to the St. Louis ree- ords, holding that the District Court should not have dismissed. The Eighth Circuit reheard the § 501 claim (Count II) en bane. The § 201(c) claim (Count I) was not re- heard, and the full Court followed the panel decision— affirming the dismissal of the International Union’s De- troit officials for improper venue, since its “principal office” was not in St. Louis; reversing and remanding as to St. Louis records, since Local 25’s “principal office” was in the Eastern District of Missouri. On the § 501 issue (Count II) the full Court affirmed dismissal, as had the panel, following the Seventh Cir- cuit’s McNamara decision. 594 F.2d at 668-674 (Pet. App. at 41-54). The dissent, authored by Judge Ross, argued that dismissal was not appropriate, and a remand should be had to inquire into whether the expenditures (Pet. App. 30-35). Many of these red herrings are rooted in Gabauer’s and Huskey’s removal from office for gerry-mandering and misappropriation of union funds. They lost these issues in earlier litigation. See: Gabauer v. Woodcock, 520 F.2d 1084 (8th Cir. 1975), cert. den. 423 U.S. 1061 (1976); and Huskey v. Wood- cock, 520 F.2d 1096 (8th Cir. 1975), cert. den., 423 U.S. 1061 (1976). A review of these decisions is, perhaps, useful as background. 6 in question were “antithetical” to the interests of the membership. 594 F.2d at 674-6 (Pet. App. 54-8). The majority of the Eighth Circuit, agreeing with the Sev- enth, held that Congress did not intend § 501 as a vehicle for that sort of inquiry, at least in the circumstances of this case. ARGUMENT As to the $501 claim, the Eighth Circuit rejected petitioners’ arguments, expressly agreeing with the Sev- enth Circuit’? using the following straight-forward, re- strained analysis: Congress, as evinced by both the language of § 501 and its legislative history, intended that section to incorpo- rate the common law approach to fiduciary responsibility. The Complaint is devoid of allegations of adverse deal- ing, personal gain, disobedience of the principal and other such conduct. In the UAW’s case, there is specific authorization from the principal for the conduct of which petitioners complain. So, under the established rules of agency, the agent officers cannot be held derivatively liable for the use of the organization’s property, even in an unlawful manner, since the principal authorized the agent’s conduct.* Petitioners’ contention that the UAW Constitution and Resolutions are “exculpatory,” is rejected by a quotation of McNamara: 7“We believe that the trial court properly followed \feNameara Vv. Johnston, 522 F.2d 1157 (7th Cir. 1975), cert. den. 425 U.S. 911. . (1976), and correctly held that the appellees did not breach their fiduciary duty by making the questioned expenditures.” 594 F.2d at 668 (Pet. App. at 41). 8 This is consistent with the Eighth Circuit’s own holdings that, if the officials had refused to make authorized expenditures for social or political purposes, the disobedience would subject them to suit under § 501(b). Johnson v. Nelson, 325 F.2d 646 (8th Cir. 1963) ; Pignotti v. Sheet Metal Workers, 477 F.2d 825 (8th Cir. 1973) ; and Bright v. Taylor, 554 F.2d 854 (8ta Cir. 1977). 7 “Section 501 was intended to follow the ‘well-estab- lished distinction between conferring authority upon an agent or trustee, which is permissible and pro- tects him against liability, and attempting to excuse breaches of trust, which is here made void as against publie policy.’ H.R. Rep. No. 741, 86th Cong., 1st Sess. 81-82, U.S. Code Congressional and Adminis- trative News, 2480 (1959). Without doubt, the pro- visions and resolutions upon which the UAW relies fall within the former category of measures that confer authority.” [McNamara, 522] at 1164 We agree with that disposition. [Gabauer v. Wood- cock, 504 F.2d 662, 670 (8th Cir. 1979) (en banc) (Pet. App. at 44-5) ] Examining the legislative history, both Circuits found that Congress had disavowed any intent to prohibit union involvement in politics. Like the Seventh Circuit, the Eighth concluded that: “Without express authorization of Congress, we cannot take unto ourselves the role of deciding which causes a union can or cannot support.” 594 F.2d at 670 (Pet. App. at 45). There is, in short, no split of the Circuits. There is complete agreement, expressed in cases which are, in every respect, identical. There is agreement on the analy- sis of the statute, on the intent of Congress, and on both the impropriety of and the dangers of expanding federal jurisdiction in this area. Petitioners’ arguments, shorn of their conclusory fur, are simply that—regardless—the judiciary should be turned to these purposes, especially on a motion to dis- miss. But, even on petitioners’ and the dissent’s assump- tions, suffice it to observe that what is, and is not ap- propriate to treatment “on the papers” is best left to the Circuits. This Court has rightly been reluctant to review such a work-a-day issue. 8 As for the § 201(c) claim (Count I), there is hardly anything to review. The Court of Appeals, for the most part, reversed—holding that the Complaint should be reinstated as to St. Louis records. Petitioners won these issues before the Court of Appeals. Al! they lost was their claim against the International Union and its De- troit records. But that result is so obviously correct as to not merit revisitation. The International Union’s headquarters is in Detroit. Section 201(c), 29 U.S.C. § 461(c), expressly limits venue to the “district in which such labor organization maintains its principal office.” (Pet. App. at 72). On its face, that district is the East- ern District of Michigan, not the Eastern District of Missouri. For some reason, petitioners dislike Detroit. But that is their problem, not this Court’s. CONCLUSION For the foregoing reasons, the Court should deny the Petition. Respectfully submitted, Morris J. LEVIN JOHN A. FILLION LEVIN & WEIN HAUS M. JAY WHITMAN 1602 Executive Office Bldg. 8000 East Jefferson Ave. 515 Olive Street Detroit, Michigan 48214 St. Louis, Missouri 63101 Counsel for Respondents. July 18, 1979 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_0343%3A2. Public record. Not legal advice.