Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-89-01218/USCOURTS-ca10-89-01218-0/pdf.json

Nature of Suit Code: 730
Nature of Suit: Labor Management Report &amp; Disclosure
Cause of Action: 

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PUBLISH 

FILED 

Uoited States Co~rt ~f Appeals 

Tenth C1rcu1t 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

JUH 2 7 1990 

R.OBERT L. HOECKER 

Clerk 

JOHN PATTERSON; HENRY FUOSS; DONNA ) 

GRATTAN; WALTER D. LOSEY; RICHARD LUNA; ) 

CARPENTERS LOCAL UNION #55; CARPENTERS ) 

LOCAL UNION #244; CARPENTERS LOCAL ) 

UNION #1396, ) 

v. 

Plaintiffs-AppelleesCross-Appellants, 

ONITED BROTHERHOOD OF CARPENTERS & 

JOINERS OF AMERICA AFL-CIO, 

Defendant-AppellantCross-Appellee. 

) 

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Nos. 89-1218 

& 

89-1305 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLORADO 

(D.C. No. 88-F-1778) 

Barry D. Roseman, Denver, Colorado, for Plaintiff-AppelleesCross-Appellants 

Lawrence Gold, Washington, D.C., and Rita Byrnes Kittle (Donald P. 

MacDonald with her on the brief) of Hornbein, MacDonald, Fatter 

and Hobbs P.C., Denver, Colorado, for Defendant-AppellantCross-Appellee. 

Before TACHA, SETH, Circuit Judges, and BROWN,** District Judge. 

**Honorable Wesley E. Brown, Senior District Judge, United States 

District Court for the District of Kansas, sitting by designation. 

Appellate Case: 89-1218 Document: 01019880174 Date Filed: 06/27/1990 Page: 1 
PER CURIAM. 

Defendant-appellant-cross-appellee United Brotherhood of 

Carpenters and Joiners of America (UBC) appeals from a grant of 

summary judgment against it in an action brought by plaintiffsappellees-cross-appellants unions and union members under the 

Labor-Management Reporting and Disclosure Act (LMRDA), 

29 u.s.c. §§ 401-531 (1982), to enjoin a dues and per capita tax 

increase levied by the UBC on seven Colorado Carpenters local 

unions. Plaintiffs cross-appeal the district court's denial of 

their request for attorneys' fees. We affirm the district court 

on both appeals. 

Background 

Plaintiffs are three local unions and members of these local 

unions that are affiliated with the UBC. Plaintiff unions are 

also affiliated with the Colorado Centennial District Council of 

Carpenters (District Council), an intermediate labor organization 

within the UBC hierarchy. The District Council is governed by 

delegates elected by members of the seven Colorado Carpenters 

local unions. 

The record indicates that the events giving rise to this 

action began in July 1987 when the delegates to the District 

Council voted to hold a mail referendum on a proposal to establish 

minimum basic dues for local union members and to increase each 

member's working assessment to the District Council. 

2 

The intent 

Appellate Case: 89-1218 Document: 01019880174 Date Filed: 06/27/1990 Page: 2 
of this proposal was to raise additional revenue that would enable 

the District Council to assume responsibility for the activities 

and expenses of the local unions' business representatives. The 

members of the District Council's affiliated unions voted down 

this proposal. 

Six 

District 

proposal 

months later, apparently at the urging of the UBC, the 

Council submitted a second, similar revenue-raising 

to its members. Again, the union members rejected the 

proposal, this time by a larger margin. 

In April 1988, the UBC became directly involved in the 

District Council revenue issue when its General Executive Board 

(UBC Board) voted to require the members of the Colorado 

Carpenters local unions to hold a third vote on proposals designed 

to increase the District Council's operating revenue. This vote 

required the members to chose between two "revenue options," but 

without an option to reject both proposals. The first proposal, 

Option A, increased both the union members' working dues to the 

District Council and the per capita tax owed to the District 

Council by five of the seven local unions. Option B left working 

dues unchanged, but increased the local unions' per capita taxes 

by as much as sixfold. According to affidavits submitted by 

plaintiffs, both of these revenue-generating proposals would have 

significantly increased the amount paid by each Colorado union 

member in dues and assessments. 

The UBC Board action created a considerable controversy among 

the members of the District Council, prompting both the District 

Council president and its delegates to urge the Board to revoke 

3 

Appellate Case: 89-1218 Document: 01019880174 Date Filed: 06/27/1990 Page: 3 
its decisions to require a third vote on the now mandatory 

revenue-raising "options." At the same time, local union members 

circulated a petition protesting the Board's decision. The UBC 

did not respond to these actions, and in a September 1988 mail 

ballot vote, a majority of the Colorado local union members chose 

Option A over Option B. 

On October 28, 1988, the plaintiffs filed the instant action 

in the United States District Court for the District of Colorado. 

In that action, plaintiffs alleged that the UBC's actions with 

respect to the September 1988 vdte and dues increase had violated 

local union members' rights under LMRDA § l0l(a) (3), 

29 U.S.C. § 4ll(a)(3), to participate in and vote, individually or 

through elected delegates, on increases in their union dues. On 

the parties' cross-motions for summary judgment, the district 

court entered summary judgment for plaintiffs and enjoined the 

dues increase approved in the September 1988 vote. Upon the 

court's denial of plaintiffs' subsequent request for attorneys' 

fees, these appeals followed. 

Analysis 

Ao Application of LMRDA Section 10l(a)(3) 

Section l0l(a) of LMRDA is part of the "Bill of Rights of 

Members of Labor Organizations" enacted by Congress to protect 

democratic processes in union organizations. See United Bhd. of 

Carpenters & Joiners v. Brown, 343 F.2d 872, 882-83 (10th Cir. 

1965). Subsection 3 of this provision establishes the right of 

individual union members to participate in and vote, either 

directly or through representatives, on union decisions regarding 

4 

Appellate Case: 89-1218 Document: 01019880174 Date Filed: 06/27/1990 Page: 4 
! 

dues and equivalent issues. Id. In particular, the subsection 

provides as relevant to this case: 

(3) Dues, initiation fees, and assessments 

Except in the case of a federation of national or 

international labor organizations, the rates of dues and 

initiation fees payable by members of any labor 

organization in effect on September 14, 1959 shall not 

be increased, and no general or special assessment shall 

be levied upon such members, except--

(B) in the case of labor organization, other than 

a local labor organization or a federation of national 

or international labor organizations, (i) by majority 

vote of the delegates voting at a regular convention, or 

at a special convention of such labor organization held 

upon not less than thirty days' written notice to the 

principal office of each local or constituent labor 

organization entitled to such notice, or (ii) by 

majority vote of the members in good standing of such 

labor organization voting in a membership referendum 

conducted by secret ballot, or (iii) by majority vote of 

the members of the executive board or similar governing 

body of such labor organization, pursuant to express 

authority contained in the constitution and bylaws of 

such labor organization: Provided, That such action on 

the part of the executive board or similar governing 

body shall be effective only until the next regular 

convention of such labor organization. 

29 u.s.c. § 4ll(a)(3). 

The district court found that the UBC's attempted imposition 

of the dues increase voted upon by the Colorado local union 

members violated this provision because (1) these members did not 

have an opportunity to reject a dues increase as required to 

comply with LMRDA § 10l(a)(3)(B)(ii) and (2) the UBC Board lacked 

authority under section 10l(a)(3)(B)(iii) to single out members of 

the District Council for a dues increase. Memorandum and Order at 

2-5 (June 16, 1988). The UBC challenges both of these 

5 

Appellate Case: 89-1218 Document: 01019880174 Date Filed: 06/27/1990 Page: 5 
,I I: 

determinations and the court's consequent conclusion that the 

Option A dues increase was prohibited by the LMRDA. 

le Sufficiency of the local union vote in favor of Option A 

The UBC first contends that the Colorado union members 

approved the contested dues increase as required by 

LMRDA § 10l(a)(3)(B)(ii) because the vote in which they chose 

Option A as their "revenue option" provided them with the 

opportunity to reject the dues increase included in Option A in 

favor of the per capita tax increase proposed in Option B. An 

increase in the per capita tax paid by a local union is not, they 

argue, an increase in the "rates of dues ... payable by" union 

members and hence is not subject to the voting requirements of 

LMRDA § 10l(a)(3)(B)(ii) •. See Seybert v. Lowen, 623 F.2d 780, 784 

& n.8 (2d Cir. 1980); Ranes v. Office Employees Int'l Union, 

Local No. 28, 317 F.2d 915, 918 (7th Cir. 1963). Accordingly, the 

UBC asserts, the September 1988 vote did present union members 

with a choice between a dues increase and no dues increase and 

their vote in favor of Option A was therefore sufficient under the 

statute. 

The district court rejected this argument on the ground that 

Option B's proposed increase in the local union per capita taxes 

was, in fact, a dues increase subject to section 10l(a)(3)(B) 's 

democratic requirements because it would have imposed additional 

financial burdens on individual union members. Memorandum and 

Order at 2. We agree. Under the "financial burden test" first 

enunciated in King v. Randazzo, 234 F. Supp. 388 (E.D.N.Y. 1964), 

aff'd, 346 F.2d 307 (2d Cir. 1965), and approved by every court 

6 

Appellate Case: 89-1218 Document: 01019880174 Date Filed: 06/27/1990 Page: 6 
that has since considered the issue, "[w]hether there has been an 

increase in dues must be determined not by who imposed the 

exaction but by the nature of the imposition and its direct effect 

upon the financial burden of the individual members." Id. at 394; 

see Seybert, 623 F.2d at 784; Local No. 2, Int'l Bhd. of Tel. 

Workers v. Int'l Bhd. of Tel. Workers, 362 F.2d 891, 894-95 (1st 

Cir.), cert. denied, 385 U.S. 947 (1966). In this case, 

plaintiffs presented undisputed evidence that the up to sixfold 

per capita tax increase proposed in Option B would require the 

local unions to increase their dues in order to remain solvent, 

thus imposing a direct financial burden on individual union 

members. Under these circumstances, Option B proposed a thinly 

disguised dues increase rather than a true p~r capita tax and was 

not an alternative· to the dues increase proposed in Option A. See 

Seybert, 623 F.2d at 785 n.11 (recognizing that a per capita tax 

increase could be deemed an increase in the "rate of dues" under 

LMRDA § 10l(a)(3) when an international union seeks to impose such 

an onerous per capita tax increase that the members of its 

subordinate locals would be coerced into increasing their own 

local membership dues so as to preserve the financial integrity of 

their locals). Accordingly, we affirm the district court's 

holding that the September 1988 union member vote in favor of 

Option A did not satisfy the requirements of LMRDA § 10l(a)(3). 

2. Sufficiency of UBC Board approval 

The UBC next argues that the dues increase proposed in 

Option A was permissible under LMRDA § 10l(a)(3)(B) because it was 

previously approved by the UBC Board. See 

7 

Appellate Case: 89-1218 Document: 01019880174 Date Filed: 06/27/1990 Page: 7 
29 U.S.C. § 4ll(a)(3)(B)(iii). In support of this argument, the 

UBC relies principally on the Ninth Circuit's decision in Mori v. 

International Brotherhood of Boilermakers, 653 F.2d 1279 (9th Cir. 

1981) . 1 

In the Ninth Circuit considered whether 

LMRDA § 10l(a)(3}(B) permitted the convention of an international 

union to establish minimum local union dues for members of a 

single craft within its affiliated local unions. Id. at 1280. 

The court held that this action was authorized by section 

101(a)(3)(B)(i), which permits an international labor organization 

to raise dues by majority vote of the delegates voting at a 

regular convention of the labor organization. See 

29 u.s.C •. § 4ll(a)(3)(B)(i). In reaching this conclusion, the 

court found that section 10l(a)(3) was not intended to displace an 

international union's traditional authority to set dues payable by 

its members to their local unions, Mori, 653 F.2d at 1283-84; see 

Ranes, 317 F.2d at 917-18, but also recognized that this authority 

was not unlimited and that Congress had intended it to be 

exercised in a democratic manner that protects union members from 

1 The UBC also cites Ranes in support of this 

Ranes, the Seventh Circuit held that 

contention. 

an international union has authority under 

[LMRDA §] 10l(a)(3)(B) to enact an across-the-board 

increase in dues to be paid by its members to its 

affiliated local unions and to bind its local unions by 

that action without submitting the question of the dues 

increase to a referendum of the locals' members. 

In 

317 F.2d at 917 

little support 

increase on the 

unions who have 

(emphasis added). This holding thus provides 

to the UBC's claim that it may impose a dues 

members of a handful of its affiliated local 

consistently voted to reject such an increase. 

8 

Appellate Case: 89-1218 Document: 01019880174 Date Filed: 06/27/1990 Page: 8 
arbitrary, exploitative or discriminatory action 

international union. See Mori, 653 F.2d at 1284-85. 

by the 

Our concern in this case is whether the procedures followed 

by the UBC adequately protected the Colorado union members' 

democratic rights as required by LMRDA § 10l(a)(3)(B). While this 

standard is generally met when an international union raises dues 

across-the-board for all of its affiliated union members, see 

Ranes, 317 F.2d at 917; White v. Local No. 207 of Laborer's Int'l 

Union, 387 F. Supp. 53, 56 (W.D. La. 1974), an attempt by an 

international union to impose increased dues on only a minority of 

its membership requires more careful scrutiny. See White, 387 F. 

Supp. at 56. In Mori, which concerned just such a dues increase 

for a minority of the international union's overall membership, 

the Ninth Circuit concluded that Congress' concern for democratic 

processes had been satisfied because the minority union members 

had had delegates present and active at the union convention that 

approved the challenged dues increase, the evidence established 

that many of these affected members supported the selective dues 

increase and there was no other reason in the record "to distrust 

the democratic process at work at the convention." Mori, 653 F.2d 

at 1284-85. The undisputed facts in this case, however, are 

significantly different. Here, the UBC sought to impose a dues 

increase on a minority of its membership that had repeatedly 

rejected just such an increase through democratic votes conducted 

by its governing labor organization, the District Council. The 

UBC body seeking to overturn this result, the UBC Board, included 

no representatives from the District Council or the Colorado local 

9 

Appellate Case: 89-1218 Document: 01019880174 Date Filed: 06/27/1990 Page: 9 
unions. Instead, it was composed of fifteen members, all of whom 

were either UBC officers or district representatives elected at 

the UBC's convention by vote of all of the delegates. The Board 

member deemed to represent UBC's Colorado union members was in 

fact a member of a Nebraska local union. Under these 

circumstances, it cannot be said that the individual members of 

the Colorado Carpenters unions were allowed to participate in the 

UBC Board's decision to increase their dues in the manner required 

by Congress in LMRDA § 10l(a)(3)(B). 2 

882-83. 

See Brown, 343 F.2d at 

This conviction is reinforced by our agreement with the 

district court that only the governing body of the District 

Council is empowered under LMRDA § 10l(a}(3}(B) to raise the dues 

payable solely by its members. This conclusion flows from the 

language of the statute, which provides that a nonlocal labor 

organization may raise the dues paid by its members by majority 

vote of delegates at its convention, by majority vote of the 

membership itself or, at least on an interim basis, by majority 

vote of its governing body. See 29 u.s.c. § 4ll(a)(3)(B). In 

each case, however, the statute makes it clear that the increased 

dues must be enacted by the relevant body "of such labor 

organization," that is the organization whose members will be 

required to pay the increased dues. See id. This reading of the 

2 The failure of the democratic process in this instance is 

even more apparent when one considers that both the Colorado union 

membership and the delegates and officers of the District Council 

vigorously and unsuccessfully protested the UBC's decision to 

disregard the results of the membership's two previous votes on 

the revenue issue. 

10 

Appellate Case: 89-1218 Document: 01019880174 Date Filed: 06/27/1990 Page: 10 
statute is not, as the UBC claims, inconsistent with the cases 

affirming an international union's authority to establish dues 

payable to affiliated local unions, see Ranes, 317 F.2d at 917; 

Denov v. Chicago Fed'n of Musicians, Local 10-208, 703 F.2d 1034, 

1042 (7th Cir. 1983), because these cases each involved an acrossthe-board dues increase for all members of the international 

union. See id. This interpretation of the statute is also 

consistent with Mori's holding that international union convention 

delegates may vote a dues increase for a minority of union members 

because the affected members in that case were not, as here, all 

members of a separate and distinct "labor organization," see 

Gordon v. Laborers' Int'l Union, 490 F.2d 133, 135 (10th Cir. 

1973)(district council constitutes "labor organization" under 

LMRDA), cert. denied, 419 U.S. 836 (1974), but rather were members 

of a specific craft who apparently were dispersed throughout the 

international union's affiliated locals. See Mori, 653 F.2d at 

1280, 1284. Thus, the dues increase in Mori was again an acrossthe-board increase applicable to all members of the international 

union who qualified and was not, as here, a dues increase imposed 

solely on members of a distinct "labor organization." 

B. Attorneys' Fees 

In their cross-appeal, plaintiffs contend that the district 

court abused its discretion when it denied their motion for 

attorneys' fees. Specifically, plaintiffs argue that the district 

court erred by applying an incorrect legal standard to their claim 

to fees under the common-benefit doctrine approved by the Supreme 

Court in Mills v. Electric Auto-Lite Co., 396 U.S. 375, 393-94 

11 

Appellate Case: 89-1218 Document: 01019880174 Date Filed: 06/27/1990 Page: 11 
( 

(1970), and Hall v. Cole, 412 U.S. 1, 5-9 (1973). That doctrine, 

based on the courts' inherent equitable power to award attorneys' 

fees when the interests of justice so require, provides that 

attorneys' fees may be shifted to a nonprevailing party when "the 

plaintiff's successful litigation confers 'a substantial benefit 

on the members of an ascertainable class, and where the court's 

jurisdiction over the subject matter of the suit makes possible an 

award that will operate to spread the costs proportionately among 

them."' Hall, 412 U.S. at 5 (quoting Mills, 396 U.S. at 393-94). 

In this case, the district court correctly described the common 

benefit doctrine as it applies in cases brought under the LMRDA 

and then specifically found that "assessment of attorneys' fees 

against defendant would not be in the interest of justice." Order 

of August 14, 1989. Under these circumstances, we find no abuse 

of discretion in the district court's decision. 

The judgment of the United States District Court for the 

District of Colorado is AFFIRMED for the reasons stated above. 

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