Chicago Daily Law Bulletin

7th Circuit Rejects Challenge To Laborers' Union Reform


December 20, 1999

A federal appeals court panel has turned back another challenge to a battle by Laborers' International Union of North America to rid itself of alleged mob influences.

In an opinion Friday, a panel of the 7th U.S. Circuit Court of Appeals rejected the argument that Laborers' International acted in bad faith and therefore should have been barred from obtaining summary judgment in a lawsuit against a local affiliate.

Laborers' International brought the suit after officials of the Construction & General Laborers' District Council of Chicago and Vicinity, or CDC, blocked the Council's trustee from performing his duties.

The Council, a subordinate organization of Laborers' International, acts as the central representative of 21 affiliated local unions that have a total of about 19,000 members.

The Council's trustee was appointed a couple of years ago as a result of a nationwide effort by Laborers' International to oust alleged organized crime elements and to prevent a government takeover of union affairs.

An independent hearing officer had determined that a trusteeship of the Council was needed because of the overwhelming evidence that organized crime had infiltrated the top ranks of the existing CDC leadership and that the CDC had been the continuous victim of undemocratic process for more than 25 years," according to the 7th Circuit panel.

But the Council's leadership voted that it would not accept the trusteeship and refused to allow trustee Robert Bloch access to Council facilities, the panel said.

The panel said those actions led Bloch and Laborers' International to turn to the federal courts for relief.

In February 1998, U.S. District Judge James B. Moran entered a temporary restraining order barring the Council and its former officers from interfering with the trusteeship, the panel said. The panel said Moran the following month directed that the terms of the order remain in force as a preliminary injunction.

Bloch and Laborers' International sought summary judgment in the case, but the Council opposed that motion, the panel said.

The panel said the Council argued that more discovery was needed and that the allegations of corruption were too old to be used in determining whether to impose a trusteeship.

The Council also contended that the federal government was exercising too much control over decisions by Laborers' International, the panel said.

And the panel said the Council argued that the trusteeship amounted to a disciplinary action against Bruno Caruso, who had made an unsuccessful bid for the presidency of Laborers' International on a platform that included eliminating government control of the union.

But Moran granted the motion for summary judgment filed by Bloch and Laborers' International, according to the panel.

The panel affirmed that decision, describing as meritless" the contention that the bad faith allegedly displayed by Laborers' International prevented Moran from granting summary judgment.

And the panel said the Council had waived two other arguments it raised on appeal by failing to bring them up in its response to the motion for summary judgment.

The Council in its appeal had argued that it was denied a fair hearing because of the evident partiality" of the independent hearing officer who found that the Council was riddled with mob elements, the panel said.

The panel said the Council also contended that it was deprived of an intra-union appeal because of Laborers' International's patently unreasonable" interpretation of its own constitution and ethics and disciplinary rules.

Chicago attorney Allan A. Ackerman, who represents the Council and its former officers in the case, said his clients would consider seeking relief from the U.S. Supreme Court on the bad-faith issue.

And saying that the issues of the hearing officer's alleged partiality and the interpretation of the union's procedures had been raised in District Court, Ackerman said the Council may seek a rehearing on those matters.

Bloch and Laborers' International were represented before the 7th Circuit by Chicago attorneys Robert E. Shapiro and David E. Gordon.

The panel's opinion was written by Judge John L. Coffey. Joining in the opinion were Judges William J. Bauer and Frank H. Easterbrook.

Laborers' International Union of North America, et al. v. Bruno Caruso, et al., No. 99-1276.

In 1994, Laborers' International launched an effort to get rid of any Mafia influence and to keep the federal government from taking direct control of union affairs, according to the 7th Circuit panel.

The panel said that effort -- which was prompted by a Justice Department investigation into alleged racketeering violations -- led Laborers' International to adopt a reform program in 1995.

The Justice Department then agreed to provide strict government oversight" of the reform program without exercising direct control over the union, the panel said.

The panel said union officials and union-affiliated entities including the Council challenged the reforms through various suits, but the 7th Circuit upheld the Justice Department's agreement with Laborers' International. Serpico v. Laborers' International Union of North America, 97 F.3d 995 (1996).

Following the Serpico decision, the attorney for the general executive board of Laborers' International brought the trusteeship proceedings that eventually led to Friday's ruling by the 7th Circuit panel.

In other court action related to the effort to reform the union, U.S. District Judge Robert W. Gettleman in August tapped two prominent attorneys to help rid the Council of organized crime elements.

Gettleman appointed former federal prosecutor Steven A. Miller as monitor and former Illinois Supreme Court justice Seymour F. Simon as adjudications officer as part of a consent decree reached in a suit against the Council.

U.S., et al. v. Construction & General Laborers District Council of Chicago and Vicinity, No. 99 C 5529.

Miller is responsible for seeking the ouster of union officials alleged to have ties to the mob, while Simon hears charges brought by Miller and decides what if any sanctions to impose.

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