F OR P UB LIC AT ION


### U N I TED STA TES C O U R T O F A PPEA LS F O R T H E N IN T H C IR C U IT

S ER V I CE S E MPLOYEES I N T ER N A T I O N A L U

NI ON ; D A V ID R EG AN ; E L I S EO M ED I NA , as Trustee s for SEIU United He althcar e Workers-West and fiduc iaries of the SEI U Unit e d H e a lth c are Wor ke rs West and J oint Employ er Educ ation F un d ; S E IU U

NI TED H EA LTH CARE W O RKERS -W EST , an unincor porate d association and f

iduciary of the SEI U Unit e d H e a lth c are Wor ke rs West and J oint Employ er Educ ation F un d; REB EC C A C OL L I NS , a s a participa nt in the SEI U United Hea lthcare Workers-West and Joint Employ er Educ ation Fund,

Plaintif fs-Appellee

s ,

v.
N A T I O N A L U

N I O N O F H EA LTH CARE W O RKERS ; J OHN B OR S OS ; S AL R O SSELLI ; J OHN V E L L AR DI TA ; RAL PH C O R N E JO ; M A R T I G A RZA ; G L EN N G O LD ST E IN ; J AS ON J OHNS ON ; M A RK K I PF ER ; G ABE KR I S TAL ; J ORGE R ODRI GUEZ ; F R ED S EAVEY ; P H Y LLI S W I L L E TT ,

De fe nd an ts- Ap pe lla nts

. No. 10-16549

D.C. No. 3:09-cv-00404- WHA

OPI NI ONS E IUV

. NUHW

2

T hi s s ummary cons t i t ut es n o part of t he op i ni on of

t he cour t

. I t ha s * b een p repa red b y co urt s t af f f o r t he co nveni ence o f

t he read er. Appea l from the United States District Court fo r t he No rt he rn Di str ic t of

Ca lif or nia Wil liam Alsup, District J udg e, Presiding Argued June 13, 2012 Submit ted Marc h 26, 2013 San F ra nc isc o, Ca lif

or nia
Filed Ma rch 26, 2013
Be fore : Ronald M. Gould, Ri char d C. Tallman,
and Carl os T. B e a , Ci rc uit

Judg e s. Opinion by

J udg e Ta llman

SUMMAR

Y *

Labor Law
T h e p anel a ffirme d the district c ourt’s judgme nt, a fter a jury trial, in an action under § 501 of t he L abor Ma nag ement Re po rt ing and Di sc los ur e Ac t a g a ins t loc a l un ion offic ia ls who diverte d union r esourc es in an attempt to establish a new competinglocal union. The pa n el h eld t hat § 501 cr eate s a fiducia ry duty to the union as an org anization, not mere ly to the union’s rank- andfi le memb ers . The pa

ne l he ld t hat in a c tiv e ly a tte mpt ingto obstruct the international union ex ecutive committee’sS E IUV

. NUHW 3

d ec ision to consolidate all of its California unioniz ed lon gte rm he a lth c are wo rk e rs fr om thr e e dif fe re nt l oc a l un ion s into one, the loca l union officials bre ache d the fiduciar y duty they owed their

own union as an o rga nization. Thi s brea ch inv olv e d a

patte rn of c on du c t of

e ng a g ingin d

ua l un ion ism that was n o t protec ted spee ch. B eca use this brea ch contravened the union’s constitution, i t could n o t have be en authorized.
Th e pa ne l a lso he ld t

hat th e dis tr ic t c ourt

did no t err

in
e x c l u d i n g e v i d e n c e , n o r

i ni s s u i n g a p e r

m an e n t i n j un c t i o n
. In a dd iti on , th e dis tr ic t c ourt did no t er r i n r e a din g the ve rd ic t to impose sever al liability , and not joint-and-se vera l liability , on the de fe nd ants

.

CO UN SEL Dan Sieg el, Sieg el & Yee , Oakland, Ca liforni a, for De fe nd ants -A

pp e lla nts

. J eff rey B. D emain & J onathan W eissg lass, Altshuler B erzon L L P , S an Fr an ci s co , C al i fo rn i a; R o b ertM

. W ei nb er g, W. Gary Kohlmann, L eon Da

y an, and Ramy a Ravindra n, Br ed h o ff & K ai s er , P L L C , W as h i n gt o n , D. C

. ; Gl en nR othner, Rothner, Seg all & G ree nstone, Pasadena , California, for Pla int if fs -A pp e lle e s.S E IUV

. NUHW

4

B ecause a jury he ard t hree weeks’ wo rt h of evi d ence b ef o re r end eri ng 1 its f inding t hat t he d ef

end ant s were l i ab l e, we r eci t e t he f act s and a ll
re a so n a b le infe re n c e s the re fro m in the li g h t m o st fav o ra b le to the ve rd ic t. See Las s i t er v

. Ci t

y of Br emer t on , 55 6 F.3d 10 4 9 , 10 5 3 (9t h C i r. 20 0 9 ). OP IN ION
TAL L MAN, Circuit J udg e:
T h is a p p e a l p r e s e n ts a c la s s ic u n io np o w e r s tr u g g le

. We must resolve whe ther § 501 of the L abor Man ageme nt Reporting and Disclosure Act cr eate s a fiducia ry duty to the
un ion a s an o rg anizatio n, no t me re ly the un ion ’s ra nk -a nd -f ile
me mbe rs . We ho ld t

hat it do e s.
The de fenda

nts, who by

jury verdic t we re de te rm ine d to

1 be ro gu e loca l union officials who diver ted union resour ces in an attempt t o es tablish a new c ompeting loc al union, brea ched this duty . The i nternational union’s executive
c omm itt e e ha d d e c ide d to c on so lid a te a ll o f it s Ca lif or nia unioniz ed long -term healthca re worke rs from three differ ent loc a l un i o n s i n t o o n e
. T h e d e f e n d an t s a c t i v e l y a t t e mp t e d to obstruct this consolidation, breac hing the fiduciar y duty they
o we d t h eir own union a s an org anization. This breac h inv olv e d a

patte rn of c on du c t of

e ng a g ingin d

ua l un ion ism that is not protected spe ech. B eca use this bre ach c ontrave ned the union’s constitution, it coul dnot have be en author ized. We affir m the jury ’s ver dict and uphold its awar d of dama g e s.
I
The Servic es Employ ees International U n i o n (“SEIU”) consists of 2.2 milli on members who wo rk in hea lthcare ,S E IUV

. NUHW 5

pu bli c se rv ic e s, and

pr op e rt y se rv ic e s. Un ite d H e a lth Workers (“ UHW”) is one of many “loca l” union s aff

iliated with SE IU

. A t t

h e ti me it s d is p u te w it

hth e inte r

n a ti onal union arose, UH W represe nted appr ox imately 150,000 healthca re w orker s in California.

T h e SE IU c o n s ti tuti o n , w h ic h is bi n d in g o n U H W, d e f i n e s th e r e l a t i o n s h i p b e tw e e n S E IU an d U H W

. T h e S E IU c on sti tut ion ve sts SEI

U’ s Inte rn a tio na l E xec uti ve B oa rd wi th authority reg ardingalig nment and jurisdiction of loca l unions lik e UHW. F or

a t le a st the la st d e c a de , SE IU h a s r e g ula rl y me rg e d a nd re a lig ne d lo c a l un ion s.

A
Th e UH W itself was for med as the r esult of SEI U’s merg er of two local healthca re unions in California in 2005. Har mony betwee n the international and i t s newly cre ated local union was shor

t-lived. Shortly

after UHW ’s cr eation, UHW officials be g an to spar w ith SEI U leade rship over SEI U’ s juri sd ic tio na l pl an f or lon g -t e rm

c are wo rker s in California. The international un io n in te nded to move 150,000 long- term ca

re w orker s from three separ ate unions, including
some 65,000 from UHW, into a new loc al union char tere d by SEI U.
The c ontroversy

beg an to heat up in 2008. In J anuar y of that y ear , an S E I U ex ecutive vice pre sident issued a re port concludingthat long- term ca re w orker s would be better
serve d if they had a union of their own. On J anuar y 25, 2008, the UHW Ex ecutive B oard pa ssed a r esolution instructing UH W of fi c e rs “ to t ake any and al l a pp ro pr iate me a sure s” to protec t the ability

of UHW long -term c are worke rs to vote on any plans to split t hem into a new union. For g ood measure ,S E IUV

. NUHW

6
the UH W Ex ecuti ve B oa rd pa sse d a n a dd iti on a l, s imi larl y worde d measure in March 2008.
SEI U dec ided to appoint a “he aringoffice r” in e arly 2008 t o f urth e r an a l y z e t h e l o n g - t e r

mc ar e w o r

k e r s i s s u e
. In Au g us t 20 08 , th e he ari ngof fi c e r re le a se d h is f

ind ing s, endorsingthe cr eation of a new SEI U union of long -term c are wo rk e rs . B a se d o n this re c omm e nd a tio n a nd oth e r f ind ing s, SEI U’s Internatio n al Executive Boa rd issued a written resolution on J anuar

y 9, 2009 , direc ting c onsolidation of long- term ca

re w orker s into a new California union.

B
As the lon g -t e rm

c are wor

ke r r e a lig nme nt c on tr ov e rs y acc eler ated a

nd tensions esca lated betwe en off icials of the international union and U HW, SEI U beg an to consider placing UHW into “trustee ship.” The SEI U consti tution grant s SEI

U the a uth or ity to p la c e a

loc a l un ion

int o trusteeship “to prote ct the intere sts of the membership” from local union malfe asanc e. Institut ing a t rust eeship a llows SEI U to appoint new of

fice rs to “take char g e and c ontrol of the af fairs of a L ocal Union” with the “ef fec t of removingthe office rs of the L ocal Union.” Essentially , a trustee ship allows the par ent union to repla ce the exis ting local union leader ship.

In August 2008, while SEI U’s appointed he aringoff i cer was re comm e n d in g

the rea lignment of

UHW’s long- term ca

re wo rk e rs , SE IU c onve ne d a he ari ngto d isc us s w he the r t o place UHW in trusteeship. For mer United St ates Sec reta ry of L ab o r R ay

M ar s h al l p re s i d edo v er

th e t ru s t ee s h i p h e a r i n g. Secre tary Marsha ll eventually

issued his report on January 21, 2009, twelve da

y s after SEI U had a dopted its realig nment pla n. Th e re po rt

re c omm e nd e d t hat UH W be pla c e d intoS E IUV

. NUHW 7

trusteeship if it “r efuse [d] to abide by and coope rate with” SEI U’s re alig nment decision re g arding long -term c are worke rs. Secre tary Marsha ll sug g ested that UHW b e given five da y s to acc ept th e l ong -term c are decision or f ace trusteeship.
The SEIU International Ex ecu t ive B oard a pproved Secre tary Marsha ll’s rec ommendations on J anuar y 22, 2009, g iving UHW u n t i l J anuar y 27, 2009, to confirm in writing that it would not oppose the cre ation of the new l o n g-term c ar e w o r k e r s un io n
. T h e U H W w o u ld n o t s o p r omise, and SEI U place d UHW into trusteeship on J anuar y 27, 2009.
C
Th e jur y fo un d th a t th e de fend ants did no t take the se de ve lop me nts kin dly . B e fo re the con tr ov e rs y re a c he d it s climax, t he def

endants, loca l UHW officia l s, took a number of a c tio ns that SEI

U pr ov e d a t tr ia l vio late d th e off icia ls’ fiduciar y duties to U HW. The jury , by its verdict, found that defe ndants, while still employ ed as U HW o ffice rs, eng ag ed in action desig ned to wea ken UHW in the eve nt of a trusteeship while a cting to form and pr omote a riva l union.
The e vidence at trial showed that U HW o fficia ls sought to c reate a

n ung ov e rn a

ble sit uatio n f or tr us te e s a pp ointe d to ad m i n i s t er

UH W b y : (1 ) b l o ck i n g ac ce s s t o UH W b u i l d i n gs to preve nt the SEI U-a

ppointed trustees fr om ent er i n g ; (2)
re moving UH W property from UHW buildings, including of fi c e e qu ipm e nt, c omp ute rs , and e mpl oy e e g ri e va

nc e fi le s; (3 ) i ns tr ucti nglow e r- le ve l U HW o ff ic ia ls a nd ra nk -a nd -f ile
mem bers not to re cog nize the authority of the trustee s; (4) hara ssing SEIU staff

by storming SEIU’s Alame da,S E IUV

. NUHW

8 California, off

ice; and ( 5) t er minating UH W collective ba rg a ini nga g re e me nts wi th C a lif or nia e mpl oy e rs
. At the same time, the defe ndants, while still on the UHW pay roll, beg an to cr eate and promote the new union. The evidenc e showed that the defe ndants: (1) sea rche d and prioritized office spa ce f

or t he new union in Dece mber 2008 and J anuar

y 2009; (2) inst ructe d staff to c ollect sig nature s on a “ d isaffiliation” pe tition i n an attempt to disaff iliate UHW f r o mS E IU ; ( 3 ) r e s e ar c h e d t h e “ d e c e rt i f

i c a t i o n ” o f

U H W, which would have terminated UH W’s role as collec tive barg aining ag ent for its members, thus allowing a new union to b e c ome the ba

rg a ini ngre pr e sent a tiv e of tho se me mbe rs ; (4 ) ann ounc e d to me mbe rs thr e e da y s be fo re th e tr

us te e sh ip was imposed that member s could decer t ify and join a “ne w, independe nt, democratic, prog ressive union;” ( 5) create d an off- line databa se of membe r conta ct inform ation befor e the trusteeship wa s imposed for use a fter the t rust eeship we nt into effe ct, at lea st in part to solicit UHW members to joi n the new union; an d (6) r eg istered the doma in NUHW.org and draf ted a press release announcing the new union on J anuar y 27, 2009, the day

the UHW trusteeship wa s imposed.
Wit hin a wee k afte r the trust ee s h ip was announc ed, the individually

named de fenda

nts had cre ated the N ational Union of Hea lthcare Workers (“N UHW”) and h ad fi led petitions to have UHW rem o v ed as the barg aining
re pr e se ntativ e fo r i ts c ur

re nt m e mbe rs
. D
L iti g a tio n b e g an in

Marc h 2 009 w he n SE IU s ou g ht a temporar y restra ining or der ( “TRO”) from the United States District Court for the Northern District of California re quiringS E IUV

. NUHW 9

the re tur n of a ll UH W pr op e rt

y po sse sse d b y

the de fe nd ants

. Th e de fe nd ants re sis te d the TRO on the g ro un ds that th e y

did
no t po sse ss a

ny UH W pr op e rt

y
. Th e de fe nd ants argue d th a t, beca use they did not po ssess any

proper ty , a TRO would be “an e x erc ise in futility .” Still, S EIU pre vailed, a T RO issued, and the defe ndants appe aled. We pre viously upheld the issuance of

injunct i v e re lief on appe al. Serv. Em ps. Int’l Un ion v . Na t’ l U

nio n of He alt

hc ar e W or k e rs , 598 F.3d 1061, 1072 (9th Cir. 2010). Notwithstanding co u nsel’s re prese ntations that the de fe nd ants po sse sse d n o U HW p ro pe rt y , t he d e fe nd ants even tual ly

re tur ne d s c or e s o f b oxe s o f r e c or ds be lon g ingto UHW. SEIU claimed that not a ll missing pr operty had bee n returne d, and the district c ourt g rante d a per manent injunction extending the TRO’ s require ment that the de fe n d ants retur n a l l U H W p r o p e rty.
The c ase pr ocee ded to t rial on S EIU’s cla ims for brea ch of fi du c iary dutie s un de r § 50 1 of the L MRD A a nd dama g e s. In the spring of 2010, the ca se wa s tried bef ore a jury , which found in favor of SEI U. The jury returne d a ver dict awa

rding damag es ag ainst the individual defenda nts in various amounts, and the distri ct court e ntere d judgme nt ag ainst the d ef endants for

vary ing a mounts awarde d by

the jury . The individual judgments ra

ng ed fr om $31,400 to $77,850, and NUHW was a ssessed dama g es of $724,000.
Al tho ug h th e jur

y ins tr uc tio ns a llo we d th e jur

y to i mpo se either individual or joint-and- sever al l i abil ity , the spec ial verdic t form containe d no place for the jury to indica te which the y ha d c ho se n. Th e ve rd ic t f or m r e qu ir ed th e jur

y to l ist dam a g e s un d e r f

o ur d if f e r e n t c o lumn s : “ Sa la

r y and Be nefits,” “ Diversion of Resource s,” “Incre ased Sec urity ,”S E IUV

. NUHW

10

and “ L os t D ue s. ” On

the fo rm , th e jur

y ent ered sp e c if

ic
a mou n t s f o r e a c hd e f e n d an ti ne a c ho f

t h e f o ur c a t e g o r i e s. The fina l column of the for m as k ed t h e j ury

to indicate the total liabilit y

of ea ch def

endant. The district cour

t interprete d the form to impose several li ability on eac h defe ndant for the amount in the final column.
The de fenda

nts moved: ( 1 ) fo r j udg ment as a matter of law; (2 ) f or ne w tri a l; a

nd (3 ) t o a lt er th e dama g e s a wa rd s. The distri ct cour

t denied these respe ctive motions, and the def en dants timely

appea led. We have jur isdiction under 28 U.S.C. § 1291.
II
We must first resolve what d u t y fede ral lawimposes on loc a l un io n o f

f ic ia ls w h o a c t to s u

b v e rt th e d ir e c ti v e s of a pare nt union in contrav en t ion of their own union’s constitution.
Under § 501 of the L abor Ma

nag ement Reporting and Di sc los ur e Ac t ( “ L MRD A” ), of fi c e rs of la

bo r uni on s ar e he ld to the highe st standards of r esponsibility and ethica l conduct in administering the af

fairs of the union. 29 U.S.C. § 501. What makes this case unusua l, and one of first impression for us, is that usua lly

a union member , not a par ent org anization like SEI U, asser

ts a § 501 claim ag ainst union office rs. See, e.g. , Kerr v. Shanks , 466 F.2d 1 2 7 1, 1274 (9th Cir. 1972); Stelling v. Int’l Bhd. of Elec. W orkers, Local Union No. 1547 , 587 F.2d 1379, 1381 ( 9th Cir. 1978)

. I n this case, howe ver, the international union asserts that the def endants viol ated their duty to UHW, the i r own orga nization. The question be fo re us , o ne tha

t un de rp ins the ma

jor ity of the de fe nd ants ’S E IUV

. NUHW 11

claims on appe al, is exactly to whom union officials owe that f i d u c i ar y d u ty.
The UHW def

e nd ants po sit

tha t th e y ow e d th is d

uty to on ly the ra

nk -a nd -f ile me mbe rs of

the ir loc a l un ion . B e c a

us e the y su bje c tiv e ly be lie ve d th e ir act ion s a ssi ste d th os e me mbe rs by

e sta bli sh inga

mor e de mocrat ic un ion wi th localiz ed control, they

maintain they

have done no wrong under § 501. The ir argument ignor es the fa ct t h at t hey diverted union resour ces to w eake n their own union and for m a riva l union m er el y beca use they did not ag ree with the constitutionally

permissible dec ision of the i nternational union. Be cause no construction of the L MRDA allows such
c on du c t bas e d mer e ly

on the de fe nd ants ’ s ub

je c tiv e mot ive s, we re je c t th e de fe nd ants ’ a

rgume nt.
Th e SEI U E xec uti ve Co mmitte e , und e r t he a uth or ity g iven to it by

both its constit ution and the UHW constitution,
c are fu lly c on sid e re d a

nd a do pte d a me a sure it b e lie ve d w ou ld b et t er se rve its member s. The UHW offic ers disagree d, which they

may do, and they

voiced the i r opposition, which they also may

do. See 29 U.S.C. § 411 (protec ti n g u n i on of fi c ia ls’ sp e e c h)

. What the y may no t do un de r t he law i s u se their union’s re source s to actively obstruct implementation of the final de cision.
Th e int e rn a tio na l un ion ha s the a uth or ity , un der its
c on sti tut ion , to pl a c e a

loc a l un ion

int o tr us te e sh ip. Th e fa c ts adduce d at trial show that SE I U did not take this decision lightly ; it appointed a respe cted former Depar tment of L abor Secre tary to preside ove r a f

act- findin g hear ing a

nd considere d the issue for six mon t h s
. Ba sed on the
re c omm e nda tio n f

ro m th is h e ari ng

and the de fe nd ants ’ ref usal to accep t S E IU’s dec ision to create a newS E IUV

. NUHW

12
consolidated loca l union under SEIU con tro l, th e in te r national place d UHW into trusteeship.

L oc a l un ion s are no t c omplete ly a t th e me rc y

of the ir int e rn a tio na l un ion s. Th e tr us te e sh ip mus t be re sp e c te d o nly if SEI U imposed it properly . I f the international union takes action that violates its own fiduciary duties under f eder al law, or if the inter

national union improperly imp res se s a trusteeshi p contra

ry to its constit ution or fede ral law s reg ardingtrusteeship, see 29 U. S.C. §§ 462–64, t he loca l union can challeng e the international union’s dec ision. See, e.g. , Navarro v. Gannon , 385 F.2 d 512, 519 (2d Cir. 1967) (a llo wi ng a loc a l un ion

to b ri ngan a c tio n und e r § 50 1 a g a ins t the international union when the international did not follow the L MRDA’s t rusteeship provisions or i ts own constitution). The de fenda

nts considere d such a le g al chal leng e, but they
wer e told by

their counsel that their cha nces of succe ss were “nil.” The international union had f ollowed the law.
Th e de fe nd ants we re le ft wi th n o le g a l r igh t to sta nd in the way of the impl em entation of S EIU’s consolidation decision. Instead, they

opted fo r an ex tensive, extra-leg al challeng e with one mission: t o discard the char red r emains of a weakened UHW while simult aneously startin g a n ew competinglocal union of their own. Now, af ter e ng ag ing in a

pattern of

conduct a im ed at we ak en i n g the ve ry union they re presented, the de fe nd ants asser t that, under the pla in languag e of § 501, this ex tra-le g al strateg y nonetheless de serve s the law’s pr otection. They argue that Cong ress intende d that the L MRDA ensu re that unions are “ internally

demo cratic,” and yet they also seekS E IUV

. NUHW 13

W e no t e t hat Sec re ta ry M a rs hal l , when reco m m end i ng t hat SE IU 2 i mpos e a t r u s t ee s h i p on U H W , pr oper l y obs er v ed, “ n o dem ocr at i c l abor
o rgani zat i o n can p erm i t l o cal uni o ns t o nul l i f y i nt ernat i o nal de c isions
r eac hed t hr ough t he d em o cra t i c p ro ce sses s pec i f i ed i n t h ei r Cons t i t u t i on and B y l aws. ” (emp hasi s ad d ed ). judicial exonerati o n for their decide dly

anar chistic methods of opposition. 2
Their a rgument that th e fi d u ciary duty of § 501 is owed
on ly to t he ra nk -a nd -f ile me mbers of

the ir loc a l un ion

fa ils

. The plain languag e of the s t atute demonstrates that union
o f f ic e r s o w e th is d

u ty to th e o r g an iz a ti o n a s a w h ole, not
me re ly to th e ra

nk a nd fi le . Inh e re nt i n th is d uty is a require ment that officia ls spe nd union mone y “solely for the benef it of the org anization and it s members . . . in accor dance with its constit ution and bylaws.” 29 U.S.C. §501(a ). Using
un ion re so ur c e s to we ake n th e un ion its e lf c on sti tut e s a brea ch of this dut y , ev en when the of fice rs believe they

are a c tin g in t he be st i nte re st o f t

he ra nk -a nd -f ile me mbe rs
. A
To de te rm ine § 5 01 ’s sc op e , w e loo k f ir st to the te xt.

“ [ S ] t a tu t o ry i n t e r

p r e t a t i o nb e g i n s w i thth e s t a tu t o r y t e x t

. If the statutory

languag e is unambig uous and the st at u tory sc he me is c oh e re nt a

nd c on sis te nt, jud ic ia l in qu iry mus t cea se.” Miranda v. Anc hondo , 684 F.3d 844 , 8 4 9 (9th Cir. 2012) (c itation and internal qu o t ation marks omitted). The te xt of § 5 01 pr ov ide s:
The off icer s . . . o f a la

bor org anization occupy p o sitions of trust i n relation to such organization and it s members as a g roup

. I t is ,S E IUV

. NUHW

14
the re fo re , th e duty of e a c h s uc h p e rs on . . . to h o ld it s mo n e y

an d p r o p e rty s o le ly for the b e n e fi t o f t h e o r ga n iz a ti o n and its members
and to m ana g e , inve st a

nd e xpe nd the same in
acc o r d an c e w it

hit s c o n s ti tuti o nan d

b yla ws and any resolutions of the gov erningbodies adopted ther eunder

. 2 9 U. S

. C

. § 5 0 1 (a ) (e mp h as i s ad d ed ). T h e s t at u t o ry l an gu age expli citly highlig hts the duty of union of fice rs to the
or g aniza tio n it se lf , n ot m e re ly

the un ion ’s me mbe rs
. Even if the d ef

en d ants believed the y

wer e ac ting in the best interest of the union’s members, they neede d to consider their ac tions in relat ion to the interests of the union as a n instit ution. The UHW constitution “s h al l at all times be subordinate to” the SEI U constitution, which prohibits l ocal
un ion of fi c e rs fr om en g a g ingin d

ua l un ion ism

or a ssi sti ngin
e ff or ts t o d isa ff

ili a te . T he de fe nd ants’ actio ns dir e c tly contravened the constitutional provisio n s of the union they repr esente d. “Expenditures by union office rs that violate the union’s constitutions represe nt t he cla ssic case of bre ach of fiduciar y duty under se ction 501.” Gu z ma n v. Be vona , 90 F .3 d 6 41 , 6 47 (2 d Ci r. 1996 ). W e fi nd no re a so n to ch an ge cour se mere ly

beca use the union off

icer s believed the ir a c tio ns ind ir e c tly

be ne fi tt ed rank -a

nd -f ile me mbe rs
. Th e te xt of the L MRD A d oe s n ot s ug g e st a de fe ns e of

“ Tr us t us, we know what’s best for our member s.”
Otherw ise, the L MRDA would essentially provi d e an unmitigated a

venue f or re bellious local off

icer s to circumvent th e c o n s ti tuti o n a l h ie r ar c h y o f an o r g an iz a ti o n li ke UH W. The UHW, at its founding , adopted the SEI U constitution and
rec og nized its authority ; that a uthority is meaning less if localS E IUV

. NUHW 15

T he def endan t s ha ve mad e O

p era t i ve P l a st ere rs the lync h p in o f t h e ir 3
cas e. I t i s n ot bi n di n g a u t h or i t y , a n d w e f i n d i t u n pe r s u a s i v e f

or s e ver al
r e a s on s
. M os t s i g n i f

i c a n t l y , t h e O

p e ra tive P l a st ere rs cou r t di d n ot i nt erpret t he st at ut e acco rding t o i ts p la in la nguage when i t hel d t hat t he def endan t onl y owed hi s § 50 1 dut y t o t he m e m b e rsh ip , and not t o t he
or ganiz at i on
. See O

per at i ve P l ast erers , 843 F. Su pp. a t 1274. A d d i t i o nal l y , t he co urt was al l t o o wi l l i ng t o charact eri ze i t s case as o ne bet ween t he l ocal memb er s an d t he i nt er nat i onal uni on, i ns t ead of bet ween the d e fen d a n t a n d the o rg a n iz a tio n he w a s e n tru ste d to re p re se n t. Se e i d. ( “ [ I ] t wo ul d be cont r ar y t o t he i nt ent of t he LM R D A t o app l y § 50 1(a) as a t o o l of i nsur i ng l o cal off i ci al s’ co m p l i ance wit h th e w i shes of t he I n t er n at i on al l ea der s h i p. ”)

. SEI U does not s ee k t o u s e § 501( a) a s a t ool to e n su re c o m p lian c e w ith its d ire c tive s; it se e k s to us e § 5 0 1 (a ) to re g a in the re so u rc e s the d e fen d a n ts sp e n t t o un d e rm ine the ir o w n un io n . F ina lly, t he O p era t i ve P l a st ere rs co urt d e c ide d only t hat i t co ul d not grant
summ ary judgm ent agai nst t he l o cal off i ci al be cause “ t he reco rd i s si l ent of fi c e rs c an attempt to sc utt le the sh ip o n th e un ion ’s dim e me re ly by inv ok ingthe putativ e int e re st o f t he ir me mbe rs
. The de fe nd ants pr op os e tha t de sp ite thi s mi sc on du c t, SEI U may

pursue only

one re medy : injunctive relief unde r § 301 of the L abor Ma nag ement R elations Act. See 2 9 U. S

. C. § 185. But in a case such as this, whe re a malcontent off

icer has alread y

resig ned, the or g anization would have no re m ed y

for those f

inancial r esourc es that the office r ski m m ed to assist the rebellion. We do not believe Congr ess intended to wr ite such a bla nk chec k fo r i nterna l insurrec tion.
We d o n ot d e c ide wh e the r § 50 1 imp os e s a duty ow e d to the international union itself. Bu t se e Op e ra tiv e Plas te re rs & Ce me nt Ma so ns v . B e nja mi n , 843 F. Supp. 1267, 1274 (N.D. Ind. 1993) (“ When the interests of a loca l and its I nternational
co n fl ict, a loca l union officials’ f iduciary duty under § 501 attache s primarily

to the l ocal union, not the International.”). 3S E IUV

. NUHW

16

a s t o t he eff

ec t o f [t he d efen d an t ’ s] ac t i o n o n L o ca l 1 0 1 o r i t s m em b ers’ i nt er es t

. ” I

d. O u r tria l r e c o rd is r e p le te w ith e v id e n c e tha t t h e d e fen d a n ts
u s e d u n i o n r e s o u r c e s t o a t t e m p t t o w e a k e n UHW

. We decide only

that § 501 imposes a duty to the l ocal union
a s an or g aniza

tio n. Un de r § 50 1, the de fe nd ants ow e d a duty to spend UHW resourc es in acc ordanc e with i ts constituti on, which “sha ll at all times be subordin at e to the I nternational C o n s t i t u t i o n
. ” A n y

e x p e n d i tur e t h a tv i o l a t e s th e S E IU constitution—i ncluding “[ g]ross dis loy alty ,” “[f]inancial
ma lpr a c tic e ,” and

“ engag ingin d

ua l un ion ism ” —w ou ld vio late thi s d

uty . T he me re su

bje c tiv e be lie f t

hat any of the se overa rchin g violations would nonetheless be justified as benef itt i n g th e r an k -a n d -f

i l e m em b er s h i p d o es n o tab s o l ve the d e f e n d an t s o f

l i a b i l i ty.
B
We turn now to the d i s t rict cour t’s jury instruction de fi nin g thi s duty , wh ic h we re vie w de no vo for stat e me nts of law a nd under a

buse of discr etion for its formulation. Hu nte r v . Co un ty

of S ac ra me nto , 6 52 F.3 d 1 22 5, 12 32 (9 th Cir. 2011). We r epea

tedly have held that “[j] ury instructions
mus t f a ir ly and a de qu ate ly

c ov e r t he iss ues p re se nte d, mus t corr ectly state the law, and must not b e m i s l eading .” Id. (q u o t i n g Da ng

v . Cros s , 422 F.3d 800, 804 ( 9th Cir. 2005)). A p art y is e nti tle d to an in str

uc tio n o n it s th e or

y of the c a se only if it is supported by

law and ha s foundation in t he evidenc e. Id.S E IUV

. NUHW 17

T h e i n s t r u ct i on s t at ed: 4

T he of

f i cer s , ag ent s , s hop s t ewar d s an d ot her represe n t at i ves of

a l ab o r organi zat i o n oc cup y po si t i o ns o f t rus t i n rel at i o n t o s uch o rgani zat i o n and i t s m em b ers as a g r ou p. I t i s , t h e r e f or e , t h e du t y of

e a c h s uch p ers o n, t aki ng i nt o acco unt t he special pro b l em s and f unct i o ns o f a l ab o r o rgani zat i o n, t o ho l d i t s m o ney and p ro p e rt y s o l el y f

o r t he b enef

i t of t he o rgani zat i o n and i t s m em b ers and t o m a n a g e , i nvest , and exp end t he
s ame i n a ccor dance wi t h i t s cons t i t ut i on an d byl aws and a ny r es ol ut i ons of t he gover ni ng bod i es adop t ed t her eun der, t o re f

r ai n f r om deal i ng wi t h s uch org ani zat i on as an adve r s e par t y or i n beh al f of an adver s e par t y i n a ny mat t er conn ect ed wi t h his dut i es an d f r om h ol di n g or a cqu i r i n g a ny pec u n i ar y or per s on al i n t er es t w h i ch c on f l i ct s w i t h t h e i n t er es t s of
s u ch or g an i za t i on , a n d t o a cc ou n t t o t h e or g an i za t i on fo r a n y p r o fit re c e ive d b y him in w h a te v e r c a p a c ity in
conne ct i on wi t h t r ans act i ons conduc t ed by hi m o r un der hi s d i rect i o n on b ehal f

of t he o rgani zat i o n. Whe n in str

uc tin g the ju ry

on the de fe nd ants ’ d

uty to UHW under § 501, the district c ourt repe ated the e ntirety of § 501, except for the statute’s inapplicable final sentenc e, verbatim. The instruct ion did not tell t he jury that the defe ndants owed a

ny duty specific ally

to the international union. I t in str

uc te d o nly

that, a s § 50 1 s tate s, the de fe nd ants 4 had a duty

“to hold its mo n ey

and prope rty

solely for the benef it of the org anization and it s members . . . in acc ordanc e wi th i ts c on sti tut ion and bylaws .” 29 U. S.C. § 50 1. B e c a us e we hold that § 501, by

its plain langua g e, cr eate d a duty that the de fend ants ow e d to the ir ow n unio n, the ins tr

uc tio n d id not misst ate the la

w.S E IUV

. NUHW

18
C
Th e de fe nd ants pr opos e that e ve n if § 5 01 c re a te s a fi d u ci ary duty to the org anization, another provision of the L MRDA shields them from any liability beca use their a ctions constituted protecte d fre e-spe ech a ctivities. See 29 U. S.C. § 411.
Whe the r t he L MRD A p ro te c ts the de fe nd ants ’ c on du c t is
re vie we d d e no vo ; w he the r the c ourt pr op e rl y fo rm ulate d it s instructions on this protection is reviewe d for a buse of discretion. Hunter , 652 F.3d at 1232. Be cause our pre cede nt demonstrates that the d ef endants e ng ag ed in conduc t, not mere ly speech , we affirm the district c ourt’s application of law a nd its fo rm ulatio n o f t

he ins tr uc tio ns
. The fr ee- speec h provision of the L MRDA pro v i d es that “[e]very member of

any labor org aniz at i on shall have the ri g ht t o me e t and

a sse mbl e fr e e ly wi th o the r m e mbe rs ; and to expre ss a ny vie ws , a

rgume nts , o r o pin ion s. ” 29 U. S.C. § 411(a) (2). This sec tion, while broad, d o es not provide bla nk e t pro te c tio n for a ll uni on a c tiv iti e s a

me mbe r w ish e s to char acte rize as free spe ech. T he statute pre serve s the union’s rig ht to “adopt and e nforc e reasonable rules as to the responsibility of ever

y member toward the org anization as an in s ti tuti o nan d

. . . con du c t th at w ou ld i nte rfe rewith its performanceof its l egal or cont r actual obligations .” Id. (empha sis added).
Our c ase la

w distinguishes be tween spe ech cr itical of a
un ion —w hic h § 41 1 p ro te c ts— and “ c on du c t de sig ne d to impair the uni on’s ability

to function”—whic h § 411 does not protec t. Fe rgus on v . I

nt’ l A ss’n o

f B rid ge , S tru c tural & Or na me nta l I

ro n W or k e rs , 854 F.2d 1169, 1174 (9t h Cir.S E IUV

. NUHW 19

1988). I n Ferguson , o ff ic e rs of a loc a l un ion

a c tiv e ly opposed the imposition of a trusteeship by their parent union. After the par ent union i m posed the trustee ship, the local office rs forme d a rival union and urg ed member s of the loca l uni o n t o join. Id. at 1171. When the trustees f iled internal misconduct cha

rg es, the off

icer s broug ht an ac tion a rgui ng that § 411 protec ted their a ctivities. Id. at 1172. We rejec ted t heir argument. We expl ained that “ a union [t hat] has disciplined union membe rs who established a r ival union, became its leader s and p ro m o t ed it, and interf ere d direc tly with the union’s eff

orts to function as a

n instit ution” has not punished the m ember s for protected f ree speec h. Id. at 1175

. T h e o f

f ic e r s ’ c o n d

u c t w a s n o t f

r e e s p e e c h ; i t w as

“ p art o f a p a tt e r

n o f c o n d u c t d e s ign e d to d e s tr o y th e union and to interfe re w ith the perfor mance of i ts leg al obligations.” Id. at 1174. The c onduct was not protec ted by the L MRDA.
We find no rea son to disti ng uish Ferguson fr om t he c a se a t ha nd

. Th e de fe nd ants , fa c e d with tr us te e sh ip, wr on g fu lly eng ag ed in a pattern of c onduct desig ned to wea ken the loca l
un ion wh ile sim

ult ane ou sly

se tti ngup a

ri va l un ion

to compete as the local union’s c ollective bar g aining ag ent. The de fe nd ants ’ po rt

ra y a l of the se ob str

uc tio nist a c tiv iti e s— which included a c tively

blocking the trustees’ acc ess to UHW fac iliti es and instruc ting e mploy ees to “ [t ]ake eve ry thing out of the o ff i ce”—as “ sy

mbolic slumber parties” g oes beyond the pale. Under Ferguson , § 4 1 1 d oes not shield from lia bil ity tho se wh o e ng a g e in s ub ve rs ive c on du c t.
T h e L M R D A d o e s p r o t e c t some of the de fe nd ants ’ activit ies, such as simply speakingout in their individual
me mbe r c a

pa c iti e s. Th e dis tr ic t c ourt c are fu lly fo rm ulate d it s ins tr uc tio ns to e ns ur e tha

t “ de fe nd ants we re fr e e to m ake the irS E IUV

. NUHW

20

c a se with in the sy ste m” and we re “ fr e e to e xpre ss t he ir op ini on s as uni on me mbe rs on the jur isd ic tio n a

nd tr us te e sh ip d e c i s i o n s
. ” B u tth e d i s tr i c tc o urta l s o i n s t ru c t e dt h e j ur y, consistent with F

e r gu s on , that de fe nd ants “ ow e d a duty to UHW and S EIU to ref

rain fr om obstructing or

frustrating a

ny formal de cision made by

SEI U or U HW .” The instructions adequately

explained that speec h alone wa s not the ty pe of conduct that c ould constitute “obstructing or fr ustrating ,” but the def endants did not have a ri g ht “while employ ed by UHW, to plan for the c reation of a union or to undermine the ability of UHW to function af

ter their de parture .”
T he instructions ade quately protec ted def

endants fr om punis hme nt for vo ic ingthe ir dis se nti ngop ini on s w hil e reta ining a

proper explanation of defe ndants’ liabilit y for their ac ts undermining U HW’s ab i l i ty to function and for
e sta bli sh inga ne w unio n. Th e dis tr ic t c ourt did no t a bu se its discretion in formulating a corr ect statement of the law to be
a pp lie d o nc e the jur

y ha d d e c ide d o n th e re le va nt f a c ts.
D
Be fore we c an dec lare that ample evide nce at tr i al supported the jury ’s ver dict, we mu s t finally consider the defe ndants’ propose d authorization defe nse. B eca use no un ion c an a uth or ize e xpe nd iture s in vio latio n o f i ts c on sti tut ion , the dis tr ic t c ourt did no t e rr in e xcludi ng th is defe nse in its fina l c harg e to the jury . We reviewthe district court’s de cision de novo. Da ng v . Cr os s , 422 F.3d 800, 804 (9th Cir. 2005).S E IUV

. NUHW 21
1
Th e de fe ns e of

a uth or izatio n d e ri ve s f

ro m a g e ne ra l r ule that “[c]ourts are re luctant to subst i t u t e their judgment for that of un ion of fi c ia ls i n th e int e rp re tatio n o f t he un ion ’s ” g overningdocuments. Stel l i ng , 587 F.2d at 1388 (quoting Ve sta l v. H off a , 451 F.2d 706, 709 (9th Cir. 1971)) (inter nal quotation marks omitted). Often, if a union offic ial’s ac t has b e e na u th o r i z e d b y c o n s t i tu t i o n , b yl aw , r e s o l u t i o n , o r b y a vote of the membership, liability under § 501 attache s only if: (1) the of fi ce r bene fitted persona lly from the a ct; or (2) the act is pate ntly

un re as onable or

taken in bad f

aith. See Guzman , 9 0 F .3 d at 64 7; Local No. 48, United Bhd. of Car pe nte rs & J

oin e rs v . U

nite d B hd

. o f Ca rp e nte rs & J oin e rs , 920 F.2d 1047, 1052 ( 1st Cir. 1990). Ag ainst this backdrop of judicia l reluctance to interve ne in union aff

airs, however, stands § 501 of the L MRDA and a union’s constitution. Section 501 require s that union f unds be spent only

for the be nefit of the or g anization and its members in a c c o r d an c e w it

hth e u n io nc o n s ti tuti on. See 29 U. S.C. § 501. The re solution of this conflict req u ires that the authorization defense apply only when t he author izi ng document, as the n-Senator John F. Kenne dy explained before § 5 01 ’s pa ssa g e , is “ no t in c on fl ic t w iththe [uni on ’s ] const itution and by -laws.” Local No. 92, Int’l Ass’n of Br idge, S tru c tural &

Or na mental I

ro n W or k e rs v . No rri

s , 38 3 F .2 d 73 5, 73 9 n. 13 (5 th Cir

. 19 67 ) (q uo tin g 105 Da ily Cong. Rec . 16415 (Sept. 3, 1959) (r emar ks of Senator J ohn F. Ke nnedy

)). L o ca l union officials c annot asser t the authorization defense when they take a ctions “in direc t conflict with, and c ontrave ntion of, provisions of the constitution of the I nternational Uni on which re mained applicable to the L ocal.” Id. at 739.S E IUV

. NUHW

22
The de fenda

nts used u n i on resour ces to unde rmine and
we ake n the ir ow n un ion and pr omo te a ri va l un io n. Th e se a c tio ns c on tr ave ne the SEI U c on sti tut ion , a

nd , th e re fo re , a lso the UHW constitution. Thus, as a matter of la w, no bylaw or bo ard re so lut ion

c ou ld a uth or ize the ir

a c tio ns
. 2
Even a ssuming the de fenda nts ha d a l egal c laim to such
an in str uc tio n, the UH W Exe c ut iv e B oa rd re so lut ion s c ou ld not, as a matter

of fa ct, au thorize the office rs’ a cts. The
re so lut ion s a

uth or ize d th e of

fi c e rs “ to t ake any

and a ll ap pr op ria teme as ur es to protec t our member s’ rig ht to vote, to remain in UHW , by

g iving nur sing home -ca

re w orker s the
me ans and

tim e to b e a

ble to fr e e ly c a st the ir

se c re t ba llo t to vote to stay

in UHW.” (empha s i s ad ded). The resolution
a uth or ize s o nly

“ a pp ro pr iate me asur e s. ” Th e de fe nd ants executed a strateg y

to w eake n UHW, leavingit ungove rnable , wh ile simult ane ou sly pla

nn ing the c re a tio n of a

ne w unio n to compete w ith UHW. These ac tions ex pressly violated the UH W an d SE IU c o n s ti tuti o n s
. T h e y c an n o t b e r e a d as

“ a pp ro pr iate me a sure s” that th e UH W Exe c uti ve B oa rd c ou ld authorize.

E
Once we c onclude that § 50 1 cr eates a duty that the defend ants ow e d to UH W an d th a t th e y c ou ld n ot c la im a de fe ns e ba se d o n f

re e sp e e c h o r a

uth or izatio n, the de fe nd ants ’ appea l of the jury

verdic t amounts only to a challeng e to the sufficie ncy

of the e vidence

. J ury verdic ts are r eviewe d for substantial evide nce, which “is evidenc e adequa

te to support the jury ’s conc lusion, evenS E IUV

. NUHW 23

if it is a ls o p o s s ib le to dr aw a c o n tr ar y c o n c lu s io n f

r o m the
same e vidence .” Johnson v. Paradise V alley U n i f ied Sch. Di st. , 251 F.3d 1222, 1227 (9th Cir. 2001) (cita t i o n and internal quotation marks omitted).

Fr om our revie w of the trial rec ord, we are satisfied t h at the pla int if

fs pr ov ide d ampl e e vid e nc e that th e de fen da nts diverted union re source s to weake n UHW and fo rm a riva l unio n
. We w il l n o t r e h a s h th e f a c ts h e r e
. B e cause the defe ndants wer e not entitled to a n authorization de fense , the
rec ord w as s u fficient in our judgme nt to support the jury ’s finding that defe ndants violated their f iduciary duty to UHW under § 501.

III
The de fenda

nts claim that the dis t ri ct court c ommitt ed pr e jud ic ia l e rr or

wh e n it e xclu de d e vid enc e that w ou ld qu e s ti o nth e e th ic s , mo ti v e s , an d le a ders h ip o f

SE IU

. We revie w a district cour

t’s exclusion of evi d en ce f or abuse of dis c re tio n an d will re ve rs e on ly wh e n ane rr or is p re jud ic ia l. Harper v. Cit

y of Los Angeles , 533 F.3d 1010, 1030 ( 9th Cir. 2008).
Th e e vid e nc e e xclu de d w a s ir re le va nt . T he de fe nd ants ’ fiduciar y duty under L MRDA §501 to hold and spend union funds fo r t he bene fit of the org anization its elf re mains reg ardle ss of whethe r SEIU is a m o d el international union. Any evidenc e showing S EIU had questionable lea dership and
e thi c s w ou ld n ot l e sse n th e de fe nd ants’ ob lig a tio n to re fr a in from usingunion res o u rc es t o weaken their own union and eng ag e in dual unionis m. This evidence could only prove fac ts that were not “of c onsequenc e in d et ermini ng theS E IUV

. NUHW

24
action.” F ed. R. Evid. 401(b). The d i s trict court did not abuse its discre tion by

excluding irre levant evide nce.
IV
Th e de fe nd ants de se rv e so me re c ogni tio n f or the ir g a ll. Havingonce told the district cour t that they

posses s ed no UHW property

befor e later returning substantial amounts of that proper

ty (but not a ll that rema ins missing ), t h ey n ow invite us to trust that they do not possess any proper ty still at larg e. We dec line the invitation.

T h e district court issued a pe rmane nt injunction that require d the re turn of al l UHW proper ty possessed by

the defe ndants. The de fenda

nts argue “there is no evidence in the
r e c o r d th a t th e y c o n ti nu e to p o s s e s s an y U H W p r o p e rty

. ” We revie w the fa ctual finding s underlyi n g a district cour t’s decision to issue an injunction f or clear error. Scott v. Pa sa de na Un ifi e d S

c h. Di st. , 306 F.3d 6 46, 653 (9th. Cir. 2002).
The fir st skirmish in this case cente red on the issuance of
a te mpo ra ry re str a ini ngor de r r e qu ir ingthe d e fe nd ants to re tur n a ny and a ll U HW p ro pe rt

y to U HW. Th e de fe nd ants op po se d th e or de r, ins ist ingto t he dis tr ic t c ourt

that th e y did not possess any

UHW pr o p erty . After

the district court issued the orde r an d we u p held it, Serv. Em ps. Int’l Union , 59 8 F .3 d at 10 72 , th e de fe nd ants re tur ne d mo re than

sixty box es of mate rial to UHW. Th en , s h ortly befor e trial, the de fe nd ants de po sit e d s e ve nteen mor e bo xes w iththe ir
c o un s e l, w h o tu

r n e d th e p r o p e rty

o v e r to U H W.
The district cour

t found, an dthe trial re cord shows, that so me e qu ipm e nt rem a ins mis sin g . T he c ourt jus tlyS E IUV

. NUHW 25

“ [ O ] nl y i f

al l at t emp t s at r econc i l i at i on f ai l ” c an t he cour t order a n ew 5 tria l o r re su b m it the sp e c ia l ve rd ic t t o the ju ry. I d. cons id e r e d

th e d e f e n d an ts ’ o b v io u s la c k

o f c r e d ib il it y and wisely conclude d that “t h er e is rea son to ex pect yet more missing files will tur n u p
. There is stil l a nee d for a n injunction.” Havingpreviously

crie d wolf i n the federa l courts bef ore, on ly to h ave the ir c ry e xpos e d, the de fe nd ants me ri t no tr us t when they

cry ag ain. The district c ourt p ro p er ly issued the perma nent injunction.
V Finally , we turn to the de fenda nts’ challeng e to the district court’s inter

pretation of the verdic t form. They contend that the dis tr ic t c ourt

e rr e d w he n it

re a d th e ve rd ic t to im po se sever al liability , and not joint-and-se vera l liabilit y , on the tw e n ty

- f o ur in d iv id u a l d e f e n d an ts and

d e f e n d an t N U H W. This argument, though, c arr ies a sig nificant burde n, o n e the defe ndants have not overc ome.

“ [W ] hen con fro nt ed b y

seem in gly

in con si st ent ans wers to the int e rr og a tor ie s o f a

sp e c ia l ve rd ic t, a

c ourt ha s a duty un de r the se ve nth

ame ndme nt t o h arm on ize tho se ans we rs , if
s u c hb e p o s s ib le u n d e r

a f a ir r e a d in g o f

the m.” Floyd v. Laws , 929 F.2d 1390, 1396 ( 9th Cir. 1991). We reviewa 5 trial court’ s interpre tation of a verdic t a nd its de cision to alter
or ame nd a judg ment for abuse of discretion. Id. at 1397–98. Wit h respe ct to whether

the jury intended joint-and-se vera l liability or seve ral liability , we must determ i n e whether the district court’s interpr etation was “ (1) il logic al, (2) implausible, or (3) without support in inf ere nces that may

beS E IUV

. NUHW

26
drawn from the f

acts in the rec o rd.” United States v. Hinkson , 585 F. 3 d 1247, 1262 (2009) ( en banc ) (inter nal quotation marks and c itation omit ted).
The ve rdict for

m in this case left much to be de sired. Al tho ug h th e dis tr ic t cour t in str uc te d th e jur

y to “ e nte r a ll amounts for whic h y o u find that defe ndant liable, including any amounts for whic h others may also be jointly

liable,” nothing in the instructions nor the verdic t f orm explained exactly how the jury

should d em arcate be tween se vera l and joint-and-seve ral liability . I t comes as littl e surprise that the jury returne d a ver dict open to debate.
The de fenda

nts raise sever al coincidenc es in the ver dict that jo int -a

nd -s e ve ra l li a

bil ity c ou ld possi bly

e xpla in. Mo st g laring ly , the amount enter ed for de fenda nt NUHW under “Diver sion of Resource s,” $720,000, totals the exact combined amount of the rema ining de fenda nts, indicating the possibili ty that eac h individual defenda nt’s liability

would be joint and several to NUHW’s l iability

. The defenda nts argue that the jury

also enter ed identica l amounts for some of the d e f e n d an ts in

e a c hc a te g o r

y o f c o n d u c t, w h ic hw ould be a
rea sonable wa

y for a jury t o express its desire for joint-ands e v e r a l l i a

b i l i ty.
The c oncer

n t h at t he amounts ente red c ould po ssi bly indicate joint-and- sever al liability , howeve r, lea ds u s astray from the pr oper f

ocus of our

inquiry . Rather, we must answer only one question: whether

the district court’s inter

pretation of t he verdict and the jury ’s i ntent was illog ical, implausible,
or wi tho ut s up po rt

in i nf e re nc e s th a t ma

y be dr awn fr om f a c ts i n t h e re cord. Id. We c an n o t f a ir ly qu ar r e l w it hth e d istrict court’s r eadingin this m anner
.S E IUV

. NUHW 27

The district c ourt’s rea ding is both logica l and plausible. On the ve rd ict f

or m, t he jur y awa rd e d d if fe re nt a mou nts ag ainst differ ent def

endants, g rantingspecific amounts for
e a c h d e fe nd ant i n e a c h o f t he fo ur c a te g or ie s o f p os sib le dama g e s
. T h is r e s u lt

is c o n s is te n t w it

hth e ju r y im posing liability ag ainst eac h defe ndant in the amount of har m cause d by that particula

r defendant’ s actions. Also, althoug h the amount assessed a g ainst NUHW under “ Diversion of Resource s” equale d the exact combined a mount of the other defe ndants, the jury

did not fol low the same pattern whe n awa rdingdamag es under “L ost Dues.” There , the combined amount of the individual defe ndants equa led $12,000; y et the jur y on ly a sse sse d $ 4, 00 0 a g a ins t N UH W. T he se fact s plausibly support the district cou rt’s infer ence from the specia l verdict that the jury intended to re

ject joint -a nds e v e r a l l i a

b i l i ty an d i n s t e a d e mb r a c e d

s e v e r a l l i a

b i l i ty.
The de fenda n t s also g loss over the most signific ant column on the verdic t f

orm: the final one, in which the jury enter ed discre te amounts for eac h defe ndant. Ultimately , the district court did no more than impose the ex ac t liability for
eac h defe ndant that the jury had enter ed on the specia l verdict fo rm
. Th e de fe nd ants c on te nd

that SE IU h a s f

a ile d to re c on c ile the m at h ematica l coincidenc es they have r aised, but that burden doe s not fall on SEI U. The de fenda nts ca n n o t meet the ir burd e n by me re ly pr ov ing the re may be oth e r p la us ibl e interpre tations of the ver dict form. They must show that the district court’s interpr etation was implausible. B ec ause we be lie ve the de fe nd ants have n ot m e t th a t bu rd e n, we up ho ld the dis tr ic t c ourt ’s int e rp re tatio n o f t he ve rd ic t f

or m and its denial of the defe ndants’ motion to a l t er o r amend the jud g me nt.S E IUV

. NUHW

28
VI The judg ment of l i ability was prope rly

enter ed whe n a corr ectly instructed jury , on a suff

icient fa ctual re cord, f

ound the def endants in breach of their fiduciary duties under § 501 of the L MR DA. There wa s no abuse of discretion in the district court’s ru l i n g on the cha lleng e to the spec ial verdic t the jury returne d.
AF F IRMED.