American Federation of Teachers
Defendants motion to dismiss in Saunders v. Hankerson, et.al.
March 21, 2003

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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

NATHAN A. SAUNDERS, Plaintiff,
v.
ESTHER HANKERSON, et al., Defendants.

Civ. Action No. 02-2536 (EGS)

MOTION TO DISMISS

David J. Strom (D.C. Bar No. 376233)
Daniel J. McNeil (D.C. Bar No. (455712)
American Federation of Teachers
555 New Jersey Avenue, N.W.
Washington, DC 20001
Telephone: (202) 393-7472
Facsimile: (202) 393-6385

James M. Cole (D.C. Bar No. 385837)
BRYAN CAVE LLP
700 Thirteenth Street, N.W., Suite 700
Washington, DC 20005-3960
Telephone: (202) 508-6000
Facsimile: (202) 508-6200

Date: March 21, 2003

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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

Civ. Action No. 02-2536 (EGS)

STATEMENT OF POINTS AND AUTHORITIES IN SUPPORT OF
DEFENDANTS' MOTION TO DISMISS

David J. Strom (D.C. Bar No. 376233)
Daniel J. McNeil (D.C. Bar No. (455712)
American Federation of Teachers
555 New Jersey Avenue, N.W.
Washington, DC 20001
Telephone: (202) 393-7472
Facsimile: (202) 393-6385

James M. Cole (D.C. Bar No. 385837)
BRYAN CAVE LLP
700 Thirteenth Street, N.W., Suite 700
Washington, DC 20005-3960
Telephone: (202) 508-6000
Facsimile: (202) 508-6200
ATTORNEYS FOR AFT AND EDWARD J. MCELROY

March 21, 2003

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TABLE OF CONTENTS

TABLE OF AUTHORITIES
PROCEDURAL BACKGROUND
PRELIMINARY STATEMENT
ARGUMENT
RULE 12(B)(1) AND (6) STANDARD FOR DISMISSAL
I. SAUNDERS' FIDUCIARY CLAIMS IN COUNT II MUST BE DISMISSED UNDER THE LMRDA FOR FAILURE TO STATE A CLAIM, LACK OF STANDING AND LACK OF SUBJECT MATTER JURISDICTION

A. Section 501 Claims Cannot be Brought Against the AFT and May be Brought Only Against Individual Union Officers
B. Defendant McElroy Never Exercised Control of WTU Finances and Therefore He Did Not Have A Fiduciary Responsibility to WTU Members
C. Plaintiff Saunders Failed to Satisfy the LMRDA Prerequisites Prior to Filing Suit and Does Not Have Standing to Bring Count II Against Defendant
D. Saunders Failed to Satisfy the LMRDA Prerequisites Prior to Filing Suit and Does Not Have Standing to Bring claims against the Bullock, Baxter, Hemphill and the Other Individual Defendants, Therefore Counts VIII-XII and XIV-XVIII Must be Dismissed
E. Plaintiff is Not Entitled to Invoke Futility as an Excuse For Failing to Satisfy the Pre-requisites Stated in § 501 of the LMRDA
F. Plaintiff Does Not Have Standing to Bring a Claim Under § 501(b) because He Did Not Seek Leave of the Court Prior to Filing the Complaint

A. Plaintiff's Allegations in Counts VI and VII Require Interpretation of a Labor Contract, and thus, are Preempted by § 301 of the LMRA
B. The AFT's Constitution Does Not Obligate the AFT to Audit Local Affiliates; Therefore Failure to Conduct Such an Audit is not a Breach of the AFT Constitution
C. In the Absence of a Duty to Act, the AFT is not Liable for the Financial Malpractice by Bullock, Baxter and Hemphill because the AFT Never Ratified their Actions
D. The Plaintiff's Claim in Count IV Must Fail Under § 301 Of the LMRA because of Saunders' Failure to Exhaust Administrative Remedies
E. The Federal Court Cannot Exercise Subject Matter Jurisdiction over Count IV of Saunders' Complaint where the Alleged Breach of the AFT Constitution is Not a Threat to Labor Peace

III. PLAINTIFF'S DEMAND TO REVIEW AFT RECORDS IN COUNT V SHOULD BE DISMISSED FOR SAUNDERS' FAILURE TO EXHAUST REMEDIES
IV. PLAINTIFF DOES NOT HAVE AN INDEPENDENT RIGHT OF ACTION UNDER U.S.C. § 411(A)(4)

A. Plaintiff Does Not Have a Cause of Action Under 29 U.S.C. § 411(a)(4) because Plaintiffs Right to Sue Has Not Been Restricted
B. Plaintiff Does Not Have Standing Under Section 101(a)(4) of the LMRDA because He Failed to Exhaust Internal Administrative Remedies

V. PLAINTIFF DOES NOT HAVE STANDING TO BRING A DERIVATIVE ACTION UNDER RULE 23.1 BECAUSE HE IS NOT REPRESENTATIVE OF THE WTU MEMBERSHIP AND HE FAILED TO MAKE A DEMAND THAT THE AFT REMEDY INTERNAL PROBLEMS WITHIN THE AFT PRIOR TO FILING SUIT
VI. CONCLUSION

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TABLE OF AUTHORITIES

FEDERAL CASES

Aho v. Bintz, 69 L.R.R.M. (BNA) 2440, 290 F. Supp. 577 (D.C. Minn. 1968)

Allis-Chalmers Core. v. Lueck, 471 U.S. 202 (1985)

Austin v. Trandell, 207 F. Supp. 2d 616 (E. D. Mich. 2002)

Avco Corp. v. Aero Lodge No. 735, 390 U.S. 557 (1968)

Bisc v. International Broth. of Electric Workers, AFL-CIO Local 1969, 618 F.2d 1299 L.R.R.M. (BNA)

Brenner v. Local 514, United Brotherhood of Carpenters, 927 F.2d 1283 L.R.R.M. (BNA)

Bocchiere v. Biller, 1988 WL 163032, 111 Lab. Cas. P 11,193 (D.D.C. 1988)

Carbon Fuel v. United Mine Workers of America, 444 U.S. 212, 100 S. Ct. 410

Commer v. McEntee, 145 F. Supp. 2d 333 (S.D.N.Y. 2001)

Conley v. Gibson, 355 U.S. 41,6 78 S. Ct. 99 (1957)

Cowger v. Rohrbach, 868 F.2d 1064 L.R.R.M. (BNA) Davis v. Corned, Inc., 105 L.R:R.M. (BNA) 2363, 619 F.2d 588 (6th Cir. 1980)

EEOC v. Regency Architectural Metals Corp., 896 F. Supp. 260, 82 Fair Empl. Prac. Case. (BNA) 331 (D. Conn. 1995)

E.E.O.C. v. St. Francis Xavier Parochial School, 117 F.3d 621 (D.C. Cir. 1997)

Federal Prescription Serv., Inc. v. Amalgamated Meat Cutters, 527 F.2d 269 L.R.R.M. (BNA)

Geddes v. Chrysler Corp., 102 L.R.R.M. (BNA) 2756, 608 F.2d 261 (6th Cir. 1979)

George v. Local Union No. 639, 321 U.S. App. D.C. 256, 98 F.3d 1419 (1996)

Glasser v. American Federation of Musician, 354 F. Supp. 1 (S.D.N.Y. 1973)

Guidry v. Sheet Metal Workers National Pension Fund, 493 U.S. 365 (1990)

Hardin v. City Title Escrow Co., 254 U.S. App. D.C. 370, 797 F.2d 1037, 1040 (1986)

Head v. Brotherhood of Railway, Airline and Steamship Clerks Freight Handlers, Express Station Employers, 512 F.2d 398, 88 L.L.R.M. (BNA) 3057 (2d Cir. 1975)

Homer v. Ferron, 362 F.2d 224 (9th Cir. 1966)

International Longshoremen's Association v. Virginia International Terminal Inc, 932 F. Supp. 761 (E.D. Va. 1996)

Intercity Maintenance Co. v. Local 254 Service Employees Intern. Union, 62 F.Supp. 2d 483 (D. R.I. 1999)

International Union, United Mine Workers of America v. District 50 United Mine Workers of America, 140 U.S. App. D.C. 3497 435 F.2d 421, 429 (1970)

Jacobsen v. Oliver, 201 F. Supp. 2d 93 (D. D.C. 2002)

Keck v. Employees Independent Association, 88 L.R.R.M. (BNA) 2355, 387 F.Supp. 241 (D. Pa. 1974)

Laughon v. International Alliance of Theatrical Stake Employees Moving Picture Technicians, Artists & Allied Crafts of the United States and Canada, 248 F.3d 931 (9th Cir. 2001)

Livadas v. Bradshaw, 512 U.S. 107 (1994)

Local 507, Transport Workers Union of America AFL-CIO v Transport Workers Union of America, 166 L.R.R.M. (BNA) 2618 (D. Mass. 2001)

Local Union No. 575 of United Association of Journeymen and Apprentices of Plumbing and Pipe Fitting Industry v. United Association of Journeymen and Apprentices of Plumbing and Pipe Fitting Industry of U.S. and Canada, 995 F. Supp. 1151 L.R.R.M. (BNA)

Local Unions 20 v. United Brotherhood of Carpenters and Joiners of America, 223 F. Supp. 2d 491 (S.D.N.Y. 2002)

Maljack Productions, Inc. v. Motion Picture Association of America Inc., 52 F.3d 373 (D.C. Cir. 1995)

NLRB v. Industrial Union of Marine & Shipbuilding Workers, 391 U.S. 418, 20 L. Ed. 2d 706, 88 S. Ct. 1717 (1968)

O'Connor v. Freyman, 121 L.R.R.M. 2387 (D.D.C. 1985)

Parks v. International Brotherhood Of Electrical Workers, 314 F.2d 866 (4th Cir.1963), cert. denied, 372 U.S. 976 (1963)

Pawlak v. Greenawalt, 477 F. Supp. 149 (M. D. Pa. 1979)

Phelan v. Local 305 of United Association of Journeymen and Apprentices of Plumbing and Pipefitting Industry of U.S. and Canada, 973 F.2d 1050 (2nd Cir. 1992)

Phillips v. International Association of Bride Structural Workers, 556 F.2d 939 L.R.R.M. (BNA)

Pierce v. Bahr, No. 96-0680, 1996 U.S. Dist. LEXIS 6488 (D. D.C. 1996)

Pignotti v. Local #3 Sheet Metal Workers International Association, 477 F.2d 825 L.R.R.M. (BNA) (8th Cir. 1973)

Republic Steel Corp. v. Maddox, 379 U.S. 650, 85 S. Ct. 614 (1965)

Ross v. International Brotherhood Of Electrical Workers, 544 F.2d 1022

Sabey v. Local 12230 United Steelworkers of America, 1983 WL 31338 L.R.R.M. (BNA)

Sabolsky v. Budzanoski, 457 F.2d 1245 L.R.R.M. (BNA)

Sheridan-Wyoming Coal Co. v. Krug, 83 U.S. App. D.C. 162, 168 F.2d 557, 559 (1948)

Shiman v. Frank, 625 F.2d 80 (6th Cir. 1980)

Smith v. United Mine Workers, 493 F.2d 1241 L.R.R.M. (BNA)

Trail v. International Brotherhood of Teamsters, 542 F.2d 961 L.R.R.M. (BNA)

United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, AFL-CIO et al v. Local 334, United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, 452 U.S. 615, 101 S. Ct. 2546 (1981)

United States v. Alcea Band of Tillamonks, 329 U.S. 40, 67 S. Ct. 167 (1946)

Vaca v. Sipes, 386 U.S. 171, 87 S. Ct. 903 (1967)

W.C. & A.N. Miller Cos. v. United States, 963 F. Supp. 1231 (D.D.C. 1997)

Wall v. Construction & General Laborers' Union, Local 230, 224 F.3d 168 (2d Cir. 2000)

Winter v. Local 639, International Brotherhood of Teamsters, 186 U.S. App. D.C. 315, 569 F.2d 146, 148 (D.C. Cir. 1977)

Wirtz v. Local 153 Glass Bottle Blowers Association of United States and Canada, 389 U.S. 463, 88 S. Ct. 643 (1968)

Wooddell v. International Brotherhood of Electrical Workers, 502 U.S. 93, 112 S. Ct. 494 (1991)

STATE CASES

Babb v. United Food and Commercial Workers District Union Local 271, 233 Neb. 826, 448 N.W.2d 168 (1989)

Levant v. Whitley, 755 A.2d 1036 (App. D.C. 2000)

FEDERAL STATUTES

MISCELLANEOUS

Fed. R. Civ. P. 12(b)(1)
Fed. R. Civ. P. 23.1
Fed. R. Civ. P. 23.2
Moore's Federal Practice § 23.1.09 (3d. ed. 2000)

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

Civ. Action No. 02-2536 (EGS)

STATEMENT OF POINTS AND AUTHORITIES
IN SUPPORT OF DEFENDANTS' MOTION TO DISMISS

PROCEDURAL BACKGROUND

On December 27, 2002 Nathan Saunders filed a complaint before this Court against the AFT and others as a pro se plaintiff. Following the completion of its forensic audit of the WTU finances, on January 17, 2003, the AFT, on behalf of the WTU membership, filed restitution claims against the former WTU president, treasurer, assistant to the president and others for the losses to the WTU that were detailed in the audit. On February 4, 2003 Plaintiff, now represented by counsel, filed duplicative restitution claims to those brought by the AFT earlier against the former WTU president, treasurer, assistant to the president and others. In that first amended complaint plaintiff also brought claims against AFT and McElroy for the losses outlined in the forensic audit. In this memorandum, we demonstrate why Plaintiff's claims against AFT and McElroy as well as the claims for restitution against the former WTU officers and others must be dismissed.

PRELIMINARY STATEMENT

One of the driving forces over the years that has maintained this ground level orientation in the AFT is the fact that unlike some industrial unions, AFT's members work for employers which also are autonomous in their own right. Therefore, the certifications that are issued by the appropriate labor boards in each state designate the local, not the AFT, as the representative of the applicable teachers and classroom personnel. Similarly, the collective bargaining agreements identify the local as the representative of the education employees. The AFT does not sign or review such agreements and it exercises no control over the agreements. Consistent with the role of signatory, the local administers the collective bargaining agreement. Significantly, each local has its own constitution and bylaws. Unlike some other unions, the AFT locals do not operate solely under the national constitution with a local set of bylaws. Additionally, each local has its own employer identification number from the Internal Revenue Service and legally functions as an autonomous employer for purposes of state and federal labor and employment law. In this functional context, each AFT local, including the WTU, governs their own affairs.

AFT does provide certain services to the members, but that is in the context of an organization which has limited jurisdiction. The AFT provides: assistance and training for professional development for teachers and classroom personnel; representation in Congress and before the Executive Branch agencies on education policy issues and related matters; collective bargaining assistance when requested by a local; financial assistance for legal cases that are brought by AFT locals to restore the jobs of members; and assistance in organizing new members. Significantly, though, the AFT exercises no direct constitutional oversight over the operations of its locals. To quote from former AFT President Albert Shanker, "AFT exercises the power of persuasion over our locals, not the persuasion of power."

The provision in the AFT Constitution that the plaintiff claims alters this underlying relationship is the audit language in Article IV, Section 6.² However, a clear reading of that section reveals that the audit is prepared for the benefit of the local membership, with a copy to be sent to the AFT. The local, not the AFT, is responsible for causing the audit to occur. And the local, not the AFT, is the entity that has the exclusive control over the records that are necessary to perform the audit. If there are problems in not performing the audit, this section, like several others in the AFT Constitution, operates under the principle that the member should first go to his/her local leadership with a complaint and then to the AFT, if that complaint is not adequately resolved at the local level. In the case before this Court, no such complaint was raised by either Mr. Saunders or any member of the WTU with the AFT and the First Amended Complaint makes no such allegations. Indeed, it was not until four months after AFT had uncovered the financial irregularities attributable to the former WTU President, Treasurer and Assistant to the President that Mr. Saunders came forward at all.

ARGUMENT

At the heart of Saunders claims is the contention that as the parent organization of the WTU, the AFT is responsible for monitoring the day-to-day activity of the WTU and its officers. Accordingly, Plaintiff maintains that the AFT is responsible contractually and as a fiduciary for the acts of the WTU officers. What the Plaintiff has failed to address, however, is the near comprehensive statutory framework that guides and governs labor organizations. And thus, while some of the issues related to principle-agent and fiduciary duty are present in this area of the law, Congress has thoroughly legislated the relationship between parent labor organizations and their affiliates, as well as the rights of individual union members within their union. It is through these statutory schemes that Saunders' claims must be addressed by the Court and dismissed for failure to meet the statutory standing and jurisdiction requirements and failure to state a claim upon which relief can be granted.

RULE 12(B)(1) AND (6) STANDARD FOR DISMISSAL

In determining whether to grant a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), this Court "must accept the factual allegations as true and draw all reasonable inferences therefrom in favor of the plaintiff." W.C. & A.N. Miller Cos. v. United States, 963 F. Supp. 1231, 1235 (D.D.C. 1997) (citing Maljack Productions, Inc. v. Motion Picture Ass'n of Am., Inc., 52 F.3d 373, 375 (D.C. Cir. 1995)); Sheridan-Wyoming Coal Co. v. Krug, 83 U.S. App. D.C. 162, 164, 168 F.2d 557, 559 (1948). "A claim must be dismissed if it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim that would entitle the plaintiff to relief." W.C. & A.N. Miller Cos. v. United States, 963 F. Supp. 1231, 1235 (D.D.C. 1997) (citing Conley v. Gibson, 355 U.S. 41, 45-46 78 S. Ct. 99, 103-106 (1957). When considering a motion to dismiss, however, the Court need not accept inferences drawn by plaintiffs if such inferences are unsupported by the facts set out in the complaint. Nor must the court accept legal conclusions cast in the form of factual allegations." Kowal v. MCI Communications Corp., 16 F.3d 1271, 1276, 305 U.S. App. D.C. 6, 11 (D.C. Cir. 1994) (citing Papasan v. Allain, 478 U.S. 265, 286 106 S. Ct. 2923 2934 (1986)); see also Alexander v. Evans-Afflick, C.A. 92-2384 (TFH)(PJA), 1993 U.S. Dist. LEXIS 16425, *7 (D.D.C. Nov. 18, 1993)(Conclusory allegations of required elements of claims that are not supported by alleged facts tending to prove those elements are insufficient. Courts are not required to accept legal conclusions as true in considering a motion to dismiss); Whitacre v. Davey, 281 U.S. App. D.C. 363, 363 n.l, 890 F.2d 1168, 1168 n.l (1989) (court not required to assume that legal conclusions are true); Alexis v. District of Columbia, 44 F. Supp. 2d 331, 336 (D.D.C. 1999) ("the court need not accept as true the plaintiffs' legal conclusions"). Indeed, "the Court must not accept inferences drawn by the plaintiff if they are unsupported by the facts, nor must the Court accept purely legal conclusions masked as factual allegations." W.C. & A.N. Miller Cos. v. United States, 963 F. Supp. 1231, 1235 (D.D.C. 1997) (citing Maljack Productions, Inc. v. Motion Picture Ass'n of Am.. Inc., 311 U.S. App. D.C. 224, 226, 52 F.3d 373, 375 (D.C. Cir. 1996); Sheridan-Wyoming Coal Co. v. Krug, 83 U.S. App. D.C. 162, 164, 168 F.2d 557, 559 (1948).

Plaintiff's First Amended Complaint brings the following counts, either jointly or separately, against the AFT and Edward McElroy: 

• Count II - Breach of Fiduciary Duty pursuant to the Labor Management Reporting and Disclosure Act against AFT and McElroy

• Count IV - Breach of National Constitution pursuant to the Labor Management Relations Act against the AFT

• Count V - Plaintiff's Right to Review Union Financial Records Against the AFT

• Count VI - Breach of Fiduciary Duty against AFT 

• Count VII - Negligence against AFT

In addition, Plaintiff's First Amended Complaint brings the following claims against Individual Defendants associated with the WTU which are virtually duplications of claims already brought by AFT:

• Count VIII - Breach of Fiduciary Duty against Bullock, Hemphill, Baxter and Holmes Count IX - Fraud against Bullock, Hemphill, and Baxter

• Count X - Conversion against Bullock, Hemphill Baxter, Holmes, Alderman, Michael Martin, Cheryl Martin and Clark

• Count XI - Unjust Enrichment against Bullock, Hemphill, Baxter, Holmes Alderman, Michael Martin, Cheryl Martin and Clark

• Count XII - Aiding and Abetting against Bullock, Hemphill, Baxter, Holmes Alderman, Michael Martin, Cheryl Martin and Clark

• Count XIV - Civil Conspiracy against Bullock, Hemphill, Baxter, Holmes Alderman, Michael Martin, Cheryl Martin and Clark

• Count XV - Violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO") 18 U.S.C. § 1964(c) Against All Individual Defendants Count XVI - Civil RICO Conspiracy

• Count XVII - Negligence against Independence Federal Savings Bank ("IFSB")

• Count XVIII - Aiding and Abetting against IFSB

Plaintiff's allegations in the First Amended Complaint as described in the counts stated above, even taken as true, do not state any claims against either the AFT or McElroy. In addition, Plaintiff's claims against AFT, McElroy and the individual defendants are fatally flawed in that he lacks standing to bring his claims and the Court lacks subject matter jurisdiction to entertain Plaintiff's causes of action. The Defendants will address Plaintiff's claims as follows:

Count II sets forth Plaintiff's allegations of breach of fiduciary duty under Section 501 of the Labor Management Reporting and Disclosure Act ("LMRDA"). Count II against the AFT should be dismissed for failure to state a claim because actions under Section 501 cannot be brought against labor organizations such as the AFT and can only be brought against union officers. Count II should be dismissed as to Defendant McElroy because as an officer of the national union, he never exercised "autocratic control" over the finances of the WTU, which is necessary to establish a fiduciary relationship between a national union officer and local union members. The Court also should dismiss Count II for lack of subject matter jurisdiction and lack of standing because the Plaintiff failed to satisfy the statutory prerequisites necessary to bring a Section 501 action.

For the same reasons - failure to satisfy the LMRDA prerequisites prior to filing suit - Saunders does not have standing to bring claims against the WTU Individual Defendants and Counts VIII-XII and XIV-XVIII should be dismissed. Counts VIII-XII and XIV-XVIII are duplicative of the AFT's restitution suit before this Court, and because the First Amended Complaint does not allege that the Plaintiff requested that the AFT file suit against the named WTU officials they should be dismissed.

Plaintiff's allegation in Count IV is based on alleged breach of the AFT Constitution and should be dismissed under Section 301 of the Labor Management Relations Act ("LMRA") for failure to state a claim upon which relief can be granted, lack of standing and lack of subject matter jurisdiction. As we will show with respect to Count IV, there has not been a breach of the AFT Constitution because it does not create a duty that requires the AFT to audit local affiliates or to be responsible for the financial affairs of the WTU. In the absence of a duty, the AFT is not liable for the actions of the former WTU president, treasurer and assistant to the president, because the AFT did not ratify or participate in their wrongful activities. On this basis alone, Count IV should be dismissed. Further ground for dismissal of Count IV is Plaintiff's failure to exhaust his internal union remedies under the AFT Constitution before filing his lawsuit. Finally, the Court should dismiss Count IV because the alleged breach of the AFT Constitution is not a threat to labor peace, but remains a matter of internal union concern and, therefore, the claim is outside the jurisdiction of this Court.

The Court should dismiss Counts VI and VII because the claims are preempted by Section 301 of the LMRA and do not contain allegations that require an interpretation of the AFT Constitution, a labor contract.

Plaintiff's demand in Count V to review the WTU financial records in possession of the AFT records should be dismissed on the grounds that the Plaintiff has failed to exhaust available remedies. Simply stated, Saunders has never approached either the WTU or the AFT seeking access to the WTU financial records.

Defendants will demonstrate that the Plaintiff does not have a cause of action under 29 U.S.C. § 411(a)(4) as alleged in paragraph 38 of the Complaint. The fundamental problem with Plaintiff's use of this provision in the Labor Code is that it does not provide the Plaintiff with an independent cause of action.

Finally, Defendants address Plaintiffs lack of standing to bring a derivative claim because he is not representative of the WTU membership for purposes of a Fed. R. Civ. P. 23.1 derivative action.

I. SAUNDERS' FIDUCIARY CLAIMS IN COUNT II MUST BE DISMISSED UNDER THE LMRDA FOR FAILURE TO STATE A CLAIM, LACK OF STANDING AND LACK OF SUBJECT MATTER JURISDICTION

A. Section 501 Claims Cannot be Brought Against the AFT and May be Brought Only Against Individual Union Officers

Section 501(a) of the LMRDA, 29 U.S.C. §501(a), establishes the fiduciary duties of officers, agents, shop stewards and representatives of labor organizations, and confers fiduciary status on union officers who actually manage the property and funds of the local union. Yager v. Carey, 910 F. Supp. 704 (D. D.C. 1995); United Mine Workers of America v. Boyle, No. 343669, 1978 WL 1601, 83 Lab. Cas. 10,573(D.D.C. 1978). Importantly, Section 501(a) only imposes liability on individual union officers for breach of their fiduciary obligations, and does not impose the duty on the labor organization itself. Consequently, a plaintiff union member cannot bring a claim - and a court does not have jurisdiction to entertain claims - for fiduciary breach against a labor organization. See, Sabolsky v. Budzanoski, 457 F.2d 1245, 75 L.R.R.M. (BNA) 2828 (3rd Cir. 1972), cert. denied, 409 U.S. 853, 93 S. Ct. 65 (1972) (holding that a complaint against international union and locals was properly dismissed as to labor organizations, because suits under the LMRDA can only be brought against union officials); Head v. Bhd. of Railway, Airline and Steamship Clerks Freight Handlers Express Station Employers, 512 F.2d 398, 88 L.L.R.M. (BNA) 3057 (2d Cir. 1975); Pignotti v. Local #3 Sheet Metal Workers Int'1 Assn, 477 F.2d 825, 830 L.R.R.M. (BNA) (8`h Cir. 1973); See also Commer v. McEntee, 145 F. Supp. 2d 333 (S.D.N.Y. 2001) (holding that Section 501 of LMRDA does not allow a suit against labor organizations); Sabey v. Local 12230 United Steelworkers of America, 1983 WL 31338, 113 L.R.R.M. (BNA) 3603 (W.D.N.Y. 1982) (stating that an action against a union under 29 U.S.C. § 501(b) was untenable, since the LMRDA imposes liability against only union officers). In this action, the Plaintiff names the AFT as a Defendant, alleges breach of fiduciary duty by the AFT and Secretary-Treasurer McElroy, and prays for restitution from the AFT. Because there is no cause of action against the AFT, Count II of the Plaintiff's Compliant must be dismissed as to the Defendant AFT.

B. Defendant McElroy Never Exercised Control of WTU Finances and Therefore He Did Not Have A Fiduciary Responsibility to WTU Members

Officers of labor organizations who have control over union funds are entrusted to use the union's money for the exclusive benefit of the members, and thus, under Section 501(a) of the LMRDA, there is a fiduciary duty between such officers and the labor organization members. 29 U.S.C. § 501(a).³ Appropriately, therefore, courts extend fiduciary responsibilities to officers of international unions only in limited instances where the international union asserts "autocratic control" over the finances of a local union. International Union, United Mine Workers of America v. District 50, United Mine Workers of America, 140 U.S. App. D.C. 349, 357 435 F.2d 421, 429 (1970), cert denied, 402 U.S. 906, (1971) (holding that when an international union interferes in the normal financial autonomy of a local union and practices autocratic control over the local, the officers of the international have a fiduciary duty to protect the interests of the local); Aho v. Bintz, 69 L.R.R.M. (BNA) 2440, 290 F. Supp. 577 (D.C. Minn. 1968) (where the staff of the international union services the local, attends local meetings, advises the local union officers and speaks directly to the employer, the international officers become "quasi-officers" of the local union and under §501(a) have a fiduciary duty to the local members); See also, Local Union No. 575 of United Ass'n of Journeymen and Apprentices of Plumbing and Pipe Fitting Industry v. United Ass'n of Journeymen and Apprentices of Plumbing and Pipe Fitting Industry of U.S. and Canada, 995 F. Supp. 1151, 158 L.R.R.M. (BNA) 2876 (D. Colo. 1998) (holding that international union president could not have breached any fiduciary duty to local union or local's members, absent allegation that president held union money or property for improper purposes, that he failed to manage, invest, or expend local union assets in accordance with international's constitution, or that he dealt with international as an adverse party, held, or acquired pecuniary or personal interest conflicting with international's interests) (Emphasis supplied). In the present case there is no allegation that, prior to the administratorship, the AFT ever exercised autocratic control over the WTU's finances, because that was not the case. Thus, Defendant McElroy cannot be held liable for a fiduciary breach and Count II must be dismissed.

Without alleging any facts to establish McElroy's autocratic control over the WTU, Plaintiff's First Amended Complaint at Count II asserts a fiduciary duty between the AFT and McElroy on the one hand and WTU on the other.⁴ Plaintiffs Complaint essentially alleges that because the AFT Constitution requires locals to perform audits and provide a copy of the audit to AFT, and these audits were not performed by WTU for a number of years, that somehow means McElroy should be liable for the embezzlement by the WTU officers. See §§ 223-227 of the First Amended Complaint. These allegations, however, do not demonstrate McElroy's "autocratic control" over the finances of the WTU. Under agency principles, "autocratic control" requires the exercise of actual decision making authority over financial matters.⁵ International Union, United Mine Workers of America v District 50 United Mine Workers of America, 140 U.S. App. D.C. 349, 435 F.2d 421, (1970); Aho v. Bintz, 69 L.R.R.M. (BNA) 2440, 290 F. Supp. 577 (D.C. Minn. 1968). These allegations in Count II, paragraphs 222-227, are no more than legal conclusions and as such do not satisfy the standard for pleading factual allegations that establish McElroy's liability. Therefore, Plaintiff's fails to sufficiently allege a fiduciary relationship between AFT officers and the WTU members.

The lack of a fiduciary relationship is also demonstrated by the AFT Constitution and structure of the union. Because Plaintiff makes repeated reference to the AFT Constitution, a copy is attached as Exhibit 1.⁶ The American Federation of Teachers Constitution describes the relationship between the parent and affiliated local unions at Article IV. According to Article IV, local unions that affiliate with the AFT are issued a charter. It is clear from the AFT Constitution that AFT's control over the day-to-day affairs of chartered locals is extremely limited. Locals are free to set their own bylaws, set their own dues rates, negotiate their own contracts, and vote for their own officers. Moreover, the AFT does not bargain collectively on behalf of the locals or approve collective bargaining agreements before they are signed. The AFT Constitution does not describe any instance where it would be appropriate for the AFT or its officers to handle local union assets and, consequently, neither the AFT nor its officers have a fiduciary duty to local union members.

Saunders' Complaint fails to allege sufficient facts demonstrating that McElroy controlled the WTU prior to the administratorship,⁷ thereby creating a fiduciary duty between McElroy and the WTU. Specifically, the Plaintiff's Complaint does not allege that McElroy practiced autocratic control over the WTU finances. Consequently, Plaintiff has failed to state a claim upon which relief may be granted, and Count II must be dismissed.

C. Plaintiff Saunders Failed to Satisfy the LMRDA Prerequisites Prior to Filing Suit and Does Not Have Standing to Bring Count lI Against Defendant McElroy

Section 501(a) of the LMRDA defines the fiduciary duty of officers, agents and other representatives of labor organizations, requiring each person to hold union money or property for the sole benefit of the union and its members. 29 U.S.C. § 501(a). In the event that either the union or the governing body of the union fails to seek appropriate relief against a person alleged to have violated the fiduciary duty, Section 501(b) permits any individual member of the union to sue that person for the benefit of the organization. Id. at § 501(b); Yager v. Carey, 910 F. Supp. 704, 151 L.R.R.M. (BNA) 2323 (D.D.C. 1995).

A union member seeking judicial enforcement of the remedial provisions under §501 (b) must first meet the statutory prerequisites. 29 U.S.C. § 501(b).⁸ The member must request that the union or its governing officers bring legal action or secure an accounting. Upon failure by the union to act, the members must allege that the union refused or failed to bring an action. The plaintiff union member then must request leave of court to bring the action with a showing of good cause. Guidry v. Sheet Metal Workers National Pension Fund, 493 U.S. 365, 375 n.16, (1990); Bocchiere v. Biller, 1988 WL 163032, 111 Lab. Cas. P 11,193 (D.D.C. 1988); O'Connor v. Freyman, 1985 WL 121, 121 L.R.R.M. (BNA) 2387, (D.D.C. 1985). The provision of Section 501(b) requiring a demand to sue is mandatory and its requirements cannot be met by anything short of an actual request. O'Connor v. Freyman, 121 L.R.R.M. 2387 (D.D.C. 1985).

The condition precedent to the filing of a §501(b) suit, by an individual member or a group of members, requires proof that the union refused or failed to sue upon a demand made by the union member. Id. The purpose of these statutory prerequisites under §501(b) is to give the union an opportunity to correct its own wrongs or problems prior to an individual or group of members seeking redress from the federal court. Int'1 Longshoremen's Ass'n v. Virginia Int'1 Terminal Inc., 932 F. Supp. 761 (E.D. Va. 1996). The union's failure to secure an accounting or to file suit on behalf of the members triggers the ability for the federal court to assert jurisdiction over §501(b) claims. Austin v. Trandell. 207 F. Supp. 2d 616 (E. D. Mich. 2002). On the other hand, a court must dismiss a union member's claim when there is a failure to comply with the statutory prerequisites prior to filing suit because the court cannot assert jurisdiction over the claim. Bocchiere v. Biller, 1988 WL 163032, (D.D.C. 1988):⁹ O'Connor v. Freyman, 121 L.R.R.M. (BNA) 2387 (D.D.C. 1985). Saunders' failure to request that the AFT secure an accounting or file a claim is fatal to his cause of action against the AFT for breach of fiduciary duties under the LMRDA; therefore, Count II of the First Amended Complaint must be dismissed.

D. Saunders Failed to Satisfy the LMRDA Prerequisites Prior to Filing Suit and Does Not Have Standing to Bring claims against the Bullock, Baxter, Hemphill and the Other Individual Defendants, Therefore Counts VIII-XII and XIV-XVIII Must be Dismissed

For the same legal reasons applicable to Plaintiff's allegations against McElroy, the alleged counts in Plaintiff's suit against the WTU president, treasurer, assistant to the president and others (referred to in the Complaint as Individual Defendants) and Independence Federal Savings Bank must be dismissed. Saunders' failure to request that the AFT secure an accounting of the WTU or file a claim against Bullock, Hemphill and Baxter is fatal to his cause of action against the Individual Defendants for breach of fiduciary duties under the LMRDA

Saunders' First Amended Complaint does not allege that the Plaintiff or any other member of the WTU requested that the AFT file suit against the named union officials or secure an accounting. Rather, Plaintiff's Complaint describes the writing of a letter to the WTU demanding answers to members' questions (¶¶ 40, 41); Plaintiff's organization of a picket outside the WTU and AFT and simultaneous press release (¶¶ 43-46); a WTU membership vote for the "Refund of Unauthorized Dues" (¶ 47); and, finally. Plaintiff's commencement of a lawsuit on December 27, 2002.¹⁰ None of these actions meet the statutory prerequisite of a demand to the AFT, and further, all actions took place after the AFT initiated an investigation into the wrongdoings of the WTU officers. Plaintiff, in his First Amended Complaint, duplicated the causes of action, virtually verbatim, from the AFT's complaint against the former WTU officers and others. This is a clear indication that the AFT was seeking recovery and, Plaintiffs duplicative causes of action cannot be maintained.¹¹

Saunders' Complaint does not allege any facts that show he requested the AFT to file suit against the alleged conspirators. Equally significant, it is a matter of record that AFT has in fact completed an accounting and on the very next day it filed suit for restitution on behalf of the membership of the WTU. It is not practical to have two parties pursue the same claims and AFT, individually and on behalf of WTU, is the proper party to proceed with these actions. See, O'Connor v. Freeman, 121 L.R.R.M. at 2389 (stating that "the ends of justice would be served" by allowing the local union to intervene as the plaintiff because Congress expressed its preference that unions prosecute a claim for breach of fiduciary duty against union officials). Consequently, the court must dismiss Saunders' claims in Counts VIII - XII and XIV-XVIII for lack of subject matter jurisdiction.

E. Plaintiff is Not Entitled to Invoke Futility as an Excuse For Failing to Satisfy the Pre-requisites Stated in § 501 of the LMRDA

Generally, the futility doctrine states that a plaintiff is excused from the prerequisites mandated by § 501(b) when it would be futile to approach the labor organization and request relief either because the internal procedures are incapable of granting full and adequate relief or the party seeking relief would be unable to receive full and impartial consideration. Yager v. Carey, 910 F. Sup p. 704 (D. D.C. 1995); Geddes v. Chrysler Corp, 102 L.R.R.M. (BNA) 2756, 608 F.2d 261 (6th Cir. 1979).

In order to bring a claim under Section 501(b) "some form of request that the union or a governing member of the union bring the action is a requirement that cannot be waived as futile." Yager, 910 F. Supp. at 727. A plaintiff has no standing to raise a Section 501(b) claim absent some request to a union official that the union take action. Saunders does not have standing to bring his 501(b) action because he did not make a request to the AFT and his lawsuit was filed after the AFT initiated an investigation into financial malpractice at the WTU.

The fact that a request to the AFT would not have been futile is evidenced by the action that the AFT did take once it realized that there was financial mismanagement by the WTU's former president, treasurer and assistant to the president. At this time, there is currently a suit before this Court seeking restitution from the WTU officers brought by the AFT on behalf of the members of the WTU. That lawsuit is the direct result of complaints from WTU members to the AFT in July 2002, after there had been an excess dues payroll deduction by the WTU. Immediately upon receiving the complaints, the AFT conducted an investigation into the financial affairs of the WTU. The AFT commissioned a forensic audit of the WTU, beginning in September 2002, and determined that WTU officers had misused over $5 million of the WTU's funds. Once the audit was completed and it was clear there was sufficient grounds for bringing an action against the former officers, the AFT filed suit in January 2003. Shortly thereafter, the AFT placed the WTU in "administratorship" pursuant to the terms of the AFT Constitution, in order to correct the financial affairs of the WTU and protect the rights of WTU members. These actions demonstrate that if Saunders had approached the AFT, it would have responded to his complaints. However, because he did not exhaust his internal union remedies, he cannot now claim futility. Accordingly, Saunders does not have standing to bring his 501(b) claim.

Similarly if the Plaintiff believed that McElroy breached his fiduciary duty to the WTU members, Saunders should have petitioned the WTU to sue McElroy in order to correct the alleged breach. There is no allegation that he did so and therefore Plaintiff has no standing to sue McElroy.

F. Plaintiff Does Not Have Standing to Bring a Claim Under § 501(b) because He Did Not Seek Leave of the Court Prior to Filing the Complaint

A union member may not seek redress from the federal court under the remedial provisions of §501(b) of the LMRDA without first filing for leave of the court. 29 U.S.C. § 501(b). A complaint alleging federal jurisdiction under § 501 (b) may be filed only upon leave of the court obtained after the plaintiff has (a) filed a verified application, and (b) shown there is good cause for filing the complaint. The plain language of § 501 states that leave of the court is a mandatory condition precedent to acceptance of a complaint. Austin v. Trandell. 207 F.Supp.2d 616 at 620; George v. Local Union No. 639, 321 U.S. App. D.C. 256, 98 F.3d 1419 (1996); O'Connor v. Freyman, 121 L.R.R.M. 2387. Saunders did not obtain leave of court to file his complaint, he has not demonstrated good cause as shown earlier because AFT has performed an accounting and filed a restitution claim, and his complaint was not verified. Consequently, Saunders does not have standing to sue.

The leave of court requirement ensures that a Plaintiff brings a suit in good faith. George v. Local Union No. 639, 98 F.3d 1419. The "good cause" requirement is intended as a safeguard to the affected union against harassing and vexatious litigation brought without merit or without good faith. O'Connor v. Freeman, 121 L.R.R.M. 2387, 2390, citing Homer v. Ferron, 362 F.2d 224 (9'h Cir. 1966); Cowger v. Rohrbach, 868 F.2d 1064, 130 L.R.R.M. (BNA) 2827 (9th Cir. 1989). The O'Connor court elaborated on the good cause requirement: 

The underlying policies behind section 501 and the requirement of a showing of good cause include the supervision of union officials in the exercise of their fiduciary obligations and the protection, through a preliminary screening mechanism, of the internal operation of unions against unjustified interference and harassment. These policies are served if good cause in section 501(b) is construed to mean that plaintiff must show a reasonable likelihood of success and, with regard to any material facts he alleges, must have a reasonable ground for belief in their existence.

121 L.R.R.M. 2387, 2391. It follows then in the context of Section 501(b) that if the defendant can establish that the Plaintiff has failed to satisfy a condition precedent prior to filing suit, then the Plaintiff will not have satisfied the good cause standard. George v. Local Union No., 639, 98 F.3d 1419 quoting Rohrbach, 868 F.2d 1064.

In the present case, the Plaintiff failed to comply with the mandatory prerequisites of §501(b) of the LMRDA prior to filing suit. First, Saunders' Complaint makes no allegation that he requested the AFT or WTU file suit or secure an accounting; second, neither Plaintiff's Complaint or First Amended Complaint was brought "upon leave of the court obtained upon verified application and for good cause shown;" therefore, Counts II, VIII-XII and XIV-XVIII in the First Amended Complaint must be dismissed.

II. THE PLAINTIFF'S BREACH OF CONTRACT CLAIMS IN COUNTS IV, VI, AND VII MUST FAIL UNDER § 301 OF THE LMRA FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED, LACK OF STANDING AND LACK OF SUBJECT MATTER JURISDICTION

Plaintiff is asserting that an alleged breach of the AFT's Constitution violated the Labor Management Relations Act ("LMRA").¹² The Supreme Court has recognized that breach of an international union's constitution can form the basis for an action under Section 301 of the LMRA. United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, AFL-CIO et al v. Local 334, United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, 452 U.S. 615, 101 S., Ct. 2546 (1981) (holding that individual member may bring a claim in federal court for breach of contract against his local union only if the alleged breach violates a contract between two labor organizations); Wooddell v. International Brotherhood of Electrical Workers, 502 U.S. 93, 112 S. Ct. 494 (1991) (holding that a member may bring suit against his local under § 301 when the breach of contract is based on the local's breach of the international's constitution). In this case, however, there is no cause of action because the AFT has not ratified, instigated, supported, or encouraged the wrongful acts by the former WTU president, treasurer, and assistant to the president which caused the injury complained of.

As described more fully below, the Court must dismiss Counts IV, VI and VII against the Defendants because Plaintiff has failed to state a claim for which relief may be granted, the Plaintiff does not have standing to bring a Section 301 claim, and the Court lack's subject matter jurisdiction over Plaintiff's claims.

A. Plaintiffs Allegations in Counts VI and VII Require Interpretation of a Labor Contract, and thus, are Preempted by § 301 of the LMRA

To the extent that Plaintiff's First Amended Complaint alleges common law breach of contract, fiduciary breach and negligence based on the AFT Constitution, such claims are preempted by federal law and the Court must resolve this dispute applying the law developed under Section 301 of the LMRA. See, Allis-Chalmers Corp. v. Lueck, 471 U.S. 202 (1985) ("[W]hen resolution of a state-law claim is substantially dependent upon analysis of the terms of an agreement made between the parties in a labor contract, that claim must either be treated as a § 301 claim or dismissed as preempted. . ."); Livadas v. Bradshaw, 512 U.S. 107 (1994); Avco Corp. v. Aero Lode No. 735, 390 U.S. 557 (1968). When those cases are read in conjunction with Wooddell, 502 U.S. 93, it follows that any claim that depends upon the interpretation and application of a contract between statutory labor organizations-here the AFT Constitutionshould be preempted by § 301. See Wall v. Construction & General Laborers' Union. Local 230, 224 F.3d 168, 178 (2d Cir. 2000) (citations omitted) (holding state law claims arising out of union's refusal to readmit union members preempted by § 301); see also Panczykowski v. Laborers' International Union of North America, 2 Fed.Appx. 157, 160 (2d Cir. 2001) (holding union members' state law claims for defamation against union preempted by Section 301, where claims was based on the terms of the union constitution); Local Unions 20 v. United Brotherhood of Carpenters and Joiners of America, 223 F.Supp.2d 491, 499 (S.D.N.Y. 2002) (Preemption clearly applies to the present plaintiffs' claims of unconscionability to the extent those claims are based solely upon the UCC or the common law because plaintiffs challenged the validity of the national union's Constitution itself). Consequently, Counts VI and VII of Plaintiff's Complaint are preempted by Section 301 and must be dismissed.¹³

B. The AFT's Constitution Does Not Obligate the AFT to Audit Local Affiliates; Therefore Failure to Conduct Such an Audit is not a Breach of the AFT Constitution

Count IV alleges breach of the AFT Constitution. Although the AFT Constitution requires local affiliates to conduct an audit, on its face it does not require the AFT to review that audit or to conduct an unprovoked investigation of an affiliate's finances. An examination of the language of the AFT Constitution's language creates no duty beyond acting as a depository for the local affiliates' audits. Article IV, Section 6 of the AFT's Constitution places an affirmative duty upon the local federation to either convene a committee of three members to conduct an internal financial review or to contract for an outside audit to be performed. AFT Const. Art. IV § 6. Article IV § 6 also states that the audit which the local performs must be provided to the members with a copy to the AFT. Id. It is clear from this language that the AFT is not required to take any actions with the audits, and a court should not impose such a requirement where it is not explicitly stated. Brenner v. Local 514. United Brotherhood of Carpenters, 927 F.2d 1283, 136 L.R.R.M. (BNA) 2841 (3rd Cir. 1991) (holding that retention of regulatory and supervisory powers by international union in its constitution merely gives a discretionary right, as distinguished from a duty, to intervene in the affairs of a local union) citing Carbon Fuel v. United Mine Workers of America, 444 U.S. 218-22, 100 S. Ct. at 414-16, (1979). 

One case addressing the duty of an international union concerning the submission of financial reports by an affiliate organization is particularly analogous. In Intercity Maintenance Co. v. Local 254 Service Employees Intern. Union, 62 F. Supp. 2d 483 (D. R.I. 1999), an employer brought an action against a local union and its officials as well as the international union, alleging damage to its business from improper secondary boycotting orchestrated by the local during an organizing campaign. 62 F. Supp.2d at 483. Upon the defendant international union's motion for summary judgment, the district court held that the international union could not be held liable for alleged improper secondary activity by the local union. The employer attempted to impose liability on the international by pointing to a financial contribution for organizing that was granted by the international to the local union, and arguing that because of the grant the international was responsible for overseeing how that money was used. The court rejected this theory stating that "although the International requested the most basic of periodic reports on the use of the funds... An agency relationship may not be constructed on the basis of mere `normal union functions' such as reporting general activities to an affiliate." Intercity Maintenance Co., 62 F.Supp.2d at 498; See also Federal Prescription Serv., Inc. v. Amalgamated Meat Cutters, 527 F.2d 269, 276-77, 91 L.R.R.M. (BNA) 2091, 2098-2099 (8th Cir.1975) (involving reporting between a local and an international union).

Because there was no affirmative duty to intervene in the day-to-day affairs of the WTU, there is no breach of contract claim. Furthermore, the AFT Constitution does not create an affirmative duty on the part of the AFT to perform a financial audit even if the local chapter does not comply with the terms of the Constitution. Saunders overlooks the requirement that the WTU must provide members with a copy of the local audit. Saunders has not alleged that any member of the WTU complained to the AFT that they did not receive a copy of the WTU's audit or of any other financial irregularity at WTU. When the AFT was advised of an overcharge of dues in July 2002, the AFT immediately investigated the WTU, secured an accounting and, once it learned the nature and extent of the embezzlement, filed suit for restitution on behalf of the members of the WTU.

The Plaintiff has masked purely legal conclusions as factual allegations in the First Amended Complaint. Specifically, the Plaintiff has concluded, based solely on the fact that the AFT Constitution required the WTU to provide AFT a copy of the audit it was to perform for its members, that the AFT owed the WTU members a duty (Complaint, ¶¶ 241, 267) and concluded that there has been a breach of that duty (Complaint, ¶¶ 247, 269). As demonstrated above, the court should not accept these legal conclusions as true and should grant Defendants' Motion to Dismiss with respect to Count IV. 

C. In the Absence of a Duty to Act, the AFT is not Liable for the Financial Malpractice by Bullock, Baxter and Hemphill because the AFT Never Ratified their Actions

Common law agency theory governs an international union's liability for the unlawful actions of its local chapters or their officers. Carbon Fuel Co. v. United Mine Workers of America, 444 U.S. 212 (1979); Phelan v. Local 305 of United Ass'n of Journeymen, and Apprentices of Plumbing and Presetting Industry of U.S. and Canada, 973 F.2d 1050 (2nd Cir. 1992); Brenner v. Local 514, United Brotherhood of Carpenters, 927 F.2d 1283 (3rd Cir. 1991). Accordingly, an international union cannot be held liable on agency theory, as a matter of law, absent evidence that either the international instigated, supported, ratified or encouraged the local's activity, or that the local acted pursuant to agreement with the international. Carbon Fuel Co., 100 S. Ct. 410. An unbroken line of decisions establishes that Courts routinely reject claims against international unions where the complaining party fails to demonstrate that the international union participated in the alleged wrongful activity. Laughon v. International Alliance of Theatrical Stage Employees, Moving Picture Technicians, Artists & Allied Crafts of the United Sates and Canada, 248 F.3d 931 (9th Cir. 2001) (unsuccessful applicant for union membership who alleged her rejection was due to sex discrimination failed to establish liability of the international union, based on contention that the international had actual notice of local's discriminatory activity, and that its failure to investigate was tacit ratification of the conduct); Phelan, 973 F. 2d 1050 (International union was not shown to have participated in, ratified or encouraged alleged scheme to suppress dissent, precluding imposition of liability of international); Shiman v. Frank, 625 F.2d 80 (6h Cir. 1980) (holding that an international that does not authorize, encourage or ratify violations of the LMRDA should not be held liable for them). See EEOC v. Regency Architectural Metals Corp., 896 F. Supp. 260, 82 Fair Empl. Prac. Case. (BNA) 331 (D. Conn. 1995) (International union was not vicariously liable for local union's violation of Title VII in failing to assert female member's colorable sex discrimination grievance against employer; there was no evidence to establish agency relationship, international agent did not generally control actions of its locals).

Similarly, an international union has no independent duty to intervene in the day-to-day affairs of its local chapters, even where the international has knowledge of the local's unlawful acts. Carbon Fuel, 100 S. Ct. 410; Phelan, 973 F.2d 1050; Laughon, 248 F. 3d 931; Brenner, 927 F.2d 1283. In Brenner, the Plaintiffs argued that the international union's failure to "step in" constituted instigation, support, ratification, or encouragement of the alleged discriminatory behavior, and alternatively, that the international union's constitution created a duty to intervene. The Third Circuit, citing Carbon Fuel, 100 S. Ct. 410 at 414-15, stated "'In the face of Congress' clear statement of the limits of an international union's legal responsibility for the acts of one of its local unions, it would be anomalous to hold that an international is nonetheless liable for its failure to take certain steps in response to actions of the local.'" Brenner, 927 F.2d 1283, 1289. Appropriately, the Third Circuit held, in a conclusion that is equally applicable to the instance situation, that:

Imposing upon an international union the legal obligation to protect local union members from allegedly abusive tactics by local officers could alter the delicate balance between local unions and their internationals, to the sacrifice of local union independence.

Saunders allegations regarding the AFT's duty and tacit authorization of the financial malpractice at the WTU are similar to the allegation in Laughon, on, 248 F. 3d 931. In that case, an unsuccessful female applicant for union membership alleged that her rejection from work was due to sex discrimination and retaliation by the local union. Laughon, heron, 248 F. 3d 931. The Plaintiff alleged that she sent a letter to the IATSE president complaining of her inability to find work with the local. In addition, the Plaintiff also alleged that she had several discussions over a two-year period with the International organizer and one conversation with the IATSE President about her difficulties joining the local and about an incident in which a local member sexually harassed her on the job. Id. at 936. In spite of her communications with the international, the court held that the plaintiff failed to establish the liability of the international union because she failed to establish an agency relationship between the international and the local or "clear proof" that the international participated in the alleged unlawful acts before the court. Laughon, 248 F.3d at 937. As in Laughon, the court should dismiss Saunders claims because his allegations of breach and negligence do not establish ratification of the financial malpractice by the former WTU president, treasurer and assistant to the president.

Plaintiff has not alleged that the AFT ratified the conspiratorial acts of the ex-officers of the WTU. The Plaintiff does not allege that the AFT was aware of the conspirator's actions, much less evidence that the AFT had the intention to ratify their illegal acts. The AFT made no warranties or promises to the members of the WTU to perform an audit of the WTU, and there are no such allegations in the Amended Complaint. The AFT has no affirmative duty, created by its constitution, to act in the fiscal management of a local. Consequently, the AFT did not breach its constitution and the Court must dismiss Count IV for failure to state a claim upon which relief must be granted.

D. The Plaintiffs Claim in Count IV Must Fail Under § 301 Of the LMRA because of Saunders' Failure to Exhaust Administrative Remedies

The court does not have jurisdiction to address Plaintiff's Section 301 claim because Saunders has not satisfied the statutory prerequisite of exhausting union remedies. The exhaustion of union remedies is a prerequisite to a § 301 action by an employee against an employer for breach of contract. Vaca v. Sipes, 386 U.S. 171, 87 S. Ct. 903 (1967). The Supreme Court has long held that prior to commencing an action for breach of labor contract, "employees wishing to assert contract grievances must attempt to use the contract grievance procedure agreed upon by the employer and the union as the mode of redress." Republic Steel Corp. v. Maddox, 379 U.S. 650, 85 S. Ct. 614 (1965). The Supreme Court in Republic Steel further explained that the employee must afford the union an opportunity to act on his behalf. Id. In this case, Saunders never afforded the WTU an opportunity to act on his behalf and went directly to the court, therefore, his Count IV must fail for failure to exhaust his internal union remedies.

E. The Federal Court Cannot Exercise Subject Matter Jurisdiction over Count IV of Saunders' Complaint where the Alleged Breach of the AFT Constitution is Not a Threat to Labor Peace

Jurisdictional provisions of federal statutes are strictly construed. United States v. Alcea Band of Tillamonks, 329 U.S. 40, 67 S. Ct. 167 (1946). Since §301 extends federal jurisdiction over union matters, the federal court should narrowly construe the scope of subject matter jurisdiction under §301. Hardin v. City Title Escrow Co. 254 U.S. App. D.C. 370, 374, 797 F.2d 1037, 1040 (1986).

There is a longstanding federal policy of noninterference in the internal affairs of union and labor matters. See Wirtz v. Local 153 Glass Bottle Blowers Ass'n of United States and Canada, 389 U.S. 463, 470-71 n.10, 88 S. Ct. 643, 670-671 (1968). Furthermore, there is a line of cases holding that union breach of contract claims pertaining only to internal union matters do not fall within the purview of §301. Trail v. Int'l Bhd. of Teamsters, 542 F.2d 961, 93 L.R.R.M. (BNA) 3076 (6th Cir. 1976); Smith v. United Mine Workers, 493 F.2d 1241, 85 L.R.R.M. (BNA) 2941 (10th Cir. 1974); 1199 DC, National Union of Hospital and Health Care Employees v. National Union of Hospital and Health Care Employees, 394 F. Supp. 189, 89 L.R.R.M. (BNA) 2322, (D.D.C. 1975) A union constitution is not a contract for purposes of Section 301 when the breach involves an intra-union dispute unrelated to a collective bargaining agreement ("CBA") or to union affairs having no connection with industrial or economic peace between labor and management. 1199 DC, 394 F. Supp. 189 (D.D.C. 1975); Parks v. Int'1 Bhd. Of Electrical Workers, 314 F.2d 866 (4th Cir. 1963), cert. denied, 372 U.S. 976 (1963). 1199 DC involved an allegation by members of a local affiliate that the national union had violated the union constitution by merging them into another local affiliate. Id. at 189. The court affirmed the lower court's dismissal of the § 301 claim because that allegation was limited to an "intra-union conflict." 1199 DC, 394 F. Supp. at 192. See also, Babb v. United Food and Commercial Workers Dist. Union Local 271, 233 Neb. 826, 448 N.W.2d 168 (1989); Keck v. Employees Independent Ass'n, 88 L.R.R.M. (BNA) 2355, 387 F. Supp. 241 (D. Pa. 1974) (holding that federal court jurisdiction does not exist under §301 in suits where the cause of action was intended to enforce internal union customs and practices).

In this instance, the AFT has placed the WTU in administratorship, the WTU's collective bargaining agreements remain in place, the WTU members continue to teach in the D.C. Public Schools and no discernable threat to labor peace exists. Plaintiff's claim of a breach of the AFT's Constitution is simply a matter of internal union affairs, and courts are hesitant to interfere in such matters. Accordingly, the Court should refuse to entertain Count IV of Saunders' First Amended Complaint against the AFT.¹⁴

III. PLAINTIFF'S DEMAND TO REVIEW AFT RECORDS IN COUNT V SHOULD BE DISMISSED FOR SAUNDERS' FAILURE TO EXHAUST REMEDIES

Plaintiff, in Count V, alleges that he is "entitled to review any books, records, and accounts necessary to verify WTU's financial reports filed with the Board of Labor. . ." First Amended Complaint, ¶256. Plaintiff claims that he is entitled to review the records pursuant to 29 U.S. C. §431(c) which provides,

Every labor organization required to submit a report under this subchapter shall make available the information required to be contained in such report to all of its members, and every such labor organization and its officers shall be under a duty enforceable at the suit of any member of such organization in any State court of competent jurisdiction or in the district court of the United States for the district in which such labor organization maintains its principal office, to permit such member for just cause to examine any books, records, and accounts necessary to verify such report. The court in such action may, in its discretion, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney's fee to be paid by the defendant, and costs of the action.

Under section 101(a)(4) of the LMRDA, 29 U.S.C. § 411(a)(4), plaintiffs have an obligation to exhaust reasonable union hearing procedures before litigating the issue in open court. Pierce v. Bahr, No. 96-0680, 1996 U.S. Dist. Lexis 6488 (D. D.C. 1996). The exhaustion requirement serves two functions: (1) it prevents unnecessary judicial intrusion into internal union affairs, and (2) it allows a court, once it becomes involved, to benefit from the union's internal development of the issues. Id.; Winter v. Local 639. Int'l Bhd. of Teamsters, 186 U.S. App. D.C. 315, 569 F.2d 146, 148 (D.C. Cir. 1977). Courts have traditionally enjoyed broad discretion to dismiss LMRDA complaints filed by plaintiffs that have failed to exhaust available internal union remedies. Pierce v. Bahr citing NLRB v. Industrial Union of Marine & Shipbuilding Workers, 391 U.S. 418, 426, 20 L. Ed. 2d 706, 88 S. Ct. 1717 (1968).

The First Amended Complaint fails to allege that Saunders has exhausted internal union procedures in an attempt to review the books and records of the WTU. In fact, Plaintiff fails to allege that to date he has asked either the WTU or the AFT to produce the WTU's financial records for his review. Nor does Saunders allege that either the WTU or the AFT has in any way constrained the Plaintiff's right to inspect WTU records. At a minimum, Saunders must give the WTU or the AFT on opportunity to grant him appropriate relief prior to his going to court. See Pierce v. Bahr, No. 96-0680, 1996 U.S. Dist. Lexis 6488 at *16 (stating that it is plainly impermissible for plaintiffs to ignore intra-union avenues of resolution, particularly when the relief offered by the union is nearly identical to the relief sought by plaintiffs in federal court). Consequently, the Court should dismiss Count V. 

IV. PLAINTIFF DOES NOT HAVE AN INDEPENDENT RIGHT OF ACTION UNDER 29 U.S.C. § 411(A)(4)

A. Plaintiff Does Not Have a Cause of Action Under 29 U.S.C. § 411(a)(4) because Plaintiffs Right to Sue Has Not Been Restricted

Saunders alleges standing to bring his claims pursuant to 29 U.S.C. § 411 for violation of his rights. Complaint ¶38. However, a union member has a cause of action under Section 101(a)(4) of the LMRDA when the individual's right to sue has been restricted. 29 U.S.C. § 411(a)(4);¹⁵ Ross v. Int'1 Bhd. Of Electrical Workers, 544 F.2d 1022, 93 L.R.R.M. (BNA) 2731 (9th Cir. 1976); Glasser v. American Federation of Musician, 354 F. Supp. 1, (S.D.N.Y. 1973). Under 101(a)(4), a union is prohibited from restricting a member's right to initiate any type of litigation, subject to the qualification that a member be required to exhaust reasonable internal procedures. Glasser, 354 F. Supp. 1; Pawlak v. Greenawalt, 477 F. Supp. 149 (M. D. Pa. 1979). Therefore, a union that fines or otherwise disciplines a member for initiating an action is guilty of violating 29 U.S.C. § 411(a)(4). Ross v. Int'1 Bhd. of Electrical Workers, 544 F.2d 1022 93 L.R.R.M. (BNA) 2731 (disciplinary action); Phillips v. Int'l. Ass'n. of Bridge, Structural Workers, 556 F.2d 939, 95 L.R.R.M. (BNA) 2875 (9th Cir. 1977) (retaliatory lawsuit). Saunders has failed to allege any facts that would trigger the provisions of Section 411 and thus, this provision provides no independent basis for his lawsuit.¹⁶

B. Plaintiff Does Not Have Standing Under Section 101(a)(4) of the LMRDA because He Failed to Exhaust Internal Administrative Remedies

Assuming, solely for the sake of argument, that Saunders has an action for violation of Section 101(a)(4), Plaintiffs claims should be dismissed for failure to exhaust all internal union remedies prior to filing suit. One of the primary purposes of the exhaustion requirement is to foster union self-regulation; consequently, exhaustion of intra-union remedies before intervention by federal courts is most absolute where complaints allege wrongdoing regarding internal union affairs. Bise v. International Broth. of Elec. Workers, AFL-CIO Local 1969, 618 F.2d 1299, 102 L.R.R.M. (BNA) 2619 (9th Cir. 1979), cert. denied, 101 S. Ct. 279, 449 U.S. 904, 66 L.Ed.2d 136. Prior to filing his suit, WTU member Saunders failed to exhaust intra-union remedies provided by the AFT Constitution, which provides an adequate response to financial wrongdoing by Local Union officers. Saunders' Complaint fails to allege any attempt (by him or other members aligned with him) to petition the AFT to investigate the WTU and there is nothing in the record indicating that such an attempt was made. Additionally, Plaintiff does not allege that the AFT denied him or other local members access to this internal administrative remedy (on the contrary, the facts indicate that the AFT immediately responded to complaints by WTU members that there was a dues overpayment to the WTU). Plaintiff's failure to exhaust intra-union remedies prior to filing his claim against the AFT, therefore, requires the court to find that Saunders does not have standing to bring an action under Section 101(a)(4) of the LMRDA.

V. PLAINTIFF DOES NOT HAVE STANDING TO BRING A DERIVATIVE ACTION UNDER RULE 23.1 BECAUSE HE IS NOT REPRESENTATIVE OF THE WTU MEMBERSHIP AND HE FAILED TO MAKE A DEMAND THAT THE AFT REMEDY INTERNAL PROBLEMS WITHIN THE AFT PRIOR TO FILING SUIT

In order to have standing to bring a derivative action against an unincorporated association under Fed. R. Civ. P. 23.1,¹⁷ the Plaintiff must fairly and adequately represent similarly situated members of the unincorporated association and prove it would have been futile for the Plaintiff to make a demand for relief to the appropriate authority within the association. Levant v. Whitley, 755 A.2d 1036 (App. D.C. 2000). An essential element of a derivative action that the member must prove is, prior to filing suit, is that the member tried to convince the directors, or Board, to remedy the wrong or why the Plaintiff failed to make the effort. Id. The precondition of bringing a demand upon the board prior to filing suit is codified by Fed. R. Civ. P. Rule 23.1.¹⁸

In bringing a derivative suit the member acts as the corporate surrogate seeking vindication of a corporate right. In order to determine whether the Plaintiff represents the interests of all the members similarly situated the Court regards factors such as economic antagonism and the use of a derivative action as "leverage in a [associational] struggle." Whitley 755 A.2d 1036 (App. D.C. 2000) quoting Moore's Federal Practice §23.1.09 (3d. ed. 2000). In determining whether the plaintiff can adequately represent members for purposes of member's derivative suit, the Court considers whether there are outside entanglements making it likely that the interest of other members will be disregarded in the management of the suit. Fed. R. Civ. P. 23.1; Davis v. Comed, Inc, 105 L.R.R.M. (BNA) 2363, 619 F.2d 588 (6th Cir. 1980).

Based on the statements of Counsel for other WTU members who have sought to intervene in this action, Saunders does not appear to be a fair and adequate representative for the members of the WTU for the purposes of this suit. See C.A. No. 02-2536 (EGS), Transcript of Status Hearing, p. 8, lines 7-16; p. 13, lines 2-4 (March 10, 2003). Attorney Mark Hanna, who indicated that he represents over 200 teachers who support the AFT trusteeship, stated on behalf of his clients, "Mr. Saunders represents a previous regime or what tried to be a regime of the WTU. His interests do not coincide with the teachers' interests who want to continue the AFT's takeover, because they don't want the Court or another group to become involved in the internal process." Id. at p. 8, lines 7-I 1. Attorney Lucy Edwards, who represents another group of WTU members similarly stated, "some of the persons in the group with Mrs. Currie have expressed a concern that Mr. Saunders does represent the previous political regime." Id. at p. 13, lines 2-4. Attorney Edwards further testified with respect to her clients, "[i]n terms of adequacy of Mr. Saunders being able to handle their issues or interests, there are some individuals who have spoken out about that." Id. at p. 13, lines 22-24.

In light of the views expressed by Counsel for several hundred WTU members, Saunders does not appear to be representative of the class of WTU members affected by this lawsuit and the Court should dismiss the Plaintiff s claims.¹⁹

In addition, Plaintiff is barred from bringing this action as a derivative suit because he failed to exhaust his internal union remedies, which is a condition precedent for a member filing a claim against a voluntary unincorporated association. Whitley, 755 A.2d 1036 (D.C. App. 2000); Pierce v. Bahr, No. 96-0680, 1996 U.S. Dist. Lexis 6488 at *15 (stating that for the same reason that Plaintiff's LMRDA was defective, namely failure to exhaust, Plaintiffs derivative action would fail). For the reasons thoroughly explained in earlier parts of this Memorandum, it is clear that Saunders failed to exhaust his internal remedies before filing his action, and therefore, his claim of representative status should be rejected and his claims dismissed.

VI. CONCLUSION

For the reasons stated above, the Court should dismiss Counts II, IV, V, VI, and VII against the AFT and McElroy, and Counts VIII-XII and XIV-XVIII, which duplicate the AFT's restitution action currently before this Court.

Respectfully submitted,

David J. Strom (D.C. Bar No. 376233)
Daniel J. McNeil (D.C. Bar No. (455712)
American Federation of Teachers
555 New Jersey Avenue, N.W.
Washington, DC 20001
Telephone: (202) 393-7472
Facsimile: (202) 393-6385

James M. Cole (D.C. Bar No. 385837)
BRYAN CAVE LLP
700 Thirteenth Street, N.W., Suite 700
Washington, DC 20005-3960
Telephone: (202) 508-6000
Facsimile: (202) 508-6200
ATTORNEYS FOR AFT AND EDWARD J. MCELROY

March 21, 2003

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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

NATHAN A. SAUNDERS, Plaintiff,
v.
ESTHER HANKERSON, et al., Defendants.

Civ. Action No. 02-2536 (EGS)

ORDER

Upon consideration of the Motion to Dismiss submitted by Defendants American Federation of Teachers and Edward J. McElroy, Plaintiffs opposition and Defendants' reply thereto, and the Court having concluded that Plaintiff has failed to state a claim upon which relief may be granted, Plaintiff does not have standing to bring his claims, and the Court lacks jurisdiction over the subject matter of the lawsuit, it is by the Court, pursuant to Fed. R. Civ. P. 12(b)(1) and (6), this _______ day of ______, 2003. 

ORDERED,

1. that Defendants' Motion to Dismiss is hereby granted; and

2. Counts II, IV, V, VI and VII of Plaintiffs First Amended Complaint as to Defendants AFT and McElroy are hereby dismissed;

3. Counts VIII-XII and XIV-XVIII of Plaintiff's First Amended Complaint are hereby dismissed.

Dated: _____

EMMET G. SULLIVAN

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FOOTNOTES

1. These local unions were: the Chicago Teachers Federation; the Chicago Federation of Men Teachers; the Chicago Federation of Women High School Teachers; the Gary, Indiana Teachers Federation; the Teachers Union of the City of New York; the Oklahoma Teachers Federation; the Scranton, Pennsylvania Teachers Association; and the High School Teachers of Washington, D.C.

2. Article IV, Section 6 provides in relevant part:

"Effective September 1, 1993, and at least every two years thereafter, each affiliated local and state federation shall convene a committee of at least three members to conduct an internal financial review according to a format to be determined by the AFT executive council, or the local or state federation shall contract for an outside audit that meets the standards of generally accepted accounting principles. Either of these reviews must be made available to its membership and provided to the national office by January 1, 1994, and at least every two years thereafter."

3. Section 501 (a) of the LRMDA provides:

The officers, agents, shop stewards, and other representatives of a labor organization occupy positions of trust in relation to such organization and its members as a group. It is, therefore, the duty of each such person, taking into account the special problems and functions of a labor organization, to hold its money and property solely for the benefit of the organization and its members and to manage, invest, and expend the same in accordance with its constitution and bylaws and any resolutions of the governing bodies adopted thereunder, to refrain from dealing with such organization as an adverse party or in behalf of an adverse party in any matter connected with his duties and from holding or acquiring any pecuniary or personal interest which conflicts with the interests of such organization, and to account to the organization for any profit received by him in whatever capacity in connection with transactions conducted by him or under his direction on behalf of the organization. A general exculpatory provision in the constitution and bylaws of such a labor organization or a general exculpatory resolution of a governing body purporting to relieve any such person of liability for breach of the duties declared by this section shall be void as against public policy."

4. Count II, at Paragraph 224(e) contains an allegation that the AFT breached its fiduciary duty to the WTU by "failing to ensure that officers of the WTU were adequately bonded." This allegation is completely without foundation because the AFT has no duty to ensure that local officers are bonded. On the contrary, Section 502(a) of the LMRDA requires the local union to obtain the bond, specifying that "[e]very officer, agent, shop steward, or other representative or employee of any labor organization. . .who handles funds or other property thereof shall be bonded to provide protection against loss by reason of acts of fraud or dishonesty on his part directly or through connivance with others. The bond of each such person. . .shall be in an amount not less than 10 per centum of the funds handled by him... Any person who is not covered by such bonds shall not be permitted to receive, handle, disburse, or otherwise exercise custody or control of the funds or other property of a labor organization or of a trust in which a labor organization is interested." 29 U.S.C. § 502(a).

5. Indeed, under Plaintiff's theory, the Department of Labor and the IRS would similarly have liability since reports are also required to be filed with these agencies and it is clear that such liability does not exist.

6. The Court may consider the AFT Constitution in this motion to dismiss because it has been incorporated and referenced in Plaintiff's First Amended Complaint. See, E.E.O.C. v. St. Francis Xavier Parochial School, 117 F.3d 621 (D.C. Cir. 1997) (stating that in deciding a motion to dismiss, court may consider facts alleged in complaint, any documents either attached to or incorporated in complaint and matters of which court may take judicial notice); Jacobsen v. Oliver, 201 F. Supp. 2d 93 (D. D.C. 2002)(same). 

7. While the AFT's administratorship over the WTU, established on January 22, 2003, has created a fiduciary relationship between the administrator and WTU members starting from that date, Plaintiff's Complaint does not allege that AFT officers breached any fiduciary duty to the WTU members after imposing the administratorship.

8. 29 U.S.C. § 501(b) reads,

When any officer, agent, shop steward, or representative of any labor organization is alleged to have violated the duties declared in subsection (a) of this section and the labor organization or its governing board or officers refuse or fail to sue or recover damages or secure an accounting or other appropriate relief within a reasonable time after being requested to do so by any member of the labor organization, such member may sue such officer, agent, shop steward, or representative in any district court of the United States or in any State court of competent jurisdiction to recover damages or secure an accounting or other appropriate relief for the benefit of the labor organization. No such proceeding shall be brought except upon leave of the court obtained upon verified application and for good cause shown, which application may be made ex parte. The trial judge may allot a reasonable part of the recovery in any action under this subsection 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."

9. In Bocchiere, the court discussed the prerequisites to filing a suit under Sections 101 and 501 (b) of the LMRDA. Plaintiff Bocchiere was originally accompanied by another plaintiff, Ganino, in his action under Section 501(b). The court summarily dismissed Ganino's claims for failure to satisfy the statutory prerequisites. The court stated that to file an action under Section 501(b), a union member must "first request action by the union and be refused and then must make an application to the court for permission to sue showing 'good cause'" Bocchiere, 1988 WL 16302 *2.

10. Plaintiff filed his pro se suit approximately two weeks before the AFT filed its restitution suit. Allowing this suit to proceed will continue to frustrate the purpose of the prerequisites of §501 of the LMRDA, which is to afford unions an opportunity to correct wrongdoing before the seeking of redress from the federal courts. In other words, before the trusteeship, Saunders could have asked the WTU to bring suit against Bullock, Baxter and Hemphill.

11. The AFT's initial complaint did not include Independence Federal Savings Bank ("IFSB") or Mr. Goosby. AFT had been in discussion with IFSB prior to Plaintiff filing his First Amended Complaint, but those discussions broke off when the Plaintiff's Complaint was filed. No request was ever made by Plaintiff to bring suit against IFSB. Similarly, Plaintiff never asked AFT to bring suit against Mr. Goosby. While AFT has not determined that Mr. Goosby is a worthwhile defendant, if Plaintiff requests that AFT bring such a suit and presents his reasoning to the AFT on that subject, AFT would be more than willing to consider his request.

12. Section 301 states that District Courts shall have jurisdiction in suits for violations of contracts between labor organizations. 29 U.S.C. § 185(a).

13. Defendants note, without conceding that Counts VI and VII are preempted by Section 301, that these claims duplicate Claim IV and, therefore, they should be dismissed for the same reasons that Count IV must be dismissed.

14. In the event that the court determines that the dispute between the Saunders and the AFT is a "labor dispute" and may be a threat to labor peace, the AFT notes that the Plaintiff has failed to satisfy the statutory procedural requirements of the Norris-LaGuardia prohibiting injunctions in labor disputes. 29 U.S.C. §§ 104, 107, 113.

16. Enforcement actions to protect a member's Title I rights are brought pursuant to 29 U.S.C. § 412, which provides: "[a]ny person whose rights secured by the provisions of this title (29 U.S.C.A §§ 411 et seq.) have been infringed by any violation of this title (29 U.S.C.A §§ 411 et seq.) may bring a civil action in a district court of the United States for such relief (including injunctions) as may be appropriate." Saunders lawsuit fails to allege district court jurisdiction pursuant to 29 U.S.C. § 412, and thus, his action must fail.

17. Plaintiff also alleged that he had standing under Fed. R. Civ. P. 23.2 but that claim must fail for the same reasons as his allegations under Fed. R. Civ. P. 23.1.

18. Fed. R. Civ. P. 23.1 reads:

Derivative Action By Shareholders: In a derivative action brought by one or more shareholders or members to enforce a right of a corporation or of an unincorporated association, the corporation or association having failed to enforce a right which may properly be asserted by it, the complaint shall be verified and shall allege, (1) that the plaintiff was a shareholder or member at the time of the transaction of which the plaintiff complains or that the plaintiffs share or membership thereafter devolved on the plaintiff by operation of law, and (2) that the action is not a collusive one to confer jurisdiction on a court of the United States which it would not otherwise have. The complaint shall also allege with particularity the efforts, if any, made by the plaintiff to obtain the action the plaintiff desires from the directors or comparable authority and, if necessary, from the shareholders or members, and the reasons for the plaintiffs failure to obtain the action or for not making the effort. The derivative action may not be maintained if it appears that the plaintiff does not fairly and adequately represent the interests of the shareholders or members similarly situated in enforcing the right of the corporation or association. The action shall not be dismissed or compromised without the approval of the court, and notice of the proposed dismissal or compromise shall be given to shareholders or members in such manner as the court directs.

19. The political nature of labor unions underscores the reason that courts are hesitant to interfere with internal union matters such as trusteeships. See Local 507. Transport Workers Union of America. AFL-CIO v. Transport Workers Union of America, 166 L.R.R.M. (BNA) 2618, 2620 (D. Mass. 2001) ("[T]here is a public interest in allowing labor organizations to practice democratic self-government ... [and] a strong public policy against a court interfering with the internal affairs of labor organizations").