Opinion
90 Civ. 5722 (CSH).
September 17, 2007
MEMORANDUM OPINION AND ORDER
Eugene Clarke is a rank-and-file member of Local Union No. 608, United Brotherhood of Carpenters and Joiners of America, AFL-CIO ("Local 608"). Local 608 is a constituent local union of the District Council of New York City and Vicinity of the United Brotherhood of Carpenters and Joiners of America (the "District Council" or the "Union").
Michael J. Forde is also a union carpenter. In addition, he is a successful union politician. Since 2000, Forde has been the Executive Secretary-Treasurer ("EST") of the District Council. The EST is the highest office in the District Council hierarchy, which Forde achieved by defeating Clarke in a Union election. At various prior times, Forde was a business agent and president of Local 608.
See United States v. District Council of New York City, 2003 WL 21035292, at *5 (S.D.N.Y. May 7, 2003) ("[I]n a recent affidavit, Clarke notes that he ran against Michael Forde for EST in an election where Forde won handily.").
On March 4, 1994, this Court entered a consent decree (the "Consent Decree") in the captioned civil RICO action commenced by the United States against the District Council, certain of its former officers, and additional individuals alleged to be involved in organized crime. Paragraph 5 of the Consent Decree required each of the District Council's constituent local unions to "adopt the job referral rules and procedures attached hereto as Exhibit A and incorporated herein" (the "Job Referral Rules").
Clarke now moves for an order holding Forde in civil contempt of the Consent Decree for violating the Job Referral Rules, imposing monetary sanctions against Forde, and mandating other remedies. The essence of Clarke's charges against Forde is that Forde behaved improperly with respect to shop steward job referrals, in order to enable his "cronies" to receive favorable job placements as stewards. Forde denies that he has acted in contempt of the Decree or the Rules and opposes any sanctions.
Clarke's complaints about Forde's conduct focus first upon five steward referrals alleged to have violated the Job Referral Rules. The earliest of these referrals involved Forde's personal participation. The later four referrals were arranged by other individuals. However, Clarke charges Forde with aiding and abetting those violations by omitting to take action to prevent them, in breach of his fiduciary duty as a union officer. Clarke expands upon that theory of liability to allege that Forde, as EST, continues by his inaction to disregard and condone systemic violations of the Job Referral Rules and the Consent Decree.
With respect to sanctions and relief, Clarke prays for an order of the Court (1) requiring Forde to reimburse the District Council for its attorney's fees incurred in connection with an investigative report into Clarke's initial administrative charges; (2) requiring Forde to pay the District Council a sanction of $5,000 for each of the five Job Referral Rules violations, for a total of $25,000, with payment to be suspended if Forde in his capacity as EST fires a particular Local 608 officer and a District Council administrator, who Clarke alleges were complicit in the conduct he complains of; and (3) requiring Forde to reimburse the District Council for fees paid to its attorneys, the firm of O'Dwyer Bernstien, incurred in defending Forde from Clarke's charges, prior to the retention by Forde of his present attorneys, the firm of Lombardi Salerno.
The parties agreed to have the matter decided by the Court upon written submissions in the first instance. Those submissions have now been received and considered by the Court. The parties agreed that if the Court desired to hear oral testimony after reviewing the parties' written submissions, such testimony would be taken before the Court. The Court will not call for oral testimony. Accordingly, this proceeding may be regarded as a bench trial on an agreed written record. The following constitutes the Court's Findings of Fact and Conclusions of Law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure.
I. PROCEDURAL HISTORY
The captioned case and related cases have generated numerous opinions by this Court and the Second Circuit. The facts that give rise to the complaint are described in 2002 WL 31873460 (S.D.N.Y. Dec. 24, 2002) (" Clarke I"), 2003 WL 21035292 (S.D.N.Y. May 7, 2003) (" Clarke II"), 2004 WL 48885 (S.D.N.Y. Jan. 9, 2004) (" Clarke III"), 2004 WL 2480435 (S.D.N.Y. Nov. 3, 2004) (" Clarke IV"), and 2005 WL 2923560 (S.D.N.Y. Nov. 2, 2005) (" Clarke V"), familiarity with which is assumed.
The procedural vehicle for the present proceeding instituted by Clarke is Rule 71 of the Federal Rules of Civil Procedure, which provides that "[w]hen an order is made in favor of a person who is not a party to the action, that person may enforce obedience to the order by the same process as if a party. . . ." "The processes available under Rule 71 are varied and flexible, in order to assure that the court's order will be afforded its full and intended effect," and include "contempt sanctions and other suitably-tailored processes." 13 Moore's Federal Practice § 71.02 at 71-4 (3d ed. 2006). Clarke II held that Clarke had standing to seek this relief against Forde. Clarke III held that he need not exhaust the Union's internal remedies before doing so.
Forde sought from Clarke a Bill of Particulars, giving notice to Forde of the specific claims against him. Clarke responded with a "Notice of Misconduct Complained of Under Rule 71 Motion to Enforce Consent Decree" dated May 30, 2004 (the "2004 NOM"). In Clarke IV, I noted that in the 2004 NOM Clarke alleged against Forde five violations of the Job Referral Rules, 2004 WL 2480435, at *2, and that while "Clarke's initial moving papers attributed ten violations against Forde," five of those violations "were subsequently withdrawn." Id. at n. 1. The five violations described in the 2004 NOM all allege improper references of carpenters to particular jobs as shop stewards, and may be identified by giving the date of the referral and the carpenter involved, as follows: (1) April 23, 1999 (Edward Maudsley); (2) November 1, 1999 (John Corrigan); (3) July 13, 2000 (John Hearty), (4) February 5, 2001 (Hearty); and (5) March 21, 2001 (Corrigan). See 2004 NOM ¶¶ 15-17.
In Clarke V, I granted Clarke's motion to amend his NOM and file an amended pleading dated May 20, 2005 (the "2005 NOM"). I noted that while Clarke sought "to amend the pleadings to include additional allegations against Forde," those allegations "relate to the same referrals/conduct Forde has already challenged," 2005 WL 2923560, at *4, namely, the same five referrals alleged in the 2004 NOM. In that respect, the allegations in the 2005 NOM, ¶¶ 15-17, repeat those contained in the 2004 NOM.
II. FACTUAL BACKGROUND
While Clarke IV and Clarke V contain descriptions of the job referral procedures mandated by the Job Referral Rules, and the conduct by Forde of which Clarke complains, I will for the sake of clarity recount certain pertinent background facts.A. The Job Referral Rules and Procedures
Under the Union's collective bargaining agreements ("CBAs") with associations of contractors in effect at the times pertinent to this action, a contractor could select half of the carpenters needed for a particular job, but was required to fill the other half with referrals from the union's out-of-work list ("OWL"). To meet this requirement, the contractor telephones a request to the office of the constituent local union in whose geographic jurisdiction the jobsite is located. The contractor specifies in that request the particular skill or skills that the carpenter must possess in order to receive the job. The contractor's request is processed and put into writing by the local union's business manager or one of its agents, who then faxes the form to the OWL office.
In CBAs negotiated in 2001 and again in 2006, the Union granted to associations of contractors an unfettered right to select all the carpenters on the job by permitting them to pick from the OWL the 50 percent contingent of carpenters that, under previous CBAs, had been assigned in chronological order from the OWL. The Union and the contractors refer to this as the "Request System." See United States v. District Council of New York City, 2007 WL 1157143 (2d Cir. Apr. 18, 2007) (summary order), holding that the Union's failure to give the government prior notice of this change violated the Consent Decree, reversing this Court's contrary conclusion in an opinion reported at 409 F. Supp. 2d 439 (S.D.N.Y. 2006), and remanding the case to this Court for the fashioning of an appropriate remedy, an issue currently sub judice. Thus the earlier CBAs in existence at the times pertinent to the proceeding at bar were amended in material respects by the 2001 and 2006 CBAs. However, for the sake of clarity, the discussion of events in text is cast in the present tense.
The OWL administrator or a member of his staff processes the contractor's request, using a computer system. Out of work carpenters submit a registration form to the OWL office, listing the specialty carpentry skills that they possess. The contractor's request is then matched with a worker who has the skills requested and who has the highest priority on the OWL, that is to say, has been on the out-of-work list the longest. That person is then offered the job.
A District Council employee named Scott Danielson was at all times pertinent to this proceeding and remains the OWL supervisor.
The Job Referral Rules were formulated and adopted as required by paragraph 5 of the Consent Decree. Those rules, as summarized by the Investigations and Review Officer ("IRO") appointed by the Court under the Consent Decree, mandated the following procedures when offering referrals:
Only members who are not currently employed at the trade may register their availability for referral (Rule 4C).
When the Local Union determines that the member who is first on the out-of-work list cannot be referred because of refusal, unavailability, or lack of required skills, the Local Union shall then refer the next member on the out-of-work list who is willing, available and has the required skills. (Rule 5F).
Rule 5F, cited above, is also applicable to shop steward appointments:
Shop stewards must be selected from the individuals referred from the out-of-work list to a given job. If there is no individual among those referred who is qualified to serve as a steward, the next available individual on the out-of-work list in order of priority who either has served as a steward, or who is qualified to serve as a steward, shall be referred to the job as steward.
IRO Decision No. 1 at 5.
B. Clarke's Charges of Misconduct against Forde
1. An Overview
Michael J. Forde is a carpenter and a successful union politician. In 1997 Forde was elected president of Local 608, one of the District Council's constituent local unions. John Greaney, a political ally of Forde's, was elected vice-president. At the time of his election as president of Local 608, Forde was the appointed business manager of that local. In 1998 Greaney became one of Local 608's appointed business agents. Forde was elected EST and took office in 2000. Greaney succeeded Forde as president of Local 608. In 2000, Forde as EST appointed Greaney to succeed him as business manager of Local 608 as well as its president. John Hearty and John Corrigan are carpenters and members of Local 608 who Clarke alleges received favored treatment in violation of the Job Referral Rules.
There is some uncertainty in the record about the date Forde took office as EST. Forde testified at his deposition that he became the EST in "December 2000." Tr. at 4. Greaney testified at his deposition that Forde, in his capacity as EST, appointed Greaney the business manager of Local 608 "around February 2000." Tr. at 11. I need not pursue this question because the precise date Forde took office as EST is not material to the resolution of this motion.
Clarke's 2005 NOM begins with the introductory statement in ¶ 1 that "Michael Forde, the Executive Secretary (`EST') of the District Council, is liable for five violations of the Consent Decree's job referral rules. The violations attributed to Forde involve referrals that were rigged or manipulated in ways that enabled three of his political cronies to jump ahead of other carpenters on the out-of-work list (`OWL') in order to get shop steward assignments."
I do not read this introductory statement as alleging the Forde participated in all five alleged Job Referral Rules violations while he was EST. In point of fact, the first two violations summarized in text took place in 1999; Forde did not take office as EST until 2000. I take it that the quoted language is intended only to describe Forde's present position in the District Council.
The NOM characterizes the conduct complained of as a series of "scams," viz., the "40-hour OSHA certificate scam," the "shop steward/foreman scam," the "tip-off scam," the "riding-the-list scam," the "out-of-turn scam," and the "falsified request scam." Id. ¶¶ 9-21. With respect to the last-specified conduct, the NOM alleges in Count One that "Forde, on April 23, 1999, and Greaney, on November 1, 1999, July 13, 2000, February 5, 2001, and March 21, 2001 submitted falsified manning requests as a means . . . of gaming the computer in order to jump over other qualified carpenters in violation of Referral Rule 5F," and that "Maudsley, Corrigan and Hearty were tipped off in advance to change their skills profiles in order to match the referral requests of April 23, 1999, November 1, 1999, July 13, 2000, February 5, 2001, and March 21, 2001." Id. ¶¶ 24, 18.
This is the pattern of conduct that Clarke's NOM characterizes as the "falsified request scam." His briefs also describe this conduct as "gaming the system." As noted, the NOM alleges other "scams" in violation of the Job Referral Rules. I consider them all in this opinion. But in the discussion infra, I will focus first on this particular "scam" because it describes the only one of the five shop steward job referrals complained of in which Clarke contends Forde participated personally. That referral, the earliest in time of the five, occurred on April 23, 1999, when Edward Maudsley was referred as a shop steward to a jobsite at 111 8th Avenue. With respect to the other four job referrals, the particular acts Clarke complains of were committed by other carpenters, but Clarke seeks to hold Forde liable as a contemnor on theories of aiding and abetting those acts, failing to exercise due diligence, and failing to act in good faith in the exercise of the power of his offices. Specifically, Clarke charges that certain of the referrals were improper because Corrigan and Hearty were "riding the list" prior to their referrals, with Forde's knowledge; other referrals were improper because Corrigan and Hearty did not possess certificates for the requested skills, namely 40-hour OSHA and welding, and further, the 40-hour OSHA skill did not actually exist (which Clarke claims Forde knew); Forde failed to remedy Greaney's, Corrigan's, and Hearty's violations; and Maudsley's and Hearty's referrals also violated provisions of the CBAs (as well as District Council practice) which contemplate that a foreman should not serve simultaneously as a shop steward.
Clarke asserts that Corrigan and Hearty were employed while concurrently on the OWL, a practice known as "riding the list" and a violation of Rule 4C of the Job Referral Rules.
Although this final claim was included in the 2005 NOM, Clarke does not assert it in his briefs on the present motion, and I deem that particular claim to be abandoned and will not further address it.
2. Clarke's Earlier Complaint to the District Council and the District Council's Response
Prior to filing the present motion, Clarke had made an administrative complaint to the District Council about the referral of shop stewards to jobsites. The full particulars of Clarke's complaint and the Union's response are recounted in Clarke I, 2002 WL 31873460, at *3-5. It is sufficient for present purposes to say that Clarke, believing that he had been bypassed for steward referrals in favor of Forde's political supporters, examined certain Union records and then wrote the Executive Committee of the District Council a letter dated July 24, 2001, which claimed that between 1998 and 2001 seven members of Local 608 had received 21 shop steward assignments which were improper, principally because those individuals were permitted to add skills to their names as they appeared on the OWL, thereby enhancing their eligibility for a shop steward's assignment.
The District Council reacted to Clarke's letter by forming an Investigation Committee comprised of Gary Rothman, Esq., a partner in the law firm representing the District Council, and Scott Danielson, the OWL supervisor. In October 2001 the Investigation Committee sent an interim report to Forde, by then the EST. On December 27, 2001, before the Investigation Committee sent its final report to the Executive Committee, Clarke filed the present motion. In January 2002 the Investigation Committee made its final report to the Executive Committee of the District Council. That report concluded that all the referrals cited by Clarke were proper and rejected his complaints in their entirety.
In his present motion, Clarke charges Forde with misconduct in connection with that report, which he characterizes as a "cover-up." NOM ¶¶ 22-23. Specifically, Clarke says that the report improperly relied upon a non-existent 40-hour OSHA certification, and "also concealed the steward/foreman, tip-off, riding-the-list, out-of-turn, and falsified request scams involved in" the five shop steward referrals previously described. Id. ¶ 23.
C. The Independent Investigators Appointed by the Court
Although on this motion Clarke dismisses the District Council Investigation Committee's January 2002 report as a cover-up and whitewash, the report led to significant developments. While the report defended as proper the referrals Clarke had criticized, it concluded with recommended revisions in the Job Referral Rules and procedures "to eliminate even the appearance of impropriety in referrals." Those recommendations resulted in negotiations between counsel for the District Council and the office of the United States Attorney, representing the public interest. The government has consistently and to this day continues to be actively engaged in the proper implementation of the Consent Decree, the Job Referral Rules, and related issues.
In December 2002, the District Council and the government entered into a stipulation, endorsed by the Court as an order, which appointed Walter Mack, Esq., as the Court's Independent Investigator ("I.I."), charged inter alia with "investigating allegations of corruption or wrongdoing involving the operation of the job referral system." In August 2006 Mr. Mack was replaced as I.I. by the Unitel Intelligence Group, headed by William P. Callahan, Esq. (hereinafter "Callahan").
The District Council decided to replace Mr. Mack as the Independent Investigator. The government opposed that decision and asked the Court to retain Mr. Mack in office, notwithstanding the District Council's contrary preference. The Court allowed termination of Mr. Mack's service as I.I. because the clear and unambiguous language of the stipulation to which the government had agreed gave the District Council the unconditional right to replace Mr. Mack after he had served two years in office. See United States v. District Council of New York City, 2005 WL 1137877 (S.D.N.Y. May 11, 2005). The District Council suggested Mr. Callahan as Mr. Mack's successor. After interviewing Mr. Callahan and considering the profile of his company, Unitel, I entered an order appointing Unitel as the Independent Investigator.
During Mr. Mack's tenure as I.I., the District Council formed an Anti-Corruption Committee ("ACC"). The ACC is composed of Maurice Leary, the District Council's director of operations; Gary Rothman, counsel to the District Council; Scott Danielson, the OWL supervisor; and Mike Murphy, a union member who acts as an investigator. The ACC meets weekly for about three hours. The I.I. attends the meetings. The meeting is devoted principally to reviewing "hot-line" calls carpenters make to the I.I.'s office complaining about perceived corruption or other misconduct. Decisions are made at ACC meetings about whether each complaint requires further investigation or other action. The hot line was established during Mr. Mack's tenure as I.I. and has been continued under Mr. Callahan. In a report to the Court dated October 4, 2006, captioned "Report of the Independent Investigator Assessing the Anti-Corruption Program of the District Council" (the "Callahan Report"), Mr. Callahan stated that since he took office as I.I. on September 1, 2005, "the I.I.'s office has fielded 474 hot-line calls. Working with the ACC, this office has been able to effectively close 332 (70%) of the calls." Callahan Report at 9.
The contents of the Callahan Report are discussed further in Parts III and IV of this Opinion.
The October 2006 Callahan Report to the Court and certain other reports from the office of the I.I. to the Court, initially held under seal, were made a part of the public file in April 2007. Counsel for Clarke quoted portions of the Callahan Report in a further letter brief dated April 19, 2007.
III. DISCUSSION
A. Burden of Proof
Clarke asks the Court to hold Forde in contempt for violating the Consent Decree and its incorporated Job Referral Rules.
To obtain an order holding Forde in contempt, Clarke must satisfy three elements: (1) the order violated is clear and unambiguous, (2) the proof of non-compliance is clear and convincing, and (3) the contemnor was not reasonably diligent in attempting to comply. EEOC v. Local 638, 81 F.3d 1162, 1171 (2d Cir. 1996) (citation omitted). A contempt order is warranted only if the "moving party establishes by clear and convincing evidence that the alleged contemnor violated the district court's edict:" King v. Allied Vision, Ltd., 65 F.3d 1051, 1058 (2d Cir. 1995) (citation omitted).
In his brief, Forde argues that Clarke should be held to the burden of proof beyond a reasonable doubt. He cites for that proposition only UMW v. Bagwell, 512 U.S. 821 (1994). The facts in Bagwell are unusual and inapposite to the case at bar. A Virginia trial court held a union in contempt of an order enjoining the union from conducting unlawful strike-related activities and fined the union over $64 million. The Virginia Supreme Court, upholding the fines, rejected the union's contention that the fines were punitive and could not be imposed absent a jury trial. The Supreme Court reversed and vacated the fines. Justice Blackmun, writing for the Court, posed the question as "whether contempt fines levied against a union are coercive civil fines, or are criminal fines that constitutionally could be imposed only through jury trial." Id. at 823. The Court reasoned that a contempt fine is considered civil and remedial if it either coerces a defendant into compliance with a court order or compensates the complainant for losses sustained, but is criminal if its principal purpose is punitive. Not surprisingly, the Bagwell Court placed the immense fine against the union in the latter category. By contrast, the relief Clarke seeks against Forde fits within the parameters of civil contempt. Accordingly I will apply the clear and convincing burden of proof uniformly applied by the courts in cases of alleged civil contempt.
B. The Clarity of the Job Referral Rules
The Job Referral Rules in effect at the pertinent times are clear and unambiguous. I reject Forde's conclusory argument to the contrary. Clarke has accordingly satisfied the first element of his motion for contempt.
C. The Five Challenged Shop Steward Referrals
To satisfy the second element, Clarke must prove by clear and convincing evidence that Forde violated the Consent Decree and the Job Referral Rules. As noted, Clarke charges violations with respect to five shop steward referrals obtained by carpenters other than Forde. I will consider the proof with respect to each referral, keyed to the particular carpenter involved.
1. The April 23, 1999 Referral (Edward Maudsley)
Edward Maudsley, a carpenter and member of Local 608, added his name to the out-of-work list on April 13, 1999. His sole specially listed skill on that date was "acoustical ceilings." However, on April 22 Maudsley added to his OWL profile the skill notations "lab furn" and "frmn/lyt." These are abbreviations for "laboratory furniture installer" and "layout foreman."
On April 23, 1999, Forde, then the business manager of Local 608, phoned or faxed in a manning request to the OWL office. The following details are taken from the "Manning Request Form" generated by the OWL staffer who received the request. The "caller's name" is listed as "Mike Forde." The company requesting a carpenter was identified as "Eurotech," with the specified jobsite the 13th floor at 111 8th Avenue. The start time for the job was 7:00 a.m. on April 26, 1999. Under "skills needed for job," the form listed: "acoustical ceil," "layout-foreman," "lab furniture," and "certified steward." On April 23 the Union referred Maudsley to the 111 8th Avenue job, as evidenced by a "Referral/Dispatch Notice" bearing that date.
While Forde has testified that he has no present recollection of this particular job request, the evidence is clear that he made the April 23 call to the OWL office. Scott Danielson, the OWL supervisor, testified at his deposition that the OWL staffer taking the call would log the name of the business agent calling in the request. Tr. at 52-53. The District Council Executive Committee Report responding to Clarke's initial complaints states at page 19: "The Business Manager [Forde] stated in his interview that he had no particular recollection of this 1999 job, but it was his practice to call in the particular job skills requested by the company." That acknowledged practice supports the inference that Forde called in the Eurotech request on April 23. Cf. Fed.R.Evid. 406. On the evidence in this record, I so find.
Federal Rule of Evidence 406 provides: "Evidence of the habit of a person or of the routine practice of an organization, whether corroborated or not and regardless of the presence of eyewitnesses, is relevant to prove that the conduct of the person or organization on a particular occasion was in conformity with the habit or routine practice."
But that finding standing alone is not sufficient to demonstrate that, in connection with Maudsley's referral, Forde acted in contempt of the Consent Decree and the Job Referral Rules. As noted supra, Clarke's theory of the case is that before Forde phoned in the Eurotech request to the OWL office on April 23, 1999 he (a) falsified that request by adding the "laboratory furniture installer" and "layout foreman" skills to those requested by the contractor, and (b) tipped off Maudsley to add those skills to his profile, thereby enabling Maudsley to vault over the heads of other carpenters on the out-of-work list when on April 23 the OWL computer matched up Maudsley's fraudulently enhanced skills with Forde's forged contractor's request.
Forde argues in his brief at 11-12 that accepting (as he must) that he phoned in the contractor's request on April 23, "Clarke has elicited no proof that Forde ever discussed this job with Maudsley before or after the latter's dispatch, nor that Forde had any knowledge of this job or the skills required therefor prior to his involvement in the manning request." True, the record contains no direct evidence to support these assertions. But a fact may be proved by circumstantial evidence, which may form the basis for a reasonable inference. Accordingly it becomes necessary to consider the evidence with respect to the contractor and the job in question.
Indeed, trial judges routinely give these instructions to juries in criminal cases, where the government must prove a defendant's guilt beyond a reasonable doubt.
The evidence shows that the job at 111 8th Avenue consisted of the renovation of the 13th floor. The general contractor for the project was Henegan Construction Company. On April 12, 1999, Henegan entered into two subcontracts with Eurotech Construction Corporation, one to furnish and install acoustical and sheetrock ceiling and the other to furnish and install concrete, masonry and fireproofing work at designated areas on the floor. On the same date Henegan entered into a subcontract with Donaldson Acoustics Company to complete all drywall work for the project.
Eurotech's superintendent on the job was Michael Purser. He testified at his deposition that his practice was to call the regional carpenters union (it would have been Local 608) for a shop steward to be assigned to the job. Purser did not know Maudsley and did not ask for him specifically. Purser was sure that he did not request that the carpenter shop steward have "laboratory furniture" skill (which Purser interpreted as "office equipment"). Purser was asked this question and gave this answer: "Q. Did Eurotech have work involving lab furniture as part of its subcontract?" "A. No." Dep. Tr. at 7-12. Purser had also arranged for an individual named Tommy McHugh to be the foreman and do the layout work for Eurotech on the job, and so did not need to ask Local 608 for a shop steward to act as a layout foreman. Id. at 7-8.
This evidence from Eurotech and its superintendent Purser compels the inference that when Purser called his request in to Local 608, he specified that the shop steward assigned must be skilled in acoustical engineering, but said nothing about "lay-out foreman" or "lab furniture." Someone at Local 608 added those skills to the manning request the local sent to the OWL office; and someone told Maudsley to add those skills to his profile. Maudsley did so on April 22 and was matched by the OWL computer with the falsified Eurotech request the next day. The addition of those skills to Maudsley's profile enabled him to jump over four carpenters who had listed ceiling skills, the only skill Maudsley had listed prior to April 22.
I also draw the inference that the "someone" at Local 608 who acted in this manner was Michael Forde. Clarke has shown by clear and convincing evidence that Forde, the Local 608 business manager at the time, phoned in the manning request which included two skills Eurotech had not asked for, and tipped off Maudsley that he had done so. The evidence does not plausibly suggest anyone else likely to have done these things. Forde's intent was to favor Maudsley. I need not accept Clarke's characterization of Maudsley as a "crony" of Forde's (a pejorative noun that runs like a leitmotiv through Clarke's briefs); it is sufficient to note that Forde and Maudsley were friends, as evidenced by Forde's appointment of Maudsley as a Local 608 business agent after Forde became EST.
See Forde Dep. at 9.
2. The November 1, 1999 Referral (John Corrigan)
Corrigan placed his name on the OWL on October 4, 1999. On the morning of November 1, 1999, he called the OWL office and added wood framing to his skill list. The combination of this skill and the "40-hour OSHA certificate" skill, which Corrigan already listed, enabled him to receive, later in the day on November 1, a referral as a steward to a job for North Berry Concrete at 59th Street and Twelfth Avenue. Corrigan had been #609 on the OWL. Although North Berry was a concrete contractor, Clarke alleges that the manning request form for the job did not require "concrete" as one of the skills, but did request a steward with a "40-hour OSHA certificate" and the wood framing skill. As in the Maudsley referral above, Clarke asserts that the manning request form was falsified to match the carpenter's (in this case, Corrigan's) skills, after a last-minute addition, enabling the carpenter to skip wrongfully over others on the OWL. The manning request form for this particular job listed the "caller's name" and the "foreman's name" as "John Vecchione."
Clarke asserts that the "40-hour OSHA certificate" skill was made up, and that no such certificate actually existed. Clarke claims that Corrigan's use of a fictitious skill is another reason why the referrals to him were improper. This charge is substantiated by the evidence. The November 1, 1999 manning request form that led to Corrigan's referral listed "OSHA certified 10 hr and 40 hr" as skills the contractor purportedly requested. OSHA gave certificates to carpenters who completed courses administered by the agency's Outreach Training Program, but the report dated June 29, 2004 by Walter Mack, Esq., at the time the Court-appointed Independent Investigator, demonstrates persuasively that while OSHA administered 10-hour and 30-hour courses, the agency never gave a 40-hour course and never issued a 40-hour certificate.
Clarke also alleges that this referral was improper because Corrigan was impermissibly "riding the list" prior to this referral, with Forde's knowledge. "Riding the list" is the phrase used to describe a carpenter's violation of Job Referral Rule 4C, which provides: "Only members who are not currently employed at the trade may register their availability for referral" on the OWL.
The evidence shows that Corrigan was indeed "riding the list" at the time in question. He was working as a steward on a Planet Hollywood site, which he left upon receiving the November 1, 1999 referral to North Berry. Clarke further claims that Greaney (also characterized as a Forde "crony") submitted a request for a replacement steward at the Planet Hollywood site before Corrigan had actually received the new referral; according to Clarke, this indicated that Greaney knew Corrigan would receive the referral, which knowledge would not be possible without the existence of the scheme to falsify the job requests to match the request to Corrigan specifically.
I should note at this juncture that unlike the Maudsley referral, where there is concrete proof of Forde's personal knowledge of participation in the Job Referral Rule violation, Clarke's allegations concerning Forde with respect to the Corrigan and Hearty referrals are conclusory and conjectural.
Finally, Clarke notes that November 1st was the day Forde was nominated to run for the position of EST; according to Clarke, Forde "would benefit from a strong supporter as steward to campaign for him at the jobsite." Clarke's Brief at 19.
3. The March 21, 2001 Referral (John Corrigan)
On March 20, 2001, Corrigan added "concrete" to his list of skills. The following day, he received an out-of-order steward referral from position #198 on the OWL to a Sorbara jobsite at Columbus Circle. The manning request form listed 40-hour OSHA certificate as a required skill, as well as four other skills. Clarke asserts that the contractor did not, in fact, ask for a steward with the skills listed on the manning request form, but that those skills were added to ensure that Corrigan received the referral, after the addition of the "concrete" skill to his skill portfolio. In support of this claim, Clarke cites I.I. Walter Mack's report concerning the Corrigan referrals. Mack references an affidavit by George Fitzgerald, the Sorbara superintendent, in which Fitzgerald stated that the manning request form did not reflect any request that he had made. Fitzgerald also affirmed that he did not write any letter requesting a steward with a 40-hour OSHA certification.
Again, Clarke also claims that Corrigan was impermissibly riding the list prior to this referral. He asserts that Forde knew or learned of the list-riding, but failed to remove Corrigan from the job.
Further, Clarke notes that the date of the referral, March 21, 2001, coincides with another fundraiser for Forde's criminal defense, held on March 25, 2001. Both Corrigan and Hearty were co-chairmen of the fundraiser. Clarke also points out that Corrigan received the job referral 22 days in advance of the Columbus Circle job, a circumstance Clarke views with suspicion.
4. The July 13, 2000 Referral (John Hearty)
Hearty placed his name on the OWL on May 31, 2000. On July 13, 2000, John Greaney — who, as mentioned, was appointed by Forde to succeed him as business manager of Local 608, and also elected as Forde's successor as president of Local 608 — forwarded a request from Hi-Rise/Component Assembly Systems for a steward who possessed five specific skills: hollow-metal storefronts, windows, foreman/layout, welder, and CPR. As of July 11, Hearty listed only two of those five supposedly requested skills in his skill portfolio. On July 12, however, he added the three other requested skills to his portfolio. Hearty received the referral on July 13, while #279 on the OWL.
Clarke again alleges that the manning request form was falsified, and that the skills listed were chosen by Greaney to match Hearty to the job (after the last-minute skills addition to his portfolio), not because those skills were in fact requested by the employer. Clarke claims that Rockrose, general contractor at the work site, subcontracted window and storefront work to other subcontractors, not Hi-Rise/Component; thus Hi-Rise/Component had no reason to request stewards with these skills. Clarke further claims that Hi-Rise/Component had no need for a welder, and that Hearty did not even possess the proper welder certificates or licenses.
According to Clarke, including welding on the manning request form eliminated 95% of certified stewards from consideration. The addition of the windows and layout skills further distinguished Hearty, enabling him to be the sole match for the request and to receive the referral ahead of those on the list who possessed the skills that would actually be used at the jobsite.
Additionally, Clarke again alleges that this referral was improper because Hearty was impermissibly riding the list prior to the referral. He asserts that Forde learned of the list-riding, but failed to remove Hearty from the job.
5. The February 5, 2001 Job Referral (John Hearty)
Hearty placed his name back on the OWL on November 22, 2000, and was assigned position #1,397. On February 5, 2001, Hearty received another referral to a second jobsite of Component Assembly. This request, like the first, was filled out and forwarded to the OWL office by Greaney. The request form listed foreman/layout, framing, welder, and windows as the required skills. Clarke again contends that the request form was falsified to ensure that Hearty received the referral over other stewards. In support of this claim, he alleges that the windows and storefront work at the site was contracted to other companies; thus, Component had no need for stewards with those skills.
Once again, Clarke claims that this referral was improper because Hearty was impermissibly riding the list prior to the referral, with Forde's knowledge.
Shop steward reports for the first Component Assembly systems job show that Hearty worked from July 13, 2000 to January 2, 2001, indicating that he was ineligible to have his name placed back on the OWL on November 22, 2000. See Consent Decree Rule 4C, cited supra.
D. Forde's Liability for Violations of the Consent Decree and Job Referral Rules
1. The Violations
Clarke has proved by clear and convincing evidence that each of the five shop steward referrals discussed supra violated the Job Referral Rules and thus violated the Consent Decree as well. The individual carpenters whose referrals as shop stewards on the specified dates violated the Rules are Edward Maudsley (once), Hearty (twice), and Corrigan (twice). These carpenters obtained these illicit referrals by means of the "falsified request scam," the "40-hour OSHA certificate scam," and "riding the list." The brief for Forde does not contend with any vigor that these carpenters did not violate the Decree and the Rules on these occasions. The case turns upon Forde's personal responsibility for one or more of these violations by other carpenters. Forde can be held in contempt only on the basis of his own conduct.
2. Forde's Liability for the Referrals of Maudsley, Hearty, and Corrigan
For the reasons stated in Part III.C. 1., supra, with respect to the referral of Maudsley, Forde is directly liable for violating the Job Referral Rules and the Consent Decree by submitting a falsified contractor's manning request and advising Maudsley to add skills to his profile — thereby enabling Maudsley to jump over other qualified carpenters on the OWL. Alternatively, Forde is liable as an aider and abettor of Maudsley's violation.
As for the other four referrals specified by Clarke on his motion, two for Hearty and two for Corrigan, Forde's liability depends on whether Clarke has proved by clear and convincing evidence that Forde aided and abetted Hearty's and Corrigan's violations of the Rules and Decree. This question requires an analysis of the present state of the law in the Second Circuit on aiding and abetting liability.
3. Analysis of Aiding and Abetting
In the early days of this protracted litigation, the then officers of the District Council moved on several grounds to dismiss the government's civil RICO complaint against them. I denied that motion in its entirety in an opinion reported at 778 F. Supp. 738 (S.D.N.Y. 1991) (the "1991 Opinion"). The government's theory was that these "Officer Defendants" (as they were called in the opinion) were liable for aiding and abetting the alleged predicate RICO acts of others. I will quote from the 1991 Opinion at some length:
The other defendants named in the government's RICO complaint also moved to dismiss.
The Officer Defendants contend that the Supplemental Complaint fails to allege a cognizable legal duty that they violated by "refusing to take any action to redress [the] racketeering act[s]" they allegedly aided and abetted. The Supplemental Complaint alleges that:
"The District Council officer defendants have the authority and obligation, both under the applicable union constitution and by-laws and under the federal labor law, to investigate and discipline union corruption."
Defendants contend that this allegation is insufficient to establish aiding and abetting liability for the predicate RICO acts. Defendants argue that the allegation fails to establish an affirmative assistance of the acts allegedly aided and abetted and so fails as a matter of law to state a claim.778 F. Supp. at 748.
Relying upon Second Circuit authority, I rejected that contention. In the 1991 Opinion I said:
In a civil RICO suit, the criminal standard has been applied in judging aiding and abetting liability. [citing United States v. Local 560 of Int'l Bhd. of Teamsters, 780 F.2d 267, 284 (3d Cir. 1985)]
To convict a defendant for criminal aiding and abetting, "it is necessary that a defendant in some way associate himself with the venture, that he participate in it as something that he wishes to bring about, that he seek by action to make it succeed." United States v. Ginsberg, 758 F.2d 823, 832 (2d Cir. 1985). . . .
The Second Circuit has stated . . . "To convict a defendant of aiding and abetting the government must prove (1) commission of the underlying crime, (2) by a person other than the defendant, (3) a voluntary act or omission by the person charged as an aider and abettor, with (4) the specific intent that his act or omission bring about the underlying crime." United States v. Zambrano, 776 F.2d 1091, 1097 (2d Cir. 1985). The government has alleged numerous acts of racketeering committed by persons other than the Officer Defendants and these allegations, if proved, satisfy the first two elements of aiding and abetting. The Officer Defendants dispute the omission element and the specific intent element. The question is whether the government has adequately alleged a duty that the Officer Defendants violated by omitting to take action.
. . . "A person cannot be found guilty of aiding and abetting a crime that already has been committed." United States v. Shulman, 624 F.2d 384, 387 (2d Cir. 1980). But the allegation of failure to redress appears to envision remedial action by the Officer Defendants at the time crimes were being committed. The pleading would also embrace proof of failure to redress ongoing violations. In neither of these situations does the government accuse the Officer Defendants of aiding and abetting completed crimes.
The government's aiding and abetting theory requires determination of whether there has been an omission and whether that omission was made with specific intent. . . . "[I]f an individual fails to act when he has an affirmative duty to do so, negative inferences concerning his intent can be drawn from this inaction." United States v. Local 560 of Int'l Bhd. of Teamsters, 780 F.2d 267, 284 (3d Cir. 1985). . . .
This Court has held that the duty of union officers to act in a fiduciary capacity forms the basis for aiding and abetting liability. [citing United States v. Int'l Bhd. of Teamsters, 708 F. Supp. 1388, 1401 (S.D.N.Y. 1989) (Edelstein, J.)] . . .
While the defendants in this case vigorously deny that the Constitution and By-Laws of the District Council give them any legal duties to investigate corruption, there can be no dispute that federal labor law does impose such a duty [citing 29 U.S.C. § 501(a)] . . .
The Court's holding today is that such a duty exists as a matter of law but the government's proof will of course have to show how the Officer Defendants failed to act as well as the other elements required to establish aiding and abetting liability.778 F. Supp. at 748-50 (some citations and footnotes omitted).
More recently, the Second Circuit has considered aiding and abetting liability within the context of alleged contempt of a consent decree. In Levin v. Tiber Holding Corp., 277 F.3d 243 (2d Cir. 2002), a state insurance superintendent sued to have the defendant corporation, the previous owner of a subsidiary insurer in liquidation, found in contempt of a consent order entered into between the superintendent and that subsidiary which barred dissipation of the subsidiary's domestic assets. After a bench trial, which focused upon several inter-corporate financial transactions, Judge Stein held the defendant corporation in contempt of the consent order as an aider and abettor of the transactions in question. The Second Circuit reversed on the ground that the superintendent had not proved in the district court that the transactions violated the consent decree. The opinion of Circuit Judge Jacobs (as he then was) on the nature of aiding and abetting a violation of a consent decree is instructive:
Before a party can be found guilty of aiding and abetting civil contempt, the court must find: (1) that the party subject to the court's mandate committed contempt; and (2) that another party assisted the enjoined party. The party seeking to hold another in contempt bears the burden of proof to establish the offense by clear and convincing evidence. . . . In the context of civil contempt, the clear and convincing standard requires a quantum of proof adequate to demonstrate a reasonable certainty that a violation occurred.
The district court erroneously held that Tiber aided and abetted a violation of the court order without reaching the predicate question of whether Ardra itself committed contempt. See Alemite Mfg. Corp. v. Staff, 42 F.2d 832, 833 (2d Cir. 1930) ("The defendant must either abet the principal, or must be legally identified with him. . . . If the principal is not involved in the contempt, the defendant cannot be; the decree has not been disobeyed. . . ."); see also United States v. Paccione, 964 F.2d 1269, 1274 (2d Cir. 1992) ("A person who knowingly assists a defendant in violating an injunction subjects himself to civil as well as criminal proceedings for contempt."); Cf. United States v. Karen Bags, Inc., 602 F. Supp. 1052, 1064 (S.D.N.Y. 1985) ("The elements necessary to prove aiding and abetting [criminal contempt] are ` the commission of the underlying offense by someone, a voluntary act or omission, and a specific intent that such act or omission promote the success of the underlying criminal offense.'" (quoting United States v. Perry, 643 F.2d 38, 46 (2d Cir. 1981))); United States v. Samaria, 239 F.3d 228, 235 (2d Cir. 2001) ("To convict a defendant on a theory of aiding and abetting [credit card fraud], the government must prove that the underlying crime was committed by a person other than the defendant and that the defendant acted . . . with the specific purpose of bringing about the underlying crime.").277 F.3d at 250-51 (some citations and brackets omitted; emphasis added in Levin).
The Second Circuit precedents cited in Levin include Alemite Mfg. Co. v. Staff, 42 F.2d 832, a 1930 opinion by Judge Learned Hand which considered whether a non-party was in civil contempt of an injunction against infringement of a patent. Judge Hand began by saying: "We agree that a person who knowingly assists a defendant in violating an injunction subjects himself to civil as well as criminal proceedings for contempt. This is well settled law." Id. at 832 (emphasis added). Judge Hand's formulation of knowing assistance as a necessary element for a finding of contempt of a civil injunction by non-parties is reiterated in later Second Circuit cases, such as United States v. Paccione, 964 F.2d 1269, 1274 (2d Cir. 1992), also cited and quoted by the Levin court, and the Levin opinion itself.
Alemite held that, on the basis of facts bearing no resemblance to those in the instant case, the individual in question had not acted contumaciously.
While Levin appears to be the most recent Second Circuit case to consider aiding and abetting the violation of a consent order or injunction, the particular point of decision in Levin is not presented by the case at hand. The Second Circuit reversed the district court's finding of contempt in Levin because an underlying violation of the consent decree had not been proved; in that circumstance, there was no offense for the defendant to aid or abet. In contrast, Clarke has proved by clear and convincing evidence that the five shop steward referrals in question all violated the Job Referral Rules and the Consent Decree. Moreover, the carpenters who gained by these illicit referrals — Maudsley, Hearty, and Corrigan — must be viewed as parties to the Decree and bound by the Rules. The preamble to the Decree recites that "the District Council has entered into this Consent Decree as the representative of its membership and the union members who comprise its constituent local unions," a group that includes these three members of Local 608. So the question of Forde's liability for proven violations by others turns upon whether Clarke has proved by clear and convincing evidence that Forde aided and abetted these referrals. In considering that question, I apply the principles of aiding and abetting derived from the cases cited and quoted supra, as well as additional cases cited infra.
Even if one rejects the Court's conclusion stated supra that Forde directly and personally violated the Job Referral Rules with respect to Maudsley's shop steward referral, Forde's liability as an aider and abettor of Maudsley's referral is obvious and requires little further analysis. Clarke has proved by the requisite standard that Forde created the falsified manning requests ostensibly submitted by the contractor and tipped Maudsley off to change his job skills profile accordingly, thereby enabling Maudsley to "game the system" and vault over the heads of carpenters who had been on the OWL longer than Maudsley. This fraudulent conduct by Forde in connection with this referral brands him as a principal violator of the Rules and Decree. At the very least, Forde's knowing assistance and manifest specific intent makes him an aider and abettor of Maudsley's violation.
The proof is quite different with respect to Forde's liability as an aider and abettor of the four subsequent illicit referrals, two for Hearty and two for Corrigan. In those instances, Clarke offers no evidence — let alone clear and convincing evidence — that Forde had any specific knowledge about Hearty's and Corrigan's Rules violations at the times the violations occurred, or that he assisted Hearty or Corrigan in obtaining these referrals. With respect to the Hearty and Corrigan referrals, Clarke's aiding and abetting theory against Forde is based upon Forde's inaction, rather than his action, as in the Maudsley referral. Forde's inaction, in Clarke's view, breached Forde's fiduciary duties as a union officer. Clarke's theory is summarized in his Reply Trial Brief at 10, where the caption reads: "Forde's [ sic] breached his fiduciary duty to disclose and remedy Corrigan and Hearty's violations." The brief then discusses separately Forde's perceived "Failure to Disclose," id. at 10-12, and his "Failure to Remedy," id. at 13-16, the Rules violations culminating in the Hearty and Corrigan referrals.
Clarke's Main Trial Brief treats these subjects at much greater length, but it is convenient to use his Reply Brief as a summary of his aiding and abetting charges against Forde.
Not surprisingly, Clarke relies upon this Court's 1991 Opinion, quoted supra. However, the 1991 Opinion turned upon the sufficiency of pleading. Clarke's present motion turns upon the sufficiency of proof. The 1991 Opinion concluded that the government's civil RICO complaint survived a Rule 12(b)(6) motion to dismiss because it adequately alleged that union officers' breaches of fiduciary duty through inactivity could impose aiding and abetting liability upon them. I applied the familiar test that in evaluating the sufficiency of a pleading, a district court "should not grant a Rule 12(b)(6) motion unless it appears `beyond doubt that the plaintiff can prove no set of facts is support of his claim which would entitle him to relief.'" 778 F. Supp. at 747 (citing and quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)), and observed that at trial "the government's proof will of course have to show how the Officer Defendants failed to act as well as the other elements required to establish aiding and abetting liability." Id. at 750. In the event, the government did not have to make that showing because the trial was terminated short of conclusion by the Consent Decree. In contrast, Clarke's motion to hold Forde in contempt of the Decree has been subjected to a full plenary trial, and the Court must evaluate the sufficiency of Clarke's proof in establishing Forde's aiding and abetting liability with respect to the five job referrals at issue.
The question whether an individual's failure or omission to act creates aiding and abetting liability arises in a number of contexts. In the 1991 Opinion I held that "[i]n a civil RICO suit, the criminal standard has been applied in judging aiding and abetting liability." 778 F. Supp. at 748. The criminal standard logically applies to a civil RICO action because, just as in a RICO criminal prosecution, the predicate acts necessary to trigger the statute are crimes. The Second Circuit held in Zambrano, 776 F.2d at 1097, that the necessary elements of criminal aiding and abetting include proof of "a voluntary act or omission by the person charged as an aider and abettor" with "the specific intent that his act or omission bring about the underlying crime." (emphasis added). The Second Circuit's more recent opinions adhere to these elements. See, e.g., United States v. Best, 219 F.3d 192, 199 (2d Cir. 2000) ("To convict a defendant on a theory of aiding and abetting, the government must prove that the underlying crime was committed by a person other than the defendant and that the defendant acted — or or failed to act in a way that the law required him to act — with the specific purpose of bringing about the underlying crime.") (emphasis added); United States v. Reifler, 446 F.3d 65, 96 (2d Cir. 2006) (same). The Second Circuit has consistently stated that "aiding and abetting is [] a specific intent crime." United States v. Samaria, 239 F.3d 228, 234-35 (2d Cir. 2001).
In Samaria the Second Circuit also explained that while "conscious avoidance" can establish a defendant's knowledge of the underlying crime, it cannot establish the specific intent required for aiding and abetting liability. 239 F.3d at 239-40.
In the case at bar, the underlying Job Referral Rules violations are not criminal in nature. That is equally true of the underlying commercial transactions in Levin. The Levin opinion does not make it entirely clear whether the Second Circuit applies the heightened criminal standard for aiding and abetting to cases where a consent decree is violated by conduct which is not criminal in nature. Levin focused upon whether the asserted violation had been proved (holding it had not). In the course of his opinion Judge Jacobs said that aiding and abetting liability attaches if an individual "assisted the enjoined party" in violating the injunction, and noted that: "A person who knowingly assists a defendant in violating an injunction subjects himself to civil as well as criminal proceedings for contempt." Levin, 277 F.3d at 250-51 (citing Paccione, 964 F.2d at 1274, and Alemite, 42 F.2d at 832). In addition, Levin cites United States v. Karen Bags, Inc., 602 F. Supp. 1052, 1064 (S.D.N.Y. 1985), which states that "[t]he elements necessary to prove aiding and abetting criminal contempt are the commission of the underlying offense by someone, a voluntary act or omission, and a specific intent that such act or omission promote the success of the underlying criminal offense." 277 F.3d at 251 (emphasis added in Levin). However, Levin cites Karen Bags as support for the general proposition that one cannot aid and abet without there being an underlying violation (as evident from the context in which Karen Bags is quoted and the emphasis added to the quotation in Levin); and, while a different interpretation might be suggested, I do not read that language as a holding by the Second Circuit that the "specific intent" element in criminal aiding and abetting applies to a non-criminal violation of a district court consent decree or injunction in a civil case.
Cases which consider aiding and abetting in other civil contexts should also be considered. To prove aiding and abetting in the civil context, plaintiff generally must show: "(1) the existence of a [legal] violation by the primary (as opposed to the aiding and abetting) party; (2) `knowledge' of this violation on the part of the aider and abettor; and (3) `substantial assistance' by the aider and abettor in the achievement of the primary violation." IIT, An Int'l Inv. Fund v. Cornfeld, 619 F.2d 909, 922 (2d Cir. 1980); Armstrong v. McAlpin, 699 F.2d 79, 91 (2d Cir. 1983). Although Cornfeld and Armstrong dealt with securities law violations, virtually identical three-part tests for aiding and abetting have been applied in other civil contexts, such as fraud, conversion, and breach of fiduciary duty.
See, e.g., Samuel M. Feinberg Testamentary Trust v. Carter, 652 F. Supp. 1066, 1082 (S.D.N.Y. 1987) ("Under New York law, a plaintiff seeking to establish a cause of action for aiding and abetting a breach of fiduciary duty must show: (1) the existence of a violation by the primary (as opposed to the aiding and abetting) party; (2) knowledge of this violation on the part of the aider and abettor; and (3) substantial assistance by the aider and abettor in the achievement of the primary violation."); Calcutti v. SBU, Inc., 273 F. Supp. 2d 488, 493 (S.D.N.Y. 2003) ("In order to state a claim [] for aiding and abetting the alleged common law conversion [], [plaintiff] must allege: (1) the existence of a primary violation; (2) knowledge of this violation on the part of the aider and abettor; and (3) substantial assistance by the aider and abettor in the achievement of the primary violation."); Lerner v. Fleet Bank, N.A., 459 F.3d 273, 292 (2d Cir. 2006) ("To establish liability for aiding and abetting fraud, the plaintiffs must show (1) the existence of a fraud; (2) the defendant's knowledge of the fraud; and (3) that the defendant provided substantial assistance to advance the fraud's commission.").
In the securities law context, the Second Circuit has explained that the required mental state should be assessed in light of defendant's legal duties. Specifically, "if the alleged aider and abettor owes a fiduciary duty to the plaintiff, recklessness [a "reckless disregard of the facts"] is enough" to satisfy the "knowledge" requirement. Armstrong, 699 F.2d at 91 (citing Cornfeld, 619 F.2d at 923). In Armstrong, the Second Circuit also explained that "[i]naction on the part of the alleged aider and abettor ordinarily should not be treated as substantial assistance, except when it was designed intentionally to aid the primary fraud or it was in conscious and reckless violation of a duty to act." Id. (citing Cornfeld, 619 F.2d at 925-27); SEC v. Treadway, 430 F. Supp. 2d 293, 339 (S.D.N.Y. 2006).
Cornfeld applied principles of aiding and abetting in the context of a private action based on Rule 10b-5 violations. The specific holding is no longer good law because the Supreme Court held in Central Bank v. First Interstate Bank, 511 U.S. 164 (1994), that private plaintiffs may not maintain aiding and abetting suits under Section 10(b) of the Exchange Act. But courts continue to cite Cornfeld's analysis in other securities law situations where aiding and abetting liability does still apply (such as Rule 10b-5 aiding and abetting actions brought by the SEC). See, e.g., SEC v. Lybrand, 200 F. Supp. 2d 384, 400 (S.D.N.Y. 2002) (citing Ross v. Bolton, 904 F.2d 819, 824 (2d Cir. 1990) and Cornfeld, 619 F.2d at 923) ("In this circuit, it is well-established that recklessness satisfies the scienter requirement for aider and abettor liability when the alleged aider and abettor owes a fiduciary duty to the defrauded party.").
Court in the Second Circuit have generally found that "actual knowledge is required to impose liability on an aider and abettor under New York law." Lerner v. Fleet Bank, N.A., 459 F.3d 273, 292 (2d Cir. 2006) (aiding and abetting fraud); Kolbeck v. LIT America, Inc., 939 F. Supp. 240, 246-47 (S.D.N.Y. 1996) (aiding and abetting breach of fiduciary duty); Pension Comm. of Univ. of Montreal Pension Plan v. Banc of America Securities, LLC, 446 F. Supp. 2d 163, 201, 202 n. 279 (S.D.N.Y. 2006) (aiding and abetting fraud or a breach of fiduciary duty both "require the putative secondary violator to have actual knowledge of the primary violator's wrongdoing"; for aiding and abetting liability, "the overwhelming weight of authority holds that actual knowledge is required, rather than a lower standard such as recklessness or willful blindness"). But some language in those cases suggests that — consistent with the rulings in Armstrong and Cornfeld — something less than actual knowledge may be sufficient when the defendant owes a fiduciary duty to the plaintiff. See Pension Comm. of Univ. of Montreal Pension Plan v. Banc of America Securities, LLC, 446 F. Supp. 2d 163, 201-03 (S.D.N.Y. 2006) ("[P]laintiffs allege no basis for inferring that [defendant] owed them any duty to monitor, verify, or investigate the veracity of the information disseminated by Lauer. When a defendant is under no such duty, even alleged ignorance of obvious warning signs of fraud does not suffice to adequately allege the actual knowledge necessary to sustain an aiding and abetting claim."); Kolbeck v. LIT America, Inc., 939 F. Supp. 240, 247 (S.D.N.Y. 1996) ("a failure to investigate, i.e., constructive knowledge, is not enough to support a claim for aiding and abetting a fiduciary duty absent the existence of a fiduciary duty running from defendant to plaintiff"). In addition, Judge Kaplan recently held that conscious avoidance, "when it can almost be said that the defendant actually knew because he or she suspected a fact and realized its probability, but refrained from confirming it in order later to be able to deny knowledge," satisfies the knowledge prong for aiding and abetting fraud. Fraternity Fund Ltd. v. Beacon Hill Asset Mgmt. LLC, 479 F. Supp. 2d 349, 367-68 (S.D.N.Y. 2007) ("the Court sees no reason to spare a putative aider and abettor who consciously avoids confirming facts that, if known, would demonstrate the fraudulent nature of the endeavor he or she substantially furthers").
Courts applying New York law have also found that "the mere inaction of an alleged aider and abettor constitutes substantial assistance only if the defendant owes a fiduciary duty directly to the plaintiff." Lerner v. Fleet Bank, N.A., 459 F.3d 273, 295 (2d Cir. 2006) (citing Kaufman v. Cohen, 307 A.D.2d 113, 126 (N.Y. App. Div. 1st Dep't 2003)); In re Sharp Int'l Corp., 403 F.3d 43, 50 (2d Cir. 2005) (same).
I apply these principles to the case at bar. While the Second Circuit's holdings in Levin on aiding and abetting a consent decree violation are binding on this Court, Levin's main thrust is upon proof of the underlying violation, not at issue here. The Levin opinion recites the elements of aiding and abetting a consent decree violation, but it does not analyze in detail the mental state or level of assistance required for aiding and abetting in that context; nor does the opinion consider the extent to which those elements might be affected by a fiduciary duty the alleged aider and abettor might bear to other parties. If the purported aider and abettor in Levin owed a fiduciary duty to anyone else involved in the case, Judge Jacobs's opinion does not mention it.
In the case at bar, Clarke predictably stresses Forde's fiduciary duties as a union officer. Indeed, as the EST of the District Council, holder of the highest Union office, Forde's fiduciary duties are unsurpassed; and, with particular reference to the appointment of shop stewards, § 16 of the District Council By-Laws provides that "[a]ll stewards will be appointed by the Executive Secretary-Treasurer in a fair and equitable manner consistent with the job referral rules and the Consent Decree," and "shall be appointed according to their skills and position on the out-of-work list." (emphasis added).
Equally predictably, Forde correctly asserts that Clarke offers no evidence that Forde had contemporaneous knowledge of Hearty's and Corrigan's violations of the Job Referral Rules or acted with the specific intent to assist those violations. While the trial record certainly shows a series of improper steward job referrals, there is no probative evidence, let alone clear and convincing evidence, that Forde was personally involved in any of the incidents involving Hearty and Corrigan. (The evidence with respect to the earlier Maudsley referral is, of course, quite different and proves Forde's personal participation.)
The core question is whether Forde's generalized fiduciary duty to ensure compliance with the Job Referral Rules trumps his lack of specific knowledge of or assistance to Hearty's and Corrigan's violations, so that Forde becomes an aider and abettor of those later violations. That is the essence of Clarke's aiding and abetting theory against Forde.
I accept the proposition, derived from some of the cases cited supra, that recklessness on the part of a union officer owing a fiduciary duty to union members (such as Clarke) may in certain circumstances give rise to aiding and abetting liability for the misconduct of others. But I cannot accept the proposition that Forde's unquestionable fiduciary duty to Union members makes him an aider and abettor of each and every violation of the Job Referral Rules, whether or not Forde had specific knowledge of an individual's violation or knew enough about the individual's conduct to justify the conclusion that Forde recklessly disregarded the violation. The Second Circuit's aiding and abetting case law provides no support for Clarke's seeming, if unstated, conception of a broad, generalized and non-specific liability akin to a strict liability standard, even if a fiduciary duty exists. While the case law on aiding and abetting may recognize a reduced level of culpability for fiduciaries — recklessness rather than actual knowledge may suffice — it does not eliminate the culpability requirement and substitute a strict liability standard. The proof must demonstrate an aider and abettor who by his own knowing acts or omissions assists another's underlying offense, either deliberately or recklessly. Negligent or ineffectual performance of duties by a fiduciary does not make him an aider and abettor.
Viewing the cases in the light most favorable to Clarke, he still must prove that Forde acted recklessly with respect to the four specific referrals upon which Clarke bases his case for contempt against Forde. That case fails because Clarke has not proved by clear and convincing evidence that Forde recklessly disregarded those particular Rules violations by Hearty and Corrigan. Certainly, the timing of fundraisers for Forde and his relationships with the other carpenters involved are insufficient to sustain that heightened burden of proof.
Certain aspects of the evidence require further comment. Clarke argues at length in his briefs that the reports made by the Investigation Committee the District Council formed to inquire into Clarke's complaint to the District Council Executive Committee were false and constituted part of "the Cover-Up," principally of carpenters' riding the list, as well as other Rules violations. Main Trial Brief at 31-37. In point of fact, Clarke's letter dated July 24, 2001 to the District Council Executive Committee (the "July 24 Letter") dealt almost exclusively that his complaint that "skills profiles were changed to conform to requests for stewards, which means that the above individuals were colluding with the Local 608 business agents who relayed the contractors' requests." July 24 Letter at 6. Clarke named several specific examples of this scheme, including the Maudsley, Hearty and Corrigan referrals at issue on the present motion. The July 24 Letter said nothing about carpenters violating the Job Referral Rules by riding the list. As I had occasion to note in Clarke I, 2002 WL 31873460, at *3, "[t]he main thrust of Clarke's [July 24, 2001] complaint was that these individuals were improperly permitted to add skills to their names as they appeared on the OWL, thereby enhancing their eligibility for a steward's assignment." The January 2002 Report of the Investigation Committee (comprised of Rothman and Danielson) to the Executive Committee concluded that all the referrals cited in Clarke's July 24 Letter "were proper under the approved system." Report at 20. In its Report the Investigation Committee then, on its own initiative, brought up the problem of riding the list:
Clarke's earlier complaint to the District Council and the District Council's response (including the reports in question) are described in Part II.B.2., supra.
During the course of our investigation, we found that some of the people involved were working while their names were on the out of work list or had signed shop steward reports on jobs where they had not been dispatched as the steward. . . . These were not matters directly raised by the complaint . . . [C]harges have been filed against the individuals involved for violating sections 15 and 16 of the constitution and by-laws.Id. at 24. Those charged individuals included Hearty and Corrigan. The record contains three District Council Charge Forms against Hearty, all signed by Danielson on January 21, 2002, charging Hearty with riding the list on three separate earlier occasions, and two Charge Forms against Corrigan, signed by Danielson on January 21 and 25, 2002, containing similar charges.
Moreover, as recounted in Part II.C., supra, the District Council's January 2002 investigation and report led directly to substantive negotiations about job referral reforms with the United States Attorney's office, stipulations between the government and the Union that placed Walter Mack and his successor, William Callahan, in office as the Court's Independent Investigators, and the creation of the District Council's Anti-Corruption Committee. In short, I am not inclined to dismiss or condemn entirely as a "cover-up" an internal Union investigative report that went beyond Clarke's complaints, gave rise to charges against carpenters for riding the list, and led directly to the appointment of two energetic I.I.s and the ACC.
The not inconsiderable fees and expenses of the Independent Investigators were and are paid by the District Council.
This is not to say that Clarke's criticisms of the Union's Investigation Report are without substance. For instance, the Report at page 19 discusses and finds no fault with the referral of Edward Maudsley. Given the seemingly readily available evidence of the forgeries and fraud resulting in that referral, see Part III.C. 1., supra, the Report's contrary conclusion does nothing to recommend Rothman and Danielson as investigators. But even if the Report failed to disclose transgressions that should have been revealed, Forde was not a member of the Investigation Committee, and Clarke offers no evidence that Forde by his own actions interfered with that Committee's functioning or dictated the Report's conclusions.
Clarke makes other charges against Forde. He alleges that Forde failed to disclose that Corrigan and Hearty lacked the very certificates — 40-hour OSHA and welder — that purportedly made them unique for certain of the referrals at issue, because if Forde had done so, it may have put an end to the alleged falsified manning request "scam." According to Clarke, citing Danielson's deposition testimony, when a carpenter adds a skill to his or her portfolio, that carpenter must present the appropriate certification to the OWL office, which would keep a copy of any such certification. Again citing Danielson's deposition testimony, Clarke asserts that the OWL office files showed that Corrigan never submitted a 40-hour OSHA certificate. Likewise, Clarke alleges that Hearty never presented a welder's certificate because he did not possess one.
Forde counters that, in fact, Clarke's original letter of complaint, which prompted the investigation which produced the Report, made no allegations of any impropriety relating to certificates, and thus presumably the Investigation Committee was not prompted to investigate that issue. As a result, Forde argues, the "failure" to discuss the presence or absence of such certificates in the Report cannot correctly be regarded as any sort of willful cover-up or nondisclosure. Further, Forde argues that he had no role in disclosing which certificates Corrigan or Hearty possessed or lacked.
Additionally, with regard to the 40-hour OSHA issue, Forde acknowledges that Walter Mack, the Independent Investigator, did establish that no 40-hour OSHA certificate existed. Forde asserts, however, that those carpenters listing the 40-hour OSHA skill actually possessed a 30-hour OSHA skill, and that it was simply a mistake that the 30-hour certificates were characterized as 40-hour certificates. A report from the Independent Investigator seems to support this position: although due to "reasons still unexplained," Mr. Mack found that for a period of time "the District Council did not recognize a 30-hour OSHA certificate and mistakenly characterized [the] certificates as 40-hour OSHA certificates." Clarke Ex. 18. It may be charitable to ascribe this circumstance to sloppy data entry or record keeping by the District Council (where, for example, the evidence shows that with respect to Corrigan's March 21, 2001 referral the contractor stated that he never requested a 40-hour OSHA skill, which suggests that the 40-hour OSHA skill was used to deliberately game the system). Again, however, there is no evidence of Forde's personal involvement in the incident.
Moreover, according to Forde, with regard to the welder's certificate, Hearty did not need a certificate showing a welding skill, because not all welding skills require such certification.
Viewing the entire record on the issue, I conclude that Clarke has not proved by clear and convincing evidence that Forde violated the Decree and the Rules, or aided and abetted violations by others, with respect to the 40-hour OSHA and welding certificates.
Clarke also asserts that Forde wrongfully failed to correct Corrigan's and Hearty's violations. Clarke claims that Forde (as well as the rest of Executive Committee) learned in late 2001 that Corrigan and Hearty had been riding the list before certain of their referrals; Clarke contends that Forde "should" have immediately removed them from their steward positions upon learning this information. In support of this position, Clarke cites an October 29, 2004 letter from Gary Rothman, District Council counsel, to Walter Mack, the Independent Investigator, wherein Rothman states that "a steward found to have secured their position while `riding the list' will be removed from that job and charged." Ex. 53, Rothman Letter. Instead, Clarke asserts, Forde took no action to remedy the wrongdoing.
Forde takes the position that, for the list-riding violations taking place in 2001, the proper punishment was not, as Clarke argues, removal from the job. Instead, according to Danielson's testimony, the punishment at that time was only a fine. It was not until later, in 2003, that removal became a punishment option that could be applied against list-riders.
Clarke argues in his briefs that fines were not a sufficient punishment for riding the list. But that is a question of union policy; it is not addressed by the Consent Decree or the Job Referral Rules. Forde's action or inaction must be evaluated in the light of the Union procedures in effect at the time. It seems that it was not mandatory under the Rules for Forde to remove Corrigan and Hearty from their jobs, even if Forde did learn that they had been referred to those jobs while riding the list. While Forde could have perhaps been more proactive in preventing list-riding and punishing those who rode the list, the fact that Hearty and Corrigan were not removed from their jobs is not sufficient to justify holding Forde in contempt.
Relatedly, Clarke also takes issue with Forde's alleged failure to "process" the charges that the Executive Committee had purportedly authorized to be brought against Corrigan and Hearty relating to the referrals they received between November 1999 and March 2001. Clarke asserts that Hearty denied that he had ever seen charges related to his July 13, 2000 and February 5, 2001 referrals, and that Forde admitted no charges were filed against Corrigan until 2004. Clarke goes on to list several punishment options that he believes could have been meted out against the two carpenters in order to prevent them and deter others from riding the list or participating in the alleged falsified request scam. Instead, Clarke claims, Forde did nothing, allowing the charges to become time-barred.
Clarke cites deposition testimony by John Early, a member of the Executive Committee, wherein Early indicates that the Committee voted to authorize charges against Hearty and Corrigan as a result of the investigation by the Investigation Committee in response to Clarke's initial letter complaint.
These charges apparently resulted from an investigation by Independent Investigator Walter Mack; Corrigan was reportedly punished by being barred from serving as a steward for three years.
Forde responds to these allegations first by pointing out that Hearty's testimony on the issue of whether charges had been brought against him was vague, unspecific, and far from an unequivocal denial of being charged for the offenses at issue. Forde makes a similar argument with regard to his deposition testimony regarding the authorization of charges — Forde could not recollect for certain at his deposition in November of 2005 which charges were authorized or brought against which carpenters. More importantly, however, Forde asserts that, contrary to Clarke's assertions, riding-the-list charges were recommended by the Investigation Committee, were adopted by the Executive Committee, and were, in fact, filed against Corrigan and Hearty no later than January 2002. In support of these claims, Forde cites to the Report, deposition testimony from John Early, an Executive Committee member, and copies of the charges against Hearty and Corrigan, signed by Scott Danielson, further described supra.
It is unclear what effect, if any, the alleged filing of these charges against Hearty and Corrigan had upon those two individuals.
On this record, I am unable to conclude that Clarke has proved by clear and convincing evidence that Forde violated the Decree and Rules in these respects, or aided and abetted others in doing so.
Finally, Clarke claims that Forde acted wrongfully in not suspending or terminating Greaney as Local 608's business manager as a result of Greaney's alleged misconduct relating to falsified manning requests, as discussed above. Citing to memoranda sent by Forde to all business managers and business agents, wherein Forde warned that failure to follow the referral rules "will result in charges from your Executive Committee, and/or possible suspension," or "disciplinary action," (Ex. 45), Clarke asserts that Forde should have suspended or terminated Greaney as business manager for rigging the aforementioned referrals. Removing Greaney, Clarke claims, "would have brought an end to his and Forde's systematic scheme of defrauding the membership of Local 608." Clarke's Main Trial Brief at 49.
Forde, however, argues that it has not been convincingly shown that Greaney engaged in the charged misconduct relating to the referrals. I do not agree; Greaney forwarded the contractors' requests leading to the two Hearty referrals in question, and there is enough evidence to support a reasonable inference that Greaney was engaging in just the sort of skill-adding, system gaming conduct in which Forde himself pursued with the Maudsley referral. But the important point is that Clarke offers no evidence that Forde knew what Greaney might be doing or that he assisted Greaney in doing it. Clarke argues that Forde's complicity in these referrals should be inferred because Forde and Greaney were friends and union political allies — "cronies," to use Clarke's favorite epithet — but this is speculation, not proof. Forde correctly asserts that there is no clear and convincing evidence of Forde's knowledge of Greaney's misconduct.
Once again, I must agree with Forde that insufficient evidence has been offered by Clarke to satisfy the applicable standard for an order of contempt. Further, as Forde points out, it is not clear that Forde would have the power to unilaterally terminate Greaney: any such termination or disciplinary proceeding would most likely have to take place through proper union disciplinary procedures.
IV. CONCLUSION
1. Clarke has proved by clear and convincing evidence that Forde, by his participation in the shop steward referral of Edward Maudsley, violated the Consent Decree and the Job Referral Rules.
2. Clarke's other charges that Forde violated the Decree and the Rules, or aided and abetted others in doing so, are dismissed for insufficiency of proof under the governing law.
Given the evidence in the record, in this opinion I need not and do not separately discuss the third element to be proven to hold a party in contempt of a court order, namely, that "the alleged contemnor was not reasonably diligent in attempting to comply." Clarke III, 2004 WL 48885, at *6. That question does not arise with respect to the Maudsley referral, where the evidence make manifest Forde's diligence in violating the Decree, not complying with it. As for the other referrals and more generalized charges Clarke makes against Forde, for the reasons stated in text they are dismissed because Clarke failed to show that "the proof of [Forde's] noncompliance is clear and convincing." Id. Consequently, I need not attempt to resolve the question, much discussed in the briefs, of whether any improvements in the job referral system may be ascribed to a District Council eager to reform, or to Independent Investigators' success in forcing improvements upon a District Council resistant to reform, or a combination of the two.
3. The Court assesses a $10,000 fine against Forde for his act of contempt with respect to the Maudsley referral. As the result of an investigation conducted by former IRO Conboy, in 1998 Forde paid a $5,000 fine for various violations of the Rules and agreed in a settlement to pay a $5,000 for each new violation. But apparently those earlier violations were not accompanied by the acts of fraud and forgery that Forde perpetrated in the Maudsley referral, and the Court, sitting in equity, is not limited by that amount.
4. Forde is directed to pay the fine of $10,000 to the District Council within thirty (30) days of the date of this Opinion and Order.
5. Clarke suggests as additional remedies that the payment of any fines assessed by the Court against Forde be suspended and forgiven if Forde (a) fires Greaney from whatever union office Greaney may currently hold and (b) fires Danielson as the OWL supervisor. The Court rejects those suggestions, and would not have accepted them even if Clarke had proved all his charges against Forde. Neither Greaney nor Danielson (whose performance as OWL supervisor has been praised by I.I. Callahan) are parties to this proceeding. It would offend due process for this Court, within the boundaries of this proceeding, to put economic pressure on Forde to take actions adverse to the employment of either individual.
6. Clarke's requests that Forde be required to reimburse the District Council for attorney's fees paid by the District Council for (a) preparation of the Investigation Report following Clarke's July 24, 2001 letter and (b) the legal defense provided to Forde in this proceeding prior to Forde's retention of his present privately retained counsel are denied. These suggestions depended principally upon Clarke proving the broad panoply of misconduct charged against Forde. Having failed to prove many of those charges, Clarke's efforts at fee-shifting fall with them. In any event, the District Council necessarily incurred legal expenses in investigating and responding to Clarke's July 2001 complaints. Presumably Clarke would not have approved if the District Council had saved this expense by ignoring his complaint; and Clarke's dissatisfaction with the Investigation Report does not justify an order of the Court requiring Forde to pay for it. As for Forde's private retention of counsel, which had occurred prior to a Court conference on February 25, 2004, see Clarke IV, 2004 WL 2480435, at *1, I conclude that Forde acted with reasonable despatch in replacing the O'Dwyer Bernstien firm, the District Council's regular counsel, with Mr. Lombardi's firm as his personal counsel.
7. Forde should take no comfort in this Opinion and Order. His conduct in the Maudsley referral was dishonorable, and revealed his personal contempt for the Consent Decree and Job Referral Rules he was bound as a union officer to obey. Moreover, there is a basis for concern that to this day the District Council and its constituent local officers are affected by a systemic, institutionalized, cultural opposition to the fair and equitable procedures embodied in the Job Referral Rules. The Callahan Report of October 4, 2006 says with respect to the job referral system:
I have not found the Union at all reluctant to investigate alleged violations of the job referral system during my tenure. I note that the OWL administrator, Mr. Danielson, has installed a program on the District Council's computers designed to detect the phenomenon known as "riding the list." In addition, I'm told that the District Council is establishing additional computer-based methods to detect Job Referral Violations. However, I think the more important question presented in this regard cannot yet be answered: What effort will the Union apply to preventing, detecting and addressing violations of the job referral system in the absence of independent oversight?
The Union has been "monitored" in this regard for over a dozen years but even with such oversight, violations routinely occur.
Callahan Report at 11 (emphasis added). Forde, as EST, is entitled to credit for the reforms described by Callahan; they were installed on his watch. But the effectiveness of Forde's stewardship as EST is cast into question by Callahan's observation that, as recently as October 2006, violations of the Job Referral Rules still "routinely occur." Clarke's dissatisfaction as a union member with Forde's performance is therefore entirely understandable, quite apart from the fact that Clarke is also Forde's political rival. But Clarke undertook by this motion to prove Forde's liability as a contemnor with respect to five specific job referrals. The law imposes a heightened burden of proof in contempt cases. With the exception of the Maudsley referral, Clarke has failed to carry that burden.
The government, plaintiff in the underlying civil RICO action against the District Council which resulted in the Consent Decree and the Job Referral Rules, continues in its oversight capacity and is presently litigating other issues with respect to the Decree and the Rules. See United States v. District Council of New York City, 409 F. Supp. 2d 439 (S.D.N.Y. 2006), rev'd and remanded, 2007 WL 1157143 (2d Cir. Apr. 18, 2007) (summary order). If the government, a neutral force in union politics, should conclude that Forde's performance as EST interferes with or obstructs the working of the job referral system to the extent that Forde is violating the Decree and the Rules, the government has standing to ask the Court for equitable relief. In saying that, the Court does no more than state the obvious. Whether to pursue that or any other remedy rests in the first instance in the discretion of the office of the United States Attorney.
The foregoing is SO ORDERED.