hereby move for summary judgment in their favor pursuant to Rule 56 of the Federal Rules of

Civil Procedure on all claims in the Verified Complaint in this case and the Counterclaims of

defendants Bruno Caruso, John Matassa, Jr. and Leo Caruso. As grounds for this Motion,

plaintiffs state that there is no genuine issue as to any material fact and they are entitled to

judgment as a matter of law. The preliminary injunction should therefore be made permanent

and defendants' counterclaims should be dismissed with prejudice. In further support of their

Motion, plaintiffs have filed contemporaneously herewith a supporting memorandum of law.

Dated: September 4, 1998 Respectfully submitted.

2

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

LABORERS' INTERNATIONAL UNION
OF NORTH AMERICA and ROBERT BLOCH,
in his official capacity as Trustee of the
Construction & General Laborers' District
Council of Chicago and Vicinity,

BRUNO CARUSO, JOHN MATASSA, JR.,
JOSEPH LOMBARDO, JR., LEO CARUSO and the
CONSTRUCTION & GENERAL LABORERS'
DISTRICT COUNCIL OF CHICAGO AND
VICINITY, an affiliated entity of the Laborers'
International Union of North America,

Robert Bloch originally brought this case to stop LIUNA's subordinate body, the Chicago

District Council ("CDC"), and certain of its former officers, from interfering with Bloch's

lawful operation of a trusteeship imposed by the Union's Independent Hearing Officer

("IHO"). Having no defense to the interference charge, defendants have tried to forestall a

final judgment against them through a variety of failed stratagems, most of which have

involved improper attempts to re-litigate the merits of the underlying trusteeship. More

recently, defendants have resorted to burdensome discovery demands, supposedly designed to

test whether LIUNA acted in good faith and for a proper purpose, but in reality relating to no

genuine issue in the litigation.

proceeding that, with the Court's assistance, defendants have now articulated in support of

their discovery requests. Defendants' principal contention is that, because LIUNA supposedly

had no good reasons for proceeding against the CDC, it must have been acting in bad faith to

'get the government off its back." Every part of this syllogism is defective, however. As the

IHO has already found, for example, LIUNA had multiple sound reasons and overwhelming

evidence from which it could conclude that a trusteeship was necessary and proper.

how colorfully described, is not and cannot be improper in this case. The reason is that

LIUNA's agreement with the government, executed in 1995, gave the government the very

direct and immediate role in LIUNA's reform process that defendants are attacking. And,

when defendants' own lawyers challenged that agreement on "bad faith" grounds in a prior

case before Judge Zagel, the court dismissed their claims on summary judgment. In an opinion

later unanimously affirmed by the Court of Appeals, Judge Zagel expressly held that LIUNA

was not acting improperly in giving this kind of role to the government.

over the CDC is not the kind of "corruption" that provides a permissible basis for a trusteeship

under the statute. This is a novel and retrograde proposition, which, in addition to providing

no basis for defendants' discovery demands, is unsupported by any law or any decision in any

court. To the contrary, both the legislative history of the LMRDA and the case law arising

under it confirm that organized crime influence and involvement in Union affairs is exactly the

kind of corruption the LMRDA was adopted to root out.

2

exclusively on the existence of corruption at the CDC, the IHO found other independent

grounds for imposing a trusteeship, including that it was necessary to restore democratic

practices to an entity ruled undemocratically for more than 25 years. This ground was not

only indisputably proper, but so compelling as to have been described by Judge Castillo as

11 earth-shattering" in his summary of the IHO's opinion. The cases are legion that the

existence of a single legitimate ground for a trusteeship is sufficient to uphold it.

trusteeship amounts to discipline of them by LIUNA in violation of Title I of the LMRDA.

Their sole evidence - the automatic removal of all officers of the District Council - does not

even implicate Title 1, which addresses only actions that have a discriminatory impact on a

Union member's rights as a member, and not as a Union officer. Moreover, so little has

LIUNA used the trusteeship to "expel" defendants from the Union, as Matassa's counsel

insists, that Matassa himself remains an active LIUNA member and president and business

manager of his local. Indeed, he is currently using those very positions as a platform to resist

actual disciplinary charges under Title 1, which have lately been filed against Matassa and

which, if his lawyers were correct about the trusteeship action, would be totally unnecessary.

further proceedings on any of defendants' defenses or claims in this case. Plaintiffs' motion

for summary judgment should accordingly be granted and defendants' counterclaims dismissed.

3

1. LIUNA, Its Constitution And The
   Ethics And Disciplinary Procedure.

As the Court is aware, LIUNA is an international labor organization with

affiliated entities located throughout the United States and Canada. Cplt.,¶ 4.¹ Defendant

CDC is a subordinate body of LIUNA, located in Chicago, which functions as the central

representative body for 21 affiliated local unions comprising approximately 19,000 union

members. Id. at 10. Until the trusteeship at issue here, which installed plaintiff Robert Bloch

as trustee of the CDC, the individual defendants were CDC officers. Id. at 6-9. Although

now "relieved of their particular trust" at the CDC as an automatic result of the trusteeship,

each defendant remains an active Union member and an officer of a subordinate Union entity

pending the resolution of any disciplinary charges. LIUNA Const., IX, § 7. Cplt., ,¶¶ 6-9.

 

The trusteeship arose under LIUNA's Constitution, which incorporates the

Uniform District Council Constitution ("UDCC") and the Uniform Local Union Constitution

("ULUC"). Together these documents govern all of LIUNA's affiliated entities, including the

CDC. ² Article IX, Section 7 of the LIUNA Constitution, which controls the imposition of

trusteeships over LIUNA affiliates, provides, in relevant part:

 

When the General President finds, in his opinion, that action by
him is necessary for the purpose of correcting corruption or
financial malpractice, assuring the performance of collective
bargaining agreements or other duties of a bargaining
representative, restoring democratic procedures or otherwise
carrying out the legitimate objects of such subordinate body or
the International Union, or to protect the organization as an
institution, he may ... appoint a temporary trustee . . . to take
charge and control of the affairs of such subordinate body;
provided, however, that prior to the appointment of such trustee

______________________________

I All cites to the complaint are to allegations admitted by defendants in their respective answers.

2 Relevant sections of the LIUNA Constitution, the UDCC and the ULUC were filed in connection with

the preliminary injunction motion as Exhibit B. All lettered exhibits reference the exhibits filed in

connection with that motion, which plaintiffs incorporate herein by reference. Numbered exhibits have

been filed contemporaneously herewith.

4

 

or supervisor he shall cause to be issued a notice setting a time
and place for hearing for the purpose of determining whether
such temporary trustee or supervisor shall be appointed . . . .

During the period of trusteeship, all the officers of the
subordinate body are relieved of their particular trust. . . . The
subordinate body and the officers and members thereof shall
cooperate with the trustee or supervisor designated by the
General President, in order that the purposes of the trusteeship or
supervision may be accomplished as soon as possible. The
trustee or supervisor shall be authorized to take full charge of the
affairs of the subordinate body, to appoint temporary officers or
employees any time during the trusteeship or supervision, and to
take such other action as in the trustee's or supervisor*s judgment
is necessary for the preservation of the subordinate body and its
interests. . . .

LIUNA Constitution ("LIUNA Const. "), Art. IX, § 7.

These provisions track closely the language of the Labor Management Reporting

and Disclosure Act ("LMRDA"). That statute, which covers proceedings such as those in this

case, permits a union to impose a trusteeship on a variety of grounds, including "correcting

corruption" and "restoring democratic practices," as reflected in the LIUNA Constitution. In

addition, the LMRDA permits a union, in open-ended fashion, to impose a trusteeship for the

purpose of "otherwise carrying out the legitimate objects" of the union. 29 U.S.C. § 462

(West 1998).

Approximately three and one half years ago, the LIUNA General Executive

Board ("GEB") amended the LIUNA Constitution to add a new Ethics and Disciplinary

Procedure ("EDP") and Ethical Practices Code ("EPC"). See Exhibit C. These amendments

had as their goal, among other things, the creation of independent offices within the Union

dedicated to eradicating mob influence over the Union and stopping LIUNA subordinate

entities, officials, members and employees from engaging in a wide range of improper, corrupt

and unlawful practices. Id. As part of this effort, the EDP re-assigned all authority to initiate

trusteeship actions, as set forth in Article IX, Section 7 of the LIUNA Constitution, from

RES.LBOR05.SJN1-1.dOC

5

 

LIUNA's General President to a new independent prosecuting official, LIUNA's so-called

GEB Attorney. Id., EDP, § 3. In addition, the Union established the office of the IHO to

preside over and decide such trusteeship actions, along with other cases brought by the GEB

Attorney. Id., EDP, § 5.

Several weeks after the adoption of the EDP and EPC. LIUNA entered into an

agreement with the United States providing for strict government oversight of and assistance to

the Union's internal reform process. Among other things, LIUNA agreed that, if the

government were ever dissatisfied with LIUNA's progress in eradicating mob influence, it

could, after 90 days, impose a consent decree giving it ftill control over the Union's

operations. See Exhibit D. As such, the arrangement anticipated close, detailed scrutiny of

LIUNA's operations by Department of Justice officials to ensure that the Union vigorously

pursued the eradication of organized crime in a manner acceptable to the government.

Immediately after the LIUNA/government agreement, a group of LIUNA

officials and LIUNA-affiliated entities from Chicago and elsewhere -- in some cases

represented by the same counsel that has appeared for the CDC here -- brought suits in federal

court challenging the legality of the EDP and the LIUNA/government agreement. In these

suits, including three filed in the Northern District of Illinois, plaintiffs insisted that all aspects

of the EDP and EPC, and the agreement with the government, were improperly adopted in

violation of the LMRA and LMRDA. Among other things, these entities contended that these

various codes and the LIUNA/government agreement were entered into in bad faith, in part to

"get the government off LIUNA's back."

In all these cases, the courts awarded summary judgment in favor of LIUNA.

See Caivano v. LIUNA, CA No. 95-268 (D.D.C. May 3, 1995) (Sullivan, J.); Serpico v.

LIUNA et al., Case Nos. 95C-614, 95C-1573, 95C-1725 (N.D. 111. Jan. 30, 1996) (Zagel, J.),

aff'd, 97 F.3d 955 (7th Cir. 1996). (The Serpico opinion is Exhibit E). In perhaps the most

comprehensive of these rulings, Judge Zagel specifically ruled in Serpico that there was and

RES.LBOR05.SJM-1.doc

6

 

could be no finding of bad faith with respect to the action LIUNA took. This included

amending its constitution in reaction to government pressure and agreeing to subject itself to

the kind of exacting scrutiny represented by the LIUNA/government agreement. Exhibit E, p.

8. The Seventh Circuit subsequently affirmed this conclusion in all respects. Serpico

LIUNA, et al., 97 F.3d 955 (7^th Cir. 1996).

 

As a result, the EPC, EDP and the LIUNA/government agreement now form a

proper part of the law governing the Union's relations with its members. The LIUNA

Constitution sets forth the rights and obligations of Union members in the face of proceedings

under these provisions. Among other things, Union officers and members have a duty to

comply with -- and/or refrain from interfering with -- orders from the International such as the

current order imposing the trusteeship over the CDC. See LIUNA Const., Arts. II, IX and

XVIII; UDCC, Art. 111; ULUC Art. 111. If a Union officer or member fails to meet any of

these obligations, he or she commits a violation of the Union's Constitution.

2. The Trusteeship Proceedings
   AndThe 1110's Opinion And Order.

the CDC in accordance with Section 3 of the EDP, as well as Article IX, Section 7 of the

LIUNA Constitution and Title III of the LMRDA, 29 U.S.C. § 461 et seq. The GEB Attorney

took this action after an extensive investigation of the CDC undertaken in consultation with the

Inspector General, another of LIUNA's new independent officers. The Trusteeship Complaint

alleged that "for at least the past twenty-five years, the leadership of the Chicago District

Council has had strong, discernable ties to the leadership of organized crime in Chicago" and

that a trusteeship was necessary to eradicate organized crime corruption, to end undemocratic

practices at the CDC and to curb financial malpractice.3 Members of the CDC were notified

_____________________________

3 Complaint for Trusteeship, In re: Trusteeship Proceedings Chicago District Council, Exhibit F, p. 1.

Additional specific allegations in the Complaint provided the CDC with further notice of the grounds

for the trusteeship.

7

that they would be given an opportunity to attend and participate in a trusteeship hearing before

the IHO ^{. 4}

trusteeship proceedings. Cplt., ,¶ ¶18-21. It had ample opportunity to do so. Before the

hearing, the GEB Attorney's Office provided the CDC with witness and exhibit lists as

required by the EDP, and provided copies of the majority of the GEB Attorney's exhibits,

despite having no obligation to do so. , Id. Thirty days after the filing of the Complaint. the

trusteeship hearing commenced. Forty-five witnesses testified under oath. approximately 200

exhibits were introduced and over 4,500 pages of transcript were generated during 19 days of
hearings⁵ . The CDC received numerous continuances during the presentation of evidence,

gaining extra time to prepare for the cross-examination of the GEB Attorney's witnesses and

for the presentation of its own case. Id.

briefs for the IHO's consideration. On February 7, 1998, the IHO issued a considered, 91

page Order and Memorandum ruling that a trusteeship over the CDC was necessary ⁶ In part

the IHO found:

1. "The GEB Attorney has proved by a preponderance of the evidence that
   members of the District Council have been and currently are associates
   of the Chicago Outfit, and that association has had a direct and indirect
   effect on the operation of the District Council";
2. "The GEB Attorney has proved by a preponderance of the evidence that,
   as a result of the influence of the Chicago Outfit, there has been and
   there is a failure of democratic process in the District Council";
3. "The Chicago Outfit has selected officers on the District Council,
   ensuring that certain individuals remain in the District Council to
   maintain the Chicago Outfit's control over LIUNA's labor jurisdiction"

_______________________________

4 Copies of the Notice Letter to officers and delegates of the CDC are Exhibit G.

5 The Transcript of Trusteeship Proceedings is Exhibit H. Transcripts of the hearings were provided to

the CDC's counsel, and made available to the delegates, during the proceedings.

6 The IHO's Order is Exhibit A.

RES.LB0R05.SJM-1.doc

8

 

4. "The GEB Attorney has proved by a preponderance of the evidence that
   the District Council has appointed individuals associated with the
   Chicago Outfit as trustees to the affiliated benefit funds": and
5. "The GEB Attorney has proved by a preponderance of the evidence that
   District Council delegates and officers have failed to take steps to
   investigate positive allegations of organized crime influence and
   violations of law by its officers and members."

Exhibit A. According to the IHO, these findings justified a trusteeship on at least two different

grounds. These were the existence of organized crime corruption and a failure of democratic

practices. Particularly interesting in light of defendants' unsupported claim of bad faith is that

the IHO found against LIUNA on the question of financial malpractice. A fourth new

independent officer, the Appellate Officer, subsequently issued two rulings that the lHO's

opinion is not appealable within the Union's internal Ethics and Disciplinary Procedure

because, among other things, it imposed no discipline on defendants.'

3. Defendants' Interference With The
   Performance Of The Trustee's Duties.

the CDC voted not to permit any trusteeship ordered by the IHO to take effect, but rather to

resist its imposition and thereby violate the LIUNA Constitution, until ordered by a court to

cease doing so. The CDC officers and delegates specifically authorized the District Council's

lawyers to take this action on their behalf. Defendants Bruno Caruso and John Matassa Jr.

expressly approved this proposal as members of the Executive Board and signed their names to

the resolution. They and Leo Caruso then joined the other CDC delegates in voting to pursue

this unlawful strategy.⁸

___________________________

7 The Appellate Officer Is orders in the underlying case are attached as Exhibit 1.

8 These proceedings of the CDC appear as Exhibit 2.

9

with defendant Bruno Caruso, former defendant Joseph Lombardo, Jr. and the late Sherman

Carmell, their lawyer, as representatives of the CDC and its Executive Board. Bloch Tr. 126

30. (A copy of the hearing transcript is attached as Exhibit 3). In that meeting, Mr. Carmell

reconfirmed that he spoke on behalf of defendants, together with the other Executive Board

members and all CDC delegates. Id. He further stated that, consistent with their earlier

resolution, they would persist in their refusal to allow Mr. Bloch access to the CDC or to its

relevant books and records, notwithstanding the IHO's order, until a federal judicial order was

entered enforcing the trusteeship. Id.

Constitution by failing to submit to the IHO's trusteeship order, plaintiffs commenced this

lawsuit. On February 10, 1998, after extensive oral argument, Judge Castillo entered a

temporary restraining order, recognizing the trusteeship as already in effect and barring

defendants and others acting in concert with them from interfering. Judge Castillo found that

the IHO's ruling was "well-reasoned and a very balanced approach" and "supported by the

facts." Tr. of February 10, 1998 Hearing, pp. 44-45. (A copy of the transcript of the hearing

before Judge Ruben Castillo is attached as Exhibit 4.) While plaintiffs had certainly "passed

the threshold of establishing a likelihood of succeeding in th[e] action," defendants had "not

met what the Seventh Circuit has labeled as a heavy burden of establishing the impropriety of

the trusteeship." Id. In light of these facts and the "earth-shattering" finding by the IHO of a

"failure of democratic procedures within the operation of the [CDC]," (Id. at 46) a TRO was

necessary to prevent irreparable harm to the Union, its affiliates and members.

that hearing, defendants sought to challenge the IHO's decision on the merits and on the basis

of the GEB Attorney's use of confidential sources, which had constituted a small part of the

10

evidence admitted against the CDC in the underlying trusteeship hearing. They also asserted

that the Union had acted with an improper motive. allegedly proceeding in retaliation for

defendant Bruno Caruso's decision to run against Arthur Coia for president of the Union. No

evidence of this supposed "bad faith" was offered at the hearing. At its conclusion, this Court

ruled that the terms of the temporary restraining order should continue as a preliminary

injunction.

need for an injunction to protect the trusteeship. In addition, with nearly the entire record of

the trusteeship hearings before it, the Court also ruled that "there was at least 'some evidence'

to support the IHO's decision," thereby making it immune from attack on the merits. The

IHO's reliance on hearsay and the use of confidential informants was also found not to be

improper as a matter of law. As for any other concerns, defendants had not met their burden

to show "by clear and convincing evidence that the IHO's decision . . . was imposed in bad

faith or for an unauthorized purpose." Order of April 6, 1998, p. 2. (A copy of this Order is

attached as Exhibit 5).

on the respective showings of LIUNA and the defendants, the Court expressed its view that the

matter should move expeditiously to a final resolution on the merits. Tr. of August 11, 1998

Hearing, pp. 2-3. (A copy of the transcript is attached as Exhibit 6.)

D. Defendants" Inproper Discovery Demand .

Court reiterated the guidelines for appropriate inquiry, including that it would not approve

discovery bearing on the credibility of the witnesses at the trusteeship hearing or on whether

the IHO's decision was correct or not. When defendants thereafter filed a motion to "clarify"

11

this ruling, the Court stressed again the limited character of its review and the

inappropriateness of re-litigating the IHO's decision. Tr. of April 16, 1998 Hearing, pp. 1. 6.

(A copy of the transcript is attached as Exhibit 7).

burdensome discovery, seeking again to probe the merits of the IHO's decision and the

credibility of the GEB Attorney's witnesses. They also sought discovery of virtually all of

LIUNA's contacts with the government since 1994. When plaintiffs filed a protective order

motion contesting, among other things, the relevance of the latter inquiry, the individual

defendants insisted that it related to their counterclaims.

requests are focused on seeking information which will lead him to relevant evidence" showing

that "in what they did to violate [Matassa's] rights, [plaintiffs] acted under color of federal

law." John Matassa, Jr.'s Answer to Plaintiff's Motion for Protective Order, p. 2. For its

part, the CDC tried to distance itself from this rationale. asserting instead that the information

might show that the CDC was neither the intended nor a proper target of a trusteeship action,

thereby showing "bad faith." See CDC's Memorandum in Opposition to Plaintiffs' Motion for

a Protective Order, pp. 11-12. How information about LIUNA/ government contacts might

show that the CDC was not an "intended or proper" target or how exactly this might prove bad

faith was never explained.

of discovery on such a basis. The Court acknowledged "the counterclaim contention that the

plaintiffs and counterdefendants are state actors, thus implicating various rights protected by

the U.S. Constitution." Nevertheless, it stressed that "[w]e have great difficulty in

understanding ... how an international union and a trustee can be transformed into

12

governmental actors exercising governmental power." Order of June 18, 1998. p. 1. (A copy

of the Order is attached as Exhibit 8).

solely upon the concepts of bad faith and improper purpose. " But here too the Court found

defendants' approach defective. LIUNA had and has, in the person of the IHO, a "full due

process hearing filter" that independently determined the propriety of the trusteeship in this

case. Nothing in defendants' approach to discovery or the case suggested a bad faith argument

that could vitiate such an independent determination. The Court nevertheless urged defendants

to work together with plaintiffs on the discovery genuinely relevant to this case.

they repudiated their claim "under color of federal law" and asserted that they had all along

meant to bring a claim solely under Title 1. Tr. of July 8, 1998 Hearing, pp. 30-32. (A copy

of the transcript of the hearing is attached as Exhibit 9). Next, they joined with the CDC in a

new bad faith theory, darkly suggesting that there was "an improper relationship" between the

GEB Attorney's Office and the government. They then sought and received an opportunity to

make a proffer purportedly establishing a basis for this assertion.

showed no "improper relationship" between the government and the GEB Attorney. Instead,

it consisted primarily of the same documents defendants' counsel had offered to Judge Zagel in

their unsuccessful effort to show that adoption of the EDP and the LIUNA/government

agreement was somehow undertaken in bad faith. Judge Zagel had concluded that, even if the

documents evinced a desire "to appease the DOJ," they would not show bad faith. Exhibit E,

p. 8. Nevertheless, defendants' proffer was full of insinuation and innuendo about the

13

government being "more involved" in the matter than LIUNA has admitted. How, even were

it true, such a fact would show bad faith was never explained.

The parties then met for a status conference on August 11, 1998. Trying to

make sense out of defendants' ever-changing justifications for their discovery and their case

generally, the Court summarized defendants' various positions as follows:

Exhibit 6, p. 2. Defendants expressly consented to this formulation of their position. Id. at p.2

discovery or to avoid surnmary judgment. Plaintiffs' summary judgment motion must

therefore be granted and the counterclaims dismissed.

and "the moving party is entitled to a judgment as a matter of law." Anderson v. Liberty

14

Lobb_v, Inc., 477 U.S. 242, 247 (1986), quoting Federal Rule of Civil Procedure 56(c)

(emphasis in original). A genuine issue of material fact does not exist absent "specific facts

showing that there is a genuine issue for trial". Fed.R.Civ.P. 56(e). There must be more than

"some metaphysical doubt as to the material fact" and more than the "mere existence of a

scintilla of evidence" to support the non-movant's position on those matters for which it will

have the burden of proof at trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475

U.S. 574. 586 (1986); Anderson, supra, 477 U.S. at 252. Rather, "there must be evidence on

which the jury could reasonably find for the [non-movant]. " Anderson, supra, 477 U.S. at

252.

governing law." Anderson, supra, 477 U.S. at 248. As a result, what is "material" for

purposes of this summary judgment motion is necessarily very restrictive. The Supreme Court

has repeatedly emphasized the strong federal policy in favor of judicial deference and non

interference in Union affairs. Air Wisconsin Pilots Protection Committee v. Sanderson, 909

F.2d 213, 218 (7 1h Cir. 1990), cert. denied, 498 U.S. 1085 (1991). This is particularly true

where an international has imposed a trusteeship on an affiliate. The presumption of validity

in those cases is deemed to be "very strong.- International Bhd. of Boilermakers, etc. v.

Local Lodge 714, 845 F.2d 687, 691 (7" Cir. 1988); National Ass'n of Letter Carriers, AFL

CIO v. Sombrotto, 449 F.2d 915, 918 (2d Cir. 1971).

are challenging it meet a "heavy burden- in their efforts to show the invalidity of the

trusteeship. Specifically, there must be a showing that the trusteeship decision had no evidence

to support it. Alternatively, defendants must have "clear and convincing evidence" that the

proceedings suffered from some glaring procedural defect or were not brought "in good faith

15

for a purpose allowable by [statute]." Local Lodge 714, supra, 845 F.2d at 695: See also

International Bhd. of Boilermakers v. Hardentan, 401 U.S. 23 3. 246 (197 1).

injunction barring interference with the trusteeship order unless defendants have concrete,

probative evidence from which the trier of fact could reasonably find that they have met one of

the exacting requirements imposed by statute and Supreme Court case law for upsetting a

trusteeship. Here defendants have no evidence to support the latest incarnations of their "bad

faith" and "improper purpose" theories, or any reason to believe such evidence exists. More

important, the theories themselves fail as a legal matter, leaving defendants without any issue

that could "affect the outcome of the suit under the governing law." Anderson, supra, 477

U.S. at 248- Likewise, the counterclaims of the individual defendants are based upon a

legally-false premise and must be dismissed. In sum, plaintiffs are entitled to summary

judgment in their favor on all aspects of this case.

issues in this case, the Court should note that defendants are still without any grounds to

contest the interference charge or challenge the IHO's decision on an evidentiary basis or

procedural defect. None of their three questions relates to these issues or purports to justify

discovery on such a basis. The reason is that there is no defense to the interference charge.

Nor can defendants reasonably contest that there is "some evidence" to support the IHO's

decision, as required by Supreme Court case law, or that the IHO's procedures were legally

proper.

injunctive relief in federal court for purposes of enforcing the trusteeship provisions of its

16

Constitution against a subordinate entity such as the CDC and individuals that aid and abet it.

A violation of the Constitution is a breach of contract giving rise to jurisdiction under Section

301 (a) of the Labor Management Relations Act (" LMRA "). See, e. g., International Bhd. of

Boilermakers, etc. v. Local Lodge 714, 845 F.2d 687, 691 (7th Cir. 1988); International Bhd.

of Teamsters v. Local 810, 19 F.3d 786, 790-91 (2d Cir. 1994); National Ass'n of Lefler

Carriers, AFL-CIO v. Sombrotto, 449 F.2d 915, 918 (2d Cir. 1971). Defendants' conduct

here clearly constituted such a breach. Not one, but numerous distinct provisions of the

LIUNA Constitution, the EDP and EPC obligated defendants to refrain from the conduct in

which they engaged. See, e.g., LIUNA Const., Art. IX, § 7; EDP, § 3, 5. Their admitted

actions -- refusing to recognize the binding authority of the Trusteeship Order, refusing to

acknowledge the authority of the Trustee, interfering with the performance of the Trustee's

duties, and refusing to surrender control of CDC property -- provide a complete basis for the

relief requested.

procedural footing- The Court has already held in the context of the preliminary injunction

order that there was "some evidence" to support the decision. No more is required to enter a

permanent injunction upholding the trusteeship. International Bhd. of Boilermakers v.

Hardeman, supra, 401 U.S. at 246. Similarly, the only procedural requirements the Union

had to satisfy before imposing a trusteeship under the LIUNA Constitution, the EDP and the

LMRDA are that the subordinate entity had to receive: (1) notice of charges by the GEB

Attorney at least 10 days in advance of a hearing; and (2) an opportunity to participate in a

trusteeship hearing conducted before the IHO, 29 U.S.C. § 464(c); LIUNA Const., Art. IX, §

7. This Court has already ruled, based on the comprehensive record before it, that these

requirements were met. Tr. of March 19, 1998 Hearing, pp. 3-6. (A copy of the transcript of

the hearing is attached as Exhibit 10). It has also specifically and correctly held, as a matter of

law, that the IHO was entitled to consider reliable hearsay, to refuse to require disclosure of

17

witness statements and to permit the IHO to rely on information from unidentified confidential

informants. Exhibit 5, ,¶ c. Nothing by way of argument or evidence can overcome this legal

determination.

necessarily reduces to an argument that the trusteeship action was not brought "in good faith

for a purpose allowable by [statute]." As described by the Court and agreed to by defendants

at the parties' August I I status conference, the issues are: ⁹

Exhibit 6, p. 2. It should be stressed again that defendants need to show such "bad faith" and

"unauthorized purpose" by "clear and convincing evidence." Exhibit 5, 1 b. As a result, the

ordinary burden upon defendants on a summary judgment motion -- to show that there is

evidence from which the trier of fact may reasonably find in its favor -- is greatly heightened

in this case. For the reasons discussed below, defendants cannot meet this burden with respect

to either LIUNA's motives or the trusteeship's purpose, both of which were unquestionably

proper here.

___________________________-

9 The second of the Court's questions, regarding the individual defendants' charge that they have been

disciplined or even expelled, is discussed in Section D below.

18

sought a trusteeship for no good reason other than to "get the government off its back" is a

marked departure from its now abandoned position that the trusteeship was instituted in

retaliation for Bruno Caruso' presidential campaign. It is hardly an improvement.

Defendants' current government conspiracy theory not only lacks consistency, ¹⁰ but, like the

prior position, has no evidence to support it. It cannot provide a basis for relief, let alone

discovery in this case.

Inspector General Douglas Gow testified that they began their investigation of the CDC as a

result of a variety of factors, including:

Exhibit 3, p. 53.¹¹ That investigation by LIUNA's independent officers led to overwhelming

evidence of corruption, which was submitted at the trusteeship hearing for the IHO's

consideration. In reviewing the circumstances and the evidence, the IHO acted as, in the

Court's words, "a full due process hearing filter" to ensure the propriety of the process. The

IHO reached a firm conclusion, based on overwhelming evidence, that a trusteeship was

10 The theory is internally contradictory. If nobody thought the CDC was corrupt, why would pursuing

the CDC "get the government off [LIUNA's] back"? Defendants appear to assume that the

government had some unspecified, but nevertheless improper, ulterior motive in seeking to have the

CDC investigated. Yet defendants do not explain what this ulterior motive was or how or why the

government's alleged ill-will is to be imputed to LIUNA.

11 Contrary to defendants' elaborate argument in their proffer, Luskin did not even mention the Draft

Complaint as a reason for starting his investigation. Nor did Gow ever say that the Draft Complaint

was his "main" reason for investigating the CDC, as defendants assert. Rather, speaking in general,

Gow said only that there are "a variety of areas that we look to" in beginning an investigation and that

these include "the draft complaint that was filed by the government." In the specific case of the CDC,

he listed numerous other factors that were important. Exhibit 3, pp. 94-95.

19

necessary and appropriate and that defendants' speculations about ulterior motives where

unavailing. Nothing in defendants' proffer or anywhere else has shown a scintilla of evidence

amidst these facts to prove bad faith, let alone the clear and convincing evidence of bad faith

that is required for defendants to resist this motion.

was imposed to "get the government off [LIUNA's] back." Because Luskin and Gow testified

about their proper reasons for beginning an investigation of the CDC, and the IHO's

conclusions were amply supported, there is no basis to conclude that "the real reason" for the

trusteeship proceeding was anything other than the reasons explained by Luskin and Gow at

the preliminary injunction hearing.

say plaintiffs did. This Court itself recognized this conclusion when it stressed that it was

-well aware of the fact that the government leaned on LIUNA and leaned on them rather

hard." Exhibit 9, p. 32. More important. this kind of relationship is exactly what is

permitted, indeed required, by the LIUNA/government agreement. And that agreement has

been specifically upheld by this Court and the Seventh Circuit in the Serpico litigation.

LIUNA/government agreement were invalid as amendments to LIUNA's Constitution,

because, among other things, they had been adopted in bad faith in violation of the LMRA and

LMRDA. More specifically, defendants' counsel argued in Serpico that the sole purpose of

the amendments was "to appease the DOJ- and thereby protect LIUNA's existing leadership

from intervention and perhaps prosecution by the government. When LIUNA responded that

there was no evidence to support such speculation, Judge Zagel concluded that it made no

difference whether there was or was not. -It is for the government to decide ... what deals it

20

is willing to make," and, because the "government is not a defendant here," its reasons are

irrelevant. Exhibit E, p. 8. Certainly they could not be evidence of bad faith by LIUNA for

responding to government pressure and amending its Constitution to respond to the

government's threat.

agreement with the government. That agreement requires LIUNA's consultation with the

government in the reform process and allows the government to scrutinize every aspect of the

Union's activity. The penalty for government dissatisfaction with the Union's efforts is that it

may imposc its consent decree, whereby the govermirent would take over the Union and - -

conduct the reform process directly by itself.

up to it. If the government is entitled to take over, not ortly the reform process, but the Union

itself if dissatisfied with LIUNA's progress, it cannot be bad faith for the Union to take those

steps that the government insists upon if that will "get the government off [its] back" on

reform issues and allow LIUNA to remain independent in all other respects. As a result, the

bulk of defendants' proffer is simply irrelevant to this case. By far the largest group of

documents comprises nothing other than documents showing the course of LIUNA/government

negotiations leading up to the LIUNA/government agreement. E.g., Exhs. 8-33. Judge Zagel

himself reviewed these very same documents during his consideration and rejection of the same

bad faith argument in the Serpico case. 12

that is of exactly the same type and that would be expected from the relationship that Judge

_________________________

12 Many of these documents still bear the exhibit stickers used for marking them as deposition exhibits

in the Serpico litigation.

21

Zagel upheld. This is true, for example, of the two documents defendants principally rely

upon. The May 21, 1995 status report from Luskin to the DOJ reports on the progress the

Union has made in satisfying the government's concerns. Significantly, it was written

approximately 90 days after the LIUNA-government agreement was executed. Under the

agreement, the government was required to forebear for 90 days from taking over the Union,

but was permitted to do so after that point if LIUNA had not made sufficient internal progress

by then with its reforms.

but LIUNA's compliance with the judicially-sanctioned LIUNA/government agreement. By its

express terms, a major purpose of the Union's internal reform effort was to ensure that the

Union cleaned itself up sufficiently to convince the government not to invoke its power to enter

the consent decree. The May 21, 1995 letter served exactly that purpose. What it means in

this context to say that LIUNA was trying to "get the government off their back" was that

LIUNA was doing all it legitimately could to convince the government that it was serious about

reform and that the Union could remain independent. It is literally impossible to construe this

as bad faith.

This letter requires government approval for Bloch's removal and is co-signed by an Assistant

U.S. Attorney. But there is nothing wrong in LIUNA's allowing the government to participate

in this way as LIUNA continued its efforts to satisfy the government's concerns about reform,

particularly where a subordinate entity of the size and importance of the CDC is concerned.

This document is not evidence that LIUNA was acting with improper motives or in bad faith or

that there was an "improper relationship" between the GEB Attorney and the government.

22

Rather, it proves that there is exactly the kind of relationship that the agreement with the

government could be expected to produce.

compelling evidence to proceed. After extensive hearings, the IHO ruled accordingly.

LIUNA's desire to satisfy the government in this process, at whatever level it existed, was not

improper. If anything, defendants' theory proves the opposite of what is required to upset this

trusteeship. Indeed, whereas defendants are obligated to supply clear and convincing evidence

of an illicit motive, defendants have unwittingly done the opposite. confirming the truth of

LIUNA's stated motives and demonstrating their propriety. Defendants' first ground for

discovery and its principal defense to summary judgment must therefore fail.

the trusteeship (embodied in the Court's third question overall) concerns defendants' theory

that attacking ties to organized crime is not a legitimate statutory purpose because organized

crime influence is supposedly not "corruption" within the meaning of the LMRDA. This

theory is no more viable than the first. The statute and the case law are directly to the

contrary. And, ultimately, the whole question is irrelevant to the Court's disposition of the

summary judgment motion.

-corruption" to exclude organized crime influence or restricts it to wrongdoing for personal

gain. 13 In fact, the statutory purposes of the LMRDA confirm that the term "corruption" was

________________________________

13 Among other things, it would make no sense within the statutory scheme to limit "corruption" to

financial wrongdoing or mob influence for personal gain. The statute elsewhere covers this kind of

wrongdoing under the rubric of "financial malpractice," which under defendants' theory, would make

the reference to "corruption" superfluous.

23

intended to and must in fact be given a broad meaning. 14 Likewise, the cases are unanimous

that the purposes of the LMRDA include a goal of preventing corruption in the form of the

infiltration of a union by criminal elements. As one court has observed:

United States v. International Bhd. of Teamsters, Chauffeurs, Warehousemen & Helpers, 803

F. Supp. 740, 746 (S.D.N.Y. 1992) (quoting U.S. v. Teamsters, Chauffeurs, Warehouseman

& Helpers, 792 F. Supp. 1346, 1353 (S.D.N.Y), affd, 981 F.2d 1362 (2d Cir. 1992)).

mob members, in positions of high office in the Union is a sufficient basis in and of itself for

trusteeship. Another decision has elaborated on why:

______________________

14 In explaining the purpose of the LMRDA's trusteeship provisions, for example, the Senate Report

states that Congress has found trusteeships to be "among the most effective devices which responsible

international officers have to ensure order within their organization." As a result, "they have been

widely used . . . to preserve the integrity and stability of the organization itself," itself an allusion to

corruption as commonly understood. Compare Webster's Third International Dictionary ("corruption"

is the "impairment of integrity, virtue or moral principle.")

24

United States v. Teamsters, Chauffers, Warehousemen & Helpers, 792 F. Supp. 1346. 1152-53

(S.D.N.Y.), affd, 981 F.2d 1362 (2d Cir. 1992) (citations and case descriptions omitted).

There is therefore no basis for defendants' assertion that corruption must be construed

narrowly to exclude all influence by organized crime other than direct financial wrongdoing.

Indeed, defendants are unable to cite a single case to support this view of the statute. 15

not -- surnmary judgment would still be required in this case. It is beyond cavil that the

LMRDA and LIUNA's Constitution authorize a trusteeship for any one of a number of

different purposes. These include " restoring democratic procedures. " 29 U. S. C. §

462(1985); LIUNA Const. Art. IX, § 7. It is similarly established that, where a trusteeship is

imposed for more than one purpose, it will be upheld if any one purpose is appropriate,

regardless what other motivations are at play. As one court has explained:

International Bhd. of Elec. Workers Local 1186 v. Eli, 307 F. Supp. 495, 506 (D. Haw.

1969).

_____________________

15 In addition, even if the term "corruption" in the statute did not include organized crime influence,

the LIUNA Constitution could still include this as a permissible purpose for a trusteeship. The

LMRDA's open-ended trusteeship provisions include the purpose of "otherwise carrying out the

legitimate objects of [a] labor organization." 29 U.S.C. § 462. As a result, LIUNA is entitled to

construe broadly, for its own legitimate purposes, whatever concepts it has adopted from the LMRDA.

That is, if the LMRDA permits LIUNA to impose trusteeships for the purpose of "carrying out the

legitimate objects of [a] labor organization," it cannot be a violation of the LMRDA for the Union to

construe its own constitutional ban on "corruption" to include a reform process that has been deemed

by the courts to be one of these "legitimate objects" of LIUNA. See Air Wisconsin, supra, 909 F.2d at

218. (Union's interpretation of its Constitution may not be set aside unless "unreasonable, perhaps

patently so.").

25

886, 907 (4" Cir. 1963) ("mixed motives" for trusteeship do not render it invalid)~ C.A.P.E.

Local Union 1983 v. International Bhd. of Painters and Allied Trades, 598 F. Supp. 1056,

1075 (D.N.J. 1984) ("one valid purpose ought to suffice, even if some other purposes are

dubious "); Mason Tenders Dist. Council v. LIUNA, 884 F. Supp. 823 (S. D. N. Y. 1995) (one

improper motive "will only invalidate the trusteeship if no other valid motive was

present.... One legally permissible purpose is all that is required for a valid trusteeship.

Pruitt v. United Bhd. of Carpenters and Joiners of America, 673 F. Supp. 441, 444 (N.D. Ga.

1987), vacated on other grounds, 893 F.2d 1216 (11' Cir. 1990) ("one illegal purpose among

many legal purposes is insufficient to declare a trusteeship illegally maintained.")

circumstances far more extreme than anything defendants have shown here. There too LIUNA

members identified as associates of organized crime asserted that the trusteeship imposed on

their local had been initiated in bad faith by Arthur Coia to deflect the attention of the federal

government from Coia to others, thereby preserving his position in the Union. Because Mason

Tenders arose before the adoption of the EDP, Coia made the initial decision to impose the

trusteeship in that case and sat on the General Executive Board that approved its imposition.

As a result, there, unlike here, his motives bore directly on the validity of the trusteeship.

trusteeship might prove by clear and convincing evidence that Coia had bad motives, the court

rejected the challenge anyway. It stressed "the valid purpose of ridding the District Council of

the improprieties uncovered after the imposition of the trusteeship," as found by the Special

Hearing Panel at the trusteeship hearing. This necessarily meant at least a mixed motive and

that the District Council had "fail[ed] to show by clear and convincing evidence that Coia and

LIUNA acted to maintain the trusteeship in bad faith or for an 'unauthorized purpose. "' Id. at

26

836-37. The court expressly found on that basis that the District Council "failed to raise

sufficiently serious questions going to the merits to make them a fair ground for litigation."

Id. at 837.

judgment motion. Defendants would still have to provide evidence that the other grounds for a

trusteeship set out in the Trusteeship Complaint and found by the IHO to be supported by the

evidence were also illegitimate. Among the findings of the IHO was that there had been a

complete failure of democratic institutions at the CDC. At the hearings, the GEB Attorney

demonstrated that one group of corrupt individuals had maintained a stranglehold on the CDC

and its affiliated funds for 25 years, resulting in the complete breakdown of democratic

procedure. During that period, the CDC and its affiliated locals 1, 2, 5, 225, 1001 or 1006

had had not a single contested election for any of the literally thousands of posts that should

have been filled by democratic vote. The GEB Attorney also demonstrated a climate of fear,

threats of violence and the use of bribes to control union leadership.

findings and conclusion were subsequently re-affirmed by Judge Castillo, who described them

as "earth-shattering. " Exhibit 4, p. 46. This ground would be sufficient to uphold the

trusteeship even were there no other permitted basis. As a result, there is no bar to summary

judgment in this case.

relates to their counterclaims. The Court summarized this theory as follows:

Matassa's counsel then restated the matter as follows:

LMRDA, which distinguishes discipline under Title I from a trusteeship under Title III. The

statute and the courts are very explicit about this distinction. Trusteeships by definition affect

labor unions and their subordinate groups as entities. LMRDA § § 301-306, 29 U. S. C. § §

461-464. Disciplinary proceedings affect individual membership rights. As described in Title

I of the LMRDA, §§ 101-105, 29 U.S.C. §§ 461-464, disciplinary actions against individual

members involve very specific types of activity:

LMRDA § 101(a)(5), 29 U.S.C. § 411(a)(5) (emphasis added).

distinction between Title 1, which governs individual membership rights, and Title III, which

governs trusteeships. They have repeatedly ruled that imposing a trusteeship under Title III

does not constitute discipline under the terms of the LMRDA because it does not "directly

___________________________

16 The counterclaims allege, in addition, that "LIUNA and Bloch, and the LIUNA General Executive

Board acted on the direction and instruction of agents and attorneys of the United States Department of

Labor and the United States Department of Justice" and for that reason "acted under color of federal

law in disciplining" defendants. After the Court expressed its "great difficulty in understanding ...

how an international union and a trustee can be transformed into government actors exercising

governmental powers" (Exhibit 8, p. 1), defendants unequivocally repudiated this claim at the July 8,

1998 status hearing. As well they should have. The courts have uniformly dismissed such claims for

want of "state action" where, as here, there is no basis to find that the conduct in question was "caused

by the exercise of some right or privilege created by the State or by a rule of conduct imposed by the

State or a person for whom the State is responsible. " Nor could such a claim survive unless, unlike

here, "the party charged with the [conduct] must be a person who may fairly be said to be a state

actor." United States v. International Bhd. of Teamsters, 941 F.2d 1292, 1296 (2 nd Cir. 1991) (quoting

Lugar v. Edmondson Oil Co., 457 U.S. 922 (1982)).

28

penalize" the individual members. Miller v. Holden, 535 F.2d 912. 915 (5" Cir. 1976). As

the statute provides, the term "discipline" means certain specific types of actions -- fine,

expulsion or suspension -- directed at specific individuals, not individuals because they are

members of a group. The Holden court therefore stressed that "Union action which adversely

affects a member is 'discipline' only when (1) it is undertaken under color of the union's right

to control the member's conduct in order to protect the interests of the union or its

membership, and (2) it directly penalizes him in a way which separates him from comparable

members in good standing. " Id. (emphasis added).

defendants as individuals and nothing that penalizes them in a way different from the way that

other comparable members have been treated. Not only defendants, but all officers at the CDC

lost their officer positions at the District Council, and not because they were the subject of

individual disciplinary charges under Title 1, but because the LIUNA Constitution mandates

that all officers, as a group, are automatically "relieved of their particular trust" during the

period of a trusteeship imposed under Title III. LIUNA Const. Art. IX, Sec. 7. This includes

responsible officials as well as corrupt ones, all of whom must give way to the plenary

authority of the trustee. In addition, this suspension of officer status occurs in all internal

trusteeships and is not peculiar to this trusteeship action against the CDC.

"discipline" because they have not been deprived of any membership right. As even the CDC

has been quick to emphasize, all of these individuals remain active members of LIUNA and

continue to hold positions of authority within their individual locals. CDC Memorandum in

Opposition to Plaintiffs' Motion for a Protective Order, pp. 12-13. They will continue to hold

their membership positions unless and until the IHO rules on disciplinary charges, which, in

29

the case of Matassa, have already been filed and, in the case of the Carusos, are forthcoming.

As such, they have suffered no discipline, as defined by the courts, because that concept refers

only to retaliatory actions that affect a union member's rights or status as a member of the

union." Finnegan v. Leu, 456 U.S. at 437. The protections of Title I do not refer to

temporary suspension of a union member's status as an officer of the union. Id. "It is readily

apparent, both from the language of these provisions and from the legislative history of Title 1,

that it was rank-and-file union members -- not officers or employees, as such -- whom

Congress sought to protect. " Id. at 437; Air Line Stewards & Stewardesses Ass'n., v.

Transport Workers Union, 334 F.2d 805, 808 (7th Cir. 1964), cert. denied, 379 U.S. 972

(1965) (the statute secures and protects members of a labor organization, but has no application

to officers of a union); Cox v. Hutcheson, 204 F. Supp. 442, 449 (S.D. Ind. 1962) (even if

imposed in badfaith, a trusteeship that removes an officer cannot be discipline).

among the leaders of the CDC over the last 25 years. 17 This was, however, done in the

context of a Title III trusteeship action, and not any disciplinary action against defendants.

Although the trusteeship has been ordered and imposed, that action has not resulted in any

"discipline" under Title I against defendants. They have not been treated differently from

other members with comparable standing, all of whom have been relieved of their particular

trust as a result of the trusteeship order. Nor have they been treated differently from other

officers in other entities made subject to a trusteeship order. Finally, defendants retain all of

________________________-

17 The GEB Attorney put on compelling evidence from which the IHO concluded that defendant

Matassa was a "made" member of organized crime and the Carusos were at least associates of

organized crime. Exhibit A, 1122-23, 29, 53-72.

30

their membership rights, continuing as members of LIUNA, active as members within their

individual locals and participating as members even within the CDC.

presumably, referring to the supposed "discipline" -- as part of their discovery efforts. There

has been no discipline here. In the end, it is difficult to understand how defendants' proffer

bears in any way on this claim or how any proposed additional discovery can serve any

legitimate purpose whatsoever. In the end, the foregoing legal principles demonstrate the

defendants' current Title I theory for their counterclaims is no more viable than the "under

color of federal law" theory they recently abandoned. Accordingly, there can and should be

no discovery in connection with the counterclaims, which can and must be dismissed.

completely demonstrated. The trusteeship order has sufficient evidentiary support to foreclose

further scrutiny, and defendants have no defense based on clear and convincing evidence of a

procedural irregularity.

improper purpose and individual discipline have and can have no merit as a matter of law.

Defendants' supposed "bad faith" has been judicially determined in this Court not to be bad

faith at all. Their "improper purpose" of rooting out organized crime influence is likewise not

improper and, in any event, only one of several permissible purposes for bringing this

trusteeship. Defendants' discipline theory is, finally, just plain wrong. For all of the

foregoing reasons, plaintiffs respectfully request that the Court grant their summary judgment

motion. enter a permanent injunction on plaintiffs' interference claims in this case and dismiss

the individual defendants' counterclaims with prejudice.

31

Dated: September 4, 1998 Respectfully submitted

Dwight P. Bostwick

COMEY BOYD & LUSKIN

1025 Thomas Jefferson Ave., N.W.

Suite 420 East

Washington, D.C. 20007

(202) 625-1200

Attorneys for Plaintiffs Laborers' International

Union of North America and Robert Bloch

32