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KOENIG v. CLARK

April 19, 1982

William J. KOENIG, Plaintiff,
v.
George CLARK, Robert Gannone, Vincent Longo, George Ernst, Jr., Raymond Eganey, Thomas Lesinski, John Ernest, Bernard O'Brien, Stanley Paduch, Sigurd Lucassen, John MacKay, United Brotherhood of Carpenters and Joiners of America and Local 455, United Brotherhood of Carpenters and Joiners of America, Defendants



The opinion of the court was delivered by: DEBEVOISE

Plaintiff, William Koenig, brings this action for damages against Local # 455 of the United Brotherhood of Carpenters and Joiners of America and ten local union officials alleging that he was discriminated against in work referrals and removed from a union office as discipline for the exercise of protected union membership rights, in violation of sections 101(a)(2), 102 and 609 of the Labor-Management Reporting and Disclosure Act (LMRDA), 29 U.S.C. §§ 411(a)(2), 412 and 529. He also asserts pendent state law claims against the individual defendants for tortious interference with prospective economic advantage and breach of fiduciary duty.

The individual defendants now move for dismissal of the action as to them on the grounds that: (1) the safeguards of the LMRDA do not apply to expulsion or suspension from union office, but only from union membership; (2) plaintiff has failed to exhaust available internal union remedies; (3) plaintiff's charges against them involve "private misconduct" not cognizable under the LMRDA; and (4) absent a viable federal cause of action, the court lacks jurisdiction to resolve the pendent state claims against them. Defendants also move to strike plaintiff's claim for punitive damages on the ground that he has not alleged malice, recklessness or wanton indifference to his rights.

 1. Subject Matter Jurisdiction

 At the outset, I note that defendants have improperly characterized their motion as one to dismiss for lack of subject matter jurisdiction, pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure. Under the well-established rule of Bell v. Hood, 327 U.S. 678, 66 S. Ct. 773, 90 L. Ed. 939 (1946), a cause of action premised upon a federal statute or the Constitution is subject to dismissal for lack of jurisdiction only if it is "wholly insubstantial," "frivolous" or "immaterial and made solely for the purpose of obtaining jurisdiction." Id. at 682-83, 66 S. Ct. at 776; see also Hagans v. Lavine, 415 U.S. 528, 94 S. Ct. 1372, 39 L. Ed. 2d 577 (1974); Hughes v. Local No. 11, 287 F.2d 810 (3d Cir. 1961). Although defendants contend that plaintiff's claim does not fall within the scope of protection of the LMRDA, "the court must assume jurisdiction to decide whether the allegations state a cause of action on which the court can grant relief as well as to determine issues of fact arising in the controversy." Bell v. Hood, supra, 327 U.S. at 682, 66 S. Ct. at 776. As the courts have held in numerous cases substantially identical to this one, plaintiff has stated a sufficiently substantial claim under the LMRDA to sustain the exercise of jurisdiction. See Lewis v. AFSCME, 407 F.2d 1185, 1188, n. 3 (3d Cir. 1969); Sheridan v. United Brotherhood of Carpenters, 306 F.2d 152, 156 (3d Cir. 1962); but see Harrison v. Local 54, 518 F.2d 1276 (3d Cir. 1975).

 Defendants' motion will be treated, therefore, as one to dismiss for failure to state a claim upon which relief may be granted, pursuant to Rule 12(b)(6). Where matters outside the pleadings are considered and all parties have had a reasonable opportunity to submit pertinent evidentiary materials, the motion will be treated as one for summary judgment and analyzed under the standards set forth in Rule 56. See Switlik v. Hardwicke Co., Inc., 651 F.2d 852 (3d Cir. 1981).

 2. Law of the Case

 Although the parties have not mentioned it in their briefs, I also note that grounds (1) and (2) of defendants' motion to dismiss, as well as their motion to strike plaintiff's claim for punitive damages, have already been ruled upon by Judge Fisher, the predecessor judge in this case. *fn1" In an oral opinion entered on November 5, 1979, a transcript of which was filed on November 15, 1979, Judge Fisher ruled that: plaintiff had standing to sue under the LMRDA for his removal from union office; that he was not required to exhaust internal union remedies; and that the allegations of his complaint were sufficient to sustain a claim for punitive damages. *fn2" Consequently, the disposition of defendants' present motion to dismiss must take into account the "law of the case" doctrine and any applicable exceptions. See Hayman Cash Register Co. v. Sarokin, 669 F.2d 162 (3d Cir. 1981); United States Gypsum Co. v. Schiavo Brothers, Inc., 668 F.2d 172 (3d Cir. 1981). *fn3"

 3. Factual and Procedural Background

 If defendants are to prevail on a motion to dismiss under Rule 12(b)(6), it must "(appear) beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 78 S. Ct. 99, 2 L. Ed. 2d 80 (1957). For purposes of this motion, therefore, I will take the allegations of the complaint as true and construe them in the light most favorable to plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 94 S. Ct. 1683, 40 L. Ed. 2d 90 (1974).

 According to the complaint, plaintiff is, and at all relevant times has been, a member in good standing of Local # 455 of the United Brotherhood of Carpenters and Joiners of America, a labor organization engaged in an industry affecting commerce within the meaning of § 3(j)(1) of the LMRDA, 29 U.S.C. § 402(j)(1).

 Between March, 1975 and March, 1978, plaintiff became concerned about the operation of the union's pension and welfare funds and expressed his concerns publicly at union meetings and job sites and privately to union officials. In addition, he helped organize and became a member of various committees designed to investigate alternatives to the existing pension and welfare fund arrangements; visited the offices of the pension and welfare funds to investigate their operations; and sent written inquiries to the funds seeking information about their operations.

 At a special meeting of the union local on April 12, 1978, plaintiff defeated a proposed amendment to the local's by-laws which would have increased the salary and benefits and reduced the workload of certain union officials by raising a point of order and successfully appealing it to the floor.

 At a regular meeting of the union local on April 13, 1978, defendant made a request to defendant Robert Gannone, President of the local, for permission to inspect shop stewards' reports, dues check-off printouts and officers' paystubs in the local's office files. Plaintiff apparently did not receive the information he sought.

 Several weeks later, on May 4, 1978, plaintiff renewed his request to inspect officers' paystubs at a meeting of the local's executive board. The board denied the request on the ground that it constituted an invasion of privacy. At the same meeting, defendant Bernard O'Brien, a fellow union member, made a formal charge to the board that plaintiff had "libelled and slandered" him at an earlier meeting by accusing him of intoxication and had "caused dissension in the union." Defendant Robert Gannone also filed written charges accusing plaintiff of "creating dissension" and "violating his Oath of Obligation to the Brotherhood." Plaintiff has not disclosed in his complaint the ultimate disposition of the charges. Presumably, they were not pursued.

 On May 11, 1978, despite the charges outstanding against him, plaintiff was nominated for the position of Vice-President of Local # 455. On June 3, 1978 he was elected to the position.

 Shortly after plaintiff's election, defendant Vincent Longo, a defeated candidate for Vice-President, wrote a letter of protest to William Sidell, President of the International Union, in which he falsely claimed that plaintiff had served as a contractor within the previous twelve months and thus was not entitled, under the terms of the International Union's constitution, to hold a union office. Sidell opened an investigation of the matter, and on June 28, 1978 wrote a letter to the local's recording secretary directing him to set forth the facts of the matter and the local's position. At this point, defendants Robert Gannone and George Clark, President and Business Manager respectively of the local, wrote letters to the International Union reiterating the false charges that plaintiff had served as a contractor within the previous twelve months. In addition, plaintiff charges, all of the individual defendants "willfully and maliciously failed to exercise the powers and duties of their respective offices and/or wilfully and maliciously improperly (sic) exercised the powers and duties of their respective offices in the investigation and reporting of their investigation of the election dispute."

 On August 3, 1978, William Sidell ordered that plaintiff be removed from office and that Vincent Longo be installed in his place. Plaintiff wrote two letters to the International Union in September, 1978 denying that he had been a contractor during the twelve month period prior to his election and setting forth facts to support his contention. He received no response to his letters, however, and no further action was taken on the matter by the International Union.

 Shortly after plaintiff was ousted from his union office in 1978, he filed a complaint with the Department of Labor, pursuant to section 402 of the LMRDA, 29 U.S.C. § 482, contending that the union's action constituted a violation of section 401 of the Act, 29 U.S.C. § 481. *fn4" The Secretary of Labor, apparently finding probable cause to credit plaintiff's allegations, filed a civil suit against Local # 455. The local failed to answer and on March 5, 1979 the district court entered a default judgment ordering the local union to remove Vincent Longo from the office of Vice-President and to reinstate plaintiff in his stead. In accordance with the court's order, plaintiff was duly reinstated to the Vice-Presidency of Local # 455. *fn5"

 In addition to removing him from office, plaintiff alleges, defendants administered the union's work referral list in a discriminatory fashion from June, 1976 through May, 1979. In particular, he claims, defendants denied him the priority on the list to which he was entitled after being laid off from a job site in February, 1978. Plaintiff filed charges with the NLRB complaining of this conduct on May 5, 1978 but withdrew the charges on June 3, 1978 after his election to the Vice-Presidency of the local.

 Plaintiff does not expressly allege in his complaint a causal connection between his own actions and those of defendants. Viewing the facts in the light most favorable to plaintiff, however, as is required on a Rule 12(b)(6) motion, it can be inferred that defendants discriminated against him in work referrals and brought about his removal from union office in order to punish him for expressing his views and taking other action in connection with union affairs prior to his election to union office.

 Plaintiff instituted the present action on July 25, 1979 against the International Union, Local # 455, George Clark, Robert Gannone, Vincent Longo, Stanley Paduch, Bernard O'Brien, John Ernst, John Mackay, Raymond Eganey, George Ernst, Jr. and Thomas Lesinski. Judge Fisher denied a motion by defendants to dismiss on ...


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