156 F. Supp. 3d 257
D.P.R.2016Background
- UDEM sues ILA over emergency trusteeship and seeks a preliminary injunction; ILA moves to strike UDEM as a party; Banco Popular is asked to recognize the ILA trusteeship over Local 1901; the court adopts the magistrate judge’s R&R after a hearing; the court gives de novo review of objections filed by UDEM.
- UDEM and ILA dispute whether UDEM disaffiliated from the ILA prior to trusteeship; the ILA constitution governs disaffiliation as a contract matter.
- The ILA imposed trusteeship over Local 1901 to push a merger of locals and address governance concerns amid a multi-local dispute; ILA seeks to enforce merger and address financial/operational concerns during trusteeship.
- The LMRDA creates a presumption of validity for trusteeships; the court finds the trusteeship to be properly imposed given alleged mismanagement and merger objectives.
- Because UDEM is deemed without trustee authorization to sue, the court recommends denying the injunction, striking UDEM as a party, and dismissing the case without prejudice; Banco Popular should recognize the trusteeship’s presumptive validity.
- The underlying factual record shows an extended, contentious process among four Puerto Rico ILA locals culminating in a trusteeship over Local 1901 and disputes about disaffiliation, merger, and fund administration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Disaffiliation validity | UDEM disaffiliated May 11–12; vote on disaffiliation at May 9 was improper | ILA constitution controls disaffiliation; May 9 vote was valid | UDEM did not successfully disaffiliate from the ILA |
| Propriety of trusteeship | Trusteeship imposed to block disaffiliation; lacks legitimate basis | Trusteeship valid to pursue merger and protect legitimate ILA objectives | ILA had a valid basis for imposing trusteeship over Local 1901/UDEM |
| UDEM's standing to sue | LMRDA §464(a) allows locals or members to challenge trusteeship | trustee has authority to sue; UDEM lacks standing without trustee authorization | UDEM must be struck for lack of authorization; lacks standing to pursue suit |
Key Cases Cited
- SEIU, AFL-CIO, CLC v. Local 1199 N.E., SEIU, AFL-CIO, CLC, 70 F.3d 647 (1st Cir.1995) (rights of a local to disaffiliate governed by international constitution (contract))
- Local Union No. 1001 v. Laborers’ International Union of North America, 365 F.3d 576 (7th Cir.2004) (who may speak for a local in trusteeship-related suit depends on the constitution)
- Hoffa v. Hoffa, 284 F.Supp.2d 684 (E.D. Mich. 2003) (trusteeship may be proper to enforce merger if justified by legitimate objectives)
- Local 13410 v. United Mine Workers of America, 475 F.2d 906 (D.C.Cir.1973) (trusteeship challenges under LMDRA; standing and procedures considerations)
- Local Lodge 714 v. United Bhd. of Carpenters & Joiners of Am., 845 F.2d 687 (7th Cir.1988) (disaffiliation and contract-based rights approach; union constitution as contract)
- Local Lodge D354 v. United Bhd. of Carpenters & Joiners of Am., 897 F.2d 1400 (7th Cir.1990) (disaffiliation rights largely governed by contract with international)
- Local Lodge D111 v. United Bhd. of Carpenters & Joiners of Am., 858 F.2d 1559 (11th Cir.1988) (contractual basis for disaffiliation rights)
- Local 48 v. United Bhd. of Carpenters & Joiners of Am., 920 F.2d 1047 (1st Cir.1990) (merger and trusteeship jurisprudence in contract context)