In the Matter of Arthur A. Coia  

Laborers’ International Union of North America

Independent Hearing Officer  

Docket No. 97-52D  

Decided October 10, 2001  

Order and Memorandum  

This Order and Memorandum addresses the Motion for Reconsideration of Fine of February 21, 2001, by Arthur A. Coia (Coia), former General President of Laborers’ International Union of North America (LIUNA).  Coia seeks  reconsideration of the LIUNA Independent Hearing Officer’s (IHO) $100,000 penalty issued on March 8, 1999.  See In the Matter of Arthur A. Coia, IHO Order and Memorandum, 97-52D (March 8, 1999).

 

I.         FACTS AND PROCEDURAL HISTORY

 

A.      The LIUNA Disciplinary Proceeding

 

In or about March of 1998, the General Executive Board Attorney (GEB Attorney) filed sixteen Disciplinary Charges against Coia, alleging multiple violations of LIUNA’s Ethics and Disciplinary Procedure (EDP), Ethical Practices Code (EPC) and the LIUNA Uniform Local Union Constitution (Constitution).  See GEB Attorney’s Amended Disciplinary Charges (Disciplinary Charges).  A disciplinary hearing began in April 1998, and lasted 22 days over the next four months.  The IHO rendered a decision in the matter on March 8, 1999.  See In the Matter of Arthur A. Coia, 97-52D. 

 

The IHO found that the GEB Attorney had proven only one of the sixteen charges, Charge XIV, by a preponderance of the evidence.  See id.  Charge XIV alleged that Coia violated the Business and Financial Activities of Union Officials section of the EPC by accepting something of value from a professional enterprise with which the Union conducted business.  See Disciplinary Charges, § II.1, 2, 6; Charge XIV; see also EPC, Business and Financial Activities of Union Officials, & 4.[1]  Specifically, the Disciplinary Charges alleged that Coia allowed Viking Leasing Company (Viking) to structure the transfer of a 1991 Ferrari F-40 (Ferrari F-40) automobile to Coia in a manner that allowed him to maximize the value of the automobile on resale and avoid payment of taxes.[2]  See In the Matter of Arthur A. Coia, 97-52D.  The IHO concluded that, although there were no union funds involved, Coia was offered an opportunity to make a substantial profit from the sale of the automobile as a result of his joint venture with Viking, a major LIUNA vendor. Id.  The IHO imposed $100,000 fine that specifically penalized only the EPC violation described in Charge XIV, and was designed to preserve “any relevance [of the EPC] to LIUNA officers.”  Id.  Coia did not appeal the fine.

 

Pertinent to Respondent’s instant motion, the IHO rejected two of the GEB Attorney’s allegations related to the automobile transaction; the allegation that Coia evaded $42,000 in federal luxury tax and the allegation that Coia failed to pay $37,750 in Rhode Island state tax.  Id.  Charge XVI, relating to the federal luxury tax, and the allegation relating to Rhode Island state tax were both dismissed as not within the jurisdiction of a labor arbitration.  Id.  Therefore, the penalty imposed by the IHO did not in any way focus on the alleged violations of local, state or federal tax law.

 

B.    Parallel Criminal Proceedings

 

At the time of Coia’s LIUNA disciplinary proceedings, the United States Attorney for the District of Massachusetts (U.S. Attorney) conducted a parallel federal criminal investigation of matters arising from Coia’s ownership of Ferraris.  On January 27, 2000, more than ten months after the IHO issued an opinion in LIUNA internal disciplinary matter, Coia entered a plea of guilty to a one-count federal information.  See Information, United States v. Coia, No. 00-10024-GAO (D. Mass., Jan. 27, 2000) (Information).  The Information alleged that Coia fraudulently used the mails to further a scheme to defraud the state of Rhode Island and the Town of Barrington of taxes owed on three Ferrari automobiles.  See id.  Specifically, Coia fraudulently registered the vehicles at Viking’s address in Middletown in order to avoid paying the Town of Barrington’s higher local excise tax; and, used fraudulent invoices from Viking to avoid paying full use tax to the state of Rhode Island.  See Agreed Factual Basis, Plea Agreement (Plea Agreement).

 

Pursuant to the Plea Agreement, Coia was ordered to pay fines and restitution.  Coia was fined $10,000.  The court ordered Coia to make restitution to the Town of Barrington in the amount of $80,396.79, and the state of Rhode Island in the amount of $19,250, for a total of $99,646.79.  Plea Agreement,¶ 4.  Coia also paid a $100 special assessment.  The monetary cost of the Plea Agreement totaled $109,746.79.

 

II.       ISSUES RAISED BY COIA’S MOTION FOR RECONSIDERATION

 

Before turning to substantive issues presented by the instant motion, the IHO will first examine the procedural issues attendant to Respondent’s filing a motion almost two years after a decision in the matter has been rendered.

 

A.      Procedural Issues

 

The IHO sua sponte raises the question of whether the IHO has jurisdiction to entertain this appeal.  There is no union precedent regarding entertaining a motion to alter a disciplinary penalty after the appellate process is final.  In federal civil proceedings, requests for relief from judgments are committed to the discretion of the district court.  See Aetna Cas. and Sur. Co. v. Home Ins. Co., 882 F. Supp. 1355 (S.D.N.Y. 1995).  Federal Rule of Civil Procedure 60 provides, in pertinent part, as follows:

 

On motion and upon such terms as are just, the court may relieve a party or a party’s representative from a final judgment, order, or proceeding from the following reasons:  . . . (5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment.  The motion shall be made within a reasonable time . . . .

 

F.R.C.P. 60 (Rule 60).

 

Based upon the criteria set out in Rule 60 and the case law construing it, the IHO concludes that he has similar discretion to reduce a penalty in the proper circumstances.  Applying Rule 60 to the instant motion, the motion fails for two reasons.  First, Rule 60 authorizes relief when it is no longer equitable for the judgment to have prospective application; however, this relief requires some change in subsequent factual or legal circumstances that make continued enforcement of the judgment inequitable.  See, e.g., Schildhaus v. Moe, 335 F.2d 529 (C.A.2 (N.Y.) 1964); Escalera v. New York housing Authority, 924 F. Supp. 1323 (S.D.N.Y. 1996); Huk-A-Poo Sportswear, Inc. v. Little Lisa, Ltd., 74 F.R.D. 621 (S.D.N.Y. 1977); Federal Deposit Ins. Corp., to Use of Secretary of Banking v. Alker, 234 F.2d 113 (C.A.3 (Pa.) 1956).  As will be discussed infra, there are no new factual or legal circumstances that make the enforcement of this fine inequitable.

 

Second, the Motion for Reconsideration was not made within a reasonable time.  Rule 60 sets no time limit on the application of this rule, except that the motion must be made within a reasonable time.  Courts have found that a “[m]otion for relief from judgment made 22 months after entry of original judgment, without sufficient explanation of delay, [is] not made ‘within a reasonable time’ as required by . . . this rule.”  Morse-Starrett Products Co. v. Steccone, 205 F.2d 244 (C.A.9 (Cal.) 1953).  Even affording Coia great latitude regarding timeliness, the present motion cannot be construed as “made within a reasonable time.”  The Motion was filed over 23 months after the Coia penalty became final.  In the future, any motions for reconsideration of a final order shall be presumptively unreasonable if filed more than one year after an order is final.  Because this Motion for Reconsideration is the first one of its kind presented to the IHO, and the viability of such post decision matters was unclear, the substantive merits of the motion will be considered. 

 

B.       Substantive Issues

 

1.       Whether the Federal Court Punishment Rests on the Same Conduct as the Punishment for the EPC Violation

 

Coia’s attorneys aver that since the IHO’s penalty was based solely upon Charge XIV, relating to Coia’s conflict of interest with Viking that gave rise to state and local tax deficiencies that Coia pled guilty to in federal court, he was essentially fined twice for the same conduct. Coia’s attorneys allege that Coia incurred a total of $850,000 in monetary penalties exclusive of his LIUNA fine.[3]  Therefore, Coia’s attorneys request that the IHO reconsider the $100,000 LIUNA fine.

 

As an initial matter, it is important to delineate the conduct that Charge XIV specifically addressed.  Charge XIV alleged as follows:

 

From on or about July 12, 1991, to in or about February 1994, ARTHUR A. COIA, while a member and officer of LIUNA, that is, General Secretary-Treasurer or General President, received and accepted something of value from a professional enterprise with which the union conducted business, to wit:  Coia caused or allowed Viking to structure the transfer to him of a 1991 Ferrari F-40 automobile, Vehicle Identification Number ZFFMN 34A6M0089653, in a such manner as to foster the misleading appearance that Viking maintained ownership of the automobile and to avoid transferring the Manufacturer’s Certificate of Origin (“MCO”), thereby allowing Coia to maximize the value of the automobile on resale, and to avoid the payment of at least $77,750 in taxes, in violation of the LIUNA Ethical Practices Code, “Business and Financial Activities of Union Officials,” Section 4.

 

Charge XIV clearly alleges only a violation of the EPC.  The IHO specifically rejected all allegations related to tax issues.  See In the Matter of Coia, 97-52D.  Moreover, the charge only addresses issues relating to the Ferrari F-40.  The Federal conviction encompasses transactions involving the Ferrari F-40, a 1973 Ferrari 365 GTB4, and a 1972 Ferrari Daytona.

 

The IHO found that the gravamen of the offense was the conflict of interest between Coia and Viking.  The Ferrari F-40 venture with Viking gave Coia the opportunity to sell the automobile as a dealer, make a large profit, avoid luxury tax, and secure a favorable financing arrangement through Viking.  Coia derived these personal benefits, which were more than an ordinary car buyer would receive, from his relationship with a union vendor.  Although some of the underlying allegations in this charge support the later imposition of taxes, the thrust of the charge was that the conduct violated the provisions of the EPC directly dealing with the business and financial transactions of union officers.  Additionally, the LIUNA charge only dealt with one of the Ferraris, whereas the Information involved several automobiles.  The tax evasion that was the subject of the Information is not the same subject matter as the conduct for which Coia was fined $100,000 by the IHO.  The fine imposed by the IHO was not imposed for failure to pay taxes to Rhode Island or the Town of Barrington.

 

2.       Equitable Considerations

 

Coia’s attorneys also advance two equitable reasons for reducing Coia’s $100,00 fine.  First, Coia’s attorneys argue that the enormity of the fines and assessments imposed upon Coia, coupled with his loss of income from private law practice, give the IHO ample reason to reconsider the fine.  Secondly, Coia’s attorneys argue that the deterrent purpose of the fine has already been met.

 

Coia has not advanced any convincing equitable argument warranting a modification of the fine.  The IHO concurs with the Assistant U.S. Attorney at Coia’s sentencing hearing; Coia led the effort to rid LIUNA of organized crime by using his political prowess to force the program.  Nonetheless, the IHO concludes that the fine was appropriate for the offense.  At the time the penalty was imposed, the IHO was aware that Coia was involved in other legal battles, which could be costly and might result in fines or penalties. The IHO imposed the LIUNA penalty mindful of those factors.  The fine was designed to be a complete sanction of only the LIUNA offense.  Therefore, reducing the fine because of subsequent, unrelated penalties would be inappropriate and would make the reform process a hollow promise.

 

Coia’s attorneys argue that reducing the fine will do nothing to weaken the deterrent effect of the union’s decision because union members are aware of the consequences Coia faced as a result of the Viking transaction.  However, deterrence is not only directed at the recipient of the penalty; deterrence is aimed at other union officers, so that they will not be tempted to engage in relationships with union vendors for their own personal benefit.  The IHO is opposed to any action that would undermine the import of that message.  Clearly, a reduction or expungement of Coia’s fine simply because his conduct warranted additional non-union penalties would send a message that the EPC offense does not merit union discipline when a member has been sanctioned by outside entities.

 

III.   CONCLUSION

 

For the foregoing reasons, the Motion for Reconsideration of Fine is hereby DENIED.

 

                                                                                                PETER F. VAIRA

 

                                                                                                INDEPENDENT

                                                                                                HEARING OFFICER