In the Matter of Arthur A. Coia

Laborers’ International Union of North America

Independent Hearing Officer

Docket No. 97-52D

Decided May 27, 1999

Order and Memorandum Regarding Fee Reimbursement

This Order and Memorandum deals with the petition submitted by Arthur A. Coia’s attorneys for legal fees incurred in the defense of charges brought by the General Executive Board (“GEB”) Attorney.

The GEB Attorney filed 16 charges against Coia.  See In the Matter of Arthur A. Coia, IHO  97-52D.  The Independent Hearing Officer (“IHO”) held a hearing on the charges during the summer of l998, for a total of 26 hearing days. At the beginning of the hearing the GEB Attorney withdrew one charge.  On March 8, 1999, the IHO entered an Order and Memorandum, holding that the GEB had not proven 14 of the remaining charges.  On the one proven charge, the IHO fined Coia $100,000. The GEB Attorney appealed  the IHO’s ruling on some, but not all of the charges.  Coia did not appeal.  That appeal is currently pending before the LIUNA Appellate Officer.

On March 29, 1999, the law firm of Williams & Connolly, Coia’s defense counsel, submitted a bill to the GEB for reimbursement of Coia’s legal fees in the amount of  $1,018, 894. This submission was pursuant to the Revised GEB Policy On Payment Of Legal Fees, adopted by the GEB on November 11, 1998 (“ November 11 Policy”). 

On April 14, 1999, upon the advice of Michael Bearse, the LIUNA General Counsel, the GEB voted to approve the fees pursuant to the November 11 Policy.  On April 15, 1999, pursuant to the provisions of the November 11 Policy, Michael Bearse forwarded the petition to the IHO for a final determination of the amount to be reimbursed.  

The November 11 Policy revised a former GEB policy which prohibited the reimbursement of legal fees of officers or employees for defense of charges arising out of their LIUNA duties, unless the officer or employee was completely exonerated. Under the November 11 Policy, legal fees in an amount over $100,000 may be reimbursed by  LIUNA if the member or officer has been partially exonerated.  The stated purpose of the policy is to make partial reimbursement to prevent unfairness.  The November 11 Policy provides that if a fee petition is initially approved by the GEB, the final determination of the amount reimbursed is to be made by the IHO.

On May 5, 1999, the IHO sent a letter to Michael Bearse with a copy to Robert Luskin, the GEB Attorney, raising certain concerns about the propriety of the IHO ruling on the fee petition.  The IHO requested that the GEB Attorney contact attorneys from the Department of Justice who have oversight over the reform process, to determine if this type of proceeding is within the reform process.  The IHO understands there has been discussion among the GEB Attorney and Department of Justice Attorneys but there has been no clear response on the issue from the Department of Justice. 

Subsequently, the IHO received a copy of a letter sent by Michael Bearse to Frank J. Marine, Deputy Chief, Organized Crime Section, U.S. Department of Justice, and Craig A. Oswold, Assistant United States Attorney, Northern District of Illinois, dated May 20, 1999.  In his letter Michael Bearse cited certain cases from the Second Circuit which approved partial reimbursement of legal fees, and requested comment from the individuals by May 26, 1999, regarding Coia’s petition.  Bearse stated in his letter that if he received no comment from Marine or Oswold by May 26, 1999, he would presume they had no concerns, and would request the IHO to proceed with the consideration of the fee request.  On May 27, 1999, Bearse informed the IHO by telephone that he had received a call from one of the attorneys, but received no specific approval of the process.  The IHO will not infer any approval of the policy by the Department of Justice from these events. 

The IHO notes that in the past Department of Justice Attorneys have formally made their positions known in IHO matters.  See In Re Local Union 190 Election Protest  (Fresina), IHO EO11, May 29, 1996 where a Department of Justice Attorney sent a letter memorandum to the IHO urging the IHO to adopt a certain standard of review in deciding appeals from decisions by the Election Officer; See also In Re Appeal of LIUNA General Counsel,  IHO EO-1000, September 24, 1996, a Department of Justice Attorney participated in an oral argument on an appeal from an Election Officer decision during the 1996 LIUNA International Convention, urging affirmance of the Election Officer’s Decision.

On his own motion the IHO has made an independent review of this matter and has concluded that the IHO should not be a part of the fee reimbursement procedure for the reasons set out below.

At the outset the IHO notes that he has no jurisdiction over GEB policy decisions unless they affect the due process of judicial proceedings before him.

The reimbursement of a member’s legal fees is a matter of policy for the GEB.  Unlike the determination of legal fees in state or federal courts, the determination to reimburse legal fees in a labor organization is essentially a matter of internal organizational policy.  By the term internal organizational policy, the IHO means the determination whether to reimburse legal fees is in the province of the legislative and executive branches of the International Union, and does not need the judicial interpretation of the IHO.  In the past, the IHO has referred matters which he believed are purely internal organizational policy to the GEB.  See In Re Local Union 92, IHO 98-28P, Order and Memorandum on Reconsideration, March 23, 1999.

During my tenure as the IHO, internal organizational policy issues regarding the governance of LIUNA have consistently been kept within the legislative or executive process.  See e.g., The Matter of the Upper New York State District Council (handled by members of the GEB acting as hearing officers).  The GEB has decided internal organizational policy questions even where a specific request was made for the IHO to hear the matter.  See Letter of Manual Monsibais, Business Manager, Local 220, regarding the proposed merger of Local 220 and Local 300 (September 16, 1998).

It is the IHO’s opinion that the repayment of legal fees should not be a part of the reform effort and, the reform officers, the IHO, the Appellate Officer, the GEB Attorney, and the IG, should not be involved in making internal organizational policy decisions.      

The IHO declines to accept the GEB referral notwithstanding the November 11 policy and will render no decision in the matter.

It is apparent that the GEB desires that the fee question be decided by a professional, independent of the GEB.  In this regard, the IHO suggests that the LIUNA General Counsel contact Frank J. McGarr, former Chief Judge, Northern District of Illinois to rule on the fee petition.  Judge McGarr, now with the Chicago law firm of Foley & Lardner, has established a national practice as a neutral arbitrator in complicated commercial matters.  The various participants to the Coia case, Williams & Connolly, the GEB Attorney, the IHO, and the LIUNA General Counsel, should be able to answer any inquiries from Judge McGarr.

        Obviously, the GEB is free to reject the above suggestion of the IHO, and is free to follow some other procedure.

PETER F. VAIRA

INDEPENDENT HEARING OFFICER