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06/01/84 Gerard Monzillo, Et Al., v. Morris Biller

June 1, 1984

UNION, AFL-CIO, APPELLEES

v.

MORRIS BILLER, ET AL., MEMBERS OF NATIONAL EXECUTIVE BOARD OF THE AMERICAN POSTAL WORKERS UNION, AFL-CIO, APPELLANTS; TRINE COUNCIL, ET AL., MEMBERS OF

AMERICAN POSTAL WORKERS UNION, CROSS-APPELLANTS

v.

MORRIS BILLER, ET AL., MEMBERS OF NATIONAL



UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

GERARD MONZILLO, et al., members of AMERICAN POSTAL WORKERS

EXECUTIVE BOARD OF THE

AMERICAN POSTAL

WORKERS

UNION, AFL-CIO,

Cross-Appellees

Nos. 82-1937, 82-2035 1984.CDC.156

Appeals from the United States District Court for the District of Columbia (Civil Action No. 82-01232).

APPELLATE PANEL:

Tamm and Mikva, Circuit Judges, and McGowan, Senior Circuit Judge. Opinion for the Court filed by Circuit Judge Mikva.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE MIKVA

In March, 1982, members of the American Postal Workers Union (APWU or the Union) were informed that the Union's National Executive Board (the Board) had decided to purchase a new national headquarters. Appellees, individual members of the Union, and an association of Union affiliates brought this action under section 501 of the Labor Management Reporting and Disclosure Act of 1959, 29 U.S.C. § 501 (1982), to prevent the Board from proceeding with the headquarters project until the Union membership had an opportunity to consider the transactions. Appellees claimed that the Board lacked authority under the Union's constitution to commit the Union to the announced transactions without bringing the matters before the membership at the National Convention. The district court entered judgment for appellees and enjoined the Board members from committing the Union to the sale or purchase of a headquarters "until the August 1982 Convention convenes, has the opportunity to consider [these issues], and adjourns." 96 Lab. Cas. para. 14,177 (D.D.C. 1982). Because the court's order has expired on its own terms, we dismiss these appeals as moot.

Background

On February 11, 1982, the Union's National Executive Board voted unanimously to finalize the acquisition of a new national headquarters. The Board had been considering various relocation options for several months. Contrary to the Board's usual practice, however, this February meeting was not publicized and was held in closed executive session. The president and general secretary-treasurer of the Union intended to commit the Union to the new building by July, 1982, one month before the Union's National Convention. The decision was announced to the membership in an article that appeared in the March 1982 edition of the Union's magazine, the American Postal Worker. Following publication of the article, appellees, individual officers of state and local Union affiliates, and the Trine Council, an informal association of Union affiliates, filed this lawsuit in district court to prevent the Board from proceeding with the headquarters project.

Appellees brought the lawsuit pursuant to the Labor Management Reporting and Disclosure Act (LMRDA or the Act), 29 U.S.C. § 501 (1982), claiming that the Board members had breached their fiduciary duties to the Union. Among the responsibilities of labor organization officials, which are set forth in section 501(a) of the Act, is "the duty . . . to manage, invest, and expend [the money and property of the labor organization] in accordance with [the labor organization's] constitution and bylaws and any resolutions of the governing bodies adopted thereunder. . . ." 29 U.S.C. § 501(a).

Appellees brought this suit under section 501(b) of the Act, which authorizes members of a labor organization to sue on behalf of the organization when an officer is alleged to have violated any of the duties set forth in section 501(a). 29 U.S.C. § 501(b). Before a member can file such a suit, however, a demand must have been placed on the labor organization to do so, and the organization must have failed to bring the suit within a reasonable period of time after that request had been made. Id. In their complaint, appellees alleged, inter alia, that the Board was without authority under the Union's constitution to commit the Union to the headquarters project. They sought "declaratory and injunctive relief" to prevent the Board members from selling the Union's current headquarters or committing the Union to acquire a new headquarters "until these issues can be considered and decided by the members of the APWU at the August 1982 National Convention of the APWU." Complaint para. 1.

The district court consolidated the hearing on appellees' application for a preliminary injunction with the trial on the merits. Testimony at the one-day hearing focused on the section of the constitution which provides that the Board "shall be the highest ranking governing body of the [Union] in between conventions." APWU Constitution, art. X, § 18. One of appellees' witnesses testified that section 18 was added to the constitution in 1980 to force the Board to follow membership resolutions between conventions and that it was designed to limit, not enlarge, the Board's powers. Appellants' witness, the general secretary-treasurer of the Union, testified that section 18 ...


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