Opinion ID: 518934
Heading Depth: 2
Heading Rank: 2

Heading: Good Cause Requirement

Text: 13 A plaintiff seeking leave to file a complaint under section 501(b) also must show there is good cause to bring such a suit. 29 U.S.C. Sec. 501(b); Horner, 362 F.2d at 227; Kerr v. Shanks, 466 F.2d 1271, 1277 (9th Cir.1972), cert. denied, 412 U.S. 918, 93 S.Ct. 2730, 37 L.Ed.2d 144 (1973); Flaherty v. Warehousemen, 574 F.2d 484, 487 (9th Cir.1978); Phillips v. Osborne, 403 F.2d 826, 830 (9th Cir.1968). Such a showing protects union officials from harassing and vexatious litigation which has no merit, Phillips, 403 F.2d at 830; Horner, 362 F.2d at 228; Loretangeli, 853 F.2d at 189, and from unwarranted judicial intrusion in the processes of union democracy. Loretangeli, 853 F.2d at 189. 14 Good cause may be established by the contents of the verified application, the complaint, or any other documents filed by the parties with the court. Horner, 362 F.2d at 228-29. Cowger submitted a verified application and a proposed complaint, both with exhibits documenting the charges alleged in his pleadings. Rohrbach filed a motion in opposition and a declaration, with exhibits documenting his allegations. Cowger then submitted a response and declaration, and Rohrbach submitted a supplemental declaration. In opposition to Cowger's application, Rohrbach contended he was being harassed by Cowger, and he provided extensive documentation in support of this allegation. He also argued that the expenditures at issue were authorized by Local 80's constitution and by the Board and, therefore, his benefit from them could not be a breach of his fiduciary obligations. 15 The district court stated in its order denying Cowger's application for leave to file his complaint that [b]ased upon the pleadings before this Court, this Court finds that there is ample evidence of ongoing and continuous harassment of Defendant Donald Rohrbach by Plaintiff and others.... Accordingly, Plaintiff's Ex Parte Application for Leave of Court to File a Breach of Fiduciary Duty Lawsuit is hereby denied. Cowger v. Rohrbach, No. MISC-20234-R, slip op. at 2-3 (C.D.Cal. Nov. 12, 1987). 16 We addressed in Horner the effect of a district court's consideration of defenses in connection with the good cause requirement. We stated: 17 Defenses which necessitate the determination of a genuine issue of material fact, being beyond the scope of summary judgment procedure, are a fortiori, beyond the scope of a proceeding to determine whether a section 501(b) complaint may be filed. Defenses involving disputed questions of fact should be appraised only after a trial at which the parties and the court can have the benefit of a complete inquiry, assisted by such pre-trial discovery as may be undertaken. 18 Horner, 362 F.2d at 229 (footnotes omitted). 19 The parties in the present case dispute Rohrbach's defense that the union's expenditures from which he benefited were authorized. However, authorization, even if shown, is not a complete defense to a section 501 action. Morrissey v. Curran, 650 F.2d 1267, 1272-74 (2d Cir.1981). See Loretangeli, 853 F.2d at 192-93. Rohrbach's only other defense is based on his contention that he is being harassed by Cowger. But, resolution of this issue involves disputed questions of fact. Moreover, while harassment may be a factor which cuts against Cowger, it does not automatically cancel out his evidence of good cause. Cowger has set forth facts which tend to show that union funds were misspent for Rohrbach's benefit. At this early stage of the proceedings, this is sufficient to satisfy the threshold good cause requirement of section 501(b). Horner, 362 F.2d at 229; Loretangeli, 853 F.2d at 191-92. But see Dinko, 531 F.2d at 75.