Appendix — Freedman v. Morrissey

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Fite. COURT, U. & 3 - 6 1 l OCT 6 Ibn

IN THE

Supreme Court of the ited States

OCTOBER TERM, 1973

No. 73-478

ABRAHAM FE, FREEDMAN, j

Petitioner, 4

Vv.

James M. Morrissey, JosepH Papriia, and Ratpu Ipranim,

Individually and on Behalf of the Members of the

NationaL Maritime Union or AMERICA,

Respondents and Cross-Petitioners,

JosepH Curran, SHANNON WALL, WituiaM Perry, ,

Martin E. Seaau and Leon KarcuMer,

Respondents.

CROSS-PETITIONERS’ SUPPLEMENTAL APPENDIX

TO PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE SECOND CIRCUIT

Artuur E. McInerney

Attorney for Cross-Petitioners- 4

Respondents J

74 Trinity Place

New York, New York 10006 :

INDEX

PAGE

prenpix A—Court of Appeals Opinion with Dissent,

dated February 20, 1970 ............ SAL

PPENDIX B—Memorandum Decision of District

Court, dated May 23, 1969 ........... SA25

PPENDIX C—Decision and Order of District Court,

Denying Reargument (July 3, 1969) ..SA32

PprENDIX D—Decision and Order of District Court,

Denying Injunction (July 3, 1969) ....SA33

PPENDIX K—Distriet Court Opinion, November 15,

a, eT eT TR TTT EOE ET PPI SA35

PPENDIX F—29 U.S.C. § 481 (a), Labor Management

Reporting and Disclosure Act of 1959,

CE ager oa. ke SA40

PPENDIX G—29 U.S.C. § 501(a)(b), Labor Manage-

ment Reporting and Disclosure Act of

Bos POO, GRUPO oon ccc ceccseess SA41

pPpENDIX H—Olick’s Letter to Judge Hays of June

19, 1973 (Treated as Perry’s Petition

eet IN ae Cito Chen rae nan SA43

-PENDIX I—Pesner’s Letter to Judge Hays of June

25, 1973, Confirming Petition ......... SA44

PENDIX J—Order Denying Plaintiff’s-Appellants’

Petition for Rehearing .............. SA45

TOR ICT ee ee

AMATO NA DENA Aha CDE DAV de ee Moen th Ve alent niall pay le

ii INDEX

PAGE

Appenpix K—Order Granting Defendant Perry’s

Petition for Rehearing and Supple-

TP UO a vc ccceccccccscccess SA46

Aprenpix L—Stipulation of Amounts Paid to the

NMU Officers’ Pension Plan on <Ac-

count of Non-Elected Persons ........ SA47

Apprenpix M—Plaintiffs’ Demand to Bring This Ac-

IRAE IG CuuNcd ous eae kaos 640 404639 SA48

Appenpix N—Agreement and Declaration of Trust

“for the Exclusive Benefit of” the

“Elected Officials” of NMU .......... SA51

AprenpdIx O—NMU Officers Pension Plan .......... SA62

Appenpix Q—Unexecuted Agreement of Trust, Un-

dated. Submitted After Trial Pursu-

ant to the Direction of the District

SE hb ois 6s ss 6044405100000 a kk xe ss SA76

Appenpix R—District Court Opinion, January 11,

0 rere errr er ar rere rer ere SA84

Appenpix S—29 U.S.C. § 431 (b)(3), Labor Manage-

ment Reporting and Disclosure Act of

BOG GATE CO) (D)..cccccccccccccvccces SA90

SAl

APPENDIX A

Court of Appeals Opinion with Dissent, dated

February 20, 1970.

Lumsarp, Chief Judge,

Dananer® and Anvenson, Circuit Judges.

Appeals from a denial of defendants’ motion for sum-

mary judgment and a granting of plaintiffs’ cross-motion

for summary judgment, but denial of plaintiffs’ petition

for an injunction, by the United States District Court,

Southern District of New York, Dudley B. Bonsal, Judge,

holding that pension payments made to certain employees

of National Maritime Union of America were, under the

Union’s constitution, improperly made. Affirmed in part

and reversed and remanded in part.

SLL REE PRP PS PEE

Cuares Sover, Esq., New York, N. Y. (Abraham

K. Freedman, Esq., New York, N. Y., on the

brief for Defendants Joseph Curran, Shannon

Wall and William Perry), for Defendants-

Appellants Curran, Wall, Perry and Abraham

E. Freedman,

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Roy L, Rearpoy, Esq., Simpson, Thacher & Bart-

lett, New York, N. Y., for Defendants-Appel-

lants Martin E. Segal and Leon Karchmer.

ee ee

*John A. Danaher, Senior Circuit Judge of the District of

Columbia Circuit, sitting by designation. H

SA2

Appendia A.

Artrnur E. McInerney, Esq., New York, N. Y.

(Duer & Taylor, New York, N. Y., on the

brief), for Plaintiff-Appellees.

Anperson, Circuit Judge:

This case arises under § 501 of the Labor-Management

Reporting and Disclosure Act of 1959, 29 U. S. C. $501

(1964), and concerns the propriety of certain payments

made into the Officers’ Pension Fund of the National Mari-

time Union (NMU). The plaintiffs, James M. Morrissey,

Joseph Padilla, and Ralph Ibrahim, have been members in

good standing of the NMU since approximately 1950, The

defendant Joseph Curran is the national president and the

defendant Shannon Wall is the national secretary-treasurer

of the NMU, both elective positions. The defendant Wil-

liam Perry is the recently retired assistant to the president

of the Union, a non-elective position. The defendants

Abraham E, Freedman, Martin E. Segal, and Leon Karch-

mer are the trustees of the NMU Officers’ Pension Plan.

The structure of the NMU and the powers and duties of

its officers and various internal governing bodies are set

out in the Union’s constitution. It makes provision for

three governing units which have nation-wide jurisdiction.

The ultimate authority is vested in the National Conven-

tion, which meets triennially and is composed of the elected

delegates from various ships and ports. When the Na-

tional Convention is not in session, the Union is governed

by the National Council, which holds regular annual meet-

ings and consists of the elected national officials and cer-

tain other delegated representatives. When the National

Council is not in session, governing authority rests in the

National Office, made up of the national presidents, secre-

tary-treasurer, three vice presidents, and three national

SA3

Appendia A.

representatives. This body is primarily responsible for the

day to day, internal administration of NMU affairs.

In 1951 the NMU constitution was amended to permit

the National Council, subject to membership approval, to

provide pension benefits for all NMU officers and em-

ployees.’. On December 29, 1952, pursuant to this author-

ity, the National Council entered into an Agreement and

Declaration of Trust with three trustees which gave them

the authority to establish a pension plan. On February 16,

1953, the trustees adopted a plan whereby pension rights

acerued to the various elected officials of the Union, in-

cluding the president, secretary, treasurer, vice-president,

national port committee member, branch agent, field pa-

trolman, and patrolman. No non-elected employee of the

Union was included under its coverage. The majority of

the administrative employees of the NMU were represented

by this or other unions in their employment relationship

with the NMU and had been granted pension rights, as per-

‘The pertinent provisions of the 1951 NMU constitution read

as follows:

‘*ArticLe 15 SALARIES OF OFFICERS

Section 1—Sa.aries AND Expenses: The National Coun-

cil, considering the financial state of the Union, is empowered,

subject to approval of the membership, to set from time to time

the actual salaries and daily expenses of all Union officers and

employees.

The National Council shall pay all salaries, approved by

the membership, of all Union officers and employees. . . .

7 7 .

Sec, 8—PeNsION AND WELFARE: The National Council,

subject to approval of the membership is empowered to make

adequate and appropriate provisions for pensions, welfare, and

similar benefits for officers and employees of the Union.’’

Between the 1951 amendment to the constitution and 1960 pension

plans were adopted for the employees pursuant to collective bar-

gaining agreements.

RENTALS AR TIC AOA LVI Feo

SA4

Appendix A.

mitted by the 1961 NMU constitution, as part of their

respective collective bargaining agreements."

On October 28, 1961, the National Office (as opposed to

the National Council) authorized an amendment to the

Agreement and Declaration of Trust, the effect of which

was to extend its coverage to certain executive and super-

visory employees of the Union who held appointive rather

than elective positions, such as the assistant to the presi-

dent, organizer, executive secretary, publicity director,

editor of the Pilot (the union house organ), and super-

visors over maintenance, bookkeeping, records and sup-

plies.*

Prior to the adoption of the amended Declaration of

Trust, however, the NMU constitution had been subjected

* The last sentence of Article 8(a) of the 1960 constitution

which concerns technical, clerical and administrative personnel at-

tached to or under the National Office, provides :

‘*Whenever possible, such employees shall be members of the

NMU or of appropriate AFL-CIO affiliates, ”’

With nothing shown to the contrary, it may be assumed that all

of the few non-elected employees, arbitrarily brought under the

Officers’ Pension Plan by the National Office, already had pension

coverage under collective bargaining agreements applicable to them.

It must be emphasized that the present case had nothing whatever

to do with such pension coverage, nor do the plaintiff in any way

challenge or seeks to disturb those pension rights of the adminis-

trative employees. Rather, in the present action, they are question-

ing only the awards to the special few non-elected employees who

have been granted the lucrative *“pension rights’’ under the Officers’

Pension Plan. For example, one of these special employees, the

defendant Perry, who incidentally already had coverage under

the NMU Deep Sea Pension Plan, resigned as assistant to the

president, January 16, 1969, and, as a specially created beneficiary

received over $100,000 under the Officers’ Pension and Plan alone.

* Three years later, in 1964, the Officers’ Pension Plan was

again extended to include additional administrative personnel not

covered by collective bargaining agreements,

© head RD Ae AAP hte

SA5

Appendiaz A.

to an extensive revision whereby, along with other changes,

the authority vested in the National Council to fix the sala-

ries of certain employees was shifted to the National Office

and the requirement for membership approval thereof was

deleted.* This revision became effective on December 2,

1960.

The plaintiffs contend that the 1961 amendments to the

Declaration of Trust, by the National Office, permitting

benefits to be paid to non-elected employees under the

Officers’ Pension Plan were not authorized by and were

in contravention of the NMU constitution, as amended in

*The amendment applicable to this case reads, in pertinent

part, as follows:

‘* ARTICLE 8 NATIONAL OFFICE

” * *

Sec. 11—EMPLOYEES OF THE UNION: (a) The National Office

shall be responsible for and shall fix the salaries of all technical,

clerical, and administrative personnel as may be required for

the effective administrative of the Union’s affairs. Wherever

possible, such employees shall be members of the NMU or of

appropriate AFL-CIO affiliates.

(b) Collective bargaining agreements affecting employees

of the NMU shall be negotiated by the National Office or such

officer or officers as it may designate; provided that no such

agreements shall be made without specific approval by the

National Office.’’

‘‘ARTICLE.14 COMPENSATION OF OFFICERS

Section 1—Salaries: (a) The National Council shall fix

the salaries for all officers of the Union, subject to approval as

provided by this Constitution.

Sec. 7—Pensions: All officers shall be eligible for benefits

under the NMU Officers’ Pension Plan, subject to such rules

and regulations as the Trustees of that Plan may establish.

Sec. 8—Welfare: All officers shall be eligible for benefits

under the Officers’ Welfare Plan. The National Council, sub-

ject to membership approval, is empowered to improve the

benefits under said Plan.’’

eS ee

Se en ee ee

SA6

Appendix A.

1960. After Union officials refused to take any action, as

requested, to obtain the return of funds paid into the Trust

fund for the benefit of non-elected employees under the

revised Plan, the plaintiffs filed a complaint in the district

court seeking an accounting, a money judgment for any;

damages suffered by the Union or the Trust fund, and an

injunction against further payments to non-elected em-

ployees.

On February 4, 1969, the district court (Bryan, Judge)

granted leave, pursuant to 29 U. S. C. §$501(b), to com-

mence this action. Defendants Curran, Wall and Perry

moved to dismiss the complaint under Rule 12(b)(5),

F, R. Civ. P., or in the alternative for summary judgment

under Rule 56. The plaintiffs filed a cross-motion for

summary judgment against all defendants. Oral argument

was heard on both motions on March 26 (Bonsal, Judge),

and on May 23 the defendants’ motions were denied and

plaintiffs’ cross-motion was granied. 302 F. Supp. 32

(S. D. N. Y. 1969). The court held that the defendants

should account for and repay pension funds accrued and

paid to non-elected Union employees, that the defendant

trustees should be enjoined from paying out of the Officers’

Pension Plan fund further benefits to non-officers and the

plaintiffs should recover costs and attorneys’ fees,

Immediately following the district court decision, the

National Council of the Union convened and proposed

amendments to the constitution which gave the National

Office of the NMU the authority, which the trial court had

found it did not have under the 1960 amended constitution,

to designate certain non-elected employees to be eligible

for benefits under the Officers’ Pension Plan as well as the

authority “to validate retroactively all pensions heretofore

paid under the plan.” The approval of these amendments

AAPA IDE AN VDAT RAE GR AT AYA ARS aug

SLAIN RENIN) LL A Pee PRA HOMOIV IE SE MOR HARD AMEEEA ELE PANE BAN IRIW POW 2 TANG GEO OANA NALINI

SA7

Appendia A.

was voted on June 24, 1969. The plaintiffs promptly moved

to have the June 24th amendments declared invalid as

exculpatory, and therefore void, under $501(a)* and to

enjoin any implementation of them. The relief sought was

denied without prejudice on July 3, 1969. The defendants

moved that the entire action be dismissed as moot on the

ground that the new amendments removed any question of

the power of the defendants to act as they did.

Meanwhile, on June 2, 1969, defendants Curran, Wall

and Perry filed a motion for reargument of the May 23

decision. On June 6 the plaintiffs filed a motion to enjoin

the defendants from being represented by counsel retained

by the Union, to require defendants to pay their own coun-

sel from funds not belonging to the Union, and to enjoin the

implementation of the proposed amendments to the NMU

constitution on the ground that they were exculpatory and

therefore void under 29 U. S. C. §501(a). On June 11 a

motion for reargument was filed on behalf of defendants

Segal and Karchmer. In separate orders entered on July

3, 1969, these motions were denied, except for the motion

relating to representation of defendants by Union counsel,

which was not ruled upon.

The defendants have appealed from the district court

decision granting summary judgment to the plaintiffs,

denying their own similar motion and their motions for

reargument. The plaintiffs have filed an interlocutory ap-

peal from the trial court’s denial of their motion to declare

*The pertinent language of the statute provides:

ss . . A general exculpatory provision in the constitution

and ‘bylaws of such a labor organization or a general excul-

patory resolution of a governing body purporting to relieve

any such person of liability for breach of the duties declared

by this section shall be void as against public policy.’’

SAS

Appendix A.

invalid and enjoin the use of the June 24 amendments to

the NMU constitution. The major dispute on these appeals

concerns the proper interpretation of the provisions for

establishing employee pension funds under the 1951 NMU

constitution, as amended in 1960.

Defendants argue that the 1960 amendments were de-

signed to shift the responsibility for the establishment of

employee salaries from the National Council to the Na-

tional Office and did not limit in any way the power of the

National Office to establish employee pension funds. They

assert that the terms “salaries,” as used in Article 8, $11

must be construed to include pensions, from which they

claim it follows that the National Office was acting within

its authority when it amended the Officer’s Pension Plan

in 1961. In support of this position they rely upon such

cases as Brumley v. Barter, 225 N. C. 691, 36 S. E. 2d 281

(1945), and Giannettino v. McGoldrick, 295 N. Y. 208, 66

N. E. 2d 57 (1946), which hold that pensions are compensa-

tion for past services as opposed to gratuities, and in that

sense, are included within the term “salary.” But as the

district court pointed out in its opinion, the framers of the

NMU constitution, when drafting the 1960 revision, clearly

had in mind a distinction between salaries and pensions,

as evidenced by the use of the term “compensation” in

Article 14 to include both types of remuneration. The NMU

constitution, as amended in 1960, was clear and explicit

with regard to the persons covered by the pension pro-

visions, and in the light of the history, context and wording

of those provisions, the district court’s rejection of the

defendant’s claim is correct. There was no genuine issue

of material fact concerning the charge of a breach of duty

on the part of the defendants, and summary judgment in

favor of the plaintiffs should be affirmed.

LP Da APE CI! 2 ECORI DES

SA9

Appendix A.

In support of their claim that the 1969 amendments* to

the NMU constitution, made immediately following the dis-

trict court decision, are exculpatory and that their applica-

tion should be enjoined, the plaintiffs rely on Highway

Truck Drivers and Helpers Local 107 v. Cohen, 182 F.Supp.

608 (E. D. Pa.), aff'd. 284 F. 2d 162 (3 Cir. 1960), cert. de-

nied, 365 U. S. 833 (1961), and Highway Truck Drivers and

Helpers Local 107 v. Cohen, 215 F. Supp. 938 (E.D. Pa.

1963), affd, 334 F. 2d 378 (3 Cir.), cert. denied, 379 U.S.

921 (1964). In the first of these two cases the district court

found that it was improper for the local union to pay the

attorney fees of union officers who were under criminal in-

dictment. These fees were to be paid pursuant to a resolu-

tion of the local which permitted such payment, and that

resolution was declared invalid because it authorized “ac-

tion beyond the powers of the union as derived from its

constitution and was inconsistent with the aims and pur-

poses of the Labor-Management Reporting and Disclosure

Act.” 284 F. 2d at 164. The international union then

amended its constitution to permit such authorizations.

Thereafter in the second Cohen case the union officers

claimed that the payments were valid as the amendment

purported to be retroactive. In rejecting this claim the

Third Circuit said:

5 The following is the full text of those amendments :

‘Amend Article 8, Section 11 to add the following paragraph :

The National Office shall have the authority to provide pen-

sions for all past and present employees of the Union and to

protect the pension rights of all past and present employees

of the Union.

Amend Article 14, Section 7, as follows:

Sec. 7—Pensions: All officers and such employees as the

National Office may designate, shall be eligible for benefits

under the NMU Officers’ Pension Plan, subject to such rules

and regulations as the Trustees of that Plan may establish.

The National Office shall have the authority to validate retro-

actively all pensions heretofore paid under the Plan.’”’

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Appendix A.

“‘That abortive attempt to validate the illegal 1959

resolution, could not of course in 1961 legitimatize the

1959 payments which have been held to have been

wrongful. And the action of the International was just

as inconsistent with Section 501 of the Labor Manage-

ment Act as was the Local’s ill conceived resolution.’’

334 F. 2d at 381.

The defendants in the present case, however, assert that

the cases cited actually support the defense. It is their

contention that the trial court held in the 1960 Cohen case

that a resolution authorizing an expenditure of union funds

was not an exculpatory provision in violation of 4 501(a)

and, in the 1963 Cohen case, that a constitutional amend-

ment authorizing expenditures already incurred was not

exculpatory unless the expenditures themselves were in

violation of § 501 of the Act. Turning to the present case

they argue that the court below did not find that the pay-

ments into the Officers’ Pension Plan for the benefit of

employees were per se violative of §501(a), and therefore

any subsequent constitutional provision purporting to

validate the past payments cannot be exculpatory within

the meaning of §501(a). In making this assertion, the

defendants conveniently overlook the fact that the trial

court did find that they had breached their duties because

the expenditures in question were not authorized by the

NMU constitution and that they were in violation of § 501

of the Act. In the Cohen cases the trial court was affirmed

because the local union authorized actions beyond its

powers as derived from the constitution and because its

effort to pay attorneys’ fees for officers who had been

derelict in their duties was ‘inconsistent with the aims and

purposes of the Labor Management Reporting and Dis-

closure Act.’? We agree with the position taken by the

Third Cireuit. Otherwise the provisions of § 501 would be

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OOM Ee AL POLL ELE LYE GA RITE ee a la ts ee Re ek

SA11

Appendia A.

completely emasculated if, every time a court, at the behest

of complaining members of a union, found that the officers

had breached their duties, the officers could find sanctuary

by putting through a constitutional amendment or by-law

retroactively to legitimatize their former derelictions of

duty.

The defendants also argue that the district court ‘‘has

not imposed any personal liability upon the defendants

from which they needed to be ‘exculpated,’ ’’ but we do not

agree with this argument. The district court ordered the

defendants to account for all moneys paid into the Officers’

Pension Plan and return to the NMU all moneys received

by the trustees for the benefit of non-officers with interest.

It follows that if they are unable to recoup that money,

they may be held personally liable.

The trial court’s decision, however, on the plaintiffs’

motion for an injunction, that the purpose of the 1969

amendments to the NMU constitution was to include non-

officer employees in the NMU officers’ pension plan and that

the amendments were, therefore, not exculpatory provisions

prohibited by § 501, is at odds with its holding that there

was an obvious breach of duty on the part of the defend-

ants in causing union funds to be paid out to persons who

were not entitled to them. His conclusions might have been

correct if the provisions were prospective only in their

application but the amendment to Article 14, §7 provides

in part: ‘‘the National Office shall have the authority to

validate retroactively all pensions heretofore paid under

the plan.’”? This is clearly exculpatory in intent and lan-

guage. The NMU exercised its authority under the 1969

amendments to attempt to validate retroactively all the

pensions previously paid. The determination that the 1969

amendments were not exculpatory is reversed and will be

reconsidered on remand.

The defendants raise a number of additional minor

issues, several of which will be commented upon. They

ee ee

SA12

Appendix A.

have throughout pressed the defense of laches. But the

matter of improper payments of union funds to persons

not entitled to them is a continuing offense and cannot bar

an injunction to prevent continued payments or an account-

ing for all of the unlawful expenditures.

The defendants Segal and Karchmer claim that the

ultimate order issued by Judge Bonsal exceeded the

court’s jurisdiction because it is their contention that the

court’s jurisdiction is fixed by the order issued by Judge

Bryan on plaintiffs’ application for leave to bring suit on

February 4, 1969. This is an incorrect interpretation of

§501(b). The purpose of requiring permission to bring an

action is a safeguard to protect the union officers from

vexatious suits and once given is not to be treated as a

stricture on jurisdiction. Horner vy. Ferron, 362 F. 2d 224,

228 (9 Cir.), cert. den. 385 U. S. 958 (1966). An issue was

also raised that Judge Bonsal had no power to grant

summary judgment on plaintiffs’ motion because of in-

adequacy of notice to some of the defendants. The trial

court, however, had power on its own motion to enter

summary judgment against the party who was the original

mover. 6 Moore, Federal Practice, 56.12 at 2241 (2d ed.

1966). While some of the defendants had only a brief

opportunity to prepare for the argument on the plaintiffs’

motion, there is nothing whatever to indicate that any party

was at all prejudiced. Stein v. Oshinsky, 348 F. 2d 999,

1000-01 (2 Cir.), cert. den. 382 U. S. 957 ( 1965).

Defendants also argue that the trustees of the Officers’

Pension Plan do not come within the definition of those

having a fiduciary responsibility as set forth in 29 U. S. C.

§ 402(q). ‘his court has specifically rejected this claim in

Tucker v. Shaw, 378 F. 2d 304, 308 (2 Cir. 1967). The trial

court was correct in finding that all of the defendants were

in a position of trust and responsibility in relation to the

monies charged to have been unlawfully expended and all

a A ty DEA Mad tant ANE AH YS LA IEE lm Wire 3%,

re a

SA13

Appendiaz A.

had a duty to see that it was restored to the Union

treasury.

The remaining points raised by the defendants do not

merit discussion.

We affirm denial of the defendants’ motion for sum-

mary judgment and the entry of summary judgment in

favor of the plaintiffs. As the June 24, 1969, amendments

to the NMU constitution are clearly exculpatory as pro-

hibited by §501(a), we reverse the denial of plaintiffs’

motion to have these amendments declared void, and re-

mand to the district court for appropriate action declaring

the amendments to be without effect and enjoining defend-

ants from acting in reliance upon them. As the district

court apparently did not pass on so much of plaintiffs’ mo-

tion as requested that defendants be enjoined from retaining

counsel paid or to be paid with Union funds, this question

should also be determined on remand. The controlling

cases on this point are Tucker v. Shaw, supra, and Holde-

man v. Sheldon, 311 F. 2d 2 (2 Cir. 1962), in which we held

that all that is necessary for enjoining of the defendants in

a § 501 action is that the plaintiff make ‘‘a reasonable show-

ing that he is likely to succeed.’’ We also note that the

district court maintains continuing jurisdiction to insure

that the accounting and return of funds to the Union

treasury proceeds as ordered, and, of course, it retains the

power to issue the necessary orders to assure full com-

pliance.

Affirmed in part, reversed in part, and remanded for

further proceedings in compliance with this opinion.

Dananer, Senior Circuit Judge (dissenting) :

Although according great respect for the views of my

colleagues and for those of the able District Judge, Honor-

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SAl14

Appendix A.

able Dudley B. Bonsal, I nonetheless fear that error has

occurred.

The National Maritime Union of America (hereinafter

NMU) was founded in 1937. Some fourteen years later,

the still-young Union adopted a Constitution which, so far

as is here pertinent, provided that “considering the finan-

cial state of the Union,” the Union’s National Council’ was

empowered to make adequate and appropriate provisions

for pensions, welfare and similar benefits for officers and

employees of the Union. That power was never rescinded,

I suggest, but was later transferred to the National Office.

Agreeably to such authorization, effective as of Febru-

ary, 1953, the NMU Officers’ Pension Plan was adopted,

then covering all elected officers of NMU. There has been

no challenge here to the validity of that Plan.

NMU in the management of its properties, in the ad-

ministration of its far-flung business and in furtherance of

its purposes, utilized the services of a staff of lawyers,

_ economists, pension administrators, staff experts in Wash-

inton, doctors, and supervisory staffs of Union-owned real

estate.’ For their protection as well as to further its own

interest in their retention in its service, NMU negotiated

with various unions of which its employees were members

for the establishment of pension and welfare plans. As an

employer, NMU was bound to bargain respecting hours,

wages and conditions of employment. Although clearly

authorized to do so, NMU had not until the events here

* The National Council was authorized to act between National

Conventions. Another entity, known as the National Office, was

accorded the same powers as those reposed in the National Council,

to be exercised in the more frequent meetings of the National Office.

* Some inkling of the nation-wide scope of the operations of

NMU may be gleaned from the carefully-detailed findings of Dis-

trict Judge Motley outlined in Wirtz v. National Maritime Union

of America, 284 F. Supp. 47 (S. D. N. Y. 1968); affirmed by this

Court 399 F. 2d 544 (1968).

SEEN OM eR ON WI a ver ® Revi.

SA15

Appendia A.

at issue, set up a separate plan for a few of its supervisory

personnel, not elected officers and not represented by some

union.

Some sixteen years after the original Plan had become

effective, the plaintiffs here alleged that without authoriza-

tion a lump-sum benefit’ had been accorded to the defendant

Perry following his resignation as Executive Assistant to

the National President. Purporting to base the action upon

95 U.S. C. § 501, the plaintiffs had sought an accounting, a

money judgment against the defendants, and an injunction

to restrain the Trustees from paying benefits to Perry or

any other non-elected employees of NMU. The Union was

not made a party. Under date of May 23, 1969, the District

Judge filed an Opinion holding, compendiously, that there

was no authority‘ for covering non-employees into the Plan,

and so he granted summary judgment for the plaintiffs. He

ordered the defendants to account; enjoined the Trustees

from paying benefits under the Plan to non-officers; and

further directed the Trustees to return to NMU, with inter-

est, all moneys received by the Trustees for the benefit of

non-officers.

Meanwhile, Congress adopted the “Welfare and Pen-

sion Plans Disclosure Act,” effective as of January 1, 1959,°

which defined an “employee pension benefit plan” to mean

* The original Plan had specifically provided that the Trustees

in their discretion might make a lump-sum payment in lieu of bene-

fits otherwise provided. Indeed, the authorization was amended

and extended in 1958.

‘There was no evidence that the officer defendants or the

Trustees personally benefited in any way or otherwise acted un-

lawfully, or that they had exercised bad faith. Cf. Bakery and

Confectionery Workers Internat’l U. v. Ratner, 335 F. 2d 691

(1964).

599 U. S. C. A. § 301 et seq. PL 85-836, as amended by PL

87-420. 76 Stat. 35, which vastly increased the authority of the

Secretary of Labor to supervise and to administer the disclosure

requirements of the earlier Act.

——~ ,

eT 4 NA ag a Oe there “

;

;

;

|

SA16

Appendia A.

‘fany plan, fund or program which is communicated or

its benefits described in writing to the employees, and

which was heretofore or is hereafter established by an

employer or by an employee organization, or by both,

for the purpose of oe for its participants .

retirement benefits .

And the Act further defined the term ‘‘participant’’ to

mean

‘*any employee or former employee of an employer or

any member of an employee organization who is or may

become eligible to receive a benefit of any type from

an employee welfare or pension benefit plan... .’’

NMU became bound to submit annually to the Secretary

of Labor a report describing the Plan, an annual financial

statement, and further information in such form and de-

tail as the Secretary might prescribe. NMU complied with

those requirements.’

So it was in part, and with the Labor Management Re-

porting and Disclosure Act of 1959 (LMRDA)’ by this time

on the statute books, the 1951 Constitution was revised at

an NMU Convention held in October, 1960, with ratification

by the membership after a referendum vote concluded in

December of 1960.

I deem it unthinkable that the NMU membership sup-

posed for a moment that the amended Constitution was

intended to wipe out whatever rights to coverage had been

acquired since 1952. There was no repealer clause in the

1960 revision. To me, it is inconceivable that the eligibility

established in 1952, followed by good faith reliance under

*29 U. S. C. A. 32 §§ 304-307. NMU furthermore was bound

to report in detail to the Bureau of Internal Revenue and annually

did so.

729 U. S. C. A. $401 et seq.

ee nS a ee ke PO dharma — 2

. S aoe ene en

SA17

Appendia A.

the express terms of the earlier Constitution, was to be

deemed obliterated. I reject the suggestion that the Con-

stitution, as revised, had narrowed the authority of this

Union to provide pensions for any of its 47,000 members,

whether they be elected officers or employees or whatever

their status.

On the contrary the 1960 Constitution even broadened

benefits to be accorded to members whose rights had pre-

viously accrued, as for example where Article 15, Section

8(f), specified that members

‘‘receiving a monthly pension under the NMU Welfare

and Pension Plan or the NMU Officers’ Pension Plan

shall not be required to pay dues and shall be regarded

as honorary members... .’’

Against such background, lacking representation by any

employee union and not possessing the status of elected

officers, a few non-elected employees were brought into the

Plan. Perry as Assistant to the President* was included,

certain others being identified as Organizer, Maintenance

Supervisor, Bookkeeper Supervisor, Records and Supply

Supervisors, Executive Secretary, Publicity Director and

the Editor of the NMU official News Organ, The Pilot.

In sum, my reading of the record and my construction

of the NMU Constitution convince me, first, that it had

always been the plain intendment of this Union that pen-

sions for both officers and employees be authorized; and

next, that the power to establish any plans had heen created

in 1951, with continuing authorization to amend whatever

‘The Constitution in Article 13, Section 1, provided as to the

National President that:

(f) He may, in his discretion, and at such salary as the National

Office may determine, appoint a member, or members, of the

Union to assist him in the exercise of his administrative func-

tions; provided that such assistant or assistant shall at no time

act in an executive capacity.

ee

ta ee

SA18

Appendix A.

plan might thereupon be established. See, for example,

Article 15, Section 8 of the Constitution, ratified in 1951,

which read:

The National Council, subject to approval of the mem-

bership, is empowered to make adequate and appro-

priate provisions for pensions, welfare, and similar

benefits for officers and employees of the Union.

Nothing to be discerned from the revised Constitution,

ratified December 2, 1960, detracted one whit from that

authority. Rather, I suggest, the later revision must be

read with the former. The only difference in giving effect

to the continuing intent of the Union membership was that

after the 1960 revision, the authority to act was transferred

from the National Council to the National Office. I conclude

that even without more than my analysis suggests, the Dis-

trict Judge erred in concluding that at the time the chal-

lenged action was taken, there had been a lack of authority

to provide pensions for all past and present employees of

the Union,

II.

But there was more. After the release of Judge Bon-

sal’s May 23, 1969 Opinion, the Union promptly took steps

to reiterate the NMU intention. If the judge could be heard

to say the NMU had failed to make clear its intention, two

amendments to the Constitution were immediately pro-

posed. The amendments by referendum were forthwith

approved by the membership by an overwhelming vote.

Accordingly, the revised 1960 Constitution was further

amended by the addition to Article 8, Section 11, of the

following:

(d)—The National Office shall have the authority

to provide pensions for all past and present employees

ne Bane FOF AN A eR I GE oT Me Die oe LARS PRA DIME NE NEE th

Saas

SA19

Appendia A.

of the Union and to protect the pension rights of all

past and present employees of the Union.

The membership further amended Article 14, Section 7,

to read as follows:

Pensions: All officers and such employees as the

National Office may designate shall be eligible for

benefits under the NMU Officers’ Pension Plan, subject

to such rules and regulations as the Trustees of that

Plan may establish. The National Office shall have the

authority to validate retroactively all pensions hereto-

fore paid under the Plan.

These plaintiffs then attacked the amendments as “ex-

culpatory” within the meaning of 29 U.S.C. § 501, and they

sought an injunction. The District Judge flatly—and

correctly—rejected that contention and ruled that the

amendments “were not exculpatory provisions prohibited

by 29 U.S. C. $501. Their purpose is obviously to include

non-officer employees in the NMU Officers’ Plan.”

(Emphasis added.)

® DECISION AND ORDER ON MOTION FOR AN INJUNCTION

The amendments to the NMU Constitution are not exculpatory

provisions prohibited by 29 U. 8S. C. 501. Their purpose is obviously

to include non-officer employees in the NMU Officers’ Pension Plan.

According to the Certification of the Honest Ballot Association,

dated June 24, 1969, the following amendments were adopted by

a vote of 10,043 to 1,685:

‘* Add the following paragraph to Article 8, Section 11:

(d)—The National Office shall have the authority to pro-

vide pensions for all past and present employees of the Union

and to protect the pension rights of all past and present em-

ployees of the Union.

‘Amend Article 14, Section 7 to read as follows:

Pensions: All officers and such employees as the National

Office may designate shall be eligible for benefits under the

NMU Officers’ Pension Plan, subject to such rules and regu-

lations as the Trustees of that Plan may establish. The

Ph eas Te

$A20

Appendiz A.

Granting that the Constitution had validly been amended,

the District Judge’s July 3, 1969 Memorandum observed,

“It does not appear that the National Office has exercised

this authority.”

I read him to be saying, “I do not perceive that the

necessary authority existed to include non-officers at the

time they were covered into the Plan. But now NMU has

conferred that authority. Even so as of this moment, the

National Office has not so far exercised its power.” And

accordingly he concluded only that since the inclusion of

non-officers “was beyond the power of the defendants,

plaintiffs are entitled to appropriate relief.”

9 (con’d)

National Office shall have the authority to validate retroactively

all pensions heretofore paid under the Plan.’’

While it is stated that 12,040 members obtained a ballot, it is

not stated how many members of NMU were eligible to vote. The

amendment to Article 14, Section 7 provides that ‘‘the National

Office shall have the authority to validate retroactively all pensions

heretofore paid under the Plan.’’ However, it does not appear

that the National Office has exercised this authority.

Plaintiffs’ motion is denied, without prejudice to the plaintiffs

seeking further relief by appropriate application if the defendants

should violate the order of the court.

It is so ordered.

Dated: New York, N. Y.

July 13, 1969.

Dupb.ey B. BonsaL

U.S8.D.d.

*° DECISION AND ORDER ON MOoTION For REARGUMENT

Defendants’ motion for reargument is denied. The interpreta-

tion of the meaning of ‘‘salaries’’ sought by defendants would not

change the holding that only officers were eligible for benefits under

the NMU Officers’ Pension Plan, for the reasons stated in the Memo-

randum filed May 23, 1969. Therefore the inclusion of non-officers

in the Plan was not authorized by the NMU Constitution as revised

in 1960. Since such inclusion was beyond the power of the defend-

ants, plaintiffs are entitled to appropriate relief,

Consideration has been given to the affidavit of the defendant

Martin Segal dated June 11, 1969, which was filed in support of the

defendants’ motion for reargument. Mr. Segal is one of the trustees

of the NMU Officers’ Pension Plan, who appeared in the action and

SA21

Appendia A.

Thereupon after such prompting, as the record shows,

the National Office acted to implement the authority so re-

cently reaffirmed. It adopted a resolution based upon the

desire of the National Office “to confirm the pension rights

of all employees of the Union, both retroactively and pro-

spectively.” The text appears in the margin.”

Right then and there, having been advised in the prem-

ises, the assumed omission having been cured by NMU, the

(10 cont’)

filed his answer on May 1, 1969. The court does not question Mr.

Segal’s good faith as trustee. However, the plaintiffs are entitled

to obtain the return to NMU of the monies paid to the Fund on

behalf of non-officers since their inclusion was not authorized.

It is so ordered.

Dated: New York, N. Y.

July 3, 1969.

Dub ey B. BonsaL

U.8.D.d.

11 ‘*Now, THEREFORE be it Resolved:

(1) All pensions, heretofore paid by the NMU Officers’

Pension Plan are hereby validated and approved.

(2) All employees of the Union except (a) those already

covered by collective bargaining agreements where the NMU

is the employer, which collective bargaining agreements provide

for the covered employees . . . shall be eligible for benefits

under the NMU Officers’ Pension Plan.

(3) Payments on the NMU Officers’ Pension Plan to pro-

vide for the foregoing benefits are hereby authorized and all

past payments by the Union to the NMU Officers’ Pension

Plan are hereby ratified and approved.’’

Pursuant thereto, the Plan (identified as that which was ‘‘effec-

tive as of February 16, 1953,’’ as amended) was again amended in

Article I, Section 8 to define, more specifically, the term ‘‘Partici-

pant’’ to mean

‘‘an Officer, Representative, Supervisor or Professional, and

all other employees of the Union except (a) any employee whose

compensation, hours of work or conditions of employment are

determined by collective bargaining with a recognized bargain-

ing agent... .”’

And Section 9 defines ‘‘ NMU Constitution’’ to mean

‘*the Constitution of the NMU in force and effect at the time

of the adoption of this Pension Plan [1953] together with any

amendments thereto.’’

SA22

Appendix A.

District Judge should have entered summary judgment in

behalf of the defendants, thus rendering moot whatever

claims had previously been urged upon the Court by these

plaintiffs. To take any other view, as it seems to me, is not

only to deny NMU its right to manage its own affairs."* but

in view of the rectification of whatever oversight the Judge

thought he had detected, the membership clearly restated

its approval of the authority of the National Office and of

the Trustees to provide pensions for all officers and all

employees.’*

** The Supreme Court has recognized that unions in the view of

Congress are to be accorded great latitude in resolving their own

internal controversies. Wirtz v. Bottle Blowers Assn., 389 U. §.

463, 471, text, n. 10 (1968) ; ef. Wirtz v. Hotel Employees, 391

U. S. 492, 497 (1968).

** Applying to the documents before us principles analogous to

those governing statutory construction, we are bound to read them

together. Certainly repeals by implication are not favored, and

nowhere can it be seen that the 1960 Constitution repealed the

earlier version. Where there are two acts upon the same subject,

it is fundamental that the rule is to give effect to both if possible.

United States v. Borden, 308 U. S. 188, 198 (1939).

The language before us must be interpreted in the light of

reason and understanding to reach the results intended by the

NMU’s Conventions and the respective Constitutions which reflect

the membership approval. Rathbun v. United States, 355 U. S.

107, 109 (1957) ; ef. United States v. Public Utilities Comm’n, 345

U. S. 295, 315 (1953).

If caution ‘‘against a literal reading of congressional legisla-

tion’’ be required, Wirtz v. Bottle Blowers Assn., supra, at 468,

how much more so should that caution be applied to the language,

often enough inartful, as employed by the Union’s draftsmen.

Recognition of the general objectives sought to be achieved by NMU

should provide the key to a reconciliation of all alleged doubts.

This was no case where officers of the Union were misappro-

priating Union funds for themselves. Cf. Tucker v. Shaw, 378

F. 2d 304, 306 (2 Cir. 1967); indeed, the Judge found no lack of

good faith on the part of the trustees, ef. Coleman v. Brotherhood

of Railway & Steamship Clerks, Etc., 340 F. 2a 206, 209 (2 Cir.

1965). Here, the Union officers, the National Office, the NMU

membership and the trustees had undertaken, to do precisely what

the Union sought to accomplish.

a Pt mnaNesd OS ats? WEE Et eee ie pao YY

SA23

Appendix A.

The purpose and the intent of the Union emerged con-

clusively. I respectfully submit, and the conferred author-

ity was exercised.

III.

Having in mind that the District Judge concluded that

summary judgment was in order, perhaps it will not be

amiss to turn back to his May 23, 1969 Memorandum Deci-

sion. There he concluded that the “plaintiffs’ action for

breach of defendants’ fiduciary duties is not barred by

laches.” He continued that “in this case defendants have

made no showing that they have been prejudiced by the

delay.”

Judge Motley found in Wirtz v. National Maritime Union

of America, 284 F. Supp. 47, 53 (1968), that the defendant

Wall in the 1966 contest for National Secretary-Treasurer

had defeated the plaintiff Morrissey by a vote on the order

of two to one. The plaintiff Padilla received the least

number of votes and by about the same ratio as he sought

election as one of the Vice-Presidents. These plaintiffs then

had filed protests id., 57, in accordance with the provision

of the Constitution, and after their protests had been

heard and rejected they sought the intervention of the

Secretary of Labor. They did not do so here, and it may

be noticed that the Secretary is not complaining concern-

ing the present issue,“ although he had been kept informed

through the annual filing of the reports required by the

Disclosure Acts.

discussing, we find these plaintiffs seeking an accounting

Now, some eight years after the actions we have been

and a return of moneys contributed to the Pension Plan. If

44In passing it should be noted that the Internal Revenue

Service had required NMU to amend the Plan so as to cover broadly

all employees, officers, as well as non-officers. Thereupon, the Plan,

so amended, was approved by the Bureau of Internal Revenue.

SA24

Appendix A.

as the plaintiffs contend on brief these defendants under

the judgment will be bound individually to return to NMU

all moneys theretofore paid or accrued for the benefit of

the intended participants, it is difficult to see why the de-

fendants shall not ‘‘have been prejudiced by the delay.”’

Surely if this action had earlier been commenced and con-

cluded with like result, it would seem inevitable that lia-

bility so entailed would have been limited. Moreover, cor-

rective action, if really required, could at once have been

taken to the end that the Union’s concern for eligible par-

ticipants be satisfied.

It seems to me that a hearing, at least on this aspect of

the case, was clearly in order, I fail to see how the Judge

could have faulted the defendants as having “made no

showing that they have been prejudiced by the delay.” To

what extent that conclusion of the District Judge entered

into his determination that summary judgment was in

order, we do not know. But we do know that despite the

absence. of extrinsic evidence both on this point and with

respect to what was in fact the intention of the Union,

summary judgment for the plaintiffs was directed. If

summary judgment were not to be entered in favor of the

defendants for the reasons previously advanced, at the

very least according to my appraisal of the record here

there should have been'a hearing. There was error on

account of that failure if for no other reason.

IV.

It would unduly protract this exposition of my views

were I to go into further detail. Sounding again the note

on which I opened, I respectfully submit my observations

with the greatest regard for those of my colleagues and

Judge Bonsal.

** Cf. United States v. Diebold, Inc., 369 U. S. 654, 655 (1962).

ee eee ee

SA25

APPENDIX B

Memorandum Decision of District Court, dated

May 23, 1969.

MEMORANDUM

Bonsat, D. J.

Plaintiffs are three members of the National Maritime

Union of America (NMU); defendants Curran and Wall

are elected officers of the NMU; defendant Perry was an

employee of the NMU and Assistant to the President;

and defendants Segal, Freedman, and Karchmer are trus-

tees of the NMU Officers’ Pension Plan (the Pension

Plan).

Plaintiffs instituted this action in February 1969. The

complaint alleges that defendants allowed the Pension

Plan to be amended in 1961, so as to include as partici-

pants designated employees of the NMU, who were not

elected officers of the NMU (non-officers), in violation of

the NMU Constitution then in effect; and that the amend-

ment was designed to siphon NMU funds to the non-officers

who were not authorized to receive them. Plaintiffs seek

an accounting and money damages from the defendants

responsible; an injunction enjoining the Trustees from pay-

ing any benefits to non-officers ; and costs, disbursements,

and attorneys’ fees, under 29 U.S.C. $ 501(b).

Defendants Curran, Wall, and Perry (moving defend-

ants) move for an order, pursuant to Rule 12, F. R. Civ.

P., dismissing the action; or, in the alternative, for an

order, pursuant to Rule 56, F. R. Civ. P., for summary

judgment on their behalf. Plaintiffs cross-move for sum-

mary judgment as against all defendants.

In 1951, following the amendment of the NMU Con-

stitution, Article 15, entitled “Salaries of Officers,’’ pro-

SA26

Memorandum Decision of District Court,

dated May 23, 1969.

vided, in part, as follows:

“Section 1—Salaries and Expenses: The National

Council . . . is empowered, subject to approval of

the membership, to set from time to time the actual

salaries and daily expenses of all Union officers and

employees.

Sec. 8—Pension and Welfare: The National Council,

subject to approval of the membership is empowered

to make adequate and appropriate provisions for pen-

sions, welfare, and similar benefits for officers and em-

ployees of the Union.” ( Emphasis added.)

On December 29, 1952, an Agreement and Declaration

of Trust (the Trust Agreement) was entered into between

the NMU and three Trustees, including defendants Segal

and Karchmer, granting to the Trustees authority to estab-

lish the Pension Plan.

On February 16, 1953, the Trustees promulgated the

Pension Plan, which provided that “officers” who had at-

tained a certain age and had credit for a certain number

of years of ‘‘covered employment”’ were eligible to receive

pension benefits.*

* Relevant provisions of the Pension Plan were as follows:

** ARTICLE II, DEFINITIONS

Section 5. ‘Officers’ shall mean a person holding any one of

of the following offices in accordance with the provisions of

the NMU constitution:

(a) National President

(b) National Secretary

(c) National Treasurer

(d) Vice President

(e) National Port Committee Member

(f) Branch Agent

(g) Field Patrolman

(h) Patrolman -

e

Section 7. ‘Covered Employment’ shall mean employment

as an officer of the NMU.”’

SA27

Memorandum Decision of District Court,

dated May 23, 1969.

In 1960, the NMU Constitution was again substantially

revised and a new Article 14, entitled ‘‘Compensation of

Officers,’’ was substituted for Article 15 of the 1951 Con-

stitution.

Article 14 provided, in relevant part:

‘‘Section 1—Salaries: (a) The National Council

shall fix the salaries for all officers of the Union, sub-

ject to approval as provided by this Constitution.

* * *

Sec. 7—Pensions: All officers shall be eligible for

benefits under the NMU Officers’ Pension Plan, subject

to such rules and regulations as the Trustees of the

Plan may establish.’’ (Emphasis added.)

Article 8, entitled ‘‘National Office,’ was also amended

in 1960 to provide that the National Office was ‘¢responsible

for and shall fix the salaries” of staff personnel of the

NMJ, including the non-officers, and shall negotiate collec-

tive bargaining agreements for the employees of the NMU.

On October 28, 1961, the Trust Agreement of 1952 was

amended so as to make eligible for pension benefits non-

officers holding the following positions, and the Pension

Plan was amended accordingly:

Assistant to the President

Organizer

Maintenance Supervisor

Bookkeeping Supervisor

Records and Supplies Supervisor

Executive Secretary

Publicity Director

Editor of ‘‘The Pilot’’

SA28

Memorandum Decision of District Court,

dated May 23, 1969.

Plaintiffs contend that the defendants violated the 1960

Constitution by allowing non-officers to be included in the

Pension Plan. On the other hand, the moving defendants

assert that they were acting under their power in Article 8

to fix salaries and bargain collectively for NMU employees;

and that this power included the right to provide pension

benefits under the Pension Plan for non-officers.

Article 15 of the 1951 Constitution empowered the

National Council ‘‘to make . . , provisions for pensions

. . . for officers and employees of the Union.’’ Article 14

of the 1960 Constitution deleted the word ‘*employees,’’

stating that ‘All officers shall be eligible for benefits under

the [Pension Plan].’’ Thus, the 1960 Constitution did

not continue the authority to include non-officers in the

Pension Plan.**

While the term ‘‘salaries’’ may include ‘*pensions,’’

as delayed payments of salary, Brumley v. Baxter, 225

N. C. 691, 36 S. E. 2d 281 (1945), see Inland Steel Co. v.

N. L. R. B., 170 F. 2d 247 (7th Cir, 1948), cert. denied, 336

U. S. 960 (1949), the 1960 Constitution carefully distin-

guished between the two, using the term ‘*compensation’’

in the title of Article 14 to encompass ‘‘salaries’’ in sec-

tion 1 and ‘‘pensions’’ in section 7. In the previous

Constitution, the word ‘‘salaries’’? was used in Article 15

to cover both. Moreover, a reading of Article 14 of the

1960 Constitution makes a clear distinction between officers

and employees. Thus, section 5, with reference to illness,

speaks of ‘‘an officer or employee,’ and section 6, relating

to severance pay, again speaks of ‘‘an officer or employee,’’

while section 7, dealing with pensions, speaks of ‘‘all

officers.’’

Since the 1960 Constitution did not authorize the in-

clusion of the non-officers in the Pension Plan and it is

** The authority to provide pensions for employees in the 1951

Constitution was not exercised by the NMU. The Pension Plan

between 1951 and 1960 included officers only,

SA29

Memorandum Decision of District Court,

dated May 23, 1969.

not denied that funds of the NMU have been paid to the

Trustees for disbursal to the non-officers under the Pension

Plan, plaintiffs are entitled to relief under 29 U. 8S. C. § 501.

Plaintiffs argue that they are entitled to summary judg-

ment since the only issue in the case, the construction of

| the 1960 Constitution, has been resolved in their favor.

| On the other hand, moving defendants say that there are

| contested issues as to which of the individual defendants

were responsible for the amendment including non-officers

in the Pension Plan; whether adoption of the amendment

was a breach of fiduciary duty; and whether plaintiffs’

action is barred by laches. In addition, defendant Karch-

mer asserts that he was not timely served by plaintiffs

with their cross-motion for summary judgment and that

he is not a proper party defendant under 29 U. S. C. § 501.

There is no genuine issue of fact as to the responsi-

bility of the defendants. It is admitted that defendant

Curran, as President of the NMU, and defendants Karch-

mer, Segal, and Freedman, as Trustees of the Pension

Fund, were responsible for authorizing the amendment

including the non-officers in the Pension Plan. Defendant

Wall, as Secretary-Treasurer, is responsible for the finan-

cial affairs of the NMU, and under the 1960 Constitution

he and Curran are ‘‘directed to pay all obligations in-

curred by or on behalf of the Union,’’ including payments

to the Pension Plan. Defendant Perry, formerly Assistant

to the President, was a non-officer who by the amendment

was made eligible to receive pension benefits under the

Pension Plan.

Under 29 U. S. C. § 501, defendants Curran, Wall, and

Perry owe a fiduciary duty to the NMU and its members

‘‘to hold its money and property solely for the benefit

of the organization and its members and to manage,

invest, and expend the same in accordance with its con-

stitution. .. and... torefrain. . . from holding or

SA30

Memorandum Decision of District Court,

dated May 23, 1969.

acquiring any pecuniary . . . interest which conflicts

with the interests of such organization . . .”’

Defendants Karchmer, Segal, and Freedman owe the same

fiduciary duty to the NMU and its members as Trustees of

the officers’ Pension Plan.

Plaintiffs’ action for breach of defendants’ fiduciary

duties is not barred by laches. The amendment, including

the non-officers in the Pension Plan was adopted in 1961,

and less than seven years later plaintiffs requested the

NMU for an accounting and for a return of moneys con-

tributed to the Pension Plan. In an action based on breach

of fiduciary duties, the defense of laches is carefully scru-

tinized, Libby v. L. J. Corporation, 247 F. 2d 78, 82 (D. C.

Cir. 1957), and in this case defendants have made no show-

ing that they have been prejudiced by the delay.

Although it appears that plaintiffs did not timely serve

their cross-motion for summary judgment, see Rule 56(c),

F. R. Civ. P., the court will consider the cross-motion, inas-

much as it could enter judgment for plaintiffs on its own

motion, Bell v. Waterfront Commissioner of N. Y. Harbor,

183 F. Supp. 175 (S. D. N. Y. 1960), aff’d, 279 F. 2d 853 (2d

Cir. 1960). See also Williams v. Howard Johnson’s Inc.

of Washington, 323 F.2d 102, 104 (D.C. Cir. 1965) ; 6 Moore,

Federal Practice, {| 56.15[6] (2d ed. 1966).

Accordingly, defendant’s motion to dismiss plaintiffs’

action or, in the alternative, for summary judgment, is

denied. Plaintiffs’ motion for summary judgment is

granted, and judgment will be entered in favor of plaintiffs,

directing defendants to account; enjoining defendant

Trustees from paying any benefits under the Pension Plan

to non-officers ; and directing the Trustees to return to the

NMU all moneys received by the Trustees for the benefit of

non-officers, with interest from the dates the moneys were

received. Plaintiffs are entitled to costs, disbursements

~~

A 2 atin ee

Bh A le OT I ES 4 ~ “ .

a AEE . Co AI FO AA AR ie sind Ce Ranearrusr a

SA31

Memorandum Decision of District Court,

dated May 23, 1969.

and attorneys’ fees out of the amounts returned by the

Trustees to the NMU, in such amounts as may be approved

by the court.

Settle order on notice.

Dated: New York, N. Y., May 23, 1969.

Dupuey B. Bonsau

U.S.D.J.

SA32

APPENDIX C

Decisioa and Order of District Court Denying

Reargument (July 3, 1969). -

Defendants’ motion for reargument is denied. The in-

terpretation of the meaning of ‘‘salaries”’ sought by de-

fendants would not change the holding that only officers

were eligible for benefits under the NMU Officers? Pension

Plan, for the reasons stated in the Memorandum filed May

23, 1969. Therefore the inclusion of non-officers in the

Plan was not authorized by the NMU Constitution as re-

vised in 1960. Since such inclusion was beyond the power

of the defendants, plaintiffs are entitled to appropriate

relief.

Consideration has been given to the affidavit of the de-

fendant Martin Segal dated June 11, 1969, which was filed

in support of the defendants’ motion for reargument. Mr.

Segal is one of the trustees of the NMU Officers’ Pension

Plan, who appeared in the action and filed his answer on

May 1, 1969. The court does not question Mr. Segal’s good

faith as trustee. However, the plaintiffs are entitled to

obtain the return to NMU of the monies paid to the Fund

on behalf of non-officers since their inclusion was not

authorized.

It is so ordered.

Dated: New York, N. Y., July 3, 1969.

Dup.ey B. Bonsar,

U.S.D.J.

SA33

APPENDIX D

Decision and Order of District Court Denying

Injunction (July 3, 1969).

The amendments to the NMU Constitution are not ex-

culpatory provisions prohibited by 29 U. S. C. 501. Their

purpose is obviously to include non-officer employees in the

NMU Officers’ Pension Plan. According to the Certification

of the Honest Ballot Association, dated June 24, 1969, the

following amendments were adopted by a vote of 10,043

to 1,685:

‘Add the following paragraph to Article 8, Section

11:

(d)—The National Office shall have the authority to

provide pensions for all past and present employees

of the Union and to protect the pension rights of all

past and present employees of the Union.

‘¢ Amend Article 14, Section 7 to read as follows:

Pensions: All officers and such employees as the

National Office may designate shall be eligible for bene-

fits under the NMU Officers’ Pension Plan, subject to

such rules and regulations as the Trustees of that Plan

may establish. The National Office shall have the au-

thority to validate retroactively all pensions heretofore

paid under the Plan.”’ :

While it is stated that 12,040 members obtained a ballot,

it is not stated how many members of NMU were eligible

to vote. The amendment to Article 14, Section 7 provides

that ‘‘the National Office shall have the authority to vali-

date retroactively all pensions heretofore paid under the

Plan.’? However, it does not appear that the National

Office has exercised this authority.

SA34

Appendix D.

Plaintiffs’ motion is denied, without prejudice to the

plaintiffs seeking further relief by appropriate application

if the defendants should violate the order of the court.

It is so ordered.

Dated: New Nork, N. Y.

July 3, 1969.

Dupiey B. Bonsau

U.S.D.J.

SA35

APPENDIX E

District Court Opinion, November 15, 1972.

Bonsau, D. J.

In signing the judgment dated November 19, 1972, the

court has allowed plaintiffs’ attorneys, Messrs. Duer &

Taylor, the sum of $111,864, of which $110,000 represents

counsel fees and disbursements, and $1,864 represents

accountants’ fees and disbursements incurred by plaintiffs’

attorneys in connection with this litigation. The amount

so allowed is to be paid by NMU from the judgment re-

covered by the National Maritime Union (‘‘NMU”’) against

the NMU Officers Pension Plan (‘‘the Officers Pension

Plan’’) in the amount of $674,222.60, which judgment was

dated February 18, 1972 and the amount of which judgment

has been paid to NMU. This allowance is made pursuant

to Section 501(b) of the Labor-Management Reporting and

Disclosure Act of 1959 (‘‘LMRDA”’).

In its application for attorneys’ fees, disbursements and

necessary expenses (Affidavits of February 9, February 14,

July 11, and November 6, 1972), plaintiffs’ attorneys seek a

fee of $350,000 plus disbursements as of that date of

$3,589.54, and as a necessary expense, the bill of .the ac-

counting firm of Greenstein & Greenstein in the amount of

$3,724, of which $3,360 is for services and $364 is for dis-

bursements. Objections have been filed on the ground that

the plaintiffs’ attorneys had unduly puffed up the value of

their services and have not furnished a statement of the

actual hours spent by them in the prosecution of the litiga-

tion. The affidavit filed by plaintiffs’ attorneys on Novem-

ber 6, 1972 states:

‘‘] did not make a practice of entering the day by

day time spent. However, I know that the hours spent

by me and by my said partners averaged at least 15

hours per week. To be on the very conservative side

I stated in my affidavits of July 11, 1972, and I repeat

nee tae RT RI LT STs 7

SA36

Appendix E.

that the time well exceeded 2,500 hours up to that

date.

*‘Since then additional time was spent at the hearing

in Court of July 12, 1972, and in reviewing the steno-

graphic records, the preparation of plaintiffs’ brief, the

consideration of defendants’ briefs, in the preparation

of plaintiffs’ reply briefs, the study of the Court’s

opinion, the preparation of judgment, and the papers

submitted in opposition to proposed judgments sub-

mitted by defendants.”’

In considering the allowance to be made to plaintiffs’

attorneys, the court recognizes that this was a hard-fought

litigation brought by three-union members on behalf of

NMU;; that plaintiffs were successful in establishing that

NMU’s Officer Pension Plan violated NMU’s constitution;

that there were proceedings both in this court and in the

Court of Appeals, with certiorari being denied by the

Supreme Court; and that the plaintiffs have been successful

in obtaining a recovery on behalf of NMU from the Officers

Pension Plan in the amount of $674,222.60... In deter-

mining a reasonable fee for plaintiffs’ attorneys, the

court has considered the following factors: (1) the amount

of the recovery; (2) the novelty and complexity of the

legal issues; (3) the manner in which the services were

performed and the standing of plaintiffs’ attorneys: (4)

the benefit to NMU; (5) the contingent nature of

plaintiffs’ attorneys’ employment; and (6) the time reason-

ably expended by plaintiffs’ attorneys. See Derdiarian v.

Futterman Corp., 254 F.Supp. 617 (S.D.N.Y. 1966) ; Fox v.

‘In addition, plaintiffs have obtainted a judgment in favor of

the Officers Pension Plan against defendant William Perry in the

amount of $222,000, plus interest, being the amount of the lump

sum pension which was paid to Mr. Perry and to which he was not

entitled.

, at

——. >) Ne

SA37

Appendix E.

Glickman Corp., 253 F.Supp. 1005 (S.D.N.Y. 1966) ; Winkel-

mam v. General Motors Corp., 48 F.Supp. 504 (S8.D.N.Y.

1942), aff’d sub nom., Singer v. General Motors Corp., 136

F.2d 905 (2d Cir. 1943); Angoff v. Goldfine, 270 F.2d 185

(1st Cir. 1959).

Plaintiffs obtained a substantial recovery on behalf of

NMU, and it has been said that ‘‘the amount of recovery

rather than the time spent is the prime factor in fixing

[the] fee.’? Derdiarian v. Futterman Corp., supra at 620.

The issues presented were not complicated and the pro-

ceedings themselves were quite simple. The issue of

whether the inclusion of non-officers in NMU’s Officers

Pension Plan violated NMU’s constitution was decided on

a motion for summary judgment. A one-day trial was

held on August 23, 1971 to determine the amount paid by

NMU to the Officers Pension Plan for non-officers: the

amount paid by the Officers Pension Plan to non-officers:

and the liability of defendant Perry to the Officers Pen-

sion Plan. Thereafter, a trial was held on April 13, 14,

May 1, and July 12, 1972, on the issue of whether certain

officers of NMU and certain trustees of the Officers Pension

Plan should be surcharged under LMRDA.

No information has been presented as to the expertise of

plaintiffs’ attorneys in this type of litigation, and their

services, while showing imagination, were routine.

Plaintiffs’ attorneys are unable to give the number of

hours reasonably expended by them in this litigation. How-

ever, they indicate that their services extended over a

period of 314 years and estimate that they expended in

excess of 2,500 hours to July, 1972.

Plaintiffs’ attorneys’ fees were contingent on recovery, i

and the provision for attorneys’ fees in Section 501(b)

is an important consideration in actions brought under 4

LMRDA. Indeed, without the stimulus provided by Sec-

tion 501(b) many deserving cases of violations of LMRDA

|

SA38

Appendix E.

would not be prosecuted by objecting members of the union.

In this respect, Section 501(b) is not unlike Section 16(b)

of the Securities Exchange Act of 1934. In Smolowe v.

Delendo Corp., 136 F. 2d 231 (2d Cir.), cert. denied, 320

U.S. 751 (1943), the Court of Appeals stated at page 241:

“Since in many cases such as this the possibility of re-

covering attorney’s fees will provide the sole stimulus for

the enforcement of §16(b), the allowance must not be

too niggardly.’”

Plaintiffs’ attorneys seek an allowance, as a necessary

expense, the fee claimed by their accountants, Greenstein

& Greenstein. Harry Greenstein, a partner of the account-

ing firm, filed an affidvait dated February 3, 1972, to which

is attached their bill to plaintiffs’ attorneys in the amount

of $3,724, dated February 1, 1972, and a copy of their

diary entries which state that they spent 96 hours in

performing accounting work and in testifying at trial.

The accountants claim compensation at the rate of $36 an

hour, or $3,360 plus disbursements of $364, making a total

of $3,724. The services of Greenstein & Greenstein re-

lated only to making an accounting to determine the amount

paid by NMU to the Officers Pension Plan for the ac-

count of non-officers and the amounts paid by the Officers

Pension Plan to non-officers. This was not difficult, in-

volving only a limited study of the accounts of NMU

and the Officers Pension Plan. In the court’s opinion, the

amount claimed is excessive. Plaintiffs’ attorneys will be

allowed $1,500 to cover the accountants’ fees, and $364 to

cover the accountants’ dishu>sements.

Taking the foregoing factors into consideration, plain-

tiffs’ attorneys have been awarded the sum of $110,000

for reasonable attorneys’ fees, inclusive of disbursements,

*See also Ratner v. Bakery & Confectionery Workers Int. U.,

254 F.2d (D.C.Cir. 1965), note 7 at page 306.

Reale DR IS Re LE OM No SEY

SA39

Appendia E.

and $1,864 for the services and disbursements of Green-

stein & Greenstein, making a total of $111,864 which shall

be paid by NMU out of its recovery from the Officers

Pension Plan, of $674,222.60.

It is so ordered.

Dated: New York, N. Y., November 15, 1972.

Duptey B. Bonsai

U.S.D.J.

t

E

TBRELY

rae

FZ PENTEL BEY

SA40

APPENDIX F

29 U.S.C. § 481(a), Labor Management Reporting and

Disclosure Act of 1959 Sec. 401(a).

$481. Terms or Orrice anp ExLection ProcepureE—Orri-

CERS OF NATIONAL OR INTERNATIONAL LABOR ORGANIZA-

TIONS; MANNER OF ELECTION.

(a) Every national or international labor organization,

except a federation of national or international labor or-

ganizations, shall elect its officers not less often than once

every five years either by secret ballot among the members

in good standing or at a convention of delegates chosen by

secret ballot.

Reena te

“> eine HPP Wee

SA41

APPENDIX G

29 U.S.C. § 501(a) (b), Labor-Management Reporting

and Disclosure Act of 1959 Sec. 501 (a) (b).

§ 501. Finvotary REsPonsimBILity OF Orricers or Lasor Or-

GANIZATIONS—DvuTIES OF OFFICERS; Excuupatory Pxo-

VISIONS AND REsoLuTions VOID.

(a) The officers, agents, shop stewards, and other rep-

resentatives of a labor organization occupy positions of

trust in relation to such organization and its members as &

group. It is, therefore, the duty of each such person, taking

into account the special problems and functions of a labor

organization, to hold its money and property solely for the

benefit of the organization and its members and to manage,

invest, and expend the same in accordance with its con-

stitution and bylaws and any resolutions of the governing

bodies adopted thereunder, to refrain from dealing with

such organization as an adverse party or in behalf of an

adverse party in any matter connected with his duties and

from holding or acquiring any pecuniary or personal in-

terest which conflicts with the interests of such organization,

and to account to the organization for any profit received

by him in whatever capacity in connection with transactions

conducted by him or under his direction on behalf of the

organization. A general exculpatory provision in the con-

stitution and bylaws of such a labor organization or a gen-

eral exculpatory resolution of a governing body purporting

to relieve any such person of liability for breach of the

duties declared by this section shall be void as against

public policy.

SA42

Appendia G.

Violation of duties; action by member afer refusal

or failure by labor organization to commence

proceedings, jurisdiction; leave of court;

counsel fees and expenses.

(b) When any officer, agent, shop steward, or repre-

sentative of any labor organization is alleged to have

violated the duties declared in subsection (a) of this section

and the labor organization or its governing board or offi-

cers refuse or fail to sue or recover damages or secure an

accounting or other appropriate relief within a reasonable

time after being requested to do so by any member of the

labor organization, such member may sue such officer, agent,

shop steward, or representative in any district court of the

United States or in any State court of competent juris-

diction to recover damages or secure an accounting or other

appropriate relief for the benefit of the labor organization.

No such proceeding shall be brought except upon leave of

the court obtained upon verified application and for good

cause shown, which application may be made ex parte. The

trial judge may allot a reasonable part of the recovery in

any action under this subsection to pay the fees of counsel

prosecuting the suit at the instance of the member of the

labor organization and to compensate such member for any

expenses necessarily paid or incurred by him in connection

with the litigation.

8A43

APPENDIX H

Olick’s Letter to Judge Hays of June 19, 1973

(Treated as Perry's Petition for Rehearing).

June 19, 1973

Hon, Paul R. Hays

United States Circuit Court Judge

United States Courthouse

Foley Square

New York, N.Y. 10007

Re: Morrissey v. Curran, et al.

Docket #3 72-2443, 73-1082, 73-1363, 73-1383

Dear Judge Hays:

The consolidated appeals in the above matter were

argued before a panel consisting of yourself and Judges

Smith and Timbers on April 11, 1973. A decision was ren-

dered on June 18, 1973. One of the issues raised on the

appeal relating specifically to William Perry was whether

the District Court had jurisdiction to enter a personal

judgment against him in the sum of $263,307.00 in favor of

the Officers’ Pension Plan. Mr. Perry appealed separately

from this judgment and this office, on his behalf, submitted

a brief and oral argument on this point. We find nothing

in the Court’s decision of June 18, 1973 which in any way

disposes of Mr. Perry’s separate appeal or even makes

mention thereof.

Accordingly, clarification is respectfully requested with

respect to the issues raised by Mr. Perry which are sepa-

rate and distinct from issues raised by the other appellants.

Very truly yours,

Arruur 8. OLick

Arthur 8. Olick

SA44

APPENDIX I

Pesner’s Letter to Judge Hays of June 25, 1973

Confirming Petition.

June 25, 1973

Honorable Paul R. Hays

United States Circuit Court Judge

United States Courthouse

Foley Square

New York, New York 10007

Re: Morrissey v. Curran, et al.

Docket Nos. 72-2443, 73-1082, 73-1363,

73-1383

Dear Judge Hays:

This letter will confirm my telephone conversation with

your law clerk, Thomas Galloway, of June 25, 1973 in

which our office was informed that our letter to you dated

June 19, 1973 will be considered by you as a petition for

re-hearing on behalf of William Perry pursuant to Rule 40

of the Federal Rules of Appellate Procedure.

Copies of our June 19, 1973 letter and of this letter are

being sent to all counsel for the respective parties in this

matter.

Very truly yours,

Kreryoier, Revxix, Otick & GoLpBERG

Steven M. Pesner

Steven M. Penser

SMP :mia

ec: Arthur E. McInerney, Esq.

Joseph P. Altier, Esq.

Simon H. Rifkind, Esq.

Roy L. Reardon, Esq.

Herman E. Cooper, Esq.

SA45

APPENDIX J

Order Denying Plaintiffs-Appellants’ Petition

for Rehearing

UNITED STATES COURT OF APPEALS,

Seconp Cracurt.

At a Stated Term of the United States Court

of Appeals, in and for the Second Circuit,

held at the United States Court House, in

the City of New York, on the seventeenth

day of July, one thousand nine hundred

and seventy-three.

-

James M. Morassey, Joseru Paprwa, Ratrsn Ipranio,

individually and on behalf of the members of the

Nationat Maritime Unton or AMERICA,

Plaintiffs-Appellants-Appellees,

v.

Josern Curran, SHannon WaLL, WILLIAM Perry,

ApranaM E. FREEDMAN,

Defendants-Appellees-A ppellants,

Martiw Secat and Leon KarcuMer,

Defendants-Appellees.

a

vv

A petition for a rehearing containing a suggestion that

the action be reheard in bane having been filed herein by

counsel for the Plaintiffs-Appellants and no active circuit

judge having requested that a vote be taken on said sug-

gestions.

Upon consideration thereof, it is

Ordered that said petition be and it hereby is denied.

A. Dantet Fusaro

Clerk

SA46

APPENDIX K

Order Granting Defendant Perry’s Petition for

Rehearing and Supplementing Opinion.

The application for a rehearing is granted.

The following paragraph shall be added to the last page

of the opinion of the Court:

“D. Jurisdiction with respect to claim against Perry

We hold that the district court was correct in finding

that it had jurisdiction to enter and in entering a

personal judgment against William Perry and in favor

of the Pension Plan in the amount of $263,307.00.’’

In all other respects we adhere to our original decision.

J. JosEPH SMITH

/s/ J. Joseph Smith

Paut R. Hays

/3/ Paul R. Hays

Wo. H. Trmsers

US.C.II.

/s/ William H. Timbers

August 6, 1973.

PRRRUISH atin reese aan aes

$A47

APPENDIX L

Stipulation of Amounts Paid to the NMU Officers’

Pension Plan on Account of Non-Elected Persons.

sawwnyvg Contribution

Total 1/8/71 6,388,006 1,689,597

Adjusted as — 31,729

7/1/71 113,575

6,274,431 1,657,868

Agreed 111,337 — 28,947

6,163,094 1,628,921

Interest Adjusted

6/1/70 to 7/1/71

Total Interest

Contributions

7/1 = 2,099,260

adjusted 2,066,512

—_—— to 8/23/71

32,748

1/1/71 = 2,075,569

Interest to 12/10/70 1,628,921

1 mo. = 8144.60

1 day = 271.86

Interest

385,972

— 2,605

383,367

— 2,787

380,580

57,011

437,591

1,628,921

2,066,512

14,661

2,081,173

to 8/23 = $14,661.00

SA48

APPENDIX M

Plaintiffs’ Demand to Bring This Action.

Exursit A, ANNEXED To CoMPLAINT

James M. Morrissey

2621 Palisades Avenue

New York 10463, New York

May 17, 1968

Mr. Shannon Wall

National Secretary-Treasurer

National Maritime Union

36 Seventh Avenue

New York, New York

Dear Sir:

The Undersigned, a member of the National Maritime

Union of America, hereby makes demand upon you, upon

the National Maritime Union of America, and upon the

latter’s National Office, that you, the said organization, and

the latter’s officers and governing body sue and/or recover

damages and secure an accounting or other appropriate

relief for any and all losses, liabilities, expenses and/or

expenditures suffered by the National Maritime Union of

America because of or by reason of the purported coverage,

in the NMU Officers’ Pension Plan, as revised and amended

on and after October 28, 1961, of persons not in fact officers

of NMU as defined in the NMU Constitution.

In particular, the undersigned makes demand that the

National Maritime Union of America, its officers and/or

governing body, bring suit or other proceeding to recover

for the National Maritime Union of America all moneys

contributed pursuant to or by reason of the said NMU

Officers’ Pension Plan to any fund or other repository for

~~

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Ye IRR Re Nath 0S a A AR EMEA RRS PREC hae E™ INE Hy END IM OS PE At NS eS IS AR ES Smet ENE

6.

SA49

Appendix M.

the payment of any pension or pensions to any person or

persons employed by the National Maritime Union in the

capacity of ‘‘ Assistant to the President’’, ‘‘Publicity Di-

rector and Editor of the Pilot’’, ‘‘Executive Secretary’’,

‘‘Maintenance Supervisor’’, ‘‘Bookkeeping Supervisor”’,

‘*Records and Supplies Supervisor’, or in any other

capacity not that of an elected officer.

Fraternally,

Name: JAMEs M. Morrissey

Book Number: 34210

Address: 2621 Palisades Ave.

New York 10463, N. Y.

SA50

Appendix M.

Exhibit ‘‘A”’’

No. 761078

Receipt For Certified Mail—30¢

Sent To

Shannon Wall NMU

Street and No.

36 Seventh Ave.

P.O. State and Zip Code

New York, N. Y., 10004

Extra Services For Additional Fees

Return Receipt

Shows to whom and date delivered

10¢ fee

Shows to whom, date, and where delivered

] 35¢ fee

Deliver to Addressee Only

(] 50¢ fee

POD form 3800

Mar. 1966

No Insurance Coveraged Provided—

Not For International Mail

(See other side)

Postmark or date

New York, N. Y.

May

17

1968

G.P.O.

SRA 8 swt me: MER ANITA Ie HORE DseuraiR

SA51

APPENDIX N

Agreement and Declaration of Trust “for the Exclu-

sive Benefit of” the “Elected Officials” of NMU.

AGREEMENT and Deciaration or Trust dated as of De-

cember 29, 1952, by and between the [National Maritime

Union of America, CIO,] (hereinafter referred to as the

‘‘Union’’), and [Herman FE. Cooper, Martin E. Segal and

Leon Karchmer,] (hereinafter referred to as the “Trus-

tees”), as Trustees under this Agreement and Declaration

of Trust.

WITNESSETH:

Wuereas, the [National Maritime Union of America,

CIO,] desires to establish and maintain a trust fund for

the exclusive benefit of its elected officials through pay-

ments, upon the terms, and subject to the conditions and

limitations contained in this agreement; and

Wuereas, the Trustees have declared and do hereby

declare that they will receive, hold, administer and dispose

of all money and securities paid, transferred, or delivered

to them as Trustees, pursuant to the provisions of this

Agreement and Declaration of Trust, with the duties and

powers and for the uses and purposes herein set forth, and

none other;

Now, THEREFORE, in consideration of the premises, it is

mutually agreed between the parties, as follows:

I. DerFtnitions.

Wherever used in this Agreement and Declaration of

Trust:

1. “Agreement” means this Agreement and Declaration

of Trust.

II.

SA52

Appendix N.

“Union” means the [National Maritime Union of

America, CIO.]

“Trustees” means the Trustees designated herein, as

well as their successors designated in the manner

herein provided.

“Fund” means all moneys and property paid to the

Trustees and all securities purchased by the Trustees,

pursuant to the provisions of this agreement, together

with all interest or other income thereon, and the net

proceeds of any sale or other disposition of such

securities.

“Plan” means the Pension Plan adopted by the Trus-

tees, pursuant to the terms of this agreement.

“Officer” means a person holding any one of the fol-

lowing offices, in accordance with the provisions of the

Union Constitution:

a) National President

b) National Secretary

c) National Treasurer

d) Vice President

e) National Port Committee Member

f) Branch Agent

g) Field Patrolman

h) Patrolman

Source or Assets oF THE F'unp.

In consideration of this Agreement and upon its exe-

cution, the Union agrees to pay to the Trustees an

initial payment of $80,000.00.

SA53

Appendia N.

2. Commencing with the calendar quarter of January 1,

1953, to March 31, 1953, and for each calendar quar-

ter thereafter, the Wnion agrees to pay to the Trus-

tees a sum of money equal to 23% of the compensa-

tion paid by the Union to the officers of the Union.

for the calendar quarter then ending. Such payment

shall be due within ten days after the end of each

calendar quarter.

III. THe Trustees.

A. Terms of Office and Successors

1. The Trustees designated herein shall continue to

serve as Trustees for life, unless they or any one of them

resign or become incapable of discharging their duties as

Trustees. A resignation must be submitted in writing to

the President of the Union and the question of a Trustee’s

incapacity to discharge his duties shall be conclusively de-

termined by the other Trustees.

2. In the event of a vacancy created by the death,

resignation or incapacity of one of the Trustees, the re-

maining two Trustees shall immediately meet and desig-

nate a successor Trustee, who shall serve for the same

term and upon the same terms and conditions as his

predecessor. In the event that the remaining Trustees are

unable to designate a successor Trustee, such designation

shall be made by a majority vote of the National Officers

of the Union.

3. During the interim period prior to the designation

of a successor Trustee, the remaining Trustees acting in

the manner herein provided, shall administer the affairs

of this trust fund,

SA54

Appendix N.

B. Meetings and Voting

1. Decisions of the Trustees shall be made by the con-

curring vote of the majority of the Trustees. The vote of

the Trustees may be cast by them in person at a meeting,

or may be evidenced by a written instrument signed by

them, or telegrams from a requisite number of Trustees,

after written notice to all of the Trustees of the question

to be decided.

2. Any Trustee may call a meeting of the Trustees at

any time by giving written notice not less than forty-eight

hours in advance of the time and place thereof to each

Trustee. Meetings of the Trustees may also be held at

any time without notice if all the Trustees consent thereto.

3. A majority of the Trustees, present in person at any

meeting, shall constitute a quorum for the transaction of

business.

C. Powers and Duties

1. The Trustees shall, as soon as practicable after the

execution of this Agreement and Declaration of Trust,

meet and adopt a Pension Plan for the purpose of paying

retirement benefits to the officers of the Union. ‘The

Trustees shall have full and sole discretion to determine

the amount of such benefits and the terms and conditions

of payment and shall have the power to conclusively de-

termine all questions concerning the payment of benefits

to any individual recipient or prososed recipient.

2. The Trustees shall deposit all moneys received by

them in such bank or banks as they may designate for that

purpose and in such manner as the Trustees, in their sole

discretion, shall determine. The Trustees shall invest and

SA55

Appendix N.

reinvest such moneys as in their sole discretion they may

determine are not required for current expenditure in any

securities and without distinction between principal and

income. The Trustees, in their discretion, may keep such

portion of the Fund in cash or cash balances as the Trus-

tees may, from time to time, deem to be in the best interests

of the Fund.

3. The Trustees are authorized and empowered:

(a) To sell, exchange, convey, transfer, or otherwise

dispose of any property held by them by private

contract or at public auction.

(b) To make, execute, acknowledge, and deliver any

and all documents of transfer and conveyance

and any and all instruments that may be neces-

sary or appropriate to carry out the powers

herein granted.

(c) To register any investment held in the Fund in

their own names or in the name of a nominee

and to hold any investment in bearer form, but

the books and records of the Trustees shall at

all times show that all such investments are part

of the Fund,

4. The Trustees shall not he liable for the making, re-

tention, or sale of any investment or reinvestment as made

by them, as herein provided, nor for any loss to, or «liminu-

tion of the Fund, except due to their own wilful mis-

conduct.

5. The Trustees shall be protected in acting upon any

paper or document believed by them to be genuine and to

have been made, executed, or delivered by the proper party

purporting to have made, executed or delivered the same,

and shall be protected in relying and acting upon the opinion

SA56

Appendix N.

of legal counsel (including opinion of legal counsel who is or

may be a trustee hereunder) in connection with any matter

pertaining to the administration or execution of this Trust

Fund. No Trustee shall be liable for any action taken or

omitted by him unless such act or omission is the result of

wilful misconduct, nor for the acts of any agent, employee,

or attorney selected by the Trustees with reasonable care,

nor for any act or omission of any other Trustee.

6. No party dealing with the Trustees in relation of this

Trust Fund shall be obliged to see to the application of any

money or property of the Trust Fund, or to see that the

terms of this Trust Fund have been complied with, or be

obliged to inquire into the necessity or expediency of any

act of the Trustees, and every instrument executed by the

Trustees shall be conclusive in favor of every person rely-

ing thereon: (a) that at the time of delivery of said instru-

ment the Trust Fund hereby created was in full force and

effect, (b) that said instrument was executed in accord-

ance with the terms and conditions contained in this agree-

ment, and (c) that the Trustees were duly authorized and

empowered to execute such instrument.

7. The receipt given by the Trustees for any money or

other property received by them shall effectually discharge

the person or persons paying or transferring the same, and

such person or persons shall not be bound to see to the

application, or be answerable for the loss or misapplication

thereof.

8. The Trustees may deduct from and charge against

the Trust Fund any taxes paid by them, which may be

imposed upon the Trust Fund, the income, property, or

transfer thereof, or of any part thereof, or upon or with

respect to the interest of any individual therein, which the

§A57

Appendix N.

Trustees are required to pay. The Trustees, in their dis-

cretion, may contest the validity or amount of any tax,

assessment, claim or demand which may be levied or made

against, or in respect of the Trust Fund, or against or in

respect of any part of the Trust Fund, the income, prop-

erty or transfer thereof, or in any matter or thing con-

nected therewith.

9. The Trustees shall be empowered to obtain and deter-

mine compensation for legal counsel, accounting, technical,

actuarial and investment services and such administrative

assistance as they may, in their discretion, find necessary.

If any Trustee shall have a financial interest in a firm

whose services are desired by the Fund, that Trustee shall

not participate in discussions or decisions relating to the

retention of such firm or the terms and conditions of com-

pensation for the services to be rendered.

10, The Trustees may delegate any of their ministerial

powers and duties hereunder to one or more of the Trus-

tees or to one or more officers of the Union designated by

them for that purpose.

11, In the event of any ambiguity, the Trustees shall

have the power to construe this Agreement and Declara-

tion of Trust, and their construction of the same shall be

final and conclusive.

12. The Trustees shall have all other powers necessary

and proper to the carrying out of the purposes of the

Trust.

IV. Tue Union.

1. The Union shall promptly pay to the Trustees the

contributions due, in accordance with the provisions of

SA5S

Appendia N.

this agreement, or of the Pension Plan adopted pursuant to

this agreement, or, if the Trustees so direct, to deposit

such contributions in such depository as the Trustees shall

designate.

2. The Union shall provide the Trustees with all records

and information requested by the Trustees and designated

by the Trustees as being necessary to the performance of

their duties.

3. Liability for the payment of the pensions and benefits

provided for under the Pension Plan adopted pursuant

to the within Agreement and Declaration of Trust and

any other liability arising under or out of this agreement

shall be limited exclusively to the assets of the Trust Fund,

and in the event that such assets are at any time insufficient

to provide for the payment of any pension or benefit pay-

ments due under the Pension Plan, or any other such lia-

bility, no liability for the payment thereof shall attach to

or may be asserted against the Trustees.

V. MisceLLANgous.

1, Notwithstanding anything to the contrary contained

in this Agreement and Declaration of Trust, as now ex-

pressed or hereafter amended, it shall be impossible at any

time for any part of the trust corpus or income to revert

to the Union or to be used for or diverted to any purpose

other than the exclusive benefit of the eligible officers,

through the payments, upon the terms, and subject to the

conditions and limitations contained in the Pension Plan

adopted pursuant to this agreement, or in the event of

termination, in such manner as shall be designated by the

Trustees.

i eM a) pene 7

SA59

Appendix N.

2. No officer, or any individual claiming by, through,

or under any officer, shall have any right, title or interest

in or to or claim against the trust fund or any part thereof,

except the right to receive pensions or benefits in the

amounts and subject to the terms and conditions provided

in the Pension Plan.

8. Neither the pension nor any other benefit under the

Pension Plan, nor the assets in the individual account of

an officer entitled to receive such pension or benefits shall

be subject in any manner to anticipation, alienation, sale,

transfer, assignment, pledge, encumbrance or charge, and

any attempt so to anticipate, alienate, sell, transfer, assign,

pledge, encumber or charge the same shall be void; nor

shall any such pension or other benefit or such assets be

in any manner, whether by action of the officer or his

beneficiary or by operation of law, liable for or subject

to the debts, contracts, liabilities, engagements or torts of

the person entitled to such pension or other benefit.

4. Every individual receiving or claiming a pension or

other benefit under this Agreement and Declaration of

Trust or Pension Plan enacted pursuant hereto, shall be

conclusively presumed to have been competent until the

date on which the Trustees shall have received written no-

tice, in a form and manner acceptable to them, that such an

individual is an incompetent or a minor, for whom a guard-

ian or other person legally vested with the care of his

person or estate shall have been appointed; provided, that

the Trustees may, in their discretion, validily recognize

actions by, and conduct transactions with, others acting,

prior to the receipt of, or in the absence of such written

notice, in behalf of an individual found by the Trustees

to be an incompetent or a minor, if the Trustees shall

find such actions or transactions to be in the best inter-

ests of such individual.

SA60

Appendix N.

5. This agreement and the Trust Fund and Pension

Plan established hereunder and pursuant hereto have been

executed in the State of New York and all questions per-

taining to the validity or construction of this instrument

and of the acts or transactions of the parties hereto shall

be determined in accordance with the laws of the State of

New York.

6. In case any provisions of this agreement shall be held

illegal or invalid for any reason, said illegality or invalidity

shall not affect the remaining parts of this agreement, but

this agreement shall be construed and enforced as if said

illegal and invalid provisions had never been inserted

herein.

VI. TERMINATION.

1. The trust created by this Agreement and Declaration

of Trust shall terminate: (a) When the Trustees, in their

sole discretion, determine that the purposes of this Agree-

ment can no longer be carried out; (b) upon the affirmative

vote of two-thirds of the membership of the Union, but in

no event shall the trust be terminated by vote of the mem-

bership for a period of at least twenty years from the date

of execution of this Agreement and Declaration of Trust.

2. If there shall be assets remaining in the Trust Fund

upon the termination of this trust, such remaining assets

shall be distributed and disposed of in such manner and

upon such terms and conditions as the Trustees shall, in

their sole discretion, determine.

VIT. AMENDMENTS.

1. This Agreement and Declaration of Trust may be

amended at any time by an instrument in writing, executed

by the President of the Union and a majority of the Trus-

tees.

SA61

Appendia N.

VIII. Name.

The fund established by this Agreement and Declara-

tion of Trust shall be known as the [“National Maritime

Union Officers’ Pension Fund”), and the Trustees may con-

duct business under that name.

: In wiTNEss WHEREOF, the Trustees and the [National

Maritime Union of America, CIO], by its duly authorized

officers, have executed this Agreement and Declaration

of Trust to evidence their acceptance of the trusts hereby

created and their agreement to be bound thereby.

SN Oa

[NationaL Maritime Union or America, C.1.0.]

JosEPH CURRAN

A Joseph Curran, National President ‘

Neal Hanley, National Secretary i

M. Heptey STonE

oe OKO S EES OBOE EEE EH OEHHEBDESHEGEAE OCH GSHODEO®O

N. Hedley Stone, National Treasurer

TRUSTEES:

Herman E. Cooper

oo e 6 6.6'o 6 6.6.6: EES 64 OO FE ESO4. EO FE CHREECECO CEOS EOF

Herman E. Cooper

Leon KarcHMER

Leon Karchmer

Martin E. Secau

eb OeS OO SHSESHHEREESECHOCHORESCHCHBOSCEMRECECSCECE*SE

Martin E. Segal

ee ee ee ed

SA62

APPENDIX O

NMU Officers Pension Plan.

NMU Officers Pension Plan

Pursuant to Article III, Section C, Subsection 1, of the

Agreement and Declaration of Trust establishing the NMU

Officers Pension Fund, the Board of Trustees, by resolution

on Feb. 16, 1953 duly adopted the following Pension Plan.

ArtTICcLE I. GENERAL PURPOSE

This Pension Plan is to be used as a medium for provid-

ing retirement benefits for eligible officials of the NMU.

The Plan is geared to retirement benefits for officers who

reach the age of sixty-five and have been in office for twenty

years or more. Provision is also made for a reduced pen-

sion for those officers who reach the age of sixty-five but

have less than twenty years in office. Other benefits are

provided for officers whose terms of office terminate before

they reach sixty-five. This Plan sets forth the full details

of the benefits and the eligibility requirements.

Articute II. Derinitions

Unless the context or subject matter otherwise requires,

the following definitions shall govern in this Pension Plan:

Section 1. ‘‘Pension Fund’’ shall mean the NMU Of-

ficers Pension Fund established pursuant to the Agree-

ment and Declaration of Trust dated Dee. 29, 1952, together

with any modifications or amendments thereto.

Section 2. ‘‘Pension Plan’’ shall mean the NMU Of-

ficers Pension Plan, as contained in this document, together

with any modifications or amendments hereto.

SA63

Appendix O.

Section 3. ‘‘Board of Trustees’’ shall mean the Board

of Trustees named in the Agreement and Declaration of

Trust dated Dec. 29, 1952, establishing the Pension Fund,

and as constituted from time to time in accordance with the

provisions of said Agreement and Declaration of Trust.

Section 4. ‘‘NMU”’ shall mean the National Maritime

Union of America, C.I.O.

Section 5. ‘‘Officer’’ shall mean a person holding any

one of the following offices in accordance with the provi-

sions of the NMU constitution:

(a) National President

(b) National Secretary

(c) National Treasurer

(d) Vice President

(e) National Port Committee Member

(f) Branch Agent

(g) Field Patrolman

(h) Patrolman

Section 6. ‘‘NMU Constitution’? shall mean the con-

stitution of the NMU in force and effect at the time of

adoption of this Pension Plan, together with any amend-

ments thereto.

Section 7. ‘‘Covered Employment’’ shall mean employ-

ment as an officer of the NMU.

Section 8. ‘‘Term of Office’’ shall mean the period of

time for which an officer is elected to serve in accordance

with the provisions of the NMU constitution.

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SA64

Appendix 0.

Section 9. ‘‘Average Monthly Salary’’ shall mean the

total compensation payable to the officer pursuant to the

provisions of the NMU constitution for all periods of em-

ployment after Aug. 1, 1952, divided by the number of

months of such employment.

Section 10. ‘‘ Annual Salary’’ shall mean the total com-

pensation payable to the officer pursuant to the provisions

of the NMU constitution for all periods of employment be-

tween Aug. 1 of any one year and J uly 30 of the following

year.

Section 11. ‘‘Applicant’’ shall mean a person making

application for benefits under this Pension Plan.

Section 12. ‘‘Pensioner’’ shall mean a person receiving

benefits under this Pension Plan.

Section 13. ‘‘Beneficiary’’ shall mean the person or per-

sons designated by the officer in a form prescribed by the

Trustees as the person or persons entitled to receive any

benefits that may be payable as a result of the officer’s

death.

Section 14. The use of the masculine gender shall be

construed as including the feminine gender as well.

ArticLe III. Recutar PENsION BENEFITS

Section 1. An officer shall be eligible for a Regular

Pension Benefit if he

(a) Has attained the age of sixty-five years,

and

(b) Has credit for twenty-years or more of covered

employment including at least six months of

covered employment since Aug. 1, 1952.

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SA65

Appendix O.

Section 2. The Regular Pension Benefit shall be a

monthly payment in an amount equal to 50% of the ap-

plicant’s average monthly salary. The resulting figure

shall be rounded off to the next higher whole dollar amount.

Section 3. An officer whose application for benefits

under this Article is approved shall be entitled, upon re-

tirement, to receive the Regular Pension Benefit for the

remainder of his life subject, however, to all the provisions

of this Plan. The first monthly benefit payment shall be

payable for the calendar month immediately following ap-

proval of the application for benefits. The last monthly

benefit payment shall be payable for the calendar month in

which the pensioner dies. If the pensioner dies before re-

ceiving 120 Regular Pension Benefit payments, his bene-

ficiary shall be paid the Regular Pension Benefit for the

number of months, which, when added to the number of

Regular Pension Benefits received by the pensioner while ‘

alive, will total 120. i

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Section 4. No officer shall be entitled to benefits under

this Article, if, at the time of his application or thereafter, ;

he has received or been approved for benefits under Article

IV or Article V of this Pension Plan.

ArticLe IV. Repucep Pension Benerits

Section 1. An officer shall be eligible for a Reduced é

Pension Benefit if he B

(a) Has attained the age of sixty-five years,

(b) Has credit for ten years or more of covered em-

ployment, including at least six months of covered

employment since Aug. 1, 1952.

Section 2. The Reduced Pension Benefit shall be a

monthly payment in an amount equal to that portion of

ip sane mcniegn TROPA HNN NF TRE RACERS RMT any :

SA66

Appendix O.

50% of the applicant’s average monthly salary which the

number of years of the applicant’s credited covered em-

ployment bears to twenty. The resulting figure shall be

rounded off to the next higher dollar amount.

Section 3. An officer whose application for benefits

under this Article is approved shall be entitled, upon re-

tirement, to receive the Reduced Pension Benefit for the

remainder of his life subject, however, to all the provisions

of this Plan. The first monthly benefit payment shall be

payable for the calendar month immediately following ap-

proval of the application for benefits. The last monthly

benefit payment shall be payable for the calendar month in

which the pensioner dies. If the pensioner dies before

receiving 120 Reduced Pension Benefit payments, his bene-

ficiary shall be paid the Reduced Pension Benefit for the

number of months, which, when added to the number of

Reduced Pension Benefit payments received by the

pensioner while alive, will total 120.

Section 4. No officer shall be entitled to benefits under

this Article if, at the time of his application or thereafter,

he has received or been approved for benefits under Article

III or Article V of this Pension Plan.

ArticLe V. Earty RetireEMENT PENSION BENEFITS

Section 1. For the purpose of this Article, each officer

shall be deemed to have an ‘‘Early Retirement Account.”’

Section 2. After completion of each full year of covered

employment after Aug. 1, 1952, an amount equal to 12.5%

of the officer’s annual salary for that full year shall be

decmed credited to the officer’s Early Retirement Account.

DEANE EERIE EEE DET OTD Ly heen ia ae ie

SA67

Appendix O.

Section 3. For all officers who were officers on Oct. 1,

1952, there shall be deemed credited to each such officer’s

Early Retirement Account an amount equal to 12.5% of the

officer’s annual salary payable for the period of Aug. 1, 1952,

to July 30, 1953, multiplied by the number of years of credit

the officer has for covered employment prior to Oct. 1, 1952.

For the purpose of this Section, Exhibit ‘‘A’? is annexed

hereto, which lists the names of all persons who were officers

on Oct. 1, 1952, and the number of years that shall be cred-

ited for covered employment prior to Oct. 1, 1952, for each

officer included in said Exhibit ‘‘A.”? Exhibit ‘‘A’’ shall be

controlling for all amounts credited pursuant to this Section.

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Section 4. The Early Retirement Pension Benefit shall

be the amount of money deemed credited to the officer’s ac-

count in accordance with Sections 2 and 3, above. The

amount of the benefit shall be computed as of the date the

officer makes application for same.

ore ee

Section 5. An officer shall be eligible for an Harly Re- ;

tirement Pension Benefit if at the time of his application :

(1) He has credit for sia years or more of covered em-

ployment, including at least six months of covered *

employment since Aug. 1, 1952,

AND :

(2) His covered employment has been terminated and

he has not been elected to covered employment for

the next ensuing term of office,

AND

(3) He certifies that he is no longer engaged in covered

employment.

Section 6. An officer eligible for the Early Retirement

Pension Benefit under this Section shall have the following

:

5

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SA68

Appendix O.

options with respect to receiving payment of such benefit:

(1) He may receive the amount of equal monthly pay-

ments over a three year period following approval

of his application, or

(2) He may receive the amount in equal monthly pay-

ments over a five year period following approval of

his application, or

(3) He may receive the amount in equal monthly pay-

ments over a ten year period following approval of

his application, or

(4) He may receive a monthly pension benefit for the

remainder of his life in an amount that can actu-

arially be provided by such sum.

Section 7. After an officer’s termination of covered em-

ployment, he may apply to the Board of Trustees for a

determination of the amount credited to his Karly Retire-

ment Account, as hereinabove provided, and a determina-

tion of the benefits that would be payable to him under each

of the four options outlined in Section 6, above, The Trus-

tees shall then determine such amounts and advise the officer

of same. After the officer has received notification of such

amounts, he shall then have sixty days within which to ex-

ercise his option under this Article. If he fails to exercise

his option then the Trustees shall exercise the option on his

behalf.

Section 8. If the officer’s covered employment is termi-

nated by death, his beneficiary shall have the right to re-

ceive the Early Retirement Benefit provided in this Article

as though the deceased officer were alive and making ap-

plication for such benefit.

In the event of the death of an officer, after electing

options (1), (2), (3), or (4), in Section 6 above, his bene-

CP ARMIN ARLE! OAM hilt om ABN A Pi

SA69

Appendix O.

ficiary shall be entitled to receive the Early Retirement

Benefit for the balance of the period remaining after the

officer’s death, as determined by the option elected by the

officer,

Section 9. No officer shall be entitled to benefits under

this Article, if at the time of his application or thereafter,

he has received or been approved for benefits under this

Article III or Article IV of this Pension Plan.

as ee

Articte VI. AppLication ror AND PayMENT OF BENEFITS

Section 1. An officer may apply for benefits under Article

III, Article IV, or Article V before his covered employment

terminates; however, no such application may be finally ap-

proved or benefits paid until the officer’s covered employ-

ment terminates and the officer certifies that he is no longer

engaged in covered employment.

Section 2. No benefits under Article ITI, Article IV, or

Article V shall be paid for any month in which the officer

is engaged in covered employment.

PORE ELEN ON I EO I OG, OOO

Section 3. Once a benefit is paid under either Article ITI,

Article TV or Article V, no officer or beneficiary shall be

entitled to receive any other benefits under this Pension

Plan except in accordance with the Article under which

the benefit is paid.

RITE SF SE REP 2 SE

Section 4. Application for benefits shall be made in

writing to the Board of Trustees. Each and every officer,

pensioner and beneficiary shall furnish to the Board of

Trustees any information or proof requested by it and rea-

sonably required to administer this Pension Plan and de-

termine eligibility for benefits hereunder.

PLD BOOST A Ee ene

|

SA70

Appendix O.

Section 5. This Pension Plan shall become effective im-

mediately.

Section 6. To the end of making it impossible for officers,

pensioners and beneficiaries covered by this Pension Plan

to improvidently imperil the provisions made for their re-

tirement or welfare by directly or indirectly anticipating,

pledging, or otherwise disposing of benefit payments that

may be due them hereunder, is is hereby expressly provided

that no officer, pensioner, or beneficiary shall have any

right to assign, alienate, transfer, sell, hypothecate, mort-

gage, encumber, pledge, commute or anticipate any benefit

payment that may be made under this Pension Plan, and

further, that such payments shall not in any way be sub-

ject to any legal process, to levy of execution, to attachment

or garnishment proceedings, nor shall such payments be

subject to the jurisdiction of any bankruptcy court or in-

solvency proceedings by operation of law or otherwise,

and any such assignment, ete., shall be void and of no effect

whatsoever.

Section 7. If an officer or pensioner, at the time of his

death, does not have on file in the office of the Pension

Fund a valid and duly executed designation of beneficiary,

then, at the time of the officer’s death, the Trustees, in

their sole discretion, may determine the benficiary from

among the following:

(a) wife of the pensioner,

(b) children of the pensioner,

(c) father of the pensioner,

(d) mother of the pensioner,

(e) brothers and sisters of the pensioner,

(f) personal representative of the pensioner’s estate.

IDO ROW eh Or OV

on

SA71

Appendix O.

Such designation of the beneficiary by the Board of Trus-

tees shall then be deemed, for the purpose of this Pension ’

Plan, as the beneficiary designated by the officer or pen- ;

sioner and the use of the word “beneficiary” throughout f

the other Sections of the Pension Plan shall be deemed to '

mean the beneficiary so determined by the Board of Trus-

tees.

Where, under this Section, benefits become payable to a

person under 21 years of age, the amount may be paid to

such person—without requiring the appointment of a

guardian—by paying such amount to anyone over the age

of 21 years who submits satisfactory proof that he or she

is suppotring and maintaining such person, and gives as-

surance to the Trustees in form satisfactory to them that

the money so paid over will be used for such purposes,

Section 8. If the total amount of benefit due an officer

under Article V is $5,000 or less, the Board of Trustees,

in their sole diseretion, may make a lump sum payment of

said amount upon approval of the officer’s application for

benefits under that Article and such payment shall be

deemed full and complete payment of benefits under that

Article. If the Board of Trustees exercises the right

granted by this Section, the options provided in subdivi-

sions (1), (2), (3) and (4) of Section 6 of Article V, shall

he deemed inoperative.

ArticLte VII, Crepirinc Coverep EmpLoyMENtT

Section 1. Credit for covered employment shall be de-

termined as provided in this Article.

Section 2. Covered employment shall be credited only

in full year units.

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SA72

Appendix O.

3. An officer shall be given credit for covered employ-

ment after Aug. 1, 1952, for the period of time he is em-

ployed by the NMU in one of the official capacities listed

in Article II, Section 5, of this Plan and for which em-

ployment he receives a salary from the NMU. For the

purpose of this Section, a full year of covered employment

shall be deemed to be 340 days in any period of 365 con-

secutive days.

Section 4. An officer shall be given credit for covered

employment before Aug. 1, 1952, only if such officer is

listed on Exhibit “A,” attached hereto, and in such case

the amount of credit for such covered employment shall be

as indicated on Exhibit “A.”

Section 5. If an officer is disabled because of injury or

sickness during the term of his office, it shall be presumed

that he is engaged in covered employment for any period

of such disability. Disability for the purpose of this Sec-

tion shall mea total incapacity, because of injury or illness,

to perform the duties of an officer of the NMU. The offi-

cer shall have the burden of proving such disability to the

Board of Trustees. The Board of Trustees, in its sole

discretion, may then decide whether such period of dis-

ability shall be deemed covered employment. In no event

shall credit be given for a period of disability which ex-

tends beyond the officer’s term of office.

Section 6. If an officer's salary is not paid to the officer

by the NMU because of his absence from employment due

to a reason other than disability because of injury or sick-

ness, the period of such absence shall be deemed to be a

period of time in covered employment if the absence is

involuntary on the part of the officer and due to cireum-

stances beyond his control. The Board of Trustees in its

sole discretion may decide whether credit shall be given

for such period of absence and the officer shall have the

burden of proving the facts to the Board of Trustees. In

SA73

Appendix O, ;

o-

no event shall credit be given for a period of absence i

which extends beyond the officer’s term of office. 3

Section 7. No credit shall be granted for covered em- f

ployment for any period of time preceding the payment

of benefits under Article ITI, IV or V, if an officer engaged

in covered employment after receiving such benefits, ex-

cept for the six year qualification provision of Section 5

(1), Article V.

Section 8. If an ofticer has not been engaged in coy-

ered employment for any ten consecutive year period, he

shall not be credited with any period of covered employ-

ment prior to his re-employment as an officer.

ArticLeE VIII. AMENDMENT AND TERMINATION

Section 1. The Board of Trustees may amend or mod-

ify this Pension Plan at any time in accordance with the

Agreement and Declaration of Trust. However, benefits

accrued prior to amendment shall not in any event, be

reduced or eliminated.

Section 2. If the Plan is discontinued, the assets then

remaining in the Pension Fund (after providing the ex-

penses of the Pension Plan), shall be allocated, to the ex-

tent that they shall be sufficient, for the purpose of paying

retirement benefits (based on creditable covered employ-

ment to the date of discontinuance of the Plan) in the

following order of priority:

(a) to continue the payment of Regular, Reduced or

Karly Retirement Benefits to pensioners whose

application for such benefits had been finally ap-

proved at the time of discontinuance of the Plan;

(b) to provide for the payment of Regular Pension

Benefits to officers who have attained the age of

65, or over, on the date of discontinuance of the

|

RAEN NA SEEM BM NINA EEE A SITE NLL

SA74

Appendix O.

Plan, without reference to the order in which they

shall apply for or be approved for Regular Pen-

sion Benefits;

(c) to provide for the payment of Reduced Pension

Benefits to officers who have attained the age of

65, or over, on the date of discontinuance of the

Plan, without reference to the order in which they

shall apply for or be approved for Reduced Pen-

sion Benefits;

(d) to provide for the payment of benefits under Arti-

cles III, IV, or V, to beneficiaries of deceased

officers or pensioners.

(e) to provide Early Retirement Benefits to officers

whose employment terminates after the discon-

tinuance of the Plan without regard to the order

in which such applications are made or approved.

Section 3. If, after providing for all of the foregoing,

any funds then remain, the Board of Trustees may use

such funds in whatever manner they deem proper to carry

out and effectuate the purpose of this Pension Plan in

providing retirement benefits for officers. However, under

no circumstances may any portion of the Pension Fund

revert to or be paid to the NMU.

We, the undersigned Trustees, certify that the foregoing

Pension Plan was duly adopted at a meeting of the Trus-

tees of the NMU Officers Pension Fund held on the 16th

day of February, 1953.

LEMAR ONES DRE REOA EDO aReEED (/s/ Herman E. Cooper)

re eee PT eee AN (/s/ Leon Karchmer)

TERETE Ee rere eee (/s/ Martin E. Segal)

SA75

APPENDIX P

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SA76

APPENDIX Q

Unexecuted Agreement of Trust, Undated. Submitted

After Trial Pursuant to the Direction of the Dis-

trict Court.

AGREEMENT AND DECLARATION OF Trust

AGREEMENT AND DecLaRATION or TrRUsT made at New

York, New York the day of , 1972 by

and between the National Maritime Union of America,

AFL-CIO, hereinafter referred to as the “Union,” and

Alvin Shapiro, hereinafter referred to as the “Trustee.”

WITNESSETH:

Wuereas, the National Office of the Union is vested with

the responsibility for fixing the salaries of all technical,

clerical and administrative personnel employed by the

Union; and

Wuereas, pursuant to this responsibility the Union de-

sires to make provision for pensions for those of its em-

ployees not already provided with pension benefits and is

establishing the NMU Employees Pension Plan (herein-

after called the “Plan”) for that purpose,

Now, THereEForE, the Union and Trustee do hereby agree

and declare each with the other as follows:

1. Union hereby establishes with Trustee a trust which

will comprise an initial amount to be actuarially deter-

mined to be necessary to fund the Plan’s obl

igations and,

commencing

1972, and for each month

thereafter, a sum equal to twenty-six percent (26%) of

the compensation paid by the Union to the Participants

for the month then ending, such payment to be made

SD RD RIL HAL RE

SA77

Appendix Q.

within ten (10) days after the end of each month. All

such money and property, all investments made therewith

and proceeds thereof, and all earnings and profits thereon,

less the payments which at the time of reference shall have

been made by Trustee, as authorized herein, are referred

to herein as the ‘“‘Fund.’’ The Fund shall be held by

Trustee in trust and dealt with in accordance with the

provisions of this Agreement and Declaration of Trust.

At no time shall any of the corpus or income of the Fund

be used for or diverted to purposes other than for the ex-

clusive benefit of such Participants and their beneficiaries.

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2. It shall be the duty of the Trustee (a) to hold the

Fund, (b) to invest and reinvest the Fund, and (c) to make

payments to the Participants or their beneficiaries under

the Plan. The amount and nature of the benefit program

to be provided by the Plan and the terms and conditions

of payment shall be determined by the National Office of

the Union and furnished in writing to the Trustee. From

time to time the Trustee shall cause an actuarial study to .

be made of the amounts needed to fund the benefits pro- yi

vided by the Plan, and the amount and rate of contribution i

shall be increased or decreased to reflect the funding needs

of the Plan. The Trustee shall be under no duty to enforce

payment of any contribution and shall not be responsible

for the adequacy of the Fund to meet and discharge any i

liabilities under the Plan. :

3. In addition to the rights, powers and privileges

granted by law, and not in limitation thereof, Trustee shall

have the following rights, powers and privileges and shall

be subject to such of the following restrictions and limi-

tations as are hereinafter set forth:

te Lee Ree oats

(a) To invest and reinvest the principal and income

of the Fund and keep the Fund invested, without dis-

LEE hey

SA78

Appendiz Q.

tinction between principal and income, in any form of

property without restriction to investments authorized

for fiduciaries. He may keep such portion of the Fund

in cash or cash balances as he may from time to time

deem to be in the best interests of the Fund.

(b) To vote in person or by proxy on all stocks or

other securities in connection therewith, to delegate

discretionary powers; to deposit securities under pro-

tective agreements or with protective committees, to

consent to or otherwise participate in any reorganiza-

tion, dissolution, consolidation or merger of any cor-

poration, and to pay assessments or charges required

in connection therewith; and generally, to exercise with

respect to all stocks, bonds or other investments, all

such rights, powers and privileges as may be lawfully

exercised by any person owning similar property in

his own right, subject, nevertheless, to the direction

and control of the National Office of the Union;

(c) No bond shall be required of him in any juris-

diction in which he may act:

(d) To make transfers, payments and deliveries to

or for the account of Participants and their bene-

ficiaries ;

(e) To make, execute and deliver, as Trustee, with

provision for no individual liability, all instruments in

writing necessary for the exercise of any of the fore-

going powers;

(f) To register any property in the name of his

nominee, or to hold property unregistered or in such

other form that title shall pass by delivery, but without

thereby increasing or decreasing his liability as Trus-

tee;

(g) To make distributions hereunder in cash or in

kind, or partly in cash and partly in kind.

ie

SA79

Appendix Q.

4. The Trustee shall be protected in acting upon any

paper or document believed by him to be genuine and to

have been made, executed, or delivered by the proper party

purporting to have made, executed or delivered the same,

and shall be protected in relying and acting upon the

opinion of legal counsel or the Plan’s actuary, acting in

their appropriate spheres, in connection with any matter

pertaining to the administration or execution of this Trust.

The Trustee shall have no duties or responsibilities to

determine the correctness of the Union’s contributions to

this Trust or the actuary’s computation of benefit pay-

ments,

5. The Trustee shall not be required to participate in

any litigation, either for the collection of monies or other

property due the Fund, or in defense of any claim against

the Fund, unless Trustee shall have been indemnified to his

satisfaction against all expenses and liabilities to which he

might become subject.

6. The Trustee shall keep or caused to be kept accurate

and detailed accounts of all investments, receipts, disburse-

ments, and other transactions hereunder and all accounts,

hooks and records relating thereto shall be open to inspec-

tion and audit at all reasonable times by any person desig-

nated by the National Office of the Union. Within forty-

five (45) days following the close of each fiscal year, and

within ninety (90) days after the removal or resignation

of the Trustee as provided in paragraph 16 hereof, Trus-

tee shall file with Union a written account setting forth all

investments, receipts, disbursements, and other transac-

tions effected by him during such fiscal year or during the

period from the close of the last fiscal year to the date of

such removal or resignation, which account so filed shall

be open to inspection during business hours by the National

Office of the Union and by the Participants and their bene-

,

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SERENE Oe

SA80

Appendix Q.

ficiaries for a period of ninety (90) days immediately fol-

lowing the date on which the account is filed with the Union.

Upon the expiration of such ninety-day period, Trustee

shall be forever released and discharged from all liability

and accountability to anyone with respect to the propriety

of his acts and transactions shown in such account, except

with respect to any such acts or transactions as to which

the Union, Participants or beneficiaries shall have filed

written objections with the Trustee, within such ninety-day

period.

7. The Trustee’s duties and responsibilities shall be only

those which are expressly imposed upon him by the provi-

sions of this agreement; and he shall not be liable for the

making, retention or sale of any investment or reinvestment

made by him as herein provided, or for any loss to or

diminution of the Fund, nor shall he be liable hereunder

except for his own negligence or wilful misconduct.

8. As between Trustee and Participants, their heirs,

beneficiaries, executors and administrators on any matter

regarding or arising out of this Agreement, the claims of

such Participant, his heirs, beneficiaries, executors and ad-

ministrators shall be limited to the assets of the Fund and

Trustee shall not be responsible for any claim in connection

therewith.

9. No party dealing with the Trustee in relation to this

Trust shall be obliged to see to the application of any

money or property of the Trust; or to see that the terms

of this Trust have been complied with, or be obliged to

inquire into the necessity or expediency of any act of the

Trustee, and every instrument executed by the Trustee

shall be conclusive in favor of every person relying thereon:

(a) that at the time of delivery of said instrument the

Trust hereby created was in full force and effect, (b) that

itinerant anes

SA81

Appendix Q.

said instrument was executed in accordance with the terms

and conditions contained in this Agreement, and (c) that

the Trustee was duly authorized and empowered to execute

such instrument.

10. The receipt given by the Trustee for any money or

other property received by him shall effectually discharge

the person or persons paying or transferring the same, and

such person or persons shall not be bound to see to the

application, or be answerable for the loss or misapplication

thereof.

11. The Trustee may deduct from and charge against

the Trust any taxes paid by him, which may be imposed

upon the Trust, the income, property or transfer thereof,

or any part thereof, or upon or with respect to the interest

of any individual therein, which the Trustee is required to

pay. The Trustee, in his discretion, nay contest the valid-

ity or amount of any tax, assessment, claim or demand

which may be levied or made against, or in respect of the

Trust, or against or in respect of any part of the Trust,

the income, property or transfer thereof, or in any matter

or thing connected therewith.

12. The Trustee, in consultation with the National Office

of the Union, shall be empowered to obtain and determine

compensation for legal counsel, accounting, technical, actu-

arial and investment services and such administrative

assistance as he may find necessary. The Trustee shall be

paid a yearly fee for his services, the amount of such fee

to be determined by the National Office of the Union.

13. The Trustee may delegate any of his ministerial

powers and duties hereunder to one or more officers or

employees of the Union designated by the National Office

of the Union for that purpose.

t

Dee ees

SA82

Appendix Q.

14. In the event of any ambiguity, the Trustee shall have

the power to construe this Agreement and Declaration of

Trust, and his construction of the same shall be final and

conclusive,

15. The Trustee shall have all other powers necessary

and proper to the carrying out of the purposes of the Trust.

16. Any Trustee may resign at any time upon sixty (60)

days’ notice in writing to the Union. Any Trustee may be

removed by the Union, by action of its National Office, at

any time upon sixty (60) days’ notice in writing to the

Trustee. Upon such resignation or removal of Trustee,

the Union, by action of its National Office, shall appoint a

successor Trustee who shall have the same powers and

duties as those conferred upon Trustee hereunder and,

upon acceptance of such appointment by the successor

Trustee, the removed or resigned Trustee shall assign,

transfer and pay over to the successor Trustee, funds and

properties then constituting the Fund. The removed or

resigned Trustee is authorized, however, to reserve such

reasonable sum of money as he may deem advisable for

payment of his fees and expenses,

17. The Union reserves the right at any time, by action

of its National Office, to modify or amend, in whole or in

part, any or all of the provisions of this Agreement and

Declaration of Trust provided that no such modification or

amendment which affects the rights, duties or responsibili-

ties of the Trustee may be made without his consent in

writing and provided further that no such modification or

amendment shall authorize or permit, at any time, any part

of the corpus or income of the Fund to be used for or

diverted to purposes other than for the exclusive benefit of

Participants and their beneficiaries under the Plan.

SA83

Appendix Q.

18. Trustee hereby accepts this trust and agrees to hold

all the cash, securities and other properties now or here-

after constituting the Fund hereunder, subject to all the

terms and conditions of this Agreement and Declaration of

Trust.

19. This Agreement and Declaration of Trust shall be

administered, construed and enforced according to the laws

of the State of New York.

In Wiryess Wuerror, the National Maritime Union of

America, AFL-CIO, by its duly authorized officers, and the

Trustee have executed this Agreement and Declaration of

Trust to evidence their acceptance of the trust created and

their agreement to be bound thereby, as of the date and

year first above written.

Nationa, Maritime Union or AMERICA,

AFL-CIO

Shannon Wall, National Secretary-

Treasurer

Truster—Alvin Shapiro

SA84

APPENDIX R

District Court Opinion, January 11, 1972.

Bonsat, D. J.

Plaintiffs, three members of the National Maritime Union

of America (‘‘NMU’’), instituted this action in February,

1969, against defendants Curran and Wall, elected officers

of the NMU. Perry, a former employee of NMU and

Assistant to the President, and Segal, Freedman and

Karchmer, Trustees of the NMU Officers Pension Plan

(‘‘the Pension Plan’’), The complaint alleged that the

Pension Plan had been amended in 1961 so as to include

as participants designated employees of the NMU who

were not elected officers of the NMU (‘‘non-offcers’’), in

violation of NMU’s constitution then in effect, and that the

amendment was for the purpose of siphoning NMU funds

to non-officers who were not authorized to receive them.

In the complaint, plaintiffs seek an accounting and money

damages; an injunction enjoining the Trustees of the

Pension Plan from paying any benefits to non-officers; and

costs, disbursements and attorneys’ fees.

Plaintiffs and defendants both moved for summary judg-

ment and this court granted summary judgment on liability

to the plaintiffs, 302 F.Supp. 32 (1969). This court found

that the 1960 constitution of NMU did not authorize the

inclusion of non-officers in the Pension Plan and that the

plaintiffs were entitled to relief under 29 U.S.C. § 501.

On appeal, the Court of Appeals affirmed the foregoing

determination and, in addition, held that certain amend-

ments to the constitution which were submitted to the

membership in 1969 and which would have enabled the

union to validate retroactively pensions theretofore paid

to non-officers, were exculpatory and void under 29 U.S.C.

§ 501(a) (the Labor-Management Reporting and Disclosure

Act of 1959). (423 F.2d 393 (1970)). The Supreme Court

denied certiorari, Curran v. Morrissey, 399 U.S. 928 (1970) ;

SA85

Appendix R.

Segal v. Morrissey, 400 U.S. 826 (1970). The proceeding

was remanded to this court for appropriate action declaring

the amendments to the constitution to be without effect and

enjoining defendants from acting under them. In addi-

tion, this court was asked to pass on the issue of whether

the defendants should be enjoined from retaining counsel

paid or to be paid with NMU funds.

By memorandum filed July 6, 1970, this court held that

the amendments to the NMU constitution were without ef-

fect, and enjoined defendants from acting under them, and

further enjoined defendants from employing counsel paid

or to be paid from union funds, and filed an appropriate

order to this effect. Thereafter, there was a substitution

of counsel on behalf of certain of the defendants.

The issue of damages was tried to the court on August

23, 1971, and following the trial, the parties submitted pro-

posed findings of fact and conclusions of law. At the trial,

the parties stipulated that between December 1, 1960 and

May 23, 1969 NMU paid to the Pension Plan the aggre-

gate sum of $1,628,921 for the accounts of non-elect per-

sonnel employed by NMU. These payments can be broken

down as follows:

Wages Contribuiions

Patrolmen $3,968,181.50 $1,021,930.40

Field Patrolmen 214,381.00 55,692.06

Agents 124,586.50 31,015.16

Organizers 315,185.00 81,102.70

William Perry 169,907.00 84,782.58

Staff Employees 1,370,853.06 354,398.10

Total; $6,163,094.00 — $1,628,921.00

However, the parties did not stipulate as to what part of

the $1,628,921 was paid for the accounts of non-officers.

Under the prior decision of this court, 302 F.Supp. 32,

as affirmed by the Court of Appeals, 432 F.2d 393, it is clear

a a a en) es

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SA86

Appendix R.

that NMU employees holding the positions of Assistant to

the President, Organizer, Maintenance Supervisor, Book-

keeping Supervisor, Records and Supplies Supervisor, Ex-

ecutive Secretary, Publicity Director and Editor of the

Pilot were not officers, and that NMU employees holding

union offices enumerated in Article 11 of the NMU constitu-

tion in accordance with the provisions of the NMU con-

stitution were officers* and therefore, under Article 14,

Section 7 of the 1960 NMU constitution, were authorized

to participate in the Pension Plan.

While in 1960 Article 11 of the NMU constitution pro-

vided that all union offices would be elective, in 1963 Article

11 was amended to provide that the office of Patrolman

would be filled by appointment. In addition, during the

entire period involved in this litigation Article 8, Section

9 of the NMU constitution provided that vacancies in elec-

tive officers other than National President, National Secre-

tary-Treasurer, or Vice-President could be filled by ap-

pointment for the remainder of the unexpired four-year

term of office. Accordingly, Patrolmen holding office by

appointment under Article 11 of the NMU constitution be-

* Article 11 of the 1960 NMU constitution entitled ‘‘ Officers

and Term of Office’’ reads as follows:

“*Section 1—National Officers: National Officers of the

NMU shall consist of :

(1) National President

(2) National Secretary-Treasurer

(3) Three (3) Vice-Presidents

(4) Three (3) National Representatives

Sec. 2—Other Officers: The officers shall consist of :

(1) A branch for each Branch.

(2) Field Patrolmen as numerically and geographically

determined by the National Council.

See. 3—Term of Office: All officers shall be elected for a

term of four (4) years, to commence as soon as practicable

after certification of the election results.’’

SA87

Appendiz R.

tween 1963 and 1969, when Patrolmen once again became

an elective office, see Wirtz y. National Maritime Union of

America, 284 F.Supp. 47 (S.D.N.Y.), aff'd 399 F.2d 544

(2d Cir. 1968), and Patrolmen, Filed Patrolmen, and

Agents holding office between elections by appointment,

pursuant to Article 8, Section 9 of the N MU constitution,

were officers in accordance with the provisions of the NMU

constitution and therefore were authorized to participate

in the Pension Plan.

Of the $1,628,921 paid into the Pension Plan for the ac-

counts of non-elected personnel employed by NMU,

$1,108,637.62 was paid to appointed officers holding union

office in accordance with the provisions of the NMU con-

stitution, as follows: Patrolman—$1,021,930.40; Field Pa-

trolman—$55,692.06 ; Agents—$31,015.16. The balance of

the $1,628,921, or $520,283.38, was paid into the Pension

Plan for the accounts of employees who were not union %

officers, as follows: Organizers—$81,102.70; the Assistant

to the President of NMU (defendant Perry )—$84,782.58 ;

and staff employees—$354,398. 10. Since Article 14, Section

7 of the 1960 NMU constitution did not authorize the inclu-

sion of non-officers in the Pension Plan, NMU is entitled to

recover from the Trustees of the Pension Plan the

$520,283.38 paid into the Pension Plan for the accounts of

the non-oflicers.

The evidence also shows that the Trustees of the Pension

Plan paid out of the Pension Plan to non-officers a total of

$371,271. These payments can be broken down as follows:

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William Perry $222,200

Sarah Laderhandler 9,201

James Tevan 12,799

Sophia Tevan 11,561 t

Irving Branch 115,510 i

Total $371,271 3

SA88

Appendix R.

It also appears from the evidence at the trial that NMU ex-

pended a total of $24,151.52 in connection with the adoption

of the 1969 amendments to the constitution, which amend-

ments the Court of Appeals found to be exculpatory, void,

and of no effect.

Since defendant Perry was a non-officer but, as Assistant

to the President of NMU, was ina fiduciary capacity, he

will be required to return to the Pension Plan all amounts

which he has received from it, together with interest.**

Plaintiffs contend: ( 1) that the defendants Curran,

Wall and Freedman should be required to pay to NMU the

$24,151.52 expended in connection with the adoption of the

1969 amendments to the NMU constitution, which amend-

ments the Court of Appeals found to be exculpatory; (2)

that the defendants Curran, Wall, Perry and Freedman

should be directed to pay to NMU the value of the legal

services rendered by Freedman and Sovel in this action;

and (3) that the defendants should be ‘‘surcharged”’ with

respect to pension payments made by NMU to non-officers,

after the order of this court filed May 23, 1969, which plain-

tiffs assert were for the purpose of circumventing that

order. Defendants contend that these claims are not

within the scope of this action.

Since the court limited the issues to be determined at the

August 23, 1971 trial to (1) the amount wrongfully paid

into the Pension Plan; (2) the amount wrongfully paid out

of the Pension Plan; and (3) the liability of defendant

Perry, plaintiffs’ additional claims are not properly be-

** Defendant Perry’s contention that the court is without sub-

ject matter jurisdiction over the claim against him is without merit

in view of the Court of Appeals’ holding that, ‘ [t]he trial court

Was correct in finding that all of the defendants were in a position

of trust and responsibility in relation to the monies charged to

have been unlawfully expended and all had a duty to see that it

was restored to the Union treasury.’’ 423 F.2d at 400.

: — " *

SPF LARA 5 MOREA PAE G0 TD kN. ae Bie We

2 CG UE VARI, TRAY

SA89 .

Appendix R.

fore the court at this time. However, plaintiffs may notice

a hearing for the purpose of determining these additional

claims.

Plaintiff may also notice a hearing to determine the per-

sonal liability, if any, of the defendant trustees, Freedman,

Segal and Karchmer, and Officers, Curran and Wall, to

NMU for the monies which the Pension Plan has paid out

to non-officers and which it is unable to recoup.

Judgment will be entered directing the Pension Plan to

pay NMU the $520,283.38 which it received from NMU for

the account of non-officers, together with interest to date.

Judgment will be entered in favor of the Pension Plan

against the defendant Perry in the amount of $222,200.

improperly paid to him, together with interest to date.

The foregoing constitutes the court’s findings of fact and

conclusions of law, F.R.Civ. p. 52(a).

Settle judgments on notice.

Dated: New York, N. Y, January 11, 1972.

Duptey B. Bonsar

U.S.D.J.

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SA90

APPENDIX S

29 U.S.C. § 431 (b) (3), Labor Management Reporting

and Disclosure Act of 1959 § 201 (b) (3).

§ 431. Report or Lasor Orcanizations—Apoption AND

Fiuine or Constitution AND By.aws; ConTENTS OF

Report:

(b) Every labor organization shall file annually with

the Secretary a financial report signed by its president

and treasurer or corresponding principal officers contain-

ing the following information in such detail, as may be

necessary accurately to disclose its financial condition and

operations for its preceding fiscal year—

(3) Salary, allowances, and other direct or indirect dis-

bursements (including reimbursed expenses) to each officer

and also to each employee who, during such fiscal year,

received more than $10,000 in the aggregate from such

labor organization and any other labor organization af-

filiated with it or with which it is affiliated, or which is

affiliated with the same national or international labor

organization;