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Private Plaintiffs' Use of Equitable Remedies Under the RICO Statute: a Means to Reform Corrupted Labor Unions

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Private Plaintiffs' Use of Equitable Remedies Under the RICO Statute: a Means to Reform Corrupted Labor Unions University of Michigan Journal of Law Reform Volume 24 Issues 3&4 1991 Private Plaintiffs' Use of Equitable Remedies Under the RICO Statute: A Means to Reform Corrupted Labor Unions Randy M. Mastro Gibson, Dunn & Crutcher Steven C. Bennett Office of the United Statestt A orney for the Southern District of New York Mary P. Donlevy Gibson, Dunn & Crutcher Follow this and additional works at: https://repository.law.umich.edu/mjlr Part of the Criminal Law Commons, Labor and Employment Law Commons, and the Legislation Commons Recommended Citation Randy M. Mastro, Steven C. Bennett & Mary P. Donlevy, Private Plaintiffs' Use of Equitable Remedies Under the RICO Statute: A Means to Reform Corrupted Labor Unions, 24 U. MICH. J. L. REFORM 571 (1991). Available at: https://repository.law.umich.edu/mjlr/vol24/iss3/4 This Symposium Article is brought to you for free and open access by the University of Michigan Journal of Law Reform at University of Michigan Law School Scholarship Repository. It has been accepted for inclusion in University of Michigan Journal of Law Reform by an authorized editor of University of Michigan Law School Scholarship Repository. For more information, please contact [email protected]. PRIVATE PLAINTIFFS' USE OF EQUITABLE REMEDIES UNDER THE RICO STATUTE: A MEANS TO REFORM CORRUPTED LABOR UNIONS Randy M. Mastro* Steven C. Bennett** Mary P. Donlevy*** Since its enactment in 1970, the Racketeer Influenced and Corrupt Organizations statute' (RICO) increasingly has become a vehicle through which the federal government has attacked corruption of labor unions by organized crime. In 1989, for example, the government used the RICO statute to reform the electoral and disciplinary procedures of the International Brotherhood of Teamsters (the IBT or Team- sters);2 and just last year, the government brought a civil RICO suit seeking appointment of an administrator for the New York Waterfront and appointment of trustees for several locals of the International Longshoremen's Association.3 Despite the opportunities that the RICO statute offers for constructive union reform, private litigants have yet to seek RICO equitable remedies against labor unions. This article explains how the government has prosecuted civil RICO cases against labor unions and suggests how private litigants might use the RICO statute to achieve similar equitable reform of labor unions. In describing the government's approach to * Randy M. Mastro is a former Assistant United States Attorney and Deputy Chief of the Civil Division of the Office of the United States Attorney for the Southern District of New York. He was the lead prosecutor in the Government's civil RICO action against the International Brotherhood of Teamsters. He is a graduate of Yale University, B.A. 1978, and the University of Pennsylvania Law School, J.D. 1981. He is currently an associate at Gibson, Dunn & Crutcher in New York City. ** Steven C. Bennett is an Assistant United States Attorney in the Office of the United States Attorney for the Southern District of New York. He is a graduate of Macalester College, B.A. 1979, and New York University Law School, J.D. 1984. *** Mary P. Donlevy is currently an associate at Gibson, Dunn & Crutcher in New York City. She is a graduate of Pepperdine University, B.A. 1986, and Columbia University School of Law, J.D. 1989. 1. Organized Crime Control Act of 1970, Pub. L. No. 91-452, § 901a, 84 Stat. 922, 941 (codified as amended at 18 U.S.C. §§ 1961-1968 (1988)). 2. Consent Order, United States v. International Bhd. of Teamsters, No. 88 Civ. 4486 (S.D.N.Y.) (Mar. 14, 1989); see infra notes 73-83 and accompanying text. 3. Complaint, United States v. Local 1804-1, Int'l Longshoremen's Ass'n, 732 F. Supp. 434 (S.D.N.Y. 1990) (No. 90 Civ. 0963) (Feb. 14, 1990); see infra notes 87-90 and accompanying text. 572 University of Michigan Journal of Law Reform [VOL. 24:3 & 4 prosecuting civil RICO actions against labor unions, the authors aim to provide a road map for private litigants to avail themselves'of the types of equitable remedies achieved in prior civil RICO cases. Prior to the enactment of the RICO statute, the federal government's supervision of labor unions principally entailed enforcement of the labor laws, coupled with criminal prosecu- tions of corrupt individuals.4 This limited approach to regulation sometimes permitted unions with sordid histories to remain mired in corruption even in the midst of scrutiny by the Labor Department and other regulatory and law enforce- ment agencies. 5 Moreover, union dissidents, constrained by the same labor laws and ostracized by their own leadership, had to rely largely on occasional government intervention for the limited reforms that were available.6 The RICO statute radically changed the regulatory land- scape. In RICO, the government has found a new and potent weapon to fight corruption of labor unions by organized crime.7 RICO has given federal courts the freedom to fashion creative equitable remedies to redress racketeering activity. Under RICO, even at the preliminary stage, "the court may at any time enter such restraining orders or prohibitions, or take 4. S. REP. No. 617, 91st Cong., 1st Sess. 78-79 (1969) [hereinafter SENATE REPORT]. 5. For example, both the Secretary of Labor and the courts found the Teamsters' system of selecting delegates responsible for electing national officers to be in technical compliance with the labor laws. See Theodus v. McLaughlin, 852 F.2d 1380, 1384-86 (D.C. Cir. 1988). 6. In the case of the International Brotherhood of Teamsters, Teamsters for a Democratic Union (TDU), a dissident group, made several unsuccessful attempts to reform the Teamsters' election process through litigation. See, e.g., id. at 1381-82. Unable to effect changes, union reformers have had to rely on government prosecu- tions of corrupt elected officials. Four of the last five Teamsters presidents were indicted while in office. Three of them (David Beck, James Hoffa and Roy Williams) were convicted of felonies. PRESIDENT'S COMM'N ON ORGANIZED CRIME, THE EDGE: ORGANIZED CRIME, BUSINESS, AND LABOR UNIONS 89-90 (1986) [hereinafter THE EDGE]; see also Hoffa v. United States, 385 U.S. 293 (1966); United States v. Williams, 737 F.2d 594 (7th Cir. 1984), cert. denied, 470 U.S. 1003 (1985); United States v. Hoffa, 436 F.2d 1243 (7th Cir. 1970), cert. denied, 400 U.S. 1000 (1971). The fourth (Jackie Presser) was under indictment on federal felony charges at the time of his death. United States v. International Bhd. of Teamsters, 905 F.2d 610, 613 (2d Cir. 1990) (discussing United States v. Friedman, No. 86-114 (N.D. Ohio 1986), which named Presser as co-defendant). 7. In a recent civil RICO action against the Teamsters, the government was able to reform the Teamsters election process. See Consent Order, United States v. International Bhd. of Teamsters, No. 88 Civ. 4486 (S.D.N.Y.) (Mar. 14, 1989). As part of the settlement of that lawsuit, the Teamsters Union has been required for the first time ever to elect its top officers by direct, rank-and-file, secret ballot. Id. at 13. SPRING AND SUMMER 1991 RICO and Labor Unions such other actions ... as it shall deem proper."8 Thus, the RICO statute has given the government a means to change the way corrupt unions elect their officers, discipline their officers and members, and otherwise conduct their operations. 9 The fact remains, however, that the government has used this "extraordinary" weapon "very sparingly."10 In the two decades since the statute was passed, the government has brought few civil RICO actions against labor unions.' These cases have involved unions plagued by "systemic corruption" for "so many years" that a "drastic" remedy was necessary.' 2 In short, the government has sought RICO relief against labor unions only in the most egregious circumstances. Nevertheless, through its early successes with the statute, the government has established extremely valuable prece- dents, the benefits of which private litigants may be able to share. Unlike the government, whose primary concern is eliminating union corruption,' 3 private litigants may have a completely different agenda in bringing a civil RICO action against a labor union. Because RICO affords previously unavailable equitable remedies, union reformers now have within their grasp a weapon that works. They simply need to use it. Part I of this Article outlines the government's approach to civil RICO actions involving labor unions, including an 8. 18 U.S.C. § 1964(b) (1988). 9. In connection with the Teamsters settlement, Benito Romano, the United States Attorney for the Southern District of New York, explained the value of the RICO statute: "There would have been no [other] way that I could think of... that would have afforded us the broad-based relief that we think we needed in order to achieve systematic reform." Federal Government's Use of Trusteeships Under the RICO Statute: Hearings Before the Permanent Subcomm. on Investigations of the Senate Comm. on Governmental Affairs, 101st Cong., 1st Sess. 56 (1989) [hereinafter RICO Hearings]. 10. Id. at 57 (statement of Benito Romano, United States Attorney, Southern District of New York). 11. See, e.g., United States v. International Bhd. of Teamsters, 905 F.2d 610 (2d Cir. 1990); United States v. Local 359, United Seafood Workers, 889 F.2d 1232 (2d Cir. 1989); United States v. Bonanno Organized Crime Family of La Cosa Nostra, 879 F.2d 20 (2d Cir. 1989); United States v. Local 30, United Slate, Tile, & Composition Roofers, 871 F.2d 401 (3d Cir.), cert. denied, 493 U.S. 953 (1989); United States v. Local 560, Int'l Bhd. of Teamsters, 780 F.2d 267 (3d Cir.
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