Cross Petittion — Kozera v. Westchester-Fairfield Chapter of National Electrical Contractors Ass'n

Supreme Court brief1991

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IN THE

Supreme Court of the United States

OcToBER TERM, 1990

LOCAL UNION NO. 501 OF

INTERNATIONAL BROTHERHOOD OF

ELECTRICAL WORKERS, AFL-CIO,

Petitioner,

VS.

WESTCHESTER-FAIRFIELD CHAPTER OF

NATIONAL ELECTRICAL CONTRACTORS

ASSOCIATION, INC. and

TED KOZERA, MIKE HANLEY, CHRIS KULERS,

MICHAEL CINELLI, FRANK HONAN and

JAMES STEMMERMAN,

Respondents.

ON CROSS-PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

CROSS-PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

RALPH P. Katz

Counsel on Record

Attorney for Petitioner

Local Union No. 501 of

International Brotherhood of

Electrical Workers, AFL-CIO

200 East Post Road

White Plains, New York 10601]

(914) 682-8900

QUESTIONS PRESENTED

1. Do all the members of an

unincorporated association have the

capacity to sue their own association

for compensatory damages on the basis of

an action brought on their behalf by six

members, and does such an attempt

produce a case or controversy, when:

(a) all the assets of their

association consist of their own

contributions and the investment

income thereon;

(b) the unincorporated

association is a local labor union

which reposes ultimate power and

authority in its members who meet

once each month, who elect their

officers, who have a procedure for

removal of their officers from

office, and who have elected an

executive board to act for them on

EE nn EY Se See EE

matters which arise between

membership meetings and cannot

await the next such meeting;

at a membership meeting, or

elsewhere, to have the union

distribute money from the union

treasury to themselves, nor has any

member, including the plaintiff-

members, otherwise initiated, no

less exhausted, any internal

procedure to require the union so

to act;

(d) The alleged damage is the

result of unauthorized acts by two

elected officers contrary to the

basic policy of the union, contrary

to the specific directions of the

union's executive board expressed

between membership meetings, and

not foreseeable by the executive

iii

board; and

(e) Subsequent to the conduct

complained of, and with full

knowledge of that conduct, the

membership, in a contested

election, elected the same two

officers to continue in their

offices?

2. If the assent to a collective-

bargaining agreement was induced by the

duress of a third person, not a party to

the contract, is the collective-

bargaining agreement voidable by the

victim if the other party to the

contract knew of the duress prior to the

signing?

3. Assuming solely arguendo that

an unincorporated association labor

union may be liable in compensatory

damages to all of its members, is a

labor union, as an entity, liable for a

breach of its duty of fair

representation based solely on the

unauthorized and unratified conduct of

two of its officers, which conduct is

contrary to the stated policy of the

union and to the exprfessed preference

of the union's executive board?

Parties to the Proceedings Below

The plaintiffs in the District

Court, Ted Kozera, Mike Hanley, Chris

Kulers, Michael Cinelli, Frank Honan and

James Stemmerman, sued individually and

on behalf of the class of all the

members of Local 501. They have

petitioned for a writ of certiorari.

Defendants were the Westchester-

Fairfield Chapter of National Electrical

Contractors Association, Inc.,

("Chapter") and Local Union No. 501 of

the International Brotherhood of

Electrical Workers, AFL-CIO, the cross-

petitioner here.

Chapter is a corporation organized

in the State of New York. Local 501 is

an unincorporated association and a

labor organization. It was sued both in

its own name and by its president and

treasurer, Donald Werle and Douglas

Reid, respectively, who were sued in

their representative Capacities,

vii

TABLE OF CONTENTS

Page

Questions Presented i

Parties to the Proceedings Below Vv

Opinions Below 2

Jurisdiction 3

Statement of the Case 3

Reasons For Granting The Writ 14

I. To Determine A Novel,

Yet Fundamental,

Question Of Labor Law 14

II. To Establish Criteria

For Determining The

Proper Course Of

Judicial Intervention

Or Judicial Abstention

Especially In Cases

Where The Class

Represents A Majority

Of The Union Membership 23

III. To Give Guidance To The

Courts Concerning The

Legal Consequences Of

The Use Of Third Person

Duress By A Party

Negotiating A Collective

Bargaining Agreement 27

IV. To Explicate The Place

Of The Newly Minted

viii

Page

"Meaningful Standards"

Test In The Fabric

Of The Law 36

Conclusion 44

TABLE OF AUTHORITIES

Cases

Aircraft Associates £ Mfg. Co., Inc.

v. United States, 357 F.2d 373 (Ct.

SE CABS, APSSd vvveevevesevsvsersysrr

American Federation of Labor v.

Reilly, 113 Colo. 90 (1944)........

American Federation of Musicians v.

Wittstein, 379 U.S. 171 (1964).....

American Society of Mechanical]

Engineers, Inc. v. Hydrolevel

Corm., 456 U.S. $56 (1982).........

Atk i Sinclair Refining Co.,

SIO U.S. 238 (A9GZ) wv evvvevevveees

Carbon Fuel Co, v. Unit .d Mine

Workers of America, 444 U.S. 212

LEM VOPRGHGRERSESEGCER SE DES SESE EEeeeer

Charles Dowd Box Co., Inc, v.

Courtney, 368 U.S. 502 (1962)......

Citibank v.. Graphic Scanning Corp, j ’

459 F.Supp. 337 (S.D.N.Y. 1978)....

Complete Auto Transit, Inc. v. Reis,

eee lS eee ree eee

Ford Motor Company v. Huffman, 345

Dis Bw TRUE eerie secseesecussece

Page

29,30

14,39

Frenza v. Sheet Metal Workers, 567

F. Supp. 580 (E.D. Mich. 1983).....

Grimshaw Co, v,. Neil C, Withrow Co, ’

248 F.2d 896 (8th Cir. 1957).......

Gurton v, Arons, 339 F.2d 371 (2d

CAE. APGRE) cence cevvevssseveceseosess

Humphrey v. Moore, 375 U.S. 335

LEDGE) a ccc eee acca ees eeseseceeces

International Brotherhood of

Boil 5 <) Build

Blacksmiths, Forgers and Helpers v.

Hardeman, 401 U.S. 233 (1971), reh.

denied 402 U.S. 967 (1971).........

Jamestown Farmers Elevator, Inc, v.

General Mills, Inc., 552 F.2d 1285

(8th Cir. 1977), ret.denied 552

FP .2MG 1955. ccc wcccccsscccescvccccs

Local 174, Teamsters, Chauffeurs,

Warehousemen & Helpers of America

v._Lucas Flour Co,, 369 U.S. 95

. 30) ee rr a a

Page

Cases Page

Claiborne Hardware Co,, 458 U.S.

Se TCE E ee cede wk a wbe sees eonees 38-39

Navarro v, Gannon, 385 F.2d 512 (2d

a ee wwe 24

Commerce, 360 F.2d 103 (2d Cir.

1960), cert, denied 385 U.S. 931

eh een eat as a ehhh oe ee eae ss 22

R T ) I L uni

429, 133 LRRM 2085 (E.D. Pa. 1989). 21

Rosen v. Allegheny Corporation, 133

FP. Supp.836 (8.D.N.¥. 1955) ...ccoce 22

Sako v. Teamsters, Local 705, 125

Fee ys Oe FF ee ey) 21

Steele v,. Louisville N.R,. Co,, 323

Fee ee ee eee 18

“1 ‘le Wor) Un; 2

Lincoln Mills of Alabama, 353 U.S.

sy ae ee ee 16

Trail _v,. International Brotherhood

of Teamsters, 542 F.2d 961 (6th

ee Ee a hah on 0s oo ee ad 20

xii

Cases Page

Tunstall _v. Brotherhood of

Locomotive Firemen, 323 U.S. 210

Ee ee er 18

United Steelworkers of America v.

R.H. Boulingy, Inc,., 382 U.S. 145

Ce ea ae eS eae baw we 14

Vaca v. Sipes, 386 U.S. 171 (1967) .. 18

Warehouse Union, Local 860 v. NLRB,

652 F.2d 1022 (D.C. Cir. 1981)..... 21

{

Warner v,. McLean Trucking Co,, 627

F. Supp. 203 (S.D. Ohio 1985)...... 21

Weinraub v. Int’] Banknote Co,, 422

FP. Supp. 856 (S.D.N.¥. 1976)....... 29,31

Williams v. International

Typographical Union, 423 F.2d 1295

(10th Cir. 1970), cert. denied 400

Pe errr eee eee 24

Statutes

Labor-Management Relations Act,

Section 301, 61 Stat. 156 (1947),

SP UBC. BOGCIOR 188... ccccccvccess 16

Labor-Management Reporting and

Disclosure Act, Sections 2, 102,

304, 402, 73 Stat. 519, 523, 531,

Bee SOOee bie cake neh cee see baeanes

xiii

eee. te ke 6 eee ee ko

EEE ee eee

SST TCT Tee

Consolidated Laws of New York,

General Associations Law, Section

BUMP PEWS SHEER Rese ee cersccrcnccece

Rules

Federal Rules of Civil Procedure

ee etc es ee cece ee

ee ta tec ae eee

Other Authorities

7 Corpus Juris Secundum,

Associations, Section 26 (1980

BG) occ c cere ccscceseseccssccccces

6 New York Jurisprudence 2d,

Associations and Clubs, Section 13

EN IES SS SPS EEE

Restatement (Second), Contracts,

et ce ees cece ces

Xiv

Section 175, comment (€)..--+-+++++:> 29-30

In the

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1990

LOCAL UNION NO. 501 OF

INTERNATIONAL BROTHERHOOD OF

ELECTRICAL WORKERS, AFL-CIO,

Petitioner,

WESTCHESTER-FAIRFIELD CHAPTER OF

NATIONAL ELECTRICAL CONTRACTORS

ASSOCIATION, INC. and TED KOZERA,

MIKE HANLEY, CHRIS KULERS,

MICHAEL CINELLI, FRANK HONAN and

JAMES STEMMERMAN,

Respondents.

CROSS-PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Cross-petitioner, Local Union No.

501 of the International Brotherhood of

Electrical Workers, AFL-CIO ("Local 501"

or “Union") respectfully prays that a

writ of certiorari issue to review the

judgment and opinion of the United

States Court of Appeals for the Second

Circuit entered in the above-entitled

proceeding on July 13, 1990.

Opinions Below

The opinion of the Court of Appeals

for the Second Circuit of July 13, 1990,

reported at 909 F.2d 48, was reprinted

in the Appendix to plaintiffs' petition

for a writ of certiorari at pp. sexta’

The District Court's order of February

17, 1988 which is unreported, was

reprinted at pp. 18a-20a; its opinion of

September 26, 1989, reported at 714 F.

Supp. 644, was reprinted at pp. 2la-49a;

and its final judgment of September 26,

1989, which is unreported, is reprinted

at pp. 50a-56a. The order of the Court

of Appeals of August 17, 1990, denying a

motion for rehearing, which is

unreported, was reprinted in the

Appendix at pp. 57a-58a.

1/ All Appendix page references are to

the Appendix to the petition for a writ

of certiorari in Supreme Court Index No.

90-770.

—SEEe ee

Jurisdiction

The judgment of the Court of

Appeals for the Second Circuit was

entered on July 13, 1990. A timely

petition for rehearing was denied on

August 17, 1990. The petition of the

plaintiffs below for a writ of

certiorari in No. 90-770 was served on

the cross-petitioners herein on November

15, 1990.

Statement of the Case

On June 4, 1987 Local 501

received a copy of two collective

bargaining agreements determined by an

arbitration panel (hereinafter the

Residential Agreements) together with an

arbitration award directing that they be

signed by Local 501. On June 22, 1987

Locel 501's executive board expressed a

preference for taking legal action to

vacate the arbitration award, did not

authorize the signing or transmittal of

the Residential Agreements to the IBEW,

thereafter expected the award to be

challenged in court, and had no

knowledge, nor reason to know, that its

expectations and expressed preference

were to be flouted.

Two officers of Local 501 did sign

the Residential Agreements and one

officer transmitted them to the IBEW.

In a sequence of facts to be

detailed below plaintiffs herein sued,

individually and as representatives of

all members of Local 501, to vacate the

arbitration award to nullify the

Residential Agreements ordered therein,

and for compensatory damages both

against the Chapter and, for breach of

its duty to provide fair representation,

against Local 501.

————

The arbitration award was

thereafter vacated, the District Court

finding and holding that the

determination and imposition of the

Residential Agreements was in excess of

the power of the arbitrators because the

language of the arbitration agreement

clearly disabled the Chapter from

unilaterally submitting interest issues

to arbitration. The Court of Appeals

affirmed the vacation of the award but,

reversing the District Court, held Local

501 bound to the Residential Agreements

because of the apparent authority of its

officers.

The Court of Appeals also reversed

the District Court's holding that the

conduct of the said two officers could

not be imputed to Local 501 for purposes

of holding that it, as an entity, had

breached its duty of fair representa-

tion. It remanded that part of the case

EP Serra raeereeree ane ane en

for factual amplification on the issues

of whether the actions of the two

officers violated Local 501l's duty of

fair representation and whether Local

501 had in place adequate procedures to

guard against the commission of

unauthorized acts.

Local 501 is an unincorporated

association. It is established by the

joint action of ten or more individuals.

It is dissolved when fewer than five

members in good standing object to

dissolution.

The sole income of Local 501

is from membership initiation fees,

membership dues and assessments,

contributions from working employees for

administrative purposes, and income from

the investment of the above.

Local Union No. 501 is organized to

be run by its members. The

—__aaaaaae

International Brotherhood of Electrical

Workers’ (IBEW) constitution places

great emphasis on Local union membership

meetings and provides that "any action

that the L. U. can take, and which

should be taken prior to the next

regular meeting of the L.U." may be

taken by Local 501's executive board.

Neither the plaintiffs nor any

other member of Local 501 made any

motion at any membership meeting or

elsewhere for Local 501 to levy against

its own treasury to pay compensatory

damages to themselves.

The plaintiffs did seek to

influence Local 501 action by way of a

petition. The petition was accompanied

by a letter asking that it “be read ..

and ... be duly recorded in the minutes

of the regular monthly meeting of L.U.

501 IBEW held this Thursday, July 16,

_———————EEo

1987." The petition and accompanying

letter were read to the membership at

the July 16, 1987 meeting and recorded

in the minutes.

The lead plaintiff in this case,

who was also the first signatory on the

petition and the suthor of the letter

which accompanied the petition, received

a written reply dated July 21, 1987 from

Local 501 to his letter and petition,

both dated July 16, 1987, advising him,

inter alia, that the matter raised by

his petition was open for possible

further action by Local 501.

Each plaintiff, and all the other

members of Local 501, were sent a letter

dated July 22, 1987 together with an

enclosed ballot card with instructions

to “make sure it is received back at the

Local 501 building by or before 5:00

P.M. On August 3, 1987 if you want it to

be considered."

Seven hundred and one ballots were

returned by the voting deadline and were

counted on the evening of August 3,

1987: 571 to vacate the arbitration

award (the action sought in the petition

sponsored by the plaintiffs), 105 not to

vacate the arbitration award, 19 blanks,

and 6 improperly marked.

The plaintiffs, however, did not

wait for the balloting period to run its

short course. The plaintiffs, having

knowledge that Local 501 was responding

to their petition, rushed into court.

The deadline for balloting was Monday,

August 3, 1987. The plaintiffs filed

their complaint in this action on the

previous Friday, July 3l, 1987.

Local 501 plead the failure to

exhaust internal union remedies.

Local 501 cross-claimed against the

Se ee

Chapter and, among other relief, sought

nullification of the arbitration

determined Residential Agreements

on the basis of duress.

The District Court held, on the

basis of law, that no duress was

chargeable to the Chapter, but it

granted to Local 501 on other grounds

all the relief sought by it including

nullification of the said Residential

Agreements. There was no part of the

judgment from which Local 501 could have

appealed, and the absence ot tedieles

findings on the subject of duress

rendered that ground unavailable as a

basis for affirmance of the District

Court’~ judgment by the Court of

Appeals. The subject, therefore, was

not raised on the Chapter's appeal to

the Court of Appeals. This Court

should, in the interests of justice and

because of the importance of the issue

in the development of labor law by

federal court decisions, correct the

errors of law and remand for the finding

of facts on the issue of duress and for

further legal determinations based

thereon.

In brief, Local 501 alleged illegal

conduct by the IBEW which had already

caused great damage to Local 501, the

threatening by the IBEW of further

drastic damage to it, and the use by the

IBEW “as an excuse for its action the

absence of an IBEW approved collective

bargaining agreement covering the

affected members of Local 501."

Local 501 further alleged "against

the foregoing background” that the

Chapter “refused to sign the 1986-1989

Inside Wiremen's Agreement ... unless

and until Local 501 would sign the said

[Residential Agreements]."

The District Court repeatedly

stated during the trial that Local 501

had proved that its officers and

executive board members had "an

objective basis for their fears about

the international."; and continued "So,

therefore, I will be constrained to find

on the proof I have that there was an

objective basis for your clients'

concern. You can't lose on that factual

issue ..." (i.e. IBEW duress).

The evidence further showed that

the Chapter president knew of the IBEW's

depredations of Local 501, and of Local

50l's fear of the IBEW, and of the use

by the IBEW of the absence of a signed,

IBEW approved, collective-bargaining

agreement as an excuse to reduce Local

501's jurisdiction. The evidence

further showed that the Chapter

president had this knowledge prior to

the time he threatened to refuse to sign

the 1986-1989 Inside Wiremen's Agreement

unless Local 5011's officers signed the

Residential Agreements. The Chapter's

failure to sign the Inside Wiremen's

Agreement would have left Local 501 with

no IBEW approved collective bargaining

agreement.

The evidence shows that Local 50l1's

business manager signed the Residential

Agreements because of the Chapter's

threat to refuse to sign the Inside

Wiremen's Agreement and his fear of IBEW

action against Local 501 if that

agreement were not signed and submitted

to the IBEW.

Findings on the foregoing factual

matters were not inciuded in the

District Court's opinion because it

I Eee

held, as a matter of law, that no duress

was chargeable to the Chapter.

Reasons For Granting The Writ

I. To Determine A Novel, Yet

Fundamental, Question Of

Federal Labor Law

The relationship of the members of

a labor union to the union itself as a

separate entity is a recurring subject

which has required repeated visitation

by this Court. The question

27 E.g., Atkinson v. Sinclair Refining

Co., 370 U.S. 238 (1962) (individual

members are not subject to levy to pay

damages for union wrongs even when they

participate in the wrongs.); United

Steelworkers of America v. R. H.

Bouligny, Inc., 382 U.S. 145 (1965)

(declined to treat union as if it were a

corporation for diversity purposes,

recognizing problems from such

treatment.) (382 U.S. at 152) The

geographic jurisdiction of Local 501,

for example, encompasses parts of the

States of New York and Connecticut.) ;

Complete Auto Transit, Inc. v. Reis, 451

U.S. 401 (1981) (individual members not

liable even when participating in an

unauthorized strike for which the union

has no liability).

/ 15

presented in this case is whether all

the members of Local 501 can sue

themselves (as Local 501 is an

unincorporated association) for monetary

damages and whether such an attempt

creates a case or controversy.

Otherwise put, the question is whether

Local 501 is an entity separate from all

of its members for the purpose of being

sued by them all for the payment to them

of their own meney from its treasury.

The District Court termed this "a novel

question” and dismissed the complaint.

(55a) The Court of Appeals reversed the

dismissal and remanded that part of the

plaintiffs' case against Local 501 (17a)

without even alluding to the existence

of this question. (The State of

Colorado's attempt to require the

incorporation of all labor unions doing

business within the state may have

EEE _

resolved this problem, but the

legislation was held to violate the

federal constitution in American

Federation of Labor v. Reilly, 113

Colo. 90 (1944)).

It is peculiarly the province of

this Court to address seminal matters of

labor law, such as a union member's

relationship to his union, on a case by

case basis, because it is an essential

part of our Nation’s labor law, arises

in the instant case within the context

of 29 U.S.C. section 185 (Labor-

Management Relations Act, section 301,

61 Stat. 156 (1947)), and involves the

subject of a union's court-law created

duty of fair representation.

This Court held in Textile Workers

Union of America v. Lincoln Mills of

Alabama, 353 U.S. 448 (1957) "that the

substantive law to apply in suits under

————————

section 30l(a) is federal law... " 353

U.S. at 456. The Court then wrote:

"The Labor-Management Relations Act

expressly furnishes some

substantive law. It points out

what the parties may or may not do

in certain situations. Other

problems will lie in the penumbra

of express statutory mandates.

Some will lack express statutory

sanction but will be solved by

looking at the policy of the

legislation and fashioning a remedy

that will effectuate that policy.

The range of political

inventiveness will be determined

by the nature of the problem."

353 U.S. at 457.

Although State courts have concurrent

jurisdiction of section 301 suits,

Charles Dowd Box Co., Inc. v. Courtney,

368 U.S. 502 (1962), State courts must

apply federal law and "incompatible

doctrines of local law must give way to

principles of federal labor law." Local

174, Teamsters, Chauffeurs, Warehousemen

& Helpers of America v. Lucas Flour Co.,

369 U.S. 95, 102 (1962).

eel

————————E eS

The need to use federal law applies

with special force to duty of fair

representation issues which arise in

connection with and out of section 301,

as does the instant case, as the concept

of a union's duty of fair representa-

tion is itself a creature of court

determined federal labor law. See

Steele v. Louisville N. R. Co.. 323 U.S.

192 (1944); Tunstall v. Brotherhood of

Locomotive Firemen, 323 U.S. 210 (1944);

Ford Motor Company v. Huffman, 345 U.S.

330 (1953); Humphrey v. Moore, 375 U.S.

335 (1964); and Vaca v. Sipes, 386 U.S.

171 (1967).

Moreover, the question of whether

every member of an unincorporated

association may bring an action for

money damages against his own

unincorporated association touches on

Rules 17(b) and 23.2 of the Federal

Rules of Civil Procedure.

Albeit the question is novel in the

sense that no prior decision has been

found which addresses it, the question

does not exist in a vacuum.

It is Hornbook law that each member

of Local 501 in good standing has an

undivided ownership interest as a joint

tenant in the property of his

unincorporated association, its treasury

and all other assets, 6 New York

Jurisprudence 2d on Associations and

Clubs, section 13, at 342 (1980 Ed.),

"and they, accordingly, have the right

to manage, control, and dispose of such

property or funds at their joint

pleasure." 7 Corpus Juris Secundum on

Associations, Section 26, at 70 (1980

Ed.).

The plaintiffs have not cited any

authority, and counsel for Local 501 has

Re Oe

found none, to support the proposition

that the entire membership of an

unincorporated association union can

successfully sue its union for

compensatory an

The acceptance of the plaintiffs'

proposition, and a subsequent legal

victory by them, could result in the

dissolution of the members' own Union

treasury through its distribution to

themselves, and could possibly result in

the dismantling of the Union itself

through the forced sale of real

property, if any, and chattels. The

members might then need to vote a

special assessment on themselves to

replenish their own Local 501 treasury.

3/ The cases cited by plaintiffs are:

Trail v. Int'l Bhd. of Teamsters, 542 F.

24 961, 964 (6th Cir. 1976) (**over-the-

road' truckdrivers who live in Michigan

The acceptance of the plaintiffs'

proposition, and a subsequent legal

victory by them, could result in the

dissolution of the members’ own Union

treasury, through its distribution

to themselves, and could possibly

result in the dismantling of the

Union itself through the forced sale

of real property, if any, and chattels.

and who are employed by various Michigan

trucking companies, ..."); Frenza v.

Sheet Metal Workers, 567 F. Supp. 580,

S562 (E. D. Mich. 1983) ("Plaintiffs,

thirteen members of Local 80, ...") (no

class action); Warner v. McLean

Trucking Co., 627 F. Supp. 203, 205 (S.

D. Ohio 1985) ("members of Local 100,

International Brotherhood of Teamsters

(IBT), and who are employed by McLean

Trucking Company's breakbulk facility in

Cincinnati, Ohio."); Sako v. Teamsters

Local 705, 125 LRRM 2372, 2373 (N. D.

Ill. 1987) ("all members of the union

who are also employed by Niedert.");

Warehouse Union, Local 860

v. NURB, 652 F. 24 1022, 1023 (D.C. Cir.

T981) (a unit of thirteen clerical

workers employed by "“Emporium");

Renninger v. Teamsters, Local Union 429,

33 CREA 2085 (E.D. Pa. 1989) (five

individual plaintiffs; no class action)

The members might then need to vote a

special assessment on themselves to

replenish their own Local 501 treasury.

And, if Local 5011's assets were

insufficient to satisfy the compensatory

damages, members of Local 501, as

individuals, might then bring an action

against themselves, as individuals, to

satisfy the judgment. Consolidated

Laws of New York, General Associations

Law, Section 1601).

None of the federal labor or

procedural statutes determines the

4/7 The Federal courts ordinarily apply

the law of the State with respect to

such questions: Rosen v. Alleghen

Corporation, 133 F. Supp. 858, 867

(S.D.N.Y. 1955); see Petrol Shipping

Corporation v. Kingdom of Greece,

Ministry of Commerce, 360 F.2d 103,

107-108 (2d Cir. 1960), cert. denied

385 U.S. 931 (1966); but in this case it

would be necessary to decide whether the

federal law limiting a money judgment

against a labor organization to its own

assets as an entity (29 U.S.C. section

185 (b)) should be applied when the

judgment creditors are the entire

membership of the union.

’ i

question presented in this case. The

issue falls within the penumbra and

calls for judicial inventiveness. The

subject deserves this Court's attention.

II. To Establish Criteria For

Determining The Proper Course Of

Judicial Intervention Or Judicial

Abstention Especially In Cases Where

The Class Represents A Majority Of

The Union Membership

Labor unions are, among other

things, political entities and in regard

to this characteristic the law has

established an internal tension which

the courts must try to accomodate. The

law seeks to promote internal union

democracy and direct membership

political participation both by judicial

intervention (e.g. 29 U.S.C. sections

412, 464, and 482(b), American

Federation of Musicians v. Wittstein,

379 U.S. 171, 182-183 (1964) ("The

pervading premise of both these titles

is that there should be full and active

pineal

a hcariaicaisiaeaea imate

participation by the rank and file in

the affairs of the union."); Navarro Vv.

Gannon, 385 F. 2d 512 (2d Cir. 1967) )

and by judicial abstention

(International Brotherhood of

Boilermakers, Iron Ship Builders,

Blacksmiths, Forgers and Helpers v.

Hardeman, 401 U.S. 233 (1971), reh.

denied 402 U.S. 967 (1971) (recognizing

"the apparent congressional intent to

allow unions to govern their own

affairs, ..." 401 U.S. at 246); Howard

v. United Association of Journeymen and

Apprentices of the Plumbing and Pipe

Fitting Industry, Local 131, 560 F. 2d

17, 21 (lst Cir. 1977); Williams Vv.

International Typographical Union, 423

F.2d 1295 (10th Cir. 1970), cert. denied

400 U.S. 824 (1970); Gurton v. Arons 339

F.2d 371, 375 (2d Cir. 1964) ("General

Supervision of unions by the courts

would not contribute to the betterment

of unions or their members or to the

cause of labor-management relations.").

Thus, it does not appear that it

serves the purpose of the law for the

judiciary to become involved in what all

the members of Local 501, for that is

the definition of the class on whose

behalf the plaintiffs allege they are

Suing, can do for themselves directly.

No Local 501 member (including, of

course, no plaintiff) has sought to

accomplish directly by a vote of the

membership what plaintiffs ask of the

courts.

Whether all the members of Local

501 should seek relief from their own

Union treasury for themselves is

essentially a political question. It

can be decided by membership vote.

This case gives this Court the

opportunity to delineate criteria to

determine when court intervention is

called for by the federal law and when

the judiciary should abstain from

interference in internal union politics.

The exercise of such leadership by the

Court in this area would be of value

for, although the instance of all the

members of an unincorporated association

Suing their association to pay

themselves from their own treasury is

novel, the prospect of classes composed

of a majority of the members of a union

is not.

It is suggested that, absent

evidence that democratic procedures are

unavailable and attempts at membership

participation would be futile (there is

no such evidence in the instant case and

Local 501 plead the affirmative defense

of failure to exhaust internal union

remedies), the substitution of the

judicial forum for the political forum

is counterproductive to the expressed

Congressional intent to foster union

democracy.

The question of whether the

union members' money which is in the

Union treasury should be paid out to the

union members ought to be decided by

those members, not by a court.

III. To Give Guidance To The Courts

Concerning The Legal Consequences

Of The Use Of Third Person Duress By A

Party Negotiating A Collective

Bargaining Agreement

The Congress found "from recent

investigations in the labor and

management fields, that there have been

a number of instances of breach of

trust, corruption, disregard of the

rights of individual employees, and

other failures to observe high standards

of responsibility and ethical conduct

~oe " 29 U.S.C. section 401(b) (Labor-

a ee

Management Reporting and Disclosure Act,

as amended, section 2, 73 Stat. 519

(1959) )

In this case Local 5011's officer

Signed the Residential Agreements

because of duress from Local 50l's

affiliated international union, the

IBEW, not a party to the contracts.

The signing took place subsequent to the

time when the Chapter, the employer

party to the agreements, knew of the

duress and used it. Moreover, the

Residential Agreements themselves

resulted from a unilateral submission by

the Chapter to a panel of arbitrators in

violation of the agreement to arbitrate

which clearly required mutual submission

of interest arbitration issues.

It is respectfully submitted that

the interests of justice require the

correction of the errors below and a

statement by this Court of the law as it

applies to such duress in the collective

bargaining process.

The first of the two misstatements

of the law of duress in this case is:

"Duress is a basis to invalidate a

contract Only when the duress is

exercised by the other contracting

party, not some third party. See

Citibank v. Graphic Scanning Corp.,

459 F. Supp. 337 (S.D.N.Y. 1978);

Weinraub v. Int'l Banknote Co., 422

F. Supp 856 (S.D.N.Y. 1976) (47a-

48a)

The cited cases, discussed below,

do not support the proposition for which

they were adduced.

Restatement (Second), Contracts,

Section 175(2) reads:

"If a party's manifestation of

assent is induced by one who is not

a party to the transaction, the

contract is voidable by the victim

unless the other party to the

transaction in good faith and

without reason to know of the

duress either gives value or relies

materially on the transaction."

The Restatement, Supra, includes

the following exposition:

"Duress by a third person. If

ae re eR ee

a party's assent has been induced by the

duress of a third person, rather than

that of the other party to the contract,

the contract is nevertheless voidable by

the victim. There is, however, an

important exception if the other party

has, in good faith and without reason to

know of the duress, given value or

changed his position materially in

reliance on the transaction." (Comment

(e) to Section 175)

In this case the Chapter did know

of the IBEW's duress and, moreover, the

Chapter was not “in good faith" because

it unilaterally asked the arbitration

panel to impose collective-bargaining

agreements on Local 501 when such a

subject matter could be submitted for

arbitration under the arbitration

agreement “by mutual agreement only".

Tne District Court, in support of

its erroneous statement on duress by a

third party, cited Citibank, supra, and

Weinraub, supra.

Citibank did not rule on the issue

of duress. The determination was made

on the basis of collateral estoppel.

459 F. Supp. at 341 Not only did the

decision rely on collateral estoppel,

but the court could not have considered

or determined the issue of third party

duress because there was no third party

in that case. 459 F. Supp. at p. 341,

ftnt. 3. There is dictum in Citibank on

third party curess and in support of

that dictum the case of W. R. Grimshaw

Co. v. Neil C. Withrow Co., 248 F. 2d

896, 905 (8th Cir. 1957) is cited.

Grimshaw, however, followed the law

as written in section 175 (2) of the

Restatement (Second), Contracts and,

thus, is no support for the misstatement

of the law of duress in the instant

case.

Weinraub, like Citibank, does not

support the proposition for which the

District Court cited it. Weinraub, too,

followed the statement of the law as set

: forth in section 175 of the Restatement

(Second), Contracts. In Weinraub the

defendants moved for summary judgment on

the ground that "any economic duress was

imposed by First Jersey National Bank,

not by defendants." 422 F. Supp. at

860. The court rejected that argument,

called it "somewhat simplistic" (422 F.

Supp. at 860), looked behind the third

party aspect, found the defendants "were

aware" of the duress imposed by a third

party on the plaintiffs (422 F. Supp at

860), and might share some

responsibility for creating the

situation in which the plaintiffs found

themselves (422 F. Supp. at 860); as

does the Chapter in this case by

unilaterally asking the arbitration

panel to impose the Residential

Agreements on Local 501.

The defendants’ motion for summary

judgment in Weinraub, based on the

argument that they nad no liability

because the duress was imposed by a

third party, was denied.

The District Court further

misstated the law of duress in the

instant case when it wrote: "A

negotiating demand by an adverse party

cannot be a sufficient predicate for a

claim of duress, since that type of

pressure is at the heart of virtually

every contractual negotiation." (48a)

The District Court then cited: "Cf.

Weinraub, supra, 422 F. Supp. at 859;

Restatement (Second) of Contracts,

section 492 (wrongful threat is

required)." (48a)

Weinraub, contrary to that for

which it was cited, holds that a

negotiating demand by an adverse party

can be a sufficient predicate four a

claim of duress. 422 F. Supp. at 860

ana ane cnc ara nara nace naman etal emma ee

And the Restatement (Second),

Contracts also states the law

differently from the District Court's

citation of it. The District Court

cited "Restatement (Second) of

Contracts, section 492 (wrongful threat

is required." (48a) But there is no

section 492 in the Restatement (Second),

Contracts. The subject of former

Section 492, according to Table VI of

the Restatement (Second) of Contracts,

is now found in its sections 174 and

175. We have already examined Section

175. Section 174 is concerned only with

physical compulsion.

As is seen in Weinraub, supra, a

negotiating demand, even when the thing

demanded is not illegal, can be a

sufficient predicate for a claim of

duress. Weinraub is not a sport.

Jamestown Farmers Elevator, Inc. v.

General Mills, Inc., 552 F. 2d 1285 (8th

Cir. 1977) reh. denied 552 F. 2d 1295;

Aircraft Associates & Mfg. Co., Inc. v.

United States, 357 F. 2d 373 (Ct. of

Claims, 1966).

The Chapter acted in bad faith by

unilaterally submitting a dispute where

submission by “mutual agreement only"

was required. The Chapter then

leveraged itself on the IBEW's duress of

which it had knowledge.

Local 501 acknowledges that threats

are part of the bargaining process but,

as the courts hold, certain threats

including those not threatening illegal

acts, in certain circumstances, are

improper and constitute duress. Such

threats and such circumstances were

present in this case.

The District Court gravely erred on

the law of @uress. Because of the

importance of the subject of duress in

collective bargaining negotiations and

in the interests of justice, we ask that

the writ of certiorari also issue on

this subject.

IV. To Explicate The Place Of The

Newly Minted "Meaningful Standards*

Test In The Fabric Of The Law

The dissent in American Society of

Mechanical Engineers, Inc., v.

Hydrolevel Corp., 456 U.S. 556 (1982)

(Hydrolevel) reads at 594:

"How far the Court's holding

extends is unclear. The Court

emphasized that ASME is a standard

setting organization. Yet it does

not limit its rationale to these

particular organizations. One must

be concerned whether the new

doctrine and the sweep of the

Court's language will be read as

exposing the array of nonprofit

associations - professional,

charitable, educational, and even

religious - to a new theory of

strict liability in treble

damages."

This case is an appropriate vehicle

to help clarify “[{h])ow far the Court's

holding extends". For the application

of the "meaningful standards" test in

this case by the Court of Appeals

appears to constitute, by extension, the

use of that test to reverse prior

decisions of this Court.

Tre Court of Appeals wrote: "Yet

we conclude that if the acts of the

president and the business manager are

found to violate the union's duty of

fair representation, such acts should be

attributable if it is determined that

the Local Union did not have in place

adequate procedures to guard against the

commission of such unauthorized acts."

(17a) The Court of Appeals further

wrote: " ... we vacate the district

court's finding that the Local Union may

not be held liable for any potential

breach of the duty of fair

representation ..." (17a)

Thus, the Court of Appeals,

depending on further facts, would hold

Local 501 liable based on the authorized

and unratified acts of two of its

officers. The case was remanded for

"further factual amplification" for "a

determination of whether the agents'

actions constituted a breach, and

whether such breach might have been

avoided through institution of proper

safeguards." (17a)

We ask this Court to grant

certiorari to review the determination

of the Court of Appeals on the Union's

potential liability because, if not

reviewed now, the reversal of the

District Court will become tune law of

the case and because that Court of

Appeals' determination, on the facts of

this case, fails to follow the decisions

of this Court. See National

Association for the Advancement of

Colored People v. Claiborne Hardware

Co., 458 U.S. 886, 930-931 (1982);

Complete Auto Transit v. Reis, 451 U.S.

401, 415-416 (1980); Carbon Fuel Co., v.

United Mine Workers of America, 444 U.S.

212, 216 (1979).

The holding that the conduct of

Local 5011's two officers "cannot be

properly imputed to the Union" (45a) was

made by the District Court on the basis

of findings of fact rooted in the record

and supported by references in the

opinion to the particular facts of this

case. (45a-46a) The Court of Appeals

reversed without disputing the District

Court's findings of fact, without basing

its reversal on any reference to any

particular facts which it found, but

writing only that "such acts should be

attributable if it is determined that

the Local Union did not have in place

adequate procedures to guard against the

commission of such unauthorized acts."

(17a), citing Hydrolevel, supra.

Local 501 does not object to or

oppose the application of the

"meaningful standards” test enunciated

in Hydrolevel, supra, but the Court of

Appeals by seeking to apply only that

test has jettisoned the bulk of the law

of agency relevant to this case. For,

by paying no attention to the facts of

this case, it has overlooked all the

applicable criteria and inquiries which

ordinarily precede the application of

the "meaningful standards" test. Were

the law to be followed as stated by this

Court, even if the facts to be

determined on remand were found

adversely to Local 501, the

determination of the District Court

should stand.

This Court has closely examined the

legislative history of the Taft-Hartley

Act with particular reference to union

liability and the subject of agency. In

reviewing that legislation this Court

has written:

"At the same time, Congress gave

careful attention to strikes during

the term of a collective-bargaining

agreement, but stopped short of

imposing liability upon a union for

strikes not authorized,

participated in, or ratified by

3t.”

Carbon Fuel Co. v. UMW, 444 U.S. at 216

"The legislative debates and the

process of legislative amendment

demonstrate that Congress

deliberately chose to allow a

damages remedy for breach of the

no-strike provision of a

collective-bargaining agreement

only against unions, not

individuals, and, as to unions,

only when they participated in or

authorized the strike." (emphasis

in original)

Complete Auto Transit v. Reis, 451 U.S.

at 415-416.

NAACP v. Claiborne Hardware, supra,

eee ee

’

is a post-Hydrolevel case and actually

cites ASME v. Hydrolevel at 458 U.S.

930. Yet, in NAACP v. Claiborne

Hardware the Court did not apply the

"meaningful standards" test because it

never had to reach it. The Court

reviewed the facts and found that the

statements attributed to an admitted

agent of the NAACP were "contrary to

NAACP policy" 458 U.S. at 930, that

there was no evidence that the NAACP had

ratified the violence complained of (458

U.S. at 930-931) or had specific

knowledge of any acts of violen€e or

threats (458 U.S. at 931), or had

authorized the boycott which had led to

threats and violence. (458 U.S. at 931)

It was on the basis of the above

criteria applied by this Court

(knowledge, authorization and

ratification), that the District Court

in the instant case held that the

conduct of two officers could not be

imputed to Local 501. The decision of

the Court of Appeals would substitute

the "meaningful standards" test in place

of the above common law criteria for

determining responsibility because of an

agency relationship.

The “meaningful standards' test is

a new legal development. This Court's

explication of its place in the fabric

of the law is needed.

CONCLUSION

For all the reasons above stated, a

writ of certiorari should issue to

review the judgment and opinion of the

Court of Appeals for the Second Circuit.

Respectfully submitted,

Attorney for Patitioner

Local Union No. 501 of

International

Brotherhood of

Electrical Workers,

AFL-CIO

200 East Post Road

White Plains, N.Y. 10601

(914) 682-8900

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.