Ohlson v. Slawson
Filing
81
MEMORANDUM OPINION AND ORDER. IT IS HEREBY ORDERED that: 1. Plaintiff's Motion to Vacate Judgment, Reopen the Summary Judgment Record and/or for a New Trial 55 is GRANTED; 2. Judgment herein entered on November 29, 2012 is hereby vacated ; 3. The record on summary judgment is hereby reopened with respect to the claim for intentional interference with contract and the documents sought by Plaintiff to be made a part of the summary judgment record are hereby made a part of that record; and 4. The Defendant's motion for summary judgment 32 is GRANTED with respect to Counts II and III and DENIED with respect to Count I.(Written Opinion). Signed by Chief Judge Michael J. Davis on 6/26/13. (GRR)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Thomas E. Ohlson,
Plaintiff,
v.
MEMORANDUM OPINION
AND ORDER
Civil No. 11‐2104
Bradley D. Slawson, Sr.,
Defendant.
_________________________________________________________________
Richard T. Wylie, Counsel for Plaintiff.
Kyle A. McCoy, Counsel for Defendant.
_________________________________________________________________
This matter is before the Court on Plaintiff’s Motion to Vacate Judgment,
Reopen Summary Judgment Record and/or Grant a New Trial pursuant to Rule
59 of the Federal Rules of Civil Procedure.
I.
Background
Plaintiff is a former Business Agent and employee of the Teamsters Local
No. 120 (“Local 120”), which is affiliated with the International Brotherhood of
Teamsters (“IBT”). He was laid off from his paid position effective May 5, 2011.
On June 29, 2011, Plaintiff filed an action in Minnesota state court alleging that
Defendant interfered with his contract of employment with the Local 120 and
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that Defendant intentionally inflicted emotional distress upon Plaintiff. Plaintiff
was then recalled to his full‐time position as Business Agent in July 2011 and was
made whole for all back pay, benefits, and other compensation due and owing
him, retroactively to the date of the layoff. Defendant thereafter removed
Plaintiff’s action to this Court.
When the next union elections were held in November 2011, Plaintiff did
not seek re‐election as a Business Agent. Instead he challenged the incumbent
President and lost. Because he no longer held an elected position with the Local
120, his employment with the Local 120 terminated effective December 31, 2011.
Plaintiff amended his complaint, adding a claim that Defendant violated
Plaintiff’s rights under the Labor Management Reporting & Disclosure Act
(“LMRDA”), 29 U.S.C. § 401, et seq.
II.
Decision on Summary Judgment
Defendant filed a motion for summary judgment as to all claims on July 2,
2012. In response to Defendant’s motion for summary judgment, Plaintiff agreed
that the claim for intentional infliction of emotional distress should be dismissed.
Thus, the only claims addressed by the Court on summary judgment were the
claims for interference with employment contract and a violation of rights under
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LMRDA.
With respect to the intentional interference with contract claim, the Court
determined that generally, union agents will not be held personally liable when
they act in their official capacities for the union. Arnold v. Air Midwest, Inc., 100
F.3d 857, 861 (10th Cir. 1996) (citing Atkinson v. Sinclair Refining Co., 370 U.S.
238, 249 (1962)). The Court further recognized, however, that Minnesota law
provides that liability may attach where there is evidence that a company officer
or agent is motivated by malice and bad faith, personal ill‐will, spite, hostility or a
deliberate intent to harm the plaintiff. Nordling v. N.S.P. Co., 478 N.W.2d 498,
506 (Minn. 1991). Plaintiff had argued in his opposition brief that fact questions
existed as to whether Defendant was motivated by malice or ill‐will towards
Plaintiff when he interfered with Plaintiff’s employment contract.
By Memorandum Opinion and Order dated November 29, 2012, this Court
granted Defendant’s motion and entered judgment in favor of Defendant on all
claims. (Doc. Nos. 53 and 54.) In granting summary judgment on the intentional
interference with contract claim, the Court held that on the record before it,
Plaintiff had failed to demonstrate the existence of genuine issues of fact as to
whether the Defendant acted with actual malice ‐ that is without legal justification
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or excuse or that Defendant willfully violated Plaintiff’s known rights when he
laid him off from his position on May 5, 2011. (Doc. No. 53 at 12.) The Court
further held that Defendant had demonstrated that the Local 120 had experienced
financial hardships, and that the decision to terminate Plaintiff’s employment was
because of those financial difficulties.
With respect to Plaintiff’s LMRDA claim, the Court first recognized that the
“statutory rights of association and expression [under LMRDA]. . . are accorded
only to union members acting as members and not to union officers acting solely
in their official capacity as officers.” Johnson v. Kay, 860 F.2d 529, 536 (2d Cir.
1988) (citing Finnegan v. Leu, 456 U.S. 431, 436‐37 (1982)). The Court further
noted that “an attack largely focusing upon a union officer may, under some
circumstances, ‘directly threaten the freedom of members to speak out,’ and
therefore violate the LMRDA, where ‘as a result of established union history or
articulated policy’ there is ‘a deliberate attempt by union officials to suppress
dissent within the union.’” Johnson, 860 F.2d at 536 (internal citations omitted).
Because Plaintiff was a union officer, the Court found that to maintain a
claim under LMRDA, he had to prove that Defendant acted pursuant to “an
established union history or articulated policy” to deliberately suppress dissent
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within the union. The Court found that Plaintiff failed to do so, noting that
Plaintiff testified at his deposition that he could only speculate as to the
Defendant’s motivation for his alleged conduct. The Court further found that
Plaintiff was allowed to run for office in 2011, and that to the extent Plaintiff
alleged that his rights as they relate to the 2011 election were violated, such claim
must be brought by the Secretary of Labor, and is not actionable in a civil action
by a union member or former union officer. See 29 U.S.C. § § 482(a) and 483;
Bradley v. Am. Postal Workers’ Union, 962 F.2d 800, 802 (8th Cir. 1992) (plaintiff’s
claim that he was deprived of a fair election and the right of participation are
governed by Title IV of the LMRDA, which requires a claim to be filed with
Secretary of Labor).
III.
Motion to Vacate Judgment and Reopen Summary Judgment Record
A motion under Federal Rule of Civil Procedure 59(e) serves the limited
function of “correcting ‘manifest errors of law or fact or to present newly
discovered evidence.’” United States v. Met. St. Louis Sewer Dist., 440 F.3d 930,
933 (8th Cir. 2006) (quoting Hagerman v. Yukon Energy Corp., 839 F.2d 407, 413
(8th Cir. 1988)). A motion under Rule 59(e) “cannot be used to introduce new
evidence, tender new legal theories, or raise arguments which could have been
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offered or raised prior to entry of judgment.” Id.
“To prevail on a Rule 59(e) motion, the movant must show that (1) the
evidence was discovered after trial; (2) the movant exercised due diligence to
discover the evidence before the end of trial; (3) the evidence is material and not
merely cumulative or impeaching; and (4) a new trial considering the evidence
would probably produce a different result.” United States v. Met. St. Louis Sewer
Dist., 440 F.3d 930, 933 (8th Cir. 2006).
A motion under Rule 59 must be filed no later than 28 days after judgment
has been entered. To the extent evidence is discovered after the time to file a
motion under Rule 59 has passed, such evidence may be considered under Fed. R.
Civ. P. 60(b)(2) and (6).
A.
Newly Discovered Evidence
Plaintiff asserts that he is entitled to relief under Rule 59(e) based on newly
discovered evidence ‐ the Recommendation of the Independent Review Board
(“IRB”) of the International Brotherhood of Teamsters (“IBT”) dated November 9,
2012 to place the Local 120 in Minneapolis into Trusteeship (Ohlson Decl., Ex. A)
and the Report and Recommendations of the Hearing Panel Appointed to Hear
Charges Against Former Local 120 Officers Bradley D. Slawson, Sr., Bradley D.
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Slawson, Jr. and Former Employee and Member Todd Chester dated March 29,
2013, and adopted by the General President of the IBT on April 1, 2013. (Wylie
Decl., Ex. A.)
As indicated in the Trusteeship Recommendation Report, the IRB
determined evidence existed that the Defendant and his son, Bradley Slawson, Jr.
are corrupt and incompetent, that the Local 120 was engaged in financial
malpractice and was not being conducted in the best interests of its members.
(Ohlson Decl., Ex. A at 1‐2.) The Report goes on to describe the many findings of
the IRB upon which the recommendation to place the Local 120 into a Trusteeship
was based. As related to Plaintiff, the Report provides that Defendant violated
Section 13(B) of the Local Bylaws by removing him as an elected business agent
without having preferred written charges against him and such charges having
been found proven by the Executive Board. (Id. at 136.) Further, the IRB noted
that Defendant ordered Plaintiff’s salary and benefits ended as of May 9, 2011, but
that only the Executive Board had the power to do so. (Id. at 137.) Further, the
IRB noted that Defendant’s claim that Plaintiff was laid off for economic reasons
because the Local 120 was losing money was pretextual, given the fact that
Defendant was partly responsible for the Local 120ʹs financial difficulties. (Id.)
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Based upon the IRB’s Report and the reasons cited therein for the trusteeship,
James Hoffa, General President of the IBT, imposed an Emergency Trusteeship
over the affairs of the Local 120, effective November 13, 2012. (Id., Ex. B.)
On December 20, 2012, the IRB issued a Report and Recommendation to IBT
that Defendant, his son Bradley Slawson, Jr. and Todd Chester be charged for
violating the IBT Constitution on a number of grounds. (Wylie Decl., Ex. A at 4.)
A hearing on the charges was scheduled before a Hearing Panel comprised of
uninvolved members. (Id. at 7.) The hearing took place on February 28, 2013. (Id.
at 8.) Defendant and his son were present, and were given the opportunity to
submit evidence and argument in support of their positions. (Id.) Todd Chester
did not appear. (Id.) The Panel issued its findings and recommendations based
on the entire record. (Id.)
With respect to the Defendant herein, the Panel found the evidence
supported the charges against him as follows: Charge One ‐ embezzlement of
$90,000 of the Local 120 money for the benefit of Todd Chester; Charge Two ‐
breach of fiduciary duty by causing false statements to be made to Bank Mutual to
secure financing for the Local 120ʹs building project, failing to monitor expenses,
allowing the general contractor to charge the Local 120 for $90,000 paid to Todd
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Chester and allowing the contractor to pass on other inappropriate charges to the
Local 120 and improperly retaining the $35,000 the contractor owed the Local 120;
Charge Three ‐ committing act of racketeering by engaging in a scheme to defraud
Bank Mutual into providing financing for the Local 120’s building project; Charge
Four ‐ breach of fiduciary duty by taking $68,100 between 2007 and 2012 from the
Local 120 Bar and Gaming revenue without disclosure to the Local 120’s members;
Charge Five entering into sham collective bargaining agreement with American
Pride Home Services in order to accommodate the company’s marketing strategy,
including using the Local 120’s resources to help this company market its
products to the Local 120 members and causing the Local 120 to use the
company’s services; Charge Eight ‐ violating the Local Bylaws in a numbers of
ways, including failing to secure membership approval of transactions related to
the purchase of land and construction of a building in 2007 and 2008; and Charge
Eleven ‐ violating his fiduciary duty and embezzlement of the Local 120 money by
charging expenses to the Local 120 which had no union purpose.
Based on the evidence, and given regard to the nature and seriousness of
the offenses, Defendant’s prior service and disciplinary record, his position in the
union and any mitigating circumstances, the Hearing Panel recommended that
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Defendant be permanently barred from holding any office or employment with
the Local 120, the IBT or any affiliate and that he be barred for a period of 10 years
from holding membership in the Local 120 and be barred from any knowing
association with members of the IBT until such time as he shall regain his
membership in good standing. The Hearing Panel also recommended that he be
fined $159,065.97 ‐ which represents the sum wrongfully paid to Todd Chester,
wrongful stipends taken from the Local 120 Bar and Gaming revenue, and
wrongful reimbursements.
Defendant argues that the Trusteeship Recommendation Report was issued
on November 9, 2012. Judgment in this case was entered on November 29, 2012.
Because the Trusteeship Recommendation Report was issued before Judgment
was entered, Defendant argues it is not newly discovered evidence under Rule
59(e).
While the Trusteeship Recommendation Report was issued before
judgment was entered, the record demonstrates that Plaintiff did not receive
notice of the Report until after oral arguments, and approximately two weeks
before the Court issued its decision. Moreover, the Trusteeship Recommendation
Report was the first of two reports issued in response to evidence that Defendant
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and others were engaged in corrupt and incompetent conduct with respect to
their positions as executives of Local 120. The hearing on the charges issued
against Defendant, the Report and Recommendation of the Hearing Panel and the
IBT General President’s decision to adopt the recommendations of the Hearing
Panel and issue penalties did not issue until months after judgment was entered
in this case. Under these circumstances, the Court finds that such evidence is
newly discovered evidence, and that Plaintiff exercised due diligence to discover
the evidence prior to judgment and filed a timely motion pursuant to Rule 59.
B.
Materiality
1.
Intentional Interference with Contract
It is Plaintiff’s position that the above evidence is material to the claims he
asserted in this action, as such evidence goes to the issue of whether Defendant
was acting in his official capacity when he unilaterally made the decision to
terminate Plaintiff’s employment as business agent. The evidence also goes to the
issue of whether Defendant was motivated by actual malice or ill‐will when he
made the decision to terminate Plaintiff’s employment.
The Court finds that newly discovered evidence discussed above is material
to Plaintiff’s claim for intentional interference with employment contract. As
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noted above, such a claim will lie against Defendant if Plaintiff proves that
Defendant was “predominantly motivated by malice and bad faith, that is, by
personal ill‐will, spite, hostility, or a deliberate intent to harm the plaintiff
employee.” Nordling, 478 N.W.2d at 506. The newly discovered evidence
includes final findings and conclusions of IBT General President Hoffa that
Defendant, during the times relevant to Plaintiff’s claims, wrongly diverted
money from the Local 120, through embezzlement, breaches of fiduciary duties
and by numerous business expenses abuses. Such evidence is material to whether
Defendant was acting in his official capacity as Secretary‐Treasure of the Local 120
when he made the unilateral decision to terminate Plaintiff’s employment. Such
evidence is also material to whether Defendant was motivated by actual malice
when he unilaterally made the decision to terminate Plaintiff’s employment
purportedly because the Local 120 was experiencing financial difficulties ‐
difficulties that may well have been caused by Defendant’s wrongful conduct.
The Court further finds that had Plaintiff presented this evidence in
opposition to Defendant’s motion for summary judgment, the Court would have
denied the motion with respect to Plaintiff’s claim for intentional interference with
contract based on the existence of genuine issues of material fact.
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2.
Violation of LMRDA
Pursuant to the parties’ submissions, it does not appear that Plaintiff takes
the position that the newly discovered evidence is material to his claim under
LMRDA. Nonetheless, the Court finds that Plaintiff is not entitled to relief with
respect to his LMRDA claim, as Plaintiff cannot demonstrate the newly
discovered evidence would have produced a different result with respect to this
claim. As previously noted, the Court found that Defendant was entitled to
summary judgment on this claim, because such claim must be brought by the
Secretary of Labor, and is not actionable in a civil action by a union member or
former union officer.
IT IS HEREBY ORDERED that:
1.
Plaintiff’s Motion to Vacate Judgment, Reopen the Summary
Judgment Record and/or for a New Trial [Doc. No. 55] is GRANTED;
2.
Judgment herein entered on November 29, 2012 is hereby vacated;
3.
The record on summary judgment is hereby reopened with respect to
the claim for intentional interference with contract and the
documents sought by Plaintiff to be made a part of the summary
judgment record are hereby made a part of that record; and
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4.
The Defendant’s motion for summary judgment [Doc. No. 32] is
GRANTED with respect to Counts II and III and DENIED with
respect to Count I.
Date: June 26, 2013
s/ Michael J. Davis
Michael J. Davis
Chief Judge
United States District Court
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