The opinion of the court was delivered by: CLARY
We have for decision two actions; the case of Roy J. Underwood against William E. Maloney, Civil Action No. 14398, and the case of Homer Dawson and 11 others against William E. Maloney and Hunter P. Wharton, being Civil Action No. 14547.
In the Underwood case, Underwood seeks to enjoin the enforcement of the decision of the General Executive Board of the International Union of Operating Engineers suspending him and to reverse such action. He seeks restoration to his position as President and Business Manager of Local 542 and its branches, 542A, 542B, and 542C of the said International Operating Union, to restrain Maloney, the General President, and the General Executive Board from interference with the performance of his duty as President and Business Manager, and further seeks damages in a total sum of $ 250,000.
The Dawson case purports to be a class action, Dawson and his colleagues seek to set aside and nullify the order of supervision invoked by the General President on August 19 of 1952. They seek reinstatement of all the officers of Local 542 and to restore control of the Local to its own membership, return of all funds, records and assets, and an accounting from the defendant Maloney and from Wharton, who has been installed by Maloney as Supervisor of the Local and its branches.
The Court will now proceed to outline the facts adduced in this record which it deems pertinent to a decision of the legal issues which have to be this day decided.
For purposes of clarity I propose to outline the facts in a series of periods, the first period ranging from 1938 to 1948, the second period running from March 31 of 1948 to May 1 of 1952, the third period from May 1, 1952, to September 27 of 1952, and the fourth and final period from September of 1952 to the present time.
Despite the objection of the defendants to the testimony antedating 1948, I feel that for a full understanding of the issues involved in the case, the evidence which was introduced of the Union and its activities during this ten-year period is entirely relevant to a decision of these issues. I shall take that period because, as I recollect the evidence, Mr. Underwood joined the Local in or about the year 1937. The charter of the Local had been granted in 1935. As of the date of Mr. Underwood's first connection with the Union as a member, the Union was under supervision of one Joe Fay, a member of the New Jersey Local. Maloney was not the President at that time. I believe the President at that time was one Huddell. The evidence has disclosed to my satisfaction that the method of operation of Local 542 was anything but good. At that time every worker was compelled to pay to the Union a percentage of his total salary earned during any given week. That was in addition to the dues.
In judging this case I am not losing sight of the real facts of the economic history of the United States. Unions, particularly on the international scheme, from the mid thirties, after the Wagner Act, 29 U.S.C.A. § 201 et seq., were developing rapidly. It is not at all surprising that there should be some difficulties and differences in the course of expanding and growing organizations. However, the Local Union never had a chance to conduct its own affairs. The evidence discloses that up until 1940 there was turmoil in the meetings of the organization and there was this situation, which I definitely deplore, of forcing the members to pay percentage assessments.
That situation, however, was cleared up shortly after Maloney, the defendant in the Underwood case, became the General President.
As far as my review of the evidence is concerned, it appeared to be shortly after Maloney was made the International President.
However, Maloney did appoint one Jasper White -- and it does not appear in the record on whose suggestion -- as Assistant Supervisor,
Joe Fay having been Supervisor at the time Maloney came to office as International President. The actions of White as Supervisor were anything but helpful to the labor movement. I think the evidence clearly discloses that from 1940 to 1947 Joe Fay had little if anything to do with the running of the Local, appearing only occasionally. There is no doubt that the record clearly discloses that White negotiated all contracts during that period.
In 1945 Underwood attempted to secure what I choose to call local independence. There has been used through this case 'local autonomy,' which I find does not appear anywhere in the picture. 'Autonomy' can mean a lot of things, and I don't propose to use 'local autonomy' as the basis for a decision or have that word involved in a decision in this case. I prefer to use the term 'local independence.'
It is extremely significant of White's hold on the Union, his intimidation of members, and so forth, that it took approximately two years to secure enough people to start a lawsuit. However, such a lawsuit was started in the Court of Common Pleas No. 2 of Philadelphia County, the purpose of the suit being to restore independence of operation to the Local Union. After a second review of the evidence in this case I am pointing up at this time that the defendant in the Underwood action and in the Dawson action in this case, when the case came up for trial, immediately agreed, without the necessity of the trial, to have the membership decide for itself (1) whether it wanted independence of operation, and (2) if the vote was in the affirmative, to have an independent election of officers. The vote was had, strongly in favor of independence, and an election of officers was had.
I should note at this time that Fay, having been convicted of extortion in the New York area, which conviction was affirmed by the Supreme Court of the United States in 1947, Fay v. People of State of New York, 332 U.S. 261, 67 S. Ct. 1613, 91 L. Ed. 2043, had been replaced by Third General Vice-President McDonald as Local Supervisor, and that Fay had been immediately after his conviction peremptorily expelled by Maloney from the Union of Operating Engineers.
It is apparent that McDonald and Maloney were at that time perfectly willing to have Local 542 obtain its own independence of operation and function as an independent integral part of the International Union of Operating Engineers.
We now come to the period of April 1, 1948, to May 1, 1952. In that period there was a remarkable improvement in the method of conducting the meetings and in the approach of the officers and business agent and the Executive Committee to Union obligations. I recognize and I think the evidence clearly discloses that this did not happen without some bickering and quite a bit of turmoil. I think the evidence also establishes that it was McDonald's suggestion to Underwood and the membership that a system of fines of $ 5 to $ 25 be imposed on anyone who interrupted meetings, which seems to the Court to be a sensible and practical solution. At any rate, as a result of the putting on of the penalties, the turmoil and bickering soon calmed down, and during Underwood's term of office -- and I am limiting it to the period up until July of 1952 -- any member who desired to talk upon a subject on the floor was fully protected in his right of free speech and free expression at that time. I say that even though such a person might have ideas which were contrary to that of the President and General Manager and the thinking and decisions of the Executive Board of Local 542. I shall not advert to that particular subject again.
There is, however, one point that I want to make at this time, that within two months after Underwood became President there was a short strike, that Underwood was in a large measure a proponent of that strike, even though it was called in violation of International contracts and even though it was called in violation of the master agreements with the Building and Construction Trades Council, of which Local 542 was a member.
It was a very short strike, but it indicates on the part of Underwood and his associates the beginning of an attitude which will become rather important as we develop the facts in the discussion of a final decision in this case.
Working under the 1949 agreement from 1948 up until 1950, it appears that, with the help of Vice-President McDonald, the operation of 542 was as nearly perfect as the Court can conceive is humanly possible.
The collective bargaining agreements had been, by custom and practice, for one-year periods. The effective dates were from May 1 of one year to April 30 of the next year. True it was that the actual signing of the contracts were often subsequent to the May 1 date, but the provisions of the contracts were retroactive to that date. My recollection is that even in the Feinsinger arbitration that condition also prevailed.
We are now at the beginning of the crucial periods in this case, 1950 to 1952. The unions and the Philadelphia local contractors orally agreed to the installation of a welfare fund, and at this time I intend to give certain definitions which will carry through the rest of this opinion. Hereafter when I mention the local contractor associations, I shall refer only to the three local Philadelphia associations, which comprise roughly in the neighborhood of 100 contractors, actually 98 contractors.
As opposed to that, there were several times that number of contractors in and beyond the five-county area covered by the three associations of which I spoke. Included in that group of contractors were contractors who were also members of associations such as Lehigh Valley, and so forth, numbering many times the number of members of the local contractors associations. Those contractors will hereinafter be referred to by me as the independents.
After the negotiations between the Union and the local contractor associations for the collective bargaining agreement for the year 1950 to 1951, the Union designated one Robert G. Kelly, its attorney, to conduct negotiations and to settle details of the collective bargaining agreement, as well as the setting up and operation of the welfare fund. It took many weeks to accomplish that result, and that Kelly did his job well is evidenced by the fact that his efforts met the unanimous approval of the Union. That was the case where one Halloran was the sole negotiator for the local contractor associations and Kelly for the Union.
As a result of that conference Kelly signed an addendum, as the Union representative, making the terms of the collective bargaining agreement the same as the welfare agreement and extending its terms to April 30 of 1952. That addendum, the evidence disclosed, did not come to Underwood's attention for a matter of weeks, and he attempted in the fall of 1950 to repudiate the agreement. I believe it was a matter from August to October. I do not believe it important for decision in this case whether the contractors did or did not take any action at that time. At any rate, we can take this as the fact, that from that moment on the local association contractors took the position that they had a valid two-year agreement. The Local Union and its negotiating committee, through Underwood, declared that Kelly had no authority to make that addendum extending the provision one year. They repudiated it and asked for negotiations with the local contractor associations for a revision of the benefits under the agreement.
It was at this time that the differential between the independents and the local contractor associations became very important. The Union, through Underwood and his associates, obtained an agreement with the independents, who, as I have said, were many times in number greater than the local contractor associations, to advance from May 1 of 1951 to April 30, 1952, the base rate of pay 25 cents an hour. The local contractors, asserting that they had a valid subsisting contract, refused to bargain in that connection, and the Union declared a strike. The local contractor associations went to court, and in a lower court action, affirmed about the middle of March of 1952 by the Supreme Court of Pennsylvania,
it was decided that there was a valid subsisting collective bargaining agreement and that the Union was bound to honor its contract under the law.
That was the posture of the situation in March of 1952, at a time when there was no question in fact or in law that the collective bargaining agreement of Local 542 with the local contractor associations expired on April 30 of 1952. Notice to that effect was timely given by the Union, and the local association contractors were invited to negotiate a new agreement. It is clear from the testimony that very little effort was expended by Local 542 in sitting down and negotiating affairs with the local contractor associations.
Sharply contrasted to this, however, is the approach of Local 542 to the independent contractors. Negotiations were entered into with the independents, vigorously pursued, and a result of a basic change in rate of pay of an additional 15 cents was secured, which totalled, as of May 1, 1952, a differential of 40 cents between the amount of the local contractors' agreement of 1950 and the new agreement with the independents. The agreement, so far as the Court has been able to determine from the testimony submitted in this case, was an entirely reasonable and practical bargaining contract.
We now come to the third period, of the period from May to September of 1952. Factually we know that there was no contract with the local contractor associations as of May 1, 1952. Under proper procedures the Union struck the jobs of the contractors belonging to the local associations.
Was there any effort to settle this strike? That is the crux of this case. In the agreement with the independents there was what I choose to call an openend item, that should the Union be able to secure from the local associations terms which were superior to those contained in the independent contract or obtain greater benefits for the members of the Union, the independents would retroactively agree to the same advantages being included in their contract with the Union.
What were the demands or suggestions made by the Union to the local contractor associations?
First of all, I think it is clear from the evidence that there was demanded every single item of benefit to the Union contained in the contract with the independents, including a 40-cent rise over the 1950 contract, but those demands were coupled with the absolute requirement that the local contractors pay every operating engineer who worked for any of them during the period from May 1, 1951, to April 30, 1952, retroactively 25 cents an hour, which was the amount paid by the independents, and which was what Underwood and his negotiating group for the Union wanted in 1951 but which the court said, under a valid subsisting contract, the men were not entitled to.
In other words, Underwood demanded the dollar value of the fruits of the contractors' victory or affirmance of the validity of the contract in the spring of the year. Although the contractors won in their contentions that they had a valid contract at which the Union had agreed to work for a period of one year, nevertheless, that was the one thing that had to be determined first in this negotiation.
If that were all, it might appear that a decision on that might not be insoluble, but what else did the Union demand? It demanded a pension plan not demanded of the independents. It demanded a safety code not demanded of the independents, with a penalty of $ 500 to be paid into such fund as the Union might direct. Violation of the safety code works both ways. An employer might violate it and an employee might deliberately violate it. That employee would be a Union member, but nevertheless, under the proposed agreement, the contractor would be responsible for the deliberate acts of the Union member.
Not required of the independents was a provision that if a machine were on a job belonging to any person or contractor with whom the Union had any dispute, it could not be operated, and if necessary for operation on the particular job, the whole job might be shut down.
Furthermore, they demanded that for any infraction or violation of any provision of the entire agreement, the employer must pay $ 500 into some fund to be designated by the Union, and that collectively every employer would be responsible for the acts of the individual members of the Association, a matter of joint or several liability on independent unrelated acts, and, further, that the Union would have the right to, in effect, exercise a veto power on who should be further members of any particular association.
It has been testified to, I believe, or argument has been made and it hasn't been controverted, at least as to the last four or five items, that this type of demand has never been heard of in the history of collective bargaining in the United States.
What was the condition of the persons affected, the local contractors in that situation, since their activities have been involved in large measure in this case? I am starting out by saying that there was one attempted action on the part of the local contractors which I utterly and vehemently condemn. Chief negotiator for the local contractors, Halloran, was definitely in a difficult situation, and in that situation he undertook to break the Union. He called on one Baronett, a former business agent, and another character of less than renown, Bozzelli, and attempted to have them organize a back-to-work movement, or if that should fail, to obtain from the general officers, the officers of the International Union, a new and competing charter in competition with Local 542. That he had no right to do anything of that nature, since he was a contractor and an employer, goes without saying, and the fact that he spent many thousands of dollars in trying to bring about this unwholesome and unholy result is certainly nothing to his credit, but, fortunately, he failed.
I shall now recount in chronological order the facts only, without comment, of the months of May, June, July, August, and September which I deem have a bearing upon the ultimate decision in the case. What was the position of the contractor associations and what did they do? I have discussed and will not refer again to the unwholesome attempt at union breaking.
The Local attorney for the Philadelphia contractor associations associated with him former Attorney General McGrath. Mr. McGrath, through George Meany, then Secretary-Treasurer of the A.F. of L. and now the President of the A.F. of L.-C.I.O., brought about a meeting between Halloran and Maloney in Chicago. This meeting was had only after McGrath had intervened with the then Secretary of Labor of the with the then Secretary of Labor of the United States, Maurice Tobin, to use Tobin sent someone to Philadelphia who brought back what was apparently a favorable report that the matter might be discussed calmly and an honorable settlement reached. Halloran also enlisted the services of William E. Carter, heretofore referred to, then an official of the New Jersey Local, and requested him to bring the contractors' position to the attention of International President Maloney.
Underwood was summoned to a conference at the Hamilton Hotel in Washington with Maloney, at which certain discussions took place which I will hereinafter refer to. In addition, Maloney asked Carter to make an independent survey and report. Maloney further summoned Underwood to Chicago, and in a three-day or four-day meeting there was later brought into the picture first Carter and secondly Halloran. The details of that meeting will be later referred to.
Underwood returned to Philadelphia, and the local unit of the Building and Construction Trades Council began to enter into the picture and importuned Maloney to do something about the settlement of the strike. Meetings were held by Underwood with the negotiating committee of the contractors, with the negotiators for the Union, with Carter sitting in, and they were entirely fruitless. On August 4 there was a meeting of the Executive Committee of Local 542, at which time it was clearly evident that there might be some intervention on the part of the National President, and by unanimous vote of the Executive Committee, confirmed apparently unanimously at a meeting of the membership on the 5th, it was decided that the Local Union would maintain its position and, if necessary, refuse to obey any order of the International President in connection with the then strike which had started on May 1,
and we are now up to August 5.
In the meantime there was a meeting of the A.F. of L. in Atlantic City, attended by Maloney. He had been importuned up to that point in some degree by the Secretary of Labor of the United States. Mr. Meany and Attorney General McGrath had talked to him. The high officials of the Building and Construction Trades Council had pressured him, claiming that there were 8,500 people walking the streets out of work because of the action of the Operating Engineers. He had received a rather starting telegram from the then Governor of Pennsylvania pointing out clearly that the action of the Engineers had stopped -- and there was no denial of this -- public construction in the amount of $ 125,000,000, which included highways, bridges, hospitals, schools, which the Governor deemed important for the welfare of Pennsylvania;
and in that status he issued an order for Underwood to order the members of Local 542 back to work and within 24 hours to notify him of his intention to comply.
What happened? In defiance of the order Civil Action No. 14071 was instituted in this court, charging a criminal conspiracy between Maloney, the officers of the Local Building Trades Council, Attorney General McGrath, Halloran, and there may have been some other people involved. The plain implication was that Mr. Maloney was being paid for what he did, in other words, that he had been bribed, and that assistance in the bribing came from the former Attorney General of the United States. I will have a lot to say about that later.
The case came on for hearing before Judge Grim of this court on the 14th day of August, 1952, and after two days of hearing, conducted mostly in chambers in the form of informal discussions, the case was settled by agreement, and it was decided that there would be a recommendation that the men return to work, waiving, as a condition of arbitration of any difference, the 25 cents an hour differential between the independents and the local contractors for the year May 1, 1951, to April 30, 1952.
That agreement was approved by the Union, and the men returned to work, and on that very day the order of supervision here under attack and consideration was issued by General President Maloney, and control of Local 542 passed to the supervisor appointed by the President, Hunter P. Wharton.
In connection with the order invoking supervision, a notice of a hearing was given for Washington on August 26. Such a hearing was held with the same Mr. Carter as Hearing Officer, and Mr. Thomas, the then General Counsel of the International Union, being present. After the hearing Carter made a report to the General President and the General Executive Board recommending the continuance of supervision, which has since continued to this day. After that hearing he also filed written charges against Underwood complaining of his actions in connection with the events between May 1 and August 14 of 1952, and asked that Mr. Underwood be disciplined in accordance with the procedures set forth in the Constitution of the International Union.
Mr. Underwood was served with a written copy of the charge and had the opportunity to and did reply. A hearing was set for the Commodore Hotel in New York in September. The hearing was held, and Mr. Underwood, as the result of and after the hearing, at a meeting of the Executive Board, was found guilty of the charges as preferred and was suspended for six years and fined $ 3,500.
It has not been established to my satisfaction, however, that the contracts by Wharton have been other than favorable to the membership, in that they are improvements on preceding contracts, and the scope and extent of coverage of the Union in this particular area has been greatly extended during his period. I cannot and do not condone the violence that has been exerted by some of his business agents, nor their goon-like tactics of terrorizing meetings, and I particularly deplore the attack on a gentleman who appeared to me to be a pretty decent human being, and that is McCarty. I think, however, that McCarty was led into that situation by another member of the Union about whom I may have to say something later.
I have reached an equally firm conviction that Underwood and his adherents did nothing to stabilize or tranquillize matters. I think it is perfectly clear from the evidence that has been produced before me in this case that they aggravated the situation.
I have outlined the general facts. I now proceed to a discussion of the law of the case and to the application of the facts to the law as I have determined it to be in this case. First of all, the Court must have jurisdiction of the action before it can render a binding decision.
In that connection, let us first take the Underwood case, Civil Action No. 14398. The action is in this court by reason of diversity of citizenship. Underwood is a resident of Pennsylvania and Maloney is a resident of Illinois. The evidence has clearly established that more than the statutory sum of $ 3,000 exclusive of interest and costs is involved, so if there is a justiciable controversy between these two parties the matter is properly in this court. 28 U.S.C.A. § 1331.
One of the problems involved in that determination is whether there must be an exhaustion of internal union remedies. There is a legal principle in connection with disputes of members and unions that an aggrieved person must use all reasonable internal protections of the Constitution and By-Laws which are available to him.
If reasonable internal protections are not afforded, there is no question of the right of the individual to come to court. If reasonable protections are set up and the aggrieved person attempts to use them and can't get a decision, that may well spell exhaustion of internal union remedies.
The law is clear, however, that exhaustion of internal remedies is not required where there is a property right involved or where the plaintiff is seeking damages on the basis of loss of wages and employment protection. That is the case of Heasley against Operative Plasterers & C.F.I.A., Local 31, 1936, to be found at 324 Pa. 257, 188 A. 206, opinion by Justice Stern.
The logic behind such a rule is clear. While an appeal to an Appellate Review Board within the Union might obtain reinstatement, if there is an expulsion, or a lifting of a suspension, the Union has no power to award damages created by its own misdeeds. The law even goes further and says that, even absent a suit for damages, if illegal procedures are used in suspending or expelling a member, or that there was bad faith in the action taken on the part of the Union authorities, or if there is no effective right of appeal, exhaustion of remedies is not necessary;
and when I mention illegal procedures, I have in mind the failure on the part of the Union to comply with the protection granted in the Union's own Constitution, as properly interpreted in the light of due process, both procedural and substantive.
Should the Union attempt to arrogate to itself power not granted by its own Constitution, that would also spell illegal procedure.
In the Underwood case nearly every one of the factors not requiring exhaustion of remedies before the institution of suit have been alleged in the complaint and evidence has been offered in support of those contentions. It must follow, therefore, that Underwood's present suit was properly filed and that the Court has jurisdiction both of the parties and of the subject matter of the suit.
Now we turn to the Dawson suit, Civil Action No. 14547. With respect to this suit, all that I have said with respect to jurisdiction in the Underwood suit applies equally, with one additional problem which was left for determination at the time of the trial of this case. That question is whether the named plaintiffs and such other Union members as appeared to testify represent adequate representation of the entire Union membership.
At the outset I am confronted with the opinion of the Circuit Court of Appeals of the Third Circuit in Giordano v. Radio Corp., 1950, 183 F.2d 558. In that case Giordano was expelled by a rather close vote of the entire membership of the Union. He brought suit on behalf of himself, the expelled member, and 15 other members who were likewise about to be expelled. The court in that case held that he was attempting to vindicate a personal rather than a class right.
In this case Dawson and his co-plaintiffs are seeking to set aside the order of supervision on the ground that the President was without authority to issue it and that all of the members of Local 542, an unincorporated association, were denied procedural aud substantive due process, which made null and void the continuance of the order entered on August 19, 1952.
The evidence in the record in this case discloses that not only the named plaintiffs in this action, but the entire Executive Board, composed of some of the plaintiffs in this action, voted unanimously to support the legal action against any effort of the International officers to interfere in any way in the conduct of the Local, which, of course, would include the invoking of supervision over the affairs of the Local. We also have the uncontroverted minutes that on the day after that vote, which was August 4 of 1952, that on August 5 of 1952, several hundred of the 4,500 members of the Union at a meeting unanimously, so far as the minutes show, reaffirmed and approved the prior action of the Executive Board.
It would appear, therefore, to the Court that the factual situation in this case is so different from the Giordano case that the ruling of Judge Maris and the principle of law there enunciated are not applicable to the facts of the present case.
I hold, therefore, that there has been a sufficient showing of adequate representation of the class for the purposes of the relief claimed in the Dawson suit, and I therefore hold that the Court likewise has jurisdiction of the action in the Dawson case.
I think perhaps that such a finding in this case is fortunate. There are many reasons why this case should be decided once and for all and finally. Disputes of this nature have a terrific impact on the little fellow, and he is the one that suffers, and we must get a determination so that all parties to this action will know their respective rights and their liabilities and obligations.
It is clear that there is a cleavage in this organization and that the funds have been contributed by a group for the purpose of waging these very lawsuits, and it is entirely clear, from what I have seen in this court between February 4, 1957, the start of the case, and May 3, of 1957, which was the last day of the trial of this case, that there is extreme bitterness, and I feel that a decision may be of help in ending this most unfortunate and unnecessary situation.
We have now reached the point where a discussion of the applicable law to the facts of the case as I have heretofore found them is in order. There are two separate and distinct cases here, which will require individual and joint treatment. First of all, let us take the Underwood case. This is a conflict involving an individual who stands suspended because of alleged misdeeds, and we now must apply the law governing suspension as it affects him as an individual and the rights of the Union to impose such a suspension.
I have heretofore referred to the law governing a situation like this. Stated simply and in general terms, the law requires that the International obey its own Constitution and afford the accused procedural and substantive due process of law. That due process properly includes, as the courts of Pennsylvania have so often said, procedures in conformity with the law of the land, which means legal due process. There is one limitation to this general statement, however, which is important in this case, and that is that due process accorded within the framework of an unincorporated association does not necessarily mean due process as ordinarily interpreted in a judicial proceeding.
Mr. Justice Stern in an opinion used an expression which I think is applicable in most of these situations. Technically, due process of law as referred to in legal proceedings requires certain niceties of procedure, such as the right to representation by counsel, a stenographic record, and certain other safeguards which are accorded to any suitor in the courts of the United States. The distinction of due process within the Union framework is this: The courts have never held that the requirement that a person be represented by a member of the Union, as contrasted to outside counsel, has been other than valid.
Neither have the courts ever held that a person is entitled to a stenographic transcript unless one actually was taken. So two of the complaints in this case fall immediately.
We also have certain other requirements which I will advert to in a few moments, but there are two fundamental principles of law which I want to make clear at this point. The courts do not look with favor upon interference by the courts in the internal workings of any fraternal, religious, or labor organization. If, in the matter of discipline, the court finds that substantial conformity has been had and that substantial justice has been done and the procedures have been fair and reasonable, the courts are extremely reluctant in any wise to interfere in the operation of an unincorporated association such as this.
Where, however, an adjudication by a trial committee, or succeeding appellate bodies within the Union, of the guilt of an accused individual or even a Local itself of the International involves certain specific and well defined procedures without which the courts have generally held the accused has been denied the right of due process, the courts do not hesitate to interfere.
What are those requirements? First, it must be clear that the Union hearing complied with the Union's internal law. Article VI, Section 6, of the Constitution involved here requires that any and all members, local officers and local unions affected or aggrieved by any act or decision of the General President, may demand a hearing thereon before the General Executive Board, with appeal to the general convention in the manner described within the Constitution.
Pennsylvania courts have uniformly interpreted such a provision that there must be in the proceeding a findings of fact in a general form, as contrasted to the court requirement of a very specific form, (2) a decision that the accused has violated some provision of the Constitution or rules of the organization, (3) that he has been informed of what he is accused, in other words, that written charges must be presented, that the accused must be notified of the time, place, and purpose of the hearing, which has to be conducted with some degree of specificity and formality, and (5) that the decision clearly state the result and the penalty.
Now, that generally states the law of the Underwood case. I want to make it extremely clear, since there are so many people present in the courtroom this morning, that this case is not being decided in the news columns, nor in connection with any matters presently before any legislative group, nor on the basis of any propaganda in newspapers or periodicals which has been instigated by any party to this action, and there has been a lot of it since it started, but the determination of the Court this morning is made on the record made in this courtroom and the exhibits entered there and nothing else.
Now, what does the record show? From a re-examination of the entire record, the Court has been impressed with the fact that Union members between 1938 and 1948 were not very well treated by their superiors, the men who had the business conduct of the Union in charge, and whose activities would affect what I choose to call the little man. Two of the most glaring faults with the operation of the Union were the percentage assessment of wages and the practice of charging a weekly license fee for the privilege of working as an operating engineer. They were glaring abuses, and I may say that while it is unimportant to a decision in this case, I have no doubt that a lot of these percentage payments reached pockets other than the pocket of the Union Treasurer. The fact that that practice was discontinued at the time Maloney came in any have a bearing in the light of future developments.
Underwood attempted to take credit for the abolition of the permit fee. That claim is not borne out by the record. Before he came to power the then supervisor had been peremptorily ordered by Maloney todiscontinue that practice,
so that Underwood's problem was merely to put into effect what I consider to be a proper action on the part of the International President to secure peace within a local organization.
I have adverted to the fact that during the period of 1938 to 1948 Carter signed some contracts in Fay's name. That Fay probably designated him to do it I have no doubt, because I have been unable to find that Fay had any appreciable influence on the operation of the union between 1938 and 1948, but Jasper White did, and there is no doubt in my mind, from the Feinsinger arbitration and the report, that Jasper White might well have pleaded the Fifth Amendment in his conviction for contempt of Court, because I think the record in this case as presented to me clearly shows that while he obtained apparent advantages in contracts which would be favorable to union membership, they were obtained from the contractors without much argument for what he called window dressing, with no intention of enforcing them against the particular contractors involved.
What he may call window dressing I choose to term methods of extortion, because the record of that Feinsinger arbitration clearly shows that he used those on the job and they were settled on the job, and the inference is inescapable that he settled difficulties by extorting moneys from the contractors for his own personal greed. However, with the exception of his short reappearance in the Baronett matter, which I have already characterized, Jasper White is no longer in the picture, and what he did at that time now has no bearing on this case.
But what was the position of the International? We are dealing here with two men, Underwood and Maloney. What was Maloney's position when Underwood came to power, and we must recall that he threw no block at Underwood coming to power on the basis of the Court of Common Pleas No. 2 suit. The record is clear that Maloney gave him every assistance he requested. He sent McDonald, his third International Vice President, into Philadelphia to help him,
and the record shows that he did help him. An objective rereading of the entire record in this case clearly shows that McDonald played a large part in bringing the harmony and the well-being of the union into existence in what I have termed as perfect handling of the union during the time that I mention.
That Underwood was a dynamic individual who had the complete confidence of an extremely large percentage of the members is also evident. That is not in the slightest degree surprising. For a period of ten years union meetings in the real sense had been practically non-existent. There was a turmoil any time anyone attempted to speak his mind. No one was permitted to talk unless in support of Jasper White or his cohorts. Properly and intelligently Underwood insisted that every member who wished to speak be given the opportunity without interference from other men. As I have previously stated, there was some trouble at first, but eventually that system was carried out, and so it does not come as any surprise to the Court, and it is clearly evident here, that Underwood's Executive Committee would follow his slightest which as if it were a command.
Underwood's evidence has completely convinced me that the organization of the Pennsylvania Turnpike was instituted by Maloney alone. It resulted in a substantial increase in membership in 542. Despite an Underwood letter in September of 1949, which was carping and critical, he admitted some two months later that Maloney and Maloney alone by exerting pressure at different points throughout the country brought the contractors into line so that the entire turnpike area was covered by proper union contracts.
As I have said, after that episode, and certainly up until the time of 1950, Underwood's tenure was marked with the complete approbation of both Maloney and McDonald. I have already commented upon the 1950 contract and the Kelly incident and what happened up until 1952, and I do not need to repeat it.
What is the real situation in that crucial period between May 1 and August 19 of 1952? I am not in the slightest degree impressed with the open-end provision of the independent union contractors. I am of the firm conviction, reinforced by a complete review of the record, that while Underwood made a reasonable contract with the independents, he at no time had any intention of making any contract with the local contractor associations, and what evidence is there to support that conclusion?
There certainly is no evidence here that is credible, in my opinion, that he attempted to bargain in good faith. The demands which he made on the local associations he did not make against the independents, and if they were important to his membership, they were more important to have with 450 contractors than with less than a hundred. He didn't think it important enough at that time, but he did make the demands which have been termed in the course of this proceeding outrageous against a few people,
and what was the reason behind it? That there was bitterness between Halloran and Underwood, perhaps on a professional basis, perhaps on a personal basis, is well known to the Court, because both of them were before me in a preceding suit.
In that situation what did Halloran do? I have already castigated him for union breaking, which I think is despicable, but in the favorable economic position that Underwood wa in, Underwood was in a position to bankrupt the contractors and to destroy their association. That he did not at any time attempt in Philadelphia, with the contractor associations, to bargain in good faith, as he was required to do, is to me crystal clear from this evidence.
Now we come to the great part of the conspiracy about which I shall talk later, the conspiracy between Attorney General McGrath and Maloney and others. Carter was thrown in, I think for good measure, I am not sure. I haven't looked at the caption in the last two days.
What is the evidence produced here? That Halloran's attorney sought out the services of a man who had been until a relatively few days before the Attorney General of the United States for the purpose of enlisting his aid with the higher echelons of the union and with the Government of the United States does not strike the Court as being one bit surprising nor it is in the slightest degree unethical. The picture sought to be painted, that General McGrath went first to George Meany for a favorable approach to Maloney, a man whom he had met theretofore only casually, when George Meany's daughter was his secretary, strikes me as not being unethical, not being criminal, not being venal, but practical, good, everyday horse sense. That he would in Chicago give Halloran an opportunity, which he never had, to state briefly his opinion of Underwood's attitude and what Underwood was trying to accomplish, does not in the least bit surprise me, and the fact that a man of McGrath's stature received $ 15,000 in an important case does not strike me as proving anything in the nature of a conspiracy, and I see absolutely nothing wrong with it.
On the contrary, one element in this case which has been entirely ignored is this: I am not so far out of the practice of the law that I don't recall that when I would associate a lawyer in another city to represent me in a certain situation, that lawyer, before he sent his bill would discuss it with me, and then and there the amount to be billed the client was determined and a forwarding fee was determined; and that has been entirely ignored in this case, that it probably wasn't McGrath that set the fee. It was probably Jacoby, and Jacoby got $ 10,000 out of it, out of which he put $ 7,000 in his pocket and gave his partner $ 3,000. I see no evidence in this case of dishonesty, and I regret sincerely that there has been any implication in the slightest degree of dishonesty against a worthy lawyer, no matter whether he happens to be a Philadelphia lawyer, a Pennsylvania lawyer, or a lawyer of another state.
Now, what else do we have? We have the inference which I am asked to draw that Halloran and his group, who had had dealings, proper professional dealings, with Carter before in Jersey, because they operated in Jersey and they had to do business with him, went to see him and pleaded with him to talk to Maloney, and the only evidence in the case is that Carter in the first instance gave them absolutely no encouragement. The fact that he might have properly, with thoughts of good trade unionism, carried the story to Maloney, just doesn't ever seem to occur to the plaintiff in this case. There is an attempt to ascribe every bad motive to everyone who opposed Underwood in this case, and he surrounds himself with a halo of sanctity and holiness which isn't borne out by the record.
In the posture of the case in June and July, I disbelieve Underwood's statement of what happened in Washington, that he was told to maintain his demands. I believe Maloney, that Underwood asked for a few days to settle the strike.
I disbelieve Underwood's account of the Chicago conference. I believe Maloney's account that there was agreed to by Underwood, with a promise to submit it to the membership with a recommendation of acceptance, the independent contract as it then existed, with four variations of minor degree which could very readily be submitted to arbitration.
What happened when Underwood came back from Washington and came back from Chicago? He insisted on every one of the demands listed on Exhibit P-178, not one of which was required of the independents previously mentioned.
This information had to get to Maloney. Much is made of the fact that he sent Carter in to break the strike, and I believe from the evidence that the only intention on the part of Maloney or his then representatives was to settle, not to break the strike. Underwood would never have settled the strike until he had bankrupted all of the contractors involved or driven them out of the association.
What was Maloney to do in that situation? Despite the fact that Carter has been painted throughout this picture by the plaintiff as a scoundrel, a rogue, and a thief, the only documentary evidence that we have in this case
shows him to be a keen, intelligent, honorable, honest purveyor of facts, and those are the facts that came right from the plaintiff's own mouth.
That there was some dissembling on the part of Carter and Maloney I agree. Carter was sent in here as more than an observer in the contract negotiations. He was sent in here to enter into the negotiations, if necessary, and I think that that dissembling was to protect Underwood's position, and instead of its being characterized as an underhand, secret deal, I think that Maloney is to be commended for trying to uphold in that difficult position the picture of Roy Underwood as president of Local 542.
That is the impression I have from the case. James McDevitt, of the Building Trades Council, said that he was most interested and that he had time and time again asked Maloney to do something about this situation, that 8,500 people were walking the street. It hasn't been denied that he did so, but the innuendo was raised that he wasn't a good trade union member. I think Mr. McDevitt's record clearly indicates to the contrary.
What was Maloney to do in a situation like that? Here was a situation where the Governor of the State and all of the associate trades in Philadelphia were pounding Maloney. He was convinced, because he had been told by Underwood, that Underwood intended to break the contractors and break the association.
He tried to persuade him not to do it and gave him an opportunity on several occasions not to do it, but what was Underwood's attitude? They had to go.
Now, much as I despise the action of union breaking, it is a two-edged sword, because anyone who unwarrantedly attempts to break individuals and associations is likewise in the same category that I put Halloran. Maloney was faced with an intolerable situation. The lawsuit had been started to effect what Underwood testified to here on this stand. True it had been started -- because he Dominated that union -- to test the validity of that order. The order was valid and within the power, under the constitution, of the General President. If that suit was successful, international unionism as I know it in this country would have been destroyed. It is a question of the tail wagging the dog. Underwood attempted to determine for himself the constitutionality and the right of every order received from the General President. That attitude was observed all the way through his conduct of office. It is unfortunate, because until he developed that, he had great potential. That is shown in his attitude toward the Building Trades Council. When they called him on the carpet for not doing something according to the rules, he said, 'You are anti-labor. Get out.' When Maloney was pushing him to organize the Turnpike, he said 'You are anti-labor. You are entirely responsible.' That has been the attitude. He has been right; nobody else possibly has been right.
But Maloney's order was valid, and Underwood should have obeyed it and taken his appeal if he felt it was wrong. I find that Maloney acted in the utmost good faith, and I commend him ...