101 Lab.Cas. P 11,066
Gerard MONZILLO, et al., members of American Postal Workers
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 Executive Board
of the American Postal Workers Union, AFL-CIO,
Cross-Appellees.
Nos. 82-1937, 82-2035.
United States Court of Appeals,
District of Columbia Circuit.
Argued Sept. 28, 1983.
Decided June 1, 1984.
Appeals from the United States District Court for the District of Columbia (Civil Action No. 82-01232).
Darryl J. Anderson, Washington, D.C., with whom Anton G. Hajjar, Washington, D.C., was on the brief for Biller, et al., appellants in No. 82-1937 and cross-appellees in No. 82-2035.
Thomas C. Greble, New York City, for Monzillo, et al., appellees in No. 82-1937 and cross-appellants in No. 82-2035. Allen B. Roberts, New York City, also entered an appearance for Monzillo, et al.
Before TAMM and MIKVA, Circuit Judges, and McGOWAN, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge MIKVA.
MIKVA, Circuit Judge:
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. Sec. 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. (CCH) p 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. Sec. 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 by-laws and any resolutions of the governing bodies adopted thereunder...." 29 U.S.C. Sec. 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. Sec. 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 p 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, Sec. 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 gave the Board the full authority, in between conventions, to engage in any business which it deems necessary or proper to protect the interests of the Union and its members.
An interpretation of a union constitution rendered by officials of a labor organization is entitled to considerable deference by a reviewing court and should not be overruled unless the court finds that the interpretation was unreasonable or made in bad faith. See Local 334, United Association of Journeymen and Apprentices v. United Association of Journeymen and Apprentices,
The court's two page order enjoined the appellants from committing the Union to the "sale or other disposition" of the current headquarters or to the "purchase or other acquisition" of a new headquarters "until the August 1982 APWU National Convention convenes, has the opportunity to consider the [transactions], and adjourns ......" (emphasis added). In addition, the court dismissed the Trine Council as a plaintiff, denied the Union's motion to intervene as a defendant, and set bond in the amount of $250.
One week after the district court issued its order, appellants filed a motion for a new trial. While that motion was pending, the Board adhered to the court's injunction by formally withdrawing from the proposed headquarters project. The district court denied the motion for a new trial on July 19, 1982 on the ground that the case had become moot. The court stated that, as a result of the withdrawal, "there is no longer a live controversy. Defendants seek an advisory opinion from the Court as to the [Board's] authority to conduct business." Appellees subsequently filed a request for attorneys' fees pursuant to section 501(b) of the LMRDA, but the district court stayed consideration of that request pending our disposition of this appeal.
The Union's National Convention convened on August 23, 1982 and adjourned on August 27, 1982. At that meeting, the Convention adopted an "interpretative resolution" which appeared to dispute the district court's interpretation of the Union's constitution. That resolution interpreted the constitution as giving the Board "full authority, except when a convention is in session, to make decisions and engage in transactions that the National Executive Board deems necessary in the best interests of the Union." See Appendix, post.
Appellants here claim that the appellees had not met the jurisdictional prerequisites for filing suit under section 501 of the LMRDA, that the Board's interpretation of its authority under the Union's constitution was proper, and that the district court had abused its discretion in denying their motion for a new trial. Monzillo v. Biller, No. 82-1937. The Trine Council cross-appealed from its dismissal as a party plaintiff. Trine Council v. Biller, No. 82-2035.
Appellees filed a motion to dismiss the appeal as moot. A motions panel of this court referred that motion to the merits panel and ordered the parties to brief two additional issues: whether either the injunction bond filed in district court or appellees' request for attorneys' fees bars a determination of mootness. We now hold that the underlying controversy is moot and that neither the $250 injunction bond nor the request for attorneys' fees preserves the merits of that controversy for our consideration.
DISCUSSION
I. The Underlying Controversy
Appellants contend that there is a continuing dispute between the parties concerning the Board's authority to acquire a new national headquarters on behalf of the Union. They claim that at least one appellee has threatened future litigation if the Board proceeds with any new transaction and argue that the district court's opinion has placed a cloud on the Board's authority to enter into agreements with outside parties. Specifically, appellants express concern that they will be subject to future liability if they proceed with the acquisition of a new headquarters.
It is well settled that "[f]ederal courts lack jurisdiction to decide moot cases because their constitutional authority extends only to actual cases or controversies." Iron Arrow Honor Society v. Heckler, --- U.S. ----,
In general, a case becomes moot where the activities for which an injunction is sought have already occurred and cannot be undone. In this case, appellees obtained all the relief that they sought: the Board was enjoined from proceeding with the particular headquarters project under challenge until after the National Convention had met in August, 1982. Because that Convention has long since adjourned, there is no relief we can grant that could undo the effects of the district court's injunction.
Appellants contend, however, that the issue of declaratory relief is still "live" because the parties disagree over the Board's authority to commit the Union to the sale or acquisition of a national headquarters. While it is true that the complaint sought both injunctive and declaratory relief, it explicitly sought such relief only "until these issues can be considered and decided by the members of the APWU at the August 1982 National Convention...." The district court's order did not provide any declaratory relief and enjoined the Board from acting only until the Convention adjourned. The court's ruling on the motion for a new trial demonstrates that its initial order was limited to enjoining the Board from acting on that one particular project until the Convention adjourned. The relief sought and granted by the district court has expired on its own terms; there is nothing left for us to review. See Alton Southern Railway Co. v. International Association of Machinists,
We also reject appellants' argument that the underlying controversy is "capable of repetition, yet evading review," and, therefore, should not be dismissed as moot. Southern Pacific Terminal Co. v. ICC,
We also find that appellants' reliance on cases where the defendants have voluntarily discontinued the behavior sought to be enjoined is misplaced. See County of Los Angeles v. Davis,
II. The Injunction Bond
Appellants claim that the $250 injunction bond filed by appellees precludes us from dismissing this case as moot. Rule 65(c) of the Federal Rules of Civil Procedure requires the filing of a security bond by a party who benefits from a temporary restraining order or preliminary injunction:
No restraining order or preliminary injunction shall issue except upon the giving of security by the applicant, in such sum as the court deems proper, for the payment of such costs and damages as may be incurred or suffered by any party who is found to have been wrongfully enjoined or restrained.
FED.R.CIV.P. 65(c). The purpose of the security requirement is to protect a party from damages suffered if it is later determined that the preliminary relief was wrongfully granted. As Justice Stevens recently explained:
Since a preliminary injunction may be granted on a mere probability of success on the merits, generally the moving party must demonstrate confidence in his legal position by posting bond in an amount sufficient to protect his adversary from loss in the event that future proceedings prove that the injunction issued wrongfully.
Edgar v. Mite Corp.,
In this case, the district court "consolidated the hearing of the application for preliminary injunction with trial on the merits pursuant to Rule 65(a)(2)."
Even assuming, however, that the district court properly ordered the posting of the bond, the bond does not preserve the underlying controversy. The mere fact of the bond is insufficient to keep the case alive; otherwise no appeal from a preliminary injunction could ever be dismissed as moot. In Japan Air Lines Co. v. International Association of Machinists,
University of Texas v. Camenisch,
No such claim for damages arising from the injunction has been asserted in this case. If we were to extend Camenisch to these facts, no preliminary injunction or temporary restraining order could ever be dismissed as moot. In every case where a bond must be filed under Rule 65(c), the losing party could argue that determining who should bear the costs of the litigation precludes a finding of mootness. Standing alone, a bond that only covers the costs of litigating a preliminary injunction does not preserve an otherwise moot controversy for final adjudication on the merits.
The Supreme Court's opinion in Liner v. Jafco, Inc.,
[A]n employer armed with a state injunction would have no incentive to initiate Board proceedings. It would encourage such interference with the federal agency's exclusive jurisdiction if a state court's holding of mootness based on the chance event of completion of construction barred this Court's review of the state court's adverse decision on the claim of federal preemption. We have given significant weight to the vital importance of preventing state injunctions from frustrating federal labor policy in situations which the Congress has ordained shall be dealt with exclusively by the Board.
Id. at 307-08,
III. Application for Attorneys' Fees
The LMRDA permits a trial judge to award attorneys' fees to the party bringing suit under section 501(b) of the Act. The statute provides: "The trial judge may allot a reasonable part of the recovery in any action under [subsection 501(b) ] to pay the fees of counsel prosecuting the suit at the instance of the member of the labor organization and to compensate such member for any expenses necessarily paid or incurred by him in connection with the litigation." 29 U.S.C. Sec. 501(b). It is true that attorneys' fees can be awarded under this provision even where there has been no monetary recovery. See Usery v. Local Union No. 639 International Brotherhood of Teamsters,
A request for attorneys' fees "does not preserve a case which otherwise has become moot on appeal...." U.S. v. Ford,
Nor is it necessary to have a final determination on the merits of appellees' claim to decide whether they are entitled to attorneys' fees under the LMRDA. The question is whether appellees' efforts to bring about the district court's injunction--properly granted or not--conferred a substantial benefit on the Union. The application for attorneys' fees does not preserve the entire controversy for a final determination on the merits.
Although appellees' application for fees must be considered by the district court in the first instance, that court's discretion to award fees will be limited in this case. The LMRDA "does not give courts a license to interfere broadly in internal union affairs." Morrissey v. Curran,
CONCLUSION
We hold that these appeals must be dismissed as moot. The relief sought and granted by the district court has expired on its own terms, and neither the $250 injunction bond nor the application for attorneys' fees preserves the underlying controversy for final adjudication on the merits.
Appellants have expressed concern that the district court's judgment has placed a cloud on their authority to commit the Union to any major real estate agreement. Any such cloud will be removed with the issuance of our decision today directing the district court to vacate its judgment and order. See United States v. Munsingwear,
It is so ordered.
APPENDIX
The full text of the interpretative resolution, which was adopted by a vote of 1,087 to 843, is as follows:
ARTICLE 10--INTERPRETATIVE RESOLUTION
WHEREAS, Under Article 10, Section 13 (presently, Section 18) it notes that the National Executive Board is the ranking governing body of the APWU between conventions with all authority necessary to conduct the affairs of the Union between conventions; and
WHEREAS, A District Court Judge has recently seen fit to interpret the Constitution for the Union and to tell the Union that the National Executive Board does not have the necessary authority to run the affairs of the Union between conventions; and
WHEREAS, The power to interpret its own constitution properly lies with the Union itself;
THEREFORE, Be It Resolved, That Article 10, Section 13 (presently Section 18) of the Constitution be, and it hereby is, interpreted by this APWU Sixth Biennial National Convention, convened in Miami, Florida, to give the National Executive Board the full authority, except when a convention is in session, to make decisions and engage in transactions that the National Executive Board deems necessary in the best interests of the Union.
