In October 2001, SEIU notified Local 87's leadership that it was
considering merging Local 87 and other SEIU local unions into SEIU Local
1877, as a single statewide SEIU local (First Leung Decl. ¶ 10.)
SEIU was considering the merger in furtherance of the "New Strength Unity
Plan," adopted at its 2000 Convention (First Baird Decl. Exh. 3 at 3-5).
On November 15 and 16, 2001, SEIU conducted hearings on the matter (First
Leung Decl. ¶ 13). At the hearing, Local 87 members voiced their
strong opposition to the merger, and presented a report supporting their
opposition, entitled "Proposal for a Northern California Building Service
Local" (Ibid., Exh. 2). At its December 2001 membership meeting, Local
87's membership voted against the proposal for a statewide local (Id.
On December 8, Local 87 members instructed their officers not to
negotiate with the International and instead [to] fight the merger"
(Second Baird Decl. Exh. 2 at 6). On January 13, 2002, SEIU International
President Andrew Stern appointed four representatives to monitor and
assist in the implementation of the merger directive at Local 87's
offices (First Leung Decl. ¶ 17). Stern directed "the Officers and
Staff of Local 87 to cooperate fully" with these personal
representatives, including, but not limited to "giving them advance
notice of any meetings of the Local, its officers or any affiliated
bodies at which official business is to be conducted, providing
unhampered access to the Local's office, and submitting all checks or
other disbursement of Local Union funds for their review prior to
issuance" (Id. Exh. 4).
The parties dispute whether Local 87's officers and executive board
members cooperated with Stern's personal representatives. Plaintiffs
claim that they provided Stern's personal representatives full access to
Local 87's offices and financial records and invited them to Local 87
meetings (First Leung Decl. ¶ 18; Miranda Decl. ¶ 9; Abozayd
Decl. ¶ 10). Defendant SEIU claims that the Board engaged in conduct
to thwart the merger by taking the actions they claim provided the proper
purposes for the trusteeship, as discussed below.
On or about January 13, 2002, SEIU's Executive Board adopted the
hearing officer's recommendation that Local 87 should be merged into
Local 1877 (First Leung Decl. ¶ 16). Around the same time, Local
87's leadership had begun to meet with representatives of SEIU and Local
1877 to discuss the terms of the merger (First Leung Decl. ¶ 14;
Miranda Decl. ¶ 7; Abozayd Decl. ¶ 8). Local 87's leadership
indicated that it would not oppose the merger if the membership supported
it (Miranda Decl. ¶ 7; Abozayd Decl. ¶ 8).
On or about January 22, 2002, SEIU advised Local 87 of the terms of its
imposed merger. In a letter from President Stern, SEIU told Local 87
officers that they were obligated to comply with the merger decision and
to cooperate in the transition process, and directed them to "cease and
desist any activity that undermines the merger process" (Monterroso
Decl. ¶ 10, Exh. 5). SEIU ordered Local 87's officers and executive
board members to recommend these terms to their membership (First Leung
Decl. ¶ 21; Miranda Decl. ¶¶ 10-1). Local 87's officers and
executive board members refused to recommend the merger to the membership
because the proposed final terms did not include several items they had
proposed (First Leung Decl. ¶ 22; Miranda Decl. ¶ 11; Abozayd
Decl. ¶ 13). Local 87's leaders agreed to send a neutral notice to
the membership calling for a membership meeting to discuss and vote on
the proposed terms of the merger (First Leung Decl. ¶ 22, Exh. 7).
On January 23, 2002, SEIU representatives met with the Local 87
Executive Board to discuss any concerns the Board members had about the
merger. The Executive Board stated that it voted not to "recognize the
merger" and not to "cooperate with the merger" (Monterroso Decl. ¶
15; First Baird Decl. ¶ 11). Local 87's leadership agreed to prepare
a final counter-offer of merger terms and to present their proposal to
legal counsel for SEIU on January 26 (First Leung Decl. ¶¶ 23-24;
Miranda Decl. ¶ 12). The attorney asked to reschedule the meeting to
the morning of January 28. Leung requested that Weinberg confirm with the
SEIU International that the delay of their meeting was acceptable. He
confirmed that the International approved the delay of the meeting (First
Leung Decl. ¶ 24).
On January 25, 2002, President Stern was advised of the actions Local
87 had taken, and on January 27, issued an "emergency" trusteeship order
pursuant to his right under SEIU's Constitution (Medina Decl. Exh. A,
Art. VIII, § 7(a)). On January 28, 2002, the "emergency" trusteeship
went into effect. SEIU cancelled the membership meeting scheduled for
that afternoon, removed Local 87's officers from office, seized control
of Local 87's building at 240 Golden Gate Avenue in San Francisco, and
denied Local 87 executive board members entry (Id. ¶¶ 26-27).
SEIU's January 28, 2002 "Emergency" Trusteeship Notice makes it clear
that the trusteeship was imposed because of Local 87's opposition to the
proposed merger (Exh. 8). SEIU charged that Local 87's officers refused to
recognize the merger, misinformed members, and used scare tactics to
mislead members; failed to supply the International President's personal
representatives with information necessary to develop an orderly merger
transition; interfered with the local's finances and attempted to disrupt
Local 87's collective bargaining relationships by encouraging,
participating or permitting the circulation of dues revocation notices;
engaged in dual unionism by taking steps to disaffiliate from SEIU and
approaching another union; and engaged in financial malpractice by using
local union resources to block the merger.
SEIU's constitution required the International Executive Board ("IEB")
to conduct a hearing within 30 days of imposing an emergency trusteeship
to determine if the imposition of the emergency trusteeship was
appropriate and whether the trusteeship should continue (Medina Decl.
Exh. A, Art. VIII § 7(f). On February 12, a hearing was conducted
before an IEB hearing officer. The hearing officer upheld the decision to
impose the emergency trusteeship, concluding that each of the charges
discussed in the notice of the emergency trusteeship had been established
(First Baird Decl. Exh. 3 at 1). He also determined that an ongoing
trusteeship was justified because of new evidence SEIU discovered after
imposing the trusteeship. This evidence included that the local union's
grievance handling was in "disarray" and that the local union membership
voted to provide its officers with severance pay in the event that their
jobs were eliminated in the merger. The IEB hearing officer found that
plaintiffs never had been negotiating in good faith with SEIU's
representatives (Id. at 9).
Following the hearing on February 12, 2002, SEIU adopted the hearing
officer's report finding that the emergency trusteeship was properly
imposed and that the trusteeship should be continued for the following
(1) Local 87's officers had not negotiated in good
faith with SEIU over the terms of the proposed
(2) Local 87's officers failed to stop the circulation
of dues deduction authorization revocation notices
and, after the trusteeship was imposed, circulated
such notices themselves;
(3) Local 87's officers knew about and condoned
contacts with another union to discuss other options
to their affirmation with SEIU;
(4) Local 87's grievance handling and hiring hall
operations were in "disarray;" and
(5) Local 87's Executive Board hired counsel to assist
it in its response to the merger proposal and proposed
severance agreements for local officials.
On January 29, plaintiffs filed their complaint in this case,
challenging both the merger decision and the trusteeship. Two weeks later
plaintiffs applied to this Court for a temporary restraining order. On
February 22, this Court denied that request. On April 12, this Court
denied plaintiffs' motion to continue proceedings on its motion for a
preliminary injunction. On August 8, 2002, defendant SEIU filed this
Summary judgment shall be rendered if "there is no genuine issue as to
any material fact and the moving party is entitled to judgment as a
matter of law." Fed.R.Civ.Pro. 56(c). Summary judgment is not granted if
the dispute about a material fact is "genuine" that is, if the evidence
is such that a reasonable trier of fact could return a verdict for the
nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). "The evidence, and all reasonable inferences therefrom must be
viewed in the light most favorable to the non-moving party." T.W. Elec.
Serv., Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630-31 (9th
The moving party "has both the initial burden of production and
ultimate burden of persuasion on a motion for summary judgment." Nissan
Fire & Marine Ins. Co., Ltd. v. Fritz Companies, Inc., 210 F.3d 1099,
1102 (9th Cir. 2000). "Credibility determinations, weighing evidence, and
drawing of legitimate inferences from the facts are jury functions, not
those of a judge, whether he is ruling on a motion for summary judgment
or for directed verdict; evidence of the nonmovant is to be believed and
all justifiable inferences are to be drawn in his favor." Anderson, 477
U.S. at 255.
On a motion by the party without the burden of proof at trial, the
party may carry its initial burden by either of two methods. "The moving
party may produce evidence negating an essential element of the nonmoving
party's case, or, after suitable discovery, the moving party may show that
the nonmoving party does not have enough evidence of an essential element
of its claim or defense to carry its ultimate burden of persuasion at
trial." Nissan Fire, 210 F.3d at 1106. Once the moving party meets its
burden, the nonmoving party must "go beyond the pleadings and by [its]
own affidavits, or by depositions, answers to interrogatories and
admissions on file, designate specific facts showing there is a genuine
issue for trial." Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986)
(internal quotations omitted). Summary judgment for a defendant is
appropriate when plaintiff fails to make a showing sufficient to establish
the existence of an element essential to that party's case, and on which
party will bear the burden of proof at trial. Id. at 322.
Validity of the Merger of Local 87 into Local 1877
Plaintiffs' first three claims for relief in their complaint challenge
to merge Local 87 into Local 1877 (Compl. ¶¶ 39-47).
Defendant SEIU seeks summary judgment on those claims. In its opposition
to SEIU's motion, plaintiffs do not oppose those arguments (Opp. at
10-15). Under FRCP 56(e), a party cannot rest on the allegations in its
pleadings in response to a properly supported summary judgment motion:
When a motion is made and supported as provided by
this rule, an adverse party may not rest upon mere
allegations and denials of the adverse party's
pleading, but the adverse party's response, by
affidavits or as otherwise provided by this rule must
set forth specific facts showing that there is a
genuine issue for trial. If the adverse party does not
so respond, summary judgment, if appropriate, shall be
entered against the adverse party.
Here, plaintiffs have failed in any way to oppose the material facts
and legal arguments relating to the merger raised by SEIU in its motion.
The Court finds that defendant SEIU properly has raised the issue of
its merger decision in its motion for summary judgment. SEIU argues that
in deciding to merge Local 87 into Local 1877, it acted reasonably and in
good faith, and complied with federal labor law and its own constitution
and bylaws. Accordingly, this motion GRANTS defendant SEIU's motion for
partial summary judgment with regard to plaintiffs' claims challenging the
Plaintiffs' Burden to Challenge SEIU's Purpose for Imposing the
A threshold issue is the evidentiary standard plaintiffs must meet to
defeat SEIU's motion for partial summary judgment regarding the
trusteeship. A labor organization's trusteeship of an affiliate is
entitled to a presumption of validity for 18 months if it has been
"established . . . in conformity with the procedural requirements of its
constitution and bylaws and authorized or ratified after a fair hearing."
29 U.S.C. § 464 (c). The effect of this presumption is to shift the
burden of proof to plaintiffs to show by "clear and convincing proof that
the trusteeship was not established or maintained in good faith for a
purpose allowable under [29 U.S.C. § 462]." Ibid. Thus, to overcome
summary judgment plaintiffs must establish that there are genuine
disputes of material fact which if resolved in their favor by a
reasonable fact-finder, would meet this heightened burden of proof.
Anderson v. Liberty Lobby, 477 U.S. 242, 255-56 (1986).
Here, plaintiffs do not dispute that the emergency trusteeship was
imposed in accordance with SEIU's constitution and bylaws and was
ratified after a fair internal hearing by the IEB. Accordingly, the
trusteeship is entitled to a presumption of validity unless plaintiffs
can prove by "clear and convincing evidence" that the trusteeship was not
established or maintained in good faith or for a purpose allowable under
the LMRDA. See 29 U.S.C. § 464 (c). Plaintiffs contend that there are
issues of material fact regarding whether SEIU imposed the emergency
trusteeship and maintained the trusteeship for an improper purpose. Once
an emergency trusteeship has been ratified following a fair hearing,
however, the facts underlying the initial decision to impose the
emergency trusteeship only are material to whether plaintiffs are
entitled to retroactive relief for the period between the defective
imposition of an emergency trusteeship and the subsequent "curative
hearing and vote." Mason Tenders Dist. Council v. Laborers Int'l Union of
N. America, 884 F. Supp. 823, 836 (S.D.N.Y. 1995). Here, plaintiffs have
made no claim for damages (Compl. ¶ 51). Accordingly, any disputes
concerning the facts underlying SEIU's President Andrew Stern's January
to place Local in an emergency trusteeship are not
"material." Anderson, 477 U.S. at 248. The only remaining issue is
whether plaintiffs can create a material dispute of fact as to the proper
purpose for continuing the trusteeship.
The allowable purposes for establishing a trusteeship
include: 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
29 U.S.C. § 462. The list of proper purposes for imposing a
trusteeship is "imprecise." Benda v. Grand Lodge of Int'l Ass'n of
Machinists & Aerospace Workers, 584 F.2d 308, 316 (9th Cir. 1978).
The weight on the plaintiffs "is made heavy because an allowable purpose
of the statute is the carrying out of the legitimate objects of a labor
organization . . . An object of questionable legitimacy therefore
subjects the trusteeship itself to good faith doubt." Ibid.
As long as the trusteeship is supported by at least one proper
purpose, it is immaterial that the labor union which imposed the
trusteeship also may have had an impermissible motive. See Int'l Bd. of
Elec. Workers Local 1186 v. Eli, 307 F. Supp. 495, 506 (D. Haw. 1969)
("It is not necessary at this time for the court to engage in an
exploration of the collective psyche of [the] International [union] in
order to determine which motive holds greatest sway over it. If any one
of the motives professed by International withstands the test of [
29 U.S.C. § 462], it is now sufficient."); Mason Tenders, 884 F.
Supp. at 837 ("One legally permissible purpose is all that is required
for a valid trusteeship"); Nat'l Ass'n of Letter Carriers v. Sombrotto,
449 F.2d 915, 923 (2d Cir. 1971).
Accordingly, defendant SEIU is entitled to summary judgment as long as
one of its rationales for imposing the trusteeship was proper, assuming
plaintiffs cannot create a triable issue of fact as to the existence of
that purpose. In other words, in order to survive summary judgment,
plaintiffs must raise a dispute as to each purpose SEIU has put forward to
justify the trusteeship.
Defendant's Purported Rationales for Imposing the Trusteeship
Defendant SEIU claims it imposed the trusteeship for several legitimate
purposes, including to effectuate the planned merger of Local 87 and to
prevent Local 87's officers from thwarting the merger. SEIU also argues
that Local 87 officers had taken various inappropriate actions that
threatened the local's collective bargaining relationships and undermined
its financial stability.
SEIU's primary rationale for imposing the trusteeship was to carry out
the "legitimate objects" of the labor organization, including
effectuating its merger. 29 U.S.C. § 462. Imposing a trusteeship to
effectuate a planned merger is valid under the LMRDA. Local 796 v. Int'l
Ass'n of Theatrical & State Employees, 124 L.R.R.M. 2053, 2061 (N.D.
Cal. 1986); Pile Drivers v. Northern Cal. Carpenters Reg'l Council,
992 F. Supp. 1138, 1142 (N.D. Cal. 1997). Therefore, defendant SEIU
argues, preventing plaintiffs from derailing a lawful merger was a valid
purpose of the trusteeship.
As noted above, plaintiffs must establish by clear and convincing
evidence that the trusteeship was not for this valid purpose. Plaintiffs
first debate the factual claim that they were trying to thwart the
merger. Then they contend that even if Local 87's officers did try to
block it, this
did not give rise to a valid purpose. Local 87 officers
claim that they did not attempt to block the merger but instead attempted
to negotiate its terms as demanded by their membership (Second Leung
Decl. ¶¶ 4-6, 8). They claim that in both its polling of the
membership and in its notice to the members dated January 28, 2002, of
the membership meeting at which the merger was to be discussed and voted
upon, Local 87's leadership maintained a neutral tone (First Leung Decl.
Exh. 7; Miranda Decl. Exh. 1).
The undisputed evidence demonstrates, however, that plaintiffs were
trying to thwart the merger. There is no evidence that the local was
actually negotiating in good faith over the proposed terms of the
merger. Instead it appears that the local officers attempted to undermine
the process because they disagreed with its outcome.
For instance, defendant SEIU claims that Local 87 officers took actions
that posed a threat to the union and justified the trusteeship. This
would also meet the proper purpose to "correct financial malpractice" and
to "assur[e] the performance of collective bargaining agreements or other
duties of a bargaining representative." 29 U.S.C. § 462.
Specifically, defendant SEIU alleges Local 87 officers encouraged members
to sign forms to revoke their authorizations to have their employers
deduct their union dues from their paychecks (Second Leung Decl. ¶
15). Plaintiffs maintain that the union members may not be compelled to
execute dues check off authorizations as a condition of employment as
long as they pay their union dues. Gloria Manor Home for Adults, 225
N.L.R.B. 1133, 1144 (1976). While this may be true, it is irrelevant to
SEIU's finding that the local officers jeopardized the union by
encouraging such members to sign such forms.
Further, SEIU found that Local 87 officers were not negotiating in good
faith about the merger. (Third Baird Decl. Exh. 2 at 9). Local 87 adopted
a resolution on December 8, 2001, not to negotiate with SEIU over the
terms of the merger, and plaintiffs have admitted that they were
instructed by the membership not to negotiate with SEIU concerning the
merger and to fight the merger (Id. at 6; First Leung Decl. ¶ 15).
Further, the IEB hearing officer found that Local 87 officers were
"committed to a course of reckless action to derail the merger including
sacrificing the interests of the members to achieve their personal goal
or remaining in control" (Third Baird Decl. Exh. 2 at 16).
Plaintiffs claim that the trusteeship was improperly imposed because
the members of Local 87 voted to oppose the merger, spoke out against
it, and attempted to negotiate better terms. The imposition of a
trusteeship for the purpose of suppressing dissent and free speech rights
of members violates Title I of the LMRDA and is improper under Title III
of the LMRDA. Thompson v. Office and Prof Employees Int'l Union,
74 F.3d 1492, 1506-07 (6th Cir. 1996). Furthermore, plaintiffs point
out that the members of Local 87 had the right to oppose the SEIU's plans
and to instruct their leaders to seek better terms. In Int'l Brotherhood
of Carpenters and Joiners v. Brown, 343 F.2d 872, 882-83 (10th Cir.
1965), the court held that a trusteeship was imposed because the local
union "would not affiliate with the District Council and would not raise
its dues." Id. at 883. The Tenth Circuit refused to uphold the
trusteeship because to do so would place the court "in the position of
allowing a national union to establish a trusteeship over a local union
because the members of the local union insisted upon exercising a right
guaranteed to them by statute." Ibid.*fn1 Both of these cases, however,
deal with the speech of members acting as members.
Here the trusteeship was not imposed because of the members' speech in
opposition to it — rather it was imposed because of Local 87
leadership's actions to thwart the merger that were jeopardizing the
local and international unions. In order to state a free speech claim
under the LMRDA, plaintiffs must establish that the union's action
interfered with conduct that was, in fact, protected by the LMRDA. United
Steelworkers of America v. Sadlowski, 457 U.S. 102, 111 (1982). The
question then is whether Local 87 officials were exercising a protected
right when they tried to block the merger.
Article XIV, Section 3 of the SEIU constitution and bylaws provides
that the SEIU Executive Board may "consolidate or merge existing Local
Unions under such terms and conditions as the International Executive
Board may determine when in the opinion of the International Executive
Board the interests and welfare of the International Union and the
membership thereof would be better served by such action" (Second Baird
Decl. ¶ 2). Thus SEIU is authorized to consolidate existing local
unions when it believes it is in the best interests of the union and its
members to do so. Accordingly, Local 87 officials did not have any right
to vote on or otherwise prevent the merger. Because SEIU's purpose was
not infringing on any protected right, it was proper.
The Supreme Court has noted that the LMRDA was designed to protect
union members in their capacity as members, not union officers in their
official capacity. Finnegan v. Leu, 456 U.S. 431, 436-37 (1982). A union
officer, unlike other members of the union, wears a second hat —
that of an agent of the union. "While he is not precluded from exercising
his free speech rights as a member, he is also under a duty as a
representative of the union's management to cooperate with it and
implement its directives. He may not, while acting as the union's agent,
sabotage or subvert its policies in the name of free speech." Newman v.
Local 1101, Communication Workers of America, 570 F.2d 439, 445 (2d Cir.
1978). Because this order finds that Local 87 leaders were attempting to
block a lawful merger, their conduct was not protected.
In sum, plaintiffs have not proven by clear and convincing evidence
that all reasons for the trusteeship was impermissible. Since this order
finds that Local 87 officers' attempt to thwart the merger was sufficient
to justify imposition and continuation of the trusteeship, this order
need not discuss SEIU's additional rationales for the trusteeship.
Accordingly, SEIU's motion for summary judgment is granted as to the
Plaintiffs' claims for injunctive and declaratory relief relating to
SEIU's decision to merge Local 87 into Local 1877 and SEIU's imposition
of the trusteeship are dismissed with prejudice. SEIU's counterclaim for
injunctive relief to enforce the trusteeship is granted. Plaintiffs are
prohibited from taking any actions
inconsistent with the maintenance of
the trusteeship. The only remaining issues in this case are SEIU's
counterclaims for breach of fiduciary duty and conversion.
IT IS SO ORDERED.