on point, and the growing literature on the issue, this Court concludes that a plaintiff suing under civil RICO must allege a distinct RICO-type of injury, i.e., an injury caused by a violation of Section 1962, and not merely an injury caused by the predicate acts. The Court agrees with the Second Circuit and the three decisions of this court that the "by reason of a violation of section 1962" language of Section 1964(c) imposes this requirement.
It is clear from plaintiffs' pleadings that they have failed to allege an injury separate and distinct from that caused by the predicate acts. For this additional reason
plaintiffs' RICO allegations are insufficient as a matter of law and must be dismissed.
C. Breach of Fiduciary Duty Claims
Defendants make several arguments in support of their motion to dismiss the breach of fiduciary duty allegations. After careful review, the Court concludes that these arguments are either without merit or are insufficient to warrant dismissal at this time.
Defendants first argue that the propriety of the attorneys' fees award was considered and determined in their favor by the court in the postal workers litigation.
Therefore, they argue, collateral estoppel bars the breach of fiduciary duty claims.
Defendants' argument is without merit. For collateral estoppel to apply, the issues on which preclusion is sought must have been actually and necessarily determined in a prior action, Montana v. United States, 440 U.S. 147, 153, 99 S. Ct. 970, 973, 59 L. Ed. 2d 210 (1979), and the issues in both actions must be the same, McCord v. Bailey, 204 U.S. App. D.C. 334, 636 F.2d 606, 608-09 (D.C.Cir.1980) and Donovan v. Postal Service, 530 F. Supp. 872, 898 (D.D.C.1981) (FLSA litigation). See also Restatement (Second) of Judgments § 27 (1980).
The breach of fiduciary duty issues raised by the plaintiffs in this action are whether it was a breach of fiduciary duty for Connerton and Bernstein to represent LIUNA members as private rather than as union counsel; to use LIUNA facilities to solicit individual LIUNA members for a private law suit; and to receive attorneys' fees. These issues were not considered or determined in the postal workers litigation. While the court in that action did consider whether Connerton and Bernstein should be awarded attorneys' fees, the issue was not framed in terms of whether such an award would amount to a breach of fiduciary duty. More importantly, the court in the postal workers litigation did not consider at all the issues of whether using LIUNA facilities to solicit clients or bringing the action privately constituted a breach of fiduciary duty. Because the issues raised in this action were not considered in the postal workers litigation, the doctrine of collateral estoppel is inapplicable.
Defendants next argue that the allegations fail to state a claim which may be maintained by the union.
Defendants' argument is that (1) even if they received the attorneys' fees improperly, the union would not be entitled to the fees and therefore has not been injured,
and (2) since the union is not entitled to the fees and has not suffered any injury, the allegations fail to state a claim which may be maintained by the union.
Defendants' argument ignores the fact that there are other breach of fiduciary duty allegations. The complaint also alleges that defendants should have brought the postal workers litigation as union attorneys, and that they should not have used LIUNA facilities to solicit clients for a private law suit. Both of these allegations assert injuries which may be maintained by the union under § 501(a).
Defendants' third argument is that as a matter of law union attorneys may handle cases in their private capacities and receive attorneys' fees.
This will not always be true. Whether union counsel may represent some members of a union privately depends on the conditions, both explicit and implicit, of his or her office and employment, and provisions in the constitution or by-laws of the union, and any other understandings or arrangements which may exist. The union has the power, through contract, constitution, and by-laws to dictate the extent to which union counsel may engage in non-union matters.
Plaintiffs have cited from a provision of the LIUNA constitution, purportedly in effect at the time the law suit was commenced, which states that "the General Counsel shall devote all his time exclusively to the affairs and welfare of the International Union".
While the Court is unable at this time to determine the full meaning and scope of this provision, or to know what other understandings there were between the union and counsel in this regard, the quoted provision is sufficient for purposes of a motion to dismiss to rebut the argument that union counsel may, as a matter of law, represent union members privately.
Defendants' fourth argument
is that plaintiffs' 501(a) claim is barred by laches and/or the statute of limitations.
As a threshold matter the Court must determine whether the statute of limitations or laches applies.
The weight of authority suggests that a 501(a) breach of fiduciary duty claim is governed by laches. See Note, 73 Yale L.J. 443, 466 n. 114 (1964); Morrissey v. Curran, 482 F. Supp. 31, 40 (S.D.N.Y.1979); Yablonski v. Mine Workers, 68 Lab.Cas. P 12,810, 24,615 (D.D.C.1972); Weaver v. Mine Workers, 68 Lab.Cas. P 12,700, 24,287 n. 6 (D.D.C.1972); Blankenship v. Boyle, 329 F. Supp. 1089, 1112 (D.D.C.1971).
The defense of laches requires a finding that the plaintiff inexcusably or unreasonably delayed in bringing the claim, and that the delay was prejudicial to the defendant. Rozen v. District of Columbia, 227 U.S. App. D.C. 14, 702 F.2d 1202 (D.C.Cir.1983). Although the eight year delay would seem to be unreasonable especially in light of the fact that the postal workers litigation giving rise to the claim was a matter of public record, there has not been sufficient proof on either this point or on the issue of prejudice. Accordingly, the Court declines to dismiss the claim on the grounds of laches at this time.
Finally, defendants argue that Mr. Bernstein, Associate General Counsel of LIUNA at the time of the postal workers litigation, was not an "officer, agent, shop steward, or other representative" for purposes of Section 501(a).
Rather, they argue, Mr. Bernstein was part of the union's "salaried nonsupervisory professional staff", a category of persons specifically exempt from the reach of Section 501(a). 29 U.S.C. § 402.
Without evidence regarding the specific duties, responsibilities, and terms of Bernstein's position, the Court is unable to determine whether Mr. Bernstein's position was within the purview of Section 501(a). Accordingly, the Court declines to dismiss this claim at this time.
For the foregoing reasons, the Court grants the motion to dismiss the 501(c) and RICO counts against defendants Connerton and Bernstein, but declines to dismiss the breach of fiduciary duty claims at this time.