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INTL. BHD. OF TEAMSTERS, LOCAL UNION 107 v. INTL.

August 20, 1996

INTERNATIONAL BROTHERHOOD OF TEAMSTERS, LOCAL UNION 107, et al.
v.
INTERNATIONAL BROTHERHOOD OF TEAMSTERS, et al.



The opinion of the court was delivered by: BARTLE

 Bartle, J.

 August 20, 1996

 This action involves a dispute over a union trusteeship.

 Plaintiffs, Local 107 of the International Brotherhood of Teamsters ("Local 107") and certain of its members, allege that the International Brotherhood of Teamsters ("IBT") and its General President Ron Carey ("Carey") have improperly imposed a trusteeship upon Local 107 in violation of § 462 of the Labor Management Reporting and Disclosure Act ("LMRDA"), 29 U.S.C. § 401 et seq. Plaintiffs have moved for a preliminary injunction to enjoin the trusteeship and to compel the IBT to return the governance of Local 107 to its officers. *fn1" A hearing was held on this motion on August 15, 1996. This court makes the following findings of fact and conclusions, pursuant to Rule 52 of the Federal Rules of Civil Procedure.

 On August 6, 1995 the Independent Review Board ("IRB"), established under a 1989 Consent Decree between the IBT and the Government, *fn2" issued a report criticizing the management of Local 107. The IRB report recommended that Local 107 be placed in trusteeship.

 Three days later, on August 9, General President Carey notified Local 107 of his intent to impose an emergency trusteeship over it without a prior hearing pursuant to his authority under Article VI, Section 5(a) of the IBT constitution. Based on the charges set forth in the IRB report, Carey's notice outlined six major reasons for this trusteeship: (1) the decrease in the net assets of Local 107 during the years 1991 to 1995; (2) the continued payment of bonuses to Local 107 employees during financially troubled years; (3) the wrongful personal use of union funds by Local 107 officers along with a general lack of financial control; (4) Local 107's accrual of a mortgage in March, 1995 without proper officer or member approval; (5) the failure to hold monthly membership meetings between October 25, 1991 and August 1995; and (6) the contacts between Local 107 and organized crime.

 Carey appointed Gerard P. McNamara, recording secretary of Teamsters Local Union 115, as the temporary Trustee of Local 107. McNamara implemented the emergency trusteeship on August 12, 1996. Two days later, this lawsuit followed, challenging the right of the IBT to mandate a trusteeship on an emergency basis without a hearing.

 Section 462 of the LMRDA provides:

 
Trusteeships shall be established and administered by a labor organization over a subordinate body only in accordance with the constitution and bylaws of the organization which has assumed trusteeship over the subordinate body ....

 Plaintiffs claim that the trusteeship imposed on Local 107 was not in accordance with the constitution of the IBT and therefore violated § 462 of the LMRDA. Article VI, Section 5(a) of the IBT constitution details the power of the General President to appoint a trustee and assume control of a local union. It states in relevant part:

 
If the General President has or receives information which leads him to believe that any of the officers of a Local Union or other subordinate body are dishonest or incompetent, or that such organization is not being conducted in accordance with the Constitution and laws of the International Union or for the benefit of the membership ... or if the General President believes that such action is necessary for the purpose of correcting corruption or financial malpractice ... [or] restoring democratic procedures ... he may appoint a temporary Trustee to take charge and control of the affairs of such Local Union or other subordinate body; provided, however, that before the appointment of such temporary Trustee, the General President shall set a time and place for a hearing for the purpose of determining whether such temporary Trustee shall be appointed; and further provided that where, in the judgment of the General President, an emergency situation exists within the Local Union or other subordinate body, the temporary Trustee may be appointed prior to such hearing, but such hearing shall then commence within thirty (30) days and decision made within sixty (60) days after furnishing of the transcript of testimony ....

 [emphasis added]. This provision, in summary, requires that a hearing precede the appointment of a temporary Trustee except in an "emergency situation."

 It is undisputed that § 462 of the LMRDA requires that any imposition of a trusteeship accord with the IBT's constitution and bylaws. The Union's constitution, in turn, requires a hearing before that drastic step is taken except in an emergency situation. It is conceded that no prior hearing was conducted. Thus, the pertinent question is whether Carey properly invoked the emergency situation provision of the IBT ...


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