Source: https://law.justia.com/cases/federal/appellate-courts/F2/931/177/423658/
Timestamp: 2020-07-04 00:22:36
Document Index: 25606941

Matched Legal Cases: ['§ 1964', '§ 1651', '§ 1291', '§ 481', '§ 481', '§ 481', '§ 411', '§ 481']

United States Court of Appeals, Second Circuit, 931 F.2d 177 (2d Cir. 1991) :: Justia
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United States Court of Appeals, Second Circuit, 931 F.2d 177 (2d Cir. 1991)
US Court of Appeals for the Second Circuit - 931 F.2d 177 (2d Cir. 1991) Argued Feb. 11, 1991. Decided April 12, 1991
Various IBT-affiliated joint councils and union locals (collectively "Affiliates") appeal from the order approving the election rules ("Election Rules Order") that are to govern the upcoming elections of delegates to the IBT Convention, the nomination process at the Convention, and the rank-and-file election of IBT officers. See United States v. IBT, 742 F. Supp. 94 (S.D.N.Y. 1990) ("Election Rules Order "). They challenge the order on the ground that it provides methods for selecting delegates to the IBT Convention and for electing IBT officers that differ from those specified in the IBT Constitution. The Affiliates contend that, because they were not parties to the underlying civil RICO action or the Consent Decree, that Decree cannot alter the IBT Constitution without their consent.
In June 1988, the government brought suit under the civil remedies provisions of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1964 (1988), naming as defendants the IBT, its General Executive Board ("GEB"), the individual members of the GEB, the Commission of La Cosa Nostra, and various reputed members and associates of La Cosa Nostra, a criminal organization. The 113-page complaint alleged a massive racketeering enterprise and a conspiracy to participate in that enterprise. In particular, it alleged that the GEB and its individual members had allowed principals of La Cosa Nostra to control and corrupt the IBT and various of its affiliated area conferences, joint councils, locals, and benefit funds. According to the complaint, La Cosa Nostra principals, aided and abetted by the GEB, had, by means of fraud, embezzlement, bribery and extortion, dominated the IBT. The government alleged that La Cosa Nostra selected and ensured the election of their own candidates for the position of IBT General President. In addition, La Cosa Nostra, aided and abetted by members of the GEB, allegedly used the procedure for selecting IBT officers to control the IBT and deprive its membership of free and fair elections.
The IBT moved to dismiss the complaint or, in the alternative, to require the joinder, as indispensable parties under Fed. R. Civ. P. 19(a), of all IBT-affiliated local unions, joint councils, area conferences, and benefit funds that might be subject to an adverse fact determination or any form of relief affecting their interests. The district court denied the motion. It concluded that " [t]he relief requested relates to the IBT [and] does not directly affect the rights of the [affiliates]." United States v. IBT, 708 F. Supp. 1388, 1404 (S.D.N.Y. 1989). In March 1989, the parties reached a settlement embodied in a Consent Decree entered by the district court.
Finally, the Consent Decree provides that, upon its satisfactory implementation, the district court will entertain a joint motion for dismissal of the action. Since entry of the Consent Decree, numerous disputes have arisen over its implementation. For example, the IBT challenged the authority of the Election Officer to supervise and promulgate election rules governing all phases of the upcoming election of IBT officers. See United States v. IBT ("Election Officer Order"), 723 F. Supp. 203, stay and certification denied, 728 F. Supp. 920 (S.D.N.Y.), appeal dismissed, No. 89-6252 (2d Cir. Dec. 13, 1989), cert. denied, --- U.S. ----, 110 S. Ct. 2618, 110 L. Ed. 2d 639 (1990). Two individuals challenged the application to them of the Consent Decree's disciplinary procedures. See United States v. IBT ("Friedman & Hughes"), 725 F. Supp. 162, stay denied, 728 F. Supp. 924 (S.D.N.Y.), motion to dismiss and motions to stay denied, Nos. 89-6248, 89-6250 (2d Cir. Dec. 12, 1989), later proceeding, 743 F. Supp. 155 (S.D.N.Y. 1990), aff'd, 905 F.2d 610 (2d Cir. 1990).
Various affiliated entities also have challenged the implementation of the Consent Decree in collateral suits filed in Chicago, Cleveland, and New Jersey. In response to these suits, the district court issued an order, pursuant to the All Writs Act, 28 U.S.C. § 1651 (1988), enjoining all members and affiliates of the IBT from "filing or taking any legal action that challenges, impedes, seeks review of or relief from, or seeks to prevent or delay any act of [the court-appointed officers] in any court or forum in any jurisdiction except this Court." United States v. IBT, 726 F. Supp. 943 (S.D.N.Y. 1989) (order to show cause and temporary restraining order), made permanent by United States v. IBT ("All Writs Opinion"), 728 F. Supp. 1032 (S.D.N.Y. 1990), aff'd, 907 F.2d 277 (2d Cir. 1990). In its opinion, the district court also expressed the view that the affiliates were "bound" by the terms of the Consent Decree. On appeal, we affirmed the injunction but declined to consider the question of whether the affiliates were so bound. United States v. IBT, 907 F.2d 277 (2d Cir. 1990).
The present appeal arises from the district court's consideration of two applications by the Independent Administrator. In Application X, the Independent Administrator sought approval of the final election rules promulgated pursuant to the Election Officer's authority under the Consent Decree to "supervise" the 1991 election of IBT officers. The rules governed all phases of the election process, including the election of Convention delegates by the rank-and-file of the Affiliates, the conduct of the 1991 Convention, nomination of IBT officer candidates, and the subsequent rank-and-file election of IBT officers. The IBT opposed Application X, renewing its argument that the Election Officer had no power to issue rules for any part of the three-stage election process or to supervise the IBT Convention delegate elections. In addition, the IBT made specific challenges to a number of the proposed rules. See Election Rules Order, 742 F. Supp. at 98-106. Two nonparty IBT-affiliated local unions also filed papers supporting the IBT's broad challenge to the Election Officer's power and asserting that IBT affiliates were not bound to comply with the election provisions of the Consent Decree.
On July 10, 1990, the district court granted Application X and approved the proposed election rules with some modifications. Election Rules Order, 742 F. Supp. 94. The court rejected the IBT's general challenge to the supervisory authority of the Election Officer on the strength of its earlier opinion on that subject. Id. at 98; see Election Officer Order, 723 F. Supp. at 206-07. The court also held that the disputed rules were a proper exercise of the Election Officer's authority to supervise the election of IBT officers.
In response to submissions from amici curiae Teamsters for a Democratic Union ("TDU") and Association for Union Democracy ("AUD"), the district court modified the proposed election rules in two respects. First, the court adopted TDU's proposal that the IBT membership list be made available for copying by all "accredited" candidates. Election Rules Order, 742 F. Supp. at 101-04. Second, at the suggestion of AUD, the court held that the Election Officer's authority to supervise the elections required him to conduct all phases of the elections. Id. at 106-07. Finally, incorporating by reference the reasoning of its All Writs Opinion, the district court ordered that all IBT affiliates were "bound" to comply with the election rules on pain of contempt. Id. at 108.
The government contends that the orders in question are not appealable final orders under 28 U.S.C. § 1291 (1988). It argues that the Election Rules Order and the Staffing Order are simply intermediate steps in a process that will culminate in the final certification of the election results, at which time review of the orders governing the election will be appropriate. We disagree.1
The administration of complex consent decrees such as the present one gives rise to issues of appellate review that differ from those in ordinary litigation. Whereas rulings in ordinary litigation can be reviewed for error and effect on the judgment after that judgment is final, rulings in the course of administering a consent decree concern implementation of the judgment itself, and often require intermediate acts by parties that may be unreviewable if appeals are delayed until compliance is final. A flexible approach is thus necessary, similar to that applied in reviewing bankruptcy decisions, see In re Sonnax Industries, Inc., 907 F.2d 1280, 1283 (2d Cir. 1990), another area in which intermediate rulings are frequently not reviewable at the conclusion of proceedings.
The orders in the instant matter also fall within the rationale of decisions elaborating the "collateral order" doctrine of Cohen v. Beneficial Loan Corp., 337 U.S. 541, 69 S. Ct. 1221, 93 L. Ed. 1528 (1949), which renders appealable certain orders that cannot be effectively reviewed after final judgment is entered. See also Herbst v. International Tel. & Tel. Corp., 495 F.2d 1308, 1312 (2d Cir. 1974) (order granting class action appealable); United States v. Wood, 295 F.2d 772, 778 (5th Cir.), cert. denied, 369 U.S. 850, 82 S. Ct. 933, 8 L. Ed. 2d 9 (1961) (order determining substantial rights that will be irreparably lost if review delayed, appealable).
Although the general rule is that only a party of record may appeal a judgment, a nonparty may appeal "when the nonparty has an interest that is affected by the trial court's judgment." Hispanic Society v. New York City Police Dep't, 806 F.2d 1147, 1152 (2d Cir. 1986). The Affiliates' appeal from the Election Rules Order is based on their asserted contractual interest in preserving those provisions of the IBT Constitution concerning election of IBT officers that are abrogated by the Order. This interest is sufficient to confer standing to challenge the district court's decision.2
Under the IBT Constitution, the officers of affiliated locals serve by virtue of their office as delegates to the IBT Convention. See IBT Constitution, Art. III, Sec. 5(a) (1). The Consent Decree requires a direct vote among the rank-and-file of locals to elect Convention delegates. See Consent Decree, p 12(D) (ii). The IBT Constitution also provides that Convention delegates nominate and elect IBT officers. See IBT Constitution, Art. IV, Sec. 2. The Consent Decree requires a union-wide rank-and-file election of IBT officers. See Consent Decree, p 12(D) (vii).
Even without Article XXVI, Section 2, however, we believe that the Consent Decree binds the Affiliates insofar as the election of IBT Convention delegates and IBT officers is concerned. It is true that, for purposes of interpretation, a consent decree is treated as a contract among the settling parties, Firefighters v. City of Cleveland, 478 U.S. 501, 106 S. Ct. 3063, 92 L. Ed. 2d 405 (1986), and that the terms of a consent decree cannot be enforced against those who are not parties to the settlement. Martin v. Wilks, 490 U.S. 755, 109 S. Ct. 2180, 104 L. Ed. 2d 835 (1989). However, there are several exceptions to this general rule. Nonparty members of a class
Hansberry v. Lee, 311 U.S. 32, 43, 61 S. Ct. 115, 118-19, 85 L. Ed. 22 (1940) (citations omitted). See also Martin v. Wilks, 490 U.S. 755, 109 S. Ct. 2180, 2184, n. 2, 104 L. Ed. 2d 835 (1989) (citing Hansberry) ; Montana v. United States, 440 U.S. 147, 154-55, 99 S. Ct. 970, 974-75, 59 L. Ed. 2d 210 (1979) (applying collateral estoppel against United States which, though not a party to the litigation, had exercised control over the litigation on behalf of one of the parties). Friedman & Hughes held that with regard to the international union's exercise of disciplinary powers, Article XXVI, Section 2, "entitle [d] the [IBT] to stand in judgment for [Hughes]." Hansberry v. Lee, 311 U.S. at 43, 61 S. Ct. at 118-19. We also believe that the legitimate interests of the Affiliates were "adequately represented by [the IBT]." Id.
The final election rules provide that each "accredited candidate" for union office--each candidate with petition signatures of 2.5 percent of the relevant membership pool--may have his campaign literature published in the IBT's monthly magazine, the International Teamster. See Election Rules, Article VIII, Sec. 9; Article III, Sec. 1. The district court concluded that this rule was a legitimate exercise of the Election Officer's authority under the Consent Decree to "distribute materials about the election to the IBT membership," see Consent Decree p 12(D), because publication in the union magazine was the "most efficient and effective vehicle" for such distributions. Election Rules Order, 742 F. Supp. at 99-100.
The IBT objects on the ground that, although the Consent Decree empowers both the Election Officer and the Administrator to "distribute materials" to the IBT membership, it authorizes only the Administrator "to publish a report in each issue of the International Teamster concerning the activities of the [court officers]." Consent Decree, pp 12(D), 12(E). According to the IBT, the parties could not have understood the power to "distribute materials" to include the power to "publish" in the IBT monthly magazine or the Consent Decree would not have used both terms. Under that view, the district court improperly "effected a substantial modification of the original decree." Hughes v. United States, 342 U.S. 353, 357, 72 S. Ct. 306, 308, 96 L. Ed. 394 (1952).
Relying on its "right to refrain from speaking at all," Wooley v. Maynard, 430 U.S. 705, 714, 97 S. Ct. 1428, 1435, 51 L. Ed. 2d 752 (1977), the IBT also argues that the publication rule encroaches on its First Amendment rights. However, by consenting to the Election Officer's power under the Consent Decree, the IBT waived any objection to the Election Officer's exercise of legitimate authority.
The election rules promulgated by the Election Officer afforded candidates their statutorily-prescribed opportunity to inspect the IBT membership lists within thirty days of the election and provided for the limited release of random samples from the lists to opinion polling entities. See Election Rules, Art. VIII, Sec. 2; Labor Management Reporting and Disclosure Act ("LMRDA"), Section 401(c), 29 U.S.C. § 481(c) (1988). The IBT objected to the limited release, while amicus TDU argued that candidates should have unlimited access to the membership lists. The court found the following:
Election Rules Order, 742 F. Supp. at 102. The court also asserted that "strong and extraordinary measures" were necessary "to foster alternative candidates." It concluded that the IBT's "fatally biased official editorial posture in the official union publication" constituted a misuse of its membership lists for the purposes of Section 401(c) of the LMRDA, 29 U.S.C. § 481(c) (1988). Id. at 102-03; see also 29 C.F.R. Sec. 452.71 (1990). The district court therefore ruled that all accredited candidates should be allowed to copy the membership lists. Such access, however, may be obtained only after the candidate has submitted an affidavit that he or she will not permit inspection or copying of the list by third parties. A violation of this commitment is punishable by contempt. Election Rules Order, 742 F. Supp. at 104.
Although our reasoning differs from that of the district court, we find support in the Consent Decree for this limited release of the membership list. The IBT's objection is based principally upon LMRDA Section 401(c), 29 U.S.C. § 481(c) (1988), which protects the confidentiality of union membership lists unless a union is found to have misused its list. A Department of Labor regulation defines misuse as "discrimination in favor of or against any candidate with respect to the use of lists of members." 29 C.F.R. Sec. 452.71(b) (1990). The remedy provided for such misuse is to "accord the same privilege to all candidates who request it." Id. Typically, misuse has involved discriminatory access to the lists or the use of a union publication to campaign for incumbent candidates. See Usery v. International Organization of Masters, Mates & Pilots, 538 F.2d 946, 948 (2d Cir. 1976) (union newsletter praising incumbent president and criticizing opponent). See also Bliss v. Holmes, 721 F.2d 156, 158-59 (6th Cir. 1983) (excessive publicity in favor of incumbent president); Hodgson v. United Mine Workers, 344 F. Supp. 17, 22 (D.D.C. 1972) (many references to incumbent candidate in union magazine but no mention of challenger or his candidacy). We agree with the IBT that no finding of the district court in the instant matter satisfies this standard.
Election Rules, Art. X, Sec. 1(b) (2). According to the Election Officer, this exception was created to accommodate the Supreme Court's observation in United Steelworkers v. Sadlowski, 457 U.S. 102, 119-21, 102 S. Ct. 2339, 2349-50, 72 L. Ed. 2d 707 (1982), that a ban on contributions from nonmembers was permissible because it did "not apply where a member uses funds from outsiders to finance litigation."
The rule as promulgated is a reasonable attempt to conform to Sadlowski. In that decision, the Supreme Court stated that a rule banning campaign contributions by nonmembers "would clearly violate LMRDA Section 101(a) (4) if it prohibited union members from accepting financial or other support from nonmembers for the purpose of conducting campaign-related litigation." 457 U.S. at 119, 102 S. Ct. at 2349. A blanket ban on outsiders' contributions would, therefore, be unlawful.
The IBT contends that the rule violates LMRDA Section 101(a) (4), which provides that "no interested employer or employer association shall directly or indirectly finance, encourage, or participate" in litigation brought by candidates for union office. See 29 U.S.C. § 411(a) (4). We agree with the IBT and remand for purposes of excluding "interested" employers or associations of employers from the provision of the election rules allowing nonmembers to aid candidates in obtaining accounting and legal services. The danger of allowing employers to aid candidates whom they may one day face across a bargaining table is self-evident, and we perceive nothing in Sadlowski to the contrary. Unlike the implicit waiver of the LMRDA's prohibition on membership list distribution contemplated by the Consent Decree's authorization to the election officer to supervise elections and distribute materials discussed above, there is no indication in the Consent Decree that the IBT contemplated or consented to a departure from the LMRDA's ban on contributions from interested employers.
Finally, the IBT contends that the exception violates Paragraph 8 of the Consent Decree and Section 401(g) of the LMRDA, which prohibits employer contributions "to promote the candidacy of any person." See 29 U.S.C. § 481(g). Although Paragraph 8 does not create an exception for accounting and legal expenses, we deem the Consent Decree to incorporate prevailing legal standards, including the Sadlowski decision. With regard to Section 401(g), its general prohibition can be reconciled by reading the phrase "promote the candidacy" as being limited to aiding campaign advocacy and as not including accounting and legal services.
The government also argues that the IBT may not appeal because it has agreed to be bound by the Consent Decree. Although the IBT unquestionably has "waived its objections to the terms of the [consent] order," Martin Marietta Corp. v. FTC, 376 F.2d 430, 434 (7th Cir.), cert. denied, 389 U.S. 923, 88 S. Ct. 237, 19 L. Ed. 2d 265 (1967), the rule against appellate review of the substance of a consent order applies only when the order explicitly covers the question sought to be appealed or when the issue on appeal does not raise a substantial question of interpretation. See Friedman & Hughes, 905 F.2d at 616. The IBT's appeal, however, challenges aspects of the Election Rules Order and Staffing Order that are arguably inconsistent with terms of the Consent Decree or arguably extend or modify the relief provided in the Decree. Such orders are subject to de novo appellate review. See United States v. Western Elec. Co., 900 F.2d 283, 293 (D.C. Cir. 1990). See also United States v. Armour & Co., 402 U.S. 673, 681-83, 91 S. Ct. 1752, 1757-58, 29 L. Ed. 2d 256 (1971) (exercising appellate jurisdiction over "construction of an existing consent decree")
The government's contention that the Affiliates waived any right to challenge the Election Rules Order by failing to intervene in the district court proceedings is similarly unavailing. In Martin v. Wilks, 490 U.S. 755, 109 S. Ct. 2180, 104 L. Ed. 2d 835 (1989), the Supreme Court held that a failure to intervene does not bar a subsequent attempt to challenge actions taken pursuant to a consent decree