Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca5-02-20070/USCOURTS-ca5-02-20070-0/pdf.json

Nature of Suit Code: 720
Nature of Suit: Labor Management Relations Act
Cause of Action: 

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*Senior Judge, United States Court of Appeals for the Eighth

Circuit, sitting by designation.

United States Court of Appeals

Fifth Circuit

FILED

March 5, 2004

Charles R. Fulbruge III

Clerk

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

No. 02-20070

_____________________

LOUIS A. HOFFMAN,

Plaintiff-Appellant,

versus

JOHN E. KRAMER; MARILYN H. ZEILER;

PATRICK F. FILBURN,

Defendants-Appellees.

__________________________________________________________________

Appeal from the United States District Court

for the Southern District of Texas

_________________________________________________________________

Before JOLLY, HIGGINBOTHAM, and MAGILL,* Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

Before union members may sue officers of their union for

breach of their fiduciary duties under Title V of the Labor

Management Reporting and Disclosure Act (“LMRDA”), 29 U.S.C. §

501(a), they must convince the trial court that there is “good

cause” for the suit. 29 U.S.C. § 501(b). This court has not had

occasion previously to address this “good cause” requirement. We

do today.

The district court denied Louis Hoffman’s application for

leave to sue three former officials of his union, the Southwest

Airline Pilots Association (“SWAPA”). The district court held that

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2

good cause did not exist to permit Hoffman to proceed with his

claims against the three defendants. After careful evaluation of

the statute and the claims, we agree, and affirm the judgment of

the district court.

I

SWAPA is the collective bargaining agent for the Southwest

pilots, including Hoffman. From 1997 to 2000, defendants John

Kramer, Marilyn Zeiler, and Patrick Filburn served as officers of

that union. Kramer was the President of the union and Zeiler was

Secretary/Treasurer. Filburn was a board member and later elected

Vice-President in November 1999. That election was challenged by

Filburn’s opponent and the union agreed to a new election after the

Department of Labor found “probable cause to believe that

violations of Title IV of the LMRDA occurred which may have

affected the outcome of the election . . . .” In March 2001, after

a new, supervised election, Filburn was voted out of office.

Ultimately all the defendants were replaced and new officers were

elected. The record reflects that contentious and fractious

relations had existed over a variety of topics between some members

of SWAPA and the defendants during their tenure. Hoffman, who was

part of a cadre of reformers, perceived mismanagement and improper

administration of the union’s interests and funds during the

defendants’ tenure and, despite the election of new officers, he

petitioned the union for an accounting and other remedial action

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129 U.S.C. § 501(a) sets out “Duties of officers; exculpatory

provisions and resolutions void:”

The officers, agents, shop stewards, and other

representatives of a labor organization occupy

positions of trust in relation to such

organization and its members as a 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 constitution 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 interest

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

constitution and bylaws of such a labor

organization or a general exculpatory

3

against the former union officials. After discussion by its

current board, SWAPA refused. 

Hoffman then brought this suit under 28 U.S.C. § 501, first

seeking authority to sue the former union officials. Section

501(a) imposes fiduciary duties on union officials not to engage in

self-dealing, spend union funds for personal benefit, or act

adversely to union interests. These officials must also account to

union membership for any gains they receive in connection with

their union office.1 Individual union members may sue union

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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.

29 U.S.C. § 501(a).

229 U.S.C. § 501(b) provides:

When any officer, agent, shop steward, or

representative 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

officers 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 jurisdiction 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.

4

officers on behalf of the union only if the union refuses to take

action in response to allegations of official corruption.

Additionally, a person seeking to sue the officials must first

obtain leave of the court to sue by showing “good cause” for the

suit.2 The purpose of this threshold requirement is to discourage

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29 U.S.C. § 501(b).

5

misuse of litigation and to minimize judicial interference in the

management of labor organizations. See Ray v. Young, 753 F.2d 386,

389 (5th Cir. 1985). 

Hoffman alleged several irregularities in the administration

of SWAPA during the period from 1997 to 2000 which, according to

his verified application for leave to file suit, amount to breach

of fiduciary duties under § 501(a). Hoffman alleged that the

defendants breached their fiduciary duty by destroying records,

taking money while not working, wasting union funds, spending union

funds on personal expenses, and self-dealing in negotiations. He

further contended that the actions were undertaken in violation of

SWAPA’s Constitution and Bylaws. 

The district court held a hearing on Hoffman’s request for

leave to file suit and, after concluding that Hoffman had failed to

show good cause under § 501(b), denied Hoffman’s application. The

court found that “[t]he proposed claims do not arise from the

duties demanded by the statute.” The district court, however, did

not articulate further what standard for good cause it considered

in assessing Hoffman’s claims. Our review of the denial of

Hoffman’s application requires us to determine the appropriate

standard to be applied under 29 U.S.C. § 501(b) de novo. Walgreen

Co. v. Hood, 275 F.3d 475, 477 (5th Cir. 2001); Dial One of the

Mid-South, Inc. v. BellSouth Telecommunications, Inc., 269 F.3d

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6

523, 525 (5th Cir. 2001) (statutory interpretation reviewed de

novo). The standard for “good cause” and the ultimate conclusion

whether there is good cause for permitting leave to file suit --

mixed questions of law and fact -- are subject to plenary de novo

review. See Tyler v. Union Oil Co. of California, 304 F.3d 379,

402 (5th Cir. 2002).

II

As we have noted, this circuit has not had occasion to address

the scope of the good cause review of a § 501(b) application.

Other circuits have addressed the standard and the cases construing

the good cause requirement fall along a continuum that reflects in

varying degrees some consideration of the merits of the case. This

body of case law begins with Horner v. Ferron, 362 F.2d 224, 228

(9th Cir. 1966). Horner observed: 

The requirement of section 501(b) that a

plaintiff in such an action show ‘good cause’

before being entitled to file the complaint is

intended as a safeguard to the affected union

against harassing and vexatious litigation

brought without merit or good faith. The

allegations of the verified complaint may be

sufficient to enable the court to determine

whether there is ‘good cause.’ Thus section

501(b) provides that such an application may

be made ex parte. But the court may, on its

own motion, call for a hearing, or may grant

the defendant’s motion for a hearing. At such

a hearing, the court may, if it chooses, look

somewhat beyond the complaint in determining

whether the plaintiff has made the ‘good

cause’ showing required by section 501(b). 

Horner, 362 F.2d at 228-29 (footnotes and citations omitted). 

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7

The Horner court noted that a defendant union or union

official could defeat a good cause showing through “undisputed

affidavit[s]” showing that the plaintiff failed to comply with some

condition precedent to suit or was not a member of the union sued,

or that the action was barred by the statute of limitations, res

judicata or collateral estoppel. Id. Although such facts would

not appear in the verified application, they would warrant a denial

of the application. The Horner court further observed that 

we think it inappropriate to consider, at such

a hearing, defenses which require the

resolution of complex questions of law going

to the substance of the case. Defenses of

this kind should be appraised only on motion

for summary judgment or after a trial.

Defenses which necessitate the determination

of a genuine issue of material fact, being

beyond the scope of summary judgment

procedure, are a fortiori, beyond the scope of

a proceeding to determine whether a section

501(b) complaint may be filed.

Id. at 229 (footnote omitted). The Third, Eleventh, and D.C.

Circuits follow the Horner approach. Loretangeli v. Critelli, 853

F.2d 186 (3rd Cir. 1988); Erkins v. Bryan, 663 F.2d 1048 (11th Cir.

1982); George v. Local Union 639, 98 F.3d 1419 (D.C. Cir. 1996). 

The Second Circuit has adopted an approach that requires a

more demanding showing. In Dinko v. Wall, 531 F.2d 68 (2nd Cir.

1976), the court held that the good cause requirement meant that

the “plaintiff must show a reasonable likelihood of success and,

with regard to any material facts he alleges, must have a

reasonable ground for belief in their existence.” Dinko, 531 F.2d

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3Section 501(a) imposes three basic fiduciary duties on union

officials: (1) to hold the union’s money and property solely for

the benefit of the union and its members and to manage, invest, and

8

at 74. No other circuit has adopted the “reasonable likelihood of

success” requirement. Indeed, the Third Circuit explicitly

rejected the Dinko court’s analysis, concluding that the reasonable

likelihood of success requirement “is not mandated by the statute’s

language, finds no support in the LMRDA’s legislative history,

conflicts with the Congressional policy of protecting union

members, and permits summary elimination of meritorious as well as

vexatious suits.” Loretangeli, 853 F.2d at 191. The Third Circuit

further noted that although “Congress clearly intended that the

plaintiff make some showing of the validity of the complaint that

exceeded the filing requirements of the Federal Rules of Civil

Procedure,” the statute did not require the district court to

consider the merits of the case. Loretangeli, 853 F.2d at 192.

For the reasons indicated below, and without gainsaying either the

Dinko or Horner approaches, we articulate a somewhat more specific

analysis for determining good cause under § 501.

III 

Obviously, the first step a court should undertake in

reviewing a claim is to ascertain that the allegations meet the

minimal requirements of the statute. Thus, as a threshold matter,

the court must insist upon a showing that (1) the misconduct

alleged directly relates to duties enumerated in § 501(a);3 (2)

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expend the same in accordance with the union constitution and

bylaws; (2) to refrain from dealing with the union as an adverse

party and from holding or acquiring any pecuniary or personal

interests which conflict with the interests of the union; and (3)

to account to the union for any profit received by the official in

connection with transactions conducted by him on behalf of the

union. 29 U.S.C. § 501(a). We note that in the past, this Court

has declined to delineate the precise scope and breadth of these

enumerated duties. See Vincent v. International Brotherhood of

Electrical Workers, 622 F.2d 140, 143 (5th Cir.1980); Ray v. Young,

753 F.2d at 390 n.2; Adams-Lundy v. Ass'n of Professional Flight

Attendants, 844 F.2d 245, 250 n.25 (5th Cir. 1988). The language

of § 501(a), however, clearly indicates that the fiduciary

obligations imposed are primarily pecuniary in nature -- that is,

having do to with the custody, control, and use of a union’s money

and its financial interests or property and the conduct of union

officials in relation thereto. The circumscribed nature of §

501(a)’s fiduciary duties has also been noted by the Second

Circuit. See Dunlop-McCullen v. Local 1-S, AFL-CIO-CLC, 149 F.3d

85, 93 (2nd Cir. 1998) (stating that “[s]ection 501 applies to

fiduciary responsibility with respect to the money and property of

the union and it is not a catch-all provision permitting suit on

any ground of misconduct”) (internal citations and quotations

removed); Guzman v. Bevona, 90 F.3d 641, 646 (2nd Cir. 1996)(noting

that the Second Circuit has “strictly interpreted the scope of the

fiduciary duty imposed on union officers by section 501(a),

limiting recovery to claims that centrally challenged misuse of

union money and property and rejecting those that centered on other

breaches of trust that only incidentally affected union

funds”)(internal quotations removed). 

9

given the derivative nature of the plaintiff’s suit on behalf of

the union, the plaintiff seeks remedies that would realistically

benefit the union and/or its membership, and (3) the alleged

breaches in question were presented to the union, which then failed

or refused to act on them. 

We think, however, that meeting these minimal requirements

alone is not enough to satisfy the requirements for good cause.

The mere refusal or failure of a union to seek redress for

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10

appropriately presented breaches of LMRDA duties does not itself

give license to union members to bring suit under the statute.

Instead, that refusal must in some way be objectively unreasonable.

As the Sixth Circuit aptly noted in a slightly different context,

the LMRDA “is not meant as a vehicle for judicial oversight of

union activity, but only as a means of addressing unreasonable and

arbitrary actions by union officials. The federal courts do not

sit as a ‘super-review’ board of internal union grievances unless

there is evidence of impropriety in the proceedings.” United Food

and Commercial Workers Int’l Union Local 911 v. United Food and

Commercial Workers Int’l, 301 F.3d 468, 475 (6th Cir. 2002)

(quoting Corea v. Welo, 937 F.2d 1132, 1143 (6th Cir. 1991)).

Indeed, although various rights of the dissenting minority may be

recognized in the law, the Supreme Court has long noted that the

“majority rule concept is today unquestionably at the center of our

federal labor policy.” NLRB v. Allis-Chalmers Mfg. Co., 388 U.S.

175, 180 (1967). Accordingly, the requirement that applicants for

leave to sue establish good cause effectuates the LMRDA’s “primary

objective of ensuring that unions would be democratically governed

and responsive to the will of their memberships.” Finnegan v. Leu,

456 U.S. 431, 435 (1982) (applying Title I, but discussing the

LMRDA more broadly).

We think, therefore, that an objectively reasonable decision

by union leadership not to pursue a claim is entitled to some

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4Because the suit by a union member is “for the benefit of the

labor organization,” § 501(b), we find aspects and principles of

the law regarding shareholder derivative lawsuits to be

instructive. A shareholder derivative action is brought by a

shareholder on behalf of the corporation to remedy an alleged

injury to the corporation where the corporate cause of action is,

for some reason, not asserted by the corporation itself. See W.

Fletcher, Cyclopedia of the Law of Private Corporations § 5947

(Perm. ed. 1995); Kamen v. Kemper Financial Services, Inc., 500

U.S. 90, 95-96 (1991). In the context of shareholder suits, proof

of demand or futility is usually a condition precedent to suit.

See Aronson v. Lewis, 473 A.2d 804, 811-12 (Del. 1984) (demand

requirement recognizes directors’ discretion in managing corporate

affairs, prevents undue interference with that management, and

deters strike suits); Fletcher, supra, § 5963. The demand

requirement allows directors to make a business decision about

whether to invest the resources necessary to pursue the claims.

Because the directors are entrusted with the discretion and

judgment to pursue the best interests of the corporation, and they

are presumed uniquely situated to make these decisions, their

conclusions are due deference under the so-called Business Judgment

Rule. The precise content of the Business Judgment Rule is

provided by state law but, generally speaking, “[u]nder this

familiar rule of American jurisprudence, the courts refrain from

second guessing business decisions made by corporate directors in

the absence of a showing of fraud, unfairness or overreaching.”

Capital Bancshares, Inc. v. F.D.I.C., 957 F.2d 203, 207 (5th Cir.

1992). Indeed, some contend that union leaders are arguably more

accountable to their membership than are corporate officers and

directors to their shareholders. This makes deference to elected,

disinterested union officials’ decisions all the more appropriate.

See Bruce A. Herzfelder and Elizabeth E. Schreiver, The Union

Judgment Rule, 54 U. CHI. L. REV. 980, 994-95 (1987) (arguing workers

have more incentive, opportunity, and ability to exercise certain

controls over their agent, the union official, through monitoring

and voting, than do corporate shareholders over their agents). 

11

deference.4 To this end, the district court should ensure that the

plaintiff show -- either in verified pleadings, affidavits, or a

hearing, if ordered by the district court -- that the union’s

refusal to act was objectively unreasonable, assessed from the

point of view of the membership as a whole. This deference is

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12

appropriate only when the democratic accountability of a union is

not seriously at issue. Objectively reasonable determinations by

disinterested union leaders not to bring an action seem to us a

strong indication that the claims may be ill-suited as a

springboard for judicial intervention into the management of a

labor organization that is democratically accountable to its

membership.

To be sure, Title V of the LMRDA explicitly instructs the

courts to consider “the special problems and functions of a labor

organization” in determining the fiduciary obligations demanded of

these officials. When read in context with the other provisions of

the LMRDA governing internal union democracy and members’ rights,

Title V of the LMRDA appears to target the sort of corruption or

misappropriation of the union fisc that might pervert, or be left

unremedied by, the union’s democratic processes. Thus, these

aspects of the good cause requirement -- that the plaintiff show

that the prosecution of the claims will benefit either the union as

collective bargaining representative or its membership, and that

the union’s refusal to address the claims was objectively

unreasonable -- reflect faith that union democracy will ordinarily

serve as an adequate safeguard against mismanagement by rogue

officials. Therefore, only upon a sufficient showing that the

union’s refusal to act on the members’ complaint was unreasonable

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5The reasonableness of a union board’s refusal or failure to

act on alleged breaches of fiduciary duty will necessarily be fact

and context specific. Accordingly, a district court’s

determination as to the reasonableness or unreasonableness of a

decision not to pursue a particular claim should be evaluated under

an abuse of discretion standard. 

6It is always within the discretion of the district court to

decide whether its determination in this respect is most

appropriately achieved through a review of the complaint only, or

affidavits, or an ex parte conference (when confidentiality is

essential), or a hearing, or some combination of these methods.

13

in the light of the purposes of § 501 should leave to sue be

granted.5 

IV

If a court has satisfied itself that the proposed suit, if

successful, should inure to the benefit of the union as collective

bargaining representative and/or the union membership, and that the

union’s refusal to proceed was objectively unreasonable, the court

must then proceed to assess, to some degree, the substantiality of

the claims alleged. We recognize that the court’s earlier

inquiries often will have addressed the substantiality of the

claims. Nevertheless, in addition to the foregoing preconditions

to suit, it is clear that to establish “good cause” there must be

a showing of a breach of a duty found in § 501(a), with such

specific facts that the court is convinced there is a factual basis

to surmise that the claims have the potential to raise a genuine

issue of material fact.6 At the same time, however, the court must

keep in mind the admonition in Horner that it is “inappropriate to

consider . . . defenses which require the resolution of complex

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7The standard for determining whether an applicant has stated

such a claim goes beyond the analysis of a motion to dismiss under

FED. R. CIV. P. 12(b)(6). Under Rule 12(b)(6), “[t]he complaint

must be liberally construed in favor of the plaintiff, and all

facts pleaded in the complaint must be taken as true.” Collins v.

Morgan Stanley Dean Witter, 294 F.3d 496, 498 (5th Cir. 2000)

(citing Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). “The

district court may not dismiss a complaint under Rule 12(b)(6)

unless it appears beyond doubt that the plaintiff can prove no set

of facts in support of his claim which would entitle him to

relief.” Id. Section 501(b)’s “good cause” requirement demands

considerably more of plaintiffs than to survive a Rule 12(b)(6)

motion. Otherwise, that part of the statute would be superfluous,

and would run afoul of the “cardinal principle of statutory

construction that a statute ought, upon the whole, to be so

construed that, if it can be prevented, no clause, sentence, or

word shall be superfluous, void, or insignificant.” TRW, Inc. v.

Andrews, 534 U.S. 19, 31 (2001) (quoting Duncan v. Walker, 533 U.S.

176, 174 (2001) (internal quotation marks omitted)). We should

reiterate, however, that “good cause” review does not require the

type of showing that would be necessary to prevail at the summary

judgment stage. “Defenses which necessitate the determination of

a genuine issue of material fact, being beyond the scope of summary

judgment procedure, are a fortiori, beyond the scope of a

proceeding to determine whether a section 501(b) complaint may be

filed.” Horner 362 F.2d at 229.

14

questions of law going to the substance of the case” or “[d]efenses

which necessitate the determination of a genuine issue of material

fact . . . .” Horner, 362 F.2d at 229.7 In sum, the district

court must be convinced that the allegations of the complaint have

some basis in fact that merit proceeding further. 

To sum up, the substance of the “good cause” requirement of §

501(b) requires a few essential steps for district courts to take

beyond Rule 12(b)(6) in evaluating applications for leave to sue

union officials. First, the court must determine that the alleged

misconduct directly relates to the duties enumerated in § 501(a).

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8The Application lists the following alleged breaches:

a. drawing a full-time salary without working;

b. Filburn’s pay increase due to illegal election as

vice-president;

c. depleting union funds to run a second election

after the Department of Labor declared an election

illegal;

d. misusing the union hired attorney and offices;

15

Second, because of the derivative nature of an applicant’s suit,

the court must satisfy itself that the applicant seeks remedies

that would realistically benefit the union as the collective

bargaining representative of its members and/or the membership of

the union. Third, the application must allege facts that will

support a conclusion that the alleged breaches of § 501 were

presented to the union. Fourth, the applicant must make a showing

that the union’s refusal to act on the breaches presented to it was

objectively unreasonable in the ways we have earlier discussed.

Finally, after the court is satisfied that these conditions are

met, the plaintiff must convince the court by the allegations of

the verified application, or affidavit or otherwise, that some

evidence exists, disputed or not, that will support the claims of

a breach of fiduciary duty under § 501(a). 

V

We now turn to the allegations in this case. In his verified

application for leave to file suit under § 501(b), Hoffman alleges

numerous violations of the former union officials’ duties under §

501(a) to the SWAPA membership.8 Further, it is important to note

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e. destroying union records;

f. allowing staff to take time off with pay without

authorization or disclosure to the membership;

g. allowing the executive secretary to take excessive

time off without authorization or disclosure to the

membership;

h. allowing the union to pay for an employee’s advance

degree without authorization or disclosure to the

membership;

i. using union funds for personal expenses;

j. hiring the union president’s friend without board

approval and accepting benefits without disclosure;

k. accepting tangible benefits without disclosure;

l. violating the Union Constitution for personal

political reasons;

m. violating the Union Constitution leading to

needless expenditures of union funds;

n. failing to disclose material facts related to

contract votes;

o. destroying budget records.

9The record is unclear as to whether all the claims contained

in the Application and Complaint were in fact presented to the

current union board when Hoffman requested an accounting. We

reiterate that Hoffman must satisfy the statutory precondition to

suit for all claims -- “the labor organization or its governing

board or officers 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 . . . .” 29 U.S.C.

§ 501(b).

16

that the plaintiff was given a hearing before the district judge

where his claims were explored and vetted. These claims arise in

connection with three broad categories: the voided election,

office procedures and administration, and contract negotiation.

Consistent with the requirements of § 501(b), Hoffman requested

that the union board investigate his allegations of malfeasance by

former officials Kramer, Zeiler, and Filburn.9 The record reflects

“extensive discussions” by the current board about Hoffman’s

potential lawsuit against the former officers, but Hoffman does not

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10These claims, laid out more fully in the Complaint filed with

the court, include the cost of the re-run election, and the

increased salary temporarily drawn by defendant Filburn during the

period he was vice-president as a result of the challenged

election.

17

suggest in his Application or Complaint, nor make any argument in

his brief on appeal, that the current Board was interested, biased,

or unreasonable in failing to investigate and bring its own charges

against the defendants for these alleged breaches by the

defendants. After reviewing these claims, we conclude that the

district court committed no reversible error in denying leave to

sue on each of them. This denial was appropriate as Hoffman failed

to make some plausible showing either of actionable breaches of §

501(a) fiduciary duties or that the union’s decision not to pursue

particular claims was unreasonable. 

(a)

Turning to the first category -- expenses related to the

election -- Hoffman essentially alleges that the defendants

conspired to rig the November 1999 election and seeks funds

allegedly misused during and as a result of this conspiracy.10 The

district court found no good cause to proceed on these claims

because “the remedy for the defective electoral process is not this

suit but the intervention of the Labor Department. . . . This

dispute has been resolved. . . . The money spent to re-run the

election did not personally benefit the defendants.” The

Department of Labor investigated the possible irregularities in the

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11There are different types of enforcement mechanisms for the

other parts of the statute, which means that § 501(b) usually will

not be an appropriate remedy for addressing violations of other

titles of the LMRDA. See, e.g., 29 U.S.C § 412 (authorizing civil

actions by members for violations of union member’s individual

rights under Title I of LMRDA); § 440 (providing civil action by

Secretary of Labor for enforcement of reporting and disclosure

requirements, Title II); § 464 (requiring investigation and suit by

Secretary upon valid complaint about unlawful trusteeship, and

authorizing civil action by union member, Title III); § 482

(enforcement provisions for election violations, Title IV).

18

November 1999 election and these irregularities were in fact

addressed by the election which took place in March 2001. 

We think it is clear that Section 501 is not generally

intended as a statute to impose personal liability on union

officials for funds expended in the course of activity that

violates other titles of the act.11 Although we cannot say that

allegations of illegal electioneering activities will never give

rise to a breach of § 501(a) duties, we can say that this is not

such a case. Here, all that is clear from the record is that

Hoffman has alleged that the defendants “conspired to conduct an

illegal election” and that the Department of Labor later

decertified the original election and ordered a rerun after finding

a series of violations of Title IV of the LMRDA. The general

allegation that officers conducted an illegal election does not

state a breach of the duties referred to in § 501(a), although it

may violate other provisions of the act. We therefore agree with

the district court’s conclusion that Hoffman failed to allege any

 Case: 02-20070 Document: 0051261118 Page: 18 Date Filed: 03/05/2004
12The claims concern the work schedules and salaries of Kramer

and Zeiler, the leasing of office space to the union attorney at

allegedly below-market rates, the destruction of union documents by

defendants, personnel decisions regarding time off and educational

expenses for staff as well as termination and discipline of staff,

the retention of outside consultants, the alleged improper

acceptance of private transportation by defendants from third

parties, and the improper use of union postage to send mail to

union members rather than use the union newsletter. (claims (a),

(d)-(m), and (o) in the Verified Application).

19

actionable breach of fiduciary duties under § 501(a) concerning the

election. 

Even assuming, however, that Hoffman had adequately alleged a

genuine breach of § 501(a) fiduciary duties, Hoffman has failed to

make any showing that the union’s decision not to pursue the

election claims was objectively unreasonable. There has been no

allegation, for example, that the current board members were

interested, biased, or derelict in their duties. Moreover, there

are no allegations that the cost of pursuing the claims was

justified by any potential recovery; nor was there an allegation

that Filburn did not properly receive his salary as vice president

under the Constitution and Bylaws of the union because, while there

were irregularities in the election, he nevertheless performed the

duties he assumed. 

(b)

The second group of claims relates to Hoffman’s

disagreements with the manner in which the defendants handled the

internal administration of the union during their tenure.12 The

 Case: 02-20070 Document: 0051261118 Page: 19 Date Filed: 03/05/2004
13In campaign materials, candidate Steve McPhail stated “[w]e

are now suffering from the effects of an absentee president. . . .

We have had a perfect example of what not paying attention to the

little details can do to an organization. . . . When the president

chooses to work less than a full work week, we all suffer. . . . We

voted many years ago to pay the president 115% of the line average

. . . . When I voted for that, I thought it mean the president

would be in the office all week. Apparently I was wrong.”

(emphasis in original).

20

district court found that these “routine operating decisions . .

. [such as] [d]eciding to pay for an employee’s graduate studies,

giving employees extra time off, or even shredding union

documents are not breaches of a fiduciary duty covered by the

statute.” Relying on the union officials’ accountability to the

membership, the court concluded that “[d]isagreements over union

policies -- complaints about business judgment, work habits,

employee leave, and budgeting -- are for campaigns against

incumbents” and do not constitute good cause for this lawsuit.

In fact, the record reflects that many of these issues were

directly addressed in the next election -- the candidate for the

presidency of SWAPA explicitly noted many of the perceived

deficiencies of the previous officers’ tenure.13 We see no error

in the district court’s evaluation of these claims. These claims

generally alleging maladministration of the union’s affairs by

the defendants are either not amenable to monetary damages, for

example the alleged destruction of union and budget records or

the acceptance of a plane ride without disclosure; or were not

for the defendants’ personal financial benefit, as for example

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21

the decisions to hire consultants or grant staff time off; or

were made within the authority of the particular office. As

such, they do not appear to fall within the subject matter of §

501(a).

Concerning these claims, the district court concluded that

“[h]owever stupid and wasteful the former officers’ actions may

have been, they raise issues of time, attendance, performance and

administration -- not breach of fiduciary duty. The law confides

these concerns to the union membership through the election of

officers; in fact, the defendants have already been replaced on

the union’s board.” We agree with the district court that

disagreements over the wisdom or appropriateness of particular

administrative and employment actions and decisions are usually

not amenable to suit under the LMRDA. Indeed, most of these

matters are the sort of “internal union grievances” properly left

to be worked out via union democratic processes (as they

eventually were here) and not by a federal court sitting as a

sort of “super-review board.” United Food and Commercial Workers

Int’l Union Local 911, 301 F.3d at 475. 

The closest Hoffman comes to alleging a breach of a § 501(a)

fiduciary duty in the context of this category of claims is his

allegation that Zeiler and Kramer failed to work “full-time”

 Case: 02-20070 Document: 0051261118 Page: 21 Date Filed: 03/05/2004
14Hoffman asserts one minimal claim that may be characterized

as a breach of a § 501(a) fiduciary duty: He alleges that union

funds were used for the personal benefit of the defendant Kramer,

who “used union funds to ship a large set of moose antlers to his

home in Albequerque, New Mexico.” The district judge found that

the antlers, Kramer’s personal property, were used as office

decoration and the union’s benefit from their use was consideration

for their shipment at the close of Kramer’s tenure. We find no

error in the conclusion that this claim should be dismissed as

lacking good cause. While it may state a literal, cognizable claim

of breach of fiduciary duty, it is a de minimis expenditure that

does not justify a federal lawsuit. Neither was the union’s

refusal to mount an effort to recover this relatively minor amount

unreasonable.

22

while being paid a full-time salary.14 But this allegation is not

enough to constitute a breach of § 501(a) duties. Essentially,

Hoffman is alleging that Zeiler and Kramer were derelict in the

performance of their employment obligations as union officials;

in doing so, they did not earn their salaries; by accepting their

salaries while not working full workweeks, they breached § 501(a)

duties by misusing union funds for their personal benefit.

Section 501(a), however, does not permit these derivative actions

for dereliction of employment duties. Disputes over whether

elected union officials are adequately performing their

employment obligations are matters usually to be worked out

within the union and its governing structure and not in the

federal courts. The statute cannot be plausibly read to give

rise to a cause of action against a union officer whenever there

is a disagreement concerning his work schedule or work ethic.

 Case: 02-20070 Document: 0051261118 Page: 22 Date Filed: 03/05/2004
15This claim appears in the Verified Application as claim (n),

“failing to disclose material facts related to contract votes.”

16We again note that the Constitution and Bylaws do not appear

in the record before this Court, making our assessment of these

claims difficult.

23

Therefore, the district judge did not err in finding that

good cause for a § 501 suit did not exist on any of these claims

relating to the alleged maladministration of union affairs. None

of these allegations rise to the level of actionable breaches of

fiduciary duty actionable under § 501(a). For this reason, we

AFFIRM the district court’s denial of leave to sue on these

claims.

(c)

Finally, Hoffman alleges that the defendants engaged in

improper and unauthorized negotiations with Southwest, and that

they illegally failed to disclose material facts related to

contract votes.15 Essentially the claim is that, beginning in

1998, Kramer and Zeiler conspired with Southwest Chairman

Kelleher to arrange an early contract vote, which would

improperly benefit older employees to the detriment of new hires.

This conduct was allegedly in violation of the SWAPA Constitution

and Bylaws.16 While a serious allegation, if true, we do not

think that these facts constitute an actionable violation of the

duties embodied in § 501(a). As we have noted earlier, duties

under § 501(a) relate primarily to the misuse of union money or

property. Furthermore, the scope of the duties of § 501(a) is

 Case: 02-20070 Document: 0051261118 Page: 23 Date Filed: 03/05/2004
24

also informed by remedies provided for in § 501(b) –- namely,

monetary damages, an accounting, or possibly injunctive relief.

29 U.S.C. § 501(b). Here, not only has Hoffman failed to allege

that union money was improperly or improvidently spent in

furtherance of the alleged scheme, it is unclear how the claims

he asserts are amenable to money damages that would benefit the

union as such, an accounting, or any other form of meaningful

relief provided under § 501(b). Further, the defendants are not

alleged to have benefitted personally any more than similarlysituated pilots who fared better under the contract -- which

apparently was approved by a referendum of the membership.

Finally, Hoffman failed to make a showing that the present

board’s decision not to pursue these claims, based on long-past

conduct, was objectively unreasonable. For these reasons, the

district court committed no reversible error in finding that

Hoffman lacked good cause to proceed on these claims. 

Allegations that important information -- including reports

and recommendations from outside consultants, as well as aspects

of the offer from Southwest -- was deliberately withheld from the

union membership to assure contract approval are serious indeed.

But, without more, they do not state a claim of breach of

fiduciary duty under § 501(a) that is presently remediable.

Therefore, we AFFIRM the district court’s denial of Hoffman’s

application to sue on these claims.

 Case: 02-20070 Document: 0051261118 Page: 24 Date Filed: 03/05/2004
25

VI

In order to establish good cause, we have today held that a

plaintiff must: First, allege misconduct that directly

implicates the fiduciary duties enumerated in § 501(a); second,

show that the remedies sought would realistically benefit the

union and/or the membership of the union; third, plausibly allege

facts supporting a conclusion that the breaches of § 501 were

presented to the union; fourth, make a showing that the union’s

refusal to act was objectively unreasonable in the ways we have

described; and, finally, convince the court that some evidence

exists, disputed or not, that will support the claims of a breach

of fiduciary duties under § 501(a). Most of Hoffman’s claims

fail to meet the first requirement noted above; but it is clear

that each of Hoffman’s claims fail at least on one or more these

several grounds. As such, we find that the district court

committed no reversible error in concluding that Hoffman’s suit

lacked good cause and its denial of Hoffman’s application to

bring suit against the union is

AFFIRMED.

 Case: 02-20070 Document: 0051261118 Page: 25 Date Filed: 03/05/2004