Court Opinion

ID: 8882374
Source: CourtListenerOpinion
Date Created: 2022-11-26 20:57:09.085846+00
Date Added: 2024-06-11T17:06:43.650950
License: Public Domain

DANAHER, Senior Circuit Judge
(dissenting):
Although according great respect for the views of my colleagues and for those of the able District Judge, Honorable Dudley B. Bonsai, I nonetheless fear that error has occurred.
The National Maritime Union of America (hereinafter NMU) was founded in 1937. Some fourteen years later, the still-young Union adopted a Constitution which, so far as is here pertinent, provided that “considering the financial state of the Union,” the Union’s National Council1 was empowered to make adequate and appropriate provisions for pensions, welfare and similar benefits for officers and employees of the Union. That power was never rescinded, I suggest, but was later transferred to the National Office.
Agreeably to such authorization, effective as of February, 1953, the NMU Officers’ Pension Plan was adopted, then covering all elected offices of NMU. There has been no challenge here to the validity of that Plan.
NMU in the management of its properties, in the administration of its far-flung business and in furtherance of its purposes, utilized the services of a staff of lawyers, economists, pension administrators, staff experts in Washington, doctors, and supervisory staffs of Union-owned real estate.2 For their protection as well as to further its own interest in their retention in its service, NMU negotiated with various unions of which its employees were members for the establishment of pension and welfare plans. As an employer, NMU was bound to bargain respecting hours, wages and condi*401tions of employment. Although clearly authorized to do so, NMU had not until the events here at issue, set up a separate plan for a few of its supervisory personnel, not elected officers and not represented by some union.
Some years the Plan had become effective, the plaintiffs here alleged that without authorization a lump-sum benefit3 had been accorded to the defendant Perry following his resignation as Executive Assistant to the National President. Purporting to base the action upon 29 U.S.C. § 501, the plaintiffs had sought an accounting, a money judgment against the defendants, and an injunction to restrain the Trustees from paying benefits to Perry or any .other non-elected employees of NMU. The Union was not made a party. Under date of May 23, 1969, the District Judge filed an Opinion holding, compendiously, that there was no authority 4 for covering non-employees into the Plan, and so he granted summary judgment for the plaintiffs. He ordered the defendants to account; enjoined the Trustees from paying benefits under the Plan to non-officers; and further directed the Trustees to return to NMU, with interest, all moneys received by the Trustees for the benefit of non-officers.
I.
Meanwhile, Congress adopted the “Welfare and Pension Plans Disclosure Act,” effective as of January 1, 1959,5 which defined an “employee pension benefit plan” to mean
“any plan, fund or program which is communicated or its benefits described in writing to the employees, and which was heretofore or is hereafter established by an employer or by an employee organization, or by both, for the purpose or providing for its participants * * * retirement benefits * *
And the Act further defined the term “participant” to mean
“any employee or former employee of an employer or any member of an employee organization who is or may become eligible to receive a benefit of any type from an employee welfare .or pension benefit plan, * *
NMU became bound to submit annually to the Secretary of Labor a report describing the Plan, an annual financial statement, and further information in such form and detail as the Secretary might prescribe. NMU complied with those requirements.6
So it was in part, and with the Labor Management Reporting and Disclosure Act of 1959 (LMRDA) 7 by this time on the statute books, the 1951 Constitution was revised at an NMU Convention held in October, 1960, with ratification by the membership after a referendum vote concluded in December of 1960.
I deem it unthinkable that the NMU membership supposed for a moment that the amended Constitution was intended to wipe out whatever rights to coverage had been acquired since 1952. There was no repealer clause in the 1960 revision. To me, it is inconceivable that the eligibility established in 1952, followed by good faith reliance under the express terms of the earlier Constitution, was to *402be deemed obliterated. I reject the suggestion that the Constitution, as revised, had narrowed the authority of this Union to provide pensions for any of its 47,-000 members, whether they be elected officers or employees or whatever their status.
On the contrary the 1960 Constitution even broadened benefits to be accorded to members whose rights had previously accrued, as for example where Article 15, Section 8(f), specified that members
“receiving a monthly pension under the NMU Welfare and Pension Plan or the NMU Officers’ Pension Plan shall not be required tó pay dues and shall be regarded as honorary members. * * * »
Against such background, lacking representation by any employee union and not possessing the status of elected officers, a few non-elected employees were brought into the Plan. Perry as Assistant to the President8 was included, certain others being identified as Organizer, Maintenance Supervisor, Bookkeeper Supervisor, Records and Supply Supervisors, Executive Secretary, Publicity Director and the Editor of the NMU official News Organ, The Pilot.
In sum, my reading of the record and my construction of the NMU Constitution convince me, first, that it had always been the plain intendment of this Union that pensions for both officers and employees be authorized; and next, that the power to establish any plans had been created in 1951, with continuing authorization to amend whatever plan might thereafter be established. See, for example, Article 15, Section 8 of the Constitution, ratified in 1951, which read:
The National Council, subject to approval of the membership, is empowered to make adequate and appropriate provisions for pensions, welfare, and similar benefits for officers and employees of the Union.
Nothing to be discerned from the revised Constitution, ratified December 2, 1960, detracted one whit from that authority. Rather, I suggest, the later revision must be read with the former. The only difference in giving effect to the continuing intent of the Union membership was that after the 1960 revision, the authority to act was transferred from the National Council to the National Office. I conclude that even without more than my analysis suggests, the District Judge erred in concluding that at the time the challenged action was taken, there had been a lack of authority to provide pensions for all past and present employees of the Union.
II.
But there was more. After the release of Judge Bonsai’s May 23, 1969 Opinion, the Union promptly took steps to reiterate the NMU intention. If the judge could be heard to say that NMU had failed to make clear its intention, two amendments to the Constitution were immediately proposed. The amendments by the membership by an overwhelming vote. Accordingly, the revised 1960 Constitution was further amended by the addition to Article 8, Section 11, of the following:
(d) — The National Office shall have the authority to provide pensions for all past and present employees of the Union and to protect the pension rights of all past and present employees of the Union.
The membership further amended Article 14, Section 7, to read as follows:
Pensions: All officers and such employees as the National Office may designate shall be eligible for benefits *403under the NMU Officers’ Pension Plan, subject to such rules and regulations as the Trustees of that Plan may establish. The National Office shall have the authority to validate retroactively all pensions heretofore paid under the Plan.
These plaintiffs then attacked the amendments as “exculpatory” within the meaning of 29 U.S.C. § 501, and they sought an injunction. The District Judge flatly — and correctly — rejected that contention and ruled that the amendments “were not exculpatory provisions prohibited by 29 U.S.C. § 501. Their purpose is obviously to include non-officer employees in the NMU Officers’ Plan.”9 (Emphasis added.)
Granting that the Constitution had validly been amended, the District Judge’s July 3, 1969 Memorandum observed, “It does not appear that the National Office has exercised this authority.”
I read him to be saying, “I do not perceive that the necessary authority existed to include non-officers at the time they were covered into the Plan. But now NMU has conferred that authority. Even so as of this moment, the National Office has not so far exercised its power.” And accordingly he concluded only that since the inclusion of non-officers “was beyond the power of the defendants, plaintiffs are entitled to appropriate relief.” 10
*404Thereupon after such prompting, as the record shows, the National Office acted to implement the authority so recently reaffirmed. It adopted a resolution based upon the desire of the National Office “to confirm the pension rights of all employees of the Union, both retroactively and prospectively.” The text appears in the margin.11
Right then and there, having been advised in the premises, the assumed omission having been cured by NMU, the District Judge should have entered summary judgment in behalf of the defendants, thus rendering mo.o-t whatever claims had previously been urged upon the Court by these plaintiffs. To take any other view, as it seems to me, is not only to deny NMU its right to manage its own affairs,12 but in view of the rectification of whatever oversight the Judge thought he had detected, the membership clearly restated its approval of the authority of the National Office and of the Trustees to provide pensions for all officers and all employees.13
The purpose and the intent of the Union emerged conclusively, I respectfully *405submit, and the conferred authority was exercised.
III.
Having in mind that the District Judge concluded that summary judgment was in order, perhaps it will not be amiss to turn back to his May 23, 1969 Memorandum Decision. There he concluded that the “plaintiffs’ action for breach of defendants’ fiduciary duties is not barred by laches.” He continued that “in this ease defendants have made no showing that they have been prejudiced by the delay.”
Judge Motley found in Wirtz v. National Maritime Union of America, 284 F.Supp. 47, 53 (1968), that the defendant Wall in the 1966 contest for National Secretary-Treasurer had defeated the plaintiff Morrissey by a vote on the order of two to one. The plaintiff Padilla received the least number of votes and by about the same ratio as he sought election as one of the Vice-Presidents. These plaintiffs then had filed protests, id., 57, in accordance with the provision of the Constitution, and after their protests had been heard and rejected they sought the intervention of the Secretary of Labor. They did not do so here, and it may be noticed that the Secretary is not complaining concerning the present issue,14 although he had been kept informed through the annual filing of the reports required by the Disclosure Acts.
Now, some eight years after the actions we have been discussing, we find these plaintiffs seeking an accounting and a return of moneys contributed to the Pension Plan. If as the plaintiffs contend on brief these defendants under the judgment will be bound individually to return to NMU all moneys theretofore paid or accrued for the benefit of the intended participants, it is difficult to see why the defendants shall not “have been prejudiced by the delay.” Surely if this action had earlier been commenced and concluded with like result, it would seem inevitable that liability so entailed would have been limited. Moreover, corrective action, if really required, could at once have been taken to the end that the Union’s concern for eligible participants be satisfied.
It seems to me that a hearing, at least on this aspect of the case, was clearly in order. I fail to see how the Judge could have faulted the defendants as having “made no showing that they have been prejudiced by the delay.” To what extent that conclusion of the District Judge entered into his determination that summary judgment was in order, we do not know. But we do know that despite the absence of extrinsic evidence both on this point and with respect to what was in fact the intention of the Union, summary judgment for the plaintiffs was directed.15 If summary judgment were not to be entered in favor of the defendants for the reasons previously advanced, at the very least according to my appraisal of the record here there should have been a hearing. There was error on account of that failure if for no other reason.
IV.
It would unduly protract this exposition of my views were I to go into further detail. Sounding again the note on which I opened, I respectfully submit my observations with the greatest regard for those of my colleagues and Judge Bonsai.

. The National Council was authorized to act between National Conventions. Another entity, known as the National Office, was accorded the same powers as those reposed in the National Council, to be exercised in the more frequent meetings of the National Office.

. Some inkling of the nation-wide scope of the operations of NMU may be gleaned from the carefully-detailed findings of District Judge Motley outlined in Wirtz v. National Maritime Union of America, 284 F.Supp. 47 (S.D.N.Y.1968); affirmed by this Court 399 F.2d 544 (1968).

. The original Plan had specifically provided that the Trustees in their discretion might make a lump-sum payment in lieu of benefits otherwise provided. Indeed, the authorization was amended and extended in 1958.

. There was no evidence that the officer defendants or the Trustees personally benefited in any way or otherwise acted unlawfully, or that they had exercised bad faith. Cf. Bakery and Confectionery Workers Internat’l U. v. Ratner, 118 U.S.App.D.C. 269, 835 F.2d 691 (1964).

. 29 U.S.C.A. § 301 et seq., PL 85-836, as amended by PL 87 — 420, 76 Stat. 35, which vastly increased the authority of tlie Secretary of Labor to supervise and to administer the disclosure requirements of the earlier Act.

. 29 U.S.C.A. §§ 304-307. NMU furthermore was bound to report in detail to the Bureau of Internal Revenue and annually did so.

. 29 U.S.C.A. § 401 et seq.

. The Constitution in Article 13, Section 1, provided as to the National President that:
(f) He may, in his discretion, and at such salary as the National Office may determine, appoint a member, or members, of the Union to assist him in the exercise of his administrative functions; provided that such assistant or assistants shall at no time act in an executive capacity.

. Decision and Order on Motion for an Injunction
The amendments to the NMU Constitution are not exculpatory provisions prohibited by 29 U.8.C. 501. Their purpose is obviously to include non-officer employees in the NMU Officers’ Pension Plan. According to the Certification of the Honest Ballot Association, dated June 24, 1969, the following amendments were adopted by a vote of 10,043 to 1,685:
“Add the following paragraph to Article 8, Section 11:
(d) — The National Office shall have the authority to provide pensions for all past and present employees of the Union and to protect the pension rights of all past and present employees of the Union.
“Amend Article 14, Section 7 to read as follows:
Pensions: All officers and such employees as the National Office may designate shall be eligible for benefits under the NMU Officers’ Pension Plan, subject to such rules and regulations as the Trustees of that Plan may establish. The National Office shall have the authority to validate retroactively all pensions heretofore paid under the Plan.”
While it is stated that 12,040 members obtained a ballot, it is not stated how many members of NMU were eligible to vote. The amendment to Article 14, Section 7 provides that “the National Office shall have the authority to validate retroactively all pensions heretofore paid under the Plan.” However, it does not appear that the National Office has exercised this authority.
Plaintiffs’ motion is denied, without prejudice to the plaintiffs seeking further relief by appropriate application if the defendants should violate the order of the court.
It is so ordered.
Dated: New York, N. Y.
July 3, 1969.
Dudley B. Bonsai

U.S.D.J.

. Decision and Order on Motion for Re-argument
Defendants’ motion for reargument is denied. The interpretation of the meaning of “salaries” sought by defendants would not change the holding that only officers were eligible for benefits under the NMU Officers’ Pension Plan, for the reasons stated in the Memorandum filed May 23, 1969. Therefore the inclusion of non-officers in the Plan was not authorized by the NMU Constitution as revised in 1960. Since such inclusion was beyond the power of the defendants, plaintiffs are entitled to appropriate relief.
Consideration has been given to the affidavit of the defendant Martin Segal dated June 11, 1969, which was filed in support of the defendants’ motion for re-argument. Mr. Segal is one of the trustees of the NMU Officers’ Pension Plan, who appeared in the action and filed his answer on May 1, 1969. The court does not question Mr. Segal’s good faith as trustee. However, the plaintiffs are entitled to obtain the return to NMU of the monies paid to the Fund on behalf *404of non-officers since their inclusion was not authorized.
It is so ordered.
Dated: New York, N. Y.
July 3, 1969.
Dudley B. Bonsai

U.S.D.J.

. “Now, Therefore be it Resolved:
(1) All pensions heretofore paid by the NMU Officers’ Pension Plan are hereby validated and approved.
(2) All employees of the Union except (a) those already covered by collective bargaining agreements where the NMU is the employer, which collective bargaining agreements provide for the covered employees * * * shall be eligible for benefits under the NMU Officers’ Pension Plan.
(3) Payments on the NMU Officers’ Pension Plan to provide for the foregoing benefits are hereby authorized and all past payments by the Union to the NMU Officers’ Pension Plan are hereby ratified and approved.”
Pursuant thereto, the Plan (identified as that which was “effective as of February 16, 1953,” as amended) was again amended in Article I, Section 8 to define, more specifically, the term “Participant” to mean
“an Officer, Representative, Supervisor or Professional, and all other employees of the Union except (a) any employee whose compensation, hours of work or conditions of employment are determined by collective bargaining with a recognized bargaining agent. * * ”
And Section 9 defines “NMU Constitution” to mean
“the Constitution of the NMU in force and effect at the time of the adoption of this Pension Plan [1953] together with any amendments thereto.”

. The Supreme Court has recognized that unions in the view of Congress are to be accorded great latitude in resolving their own internal controversies. Wirtz v. Local 153, Glass Bottle Blowers Ass’n., 389 U.S. 463, 471, text, n. 10, 88 S.Ct. 643, 19 L.Ed.2d 705 (1968); cf. Wirtz v. Hotel, Motel and Club Employees, 391 U.S. 492, 497, 88 S.Ct. 1743, 20 L.Ed.2d 763 (1968).

. Applying to the documents before us principles analogous to those governing statutory construction, we are bound to read them together. Certainly repeals by implication are not favored, and nowhere can it be seen that the 1960 Constitution repealed the earlier version. Where there are two acts upon the same subject, it is fundamental that the rule is to give effect to both if possible. United States v. Borden Co., 308 U.S. 188, 198, 60 S.Ct. 182, 84 L.Ed. 181 (1939).
The language before us must be interpreted in the light of reason and understanding to reach the results intended by the NMU’s Conventions and the respective Constitutions which reflect the membership approval. Rathbun v. United States, 355 U.S. 107, 109, 78 S.Ct. 161, 2 L.Ed.2d 134 (1957); cf. United States v. Public Utilities Comm’n, 345 U.S. 295, 315, 73 S.Ct. 706, 97 L.Ed. 1020 (1953).
If caution “against a literal reading of congressional legislation” be required, Wirtz v. Bottle Blowers Ass’n., supra, at 468, 88 S.Ct. 643, how much more so should that caution be applied to the language, often enough inartful, as employed by the Union’s draftsmen. Recognition of the general objectives sought to be achieved by NMU should provide the key to a reconciliation of all alleged doubts.
This was no case where officers of the Union were misappropriating Union funds for themselves. Cf. Tucker v. Shaw, 378 F.2d 304, 306 (2 Cir. 1967); indeed, the Judge found no lack of good faith on the part of the trustees, cf. Coleman v. Brotherhood of Railway & Steamship *405Clerks, Etc., 340 F.2d 206, 209, 15 A.L.R.3d 933 (2 Cir. 1965). Here, the Union officers, the National Office, the NMU membership and the trustees had undertaken to do precisely what the Union sought to accomplish.

. In passing it should be noted that the Internal Revenue Service had required NMU to amend the Plan so as to cover broadly all employees, officers, as well as non-officers. Thereupon, the Plan, so amended, was approved by the Bureau of Internal Revenue.

. Cf. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962).