effort to eliminate the undesirable element which has been uncovered in the labor-management field. To allow even a majority of members in that union to authorize such action, when, if the charges made against these defendants are true, it is these very members whom the officers have deceived, would be equally inconsistent with the Act. If some of those members have not been deceived by the defendants, but because of the immediate gains in their income and working conditions which Local 107 has won for them, they are content to accept as officers anyone who produces immediate results, regardless of what other wrongs those officers may commit in so doing, this Court would still not feel constrained to bow to their will in the light of its duty both to those members of Local 107 who place honesty above material gain as well as to the millions of others in the labor movement whose cause would be seriously injured by such an attitude.
Although we have not attempted to treat defendants' arguments individually, since we feel they are satisfactorily answered in this opinion, something should be said concerning their argument that the plaintiffs are here asking us to do that which Congress specifically refused to do when it failed to adopt Subsection 107(b) of the original Senate version of the Labor Bill (The Kennedy-Ives Bill), which specifically prohibited 'both unions and employers from directly or indirectly paying or advancing the costs of defense, of any of their officers * * * who (are) indicted for * * * any violation of any provision of the Bill.' S.Rep. No. 187, 86th Cong., First Session, 1959, U.S.Code Cong. and Adm. News 1959, p. 2318.
We are familiar with this argument in statutory construction. Although the value of such reasoning to discover the 'intent' of Congress is often questionable, we can not of course ignore it, particularly in light of several Supreme Court rulings referred to by the defendants. Manhattan Properties, Inc. v. Irving Trust Co., 1934, 291 U.S. 320, 54 S. Ct. 385, 78 L. Ed. 824; Duplex Printing Press Co. v. Deering, 1921, 254 U.S. 443, 41 S. Ct. 172, 65 L.Ed 349; Pennsylvania Railroad Co. v. International Coal Min. Co., 1913, 230 U.S. 184, 33 S. Ct. 893, 57 L.Ed 1446. Nevertheless there are reasons why we are not persuaded by their argument here.
First, the language contained in the Kennedy-Ives Bill is much broader than our holding in the present case. It is essential to an understanding of our position in this case that this point be made clear. That section quoted above would foreclose financial aid by the union to an officer in suits under the Act, under any circumstances. In our case we have expressly limited our holding to the facts before us. In the light of all of these facts we do not feel that the several actions brought against the defendants involve any question of sufficient interest to Local 107 to warrant their expending large sums of union money to pay the legal costs of the defendants in these suits. That Congress refused to foreclose the right of a union under any circumstances to lend financial aid to an officer when sued under any section of the Kennedy-Ives Bill is not, we feel, a strong argument for the conclusion that under no circumstances could a union be prohibited from lending financial aid to an accused officer.
Second, in none of the cases cited by the defendants to support their argument as to the conclusion to be drawn from the omission of Section 107(b) were there two distinct bills involved. Here the Act finally passed by Congress (with modification) was the Landrum-Griffin House Bill and not the Kennedy-Ives Senate Bill. Strictly speaking, the Conference Committee did not amend the final Bill as to the provision in question, since it was never contained in it to begin with. Had the Kennedy-Ives Bill ultimately been adopted with Section 107(b) deleted, the defendants' argument would be more convincing.
Finally, even assuming that Congress intended to leave a union free to use its funds for the purpose of paying its officers legal expenses in actions brought against them under the new Act, if under the law of Pennsylvania, the state in which the union membership contractual relationship arose, such expenditures are illegal, a union officer could not consistent with his duty to the union (which duties ultimately flow from its Constitution) expend union funds for this purpose. This would follow unless we interpret the omission of this prohibition as creating an affirmative federal right in a union to so spend its funds, which right is intended to supersede any state law to the contrary. We flatly reject such an interpretation of the new Act.
At the time that permission was granted to the plaintiff to file their complaint pursuant to § 501(b) of the Act (see our Order of November 12, 1959), we specifically refused to pass upon the validity of any of the legal arguments raised by the defendants. Since the reasonable time requirements of § 501(b) were clearly met as to at least one phase of the complaint,
and there appearing to have been 'good cause' shown by the plaintiffs for filing suit, the Court permitted the complaint to be filed.
However, since that time we have had the benefit of extensive legal arguments on the merits of the action and as a result have reached the conclusions above set forth with regard to the retrospective application of the Act. In view of these conclusions, which in effect result in stripping plaintiffs' complaint of all but those few paragraphs which state in general terms that the defendants' unlawful activities are continuing to the present time, we are compelled to order the plaintiffs to amend their complaint to state specific acts of misconduct in violation of § 501 which have occurred subsequent to September 14, 1959 and which the union upon request has failed within a reasonable time to answer or otherwise correct. In the event that the plaintiffs fail to so amend within a time to be set in our order, their complaint will be dismissed with prejudice, excepting from such dismissal, of course, that part of their complaint which deals with the injunction discussed above.
A formal order will be entered enjoining the defendants from expending union funds for the defense of the cases presently pending against the defendants in either the Courts of the Commonwealth of Pennsylvania or in this Court. This ruling in no way attempts to pass upon the question of whether or not Local 107 may with propriety, by appropriate resolution, reimburse its officers for their legal expenses in the event they are exonerated from any wrongdoing in connection with the handling of union funds involved in the actions presently pending.