1

1 UNITED STATES COURT OF APPEALS

2 FOR THE SECOND CIRCUIT

3 August Term, 2002

4 (Argued: November 20, 2002) (Decided: July 17, 2003)

5 Docket No. 02-6002 

6 -----------------------------------------------------------------

7 PATRICK ELLIS,

8 Plaintiff-Appellant,

9 v.

10 ELAINE L. CHAO, Secretary, United States Department of Labor,

11 Defendant-Appellee.

12 -----------------------------------------------------------------

13 BEFORE: F.I. PARKER, STRAUB, B.D. PARKER, Circuit Judges.

14 Appeal from the judgment of the United States District Court

15 for the Southern District of New York (Sidney H. Stein, Judge)

16 entered on December 10, 2001, denying plaintiff-appellant’s

17 motion for summary judgment and his motion to amend his

18 complaint, and granting defendant’s cross-motion for summary

19 judgment. Plaintiff-appellant now appeals seeking a declaratory

20 judgment invalidating a February 2000 Civil Service Employees

21 Association election, and an injunction compelling the Secretary

22 of Labor to file a suit to set aside the election and then

23 conduct and supervise a new one. Plaintiff-appellant also

24 challenges the district court’s denial of his motion to amend his

25 complaint. 
1 24 The CSEA is a union that primary represents state, county

25 and municipal employees within the State of New York. It has

26 approximately 191,000 members. 

2

1 AFFIRMED IN PART, AND VACATED AND REMANDED IN PART.

2 JOSEPH P. CAREY, Joseph P. Carey, P.C., 

3 Fishkill, New York (Annette G. Hasapidis, Law

4 Offices of Annette G. Hasapidis, South Salem,

5 New York, on brief), for Appellant.

6 MICHAEL KRAUSS, Assistant United States

7 Attorney (James B. Comey, United States

8 Attorney for the Southern District of New

9 York and Jeffrey S. Oestericher, Assistant

10 United States Attorney, on brief) New York,

11 New York, for Appellee.

12 F.I. PARKER, Circuit Judge:

13 Appellant, Patrick Ellis (“Ellis”), appeals from a decision

14 of the United States District Court for the Southern District of

15 New York (Sidney H. Stein, Judge) entered on December 10, 2001,

16 denying his motion for summary judgment and his motion to amend

17 his complaint, and granting the cross-motion for summary judgment

18 of appellee, Secretary of Labor Elaine L. Chao (the “Secretary”). 

19 Ellis seeks a declaratory judgment invalidating a February 2000

20 election for Statewide Officers, Region Officers, and Statewide

21 Board of Directors of the Civil Service Employees Association

(the “CSEA” or the “union”)1 22 , and an injunction compelling the

23 Secretary to file a suit to set aside the election and then 
2 23 The LMRDA has also been known as the Landrum-Griffin Act

24 and the Labor Reform Law.

3

1 conduct and supervise a new one. Ellis also challenges the 

2 district court’s denial of his motion to amend his complaint. 

3 We hold that the Secretary’s decision not to initiate suit was

4 not necessarily arbitrary and capricious, but that her Statement

5 of Reasons is not sufficient for this court to determine whether

6 or not it was arbitrary and capricious within the meaning of the

7 Labor-Management Reporting and Disclosure Act of 1959 (the

“LMRDA”).2 8 We further hold that the district court abused its

9 discretion when it denied Ellis’ motion to amend. We therefore

10 affirm the denial of summary judgment to Ellis, and vacate and

11 remand both the grant of summary judgment to the Secretary and

12 the district court’s denial of Ellis’ motion to amend. 

13 I. BACKGROUND

14 Ellis, a self-described “dissident” member of the CSEA, ran

15 for state President of the CSEA against the incumbent president

16 in the union’s February 2000 election. Ellis, having lost,

17 challenged the election. After exhausting his internal union

18 remedies, he filed a complaint on June 22, 2000 with the

19 Secretary pursuant to Section 402(a) of the LMRDA, 29 U.S.C. 

20 § 482(a). Section 402(a) allows a union member who has exhausted

21 the internal remedies provided by his union to file a complaint

22 with the Secretary alleging that a union election violated his 
3 20 Ellis emphasizes that CSEA employees were used to count

21 the ballots. He claims that they were not properly supervised by

22 True Ballot. Ellis contends that this was particularly troubling

23 because he and the other candidates with whom he shared a slate

24 had indicated that a number of union staff positions would be

25 eliminated if they won office, and thus CSEA employees allegedly

26 had a vested interest in the outcome of the election.

4

1 rights under the LMRDA. The Secretary is then required to

2 investigate the union member’s complaint. See 29 U.S.C. §§

3 482(b), 521. 

4 In his complaint to the Secretary, Ellis alleged a broad

5 range of improprieties in how the election was conducted,

6 including, among other things, that: 1) union rules were violated

7 by the improper listing of another candidate; 2) another

8 candidate accepted improper campaign contributions; 3) an

9 excessive number of ballots were mailed; 4) some members received

10 the wrong ballot, no ballot, multiple ballots, and/or late

11 ballots; 5) True Ballot, the independent balloting agency

12 conducting the election, did not provide meaningful oversight of

13 the election process; 6) voted ballots were not properly handled

or secured;3 14 7) ballots were improperly counted and inaccurately

15 tallied; 8) approximately 2,000 ballots in Ellis’ favor were

16 improperly discarded; and 9) the tallying process was not

17 properly managed. In addition, Ellis alleged that his right to

18 observe the ballot-counting process as required by the LMRDA was 

19
4 18 See 29 U.S.C. § 481(c) (“Adequate safeguards to insure a

19 fair election shall be provided, including the right of any

20 candidate to have an observer at the polls and at the counting of

21 the ballots.”); 29 C.F.R. § 452.107(a) (“[E]ach candidate must be

22 permitted to have an observer (1) at the polls and (2) at the

23 counting of the ballots. . . . If ballots are being counted at

24 more than one location or at more than one table at a single

25 location, a candidate is entitled to have as many observers as

26 necessary to observe the actual counting of ballots.” 

5 27 Ellis had actually learned of the Secretary’s

28 determination more than two months earlier when he had called the

29 Department to inquire as to the status of his complaint. 

5

denied.4 1 Ellis explained that election observers were restricted

2 to a roped-off area in one corner of the room in which ballots

3 were tallied, he was only allowed one observer, and he was not

4 able to monitor the tallying at the various tables where it was

5 taking place. Ellis also alleged that observers were not

6 permitted to speak to anyone in the room other than the CSEA’s

7 general counsel and a True Ballot representative. In addition,

8 he alleged that candidates were not permitted equal numbers of

9 observers.

10 In a letter dated October 6, 2000, the Department of Labor

11 officially informed Ellis that the Secretary had decided to

dismiss his complaint.5 12 The letter enclosed the Secretary’s

13 Statement of Reasons for Dismissing the Complaint (the “Statement

14 of Reasons”) which stated that the Secretary had investigated the

15 complaint and decided to dismiss it. The Statement of Reasons

16 explained that the vast majority of Ellis’ allegations had not

17 been substantiated, but that the Secretary had substantiated
6

1 Ellis’ allegation that observer rights guaranteed by the LMRDA

2 were violated. Nevertheless, the Statement of Reasons stated

3 that no further action would be taken by the Secretary. 

4 Specifically, the Statement of Reasons explained that: 

5 The investigation revealed that the union denied candidates

6 the right to effectively observe the election by adopting

7 rules that allowed a candidate to have only one observer at

8 the tally and restricting observers’ view of the process. 

9 Observers were not able to see the names of the voters as

10 voter eligibility was checked and were not able to verify

11 the marks on the ballots to determine whether ballots were

12 being tallied correctly. However, the investigation did not

13 disclose evidence that this violation affected the election

14 outcome in any way. There is no evidence of any election

15 impropriety such as ineligible persons voting, ballot fraud

16 or tally irregularities. Consequently, there is no probable

17 cause to believe that this violation had an effect on the

18 outcome of the election. 

19 The Statement of Reasons explained that, therefore, the

20 Department of Labor was “closing our file on this matter.” 

21 Ellis contends that the Secretary’s refusal to file suit was

22 arbitrary and capricious because the Secretary found that

23 observer rights guaranteed by the LMRDA had been violated but

24 failed to challenge the CSEA election. The Secretary counters

25 that her Statement of Reasons satisfies the requirements of the

26 LMRDA and that her refusal to file suit was not arbitrary and

27 capricious.

28 II. DISTRICT COURT PROCEEDING

29 Ellis commenced this action on January 12, 2001 seeking an

30 order declaring that the improper restrictions on observers found

31 by the Secretary affected the outcome of the February 2000
6 23 Dunlop was partially overruled on grounds not relevant to

24 this opinion by Local No. 82, Furniture & Piano Moving v.

25 Crowley, 467 U.S. 526, 550 n.22 (1984). 

7

1 election, setting aside the election, and requiring the Secretary

2 to conduct a new election under her supervision. After the

3 Secretary answered the complaint, the parties cross-moved for

4 summary judgment. While the cross-motions were pending, Ellis

5 moved to amend his complaint by adding five paragraphs, each of

6 which stated that the Secretary had failed to substantiate one of

7 his allegations. According to Ellis, this motion to amend was

8 motivated by the Secretary’s argument that by failing to

9 challenge the Secretary’s findings as to those allegations, Ellis

10 had admitted that the allegations were unfounded. 

11 The district court denied Ellis’ motion to amend his

12 complaint as futile because the court determined that under

Dunlop v. Bachowski, 421 U.S. 560 (1975),6 13 it did not have the

14 power to inquire into the factual bases for the Secretary’s

15 conclusions. See Ellis v. Chao, No. 01 CIV. 0280(SHS), 2001 WL

16 1550809, at *3 (S.D.N.Y. Dec. 5, 2001).

17 The district court then considered the parties’ competing

18 motions for summary judgment, and found that there was no genuine

19 issue of material fact. The district court found the Statement

20 of Reasons sufficient to show that the Secretary did not act in

21 an arbitrary and capricious manner. It reasoned that improper

22 restrictions on election observers have never been found to per
7 24 Ellis does not challenge this ruling on appeal, although

25 he does argue that had he been able to properly observe the

26 election, he might have been able to present the Secretary with

27 evidence that his voters were denied equal protection as compared

28 to voters for the incumbent president. 

8

1 se mandate the Secretary’s intervention. Id. at *4. 

2 The district court also rejected Ellis’ argument that the

3 Secretary’s decision not to challenge the CSEA election violated

4 his right to equal protection as set forth in Bush v. Gore, 551

5 U.S. 98 (2000). It reasoned that there was “no evidence that the

6 Secretary’s actions had the effect of ‘valuing one person’s vote

7 over that of another.’” Ellis, 2001 WL 1550809, at *4 (quoting

8 Bush, 531 U.S. at 104-05)(internal formatting omitted). It also

questioned whether Bush would apply to internal union elections.7 9

10 Based on these conclusions, the district court granted the

11 Secretary’s motion for summary judgment and denied Ellis’ motion

12 for summary judgment. 

13 III. DISCUSSION

14 A. The district court improperly granted summary judgment to

15 the Secretary, but properly denied summary judgment to

16 Ellis.

17 1. The Secretary must initiate suit under the LMRDA when

18 she finds that unlawful election irregularities may

19 have affected the election’s outcome.

20

21 Ellis argues that the Secretary’s decision not to challenge

22 the CSEA election was arbitrary and capricious. To evaluate this

23 argument, we must first determine under what circumstances the
9

1 Secretary is required to sue, so that we may evaluate whether or

2 not her decision not to sue may have been arbitrary and

3 capricious under the facts of this case. 

4 The Secretary does not have unlimited discretion to decide

5 whether or not to bring an action challenging a union election. 

6 In Heckler v. Chaney, 470 U.S. 821 (1985), the Supreme Court

7 characterized the LMRDA as a statute that “quite clearly withdrew

8 discretion from the agency and provided guidelines for exercise

9 of its enforcement power.” Id. at 834. Thus, the Secretary’s

10 decision not to initiate suit is reviewable to determine whether

11 it is arbitrary and capricious. See Dunlop, 421 U.S. at 571-73. 

12 The language of the LMRDA makes it clear that the Secretary

13 is sometimes required to file suit to set aside a union election. 

14 The LMRDA states that “if [the Secretary] finds probable cause to

15 believe that a violation . . . occurred and has not been

16 remedied, [the Secretary] shall, within sixty days after the

17 filing of such complaint, bring a civil action . . . .” 29

18 U.S.C. § 482(b). The word “shall” indicates that under certain

19 conditions, the Secretary must initiate a civil action

20 challenging a union election. The Supreme Court has recognized

21 the mandatory nature of the provision. In Heckler, the Supreme

22 Court explained that in Dunlop, it had relied upon the court of

23 appeal’s analysis that “the language of the LMRDA indicated that

24 the Secretary was required to file suit if certain ‘clearly
10

1 defined’ factors were present.” Heckler, 470 U.S. at 834

2 (quoting Bachowski v. Brennan, 502 F.2d 79, 87-88 (3d Cir.

3 1974)). 

4 The Supreme Court has indicated that the Secretary need not

5 file suit to set aside an election if the suit would be futile or

6 merely “might be successful.” Dunlop, 421 U.S. at 574. Rather,

7 the Secretary need only sue when she subjectively thinks the suit

8 will be successful: 

9 ‘As a matter of law the Secretary is not required to sue to

10 set aside the election whenever the proofs before him

11 suggest the suit might be successful. There remains in him

12 a degree of discretion to select cases and it is his

13 subjective judgment as to the probable outcome of the

14 litigation that must control.’ 

15 Id. at 572 (quoting DeVito v. Shultz, 72 L.R.R.M. 2682, 2683

16 (D.D.C. 1969)(internal formatting omitted). However, it is

17 important to note that such a suit will succeed where a court

18 finds, upon a preponderance of the evidence, that the violation

19 “may have affected the outcome of an election.” 29 U.S.C. §

20 482(c)(emphasis added). Accordingly, Dunlop instructs that the

21 Secretary must sue where she finds that the violation may have

22 affected the outcome of the election. This interpretation – that

23 the Secretary must sue whenever her investigation leads her to

24 conclude that the outcome of a union election may have been

25 affected by unlawful election irregularities – is consistent with

26 Dunlop’s assumption that if the Secretary did not sue it would be

27 either because “no violations occurred or . . . they did not
8 7 Arguably, Dunlop might also seem to suggest that the

8 Secretary may only initiate suit when she determines that the

9 violation or violations “probably” affected the election’s

10 outcome. In Dunlop the Supreme Court favorably cited Wirtz v.

11 Local 153, Glass Bottle Blowers Ass’n, 389 U.S. 463 (1968),

12 stating:

13 Bottle Blowers construed § 482(b) . . . as conferring upon

14 the Secretary discretion to determine both the probable

15 violation and the probable effect. ‘[T]he Secretary may not

16 initiate an action until [her] own investigation confirms

17 that a violation . . . probably infected the challenged

18 election.’

19 Dunlop, 421 U.S. at 570 (quoting Bottle Blowers, 389 U.S. at 472)

20 (emphasis added). See also Hall v. Marshall, 476 F. Supp. 262,

21 265 (E.D. Pa. 1979), aff’d by Hall v. Marshall, 622 F.2d 578 (3rd

22 Cir. 1980) (citing Dunlop for the proposition that “if [the

23 Secretary] finds probable cause to believe that Title IV has been

24 violated and that the violation probably affected the outcome of

25 the election, he may file suit against the union . . . .”).

26 However, the term “effect” is not synonymous with “infect,”

27 and the latter can simply mean to “invade.” See American

28 Heritage Dictionary of the English Language, 4th Ed., Houghton

29 Mifflin Co. (2000). Moreover, the reference talks about the

30 election in general being “infected,” and not merely the result

31 or outcome of the election. But see Harrington v. Chao, 280 F.3d

32 50, 53 (1st Cir. 2002) (stating that “[i]f [the Secretary]

33 determines that there is probable cause to believe that . . . the

34 violation probably infected the outcome of the election, she must

35 bring suit”) (emphasis added). Looking at the reference in

36 context of the decision as a whole, we think the reference to

37 Bottle Blowers merely explains that the Secretary is to determine

38 what probably happened, and that the Secretary may not initiate

39 suit where she believes that the LMRDA was not violated. 

11

affect the outcome of the election.” Id. at 573.8 1 

2 Requiring the Secretary to initiate suit when she determines

3 that election procedures which violated the LMRDA may have

4 affected the outcome of an election is consistent with the

5 Secretary’s role in such litigation. The Secretary has exclusive

6 authority to bring suit to set aside elections which violate
12

1 Title IV of the LMRDA, the section of the LMRDA which regulates

2 union elections. See Local No. 82, Furniture & Piano Moving v.

3 Crowley, 467 U.S. 526, 549 (1984). A union member is not

4 permitted to initiate suit on his own behalf, but rather must

5 rely upon the Secretary to initiate suit to protect his rights. 

6 In this manner, the “Secretary’s role [is] as lawyer for the

7 complaining union member.” Dunlop, 421 U.S. at 572. While the

8 Secretary does not have a “duty to indulge a client's usual

9 prerogative to direct his lawyer to file suit”, id., she

10 nevertheless does have a duty to protect the union member’s

11 legitimate right to a fair election.

12 This interpretation is also consistent with the Secretary’s

13 own regulation, 29 C.F.R. § 452.5, which states that “[s]ince the

14 remedy under section 402 [of the LMRDA] is contingent upon a

15 finding by the court . . . that the violation ‘may have affected

16 the outcome of an election[,]’ the Secretary as a matter of

17 policy will not file suit to enforce the election provisions

18 unless the violations found are such that the outcome may have

19 been affected.” 29 C.F.R. § 452.5 (citing Dunlop, 421 U.S. at

20 570).

21 Finally, this interpretation is consistent with the standard

22 that must be met to set aside an election under the LMRDA. The

23 LMRDA states that “[i]f, upon a preponderance of the evidence

24 after a trial upon the merits, the court finds . . . that the 
13

1 violation of section 481 of this title may have affected the

2 outcome of an election, the court shall declare the election 

3 . . . to be void and direct the conduct of a new election under

4 supervision of the Secretary . . . .” 29 U.S.C. § 482(c)

5 (emphasis added). See also Wirtz v. Hotel, Motel and Club Emp.

6 Union, Local 6, 391 U.S. 492, 506-08 (1968) (new election

7 required where there was a logical inference that the violation

8 “may have affected” an election’s outcome and no “tangible

9 evidence” to contradict that inference).

10 To require the Secretary to satisfy a higher standard to

11 initiate suit than would need to be satisfied for the Secretary

12 to prevail in court would be to effectively re-write the

13 standard. This would be particularly problematic given that the

14 “may have affected” standard was the result of a deliberate

15 policy choice by Congress. In Hotel, Motel, and Club Employees,

16 the Supreme Court explained that:

17 The 'may have affected' language appeared in the bill passed

18 by the Senate, S.1555. The bill passed by the House, H.R.

19 8342, and the Kennedy-Ervin bill introduced in the Senate,

20 S. 505, required the more stringent showing that the

21 violation actually 'affected' the outcome. The difference

22 was resolved in conference by the adoption of the 'may have

23 affected' language. 

391 U.S. at 505-06 (citations omitted). 24 The House report

25 outlining the changes made by the conference committee was quite

26 clear on this point, explaining that “[i]n subsection (c) of 

27 section 402, the conference substitute adopts the provision of 
14

1 the Senate bill that directs the court to set aside an election

2 if the violation ‘may have’ affected the outcome. Under the

3 House amendment an election could be set aside only if the

4 violation did affect the outcome.” H.R. Rep. No. 1147, 86th

5 Cong., 1st Sess. 35 (1959). 

6 For the above reasons, we hold that the Secretary is

7 required to initiate suit under the LMRDA when she finds that

8 unlawful election irregularities may have affected the election’s

9 outcome. This is consistent with the Supreme Court’s view that

10 it is the Secretary’s “subjective judgment as to the probable

11 outcome of the litigation that must control” her decision as to

12 whether or not to file such a suit. Dunlop, 421 U.S. at 572. We

13 now turn to the Secretary’s Statement of Reasons to determine

14 whether or not her decision not to initiate suit in the case at

15 hand was arbitrary and capricious. 

16 2. The Secretary’s Statement of Reasons is not sufficient

17 for this Court to determine whether or not her decision

18 not to initiate suit was arbitrary and capricious.

19 When the Secretary decides not to initiate suit, she must

20 provide a Statement of Reasons that sets forth the essential

21 facts upon which her inferences are based. Dunlop, 421 U.S. at

22 573-74 (“[A]lthough detailed findings of fact are not required,

23 the statement of reasons should inform the court and the

24 complaining union member of both the grounds of decision and the

25 essential facts upon which the Secretary’s inferences are 
15

1 based.”) A Statement of Reasons which rests on conclusory

2 statements is not sufficient. See Donovan v. Local 6, Washington

3 Teachers’ Union, AFL-CIO, 747 F.2d 711, 719 (D.C. Cir. 1984)

4 (“The conclusory assertion that [there is] ‘no evidence’ . . .

5 simply is not ‘adequate to enable the court to determine whether

6 the . . . decision was reached for an impermissible reason or 

7 for no reason at all.’”) (quoting Dunlop, 421 U.S. at 573); 

8 Usery v. Local Union No. 639 International Brotherhood of

9 Teamsters Chauffeurs, Warehousemen and Helpers of America, 543

10 F.2d 369, 379 (D.C. Cir. 1976) (“Of course, the Secretary’s

11 reasons for certification cannot rest on unsubstantiated

12 conclusions . . . .”)

13 Such conclusory statements not only prevent the courts from

14 undertaking meaningful judicial review of the Secretary’s

15 decision, but also reduce the overall utility of the Statement of

16 Reasons itself. As Judge Friendly explained:

17 A written statement of reasons, almost essential if there is

18 to be judicial review, is desirable on many other grounds. 

19 The necessity for justification is a powerful preventive of

20 wrong decisions. The requirement also tends to effectuate

21 intra-agency uniformity . . . . A statement of reasons may

22 even make a decision somewhat more acceptable to a losing

23 claimant.

24 See Henry J. Friendly, Some Kind of Hearing, 123 U. PA. L. REV.

25 1267, 1292 (1975)(exploring hearing requirements as they apply in

26 a variety of contexts)(footnotes omitted). Similarly, in Dunlop,

27 the Supreme Court explained that “a 'reasons' requirement 
9 25 We note that it is unclear from the record what the

26 official vote tally was. Ellis states at one point that he lost

27 by a vote count of 11,231 to 19,271, but then states that the

28 vote count in his favor dropped from 15,800 to 13,707 when the

29 2093 ballots at issue were rejected as junk without further

30 explanation. 

16

1 promotes thought by the Secretary and compels him to cover the

2 relevant points and eschew irrelevancies, and . . . the need to

3 assure careful administrative consideration 'would be relevant

4 even if the Secretary's decision were unreviewable.’” 421 U.S. at

5 572 (quoting Bachowski, 502 F.2d at 88-89, n.14). See also Exxon

6 Pipeline Co. v. United States, 725 F.2d 1467, 1473 (D.C. Cir.

7 1984)(discussing the benefits of Statements of Reasons in

8 general). 

9 In the case at hand, the entire text of the Statement of

10 Reasons is six single-spaced pages, most of which has little to

11 do with the Secretary’s decision not to bring suit. As

12 previously noted, the only part of the Statement of Reasons which

13 discusses why the Secretary decided not to sue despite finding a

14 violation of the LMRDA states that: 

15 [T]he investigation did not disclose evidence that this

16 [observer] violation affected the election outcome in any

17 way. There is no evidence of any election impropriety such

18 as ineligible persons voting, ballot fraud or tally

19 irregularities. Consequently, there is no probable cause to

20 believe that this violation had an effect on the outcome of

21 the election. 

22 The Statement of Reasons also never states the Secretary’s

conclusion as to what was the true vote tally for the election,9 23

24 does not indicate whether the Secretary’s investigators tallied
10 20 Compare Dunlop, 421 U.S. at 578-589 (appendix to the

21 opinion consisting of the Secretary’s Statement of Reasons in

22 that case, a statement which: 1) explained the scope and manner

23 of the Secretary’s investigation; 2) explained the rationale and

24 assumptions behind the investigation; and 3) provided tallies of

25 the maximum number of votes that might have been affected by each

26 violation found to have occurred).

17

1 the ballots themselves, makes no mention of Ellis’ allegation

2 that 2093 votes in his favor were improperly discarded, and never

3 makes any reference to the fact that CSEA employees and the

CSEA’s counsel participated in counting the ballots.10 4 Thus, the

5 Statement of Reasons’ explanation for the Secretary’s conclusion

6 as to the effect of the observer rights violation, and her

7 decision not to challenge the election, is obviously conclusory. 

8 We find that the Statement of Reasons is not sufficient for

9 this Court to be able to determine whether the Secretary acted in

10 an arbitrary and capricious manner when she decided not to

11 challenge the CSEA election despite finding that observer rights

12 protected by the LMRDA were violated. The Secretary states that

13 there was no evidence that the observer rights violation had an

14 effect on the outcome of the election, but does not explain where

15 or to what extent she looked for such evidence. She merely

16 refers to an undefined “investigation.” The only reference to

17 how the investigation was conducted in regards to Ellis’ observer

18 rights violation allegation is in the cover letter accompanying

19 the Statement of Reasons. Even if we were to look at the cover
11 19 We do not reach the question of whether considering the

20 cover letter, which is not technically part of the Statement of

21 Reasons, would be within the proper scope of this Court’s review.

12 22 Presumably, the Secretary is referring to the sections as

23 numbered in the original legislation passed by Congress, and not

24 the sections as numbered in the United States Code, as 29 U.S.C. 

25 § 402 is merely the definitions section for the LMRDA and does

26 not define what constitutes an investigation, and 29 U.S.C. § 601

27 was repealed long before October 2000 when the Statement of

28 Reasons was distributed. 

18

letter,11 1 that letter merely states that the investigation was

conducted in accordance with sections 402 and 601 of the LMRDA.12 2

3 Section 402 of the LMRDA, 29 U.S.C. § 482, merely states that the

4 Secretary “shall investigate” union member complaints but does

5 not state what such investigations can or should entail. See 29

6 U.S.C. § 482(b). Section 601 of the LMRDA, 29 U.S.C. § 521,

7 states what the Secretary is empowered to do as part of her

8 investigation (e.g., the Secretary “may enter such places and

9 inspect such records and accounts and question such persons as

10 [she] may deem necessary”), but does not say what the Secretary

11 must (or even should generally) do as part of an investigation. 

12 See 29 U.S.C. § 521. Accordingly, the Secretary’s reference to

13 those sections does not provide this Court with any meaningful

14 information about how the investigation was conducted in this

15 case. 

16 Without more, we cannot know whether the Secretary was

17 acting in an arbitrary and capricious manner. She states that

18 she decided not to initiate suit because she did not find
13 20 Ellis alleges that the “Secretary simply credited the

21 union’s claims that no (other) improprieties had occurred.” 

14 22 The Statement of Reasons indicates that the Secretary’s

23 investigators counted the total number of ballots. This does not

24 indicate, however, that they checked the tallies. Similarly, the

25 Secretary’s statement that “[t]here is no evidence of . . . tally

26 irregularities” does not indicate that her investigators ever

27 personally checked those tallies. 

19

1 evidence that the violation of the LMRDA affected the outcome of

2 the CSEA election, but we do not know where or the extent to

3 which she looked for such evidence. We simply cannot determine

4 whether or not the manner in which the Secretary acted was

5 arbitrary and capricious without first knowing in what manner the

Secretary acted.13 6 This is particularly true given that the

7 Secretary found a violation and thus there is at least some

8 reason to suspect that the election’s outcome may have been

9 affected. 

10 The Statement of Reasons is also inadequate because it both 

11 does not address Ellis’ allegation that 2093 ballots in his favor

12 were improperly excluded from the final vote tally, and does not

state the Secretary’s determination as to the final vote tally.14 13

14 Unless the Secretary determined that there was a gap of more than

15 2093 votes between the candidates for CSEA president, she could

16 not reasonably have determined that excluding 2093 votes in

17 Ellis’ favor could not have affected the election. Accordingly,

18 she would have needed to assess the veracity of Ellis’ allegation

19 that 2093 votes were improperly excluded in order to know whether
15 21 In her brief before this Court, the Secretary also refers

22 to her conclusion as a conclusion that “there was no probable

23 cause to believe that these restrictions may have affected the

24 outcome.” In determining whether her decision was arbitrary and

25 capricious we are limited to examining the conclusion described

26 in her Statement of Reasons, a conclusion which notably did not

27 include the words “may have.” 

20

1 or not to initiate suit. The Statement of Reasons provides no

2 indication that she did so. 

3 In addition, it is unclear from the Secretary’s Statement of

4 Reasons whether or not she applied the correct standard when

5 deciding not to initiate suit. The Secretary concluded that

6 “there is no probable cause to believe that this violation had an

effect on the outcome of the election.”15 7 Stating that there is

8 no probable cause to believe that something has happened is

9 different from stating that one does not believe that something

10 may have happened. The Secretary’s other stated reason for her

11 decision not to sue, that “the investigation did not disclose

12 evidence that this violation affected the outcome in any way,” 

13 also does not indicate that she applied the correct standard. 

14 The non-existence of specific evidence of an effect would not

15 preclude the Secretary from determining that an effect may have

16 occurred. In reaching her “subjective judgment as to the

17 probable outcome of the litigation,” Dunlop, 421 U.S. at 572, it

18 is not clear whether the Secretary considered that at trial

19 against the union, if she proved by the preponderance of the

20 evidence that the violation “may have affected” the outcome of
21

1 the election, she would prevail in the absence of “tangible

2 evidence” to the contrary from the union. See 29 U.S.C. §

3 482(c); Hotel, Motel, and Club Employees, 391 U.S. at 506-07. 

4 As such, the Secretary may not have asked whether the observer

5 violations merely “may have affected” the outcome of the CSEA

6 election, but rather may have applied a more stringent standard. 

7 However, even if we were to find that the Secretary applied the

8 correct standard, we would not affirm the grant of summary

9 judgment to the Secretary because of the Statement of Reasons’

10 other defects. Accordingly, we need not decipher the Secretary’s

11 ambiguous wording to determine whether or not the Secretary

12 applied the correct standard. The Secretary will have the

13 opportunity to clarify what standard she used upon remand. 

14 In sum, the district court erred in granting summary

15 judgment to the Secretary. On remand, a more in-depth Statement

16 of Reasons should be required from the Secretary so that the

17 district court may provide meaningful judicial review of her

18 determination. See Dunlop, 421 U.S. at 574 (“Where the statement

19 inadequately discloses his reasons, the Secretary may be afforded

20 opportunity to supplement his statement”); Brodsky v. Herman, 120

21 F. Supp. 2d 347, 350 (S.D.N.Y. 2000) (“If the court determines

22 that the Secretary's decision was arbitrary and capricious, the

23 Secretary may be ordered to reopen consideration of Plaintiff's

24 former complaint and to supplement her Statement”); Harrington v.

25 Chao, 280 F.3d 50, 61 (1st Cir. 2002).
22

1 3. Ellis’ argument that the Secretary’s decision was

2 necessarily arbitrary and capricious because it

3 represents a change from her prior litigation positions

4 is unavailing.

5 Ellis’ argument that the Secretary’s decision was arbitrary

6 and capricious because it was contrary to her long-standing

7 litigation position fails because this Court has been presented

8 with no evidence that the Secretary’s position is inconsistent

9 with prior litigation positions taken by the Secretary of Labor. 

10 In all three cases cited by Ellis to demonstrate such

11 inconsistency, the Secretary substantiated allegations of not

12 only violations of observer rights, but also of other election

13 improprieties. See Hodgson v. Local 734, Int’l Brotherhood of

14 Teamsters, 336 F. Supp. 1243 (N.D. Ill. 1972) (suit to set aside

15 an election in which observers were not able to effectively

16 observe, and the union failed to retain a number of ballots and

17 related papers recording who had voted); Hodgson v. United Mine

18 Workers, 344 F. Supp. 17 (D.D.C. 1972) (suit to set aside an

19 election in which restrictions on observers were only one of many

20 violations of the LMRDA that the Secretary had substantiated);

21 Marshall v. Laborers’ Local 135, Laborers Int’l Union, 106

22 L.R.R.M. 2500 (E.D. Pa. 1980) (suit to set aside an election

23 where, in addition to violations of observer rights, the

24 Secretary found significant physical evidence that ballot

25 tampering and manipulation had occurred). Accordingly, Ellis is

26 not entitled to summary judgment on this basis.
23

1 Moreover, even if the Secretary could be said to be

2 departing from her prior positions, her decision would not 

3 necessarily be arbitrary and capricious. Ellis cites precedent

4 from other circuits for the proposition that when an

5 administrative agency departs from its prior position a more in6 depth Statement of Reasons for its actions is required. See

7 Harrington v. Chao, 280 F.3d 50 (1st Cir. 2002); Doyle v. Brock,

8 821 F.2d 778 (D.C. Cir. 1987). However, neither case found that

9 a deviation was per se arbitrary and capricious and we find no

10 reason to believe that it would be. Nevertheless, to the extent

11 that a more detailed Statement of Reasons might be necessary to

12 justify any inconsistent positions, the Secretary may address

13 that on remand. 

14 4. Ellis’ argument that the Secretary’s decision was

15 necessarily arbitrary and capricious given that she

16 found that observer rights were violated is unavailing.

17 Ellis’ argument that the Secretary’s decision was arbitrary

18 and capricious because the Secretary simply could not have found

19 – given the lack of effective observers – that the violations did

20 not affect the election’s outcome also fails. We find no support

21 for Ellis’ suggestion that it would never be possible for the

22 Secretary to legitimately reach the conclusion that observer

23 violations occurred but could not have affected the outcome of a

24 given election. While we decline to speculate as to the various

25 circumstances under which such a conclusion would be reasonable, 
24

1 we have no reason to believe that such circumstances could not

2 exist. Accordingly, in order to determine whether the

3 Secretary’s determination was necessarily arbitrary and

4 capricious given her finding, we would need to determine whether

5 the Secretary’s factual basis was sufficient to support her

6 conclusion in this particular case. 

7 A court may only consider challenges to the factual basis of

8 the Secretary’s decision in the “rare case” in which the

9 Secretary: 1) declares that she will no longer enforce Title IV

10 or “otherwise completely abrogate[s] [her] enforcement

11 responsibilities . . .”; or 2) prosecutes complaints “in a

12 constitutionally discriminatory manner;” or 3) makes decisions

13 that are “plainly beyond the bounds” of the LMRDA or “clearly

14 defiant” of it. Dunlop, 421 U.S. at 574. 

15 Until we are able to determine that this is a “rare case”

16 within the meaning of Dunlop, we may not review the factual basis

17 for the Secretary’s decision. See Dunlop, 421 U.S. at 573

18 (stating that except in a rare case, judicial “review may not

19 extend to cognizance or trial of the complaining member’s

20 challenges to the factual bases for the Secretary’s conclusion

21 either that no violations occurred or that they did not affect

22 the outcome of the election.”). If the Secretary in fact acted

23 in an arbitrary and capricious manner, such actions could have

24 been “clearly defiant” of the Act. However, as discussed above, 
25

1 the Secretary’s Statement of Reasons is not sufficient for this

2 Court to determine whether or not she acted in an arbitrary and

3 capricious manner. Thus, we cannot know whether this case

4 presents such a “rare case,” and it would be premature for this

5 Court to consider the factual basis for the Secretary’s decision

6 without a more complete Statement of Reasons. Accordingly, the

7 district court did not err in denying summary judgment to Ellis

8 on the basis of the record then before the district court. 

9 B. The district court abused its discretion in denying Ellis’

10 motion to amend.

11 Ellis sought leave to amend his complaint, which the

12 district court denied as futile. We review the district court’s

13 denial for abuse of discretion. See Kropelniki v. Siegel, 290

14 F.3d 118, 130 (2d Cir. 2002).

15 Under Fed. R. Civ. P. 15(a), leave to amend a complaint

16 should be “freely given when justice so requires.” Id. However,

17 it is well established that leave to amend a complaint need not

18 be granted when amendment would be futile. See Foman v. Davis,

19 371 U.S. 178, 182 (1962); Jones v. New York State Div. of

20 Military & Naval Affairs, 166 F.3d 45, 50 (2d Cir. 1999) (holding

21 that “a district court may properly deny leave when amendment

22 would be futile.”) As previously explained, the district court

23 denied the motion to amend as futile because it found that it was

24 not permitted to consider the factual bases for the Secretary’s 
26

1 decision except insofar as they were stated in the Secretary’s

2 Statement of Reasons. 

3 As we observed above, we may only look outside the four

4 corners of the Statement of Reasons to scrutinize the factual

5 basis of the Secretary’s decision in the “rare” case in which the

6 Secretary: 1) declares that she will no longer enforce Title IV

7 or “otherwise completely abrogate[s] [her] enforcement

8 responsibilities . . .”; or 2) prosecutes complaints “in a

9 constitutionally discriminatory manner;” or 3) makes decisions

10 that are “plainly beyond the bounds” of the LMRDA or “clearly

11 defiant” of it. Dunlop, 421 U.S. at 574. Ellis argues that

12 amendment would not have been futile because the Secretary acted

13 in an arbitrary and capricious manner and thus this is a “rare

14 case” within the meaning of Dunlop.

15 If the Secretary in fact acted in an arbitrary and

16 capricious manner, such actions could have been “clearly defiant”

17 of the LMRDA and thus amendment would not have been futile. 

18 However, as previously discussed, to determine whether the

19 Secretary acted in such a manner we must look to the Statement of

20 Reasons which, unfortunately, is inadequate for this Court to be

21 able to make that determination. Given that there is a

22 possibility that the Secretary has engaged in actions which are

23 “clearly defiant” of the LMRDA, however, amendment would not

24 necessarily have been futile and it was an abuse of discretion 
16 12 We note that the government also argues that the motion

13 was properly denied because Ellis’ additional allegations were

14 “far too conclusory.” Each of Ellis’ additional paragraphs

15 states that the Secretary failed to substantiate a particular one

16 of Ellis’ allegations. The Secretary seems to feel that the

17 additional allegations are “conclusory” because the amendments do

18 not allege additional facts that would allow this Court to

19 conclude that the Secretary acted in an irrational or arbitrary

20 manner in failing to substantiate those claims. However, these

21 proposed amendments merely state that certain of Ellis’

22 allegations were not substantiated by the Secretary, which is not

23 disputed.

27

1 not to allow Ellis to amend his complaint to add the five

proposed paragraphs.16 2 

3 IV. CONCLUSION

4 For the reasons set forth above, we AFFIRM the denial of

5 summary judgment to Ellis, and VACATE and REMAND the grant of

6 summary judgment to the Secretary. We also VACATE and REMAND the

7 district court’s denial of Ellis’ motion to amend. On remand,

8 the district court should require a more substantive Statement of

9 Reasons from the Secretary explaining not only what the

10 Secretary’s ultimate determination was, but also the process that

11 led to, and the basis for, that decision.