Opinion ID: 763624
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: 2 Prior to the 1988 union elections, plaintiffs Bill Brooke, Robert Sandoval and Robert Williams were members of the Executive Board of Teamsters Local 287. Brooke was also vice-president, Sandoval was president, and Williams was a Trustee. During 1988, the plaintiffs and Dave Haas 1 came to believe that Mario Gullo, the local's chief executive officer, its secretary-treasurer, was mishandling several of his financial responsibilities. In particular, due to the apparent absence of records that reflected the actual receipt and expenditure of supplemental dues, the plaintiffs were concerned about how Gullo was handling that segment of the union's funds. For other reasons, they were also concerned about his handling of the Sick & Death Benefit Fund. Supplemental dues are paid by certain union members in addition to the standard dues that all members pay. The Sick & Death Benefit Fund, financed through regular dues, provides benefits to a union member who becomes disabled, or to the family of a member who dies. 3 In 1987, the union increased the share of the monthly dues payments allocated to the Sick and Death Benefit Fund. In early 1988, Sandoval became concerned that despite this increase, there was no corresponding increase in the Fund's total value. The plaintiffs approached Gullo about the discrepancy between the increased allotment for the fund and the Fund's actual growth, but did not receive what they felt to be a satisfactory explanation. This, combined with their frustration over their inability to determine the status of the monies paid as supplemental dues, caused the plaintiffs to look for help outside the Teamsters union. 4 After first seeking assistance from the Department of Labor, the plaintiffs sought the advice of a private attorney, Fernando Hernandez, in September 1988. Following an initial meeting with Hernandez, the plaintiffs brought a motion before the local union Executive Board to hire Hernandez to conduct an investigation into the supplemental dues and other related matters. The motion passed, and the plaintiffs signed a retainer agreement with Hernandez on behalf of the local union. 5 In November 1988, as a result of Gullo's continued refusal to provide information regarding financial matters to the Executive Board, Hernandez filed an action against him in United States District Court on behalf of the individual plaintiffs and the union. The complaint alleged that in September 1987 Sandoval had requested an accounting of funds in Gullo's possession and that the bylaws of Local 287 require the secretary-treasurer to provide such an accounting, but that Gullo had failed to furnish one. The complaint further alleged that Gullo had diverted union funds to his own personal use. The complaint requested, inter alia, a full accounting and damages equal to the amount of funds misappropriated by Gullo. 2 6 Shortly after the action was filed, Sandoval found a check on his bulletin board made out to the Sick and Death Benefit Fund in the amount of $11,748.28. Sandoval asked Gullo about the check, and Gullo responded that he had just recently found the money in his safe. As Sandoval testified: 7 I says: Mario, what's this? ... This check for the Sick and Death Benefit. Where did it come from? And he says: Oh, we found it in the safe. We found that money in the safe.... I told him: You mean--how convenient. After all this time you find the money in the safe? ... He says: That's all I could tell you. 8 In December 1988, the union held its election for officers and business agents. Haas defeated Gullo in the campaign for the top post, secretary-treasurer, but Gullo's supporters were elected to a majority of the positions on the Executive Board. Sandoval was re-elected as president, while Brooke and Williams won positions as business agents. 9 The new Executive Board discharged attorney Hernandez. Gullo then filed internal union charges against the plaintiffs and Haas relating to the hiring of Hernandez and the institution of the action. The charges asserted that the plaintiffs' actions were politically motivated and intended to harm [Gullo] and defraud the local union funds or credit in the amount of $13,000.... A hearing on the charges was scheduled for August 16, 1989, but on August 15 the meeting was cancelled by Haas, pursuant to his authority as secretary-treasurer. As a result, none of the plaintiffs attended the hearing. A panel of the local union, consisting of the Gullo supporters on the Executive Board and three others chosen by them, held a hearing at the time scheduled, and tried and convicted the plaintiffs in absentia. Each plaintiff was removed from office, fined $5,000, and ordered to reimburse the union for costs incurred by attorney Hernandez. The plaintiffs appealed their convictions to Teamsters Joint Council 7, which subsequently reversed Haas's conviction, but affirmed the convictions of all plaintiffs here, although it reduced the fines to $500 each. 3 10 On August 22, 1989, the plaintiffs filed a complaint in the United States District Court alleging that the assessment of fines against them and their removal from office constituted discipline in violation of the Labor Management Reporting and Disclosure Act. The complaint further alleged that the discipline was invalid because it was imposed in retaliation for plaintiffs' filing a legitimate lawsuit, in violation of § 101(a)(2) and (4) of the LMRDA, and that the hearings violated the plaintiff's right to due process in union disciplinary proceedings, in violation of § 101(a)(5). 4 In 1993, the plaintiffs and defendants filed summary judgment motions. The district court (Aguilar, D.J.) granted the plaintiffs' motion as to liability on the 101(a)(5) claim, holding that the original local union hearing denied the plaintiffs the process they were due under the Act, and that the Joint Council proceedings failed to cure these procedural defects. The court found that the first trial was clearly biased given that plaintiffs' political opponents actively participated, Haas v. Local 287, 832 F.Supp. 283, 287, (N.D.Cal.1993), and that the second trial before the Joint Council was biased as a matter of law due to the Council's reliance on the records of the original proceeding. Id. The court denied all other summary judgment motions, and the case, including damages on the § 101(a)(5) claim, went to trial on August 16, 1994 before District Judge Ingram. 11 From the outset, the district court and both parties have characterized this action as a mixed motives case. Accordingly, the district judge instructed the jury on how to assess liability in a mixed-motives case under the LMRDA. The jury returned a verdict in the plaintiffs' favor, and awarded compensatory and punitive damages. 5 Following the jury's verdict, however, the court granted the defendants' motion for a new trial as to plaintiffs Brooke, Sandoval, and Williams. 6 The court ordered the new trial on the § 101(a)(2) and (a)(4) claims based on its understanding that the defendants' liability was to be assessed according to a mixed-motives regime, and that they had satisfied an affirmative defense available in mixed-motives cases. 7 In addition, the court ordered a new trial on damages on the plaintiffs' § 101(a)(5) claim, as to which liability had previously been established. 12 The second trial began on October 26, 1995. Again, it involved the plaintiffs' claims as to both liability and damages under §§ 101(a)(2) and (a)(4), and as to damages under (a)(5). The court again presented the jury with an LMRDA mixed-motives instruction identical in all relevant respects to that given during the first trial. This time, the jury returned a verdict for the defendants on the free speech and right to sue claims. As to the damages for the procedural due process violation, the jury awarded $5 to each plaintiff. 13 The plaintiffs appeal the district court's grant of a new trial following the original jury verdict, and the defendants cross-appeal the district court's grant of summary judgment on the plaintiffs' due process claim.