APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA (D.C. Civil No. 73-957).
Van Dusen and Aldisert, Circuit Judges, and Stanley S. Brotman, District Judge.*fn* Aldisert, Circuit Judge, dissenting.
VAN DUSEN, Circuit Judge.
This is an appeal from a district court order, arising out of an action brought by the Secretary of Labor (Secretary) under Title IV of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA), 29 U.S.C. § 481 et seq.,*fn** to set aside an election for district director of District 31 of the United Steelworkers of America (USWA or Union). In this election, Edward Sadlowski, the intervenor-plaintiff, was narrowly defeated allegedly due to voting irregularities which violated the LMRDA. After settlement was reached, a new election was held, which Sadlowski won by a substantial margin. The present appeal concerns the district court denial of intervenor-plaintiff's application for attorneys' fees and expenses incurred in the process of protesting and assisting the Secretary in attacking LMRDA violations.
This appeal presents important problems in the administration of Title IV of the LMRDA. The district court held that a defeated candidate for union office who intervenes in an action brought by the Secretary of Labor to avoid an election is precluded by the statute from recovering an award of attorneys' fees against the union, and that even if there is no statutory preclusion such an intervenor may not recover attorneys' fees under the "common benefit" doctrine for his actions in complaining to the Secretary, participating in litigation, shaping a settlement, and helping to police a rerun election.*fn1 The Secretary takes no position on the district court denial of attorneys' fees.
Disagreeing with the district court as to both statutory preclusion and "common benefit," we will reverse this district court order and remand for further consideration of this record in the light of the applicable legal principles and for further proceedings consistent with this opinion.
As noted below at pages 6, 27, 31 and 32, this appeal is before the court on a motion to dismiss in which defendant requests that the application for attorneys' fees "be dismissed on its face" (see page 604 below), without regard to the actual truth of (1) the allegations in the application, and (2) the statements in the other record documents, such as depositions. We emphasize that we are not passing on the truth of the statements in the record or on the character of the intervening plaintiffs, as opposed to that of the high-ranking officers of the union, but we are required, under the posture of the case as it existed at the time of the district court order from which the appeal was taken, to take all well-pleaded allegations in the record as true for purposes of this appeal and to construe them in the light most favorable to the plaintiffs (see page 31). These record facts are important in the determination of whether the district court was justified in rejecting the application for attorneys' fees as a matter of law, rather than making its decision as a matter of discretion in the light of the record facts before it.
On February 13, 1973, the USWA held an election for the position of district director of its District 31. That unit, with approximately 300 locals and 130,000 members in Illinois and Indiana, is the largest district in the Union. This election for district director was the first to be contested in nearly twenty-five years.
The candidates were Edward Sadlowski and Samuel Evett, the personally chosen successor to the district's long-time director, who was retiring after thirty years in office. Evett, in the words of then USWA President I. W. Abel, was the candidate of the Union's "official family."*fn2 Abel explained that the "official family" was composed of incumbent district directors and the officers of the International Union. The benefits of "official family" membership included automatic support - financial and otherwise - in their election efforts.*fn3
Early election returns gave Sadlowski a lead, but a complete tabulation took nearly three days. During that period Sadlowski received reports of widespread violations of LMRDA, such as ballot fraud, illegal electioneering, deprivation of secret ballot, and interference with observers. The final tabulations published by the USWA International Tellers were: Evett 23,394, and Sadlowski 21,606. In view of the reports of massive irregularities, Sadlowski immediately sought legal assistance to aid him in protesting the election in accordance with the requirements of the USWA constitution.*fn4 Such a challenge was mandated by the LMRDA requirement that internal union remedies be exhausted as a prerequisite to filing a complaint about an election with the Secretary of Labor.
Sadlowski's protest was submitted to the USWA International Tellers on February 23, 1973, and a hearing was held on March 23, 1973. In late April 1973 the Tellers issued a report upholding the election of Evett. By letter dated May 1, 1973, Sadlowski appealed that decision to the USWA International Executive Board, again in accordance with the Union constitution. On May 31, 1973, with President I. W. Abel presiding, the Board considered Sadlowski's complaint. On that same day the report of the Tellers was sustained.
Sadlowski then filed a timely complaint with the Secretary, pursuant to Title IV of the LMRDA, 29 U.S.C. § 482(a). The Department of Labor completed its Report of Investigation in August 1973, and on November 8, 1973, the Secretary instituted suit in the Western District of Pennsylvania seeking to void the District 31 election. Sadlowski's motion to intervene as a plaintiff was granted by the district court in January 1974.
After extensive pretrial proceedings, in which Sadlowski's counsel played an active role, the district court approved a settlement agreement, on August 23, 1974. It directed that a new election for district director be held on November 19, 1974. In this new election, Sadlowski was elected director of District 31 with 39,637 votes to 20,158 for Evett. An order and decree, based upon the Secretary's certification of the election results, was entered on December 2, 1974.
On January 31, 1975, counsel for Sadlowski submitted a Verified Application for Attorneys' Fees and a supporting memorandum. The district court referred the application to a magistrate. After briefing and argument, the magistrate recommended that the request be denied. Sadlowski filed exceptions to the magistrate's recommendation, and after a hearing the district judge overruled the exceptions and adopted the Magistrate's Report and Recommendation, making the sweeping legal conclusions set forth in note 1 above. This appeal followed.
II. ISSUE OF STATUTORY PRECLUSION
The threshold question in this case is whether an award of attorney's fees to an intervenor-plaintiff such as Sadlowski is precluded by Title IV of the LMRDA.*fn5
The Union advances two reasons for finding preclusion, both of which fall under the rubric of the nature and comprehensiveness of the remedial scheme: (1) the absence of specific authorization to award attorney's fees under Title IV, and (2) the fact that the primary enforcement responsibility for Title IV rests with the Secretary of Labor, rather than with private litigants. We disagree, because we have concluded that the district court had the right, in its discretion, to award attorneys' fees on the record in this case. We hold that the district court did not have the power to reject the claim for attorneys' fees on the basis of the legal conclusions stated in note 1 above, which we reject.
A. Absence of Specific Authorization for an Award
The Union urges that an award of attorney's fees under Title IV of the LMRDA is precluded by the absence of any specific provision for such an award in Title IV, in view of specific provision for either attorney's fees or appropriate relief in Titles I, II, III and V.*fn6 It buttresses this contention by noting that Congress rejected a bill, H.R. 8342, 86th Cong., 1st Sess. § 402(a) (1959), which provided for union member suits under Title IV, and authorized the award of appropriate relief, including attorney's fees.
USWA primarily relies upon Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 18 L. Ed. 2d 475, 87 S. Ct. 1404 (1967) for the proposition that an explicit, comprehensive, and exclusive remedial scheme may bar the recovery of attorney's fees. In Fleischmann, the Supreme Court held that, because the remedial provision of the Lanham Act specifically "provided not only for injunctive relief, but also for compensatory recovery measured by the profits that accrued to the defendant by virtue of his infringement, the costs of the action, and damages which may be trebled in appropriate circumstances," (386 U.S. at 719), such precise specification of remedies, encompassing authority which could as a practical matter be used to relieve the burden of counsel fees, presented a strong case against further judicial relief. Although we agree that a truly comprehensive remedial scheme may bar such an award in certain circumstances, we believe that the analytical method embraced by Fleischmann was substantially undercut by later Supreme Court decisions, thus casting considerable doubt upon the interpretation urged by the USWA.*fn7
In Fleischmann, the Court was willing to find preclusion in Congress' selective provision of attorney's fees in other statutes and unsuccessful efforts to enact a similar measure into the Lanham Act. But in Mills v. Electric Auto-Lite Co., 396 U.S. 375, 24 L. Ed. 2d 593, 90 S. Ct. 616 (1970) and Hall v. Cole, 412 U.S. 1, 36 L. Ed. 2d 702, 93 S. Ct. 1943 (1973), the Supreme Court enunciated a presumption against preclusion and sanctioned "common benefit" awards in the context of statutory causes of action despite the provision for attorney's fees in other sections of the same statute. Mills, 396 U.S. at 390-91; Hall, 412 U.S. at 10-11.
In Hall, the Supreme Court held that a plaintiff in a suit instituted under Title I of the LMRDA could recover attorney's fees even though Title I does not specifically authorize such an award. It stated that unless remedies are "'meticulously detailed,'" to "'mark the boundaries of power to award monetary relief,'" 412 U.S. at 9, or the legislative history presents an unmistakably "'definite and absolute setting of the Congressional face against the giving of such incidental relief by the courts where compatible with established equitable principles,'" id. at 12, it will not be inferred that Congress desired to deny to the courts the traditional power to grant equitable relief in the form of counsel fees in appropriate cases.
At oral argument the Union's counsel contended that the rejection by Congress of a version of Title IV that provided for direct private enforcement and attorney's fees was conclusive evidence of an intent to limit the courts' exercise of their equitable powers in suits under Title IV. Such intent cannot, in our view, be drawn from the legislative record. As the Supreme Court's review of this legislative history in Trbovich v. United Mine Workers, 404 U.S. 528, 532-36, 30 L. Ed. 2d 686, 92 S. Ct. 630 (1972) makes clear, congressional debate centered upon the relative merits of enforcement actions by union members and by the Secretary of Labor - not upon the propriety or the possibility of equitable awards. Local 639 pointed out:
"The Conference Committee and the House ultimately adopted the public enforcement scheme of the Kennedy-Ervin bill, S. 1555, presumably because they agreed with the Senate that the Secretary should screen frivolous complaints and consolidate meritorious ones.*fn51 This legislative history, as Trbovich holds, 'can in no sense be read as a rejection of all forms of private participation in enforcement litigation,' because Congress never focused on 'the possibility that union members might assist the Secretary rather than displace him.' Id. at 536. Similarly, while Congress adopted a particular mode of enforcement, it failed to address with any detail the scope of relief, or what the court's role would be at the remedial stage. [One footnote omitted.]
543 F.2d at 387. In no sense can this legislative history be said to offer the affirmative guidance the Union asserts that it does. As Professor Archibald Cox, a principal consultant to the draftsmen of the LMRDA, has suggested:
"because much of the bill was written on the floor of the Senate or House of Representatives and because so many sections contain calculated ambiguities or political compromises . . ., the courts would be well advised to seek out the underlying rationale without placing great emphasis on close construction of the words."
Internal Affairs of Labor Unions Under the Labor Reform Act of 1959, 58 Mich. L. Rev. 819, 852 (1960). To hold that the undiscussed, unexplained adoption of an alternative enforcement scheme satisfies the "definite and absolute" standard promulgated by Hall would, in this case, be incorrect.
Nor do we believe that the remedial scheme created by Title IV approaches the meticulous detail of the provision involved in Fleischmann - or the detail necessary for a finding of preclusion of equitable powers and remedies. Since its enactment, the LMRDA, and Title IV, enforcement scheme has been filled out by the court with many details. In Hall v. Cole, which dealt with preclusion of the exercise of equitable powers and the award of attorney's fees under Title I of the LMRDA, the petitioners argued that Congress intended to preclude any such award under Title I since it only provided for "such relief (including injunctions) as may be appropriate," while §§ 201(c) (29 U.S.C. § 431(c)) and 501(b) (29 U.S.C. § 501(b)), expressly provided for attorney's fees. In response, the Supreme Court stated that:
"Confronted with a virtually identical situation in Mills, we explained that the inclusion in certain sections of the Securities Exchange Act of 1934 of express provisions for recovery of attorney's fees 'should not be read as denying to the courts the power to award counsel fees in suits under other sections of the Act when circumstances make such an award appropriate. . . . ' 396 U.S. at 390-91."
Title IV itself has been the subject of considerable judicial elaboration and expansion. In Trbovich, supra, the Supreme Court held that union member intervention in suits brought by the Secretary for violation of Title IV was not precluded by the fact that actions by the Secretary are the exclusive post-election remedy provided for by the statute. Trbovich was extended in Dunlop v. Bachowski, 421 U.S. 560, 44 L. Ed. 2d 377, 95 S. Ct. 1851 (1975), which held that union members are entitled to a statement of supporting reasons where the Secretary decides not to pursue the union member's complaint.
The fact that the Supreme Court has found it necessary to supplement the structure of Title IV on two occasions suggests that the guidelines of Hall (see page 8 above) have been met by the facts of this case. Also, Trbovich and Bachowski go much further toward supporting the view that:
"notwithstanding the absence of a broad relief provision in section 402, the court in a Title IV action faces the same task as if it were adjudicating a union member suit under the other titles - to grant relief according to the necessities of the case, i.e., to fashion 'appropriate' relief."
Local 639, 543 F.2d at 388. The question is not whether a union member is entitled to recover attorney's fees under the statute alone, where the role prescribed for him is complaint to the Secretary after exhaustion of internal union procedures. The question is what relief a union member is entitled to after having intervened in and participated in the prosecution of an action brought by the Secretary under Title IV in the manner anticipated by the Supreme Court in Trbovich.
B. Intervenor's Role in Administrative Enforcement
At the outset of this inquiry, it is clear that the Secretary has the exclusive power to bring post-election challenge suits, and that aggrieved candidates are permitted to intervene solely to support the Secretary's complaint and may not add substantive claims. See Trbovich, 404 U.S. at 530-37. However, correct as those observations are, they overlook the role of union members and intervenors in prosecution of Title IV violations, and the relationship between union members, intervenors, and the Department of Labor under both the statute and the relevant Supreme Court decisions.
Even absent the gloss of case law, it is apparent that the Congress intended to rely heavily upon the vigorous efforts of union members in prosecuting Title IV violations. The statutory framework embodies a critical role for union members.
The initial burden of enforcement falls upon the individual member, and the Secretary's role is defined by those efforts. The first step in enforcement, under section 402(a), is for a union member to challenge the election before the union. Once remedies available under the union constitution and by-laws have been exhausted, or have been invoked without obtaining final decision within three calendar months, the union member may, within one calendar month thereafter, file a complaint with the Secretary alleging violation of any provision of Title IV.
Once the union member's complaint has been filed with the Secretary, section 402(b) directs the Secretary to investigate it. If he finds probable cause to believe that a violation has occurred and has not been remedied, he must, within 60 days after the filing of such a complaint, bring a civil action in federal district court against the labor organization to set aside the invalid election. If the court finds a violation of Title IV it may declare the election void, and direct the conduct of a new election under the Secretary's supervision.
As the Supreme Court's review of the legislative history, in Trbovich, 404 U.S. at 532-33, indicates:
"Congress made suit by the Secretary the exclusive post-election remedy for two principal reasons: (1) to protect unions from frivolous litigation and unnecessary judicial interference with their elections, and (2) to centralize in a single proceeding such litigation as might be warranted with respect to a single election. Title IV as enacted serves these purposes by referring all complaints to the Secretary so that he can screen out frivolous ones, and by consolidating all meritorious complaints in a single proceeding, the Secretary's suit in federal district court. The alternative proposals were rejected simply because they failed to accomplish these objectives. There is no evidence whatever that Congress was opposed to participation by union members in the litigation, so long as that participation did not interfere with the screening and centralizing functions of the Secretary."
The addition of the exhaustion requirement, section 402(a)(1), provides additional protection for the union, since unions are thereby given the opportunity to resolve union member complaints internally and may correct any election irregularities themselves. Yet, as is undeniably apparent, at the same time Congress sought to prevent frivolous litigation it created a pivotal role for union members in the enforcement process.
In fact, quick action and skillful advocacy are probably most important at the initial stages of the enforcement scheme, when infractions must be identified, a bill of particulars formulated, the internal union procedures exhausted, and a complaint drafted for presentation to the Secretary. Prompt, thorough, and proper action in the earliest stages is essential to vindication of Title IV rights, since preservation of all election defects is a prerequisite to government intervention. The Secretary may not seek to void an election on bases not raised in "some discernible fashion" by the complainant before the union, Hodgson v. Local 6799, Steel Workers, 403 U.S. 333, 340-41, 91 S. Ct. 1841, 29 L. Ed. 2d 510 (1971), or which the union did not have a fair opportunity to consider and redress, Wirtz v. Local 125, Laborers, 389 U.S. 477, 484, 19 L. Ed. 2d 716, 88 S. Ct. 639 (1968). The clear effect of Title IV is to make the Secretary dependent upon the diligence of the union member. The Secretary's very authority to sue derives from the union member's pursuit of Title IV remedies and subsequent formal filing of a complaint with the Secretary.
Since Trbovich, union members play an even more significant role in the prosecution of Title IV violations, as intervenors. As the United States Court of Appeals for the District of Columbia Circuit noted in Local 639 :
"It is not difficult to conceive of examples of material assistance to the Secretary and the court in the vindication of the interest - of the public and the union rank and file - in union democracy. . . . Counsel representing the intervenor may unearth material and even elusive evidence, or develop telling arguments in support of the Secretary's claims of illegality. . . . The Trbovich court envisioned that intervenors would perform a role independent of the Secretary in helping the court fashion a suitable remedial order, and perhaps even assist the Secretary in supervising the conduct of the rerun. . . . Sound principle advises that error is more likely to be exposed when intervenors are able to secure competent counsel because of the prospect of recovering attorney's fees." [Footnotes omitted.]
The notion of private participation in the prosecution of Title IV violations, notwithstanding the involvement of the Department of Labor, is fully consistent with the form and purpose of this statute. Not only is the intervenor often in a position to obtain information which might, for whatever reason, be difficult for the agency to marshall or preserve, but his perspective ...