Court Opinion

ID: 2995634
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:21:26.001302+00
Date Added: 2024-06-11T11:49:03.679299
License: Public Domain

In the
United States Court of Appeals
For the Seventh Circuit

Nos. 01-2307 & 01-2791

Lyne Brunt, David Wadinski
and John Wittenberg,

Plaintiffs-Appellants,
Cross-Appellees,

v.

Service Employees International Union
and Dan Iverson,

Defendants-Appellees,
Cross-Appellants.

Appeals from the United States District Court
for the Eastern District of Wisconsin.
No. 00-C-317--Lynn Adelman, Judge.

Argued January 16, 2002--Decided March 21, 2002

  Before Bauer, Rovner and Williams, Circuit
Judges.

  Bauer, Circuit Judge. Appellants Lyne
Brunt, David Wadinski and John Wittenberg
filed suit against Service Employees
International Union and Union President
Dan Iverson, complaining of violations of
the Labor Management Reporting and
Disclosure Act (LMRDA) and state law
because Iverson terminated Appellants’
employment when they refused to support
Iverson’s re-election as union president.
The district court granted the Union’s
Rule 12(c) motion to dismiss the case and
denied Appellants’ motion for leave to
amend their complaint. The district court
also denied the Union’s motion for Rule
11 sanctions against Appellants’ counsel.
Both parties now appeal the district
court’s rulings. For the following
reasons, we affirm the decisions of the
district court.

BACKGROUND
  Brunt, Wadinski and Wittenberg were
full-time members of the Union. They were
also employed by the Union as union
representatives and their
responsibilities included settling and
arbitrating grievances, negotiating labor
agreements and representing the Union in
organization campaigns. In addition, in
late 1997, Brunt was promoted to
assistant to the union president. In this
capacity, her additional duties included
assisting other union representatives in
bargaining, as well as overseeing
troubled facilities. Brunt, Wadinski and
Wittenberg each paid their union dues and
as a result, they were entitled to the
full benefits of union protection
regarding the terms and conditions of
their employment.

  In the spring of 1998, Union President
Dan Iverson ran for re-election. Iverson
told union members that anyone who ran
against him in the presidential election
would be fired. Wadinski ran against
Iverson in the election. Wittenberg
refused to support Iverson and instead,
openly supported Wadinski. Iverson asked
Brunt for her support, but she refused.
Instead, Brunt informed Iverson that she
intended to remain "neutral" in the
election. Iverson responded that Brunt’s
"neutral" stance was a dangerous position
that could have "possible repercussions"
for her future career.

  In May of 1998, the union membership re-
elected Iverson as Union President.
Wadinski and Wittenberg were discharged
at Iverson’s direction on June 29, 1998
because they had challenged him in the
presidential election. Brunt was
discharged on August 21, 1998 because of
her decision to remain neutral in the
election. Appellants’ request for a
grievance hearing from the Union was
denied.

  On March 2, 2000, Brunt filed a
complaint in federal court, charging the
Union and Iverson with violating Title I
of LMRDA. The complaint asserted that
Brunt was terminated from her position as
an appointed union representative for
exercising her rights to free speech and
that this discipline resulted in the
termination of her rights and status as a
union member. In June, Brunt amended her
complaint, adding Wadinski and Wittenberg
as plaintiffs.

  On April 18, 2001, the district court
granted the Union’s Rule 12(c) motion to
dismiss Appellants’ complaint. The court
found that the instant case was
indistinguishable from Finnegan v. Leu,
456 U.S. 431 (1982), in which the United
States Supreme Court held that LMRDA does
not restrict the power of a union
president to hire his or her own staff.
The district court also denied
Appellants’ motion for leave to amend
their complaint to add an additional
LMRDA violation.

  On April 30, 2001, the Union moved for
reasonable attorney’s fees and costs
incurred in defending this litigation on
the grounds that the Appellants’ claims
were not warranted by either existing law
or a non-frivolous argument for the
extension of existing law. The district
court denied the motion. This appeal and
cross-appeal followed.

DISCUSSION

A.   Dismissal of Appellants’ Complaint

  Appellants first argue that the district
court erred in granting the Union’s Rule
12(c) motion to dismiss the complaint on
the grounds that Finnegan barred their
claim. Under Rule 12(c), a party can move
for judgment on the pleadings after the
filing of both the complaint and answer.
Fed. R. Civ. P. 12(c). A court will grant
a Rule 12(c) motion only when it appears
beyond a doubt that the plaintiff cannot
prove any facts to support a claim for
relief and the moving party demonstrates
that there are no material issues of fact
to be resolved. N. Indiana Gun & Outdoor
Shows, Inc. v. City of South Bend, 163
F.3d 449, 452 (7th Cir. 1998). We review
a district court’s ruling on a Rule 12(c)
motion de novo. Id.

  Title 1, section 101(a)(2) of LMRDA
grants union members the rights of
freedom of speech and assembly, including
the right to "express any views,
arguments or opinions." 29 U.S.C. sec.
411(a)(2). In addition, section 609
provides that a union and its officers
may not fine, suspend, expel or otherwise
discipline any union members for
exercising such rights to free speech and
assembly. 29 U.S.C. sec. 529. Appellants
claim that they were subject to unlawful
discipline under these provisions when
Iverson ordered their termination.

  In Finnegan v. Leu, the United States
Supreme Court examined the language of
LMRDA and held that sections 101 and 609
"[do] not restrict freedom of an elected
union leader to choose a staff whose
views are compatible with his own."
Finnegan, 456 U.S. at 441. The Court
noted that nothing in the language of
LMRDA or the legislative history suggests
that it was intended to address the issue
of union patronage; rather, LMRDA’s
objective was "to ensure that unions
would be democratically governed and
responsive to the will of the union
membership." Id. The Court concluded that
"the ability of an elected union
president to select his own
administrators is an integral part of
ensuring a union administration’s
responsiveness to the mandate of the
union election." Id.

  In Hodge v. Local Union 695, 707 F.2d
961 (7th Cir. 1983), we reviewed a LMRDA
claim and reiterated the Supreme Court’s
holding in Finnegan. The claimant in
Hodge asserted that she was wrongfully
dismissed from her union employment when
she failed to openly support the union’s
new administration. The district court
dismissed her claim and we affirmed. In
so doing, we determined that the union
leadership discharged her because her
views were incompatible with the new
administration’s policy and Finnegan
plainly allows union leadership to act on
such a conviction. Id. at 964. Further,
we noted that the Finnegan holding
applies even where the union employee
simply remained neutral, rather than
openly campaigning against a new union
administration. Id.

  In the instant case, Appellants argue
that their rights under LMRDA were
violated when they were discharged from
their positions for their refusal to
support Iverson in the union elections.
We agree with the district court that
this case falls squarely within the
mandates of Finnegan and Hodge. As
president of the Union, Iverson could
legally terminate Appellants’ employment
for their failure to support his re-
election. As we stated in Hodge, even if
Brunt did not openly oppose Iverson’s
campaign, Iverson was still within the
legal boundaries when he discharged her
for refusing to support him. Finnegan
makes clear that when union membership
has elected a leader, that leader has a
right to select his own employees.
Accordingly, the district court properly
dismissed Appellants’ complaint.

  Nevertheless, Appellants assert that
their case is distinguishable from
Finnegan and Hodge because when Iverson
terminated their employment, their status
as union members was terminated as well.
They argue that because Finnegan only
permits the Union to affect or terminate
their employment, not their membership
status as a whole, they were improperly
disciplined under section 609 and their
complaint sets forth a valid cause of
action. This argument is unpersuasive.

  Appellants are correct in their
assertion that section 609 prohibits any
discipline or retaliation that affects a
union member’s rights or status, but any
effect Iverson’s actions had on
Appellants’ status as union members was
merely incidental and does not fall
within the scope of prohibited activity
in section 609. As Union President,
Iverson had the right to remove
Appellants from their positions in
hisadministration and that right is not
affected by the fact that Appellants’
union memberships were also terminated.
Discharge from union employment does not
violate LMRDA even if it has an indirect
effect on union membership rights.
Finnegan, 435 U.S. at 440-41. Appellants
lost their union membership only because
it was wholly contingent on their union
employment, not because Iverson or the
Union terminated their membership status.
The district court properly held that
Iverson is not liable for any incidental
consequences of his legal acts.

B.   Leave to Amend the Complaint

  Appellants also argue that the district
court erred when it denied their motion
for leave to amend their complaint. They
insist that leave was necessary in the
interest of justice because the
additional claim stated a new, valid
theory of liability that would have
precluded dismissal of the complaint. We
disagree.

  Rule 15(a) provides that leave to amend
a pleading shall be freely given when
justice so requires. Fed. R. Civ. P. 15(a).
However, this right is not absolute and
is appropriately denied when, among other
reasons, the amendment would be futile.
Wilson v. Am. Trans Air, Inc., 874 F.2d
386, 392 (1989). Moreover, the decision
to grant or deny a motion to file an
amended pleading is a matter purely
within the sound discretion of the
district court. J.D. Marshall Int’l Inc.
v. Redstart, Inc., 935 F.2d 815, 819 (7th
Cir. 1991). Accordingly, a district
court’s denial of a Rule 15(c) motion
will be overturned on appeal only if it
is shown that the district court abused
its discretion by refusing to grant the
leave without any justifying reason. Id.

  Appellants moved to amend their
complaint to add factual allegations and
assert a violation of section 102 of
Title I of LMRDA. This section permits
any union member to sue for relief if he
or she was discharged as part of a
purposeful and deliberate attempt to
suppress dissent within the union. See,
e.g., Stroud v. Senese, 832 F. Supp. 1206,
1213 (N.D. Ill. 1993). Appellants argue
that they have set forth a valid
retaliatory cause of action because the
Union discharged them in order to
intimidate other union members and stifle
any dissent.

  We find Appellants’ argument that the
amended complaint asserts a new theory of
liability to be without merit.
Appellants’ proposed amendment merely
adds several factual allegations to their
central claim that they were terminated
for not supporting Iverson’s re-election.
We agree with the district court that
even with these additional factual
allegations, the complaint fails to
support a claim under section 102. The
amended complaint added allegations that
Iverson made various ultimatums regarding
the Appellants’ refusal to support his
re-election; however, these additions do
not amount to a showing of a pattern of
stifling dissent within the union. In
fact, these ultimatums were precisely
what the Finnegan holding grants Iverson
the right to do, i.e., fire any employees
on the basis of their disloyalty to him.
Nothing in LMRDA subjects him to
liability for such ultimatums. Because
Appellants’ amended complaint would not
survive a motion to dismiss, the
amendment would be futile and the
district court was well within its
discretion in refusing to grant leave to
amend.

C.   Sanctions
  Finally, the Union argues on cross-
appeal that the district court erred in
refusing to impose Rule 11 sanctions
against Appellants. The Union insists
that because Appellants’ complaint
contradicts existing case law, they
failed to set forth a non-frivolous
argument and sanctions are warranted. We
review the district court’s decision to
impose Rule 11 sanctions for an abuse of
discretion. Cooter & Gell v. Hartmax
Corp., 496 U.S. 384, 405 (1990).

  Rule 11 imposes a duty on attorneys to
ensure that any papers filed with the
court are well-grounded in fact, legally
tenable, and not interposed for any
improper purpose. Id. at 392. The rule is
principally designed to prevent baseless
filings. Id. Sanctions will be imposed if
counsel files a complaint with improper
motives or without adequate
investigation. Mars Steel Corp. v. Cont’l
Bank, 880 F.2d 928, 932 (7th Cir. 1989).
Even "objectively frivolous filings
support but do not compel an inference of
unreasonable investigation." Id. at 933.

  We agree with the district court that
the circumstances in this case do not
warrant sanctions. Although Appellants’
claims were barred by existing Supreme
Court and Seventh Circuit case law, it
does not follow that sanctions must be
imposed. Appellants did attempt to
distinguish their case from Finnegan and
Hodge, and we defer to the district
court’s finding that Appellants’
complaint was not so frivolous that Rule
11 sanctions are warranted.

CONCLUSION

  For the foregoing reasons, we AFFIRM the
judgment of the district court.