International Union, Security v. Assane Faye , 828 F.3d 969 ( 2016 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 9, 2016 Decided July 15, 2016
No. 15-7084
INTERNATIONAL UNION, SECURITY, POLICE AND FIRE
PROFESSIONALS OF AMERICA,
APPELLANT
v.
ASSANE FAYE,
APPELLEE
Appeal from the United States District Court
for the District of Columbia
(No. 1:09-cv-02229)
James M. Moore argued the cause for appellant. On the
briefs were Scott A. Brooks and Matthew J. Clark. Anton G.
Hajjar entered an appearance.
Jonathan G. Axelrod was on the brief for amicus curiae
District of Columbia Nurses Association in support of
appellant.
Eden Brown Gaines argued the cause and filed the brief
for appellee.
Before: TATEL, KAVANAUGH, and MILLETT, Circuit
Judges.
2
Opinion for the Court filed by Circuit Judge TATEL.
Concurring opinion filed by Circuit Judge TATEL.
Concurring opinion filed by Circuit Judge MILLETT.
Dissenting opinion filed by Circuit Judge KAVANAUGH.
TATEL, Circuit Judge: The Labor-Management Reporting
and Disclosure Act sets out fiduciary duties that officers and
other agents of unions owe the union that employs them. It
also permits a union member to bring a lawsuit for breach of
those duties in federal court “for the benefit of the labor
organization,” but only after “the labor organization or its
governing board or 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.” 29
U.S.C. § 501(b). The statute does not, however, expressly
give the union itself a cause of action for breach of fiduciary
duty in federal court. In this case, we must decide whether the
statute contains an implied cause of action for the union itself.
Our decision on a closely related issue in Weaver v. United
Mine Workers of America, 492 F.2d 580 (D.C. Cir. 1973) (per
curiam), requires that we answer that question in the
affirmative.
I.
Until September 24, 2009, Assane Faye was a non-
member employee of the International Union, Security, Police
and Fire Professionals of America (the “Union”). The Union
brought this suit alleging that while it employed him, Faye
breached his fiduciary duties to the Union in a number of
ways, including by encouraging union members to join a rival
union. Specifically, the Union alleged that Faye breached his
fiduciary duties under section 501 of the federal Labor-
3
Management Reporting and Disclosure Act (LMRDA). The
Union also asserted similar claims under state law, as well as
a breach of contract claim under the Labor Management
Relations Act (LMRA).
After several rounds of briefing, the district court
concluded that the LMRDA provides a cause of action only to
individual union members, not to the union itself, and that the
LMRA provides no cause of action to a union seeking to sue a
non-member employee. The district court concluded that
because neither federal statute provided the Union with a
cause of action, it lacked federal question jurisdiction over the
case. And because no other ground for subject matter
jurisdiction existed, the district court ruled that it had “no
basis to exercise supplemental jurisdiction over plaintiff’s
state common law claims.” International Union, Security,
Police & Fire Professionals of America v. Faye, 115 F. Supp.
3d 40, 47 (D.D.C. 2015). The district court thus dismissed the
Union’s entire suit without prejudice for lack of subject
matter jurisdiction.
The Union now appeals, contending that the LMRDA
gives it a cause of action and that the district court thus also
has supplemental jurisdiction over its state law claims. The
Union offers no challenge to the district court’s dismissal of
its LMRA claim. Our review is de novo. See El Paso Natural
Gas Co. v. United States, 750 F.3d 863, 874 (D.C. Cir. 2014)
(“We review de novo the District Court’s dismissal of claims
for want of subject matter jurisdiction under Rule 12(b)(1) or
for failure to state a claim under Rule 12(b)(6).”).
II.
This case presents a single substantive issue: whether
LMRDA section 501 provides a union with a federal cause of
4
action against its agent for breach of a fiduciary duty owed to
the union. This question has been reserved by the Supreme
Court, see Guidry v. Sheet Metal Workers National Pension
Fund, 493 U.S. 365, 374 n.16 (1990), and is already the
subject of a circuit split, compare Building Material & Dump
Truck Drivers, Local 420 v. Traweek, 867 F.2d 500 (9th Cir.
1989) (finding no implied cause of action), with International
Union of Operating Engineers, Local 150, AFL-CIO v. Ward,
563 F.3d 276 (7th Cir. 2009), and International Union of
Electronic, Electrical, Salaried, Machine & Furniture
Workers, AFL-CIO v. Statham, 97 F.3d 1416 (11th Cir. 1996)
(finding an implied cause of action).
Before proceeding to the merits, we pause to clarify the
nature of our inquiry. As noted above, the district court
concluded that it lacked subject matter jurisdiction because
the LMRDA gives the Union no cause of action. Earlier
decisions likewise tended to speak of the inquiry in
jurisdictional terms. See, e.g., Guidry, 493 U.S. at 374 n.16
(speaking in jurisdictional terms in the course of reserving the
issue); Traweek, 867 F.2d at 505 (treating the matter as
jurisdictional).
The Supreme Court has recently made clear, however,
that the question whether the plaintiff has a cause of action is
distinct from the question whether a district court has subject
matter jurisdiction. In Arbaugh v. Y&H Corp., 546 U.S. 500,
510–16 (2006), the Court held that the fact that the defendant
did not employ the number of employees statutorily required
to hold it liable under Title VII went to the merits, not
jurisdiction. And in Lexmark International, Inc. v. Static
Control Components, Inc., 134 S. Ct. 1377, 1388 n.4 (2014)
(quoting Verizon Maryland Inc. v. Public Service Commission
of Maryland, 535 U.S. 635, 642–43 (2002)), the Court wrote
that “‘the absence of a valid (as opposed to arguable) cause of
5
action does not implicate subject-matter jurisdiction, i.e., the
court’s statutory or constitutional power to adjudicate the
case.’” Here, as in Lexmark, the plaintiff’s claim is at least
“arguable,” regardless of whether it is “valid.” Our inquiry
thus goes to the merits, not jurisdiction, which exists under
the general federal question jurisdiction statute, 28 U.S.C.
§ 1331. See District of Columbia Nurses Ass’n v. Brown, No.
15-203, 2016 WL 29252, at *1–2 (D.D.C. Jan. 4, 2016)
(reaching the same result).
In determining whether an implied cause of action exists,
“[t]he judicial task is to interpret the statute Congress has
passed to determine whether it displays an intent to create not
just a private right but also a private remedy. Statutory intent
on this latter point is determinative.” Alexander v. Sandoval,
532 U.S. 275, 286 (2001) (internal citation omitted). Absent
statutory intent to create a cause of action, none exists, and
“courts may not create one, no matter how desirable that
might be as a policy matter, or how compatible with the
statute.” Id. at 286–87.
Congress enacted the LMRDA in 1959 in response to
various union corruption scandals and an associated
congressional investigation. See 29 U.S.C. § 401(b)
(explaining that Congress had found “a number of instances
of breach of trust, corruption, disregard of the rights of
individual employees, and other failures to observe high
standards of responsibility and ethical conduct”). The
LMRDA provision at issue in this case contains two relevant
subsections. The first, section 501(a), bears the title “Duties of
officers; exculpatory provisions and resolutions void,” and
provides as follows:
The officers, agents, shop stewards, and other
representatives of a labor organization occupy
6
positions of trust in relation to such organization and
its members as a group. It is, therefore, the duty of
each such person, taking into account the special
problems and functions of a labor organization, to
hold its money and property solely for the benefit of
the organization and its members and to manage,
invest, and expend the same in accordance with its
constitution and bylaws and any resolutions of the
governing bodies adopted thereunder, to refrain from
dealing with such organization as an adverse party or
in behalf of an adverse party in any matter connected
with his duties and from holding or acquiring any
pecuniary or personal interest which conflicts with
the interests of such organization, and to account to
the organization for any profit received by him in
whatever capacity in connection with transactions
conducted by him or under his direction on behalf of
the organization. A general exculpatory provision in
the constitution and bylaws of such a labor
organization or a general exculpatory resolution of a
governing body purporting to relieve any such
person of liability for breach of the duties declared
by this section shall be void as against public policy.
Id. § 501(a). The second, section 501(b), bears the title,
“Violation of duties; action by member after refusal or failure
by labor organization to commence proceedings; jurisdiction;
leave of court; counsel fees and expenses,” and provides as
follows:
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 or officers refuse or fail to sue or
7
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. No such proceeding
shall be brought except upon leave of the court
obtained upon verified application and for good
cause shown, which application may be made ex
parte. The trial judge may allot a reasonable part of
the recovery in any action under this subsection to
pay the fees of counsel prosecuting the suit at the
instance of the member of the labor organization and
to compensate such member for any expenses
necessarily paid or incurred by him in connection
with the litigation.
Id. § 501(b).
The statute thus gives union members an express federal
cause of action against a union agent for breach of the
fiduciary duties set forth in section 501(a). Union members
may bring such a suit “for the benefit of the [union],”
provided that they first satisfy certain procedural
requirements. Central to this case, however, nothing in the
statute expressly gives the union itself such a cause of action.
In assessing whether a union nonetheless has an implied
cause of action under section 501, we do not write on a clean
slate. In Weaver v. United Mine Workers of America, 492
F.2d 580 (D.C. Cir. 1973) (per curiam), this court faced issues
closely related to those presented here. There, relying on
8
section 501’s express cause of action, union members sued
union officers, as well as the union itself. Id. at 582. Only one
of the plaintiff union members, however, had satisfied the
statutory procedural requirements before bringing suit, and
that plaintiff was murdered while the case was pending. Id.
The defendants, including the union, moved to dismiss on the
ground that none of the remaining plaintiffs had satisfied the
statute’s procedural requirements. Id. The district court denied
these motions, but certified them for interlocutory review. Id.
at 582 & n.8.
While the appeal was pending, a union election occurred,
and control shifted to new officers supported by and
supportive of the plaintiffs (including some of the plaintiffs
themselves). Id. at 582–83. The union then filed motions to
withdraw its appeal, to intervene on behalf of the plaintiff
union members, and to dismiss the appeal filed by the
defendant officers as moot in light of the union’s intervention
as a plaintiff. Id. at 583.
This court granted the union’s motions and directed the
district court to permit the union to realign as a party plaintiff.
In doing so, the court analogized union member suits under
section 501 to shareholder derivative suits. Id. at 586. The
court noted that the union “possesses exclusively the financial
interest at stake,” and that, accordingly, “although under its
former leadership the [union] was aligned as a
defendant[,] . . . the litigation since its commencement has in
reality been its own.” Id. at 585. “Moreover, in conditioning
the availability of a derivative action under Section 501 on the
refusal of a union to bring the action itself, Congress
expressed its preference that the union prosecute a claim for
breach of fiduciary duty against union officials.” Id. at 586
(internal citation omitted). Because “[a]llowing the [union] to
assume the prosecution of this cause would further that
9
legislative preference,” the court concluded, the union “must
be accorded that right.” Id. This court conceptualized the
union as fully taking over control of the litigation and
displacing the plaintiff union members, as demonstrated by its
“understanding that the [union-member plaintiffs] will move
the District Court for leave to be dropped as party-plaintiffs,”
id. at 587 n.35, as well as by its dismissal as moot of the
defendant officers’ appeal challenging the remaining plaintiff
union members’ failure to comply with the statute’s
procedural requirements, id. at 587.
Weaver thus holds, at least, that where union members
have properly sued under section 501, the union itself may
take control of the suit and displace the union members. In
this case, the district court distinguished Weaver on the
ground that the opinion “did not address a union’s right to
initiate suit on its own behalf.” Faye, 115 F. Supp. 3d at 44
n.2. The district court and we are bound, however, “not only
[by] the result” of a prior case, “but also [by] those portions of
the opinion necessary to that result.” Seminole Tribe of
Florida v. Florida, 517 U.S. 44, 67 (1996). In allowing the
union to take over control of the litigation, the Weaver court
necessarily determined that the union was a proper plaintiff in
a section 501 fiduciary duty suit. Indeed, in language ignored
by the dissent, it emphasized that “the litigation since its
commencement has in reality been [the union’s] own.”
Weaver, 492 F.2d at 585. Neither the district court nor Faye
has offered any persuasive justification for reading the statute
to require that a union “be accorded [the] right” to take over a
suit that “since its commencement has in reality been its
own,” id. at 585–86, but not to allow the union to simply
bring “its own” suit in the first instance. Moreover, the
Weaver court’s dismissal of the individual defendants’ appeal
as moot necessarily means that it resolved the union’s right to
litigate a section 501 suit.
10
Accordingly, although Weaver did not squarely address
the precise question of a union’s right to bring a section 501
suit in the first instance, the reasoning necessary to that
decision compels the conclusion that a union may indeed do
so. In contrasting a union’s ability to litigate under section
501 as an intervening plaintiff with its ability to do so as an
original plaintiff, the district court focused on a distinction
without a difference. Weaver established both that a section
501 suit is properly understood as belonging to the union and
that the union is a proper party to litigate it. The question
before us—whether section 501 gives a union a cause of
action for breach of fiduciary duty—thus did not “‘merely
lurk in the [Weaver] record, neither brought to the attention of
the court nor ruled upon.’” See Dissenting Op. at 11 (quoting
LaShawn A. v. Barry, 87 F.3d 1389, 1395 n.7 (D.C. Cir. 1996)
(en banc)). Rather, Weaver answered it in the affirmative.
Nor, contrary to the dissent’s suggestion, id. at 7–8, are we
free to ignore our precedent merely because a party
incorrectly concedes that it fails to bind us.
The parties’ dispute over the Union’s state law claims
requires much less attention. Because the Union’s section 501
claim is properly before the district court, supplemental
jurisdiction exists for the Union’s state law claims.
III.
For the foregoing reasons, we reverse the district court’s
order dismissing the Union’s claims under section 501 and
state law for lack of subject matter jurisdiction.
So ordered.
TATEL, Circuit Judge, concurring: I write separately to
explain why, even absent Weaver, I would conclude that
LMRDA section 501 gives unions a cause of action. As I see
it, the statute’s text and structure reveal Congress’s intent both
to create federal rights and to allow unions to vindicate those
rights in federal court. See Alexander v. Sandoval, 532 U.S.
275, 286 (2001) (“The judicial task is to interpret the statute
Congress has passed to determine whether it displays an
intent to create not just a private right but also a private
remedy. Statutory intent on this latter point is determinative.”
(internal citation omitted)).
To begin with, section 501(a) creates federal rights. It
contains express rights-creating language, specifying that
union agents occupy “positions of trust in relation to [the
union] and its members as a group,” and that, accordingly,
such an agent has a series of specific duties, including “to
hold [the union’s] money and property solely for the benefit
of the organization and its members,” “to refrain from dealing
with such organization as an adverse party or in behalf of an
adverse party in any matter connected with his duties,” and
“to account to the organization for any profit received by him
in whatever capacity in connection with transactions
conducted by him or under his direction on behalf of the
organization.” 29 U.S.C. § 501(a).
To be sure, these duties correspond to state common law
fiduciary duties, but their express delineation in a federal
statute demonstrates that they reflect separate federal rights.
Rather than simply adopting state law or using an unadorned
common law term such as “fiduciary duty” without
elaboration, section 501 not only lays out the relevant duties
in some detail, but does so without any reference to state law.
Indeed, the statute itself refers to “the duties declared by this
section,” id. (emphasis added), and “the duties declared in
subsection (a) of this section,” id. § 501(b) (emphasis added).
To see that the statute does not simply incorporate state law,
2
consider a hypothetical state that expressly abolishes all state
law fiduciary duties. In such a state, union agents would still
owe the union the duties “declared” in section 501(a).
Moreover, legislative history indicates that Congress was
aware of state fiduciary law, but nonetheless “considered it
important to write the fiduciary principle explicitly into
Federal labor legislation.” H.R. Rep. 86-741 (1959), reprinted
in 1959 U.S.C.C.A.N. 2318, 2479–80.
To the extent Faye argues that section 501 creates rights
only in favor of union members rather than also in favor of
the union itself, that argument falls short. The statute specifies
that union agents occupy “positions of trust in relation to [the
union] and its members as a group,” 29 U.S.C. § 501(a), not
in relation to individual members. Moreover, the statute
requires that many of the duties it specifies be performed for
the union itself, such as the duty “to refrain from dealing with
such organization as an adverse party or in behalf of an
adverse party in any matter connected with [the agent’s]
duties.” Id. (emphasis added). And tellingly, the statute
specifies that when union members bring suit under section
501, they do so “for the benefit of the [union].” Id. § 501(b).
Of course, to provide unions an implied cause of action,
the statute must not only give them federal rights, but also
reveal that Congress intended to give them a private remedy.
Section 501 reveals just such an intent. The statute refers to
the “refusal or failure by labor organization to commence
proceedings,” id., which is most naturally read as suggesting
that a union may bring proceedings under the statute.
Similarly, the statute allows a suit by a union member “for the
benefit of the [union]” only after the union “refuse[s] or fail[s]
to sue or recover damages or secure an accounting or other
appropriate relief within a reasonable time after being
requested to do so,” id. (emphasis added), further
3
emphasizing Congress’s understanding that unions have the
capacity “to sue or recover damages or secure an accounting
or other appropriate relief” regardless of state law.
Relying on these and other aspects of the statute, courts
on both sides of the implied cause of action debate agree that
union members’ suits are analogous to shareholder derivative
suits. E.g., International Union of Operating Engineers, Local
150, AFL-CIO v. Ward, 563 F.3d 276, 287–88 (7th Cir. 2009)
(using the analogy in a case finding an implied cause of
action); Building Material & Dump Truck Drivers, Local 420
v. Traweek, 867 F.2d 500, 506 (9th Cir. 1989) (using the
analogy in a case finding no implied cause of action). But
because shareholder derivative suits are brought on behalf of
a corporation, such suits are typically allowed only after the
corporation itself fails to bring suit on the same claims. See
Ward, 563 F.3d at 288 (citing Ross v. Bernhard, 396 U.S.
531, 534 (1970)). “It would be anomalous indeed,” the
Seventh Circuit pointed out, “to read this statutory scheme as
remitting the union’s own suit—which is primary under the
statutory hierarchy—to state court.” Id. Moreover, this
“anomalous” result “would create perverse incentives” for
unions to forgo filing suit to “manufactur[e] federal
jurisdiction” so that a member could bring a section 501(b)
suit in federal court. Id. (internal quotation marks omitted).
Although even Faye, the district court, and the dissent all
acknowledge that the statute envisions that unions will have
some ability to pursue fiduciary duty claims against their
agents directly, they insist that section 501 contemplates suits
by unions only in state court for violations of state law.
Appellee’s Br. 5–6 (“Congress’[s] contemplation of a union’s
right to sue is, in fact, evident in the language of the
statute. . . . [I]t is not necessary to look beyond the language
[of the statute] to find that the statute does not convey an
4
express or implied private right of action for a union to sue in
federal court.”); International Union, Security, Police & Fire
Professionals of America v. Faye, 115 F. Supp. 3d 40, 45
(D.D.C. 2015) (“Although the statutory language does reveal
that Congress contemplated unions bringing suit in some
forum, nothing in the statute suggests that Congress thought
unions and union members required access to the same
forum.”); Dissenting Op. at 6 (“It is true that Congress
assumed that unions would be able to bring suit to enforce the
fiduciary duties imposed on union officers. But nothing in
Subsection (b) suggests that Congress intended to allow
unions to bring suit under federal law rather than under state
law.”). I disagree.
On this understanding of the statute, Congress intended to
give union members a federal cause of action for violation of
federal rights, but only when the union itself “refuse[d] or
fail[ed]” to obtain relief in state court using state law, which
may or may not overlap perfectly with the fiduciary duties
imposed by section 501(a). This conception conflicts with the
statutory description of the union member’s suit as “for the
benefit of the [union],” 29 U.S.C. § 501(b), as well as with the
virtually uniform characterization of the union member’s suit
as a derivative suit ultimately belonging to the union itself.
Far more likely to comport with congressional intent is the
reading embraced by the Seventh and Eleventh Circuits. By
creating federal rights and an express derivative federal cause
of action for union members to bring “for the benefit” of the
union—if the union does not itself “commence
proceedings”—section 501 reveals Congress’s intent that the
union be able to enforce the duties its agents owe it in federal
court.
The arguments advanced by Faye and embraced by the
district court are unconvincing. First, Faye argues that section
5
501 must be construed narrowly because it is a jurisdictional
statute. As noted above, however, Majority Op. at 4–5, the
issue in this case goes to the merits, not jurisdiction.
Faye also argues that in enacting section 501, Congress
was concerned that unions were refusing to enforce their
rights in state court, not that state law provided unions with
inadequate remedies. On this theory, Congress designed the
statute to benefit union members suffering from union
corruption, and we should therefore not read it to give the
union itself a federal cause of action. See also Dissenting Op.
at 5–7. Faye is correct that Congress recognized that state
common law remedies were available to unions. But Congress
apparently found these remedies inadequate and chose to
address the problem in a particular way: by declaring federal
duties the union agents owed the union and creating a federal
remedial scheme that includes a derivative-like suit. Such a
scheme obviously depends for its coherence on the ability of
the union to control the suit that, after all, ultimately belongs
to it.
I am also unpersuaded by the arguments advanced by my
two colleagues. First, to be sure, as Judge Kavanaugh points
out, “‘where a statute expressly provides a remedy, courts
must be especially reluctant to provide additional remedies.’”
Id. at 5 (quoting Karahalios v. National Federation of
Federal Employees, Local 1263, 489 U.S. 527, 533 (1989));
see also Millett Concurring Op. at 4–5. But here, the textual
and contextual evidence of statutory intent is strong, and the
“additional remed[y]” consists merely of allowing the
ultimate owner of a derivative claim to bring suit in its own
name.
Similarly, because I read section 501 as reflecting
congressional intent to create an implied cause of action, I am
6
untroubled that Congress also discussed “labor
organization[s]” in various other provisions of the statute.
Likewise, the inclusion of procedural prerequisites for union
members bringing suits hardly suggests that unions are
powerless to sue. Rather, I read section 501 as a whole as
reflecting an intent to give unions an implied cause of action
and the section 501(b) prerequisites as designed to prevent
union members from hijacking lawsuits that unions
themselves are willing to pursue. See International Union of
Electronic, Electrical, Salaried, Machine & Furniture
Workers, AFL-CIO v. Statham, 97 F.3d 1416, 1421 (11th Cir.
1996) (“Here, section 501(b) clearly shows that it has not one,
but two purposes: first, to enable individuals to sue on the
union’s behalf, and second, to make sure that individuals do
not preempt a union’s right to prosecute its own claims.”).
This conclusion applies with equal force to the potentially
jurisdictional statutory prerequisite that union members
receive leave of court “for good cause shown” prior to
bringing suit.
Finally, Judge Millett worries that “[a]llowing the union
itself to take over enforcement of Section 501 rights would
put back into the union’s hands the very authority Congress
sought to confer on individual members, and would empower
corrupt unions to throw the Section 501 litigation or enter into
sweetheart settlements.” Millett Concurring Op. at 6. But that
concern seems difficult to square with Congress’s willingness
to allow unions to foreclose suits by their members by
“commenc[ing] proceedings” when requested. In other words,
on any reading of the statute, Congress gave unions
significant leeway to preempt fiduciary duty suits by their
members. And even if Judge Millett is correct that “Section
501(b)’s ‘good cause’ standard protects the union member’s
right to bring a federal suit to enforce federal rights if
litigation shenanigans by the union in state court trenched
7
upon the rights and duties declared by Section 501(a),” id. at
7 n.2, then the same standard would seem to protect against
“litigation shenanigans” in federal court.
In sum, interpreting section 501 holistically and with due
regard to both its text and its remedial structure, I am
convinced that in enacting the LMRDA, Congress intended to
allow the union to itself bring suit for violation of the federal
rights Congress “declared” in section 501(a).
One final note. Faye’s reading of the statute becomes
even less tenable when this court’s interpretation of section
501 in Weaver is layered on top of it. Even if Weaver did not
control here, it holds at least that a union may take over a suit
properly brought by a union member under section 501.
Faye’s position would thus suggest that the union has no
ability to bring a federal suit in the first instance, but could
displace its members and proceed to litigate the members’ suit
against its agents in federal court. I would not read section
501 as creating such a counterintuitive scheme.
MILLETT, Circuit Judge, concurring: The issue in this
case sounds simple: can a union file suit as a plaintiff to
enforce the fiduciary duties Congress declared in 29 U.S.C.
§ 501? But the answer is hard, lying at the intersection of
important questions about the binding reach of circuit
precedent, statutory construction, and constitutional
avoidance. At bottom, I agree that Weaver v. United Mine
Workers of America, 492 F.2d 580 (D.C. Cir. 1973) (per
curiam), directs our disposition of this case, for the reasons so
well explained by the majority opinion. I write separately to
explain further my conviction that Weaver controls
notwithstanding the arguments made in the dissenting
opinion, and yet to acknowledge the force of the arguments
against Weaver’s correctness, as well as to note the potential
constitutional problems the issue raises.
A
A panel of this court is bound to adhere to the holdings of
prior circuit precedent even if we might resolve the case
differently were we to decide it in the first instance. See
United States v. Kolter, 71 F.3d 425, 431 (D.C. Cir. 1995)
(We are “bound by [an earlier] decision even if we d[o] not
agree with it[.]”); cf. Hilton v. South Carolina Public
Railways Comm’n, 502 U.S. 197, 198 (1991) (The principle
of stare decisis is “most compelling” in statutory
interpretation cases.).
Weaver’s holding alone would seem to end this case
because this court explicitly ruled there that a union may, on
its own, prosecute as plaintiff an action to enforce the federal
rights created by 29 U.S.C. § 501(a). Weaver, 492 F.2d at
586–587. The union in this case seeks to do the same thing:
to prosecute an action to enforce the rights under Section
501(a) as the sole plaintiff. Asked and answered by Weaver.
2
And Weaver’s influence does not stop there. As the
majority opinion notes, we are bound not just by the bottom-
line holding of Weaver, but also by “those portions of the
opinion necessary to that result.” Seminole Tribe of Florida
v. Florida, 517 U.S. 44, 67 (1996). The analysis on which the
Weaver court predicated its holding seals the precedential
deal.
Specifically, the Weaver court held that the union could
be the sole plaintiff enforcing rights conferred by Section
501(a) by analyzing the statutory structure, and explaining
how, under Section 501, the union “retain[ed] the primary
interest in the litigation.” 492 F.2d at 586. That was not just
a procedural judgment. Rather, Weaver declared specifically
that, given the union’s desire “to prosecute vigorously the
action brought for its benefit, it must be accorded that right.”
Id. (emphasis added). The only “right” the Weaver court
could have recognized in that sentence was a right of action
under Section 501(a). That, in fact, is what Weaver tells us in
the preceding two sentences that describe “that right”:
Congress expressed its preference that the union
prosecute a claim for breach of fiduciary duty
against union officials. Allowing the [union] to
assume the prosecution of this cause would further
that legislative preference.
Id.; see also id. (“The mere fact that individual members have
initiated the action does not prohibit the [union] from * * *
taking the offensive in its prosecution.”). Thus, contrary to
the claim in the dissenting opinion, see Dissenting Op. at 11,
the Weaver court did not just have “thoughts” about whether
Section 501 confers a right of action on unions; Weaver
expressly acknowledged and directly enforced the union’s
“right” “to prosecute * * * the action” as plaintiff, 492 F.2d at
586.
3
Finally, unless the Weaver court specifically determined
that the union had the lawful authority to independently
enforce the rights conferred by Section 501(a), there would
have been no basis for Weaver’s separate holding that
arguments about whether other would-be plaintiffs could sue
were moot. 492 F.2d at 587 (“[W]hether the action survived
the death of the only plaintiff who complied with the
prerequisite to a Section 501(b) suit [] has become
academic.”); id. at 586 (noting union argument that, if the
union “itself may assume the litigation as party-plaintiff,” that
would “moot” the dispute over whether other plaintiffs could
continue the lawsuit). There thus is nothing “lurk[ing],” see
Dissenting Op. at 11, about Weaver’s express holding that the
union’s right to bring suit as plaintiff legally moots the
question of whether other would-be plaintiffs can prosecute
the action.
The dissenting opinion would cast all of that aside for two
reasons. First, that opinion describes Weaver as “completely
miss[ing] the issue of whether Section 501 creates an implied
cause of action for unions.” Dissenting Op. at 10. But
Weaver specifically discussed how the union’s “right” to sue
“further[ed] th[e] legislative preference,” 492 F.2d at 586.
That the panel did not go on to “cite any precedent related to
finding implied causes of action,” Dissenting Op. at 9, or to
use a particular—and at that time rarely used—linguistic
formulation is irrelevant to whether the prior panel holding
binds us. 1
Second, the dissenting opinion claims that Weaver’s
holding was limited to the narrow factual circumstance before
that court: whether a union could “start on one side of a
1
This court first employed the “implied cause of action”
phraseology three years after Weaver. See Mason v. Belieu, 543
F.2d 215, 220 (D.C. Cir. 1976).
4
Section 501 case and then—midway through—switch to the
other side.” Dissenting Op. at 9. It certainly is true that the
facts of Weaver differed from those here. Thankfully, we do
not often encounter cases where the defendant orchestrates
the murder of the plaintiff, has a change of heart, and then
seeks to substitute itself as plaintiff in the litigation. But
those tragic facts played no role in the Weaver court’s
controlling legal analysis as to why the union could sue as
plaintiff. Weaver instead relied upon the legal “right” of the
union to prosecute the action, because it had the “primary
interest in the litigation” and because “Congress expressed its
preference” for that action in the design and structure of the
statute. 492 F.2d at 586.
Indeed, what else could Weaver have meant? Surely it
does not mean that persons who otherwise lack a right of
action to enforce statutorily conferred rights can suddenly
acquire such a right if they just murder the proper plaintiff
and then step into the vacuum to prosecute the suit on their
own behalf. I am not wont to impute such a bizarre holding
to a prior panel.
B
Were it not for Weaver, I might very well agree with the
dissenting opinion that no right of action can be implied here.
While Judge Tatel’s concurring opinion ably articulates the
best arguments for implying such a right, in my mind four
considerations weigh heavily against that conclusion.
First, Congress spelled out in Section 501 precisely the
cause of action it wanted to create, along with specific
conditions and limitations on the action. I am not aware of
any case in which either this court or the Supreme Court has
implied a right of action for one party where Congress
expressly bestowed that right on a different party and on
different terms. Given that the bottom-line inquiry is whether
5
“evidence anywhere in the text * * * suggest[s] that Congress
intended to create a private right,” Alexander v. Sandoval, 532
U.S. 275, 291 (2001), the better course in this case would be
to assume that Congress said what it meant and meant what it
said when it specifically designed the cause of action it
thought best to enforce Section 501(a).
Second, at every turn, the statutory text weighs against
judicially implying a cause of action. To begin with, it is not
as though Congress just overlooked unions as potential
parties. Unions—“labor organizations”—are referenced all
over Section 501. Section 501 reflects a deliberate effort by
Congress to declare fiduciary duties owed to unions, and a
corresponding right to enforce them that was consciously not
vested in the unions, but was designed to be entirely separate
and independent of those organizations.
On top of that, it seems textually impossible to shoehorn
union-plaintiffs into the statute as Congress wrote it. Section
501(b) repeatedly refers to the authorized plaintiff as a
“member” of the labor organization in describing who may
sue and how, as well as who can obtain attorneys’ fees and
costs. 29 U.S.C. § 501(b). Needless to say, a union is not a
member of itself. The statute also requires a plaintiff, before
filing suit, to establish that the union itself “refuse[d] or
fail[ed] 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.”
Id. The suit that Section 501(b) references there is a suit by
the union under extant state-law causes of action—such as
fraud, breach of contract, breach of fiduciary duty, and unjust
enrichment, all of which long predated Section 501. See, e.g.,
H.R. Rep. No. 741, 86th Cong., 1st Sess. 81 (1959), reprinted
in 1 NLRB Legislative History of the Labor-Management
Reporting and Disclosure Act of 1959, at 839 (1959). Suing
unions, by definition, cannot establish their own failure to
bring suit.
6
To allow unions to sue as plaintiffs under Section 501,
courts would have to shrug off those textual preconditions.
But that would amount to defying, not implying, a statutory
cause of action.
Third, there was good reason for all the procedural fences
Congress erected against unions as plaintiffs: the whole point
of Section 501 was to empower individuals to combat union
corruption. See Mallick v. International Brotherhood of
Electrical Workers, 749 F.2d 771, 777 (D.C. Cir. 1984)
(describing Congress’s attempt “to end ‘autocratic rule by
placing the ultimate power in the hands of the members,
where it rightfully belongs, so that they may be ruled by their
free consent, [and] may bring about a regeneration of union
leadership’”) (quoting 105 Cong. Rec. 6472 (1959) (remarks
of Sen. McClellan), reprinted in 2 NLRB, Legislative History
of the Labor-Management Reporting and Disclosure Act of
1959, at 1099 (1959)).
Allowing the union itself to take over enforcement of
Section 501 rights would put back into the union’s hands the
very authority Congress sought to confer on individual
members, and would empower corrupt unions to throw the
Section 501 litigation or enter into sweetheart settlements.
Weaver itself seemed to acknowledge that risk because the
court went out of its way to find that the union’s efforts to
proceed as plaintiff in that case were not in “bad faith” and
did not entail any “conflict of interest.” 492 F.2d at 586.
Indeed, suspicions about unions absolving corrupt officials
are presumably what led Congress to outlaw “general
exculpatory” union bylaws and resolutions that would
otherwise purport to relieve officers of the fiduciary duties
that Section 501(a) declared. 29 U.S.C. § 501(a). It would
make little sense to empower unions to accomplish through
7
litigation tactics what Congress forbade through other union
processes. 2
Fourth, the statute requires would-be plaintiffs to obtain
leave of the court “for good cause shown” before filing suit.
29 U.S.C. § 501(b). That provision appears similar to
certificates of appealability that many habeas petitioners must
obtain before filing suit. See 28 U.S.C. § 2253(c). The
certification procedure in habeas cases is jurisdictional. See
Gonzalez v. Thaler, 132 S. Ct. 641, 649 (2012). If Section
501(b)’s pre-litigation certification likewise is
“jurisdictional”—as Congress labeled it in the heading to
Section 501(b)—then implying a right of action that bypasses
Section 501(b)’s “good cause” limitation (as the record
suggests the union did here) would require courts to create
their own jurisdiction under Section 501, not just a right of
action. Courts absolutely cannot do that. See Kontrick v.
Ryan, 540 U.S. 443, 452 (2004) (“Only Congress may
determine a lower federal court’s subject-matter
jurisdiction.”) (citing U.S. Const., Art. III, § 1).
Accordingly, if we were writing on a clean slate, the
relevant indicia of statutory intent would, in my view and as
well explained by the dissenting opinion, weigh heavily
against implying a right of action for unions to prosecute
lawsuits under Section 501.
2
Judge Tatel’s concurring opinion suggests that the union could
equally frustrate an individual member’s suit under Section 501 by
collusively litigating its state-law cause of action. See Concurring
Op. at 6. But Section 501(b)’s “good cause” standard protects the
union member’s right to bring a federal suit to enforce federal
rights if litigation shenanigans by the union in state court trenched
upon the rights and duties declared by Section 501(a).
8
C
Having said all of that, one thing would still give me
pause about denying a union the right to sue under Section
501: Unless the union can sue, the enforcement scheme that
Congress devised could potentially run into some
constitutional headwinds.
For starters, Congress is clear that the fiduciary duties in
Section 501(a) belong to the union, and to that end provides
that any recovery also goes to the union itself. See, e.g., 29
U.S.C. § 501(a) (declaring duties of union officials and agents
to “hold [the union’s] money and property solely for the
benefit of the organization and its members”); id. § 501(b)
(authorizing suit “to recover damages or secure an accounting
or other appropriate relief for the benefit of the labor
organization”). The ability of Congress to empower a third
party—someone completely outside of the union’s control—
to independently enforce and definitively adjudicate the
union’s own rights would seem to raise due process concerns.
Cf. Taylor v. Sturgell, 553 U.S. 880, 896 (2008) (“[A] special
statutory scheme may ‘expressly foreclose successive
litigation by nonlitigants if the scheme is otherwise consistent
with due process.’”) (quoting Martin v. Wilks, 490 U.S. 755,
762 n.2 (1989)) (emphasis added) (alterations omitted).
It bears noting, in that regard, that individual member
suits under Section 501(b) do not map exactly onto the
shareholder derivative model referenced in Weaver, 492 F.2d
at 586 & n.27, and Judge Tatel’s concurrence, Concurring
Op. at 3. That is because stockholders actually own a portion
of the corporation and thus have individual property interests
in corporate breaches of fiduciary duties. See Ashwander v.
Tennessee Valley Authority, 297 U.S. 288, 318 (1936)
(Shareholders may bring a derivative suit because, “[w]hile
their stock holdings are small, they have a real interest[.]”);
see also 13 Fletcher Cyclopedia of the Law of Corporations
9
§ 5972 (2015) (“[O]ne who does not own shares in a
corporation is not qualified to bring a derivative action in its
name.”).
Individual union members, by contrast, have no property
interest in the union, and the broad fiduciary duties that
Section 501(a) vindicates generally run to the union and
union membership as a whole, rather than to individual union
members. 3 Construing the statute to permit unions to
vindicate their Section 501(a) rights themselves should they
choose to do so might arguably ameliorate the constitutional
concern. See Concrete Pipe and Products of California, Inc.
v. Construction Laborers Pension Trust for Southern
California, 508 U.S. 602, 528–529 (1993) (“Federal statutes
are to be so construed as to avoid serious doubt of their
constitutionality.”) (quoting International Ass’n of Machinists
v. Street, 367 U.S. 740, 749–750 (1961)).
On top of that, the ability of individual union members to
sue in federal court to enforce the union’s legal rights—based
on injuries inflicted only on the union or the membership as a
whole and to obtain a recovery that runs 100% to the union—
may raise an Article III standing question. See Vermont
Agency of Natural Resources v. United States ex. rel. Stevens,
529 U.S. 765, 771 (2000) (“The Art. III judicial power exists
only to redress or otherwise to protect against injury to the
complaining party.”) (quoting Warth v. Seldin, 422 U.S. 490,
3
See 29 U.S.C. § 501(b) (recovery is solely for the benefit of the
organization as a whole); see also, e.g., Agola v. Hagner, 556 F.
Supp. 296, 301 (E.D.N.Y. 1982) (complaint under Section 501
failed to state a claim because the suit was “for the benefit of
individual plaintiffs and not for the benefit of a labor
organization”); cf. Goolsby v. City of Detroit, 358 N.W.2d 856, 863
(Mich. 1984) (common-law duty of fair representation means that
the union “must be faithful to each member, to be sure, but * * *
must be faithful to all of the members at one and the same time”).
10
499 (1975)) (emphasis in Vermont Agency). However,
construing the statute to treat the union as the real party in
interest and the individual litigant as something akin to an
assignee for collection could—perhaps—reduce those
concerns. See Sprint Communications Co. v. APCC Services,
Inc., 554 U.S. 269, 285 (2008) (“Lawsuits by assignees * * *
are ‘cases and controversies of the sort traditionally amenable
to, and resolved by, the judicial process.’”) (quoting Vermont
Agency, 529 U.S. at 777–778).
In sum, I find the statutory construction question legally
betwixt and between, with text, structure, and purpose
pointing against recognizing an implied right of action, and
the principle of constitutional avoidance pointing in the other
direction. Weaver, however, forestalls that difficult debate
for now.
KAVANAUGH, Circuit Judge, dissenting: The Security,
Police & Fire Professionals of America is a labor union that
represents security personnel throughout the United States.
From 2004 to 2009, the Union employed Assane Faye as the
District Director of its office in Washington, D.C. The
relationship did not go well. The Union contends that Faye
was not a loyal union officer. According to the Union, Faye
endeavored to establish a rival union and misused the Union’s
resources to achieve that goal.
The Union sued Faye in U.S. District Court for violating
his fiduciary duties to the Union. The Union sued under the
federal Labor-Management Reporting and Disclosure Act and
under D.C. law. According to Faye, however, the federal Act
does not create a cause of action for a union to sue its former
officer. Faye argued that the Union therefore could sue him
only under D.C. law. The District Court agreed with Faye.
The majority opinion reverses the judgment of the
District Court and allows the Union to maintain its federal
claim against Faye. I respectfully dissent because unions do
not possess a federal cause of action to sue their officers for
breaches of fiduciary duties.
I
A
In 1959, Congress passed and President Eisenhower
signed the Labor-Management Reporting and Disclosure Act.
See 29 U.S.C. § 401 et seq. Congress was concerned about
growing instances “of breach of trust, corruption, disregard of
the rights of individual employees, and other failures to
observe high standards of responsibility and ethical conduct”
on the part of union officers. Id. § 401(b). By enacting this
statute, Congress sought to deter those problems, in part by
making corrupt union officers civilly liable to union members.
2
Section 501 of the Act sets forth the civil liability
scheme. Subsection (a) of Section 501 imposes fiduciary
duties on “officers, agents, shop stewards, and other
representatives” of the union. Id. § 501(a). (I will use the
term “officers” to refer collectively to those individuals.)
Under the Act, union officers must manage the “money and
property” of the union “solely for the benefit of the
organization and its members.” Id. The union officers must
also remain loyal to the union and refrain from any self-
dealing. See id. 1
Subsection (b) of Section 501 gives individual union
members a federal cause of action in order to enforce the
fiduciary duties created by Subsection (a). Any “member of
the labor organization” may sue a union officer violating
1
Subsection (a) reads in full: “The officers, agents, shop
stewards, and other representatives of a labor organization occupy
positions of trust in relation to such organization and its members
as a group. It is, therefore, the duty of each such person, taking into
account the special problems and functions of a labor organization,
to hold its money and property solely for the benefit of the
organization and its members and to manage, invest, and expend
the same in accordance with its constitution and bylaws and any
resolutions of the governing bodies adopted thereunder, to refrain
from dealing with such organization as an adverse party or in behalf
of an adverse party in any matter connected with his duties and
from holding or acquiring any pecuniary or personal interest which
conflicts with the interests of such organization, and to account to
the organization for any profit received by him in whatever capacity
in connection with transactions conducted by him or under his
direction on behalf of the organization. A general exculpatory
provision in the constitution and bylaws of such a labor
organization or a general exculpatory resolution of a governing
body purporting to relieve any such person of liability for breach of
the duties declared by this section shall be void as against public
policy.”
3
Subsection (a) “in any district court of the United States” in
order “to recover damages or secure an accounting or other
appropriate relief for the benefit of the labor organization.”
Id. § 501(b). 2
Because suits brought by union members under
Subsection (b) are “for the benefit of the labor organization,”
id., they are derivative suits. A union member therefore may
bring suit under Subsection (b) only after meeting two
procedural prerequisites. First, the union member may sue
under Subsection (b) only after the union itself “refuse[s] or
fail[s] to sue or recover damages or secure an accounting or
other appropriate relief within a reasonable time after being
requested to do so.” Id. Second, the union member must
acquire “leave of the court obtained upon verified application
and for good cause shown.” Id. If a union member meets
those procedural prerequisites, Subsection (b) provides the
2
Subsection (b) reads in full: “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 or 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. No such
proceeding shall be brought except upon leave of the court obtained
upon verified application and for good cause shown, which
application may be made ex parte. The trial judge may allot a
reasonable part of the recovery in any action under this subsection
to pay the fees of counsel prosecuting the suit at the instance of the
member of the labor organization and to compensate such member
for any expenses necessarily paid or incurred by him in connection
with the litigation.”
4
union member a cause of action to file suit against a union
officer.
But Subsection (b), by its terms, does not give a union –
as opposed to union members – a cause of action. That
statutory silence has precipitated a circuit split. The Seventh
and Eleventh Circuits have held that unions have an implied
cause of action under Section 501. International Union of
Operating Engineers, Local 150 v. Ward, 563 F.3d 276 (7th
Cir. 2009); International Union of Electronic, Electrical,
Salaried, Machine & Furniture Workers, AFL-CIO v.
Statham, 97 F.3d 1416 (11th Cir. 1996). The Ninth Circuit,
by contrast, has held that unions do not have an implied cause
of action under Section 501. Building Material and Dump
Truck Drivers, Local 420 v. Traweek, 867 F.2d 500 (9th Cir.
1989). This case requires us to enter the fray.
B
“Like substantive federal law itself, private rights of
action to enforce federal law must be created by Congress,”
not the Judicial Branch. Alexander v. Sandoval, 532 U.S.
275, 286 (2001). Courts must therefore be “reluctant” to
“provide a private cause of action where the statute does not
supply one expressly.” Sosa v. Alvarez-Machain, 542 U.S.
692, 727 (2004). Courts may find an implied cause of action
only if they determine that the statute “displays an intent to
create not just a private right but also a private remedy.”
Sandoval, 532 U.S. at 286.
Applying the Supreme Court’s precedents regarding
implied causes of action, I would conclude that Section 501
does not create an implied cause of action for unions.
5
To begin with, the text is clear. Subsection (b) of Section
501 creates a cause of action for union members. It does not
create a cause of action for unions.
Indeed, the text of Section 501 strongly suggests that
Congress did not want unions to have a federal cause of
action. It is “an ‘elemental canon’ of statutory construction
that where a statute expressly provides a remedy, courts must
be especially reluctant to provide additional remedies.”
Karahalios v. National Federation of Federal Employees,
Local 1263, 489 U.S. 527, 533 (1989) (citation omitted); see
also Transamerica Mortgage Advisors, Inc. (TAMA) v. Lewis,
444 U.S. 11, 19-20 (1979); National Railroad Passenger
Corp. v. National Association of Railroad Passengers, 414
U.S. 453, 458 (1974). After all, “express provision of one
method of enforcing a substantive rule suggests that Congress
intended to preclude others.” Sandoval, 532 U.S. at 290.
Here, Congress chose to create a cause of action, but only
for union members and not for unions. That decision strongly
suggests that Congress intended to allow union members –
and only union members – to sue under Section 501. We
should respect that congressional choice.
To be sure, some broader conceptions of statutory intent
take account not just of the text of the statute, but also of
legislative history. But here, the legislative history supplies
zero indication that Congress wanted to create a federal cause
of action for unions.
As Judge Millett’s concurrence explains in convincing
detail, moreover, other contextual indications in this statutory
scheme make it all but “impossible to shoehorn union-
plaintiffs into the statute as Congress wrote it.” Millett
Concurring Op. at 5. Notably, as far as anyone is aware, the
Supreme Court has never found an implied cause of action for
6
one party to sue under a particular statute when Congress
expressly created a cause of action for another party to do so.
We should not start now.
With no text and no legislative history to support its
argument, the Union relies heavily on the fact that union
members may not bring suit under Subsection (b) until the
union has refused or failed to do so itself. Subsection (b)
therefore assumes that a union could have brought suit.
According to the Union, Congress therefore must have
intended to give unions a federal cause of action to enforce
Section 501. See also Ward, 563 F.3d at 287-88.
But the conclusion does not follow from the premise. It
is true that Congress assumed that unions would be able to
bring suit to enforce the fiduciary duties imposed on union
officers. But nothing in Subsection (b) suggests that Congress
intended to allow unions to bring suit under federal law rather
than under state law. When Congress enacted Section 501, it
knew that unions already had state-law causes of action
available to them. See Tatel Concurring Op. at 5; see also
H.R. Rep. No. 86-741, at 81 (1959) (supplementary views).
But at the time, the States generally did not provide causes of
action to union members in order for them to sue corrupt
union officers. See S. Rep. No. 86-187, at 72 (1959)
(minority views); Statham, 97 F.3d at 1420. That disparity
generated a problem: Although unions could sue their
officers under state law, the unions were sometimes choosing
not to do so for corrupt reasons – in part because the officers
of the union usually determined whether a union should sue.
See generally Phillips v. Osborne, 403 F.2d 826, 828-29, 831-
32 (9th Cir. 1968). And union members had no recourse
because, as noted above, they generally could not sue the
union officers under state law. To solve that problem,
Congress enacted a new statute affording union members a
7
federal cause of action to sue crooked union officers when a
union itself would not. But Congress did not need to allow
unions to sue under federal law because unions, unlike union
members, already could bring suit against union officers
under state law. And so Congress did not need to – and did
not – create a new federal cause of action for unions.
Sticking to the statute as Congress wrote it does not leave
unions without remedies. To reiterate, they have state-law
remedies. This suit demonstrates as much. In addition to the
federal claim, the Union brought a host of other claims
against Faye under D.C. law. Those claims include
conversion and breach of contract, along with a claim for
breach of fiduciary duties imposed by D.C. law. See
Complaint at 4-6, International Union, Security, Police and
Fire Professionals of America v. Faye, No. 09-2229 (D.D.C.
Nov. 24, 2009), at Joint Appendix 8-10. In other words, even
without a federal cause of action under Section 501, unions
can still hold union officers accountable, including in this
very case, but the unions must do so under state law.
Creating a federal cause of action for unions may or may
not be “desirable” as a matter of policy. Sandoval, 532 U.S.
at 287. But Congress did not create one in the Labor-
Management Reporting and Disclosure Act, and we must
respect Congress’s policy choice.
II
The majority opinion sidesteps the merits of the Union’s
argument. Instead, the majority opinion says this Court
already decided the issue in Weaver v. United Mine Workers
of America, 492 F.2d 580 (D.C. Cir. 1973) (per curiam). In so
ruling, the majority opinion ventures far beyond both the
arguments of the parties in this case and the holding of
Weaver itself.
8
To start, even the Union here does not rely on Weaver to
support its arguments. Think about that. In its opening brief,
the Union did not rely at all on Weaver. See Union Br. 13. At
oral argument, the Union was offered Weaver on a silver
platter. See Tr. of Oral Arg. at 8. But the Union declined to
indulge. In no uncertain terms, the Union said it would be too
much of a reach to argue that Weaver had any relevance here:
“[G]iven th[e] rather unique circumstance of that case,” the
Union explained at oral argument, Weaver “does not directly
address the issue before this Panel.” Tr. of Oral Arg. at 8-9.
Again, remember that this was the Union speaking. Even the
Union did not think it could make a good argument that
Weaver controlled this case.
The Union expressly waived reliance on Weaver for good
reason. As the Union acknowledged in its brief and at oral
argument, the facts in Weaver presented a far different set of
legal issues, and the Weaver Court quite plainly did not
address much less resolve the question now before us.
Weaver involved a Section 501 suit brought by Joseph
Yablonski, a member of the United Mine Workers of
America. Weaver, 492 F.2d at 581-82. Yablonski believed
that the union’s senior officers had been misappropriating
union funds. Id. at 582. So along with other members of the
union, Yablonski sued three union officers and the union itself
under Subsection (b) of Section 501. Id. at 581-82. Simple
enough. But Yablonski and his family were murdered on the
order of the union’s president before the court could reach the
merits of Yablonski’s suit. Id. at 582; see also
Commonwealth v. Boyle, 447 A.2d 250 (Pa. 1982).
That created a potential problem for the pending suit. Of
the plaintiff union members in the suit, only Yablonski had
met the procedural demand requirement for suit under
9
Subsection (b). Weaver, 492 F.2d at 582. So the defendant
union officers and union moved to dismiss the suit, arguing
that the remaining plaintiffs were not proper plaintiffs. Id.
The District Court denied the motion, and the defendant union
officers and union filed interlocutory appeals. Id.
While the appeals were pending, the union held a new
election, and control of the union flipped: The election
displaced the incumbent officers and ushered Yablonski’s
supporters into power. Id. at 582-83. With its newly elected
officers at the helm, the union asked this Court (i) to withdraw
the union’s appeal, in which the union had been aligned with
the old defendant union officers, and (ii) to permit the union
to now intervene on behalf of the plaintiff union members
against the old defendant union officers. See id. at 583.
The question before the Weaver Court was thus a narrow
one: Generally speaking, could a union start on one side of a
Section 501 case and then – midway through – switch to the
other side? See id. at 586. Weaver held that a union could do
so. Id. at 586-87. In a brief discussion, the Court noted that
the union had chosen “to assume a defensive role” in the suit
initially, and that the defendant officers wanted this Court to
“compel the [union] to maintain [that] defensive role.” Id. at
586. But the Court declined to force the union to stick to its
original position, noting that the union was “at liberty to
shape its own destiny within the boundaries set by law.” Id.
The Court held that “like any labor organization,” the union
“is free to say which side of a controversy involving a
legitimate institutional interest it will take.” Id.
Importantly for present purposes, Weaver completely
missed (and thus said nothing about) the issue of whether
10
Section 501 creates an implied cause of action for unions. 3
Weaver did not cite any precedent related to finding implied
causes of action. Nor did Weaver purport to analyze whether
the union in that case could have brought a Section 501 claim
in the first instance. Indeed, Weaver did not mention Section
501 at all other than a passing reference to the “legislative
preference” for unions themselves to prosecute claims “for
breach of fiduciary duty against union officials.” Id. That
silence should not be surprising: As the Union in this case
observes, the Court in Weaver “took for granted that the
Union was a proper party.” Union Br. 13. Therefore, as the
Union here concedes, “the decision in Weaver turned on an
issue of civil procedure, not an interpretation of § 501.” Id.
The majority opinion extracts a different lesson from
Weaver. With considerable understatement, the majority
opinion acknowledges that “Weaver did not squarely address
the precise question of a union’s right to bring a section 501
suit in the first instance.” Maj. Op. at 10. But the majority
opinion nonetheless claims that Weaver “compels the
conclusion” that a union may bring suit under Section 501.
Id. The majority opinion reasons that by “allowing the union
to take over control of the litigation, the Weaver court
necessarily determined that the union was a proper plaintiff in
a section 501 fiduciary duty suit.” Id. at 9.
Weaver said nothing of the sort. Simply put, the Weaver
Court missed a critical issue, presumably because the parties
(in particular, the defendant union officers) failed to notice
and raise it and because the issue was not the kind of
jurisdictional issue that courts must raise on their own. It
3
It is unclear why the union rather than the union officers was
originally a proper defendant in a case of this sort, much less a
proper plaintiff after the switch. But neither question was
addressed in the multi-stage litigation.
11
therefore is entirely mistaken to think that the Weaver Court
had any thoughts or made any rulings on the issue before us.
The majority opinion’s contrary conclusion contravenes a
longstanding principle of judicial precedent: “Questions
which merely lurk in the record, neither brought to the
attention of the court nor ruled upon, are not to be considered
as having been so decided as to constitute precedents.”
LaShawn A. v. Barry, 87 F.3d 1389, 1395 n.7 (D.C. Cir. 1996)
(en banc); see also United States v. Shabani, 513 U.S. 10, 16
(1994).
For its part, Judge Millett’s concurrence says that the
question presented here was “[a]sked and answered by
Weaver.” Millett Concurring Op. at 1. That is doubly
mistaken, in my view. Review of the Weaver opinion reveals
that this question was neither asked nor answered. The court
simply missed the issue. That happens sometimes. Even in
our court. Cf. Dietz v. Bouldin, 136 S. Ct. 1885, 1896, slip op.
at 12 (2016) (“All judges make mistakes. (Even us.)”). I
would not impute to the Weaver Court rulings that it quite
obviously never made.
***
This Court’s decision in Weaver does not control the
outcome of this case, as even the Union has conceded. To
come to the contrary conclusion, the majority opinion has not
only re-engineered Weaver, but also jumped past the Union’s
commendable, good-faith candor in refusing to rely on that
inapposite case. Because Weaver does not control here and
because Section 501 does not create a cause of action for
unions, I would affirm the judgment of the District Court
12
dismissing the Union’s federal cause of action. I respectfully
dissent. 4
4
The District Court dismissed for lack of subject matter
jurisdiction. As the majority opinion notes, because the Union has
an arguable cause of action, our inquiry “goes to the merits, not
jurisdiction.” Maj. Op. at 5; see also Lexmark International, Inc. v.
Static Control Components, Inc., 134 S. Ct. 1377, 1387 n.4, slip op.
at 9 n.4 (2014). But when a district court dismisses for lack of
subject matter jurisdiction, this Court can “nonetheless affirm the
dismissal if dismissal were otherwise proper based on failure to
state a claim under Federal Rule of Civil Procedure 12(b)(6).”
Trudeau v. FTC, 456 F.3d 178, 187 (D.C. Cir. 2006). I would do
so here.