MINTZ LEVIN

Bridget M. Rohde I 212 692 6883 I bmrohde@mintz.com

August 25, 2014
By hand and ECF
The Honorable Richard M. Berman
United States District Judge
Southern District of New York
Daniel Patrick Moynihan Courthouse
500 Pearl Street
New York, New York 10007
Chrysler Center
666 Third Avenue
New York, NY 10017
212-935-3000
212-983-3115 fax
www.mintz.com
Re: United States v. District Council, et al., 90 Civ. 5722 (RNIB)
Dear Judge Berman:
We write in response to the Court's Order dated July 25, 2014, issued following the
Second Circuit's Summary Order dated July 23, 2014 in this matter. The Circuit vacated the
Court's decision of October 23, 2012 upholding the Review Officer's veto of Patrick Nee and
Levy Messinetti as officers and delegates of Local 157 and remanded the matter for further
proceedings. We write specifically to address the issues identified by the Court in its July 25
Order, i.e., whether the issues raised by Messrs. Nee and Messinetti in their July 2012
applications "remain ripe for consideration" and whether the RO's June 26, 2012 Notice of Veto
was within his authority under the June 2010 Stipulation and Order, with citation to "appropriate
background, context, and authority which may help to resolve any 'ambiguity' perceived by the
Second Circuit."
We respectfully submit that in vetoing Messrs. Nee and Messinetti as Local 157 elected
officials, the Review Officer exercised authority granted by the terms of paragraph 5.b of the
Stipulation and Order and consistent with the intent of the parties to the Stipulation and Order.
Regarding ripeness, we note that there have been Local 157 elections in the two-years since
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
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August 25, 2014
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Messrs. Nee and Messinetti made their application to the District Court, and the fact that they
were vetoed did not prohibit them from running. Indeed, they ran for and were elected as
delegates on June 19, 2013 and then again in a re-run of that election in February 2014. These
topics are addressed in more detail below, from the RO's perspective.
A. Mootness
We respectfully submit that the applications by Messrs. Nee and Messinetti challenging
the Review Officer's veto of their positions as president and recording secretary, respectively, as
well as their positions as delegates, are moot. Since the veto was issued on June 26, 2012, Local
157 has held elections. See Walsh Declaration at 9. The RO's veto did not prevent either Mr.
Nee or Mr. Messinetti from running for any future office and, indeed, they both later ran for
office and were elected to positions. See id. at s 9 and 10.
As summarized in The Green Party of New York v. Weiner,
The doctrine of mootness derives from "the Article III requirement that federal
courts adjudicate only 'Cases' and 'Controversies.'" Fox v. Bd. of Trustees, 42
F.3d 135, 139 (2d Cir. 1994) (citations omitted). The Article III case and
controversy requirement is a jurisdictional prerequisite, and thus mootness
deprives a federal court of subject matter jurisdiction. Id. at 140. "Simply stated,
a case is moot when the issues presented are no longer 'live' or the parties lack a
legally cognizable interest in the outcome." Powell v. McCormack, 395 U.S. 486,
496 ... (1969) (citation omitted). Plaintiffs lack such a legally cognizable interest
where, for example, they would enjoy no benefit even if granted the relief which
they seek. See Wirtz v. Local Unions 410, 410A, 410B & 410C, 366 F.2d 438,
442 (2d Cir. 1996) ("Since the rights of litigants are affected by the judicial
remedies available, in evaluating whether a particular appeal has become moot,
attention must be focused on the particular relief sought by the appellant.").
216 F.Supp.2d 176, 183 (S.D.N.Y. 2002).
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August 25, 2014
Page 3
In the time since the Review Officer vetoed them from the positions they held on June
26, 2012, Local 157 has conducted a number of elections. It held a February 20, 2013 election to
fill their positions, although Messrs. Nee and Messinetti did not run in that election. Messrs. Nee
and Mesinetti did run in subsequent elections. On June 19, 2013, Local 157 held a regular
election for delegates and Messrs. Nee and Messinetti ran and won. In February 2014, that
election was re-run (for a reason having to do with the eligibility of another member) and
Messrs. Nee and Messinetti again ran for, and were elected as, delegates. On June 19, 2014,
Local 157 held a regular election for officers, the trial committee and one vacant delegate spot.
Mr. Messinetti ran to be a trustee and won and Mr. Nee ran to be financial secretary and lost.
Both Messrs. Nee and Messinetti currently remain in place as delegates. See Walsh Declaration
at It 9.
In short, not only has Local 157 held elections for the positions in question since the
Review Officer's vetoes, but Messrs. Nee and Messinetti have participated in the election
process and won elective office. They have no benefit to gain by litigating the Review Officer's
veto authority and thus have no legally cognizable claim. We thus respectfully submit that there
is no justiciable controversy for the Court to decide.
B. The Veto Authority under the Stipulation and Order
The Review Officer, of course, is not a party to the Stipulation and Order. However, as
the Court-appointed officer exercising the authority provided by the Stipulation and Order since
its inception, he is fully familiar with its terms; believes he understands the parties' intent with
respect to those terms, based on his interactions with them and their reaction (or lack thereof) to
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August 25, 2014
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his exercise of the veto authority in particular; and strives to serve in faithful conformity to the
letter and the spirit of the Stipulation and Order. See Walsh Declaration.
1. The Four Corners of the Stipulation and Order
In the Review Officer's view, it is clear from the Stipulation and Order that the veto
authority of the Review Officer includes removing District Council (including local union)
officers from office when they have acted in a way that the Review Officer finds to violate the
strictures of paragraph 5.b. See Walsh Declaration at 4. This is borne of a number of
provisions within the Stipulation and Order itself, beginning with the numerous "whereas"
clauses at pages 1 through 3. See id. at 3. Those clauses set forth the relevant history of the
District Council from the time of entry of the Consent Decree in 1994, including the appointment
of Independent Investigators in December 2002 and August 2005 with the power to investigate
wrongdoing. See Stipulation and Order at 1. Additional clauses recount that despite the
presence of an Independent Investigator with the noted power, persons engaged in criminal acts
relating to the District Council and its Benefit Funds, culminating in the August 2009 indictment
of the highest elected official of the District Council and a trustee of its Benefit Funds, namely
Executive Secretary-Treasurer Michael Forde, as well as others involved with the District
Council and Funds, for various acts of racketeering. See id. at 2; see also Walsh Declaration at
2.
To address this continuing corruption, the Stipulation and Order appointed a Review
Officer, explicitly stating that it was providing the Review Officer with greater power than that
afforded to the previous court-appointed officer: "the presence and activity of an independent
court-appointed officer granted powers beyond those provided to the Independent Investigator in
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August 25, 2014
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the December 2002 Stipulation and Order and the August 2005 Order, as set forth below, are
essential to the eradication of corruption and racketeering as they affect union carpenters and
union employers." See Stipulation and Order at 3; see also Walsh Declaration at 3.
The first specific power set forth below these whereas clauses and the appointment of
Dennis Walsh as the Review Officer was the Review and Oversight Authority. As specified by
paragraph 5.b, the RO may review and veto "persons currently holding office or employment"
when he determines there has been an act of racketeering, association with a barred person,
violation of law or a Court order in the case, breach of fiduciary duty or conduct inconsistent
with the Stipulation and Order. See Stipulation and Order at TT 5.b.i(3) and 5.b.iii; see also
Walsh Declaration at 4. Notably, the Review Officer's authority with respect to District
Council officers and employees differs from his authority with respect to Benefit Funds' trustees
and personnel. See Walsh Declaration at 5. While the Review Officer was given the authority
to review and veto District Council officers and employees, he was given the authority to review
and provide written notice of findings to the Benefit Funds regarding Funds' trustees and
personnel, presumably so that the Funds could take action it deemed merited. Compare
Stipulation and Order at TT 5.b.i(3) and 5.b.iii with 7 5.b.ii(3) and 5.b.iii; see also Walsh
declaration at 7 4 and 5. This distinction is additional proof within the four corners of the
Stipulation and Order regarding the separate and distinct authority of the Review Officer to veto
or remove from office District Council officials violating paragraph 5.b.
Apart from the plain language of paragraph 5.b, it is important to note that the Review
and Oversight Authority set forth therein is structurally and conceptually distinct from the
Disciplinary Authority set forth in paragraph 5.f (as well as the authority to determine whether
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members are qualified to run for elective office under paragraph 5.k). See Walsh Declaration at
6. The language of paragraph 5.f further demonstrates that separate and distinct Review and
Oversight Authority and Disciplinary Authority were given to the Review Officer. Pursuant to
paragraph 5.f, the District Council was required to submit to the Review Officer for approval
proposed procedures to discipline officers, employees, agents, representatives and members of
the District Council for misconduct including violation of federal, state or local law; union rules,
bylaws or constitutional provisions; the Consent Decree or other court order; or any action
furthering or threatening to further the influence of organized crime. Also under this paragraph,
the Review Officer retains the continuing ability to assess the procedures. As the Court is aware,
the most recent "District Council of New York and Vicinity Trial Procedures" ("Trial
Procedures") went into effect in August 2013. See Exhibit 15 to the Seventh Interim Report of
the Review Officer dated December 3, 2013.
2. Extrinsic Evidence of the Parties' Intent
Nonetheless, the Second Circuit has found ambiguity with respect to the veto authority.
The Circuit stated that while it "acknowledge[s] the government has advanced what may be a
valid argument [that the RO could veto an individual's appointment to or continuation in District
Council office], based on a reading of the text of the Stipulation we also cannot foreclose the
possibility that the plaintiffs' interpretation [that the RO could veto only actions and had to
remove them under the disciplinary authority] is correct." Summary Order at 7. It is in this
connection that the Circuit stated that "extrinsic evidence may be considered to ascertain the
parties' intent, including the circumstances surrounding the formation of the decree.'" Id. at 7-8
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(quoting U.S. v. Broad. Music, Inc., 275 F.3d 168, 175 (2d Cir. 2001) (internal quotation marks
omitted)).
From the months preceding his appointment through the present, there have been a
number of examples of extrinsic evidence of the parties' intent with respect to the Stipulation
and Order as a whole and to paragraph 5.b in particular. First, in terms of background and
context requested by the Court, the Review Officer was present at times with the parties during
the period in which the Stipulation was being drafted. See Walsh Declaration at 2. It was the
RO's understanding from these meetings that an impetus to the June 2010 Stipulation and Order
was the indictment of individuals involved with the District Council, including its highest elected
official, then Executive Secretary-Treasurer Forde. See id. It was also his understanding that
the government sought to provide expanded authority to the Court-appointed officer, including
the ability to veto District Council officers and employees, in order to eliminate ongoing
corruption. See id. The District Council ultimately agreed to this authority, stated in paragraph
5.b. See id. The Benefit Funds did not, and the review and written notice language flagged
above was thus included in paragraph 5.b.iii with respect to the Funds' trustees and personnel.
See id.
Following his appointment in June 2010, the Review Officer has exercised his veto
authority with respect to District Council (including local union) officers on numerous occasions.
He first exercised his veto authority shortly into his tenure, with the vetoes of Willoughby, Holt
and Daly. See Docket No. 1022 (Court's Decision and Order); see also United States v. District
Council , et al., 2010 U.S. Dist. LEXIS 137163 (S.D.N.Y. December 21, 2010). The RO last
exercised that authority in May 2013 with respect to then Executive Secretary-Treasurer Michael
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August 25, 2014
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Bilello. See Docket No. 1362 (Court's Order). As the Court is aware, the individuals subject to
those vetoes, and a number of vetoes in the intervening period including the ones at issue here,
sought to overturn the RO's vetoes. The Review Officer is not aware of the parties to the
Stipulation and Order (the government and the District Council) ever objecting to the exercise of
his veto power to remove officeholders. See Walsh Declaration at 8. During Frank Spencer's
tenure as UBC Supervisor for the District Council, the RO would forward Notices of Veto to Mr.
Spencer, never receiving an objection to the exercise of the veto authority. See id. By way of
example, in April 2011 when the Review Officer vetoed Lawrence D'Errico as the District
Council's Director of Operations, Mr. Spencer did not object (nor did Local 157). See Exhibit 7
to the Second Interim Report of the Review Officer dated June 3, 2011. In the Bilello matter, the
government specifically wrote to express its concurrence with the RO's action. See Docket No.
1362 (Court's Decision and Order upholding RO's veto of Bilello quotes government's letter
stating that it "is of the view that the Review Officer properly exercised his authority to veto
Michael Bilello's tenure as the District Council Executive Secretary-Treasurer"); see also Walsh
Declaration at 8. This history of acceptance of the RO's exercise of the veto authority under
paragraph 5.b of the Stipulation and Order plainly confirms the parties' intent that the RO could
exercise his authority under 5.b to veto officials by removing them from office. See id.
Extrinsic evidence of the distinction between the Review and Oversight Authority and the
Disciplinary Authority includes the Trial Procedures referred to above. According to the Trial
Procedures, and as clear from their operation in practice, charges for the misconduct specified in
paragraph 5.f are lodged by a member against another member or by the District Council's
Inspector General ("IG") against a member; the RO has utilized this process on only a few
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Page 9
occasions in which he was seeking to have rank and file members and a business representative
fined and banned from the union. See id. at 7. Discipline under the Trial Procedures is
primarily designed as an ongoing, routinized intra-union process to adjudicate charges by union
members, or the union's IG, against union members. See Trial Procedures and Walsh
Declaration at 7. It is quite different than the veto authority employed by the Review Officer
when, in his discretion, conduct by an elected officer requires his removal. Compare Trial
Procedures with Stipulation and Order at 5.b; see Walsh Declaration at 7.
Respectfully submitted,
Bridget M. Rohde
Enclosure
cc: AUSAs Benjamin Torrance and Tara LaMorte
James Murphy, Esq.
Barbara S. Jones, Esq.
Raymond McGuire, Esq.
Patrick Nee
Levy Messinetti