Protest Decisions

November 5, 1996

VIA UPS OVERNIGHT

Phil Rushing

November 5, 1996

Page 1

Teamsters for Ron Carey Slate

c/o Phil Rushing

7524 Andrea Avenue

Stockton, CA  95207

Pat Miraglio, Secretary-Treasurer

Teamsters Local Union 439

153 E. Fremont Street

Stockton, CA  95205

Albert M. Ellis

Hakeem, Ellis & Simonelli

2800 W. March Lane, Suite 200

Stockton, CA  95219

Paul Alan Levy

Public Citizen Litigation Group

1600 20th Street, N.W.

Washington, DC  20009

Phil Rushing

November 5, 1996

Page 1

Re:  Election Office Case No. P-995-LU439-CSF

Gentlemen:

A pre‑election protest was filed pursuant to Article XIV, Section 2(b) of the Rules for the 1995-1996 IBT International Union Delegate and Officer Election (“Rules”) by

Phil Rushing on behalf of himself, Tonno Ciaramintaro, Steve Jones, Joaquin Morales,

Ray Walbert, Tim Fleming, and Howard Rempfer, all members of Local Union 439.  In essence, the protest claims that Pat Miraglio, Bob Gamaza, Joe Gatz, George Kelly,

Allen Mota, Dennis Stoycoff, Paul Vigil, Pete Easton and Claire Butterfield, all of whom are officers of Local Union 439, violated the Rules by filing a libel action in state court against the protesters for campaign statements made in the course of the 1996 International Convention delegate election.

Specifically, the protesters argue that the instant libel action is not well-founded because it does not allege actual malice, nor does it contain sufficiently specific allegations of actual injury.  The protesters further urge that the action be referred to the U.S. Attorney to determine whether a contempt motion should be filed under the All Writs Order.  Finally, they request that the Election Officer retain jurisdiction over the protest so that if the libel action is later resolved in such a way as to demonstrate that it lacked a reasonable basis in fact or law, the respondents can be ordered to pay the reasonable costs and attorney fees of the protesters.

Phil Rushing

November 5, 1996

Page 1

On behalf of the respondents, Pat Miraglio maintains that the libel action is necessary to address the harm they have suffered from “malicious lies” directed at them during the course of an election campaign.  He counters the protesters’ claim that the libel action has suppressed their free-speech rights by presenting three flyers that have been issued by the protesters since the libel action was filed.  Finally, he cites attorney-client privilege regarding the fee arrangements of the libel plaintiffs and their attorneys, but represents that any and all costs associated with the action have been paid personally by the plaintiffs.

Regional Coordinator Matthew D. Ross investigated this protest.  At the request of the Election Officer, the parties submitted position papers on the applicable legal standard, as well as evidence in support of their respective positions.

FACTUAL BACKGROUND

On September 18, 1996, the officers of Local Union 439 filed a libel action in the Superior Court of California for San Joaquin County.  The lawsuit alleged that the protesters, all of whom successfully ran as delegates to the 1996 International Convention on the Teamsters for Ron Carey slate, published two campaign flyers in March 1996 that contained the following statements:

Supplemental Income Plan, covering officials of local 439.  This pays them a whopping 14.5 percent of their gross income each year in an extra hidden plan.  Since our secretary-treasurer had a salary of $61,746 in 1994, that’s over a $10,000 in dues money paid into a fourth pension plan each year.

Western Conference Pension, the same one working Teamsters have.  But they pay into it with our dues at a much higher rate than working teamsters get, so their fourth pension is a fat one.

The Teamsters for Carey are running for delegates to represent rank and file Teamsters.  We will vote for an amendment to the I.B.T. Constitution to end multiple pensions, and fight for one good pension for all Teamsters.

After all this your so called Leadership Team Bob Gamaza and Pat Miraglio appointed two business agents to the Tracy Facility, in trucking.  They appointed Clare Butterfield from Certified Grocery who had no clue what was going on at (SDMI) and still doesn’t, and in the warehouse they appointed Pete Easton who was fired by (SDMI) for stealing.  Are these the fellows you want leading you into the future.  We hope not!

Phil Rushing

November 5, 1996

Page 1

The first three statements are in reference to the claim contained in one of the flyers that full-time local officers and business agents of Local 439 receive four pensions.  According to the lawsuit, each of these statements was false and “libelous on its face.”  Moreover, the suit claims that each statement was published by the defendants “with malice, oppression and/or fraud” because the defendants refused to file a retraction following a request by the plaintiffs.

              DISCUSSION

Article VIII, Section 11(a) of the Rules recognizes the right of all union members to “participate in campaign activities, including the right to run for office, to support or oppose any candidate, to aid or campaign for any candidate, and to make personal campaign contributions.”  Article XIII of the Rules further incorporates the right of union members to freedom of expression and assembly from Section 101(a)(2) of the Labor-Management Reporting Disclosure Act (“LMRDA”), 29 U.S.C. §411(a)(2); and Section 401(e) of LMRDA prohibiting reprisal against a member for campaigning, 29 U.S.C. §401(e).[1]

Phil Rushing

November 5, 1996

Page 1

Article VIII, Section 11(f) of the Rules prohibits any retal­i­ation against anyone by the union or its agents for exercising any right guaranteed by the Rules.[2]  To demonstrate retaliation, a protester must show that conduct protected by the Rules was a motivating factor in the adverse decision or conduct in dispute.  The Election Officer will not find retaliation if she concludes that the union officer or entity would have taken the same action even in the absence of the protester’s protected conduct.  Gilmartin, P-032-LU245-PNJ (January 5, 1996), aff’d, 95 - Elec. App. - 75 (KC) (February 6, 1996).  See Leal, P-051-IBT-CSF (October 3, 1995), aff’d, 95 - Elec. App. - 30 (KC) (October 30, 1995); Wsol, P-095-IBT-CHI

(September 20, 1995), aff’d, 95 - Elec. App. - 17 (October 10, 1995).

The Election Officer has consistently held that the Rules “neither prohibit nor regulate the content of campaign literature.”  Rogers, P-518-LU373-SOU (February 21, 1991).  Rather, as the Election Officer has stated, “[t]he goal to be protected is free speech.”  Newhouse, P-388-LU435-RMT (February 21, 1996).  See Landwehr, P-201-LU795-MOI (November 15, 1995); Braxton, P-304-LU623-PHL (May 21, 1991) (“The model for free and fair Union elections is that of partisan political elections . . .  The cardinal principle is that the best remedy for untrue speech is more free speech, with the electorate being the final arbiter”).

In Hoffa, P-1019-IBT-NYC (October 23, 1996), appeal pending, the Election Officer held that the filing and prosecution of a well-founded suit for libel is not a violation of the Rules, even if it was commenced for a retaliatory purpose.  In reaching this decision, she relied on the decision in Bill Johnson’s Restaurants v. NLRB, 461 U.S. 731, 743 (1983), where the Supreme Court found that the protections against retaliation under the National Labor Relations Act must accommodate the First Amendment right of persons to submit well-founded claims for personal injuries to the courts.

The Election Officer further found in Hoffa that the standard in Bill Johnson’s Restaurants is consistent with case law under the LMRDA, which has generally recognized that a libel action which is not sponsored or funded by a labor organization does not violate a union member’s statutory freedom of speech.  See Salzhandler v. Caputo, 316 F.2d 445, 451 (2d Cir. 1963) (“[A]lthough libelous statements may be made the basis of civil suit between those concerned, the union may not subject a member to any disciplinary action on a finding by its governing board that such statements are libelous.”); Fulton Lodge No. 2, IAM v. Nix, 415 F.2d 212, 219 n.17 (5th Cir. 1969) (“[A] union member or official who considers himself defamed by the statements of another member, is not preempted by the LMRDA from recourse to a civil action for defamation.”); Clark v. Esser, 821 F. Supp. 1230, 1237 n.5 (E.D. Mich. 1993) (same).

The Election Officer noted that while she has exclusive authority to set the terms of the election, conduct covered by the Rules may still be subject to other legal proceedings.  She cited the example of Passo, P-469-LU705-CHI (February 29, 1996), aff’d in relevant part,

96 - Elec. App. - 124 (KC) (March 13, 1996), where the Election Officer’s finding that a physical struggle between members which violated the Rules did not preempt the filing of state criminal charges for assault and battery arising out of the same incident.

Phil Rushing

November 5, 1996

Page 1

Finally, the Election Officer in the Hoffa decision also addressed the issue of whether the prosecution of a libel suit later determined to be baseless and retaliatory could improperly interfere with the election.  The Election Officer concluded that “false speech (which could include defamatory speech) does not interfere with the election process and is best left for refutation in the political arena.  Similarly, allegations raised in a libel suit can be countered in campaign statements and is simply another issue to be debated by the parties.”[3]  The Election Officer was satisfied that by adopting the Bill Johnson’s Restaurants standard, the effectiveness and number of baseless, retaliatory suits would be severely limited by the lingering threat of having to pay attorney fees and costs to the defendants.  Any further remedy, she concluded, “is not necessary to maintain the integrity of the election process.”

The protesters in this case do not argue that the right of free speech in the campaign setting is unconditional.  Rather, they contend that applying the test of Bill Johnson’s Restaurants to the present situation shows that the libel action in question is retaliatory and without a reasonable basis.  In response, Mr. Miraglio states that since the Rules are not intended to police the content of campaign literature, the Local 439 officers had no other means of addressing the harm caused by the libel defendants except to file a defamation suit in state court.  He also denies that the suit has had any chilling effect because the protesters have continued to issue campaign flyers.

In Hoffa, the Election Officer looked to the decision in Bill Johnson’s Restaurants for the test to apply in determining whether a libel action is well-founded.  The Supreme Court stated:

When a suit presents genuine factual issues, the state plaintiff’s First Amendment interest in petitioning the state court for redress of his grievance, his interest in having the factual dispute resolved by a jury and the State’s interest in protecting the health and welfare of its citizens, lead us to construe the Act as not permitting the Board to usurp the traditional fact-finding function of the state-court jury or judge.  Hence, we conclude that if a state plaintiff is able to present the Board with evidence that shows his lawsuit raises genuine issues of material fact, the Board should proceed no further with the §8(a)(1)-§8(a)(4) unfair labor practice proceedings but should stay those proceedings until the state-court suit has been concluded.

Id., 461 U.S. at 745-46.  In the Supreme Court’s analysis, if the NLRB does not enjoin a libel action because there is a reasonable basis for the action, but the suit is later withdrawn or determined to be without merit, the Board may consider the claim as meritless and proceed to determine whether it was filed in retaliation for engaging in a protected right.  If the Board finds that the complaint was retaliatory, it may still impose a remedy by ordering the employer

Phil Rushing

November 5, 1996

Page 1

o reimburse the employees for their attorneys fees and other expenses, as well as any other proper relief.  Id. at 747.[4]

In deciding whether the state court suit is baseless, the Election Officer applies certain federally imposed standards.  State remedies for defamatory statements made in the course of labor disputes are limited “to those instances in which the complainant can show that the defamatory statements were circulated with malice and cause him damage.”  Linn v. United Plant Guard Workers, 383 U.S. 53, 64-65 (1966).  The plaintiff must show “actual malice,” which means that the defamatory statements were published “with knowledge of their falsity or reckless disregard of whether they were true or false.”  New York Times v. Sullivan, 376 U.S. 254, 279-80 (1964).

At the request of the Election Officer, the parties produced evidence as to the facts of the alleged libel.  Having reviewed the submissions, the Election Officer cannot make a finding that the libel suit is baseless.  The evidence indicates a genuine dispute as to the truth or falsity of the statement at least relating to the firing of Pete Easton.  Moreover, the Election Officer cannot tell from the evidence adduced whether the libel plaintiffs acted with the actual malice required under Linn.  The suit alleges a form of malice, but in order to determine whether it is equivalent to the federal “actual malice” standard, the Election Officer would have to consider the applicable California libel law standard for malice.  This is an issue of law better left to a California state court in the first instance.  See Hoffa; Bill Johnson’s Restaurants.  As to the protesters’ argument that the suit lacks adequate allegations of actual injury, this too involves an area of state libel law more appropriately addressed by a state court.  The Election Officer cannot find on the basis of this record that the libel suit is baseless, and therefore declines to order that the suit be dismissed.

However, this does not end the matter.  In keeping with the standard set forth in Hoffa, the Election Officer will retain jurisdiction over this protest until a decision on the merits of this case is rendered by the state court.  If the suit is subsequently shown to be without merit, the Election Officer will proceed to determine whether the suit was brought in retaliation for engaging in protected rights under the Rules.  If the suit is both meritless and retaliatory, the libel plaintiff will be responsible for payment of all attorneys fees and costs incurred by the defendant(s) of the action, as well as any other relief deemed necessary and proper.

Phil Rushing

November 5, 1996

Page 1

The protesters have also suggested that the matter be referred to the United States Attorney to determine whether a contempt motion should be filed under the All Writs Act Order.  In 1990, the District Court issued an order under the All Writs Act, 28 U.S.C. §1651, enjoining all IBT members and affiliates from litigating issues related to the Consent Decree anywhere but before Judge Edelstein.  United States v. IBT, 728 F. Supp. 1032 (S.D.N.Y. 1990), aff’d, 907 F.2d 277 (2d Cir. 1990).

The District Court found that without such an order, there existed “a significant risk of subjecting the Consent Decree to inconsistent interpretations and the Court Officers to inconsistent judgments.”  Id. at 1047.  Second, the Court found that “widespread litigation across the country would subvert the reform by bogging the Court officers down in duplicative, harassing and perhaps frivolous litigation.”  Id.  Third, the Court concluded that judicial economy required “that similar issues not be litigated multiple times in different districts.”  Id.  The Court recently underscored this point in an order requiring that if any of the Court-appointed officers or parties to the Consent Decree had knowledge of any action which may be subject to the All Writs Act Order, they were to promptly advise the others.  United States v. IBT, 88 Civ. 4486 (DNE) (S.D.N.Y. September 10, 1996).

Having reviewed the libel complaint, the Election Officer does not believe that it implicates the Consent Decree and must be brought before Judge Edelstein.  As noted above, the filing of a well-founded state court action complaint for personal injuries does not automatically implicate the Consent Decree simply because the injury arose in the course of the election.  However, the Election Officer has transmitted a copy of the complaint to the U.S. Attorney’s office and to the IBT, as the parties to the Consent Decree, for their information. 

For the above reasons, the protests are DENIED in part and otherwise DEFERRED in light of the Election Officer’s order herein.  Within ten (10) days of the final adjudication or resolution of the libel complaint, the parties shall notify the Election Officer of the disposition and make any further applications for relief consistent with this decision.

An order of the Election Officer, unless otherwise stayed, takes immediate effect against a party found to be in violation of the Rules.  In Re: Lopez, 96 - Elec. App. - 73 (KC) (February 13, 1996).

Any interested party not satisfied with this determination may request a hearing before the Election Appeals Master within one day of receipt of this letter.  The parties are reminded that, absent extraordinary circumstances, no party may rely upon evidence that was not presented to the Office of the Election Officer in any such appeal.  Requests for a hearing shall be made in writing and shall be served on:

Kenneth Conboy, Esq.

Latham & Watkins

885 Third Avenue, Suite 1000

New York, NY 10022

Fax (212) 751-4864

Phil Rushing

November 5, 1996

Page 1

opies of the request for hearing must be served on the parties listed above as well as upon the Election Officer, 400 N. Capitol Street, Suite 855, Washington, DC 20001, Facsimile

(202) 624-3525.  A copy of the protest must accompany the request for a hearing.

Sincerely,

Barbara Zack Quindel

Election Officer

cc:               Kenneth Conboy, Election Appeals Master

Matthew D. Ross, Regional Coordinator