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Keywords

lawsuitplaintiffprecedentfiduciarycondition precedentappellee
plaintiffjurisdictiondamagesprecedentfiduciarycondition precedentappellee

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Phillips v. Osborne, 403 F.2d 826, 69 L.R.R.M. (BNA) 2782, 59 Lab.Cas. P 13,051

Facts

The dispute arose after some members of Local 580, dissatisfied with their affiliation with the International Brotherhood of Pulp, Sulphite & Paper Mill Workers, formed a new organization called the Association of Western Pulp and Paper Workers. Following an election that certified Western as the bargaining representative, Local 580's officers placed certain assets in escrow to prevent disaffiliation. The membership of Local 580 later voted to disaffiliate from International and join Western, leading to the plaintiff, Phillips, being elected president of the new local and subsequently filing a lawsuit against the former officers for breach of fiduciary duties.

Phillips grounded his suit upon Section 501 of the Landrum-Griffin Act, alleging that the above actions of the appellees constituted a breach of their fiduciary duties within the meaning of the Act.

Issue

The main legal issue was whether Phillips, having voted to affiliate with a rival union and accepted its presidency, was still a 'member' of Local 580 entitled to bring suit under Section 501 of the Landrum-Griffin Act.

The District Court held that Phillips could not bring this suit under Section 501(b) because he was a ‘member’ of Local 580 affiliated with International at the time he instituted suit.

Rule

Under Section 501(b) of the Landrum-Griffin Act, a member of a labor organization may sue its officers for breach of fiduciary duties only if the organization fails to act within a reasonable time after being requested to do so.

‘(b) When any officer, agent, shop steward or representative of any labor organization is alleged to have violated the duties declared in subsection (a) of this section and the labor organization or its governing board of officers refuse or fail to sue or recover damages or secure an accounting or other appropriate relief within a reasonable time after being requested to do so by any member of the labor organization, such member may sue such officer, agent shop steward, or representative in any district court of the United States or in any State court of competent jurisdiction to recover damages or secure an accounting or other appropriate relief for the benefit of the labor organization. * * *’ 29 U.S.C. § 501(b) (1959).

Analysis

The court determined that Phillips had unequivocally withdrawn from International Local 580 by voting for disaffiliation and accepting the presidency of the rival union. This conduct indicated that he was not acting on behalf of International when he filed the suit. The court emphasized that membership is a condition precedent to bringing a suit under Section 501, and Phillips' actions demonstrated that he was no longer a member of International.

The District Court correctly concluded that union membership on the part of a plaintiff is another condition precedent to his filing a Section 501 suit in the federal court.

Conclusion

The court affirmed the District Court's decision, concluding that Phillips was not a member of Local 580 at the time he instituted the suit and therefore lacked standing to bring the action under the Landrum-Griffin Act.

We affirm the District Court's construction of Section 501 as well as its factual determination that Phillips was not a ‘member’ of Local 580 for purposes of the section when he brought suit.

Who won?

The prevailing party was the appellees (officials of Local 580), as the court found that Phillips was not a member entitled to sue under the Landrum-Griffin Act.

The appellees were sued in their capacity as officers of Local 580, an affiliate of the International Brotherhood of Pulp, Sulphite & Paper Mill Workers, AFL-CIO (hereinafter ‘International’).

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