Georgopoulos & Auriemma v. International Brotherhood of Teamsters
JOHN GEORGOPOULOS and PAUL AURIEMMA,
v. No. 96-9463
INTERNATIONAL BROTHERHOOD OF TEAMSTERS,
The interest of amicus curiae is set forth in the accompanying motion for leave to file as amicus curiae.
1. When the Independent Review Board rules that a Teamster disciplinary decision is "inadequate" and that the inadequacy can be corrected only by broadening the scope of the finding of guilt and increasing the penalty, based on evidence or allegations on which the union itself did not rely and to which the accused members have not had a chance to respond, does section 101(a)(5)(C) of the LMRDA require that the accused be given the evidence and the opportunity to cross-examine the persons who made the allegations?
2. Does an attorney violate Rule 11(b)(2) of the Federal Rules of Civil Procedure when he fails to specifically identify, as an argument for modification or extension of the law, an argument for which he has support from precedent from other circuits but on which there is no controlling precedent in the circuit in which the argument is advanced?
1. The Independent Review Board.
The Consent Decree between the United States and the Teamsters Union established an Independent Review Board ("IRB") consisting of three members -- one appointed by the Attorney General of the United States, one appointed by the IBT, and one chosen by these two members. JA 220.(1) The IRB is authorized to both investigate and take action against members' corruption (including embezzlement and commission of certain other crimes), involvement with organized crime, and failures to "cooperate" with the IRB. Id. The duties and powers of the IRB are set forth in the Consent Decree itself, JA 220-224, as well as a set of Rules approved by Judge Edelstein. JA 233-250. Under these rules, the IRB may both investigate and make recommendations to the IBT or any of its subordinate bodies, monitor and react to union proceedings that follow from its own investigations, and hold its own hearings and take direct action, or exercise direct review powers over disciplinary decisions taken by the IBT's General President and General Executive Board ("GEB").
If the IRB conducts its own investigation, it will generally issue a written report setting forth findings, charges, and recommendations concerning either discipline of individuals or trusteeships over subordinate bodies, and then refer the matter to an appropriate union body. JA 221. The Consent Decree requires the IBT entity to which the matter is referred to take "appropriate action." Id. The IRB monitors the action taken by the union, and has the right to decide both whether the entity has proceeded in a "lawful," "timely," or "responsible" manner, and whether the resolution "proposed" by the union body is "inadequate under the circumstances." JA 222. In either such event, the IBT body must, within 10 days of receiving notification of the IRB's dissatisfaction, tell the IRB what else it has done or will do to "correct the defects." Id. And, if the IRB concludes that the IBT body has failed to take or propose satisfactory action, the IRB convenes a hearing and issues a decision that is final and binding, and which the GEB must implement. JA 222-223. Moreover, the IRB is authorized to review any disciplinary decision of the General President, the GEB, or the Ethical Practices Committee ("EPC") of the IBT, JA 223-224, 248-249; it may affirm or reverse such decisions, or modify them in any way.(2)
The IRB's effective authority to compel implementation of its recommendations is heightened in two ways. First, the Consent Decree provides that any failure to "cooperate" with the IRB constitutes "conduct which brings reproach upon the IBT," which is a disciplinable offense under the IBT Constitution and is expressly included in the IRB's jurisdiction, JA 220, 221. Under the Court-approved IRB Rules, "[f]ailure to act in a lawful, responsible, and timely manner shall be deemed a failure to cooperate fully with the IRB." JA 246. Thus, a failure to do exactly what the IRB "recommends" as being required to impose "adequate" discipline may itself subject a union officer to removal from office or suspension from the union. Second, several disciplinary decisions issued under the Consent Decree have held that the failure of union officials to take appropriate action against officials who engage in corrupt activity constitutes aiding and abetting of the corruption that may itself be disciplined as severely as the underlying corruption. United States v. Teamsters (Yager), 761 F. Supp. 315, 319 (S.D.N.Y. 1991); United States v. Teamsters (Calagna et al.), 88 Civ. 4486 (S.D.N.Y., November 8, 1991), Part II A. Thus, a union officer who receives a determination from the IRB that his official response to an IRB "recommendation" has been "inadequate" has a very powerful incentive to act promptly to do exactly as the IRB "suggests."
2. The Charges Against Appellants.
The disciplinary proceeding in this case arose out of a bitter strike involving White Rose Food, a grocery warehouse in Farmingdale, Long Island. Under the IBT Constitution, strikers are eligible for out-of-work benefits ("OWB") paid by the IBT through the local union, JA 68; one of the requirements imposed by the IBT for the use of its funds is that the members sign for their own OWB. JA 69. This requirement serves both to ensure that members receiving OWB would participate in required strike activities, and to protect against improper diversion of OWB into the pockets of union officials. In order to meet this requirement, Teamsters Local 138 established a system whereby OWB were distributed each Thursday morning at a union hall in Farmingdale. JA 45-46.
Because strike activities were conducted at more than forty locations in the New York metropolitan area, including New Jersey, some members could not get to Farmingdale on Thursday mornings and still perform their strike duty. JA 41-43, 47. Accordingly, the two union stewards who coordinated the Farmingdale office signed the names, and collected OWB, for approximately 50 members per week who were engaged in strike activity or otherwise explained, to the union's satisfaction, why they could not come to Farmingdale in person to collect their benefits. JA 47. The theory was that the members would come to get their benefits on a different day, or that the stewards would then bring OWB to the intended recipients in the course of their far-flung strike duties. Id. It is undisputed that the two principal officers of Local 138, appellants John Georgopoulos and Paul Auriemma (cited in this brief as "appellants"), were fully aware of the way in which OWB for these members were being distributed.
In early 1993, the IRB's staff conducted an investigation that resulted in a report that recommended that the GEB bring charges against Georgopoulos and Auriemma for allowing OWB to be distributed directly to the two stewards based on the forged signatures of the intended recipients, in violation of the IBT Constitution and the requirements of a union handbook. JA 47-48.
The GEB forwarded the charges to the IBT's EPC, which, in turn, filed a specification of charges in August, 1993 and sent them to the appellants, JA 120; the appellants then requested and received a copy of the IRB report on which the charges were based. JA 51, 73-99. Although the charges characterized the appellants' misconduct as "fraud" and "embezzlement," they did not specifically allege that the appellants had sought or obtained any pecuniary gain from the irregular method. Moreover, although the IRB Report had discussed at some length the apparent non-receipt of OWB by two specific members, JA 84-91, and drew the inference from these facts that appellants had embezzled the money for themselves, JA 94, 96, those facts were not included in the charges. At the hearing, the appellants testified about the procedure used to distribute the benefits to those who couldn't receive them in person, and introduced a statement signed by thirty strikers attesting that when they couldn't come in person, the stewards signed for them and then either picked up their benefits later or received them on the picket line. JA 51-52. Appellants also introduced evidence that the two members mentioned in the IRB Report had, in fact, received their benefits. JA 49-50.
After the hearing, the EPC continued its investigation by obtaining the tax forms issued by Local 138 to the members who received OWB, and statements from the IBT auditors' office about other cases involving OWB; the EPC also had a questionnaire sent to White Rose strikers in order to verify their actual receipt of the OWB for which their names had been signed. JA 52-53. The appellants repeatedly requested copies of all additional documents obtained by the EPC; although the statements from the IBT's auditors were provided, neither the questionnaire, nor any of the questionnaire responses, were ever sent to them. JA 53, 60, 61, 64.
The EPC then held another hearing, at which evidence was taken about the tax forms, the IBT audits, and members' actual receipt of benefits. Although several members were questioned about their actual receipt of benefits, neither the questionnaires, nor the responses to the questionnaires, were entered in evidence. JA 55-56.
The EPC then issued its own report on the charges, finding that the appellants had violated the IBT Constitution and the union handbook by violating record-keeping requirements and allowing the distribution of OWB to members who, because they did not sign for them personally, did not qualify for such benefits. JA 130-142. The EPC also rejected the charge of embezzlement, on the ground that all the benefits had, in fact, reached the intended beneficiaries. JA 132-133, 137-139. This finding was based both on the absence of evidence that any members had failed to receive their OWB, and on the testimony and demeanor of the appellants. Based on this evidence, the EPC recommended that both appellants be sanctioned in writing. JA 140. On April 11, 1994, General President Carey accepted the recommended findings concerning guilt, but determined that it was necessary to impose stiffer punishments, including a six-month suspension from union office. JA 143-144.
On July 7, 1994, however, the IRB, informed Carey that his decision was "inadequate," and demanded that his decision specifically find that appellants had "embezzled funds from the IBT," and impose appropriate specified additional sanctions in light of the greater gravity of the offense. JA 145. After all, the IRB said, an intentional violation of IBT rules alone suffices to create an "inference" of intent to embezzle. JA 146. To support this reading of the IBT Constitution, the IRB pointed to a decision by the Independent Administrator, later confirmed by the district court and this Court, that upheld embezzlement charges against two union officials, Weber and Dickens. United States v. Teamsters, 787 F. Supp. 345, 352 (S.D.N.Y.), aff'd, 978 F.2d 68 (2d Cir. 1992). In that case, the officials had been disciplined for using union funds to pay their own expenses in attending a dinner and a golf tournament; the decision was based, in part, on the proposition that evidence of failure to obtain approval from the local union executive board created an inference of the necessary "fraudulent intent."
Moreover, the IRB ruled that, although its recommended charge was not necessarily based on a finding of personal enrichment, "the IBT's factual finding that all [OWB] were distributed to the appropriate members was contradicted by the evidence." JA 146. The IRB then embarked on a lengthy analysis of the evidence on which its rejection of Carey's findings was based -- the questionnaires and responses -- and concluded, after a discussion consuming approximately one-and-a-half pages out of three pages of text, JA 146-148, that at least five identified members (not the two discussed in its Report) had reported that they did not receive the benefits for which their names had been signed. The IRB attached twelve exhibits to its letter to support this recitation of the evidence. JA 149-150. Accordingly, the IRB insisted that appellants be suspended from membership, as well as from office, for specified periods of nine months and one year. JA 151. The IRB did not send this ruling to appellants. JA 59.
Without giving appellants any opportunity to respond to the IRB's ruling, Carey accepted its recommendation in a August 10, 1994 letter to appellants; Carey enclosed the IRB's letter, but not its exhibits, which appellants never received. JA 59-60. With their motion for summary judgment, appellants proffered a variety of questions that they would have posed to the five questionnaire respondents had they been called to testify to the facts on which the IRB had relied, and cited documents, facts and arguments that they would have presented to counter any such evidence had it been offered against them in a hearing. JA 62-64. Because appellants' requests for the questionnaires and responses were denied at the time of their discipline, and because even the facts on which the IRB relied were never provided to appellants until after Carey imposed their discipline, JA 64, appellants never had any opportunity to persuade either the IRB or Carey that they had received no personal benefit from the funds paid as a result of the forgeries.
By letter of August 18, an in-house attorney for the IBT also advised the IRB that Carey planned to stagger the terms of the suspensions, because appellants were the principal officers of Local 138. JA 153. When the IRB stated by letter of September 12 that consecutive sentences were not "acceptable to the IRB," JA 588, Carey told appellants by letter of September 13 that their sentences would run concurrently. JA 157.(3)
Appellants appealed Carey's decision to the GEB, arguing, in part, that Carey had violated their due process rights by imposing discipline that had been based on evidence -- the questionnaires and responses -- that they had not had the opportunity to rebut. The GEB affirmed Carey's decision, rejecting the due process argument on the ground that neither Carey nor the IRB had based their rulings on the questionnaire evidence. JA 162.
B. Proceedings Below.
On July 11, 1995, appellants sued the IBT in the United States District Court for the Southern District of New York, alleging that the IBT disciplined them in violation of the due process provisions of the LMRDA, 29 U.S.C. § 411(a)(5); the case was referred to Judge Edelstein, on the ground that it implicated the Consent Decree and thus was related to United States v. Teamsters. JA 2. Appellants moved for summary judgment, arguing, based on precedents from several circuits, as well as from the Southern District of New York, that the statutory requirement of a "full and fair hearing" requires that the accused be given the opportunity to review and rebut, including by cross-examination, all evidence on which the disciplinary tribunal relies in making its decision. Appellants argued that the information obtained from the questionnaire responses constituted both documentary evidence that they should have been entitled to review, and testimony (from the respondents), on which they should have been allowed to cross-examine. Appellants also argued that the GEB's effort to bolster the disciplinary decision against them, by stating that neither Carey nor the IRB had relied on evidence provided by the questionnaires, should be rejected on the theory that it was a post hoc rationalization, citing Petramale v. Laborers Local 17, 736 F.2d 13 (2d Cir. 1984).
The IBT opposed this motion and filed its own motion for summary judgment. The IBT did not take issue with the proposition that, before a member may be disciplined on intra-union charges, he must be accorded the opportunity to confront all witnesses against him and to review relevant documents. However, the IBT argued that the questionnaire responses were not pertinent to its disciplinary decision, and that the respondents were not actually witnesses against appellants, because Carey based his decision solely on the proposition that "embezzlement," within the meaning of the charge against the appellants, did not carry any implication of personal gain. The IBT appealed to the general rule of deference to a union's reasonable construction of its own constitution to support the union's power to define the word "embezzle" in this manner.
Judge Edelstein granted summary judgment for the IBT. He ruled that the IBT Constitution, as construed by the courts in the case cited by the IRB, requires only fraudulent intent, not personal gain. JA 688-692. Because a member may be found guilty of embezzlement without evidence of personal gain from the signature forgeries, and because neither Carey nor the GEB had considered the evidence bearing on the existence of personal gain, the union had no need to share its evidence on that question with appellants before imposing discipline upon them. JA 684-685, 687. But the Judge Edelstein also chastised appellants' counsel for the legal argument that he had advanced in support of appellants' due process claim. He complained that the appellants submitted
no relevant case law in support of this claim. Instead, plaintiffs rely entirely on two cases from jurisdictions other than the Second Circuit, which[,] obviously, are not controlling in the Second Circuit. . . . Moreover, this Court's own research reveals no Second Circuit case law that supports plaintiffs' claim that "[a] union must provide accused members with documents which are material to the proof of the allegations against them."
The Court then proceeded to find that plaintiffs had violated Rule 11 of the Federal Rules of Civil Procedure, because the absence of Second Circuit law on point meant that, in arguing for this legal proposition, they were necessarily arguing for an "extension, modification or reversal of existing law or the establishment of new law," and their papers had failed to expressly inform the Court that they were making such an argument. Id. The Court concluded that "plaintiffs' failure to inform this court that their argument is not 'warranted by existing law'" and to make a nonfrivolous argument to extend, modify of reverse such law or establish new law "contravenes the express terms of Rule 11." JA 686-687.
Judge Edelstein also granted summary judgment for the IBT on the section 609 claim that had been made in the complaint, but not separately argued in appellants' briefs below, except for two footnotes that cited section 609. JA 700-704. He chastised plaintiffs for providing incorrect citations to two cases (each citation was off by one digit), JA 704-705, and for citing cases that did not, in fact, rely on section 609. JA 705-706. He concluded that although that facts in the record "militate against a finding" that counsel made a reasonable inquiry concerning section 609, he contented himself with stating that "plaintiffs' papers are inaccurate, poorly drafted, and an embarrassing example of shoddy lawyering," and admonished counsel to behave properly in the future. The opinion is published. 942 F. Supp. 883, 150 LRRM 2708.
A. Because the Independent Review Board Relied on Evidence of Personal Gain in Ruling That Appellants Were Guilty of "Embezzlement" and That IBT President Carey's Disciplinary Decision Was Inadequate, and Because Carey Changed Both His Disciplinary Findings and the Punishment Imposed in Response to the IRB's Ruling, the Discipline Was Imposed Without Due Process.
Section 101(a)(5)'s guarantee of due process before union discipline may be imposed plays an important role in the scheme of union democracy established by the LMRDA. Although the section does not in any way limit the substantive disciplinary decisions that the union may make, it guarantees that the union's disciplinary decisions will be based on a full consideration of the relevant circumstances. The member is entitled to a written, specific statement of the accusations, section 101(a)(5)(A), to a reasonable time to prepare a defense, section 101(a)(5)(B), and to a full and fair hearing of the charges. Section 101(a)(5)(C). By thus requiring the union to respect the adversary system of justice on which our public institutions are founded, the Act ensures that the member will have a full opportunity to explore all relevant facts, and point out all possible weaknesses in the charges, for the benefit of the tribunal that makes the decision against him.
It is universally agreed, by all courts that have considered the question, that courts should look to traditional constitutional concepts of due process in deciding whether the disciplinary hearing has been "full and fair." Boilermakers v. Hardeman, 401 U.S. 233, 246 (1971); English v. Cowell, 969 F.2d 465, 469 (7th Cir. 1992); Parks v. IBEW, 314 F.2d 886, 912 (4th Cir. 1963). There is also universal agreement that one aspect of the right of a full and fair hearing is that any evidence bearing on the discipline must be made known to the accused so that he will have a fair opportunity to counter it either by his own evidence or by cross-examination of the persons providing the adverse evidence. When the evidence consists of information provided by a person who purportedly knows it -- that is, a witness or a declarant -- the accused must be given an opportunity to cross-examine the person who is the source of the information. E.g., Ritz v. O'Donnell, 566 F.2d 731, 735 (D.C. Cir. 1977); Falcone v. Dantinne, 420 F.2d 1157, 1165 (3d Cir. 1969); Schermerhorn v. TWU Local 100, 150 LRRM 2246, 2250 (S.D.N.Y. 1995), aff'd, 91 F.3d 316 (2d Cir. 1996). And, where the evidence consists of documents, the documents themselves must be provided to the accused. Kuebler v. Litho. & Photo. Local 24-P, 473 F.2d 359, 364 (6th Cir. 1973); see also Gustafson v. Train Dispatchers, 788 F.2d 1284, 1287-1288 (7th Cir. 1986) (documents not material). Because the questionnaire responses were documents that contained assertions by various members about whether they did or did not receive the benefits for which the White Rose stewards had signed their names, both lines of cases were potentially implicated.
None of these propositions were disputed below. Instead, the union argued, and Judge Edelstein agreed, that the evidence that intended members did not receive their benefits (and thus, inferentially, that they were diverted to the benefit of the appellants) was irrelevant because neither Carey nor the GEB had relied on a finding of personal benefit. The Association agrees that the decisional documents -- Carey's letter to appellants revising the discipline, and the GEB's affirmance of his disciplinary decision as thus revised -- reflect that neither Carey nor the GEB personally considered the questionnaires or the issue of personal benefit.
However, the letter from the IRB plainly reflects that the IRB considered the issue of personal benefit to be significant. After all, approximately half of the text of its letter was devoted to the issue of whether the questionnaires provided evidence of diversion of funds, just as, in its original report, the IRB discussed at length evidence that two members had not received the benefits for which their names had been signed. When these facts proved erroneous, the IRB did not rest on the bald legal proposition that violation of the rules was enough -- it identified five additional members who allegedly did not receive their benefits. The only problem is that it did not give appellants a chance to meet these new allegations before ruling that the discipline was inadequate.
Nor is it surprising that the IRB invoked such evidence. To be sure, a union may punish a violation of procedures just as it can punish embezzlement; because courts are not allowed to scrutinize a union's disciplinary decisions to determine whether the conduct found actually violates an existing rule, Boilermakers v. Hardeman, 401 U.S. 233, 244-245 (1971), we assume that the union would not violate section 101(a)(5) by deciding to punish as "embezzlement" a violation of union rules without personal gain. However, the term "embezzle" normally connotes a taking of funds for one's own use, not simply a misapplication of funds in violation of established rules. Even if a tribunal were determined to broaden the meaning of the term "embezzle" it would not be surprising to see it protect its new definition against early reversal by picking a case where there was evidence that funds had actually been diverted.
Moreover, the case of Weber and Dickens, on which the IRB relied for the proposition that failure to follow procedures creates an inference of fraudulent intent to embezzle, was one where the benefits had redounded to the benefit of the accused officials. The payments had been for Dickens and another official to take their wives to a Florida golf tournament, and for Weber and others to buy dinner tickets, for "their own personal entertainment." 787 F. Supp. 345, 349, 352. Thus, the statement that violation of procedures creates an inference of fraudulent intent did not, as the IRB and Judge Edelstein believed, provide any substitute for a finding of personal diversion of funds. Although it may be permissible to expand the holding of that case to provide that failure to follow the rules creates an inference of personal benefit, one could easily understand why the IRB would want to have actual evidence of personal benefit to support such an extension of current precedents within the union. And, whether or not a finding of personal benefit was required to support a conviction, the fact of personal benefit would surely bear on the propriety of Carey's decision about the appropriate punishment.
Accordingly, before the court below could permissibly determine that the questionnaire evidence had no bearing on the outcome of the disciplinary proceeding, it was first required to decide that the IRB's intervention to secure a conviction of "embezzlement," and a far more severe punishment, was also not "material" to the outcome. And, because the judgment below was entered based on a summary judgment, the Judge Edelstein was required to find that there was no genuine issue about the impact of the IRB's determination on the outcome of the disciplinary proceeding.(4)
In that regard, it is clear from the record that Carey would have imposed far less discipline had the IRB not intervened, based at least in part on its view of evidence to which appellants had been denied access. Moreover, the evidence presents at least a question of fact about whether Carey felt himself to have been "directed" by the IRB to find a more extensive violation and to impose a more severe punishment. Carey's own decision thrice stated that he had thus been directed, JA 151; an in-house lawyer later wrote to the IRB to state, in response to the IRB's complaint about the use of this term, that this part of her employer's decision had been "improper." JA 153. Carey himself never retracted the statement, however.(5) And, in any event, both because the IRB has authority to directly review and modify Carey's disciplinary decisions, and because the rules and policies of the Consent Decree would empower the IRB to charge Carey personally for having failed to "responsibly" impose discipline that the IRB has told him it deems necessary, supra at 3-4, the IRB's letter to Carey should itself be deemed a disciplinary ruling that is potentially subject to the requirements of due process.
Thus, because of the summary judgment posture of the case, the judgment cannot be sustained unless this Court concludes that, despite its controlling role in the disciplinary decision, the IRB was not required to provide appellants with the questionnaire evidence, on which it plainly relied, before issuing its determinations that Carey's discipline and findings were "inadequate" and "unacceptable." So far as we are aware, there is no precedent in this Court or any other court that controls this legal question. This is partly because other unions do not have any internal body that is comparable to the IRB, with the power to compel the union to reopen disciplinary cases, to charge officials for failing to take sufficient action against corruption, and to reverse or modify disciplinary decisions outright where appropriate. However, there are several lines of authority which suggest the proper answer to this question.
First, there are a number of decisions addressing the effect of the actions of appellate or reviewing bodies within unions on members' due process claims. Courts have held that only an original trial is required, and that there need be no right of appeal, Kiepura v. Steelworkers Local 1091, 358 F. Supp. 987, 992 (N.D. Ill. 1973), but that when an appeal is allowed, it must comport with due process norms, including the right to see the record on which the appeal will be heard. See Kuebler v. Litho. & Photo. Local 24-P, 473 F.2d 359, 364 (6th Cir. 1973); Reilly v. Sheet Metal Workers, 488 F. Supp. 1121, 1127-1128 (S.D.N.Y. 1980). If the "appeal" is to be held through the taking of new evidence, the appeal may cure the due process flaws in the original if it functions as a genuinely de novo proceeding which itself complies with section 101(a)(5), including sufficient advance notice, right of cross-examination, and the like. Goodman v. Laborers, 742 F.2d 780, 784-785 (3d Cir. 1984); Myers v. Teamsters Local 302, 656 F.2d 536, 539 (9th Cir. 1981); Rosario v. ILGWU Local 10, 605 F.2d 1228, 1244 (2d Cir. 1979); see also Catlett v. Paperworkers Local 7370, 69 F.2d 254, 259 (8th Cir. 1995). And before an appellate body may grant the appeal of the charging party, the accused must receive his due process rights including notice of the appeal, a chance to prepare, and a full and fair hearing before the appellate body. Kowaleviocz v. ILA Local 333, 942 F.2d 285, 289 (4th Cir. 1991); see also Reilly v. Sheet Metal Workers, 488 F. Supp. 1121, 1127-1128 (S.D.N.Y. 1980). It fairly follows from these cases that, when a union body acts sua sponte to inject itself into a completed disciplinary proceeding in order to increase the scope of the offense for which the accused has been convicted, and to increase the punishment, the accused must similarly be notified of the proceeding and given a full and fair chance to rebut any new evidence that has been provided to the appellate body.(6)
Another line of authority holds that the "full and fair hearing" required by section 101(a)(5) must be based on evidence placed in the record of the hearing, and that the trial body may not rely on its own knowledge of the events in question. Kiepura v. Steelworkers Local 1091, 358 F. Supp. 987, 991 (N.D. Ill. 1973). For similar reasons, the entire hearing must take place in the presence of the accused; the accuser or prosecutor may not meet ex parte with the trial body. Stein v. Mutuel Clerks, 560 F.2d 486, 491 (1st Cir. 1977); see also Cornelio v. Philadelphia District Council of Carpenters, 243 F. Supp. 126, 129 (E.D. Pa. 1965), aff'd, 358 F.2d 728 (3d Cir. 1966) (fair hearing requires exclusion of influential accusers from trial committee). But if a union body with independent knowledge of the facts (based on their access to reports that the accused has been denied the right to see) could become directly involved in the review of the guilt or punishment of the accused, then the union could make an end-run around the limitations that due process properly imposes on the procedures at the trial committee level. Particularly given the IRB's supervening power to review disciplinary decisions and to impose discipline for a failure to take "responsible" action following its determination of inadequacy, the IRB's intervention in this case, based on facts that appellants never had a chance to rebut, falls squarely within this line of authority.
Indeed, the proposition that a reviewing body can examine documents, particularly unsworn, unrebutted, uncross-examined reports of the statements of witnesses, and can make judgments about the guilt of the accused and his proper punishment, flies in the face of the rudimentary requirement that the accused be allowed to face his accusers and test their witnesses by cross-examination. For all of these reasons, the IRB's after-the-trial intervention in the proceedings against appellants should be held to have failed the test of due process.
It is important to note what the Association is not arguing. We do not suggest that the IRB must afford accused members access to the records and witnesses on which it bases its decisions to recommend that charges be brought. Decisions to bring charges are not subject to any due process requirements; it is only decisions to impose discipline that are covered by section 101(a)(5) of the LMRDA. So long as the IRB's activity is confined to developing charges to be filed by others within the union, its activities will be unaffected by the arguments advanced in this brief. Only insofar as the IRB exercises its authority in the Consent Decree and the court-approved rules to determine that the union's actions on its charges are "inadequate," and thus to compel the union to take further action, must the IRB meet the same principles of accountability that other union appellate bodies must satisfy.
Nor do we wish to be understood as questioning either the propriety or the desirability of the IRB's intervention in the disciplinary process. Quite to the contrary, although the Teamsters Union has taken major strides toward democracy and accountability and away from its history of corruption and mob rule, the IRB is still needed to ensure that the Teamsters continue to clean up their own house. But having successfully avoided coverage by the United States Constitution on the ground that it is not a government body, United States v. Teamsters (Hickey), 945 F. Supp. 96, 99 (S.D.N.Y. 1996),(7) the IRB should be held at least to the due process and other norms of the LMRDA. For these reasons, the decision of the district court on the merits should be reversed, and the case remanded for further proceedings.
B. Rule 11 Does Not Require an Attorney to Label His Legal Arguments That Based on Precedents from Other Circuits, As Being Not "Warranted by Existing Law," and Thus as an "Argument for the Extension or Modification of the Law."
The merits of this case are not the only reason that the Association is filing this brief. We are also quite concerned about the lower court's unjustified attacks on the conduct of counsel for appellants below, particularly the portion of the opinion finding that the letter and the spirit of Rule 11 had been violated. As both this Court and the Supreme Court have recognized, the enforcement scheme adopted by Congress for the Union Members' Bill of Rights is entirely dependent on the availability of attorneys to represent members seeking to vindicate their democratic rights. Cole v. Hall, 462 F.2d 777, 780-781 (1972); Hall v. Cole, 412 U.S. 1, 13-14 (1973). If attorneys who are asked to represent members in making plausible claims under the LMRDA believe that they are liable to face unwarranted and highly public personal attacks, some lawyers may well be deterred from stepping forward to play this crucial role. We therefore ask the Court to consider and reject the finding that Rule 11 was violated, even though the court below imposed no sanctions based on that finding.
According to the district court, because this Court had decided no cases regarding the union's duty under section 101(a)(5) duty to furnish relevant documents to an accused, any argument to that effect, based on precedents from other circuits, is necessarily both "not warranted by existing law" and is "an argument for the modification or extension of the law," and must under Rule 11 be labeled as such. Neither conclusion is correct.
The language of the Rule alone shows that Judge Edelstein's labeling requirement is wrong. Thus, Rule 11(b)(3), as amended in 1993, provides that the signing of a pleading constitutes a representation that allegations and other factual contentions or denials enjoy actual evidentiary support unless the allegation is "specifically identified" as one for which the litigant is depending upon further investigation or discovery to locate evidentiary support. Rule 11(b)(4) contains a similar requirement for denials of factual contentions -- they must either be not warranted by the evidence or, if "specifically so identified," reasonably based on a lack of information or belief. Rule 11(b)(2), by contrast, allows legal contentions that are not warranted by existing law, so long as there is a nonfrivolous argument to extend, modify, or reverse that law, but does not have any express requirement of a label. Based on the canon of construction expressio unius, exclusio alterius, the Rule does not require a label if the litigant is arguing for modification or creation of law.
The legislative history of the 1993 Amendments strongly supports this analysis. The language concerning arguments for the extension of current law was first added to Rule 11 when that rule was amended in 1983 to stiffen the sanctions process. 97 F.R.D. 197. Under the 1983 amendments, some courts took the position that, before an advocate could urge a fact that could not be ascertained without discovery, or a legal position that could not be established without reversing or modifying a governing precedent, the paper containing the fact or legal statement had to specifically "label" the fact or argument as such. Golden Eagle Distrib. Co. v. Burroughs Corp., 103 F.R.D. 124, 127 (N.D. Cal. 1984), rev'd, 801 F.2d 1531, 1539-1541 (9th Cir. 1986). This position was generally not accepted at the appellate level, id.; Mary Ann Pensiero v. Lingle, 847 F.2d 90, 96 (3d Cir. 1988); contra, Desisto College v. Line, 888 F.2d 755, 766 (11th Cir. 1989), although some courts distinguished between the labeling of arguments and the acknowledgement of uncertainty about the facts. See Calloway v. Marvel Entertainment Group, 854 F.2d 1452, 1473 n.9 (2d Cir. 1988), rev'd on other grounds sub nom. Pavelic & LeFlore v. Marvel Entertainment Group, 493 U.S. 120 (1989). This was one of the matters that the Rules Committees considered when they amended Rule 11 again in light of the extensive debate on the sanctions issue.
In 1991, the Advisory Committee on Civil Rules proposed that Rule 11 be amended, in part, by including a labeling requirement for factual contentions and denials, but not for legal contentions. 137 F.R.D. 76. The Committee's Notes contained an explanation for this labeling rule, and said nothing about a labeling rule for legal contentions. 137 F.R.D. 78-79. The 1993 proposal from the Committee on Rules of Practice and Procedure differentiated the labeling requirement for factual contentions and denials of factual contentions because there were different considerations for each type of statement in a pleading or other paper, while continuing to omit a labeling requirement for legal contentions. 146 F.R.D. 580. The Advisory Committee Notes explained that denials and allegations raised different considerations, and specifically explained that "arguments for a change of law are not required to be specifically so labeled, [although] a contention that is not specifically so labeled should be viewed with greater tolerance under the rule." 146 F.R.D 587. These Notes show that the omission of a labeling requirement from Rule 11(b)(2) was deliberate.
Indeed, advocates who specialize in difficult cases often find that the lines applying existing precedents and the creation of new law through creative analysis of precedents is a thin one indeed; at best, the only bright line separates other kinds of arguments from one that seeks to reverse a current controlling authority. And even then, the difference may be more one of degree than of kind. For example, where a litigant contends that a decision of this Court has been undermined by a recent Supreme Court decision, is he arguing to reverse current law or to apply current law? What if the argument is that a line of reasoning recently employed by the Court is inconsistent with an earlier holding? The difficulties that many circuits have had in deciding when it is necessary to convene en banc in light of new developments simply emphasizes the difficulties that litigants may have if, on pain of sanctions, they are to be penalized for failing to decide that an argument is one for modification of an existing precedent rather than one to apply other precedent. Or consider the rules that most circuits have about the non-publication of opinions that simply apply established law to a set of facts -- must any lawsuit that depends on a legal analysis that would have to be published if adopted by the court of appeals be labeled as one for "modification or extension of existing law"?
Even if a labeling requirement were justified in principle, it could not properly be used to condemn the conduct of counsel below. So far as we are aware, there is no Second Circuit case on point concerning the obligation of a union to provide the accused with documents pertinent to a charge to ensure that the member enjoys a full and fair hearing. In those circumstances, it cannot fairly be said that, in arguing based on holdings in cases from other circuits, the appellants here were seeking to extend, modify, or alter "existing" law in any way. The LMRDA means the same thing no matter in what federal court a case is brought, and Rule 11 does not require that the "law" to be modified be specific to the particular circuit or district. To be sure, there may be some courts in which a particular analysis is foreclosed by existing circuit precedent; in such a court an argument might well be considered one for the modification and extension of existing law in the circuit. But the converse is not true -- an argument is not one for modification or extension of the law simply because there is nothing on point.
Particularly in a developing area of the law, or when applying established law to a novel situation, a labeling requirement such as the one that Judge Edelstein has adopted runs the risk of chilling creative advocacy. The Teamsters' IRB represents an unprecedented intervention into union affairs which, although in the Association's view highly desirable, requires at the very least some fresh consideration of the way in which the LMRDA applies to its activities. It is therefore disappointing that the court below took such pains to publish its censure of an attorney who attempted to apply some fairly well established precedent from other circuits to argue that his client's due process rights were violated.(8)
The judgment of the district court should be reversed.
Paul Alan Levy
Public Citizen Litigation Group
Attorney for Amicus Curiae
January 24, 1997
2. The EPC is a body established by the General President to conduct hearings in situations in which he deems it more appropriate for a hearing to be conducted at the international union level than at the local or regional level that would ordinarily be designated by the IBT Constitution for particular charges.
3. Carey's August 10 letter to appellants stated that he had been "directed" by the IRB to find that the EPC's findings constituted embezzlement and to modify their punishment. JA 151. The IRB apparently expressed its displeasure with this usage, and in-house counsel for the IBT wrote to the IRB retracting the use of that word. JA 153.
4. The fact that both sides moved for summary judgment does not, of course, preclude appellants from arguing that there was a genuine issue about one of the facts on which appellee depends for the defense of summary judgment in its favor. Painton & Co. v. Bourns, 442 F.2d 216, 232 (2d Cir. 1971) (per Friendly, J.).
5. The GEB's affirmance of the Carey decision does not cure this problem. Although the GEB was careful to say that Carey had not personally considered the questionnaires, it did not deny that Carey had acted pursuant to the IRB's insistence.
6. On the other hand, if the appellate body receives no new evidence, a "full and fair hearing" on appeal does not include the right to a new cross-examination or other opportunity to rebut new evidence.
7. In light of the district court's reprimand of counsel for misciting cases, we note that, in Hickey, the court asserted that "the Second Circuit" has "repeatedly held" that the IRB is not a state actor, citing United States v. Teamsters (Senese), 941 F.2d 1292 (2d Cir. 1991). Not only did Senese not involve the IRB, but the IRB was not even created until a year after Senese was decided.
8. With respect to Judge Edelstein's other criticisms of the briefs below, it must be acknowledged that counsel's footnotes concerning LMRDA Section 609 were erroneous. Yet it may be a case of overkill when a court publicly takes an attorney to task for the editing error of citing to a case at 261 F. Supp. rather than 361 F. Supp, or 353 F. Supp. rather than 352 F. Supp. We agree that a number of the cases cited do not actually support the proposition that section 609 was violated here; yet it is also worth mentioning that counsel did not seek summary judgment on his clients' section 609 claim. It surely would have been better had counsel expressly withdrawn the claims. On the other hand, by confining his discussion of the issue to two short footnotes, which surely would not have preserved the issue for appeal had the court below simply dismissed based on its discussion in 942 F. Supp. at 902-904, counsel did not impose extensive burdens on either the court or opposing counsel. The public reprimand contained in the opinion below, 942 F. Supp. at 904-905, was unnecessary.